REG - Fulcrum Utility Srvc - Placing and Open Offer
15/12/2021 16:35
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RNS Number : 7919V Fulcrum Utility Services Ltd 15 December 2021
THIS ANNOUNCEMENT (INCLUDING THE APPENDICES) AND THE INFORMATION CONTAINED
HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN
WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM THE UNITED STATES,
AUSTRALIA, CANADA, THE REPUBLIC OF SOUTH AFRICA, NEW ZEALAND OR JAPAN OR ANY
OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE
UNLAWFUL. PLEASE SEE THE IMPORTANT NOTICES AT THE END OF THIS ANNOUNCEMENT.
THIS ANNOUNCEMENT WAS DEEMED BY THE COMPANY TO CONTAIN INSIDE INFORMATION AS
STIPULATED UNDER THE MARKET ABUSE REGULATIONS (EU) NO. 596/2014 AS THEY FORM
PART OF UK DOMESTIC LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018.
WITH THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INFORMATION IS NOW CONSIDERED
TO BE IN THE PUBLIC DOMAIN.
15 December 2021
Fulcrum Utility Services Limited
("Fulcrum", "Group" or the "Company")
Proposed Placing to raise a minimum of £19.5 million
Launch of Accelerated Book Build
Proposed Open Offer to raise up to approximately £6.0 million
Fulcrum Utility Services Limited (AIM: FCRM), a leading independent provider
of essential utility services including multi-utility connections, electric
vehicle charging infrastructure, renewable energy infrastructure services and
smart metering solutions, today announces that it proposes to raise a minimum
of £19.5 million (before expenses) via a conditional placing of new Ordinary
Shares at the issue price of 12p per share to new and existing institutional
investors, to support the Company's growth strategy and entry into the smart
energy infrastructure market as a meter asset provider ("MAP").
The Placing is being conducted through an accelerated bookbuild process (the
"Bookbuild") which will be launched immediately following this announcement.
The Bookbuild is expected to close on 16 December 2021, following which the
final quantum of the Placing proceeds will be announced.
In addition to the Placing, the Company is proposing to raise up to
approximately £6.0 million by way of an Open Offer which will be available to
all Qualifying Shareholders at the Record Time.
Transaction Highlights
• Conditional Placing to raise a minimum of £19.5 million at the Issue Price
• Open Offer to raise gross proceeds of up to an additional £6.0 million at the
Issue price
• Indication from two of the Company's largest shareholders, Bayford & Co
Ltd and Harwood Capital LLP, that they intend to, at minimum, stand their
corner in the Fundraising and are prepared to commit up to an aggregate of
£18.5 million
• The Placing is to be conducted by way of the Bookbuild which will commence
immediately following this Announcement and will be subject to the terms and
conditions set out in Appendix 1 to this Announcement.
• The Issue Price of 12 pence represents a discount of approximately 12.7 per
cent. to the closing price on 14 December 2021 of 13.75p
• The net proceeds from the Fundraising are intended to be used by Fulcrum to
support the Company's stated growth strategy of entering the smart meter
infrastructure market as a MAP and for general working capital purposes
• Completion of the Fundraising is conditional, inter alia, upon Shareholder
approval at the General Meeting to be held on 7 January 2022.
A circular, containing further details of the Fundraising and notice of the
General Meeting to be held at 11.00 a.m. on 7 January 2022 to, inter alia,
approve the Resolutions required to implement the Fundraising, is expected to
be published and despatched to Shareholders on 17 December 2021 (the
"Circular"). Following its publication, the Circular will be available on
the Company's website at https://investors.fulcrum.co.uk
(https://investors.fulcrum.co.uk) . Defined terms used in this announcement
are set out at the end of the announcement.
Terry Dugdale, Chief Executive Officer, said: "We are delighted to announce
this fundraise. The injection of additional funds ensures we can fully
capitalise on growth opportunities in meter asset ownership as they are
presented to us and provides us with a strong platform to support our
ambitious growth plans.
"The indication of commitment from two of our largest shareholders is a strong
endorsement of their belief in our strategy and I am excited by the potential
that this funding brings to the Group."
If you would like to participate in the Bookbuild, please contact your usual
contact on the Growth Companies Sales Team or call the Cenkos dealing desk on
+44 (0)20 7397 1946.
For further information, please visit: https://investors.fulcrum.co.uk/
(https://investors.fulcrum.co.uk/) or contact:
Fulcrum Utility Services Limited +44 (0)114 280 4150
Terry Dugdale, Chief Executive Officer
Cenkos Securities plc (Nominated adviser and broker) +44 (0)20 7397 8900
Camilla Hume / Callum Davidson (Nomad) / Michael Johnson (Sales)
Details of the Fundraising
Cenkos Securities plc ("Cenkos") is acting as sole broker and bookrunner to
the Company in connection with the Fundraising and Admission. The Placing is
subject to the terms and conditions set out in Appendix 1 to this
Announcement.
Cenkos will today commence the Bookbuild in respect of the Placing. The final
number of Placing Shares to be placed at the Issue Price will be determined at
the close of the Bookbuild.
The book will open with immediate effect following this Announcement. The
timing of the closing of the Bookbuild and allocations thereunder are at the
absolute discretion of Cenkos, following consultation with the Company.
Details of the number of Placing Shares will be announced as soon as
practicable after the close of the Bookbuild. The Placing is not being
underwritten.
In addition, in order to provide Shareholders who do not, or are unable to,
take part in the Placing with an opportunity to participate in the proposed
issue of new Ordinary Shares, the Company is providing all Qualifying
Shareholders with the opportunity to subscribe for Open Offer Shares at the
Issue Price. Qualifying Shareholders subscribing for their full entitlement
under the Open Offer may also request additional Open Offer Shares through the
Excess Application Facility. The Open Offer is not being underwritten.
The Circular, containing further details of the Fundraising and convening the
General Meeting in order to pass the Resolutions, is expected to be despatched
to Shareholders on 17 December 2021 and the Circular, once published, will be
available on the Company's website at https://investors.fulcrum.co.uk.
The Fundraising and the issue of the New Ordinary Shares are conditional upon,
among other things, the Fundraising Resolutions being duly passed by
Shareholders at the General Meeting. In light of the potential health risks
and continuing uncertainty around the status of the COVID-19 pandemic, the
Company strongly recommends that Shareholders and Depository Interest holders
do not attend the General Meeting in person and instead are encouraged to
appoint the chair of the General Meeting as their proxy and submit their votes
or voting directions (as applicable) in advance of the meeting.
The New Ordinary Shares, when issued, will be fully paid and will rank pari
passu in all respects with the Existing Ordinary Shares, including the right
to receive all dividends and other distributions declared, made or paid after
the date of issue.
Admission, Settlement and CREST
Application will be made for the New Ordinary Shares to be admitted to trading
on AIM and a further announcement will be made in due course.
Subject to the passing of the Fundraising Resolutions, settlement for the New
Ordinary Shares and Admission are expected to take place at 8.00 a.m. on 10
January 2022. In addition to the passing of the Fundraising Resolutions, the
Fundraising is conditional upon, among other things, Admission becoming
effective and the Placing Agreement not being terminated in accordance with
its terms.
Appendix 1 sets out further information relating to the Bookbuild and the
terms and conditions of the Placing. Persons who have chosen to participate in
the Placing, by making an oral, electronic or written offer to acquire Placing
Shares, will be deemed to have read and understood this Announcement in its
entirety (including the Appendices) and to be making such offer on the terms
and subject to the conditions herein, and to be providing the representations,
warranties, agreements, acknowledgements and undertakings contained in
Appendix 1.
This Announcement (including the Appendices) should be read in its entirety.
Expected Timetable for the Fundraising
Record Time for entitlement under the Open Offer 6.00 p.m. on 14 December 2021
Announcement of the Fundraising 15 December 2021
Announcement of the results of the Placing 16 December 2021
Ex-entitlement date of the Open Offer 7.00 a.m. on 16 December 2021
Publication of the Circular, Form of Proxy and, to Qualifying Non-Crest 17 December 2021
Shareholders, the Application Form
Open Offer Entitlements and Excess Open Offer Entitlements credited to stock As soon as practical after 8.00 a.m. on 20 December 2021
accounts in CREST of Qualifying CREST Shareholders
Latest recommended time and date for requested withdrawal of Basic Open Offer 4.30 p.m. on 30 December 2021
Entitlements from CREST
Latest time and date for depositing Open Offer Entitlements in CREST 3.00 p.m. on 31 December 2021
Latest time and date for splitting of Application Forms under the Open Offer 3.00 p.m. on 4 January 2022
Latest time and date for receipt of Forms of Proxy and CREST voting 11.00 a.m. on 5 January 2022
instructions
Latest time and date for receipt of Application Forms and payment in full 11.00 a.m. on 6 January 2022
under the Open Offer and settlement of relevant CREST instructions (as
appropriate)
General Meeting 11.00 a.m. on 7 January 2022
Results of the General Meeting and the Open Offer announced 7 January 2022
Admission of the New Ordinary Shares to trading on AIM and commencement of 8.00 a.m. on 10 January 2022
dealings
Where applicable, expected date for CREST accounts to be credited in respect 10 January 2022
of New Ordinary Shares in uncertificated form
Where applicable, expected date for despatch of definitive share certificates 17 January 2022
for New Ordinary Shares in certificated form
Notes:
1 Each of the above times and/or dates is subject to change at the absolute
discretion of the Company and Cenkos. If any of the above times and/or dates
should change, the revised times and/or dates will be announced through a
Regulatory Information Service.
2 All of the above times refer to London time unless otherwise stated.
3 All events listed in the above timetable following the General Meeting are
conditional on the passing of the Resolutions at the General Meeting.
FURTHER INFORMATION
BACKGROUND TO AND REASONS FOR THE FUNDRAISING
2020 was a year which presented much uncertainty to Fulcrum; whilst facing the
challenges presented to the world by the COVID-19 pandemic, the Group was
simultaneously managing various changes to its senior management team. In
December 2020 Jennifer Babington was appointed as the Group's Non-executive
Chair and in January 2021 Terry Dugdale became the Group's Chief Executive
Officer. The Board was further strengthened in February 2021 with the addition
of Dominic Lavelle as a Senior Independent Non-executive Director.
Since that time and following a review of strategy by the refreshed Board, the
Group has selectively invested to strengthen its operational and business
capabilities and renewed its focus on margin and cost discipline. During the
first half of FY 2022 the Group has made positive progress in executing
against its strategy with the Group delivering approximately £28.6 million of
revenue, a 47 per cent. increase on the previous year, adjusted EBITDA of
approximately £1.0 million (H1 2021: loss of £1.0 million).
The Group has continued to make good progress in expanding its multi-utility
contracting and smart metering businesses and secured a variety of new
contract wins across all the sectors in which the Group operates, resulting in
order book growth of approximately 44 per cent., up £24.8 million to £80.9
million at 30 September 2021 (31 March 2021: £56.1 million).
The Board believes that market fundamentals remain very strong and that there
is a significant growth opportunity for the Group across all the diverse
sectors that it operates in and that these opportunities are underpinned by an
increasing regulatory framework as the UK transitions to a low carbon economy.
The Board remains confident that the Group's growing and healthy order book,
robust business model and diverse and specialist energy infrastructure
capabilities, position it well to capitalise on these significant
opportunities as the Group continues to support the UK's energy transition.
In particular, and as previously outlined, the Board believes that significant
and strategic growth opportunities exist for the Group as a participant in the
smart energy infrastructure market across all aspects of the meter life. As
such, and notwithstanding the current energy crisis, the Board has continued
to evaluate organic and strategic growth opportunities in this marketplace.
Consequently, the Board now believes that pursuing a strategy of smart meter
asset ownership, alongside the Group's core contracting business, presents the
Group with a significant growth opportunity.
Whilst the recent volatility in the UK energy market has been well documented
and resulted in the failure of a number of energy suppliers and Supplier of
Last Resort Requirements being enacted, the Group's core business of
multi-utility contracting has, pleasingly, to date been unaffected by the
turbulence in the energy market. The Board considers not only that this crisis
is short term but that it does, in fact, present the Group with a timely
opportunity to enter the market as a Meter Asset Provider ("MAP"). It is the
Board's belief that, with the expected rise in the Ofgem price cap, new energy
suppliers will enter the market at the beginning of next year. The Board
further believes that these new entrants will be looking to work with MAPs
more commensurate to their own size rather than utilising some of the other
MAPs used by some of the larger energy suppliers. Entering the market as a MAP
will, the Board believes, leverage the Group's existing expertise and provide
the Group with a means of monetising all aspects of a meter's life.
SUMMARY OF FULCRUM
Fulcrum is a leading multi-utility infrastructure and services provider
operating throughout mainland UK. Its core business is the design, build,
ownership and maintenance of utility connections and their related
infrastructure.
The Group provides a broad and diverse selection of multi-utility
infrastructure services and solutions, to four growth sectors through the UK
mainland. The sectors in which the Group operates are:
· Housing: The Group provides an end-to-end design
and build utility infrastructure service, designing, installing, and
coordinating new electricity, gas, water, and fibre connections to provide a
complete multi-utility solution for new housing developments of all sizes
across the UK;
· Industrial & Commercial ("I&C") including
Electric Vehicle ("EV") connections: The Group provides multi-utility
infrastructure for all sizes of I&C project, including all the
complexities of gas and electricity infrastructure, such as high voltage
electrical infrastructure (up to 132kV), connections to solar farms, wind
farms and battery storage sites and specialist gas infrastructure. The Group
is playing an active and growing role in expanding the UK's EV charging
network, by providing design and build services for electric vehicle charging
infrastructure and connections;
· Maintenance and Ownership: The Group has
specialist high voltage electrical maintenance capabilities and provides
services and support for electrical networks and infrastructure, including
renewable energy generating and battery storage infrastructure. As an IGT and
IDNO, it is licensed to provide gas and electricity asset ownership and
adoption services, which provide attractive and predictable long-term returns
for the Group; and
· Smart metering: The Group is an active, and
quickly growing, participant in the UK's smart metering market. It currently
delivers smart meter exchange programmes and gas and electricity meter
installation, management and maintenance services to a variety of energy
suppliers, nationwide.
Environmental, Social and Governance ("ESG") responsibilities are an integral
element of the Group's business model. Fulcrum is committed to improving its
business impact and is focused on its people, customers and the communities in
which it operates exemplified by its target for the Group to be Carbon Neutral
on a Scope 1 and Scope 2 basis by 2030. The Group is focused on ESG and is
committed to using its capabilities to support the UK's net-zero revolution.
CURRENT TRADING AND PROSPECTS
The Company announced it interim results for the six months ended 30 September
2021 on 2 December 2021 (RNS No: 2859U).
The Board is pleased with the way the business continues to demonstrate
resilience within a volatile energy market and believes that this resilience
reflects the strength of the Group's business model with its diverse revenue
streams. The Executive Team continue to execute against the Group's strategy
and the Board is excited by Fulcrum's future growth potential and remains
confident that the Group's growing and healthy order book, robust business
model and diverse and specialist energy infrastructure capabilities, essential
to supporting the UK's energy transition, position it well to capitalise on
these significant opportunities. Accordingly, the Board looks to the Company's
future with increasing confidence.
ASSET OWNERSHIP STRATEGY
The Board believes that there is a significant growth opportunity for the
Group to augment its existing smart metering activities and generate
attractive annuity style RPI-linked income for the Group by entering the
domestic and industrial & commercial markets as a MAP and becoming a fully
integrated energy infrastructure company. A pipeline of potential acquisition
opportunities has been identified and the Board is currently at varying stages
of discussion with each.
The Board's asset ownership strategy differs across the sectors in which the
Group operates and is as follows:
· Domestic Assets: The Board believes that the
values ascribed to domestic connection assets by participants in the market
have increased materially over the last few years. As domestic asset values
required tend to be large, and as realisation of them is linked to the build
out of developments, significant capital or funding is required to operate
effectively in this market.
Fulcrum's main competitors in the gas and electrical utility connection
ownership sector (being other IGT and/or IDNO licence holders) are
significantly larger businesses, which are typically owned by large, private,
infrastructure investment funds, and which may not face the same funding
constraints that Fulcrum does as a smaller quoted business. As such, in
December 2019 a strategic decision was made to cease participating in the
domestic gas asset ownership arena and accordingly substantially all the
Group's domestic gas connection assets were sold to ESP. 1 The Group
continues to work with ESP as its preferred asset adopter to bid for domestic
construction projects.
· Industrial and Commercial assets: I&C work
continues to form a meaningful part of the Group's asset ownership strategy
and the Group has a portfolio of I&C connection assets with a market value
of £22.6 million, which generated approximately £2.5 million of revenue and
£0.7 million of EBITDA in the year ended 31 March 2021. The Group holds both
IGT and IDNO licences and continues to grow its design and build activities in
the I&C sector of the market, both working with ESP as an asset adopter
and, where appropriate, independently designing, building, and adding I&C
assets to its own portfolio of assets.
· Metering assets: It is in the meter asset
ownership space that the Board believes substantial opportunities for the
Group exist. As such the Group intends to pursue a strategy of entering the
market as a MAP through either organic meter asset purchase, the acquisition
of an existing MAP or a combination of both. The Group already has in place
the necessary industry accreditations and capabilities.
(1) See the Company's announcement of 23 December 2019 for full details of
the sale of the Group's domestic gas connection assets to ESP.
The Board believes that there is an addressable market of approximately 4.6
million meter points with small energy suppliers 2 or with larger energy
suppliers for whom smart meter asset ownership is not a core part of their
business model. Approximately 2.3 million of these meters are with small
energy suppliers and it is these assets that the Board considers to be the
Group's initial target market. Furthermore, the Board believes that there are
approximately an additional 9.4 million SMETS1 meters anticipated to be
exchanged between 2024 and 2028.
(2) Small energy suppliers are defined as those that supply gas to less
than 250,000 domestic customers and electricity to less than 250,000 domestic
customers; they may also supply non-domestic sites. Source: BEIS
The Board believes that the MAP opportunity is attractive as it provides the
Group with a low risk and regulated asset investment opportunity capable of
generating a high-quality, recurring revenue stream with predictable annual
EBITDA growth to support the Group's growth ambitions. The Board further
believes a MAP platform is eminently scalable, through both equity and, in the
future, through the introduction of optimally structured debt, and anticipates
it to be capable of generating a 14 to 15 per cent. annual return on
investment with a 7-to-10-year payback period, based on an expected asset life
of 15 years.
The Executive Team are very selective in their acquisition targeting and
select targets against a set of clearly defined criteria; namely the Board
seeks to identify portfolios of meter assets or integrated smart meter
operators with a meter asset portfolio capable of being integrated into the
Group, where the Board believes there is an ability to leverage the Group's
existing skill base and operations. The Directors seek earnings accretive
acquisitions with a targeted annual return on investment of between 14 to 15
per cent. and where they believe there is an opportunity to generate both cost
and revenue synergies. By way of example with £20 million of investment the
Board would look to target approximately 130,000 energy meter assets.
Furthermore, the Board believes that the addition of appropriately structured
debt facilities will provide the Group with an additional opportunity to
invest in identified growth opportunities and further drive long-term
shareholder value. Accordingly, the Board intends to review debt funding
opportunities for the Group following completion of the Fundraising.
Additionally, the Board is cognisant that there is a nascent market emerging
in water smart metering and as such continues to monitor developments to
assess where there may be additional opportunities for the Group.
The Group is currently at varying stages of discussion and due diligence in
relation to two potential opportunities (the "Potential Acquisitions"): 3
(a) Target A: Target A is a domestic smart meter asset
provider owning approximately 225,000 meters for which the Board estimates
generate approximately £3 to 4 million of EBITDA on an annual basis. The
Directors are in early stage discussions about acquiring a portion of Target
A's meter portfolio.
(b) Target B: Target B is an integrated smart meter
operator with a portfolio of approximately 9,000 meters. For the year ending
31 March 2022, it is predicted by the seller to generate approximately
£1.3 million EBITDA.
(3) The Potential Acquisitions referred to in this paragraph are subject
to ongoing due diligence by the Company and no contractually binding
obligations have been, and will not prior to Admission be, entered into for
their sale and purchase. There can be no assurance that the Company will
determine to proceed with either of the Potential Acquisitions or be able to
agree final terms for and complete either of the Potential Acquisitions.
For a summary of the risks and uncertainties around the Potential
Acquisitions, please refer to Appendix 2 (Risk Factors) of this Announcement
and in particular, the sections entitled "There can be no certainty that the
Group will be able to successfully implement its current strategy and growth
plans.", "The Company may be unable to identify appropriate assets or complete
acquisitions." and "Material facts or circumstances may not be revealed in the
Company's due diligence of acquisition opportunities, exposing the Company to
unknown risks."
The Board believes that the Fundraising should allow the Group to target
accretive acquisitions, with the potential to add to its revenue and EBITDA
and creating a fully integrated growth platform, providing customers with a
one stop metering solution.
USE OF PROCEEDS FROM THE FUNDRAISING
The Board intends that the net proceeds of the Fundraising will be used
primarily to strengthen the balance sheet in support of the Group's stated
acquisition growth strategy of entering the smart metering market as a MAP as
well as for general working capital purposes to support the Group's revenue
growth.
RELATED PARTY AND DIRECTORS INTENDED PARTICIPATION
The Company has received indications from two of its largest Shareholders, The
Bayford Group and Harwood Capital LLP, that they intend to at minimum stand
their corner in the Fundraising but are prepared to commit up to an aggregate
of £18.5 million.
Furthermore, the following Directors have indicated their intention to
subscribe as part of the Placing as follows:
Director Amount Subscribed Number of Placing Shares
Jennifer Babington, Non-executive Chair £20,000.04 166,667
Dominic Lavelle, Senior Independent Non-executive Director £20,000.04 166,667
Terry Dugdale, Chief Executive Officer £20,000.04 166,667
Details of participation by related parties will be included in an
announcement regarding the results of the Placing.
THE PLACING AGREEMENT
Pursuant to the terms of the Placing Agreement, Cenkos, as agent for the
Company, has conditionally agreed to use its reasonable endeavours to procure
subscribers for the Placing Shares. Cenkos has conditionally placed the
Placing Shares with certain institutional and other investors at the Issue
Price. Neither the Placing nor the Open Offer has been underwritten by Cenkos.
The Placing Agreement is conditional upon, inter alia, the Fundraising
Resolutions being duly passed at the General Meeting and Admission becoming
effective on or before 8.00 a.m. on 10 January 2022 (or such later time and/or
date as Cenkos may agree, but in any event by no later than 8.00 a.m. on 24
January 2022).
Cenkos has the right to terminate the Placing Agreement in certain
circumstances prior to the Admission, in particular, in the event that any of
the warranties in the Placing Agreement were untrue or inaccurate, or were
misleading when given (save to the extent as would not in the opinion of
Cenkos (acting in good faith) be material in the context of the Fundraising)
or in the event of a material adverse change in the business of the Group.
The Placing Shares have not been made available to the public and have not
been offered or sold in any jurisdiction where it would be unlawful to do so.
The Open Offer
The Company considers it important that Shareholders have an opportunity
(where it is practicable for them to do so) to participate in the Fundraising
and accordingly the Company is making the Open Offer to Qualifying
Shareholders. The Company is proposing to raise up to approximately £6
million (before fees and expenses) through the issue of up to 49,976,537 Open
Offer Shares at the Issue Price. Any Open Offer Shares not subscribed for by
Qualifying Shareholders will be available to Qualifying Shareholders under the
Excess Application Facility. The Open Offer is not being underwritten.
Qualifying Shareholders may apply for Open Offer Shares under the Open Offer
at the Issue Price on the following basis:
9 Open Offer Shares for every 40 Existing Ordinary Shares held by
the Shareholder at the Record Time
Entitlements of Qualifying Shareholders will be rounded down to the nearest
whole number of Open Offer Shares. Fractional entitlements which would
otherwise arise will not be issued to Qualifying Shareholders but will be
aggregated and made available under the Excess Application Facility. The
Excess Application Facility enables Qualifying Shareholders to apply for
Excess Open Offer Shares in excess of their Open Offer Entitlement.
Further details of the Open Offer and the application process relating to the
Open Offer will be set out in the Circular.
Recommendation
The Directors consider the Fundraising to be in the best interests of the
Company and its Shareholders as a whole. Accordingly, the Directors
unanimously recommend Shareholders to vote in favour of the Resolutions to be
proposed at the General Meeting, as the Directors intend to do so in respect
of their beneficial holdings amounting, in aggregate, to 66,057,959 Existing
Ordinary Shares and/or Depository Interests, representing approximately 29.74
per cent. of the existing issued Ordinary Share capital of the Company.
This Announcement should be read in its entirety. In particular, you should
read and understand the information provided in the Appendices below.
IMPORTANT NOTICES
This Announcement contains statements that are, or may be deemed to be,
"forward-looking statements". These forward-looking statements can be
identified by the use of words such as "aims", "anticipates", "believes",
"could", "estimates", "expects", "intends", "may", "should", "will" or "would"
or variations or comparable terminology and the negative thereof. All
statements other than statements of historical fact included in this
Announcement are forward-looking statements. Forward-looking statements appear
in a number of places throughout this Announcement and include statements
regarding the Directors' or the Company's current intentions, beliefs or
expectations concerning, among other things, the Company's and the Group's
operating results, financial condition, prospects, growth, expansion plans and
strategies, the industry in which the Group operates and the general economic
outlook.
By their nature, forward-looking statements involve risk and uncertainty
because they relate to events and depend upon circumstances that may or may
not occur in the future and are therefore based on current beliefs and
expectations about future events, including, but not limited to, economic and
business conditions, the effects of changes in interest rates, changes in
legislation and other factors outside the control of the Company.
Forward-looking statements are not guarantees of future performance. Actual
results or outcomes to differ materially from those expressed or implied in
any forward-looking statements. All forward-looking statements contained in
this Announcement are based upon information available to the Directors at the
date of this Announcement. The forward-looking statements in this Announcement
are based on the relevant Directors' beliefs and assumptions and information
only as of the date of this Announcement, and the forward-looking events
discussed in this Announcement might not occur. Accordingly, investors should
not place any reliance on any forward-looking statements. Except as required
by law or regulation, none of the Directors, the Company or Cenkos undertakes
any obligation to publicly update any forward-looking statements, whether as a
result of new information, future events or otherwise.
This Announcement is for information only and neither this Announcement nor
any part of it constitutes or forms part of any offer to issue or sell, or the
solicitation of an offer to acquire, purchase or subscribe for, any securities
in the United States, Australia, Canada, Japan, New Zealand, the Republic of
South Africa or any other jurisdiction in which the same would be unlawful.
Any failure to comply with these restrictions may constitute a violation of
the securities law of any such jurisdiction.
This Announcement is not an offer of securities for sale into the United
States. The New Ordinary Shares have not been and will not be registered under
the United States Securities Act 1933, as amended (the "Securities Act"), or
with any securities regulatory authority of any state or other jurisdiction of
the United States, and may not be offered, sold, resold, transferred or
delivered, directly or indirectly, within, into or in the United States except
pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act and in compliance with any
applicable securities laws of any state or other jurisdiction of the United
States. No public offering of the New Ordinary Shares is being made in the
United States, the United Kingdom or elsewhere.
This Announcement is directed only at: (a) persons in member states of the
European Economic Area ("EEA") who are "qualified investors" within the
meaning of Article 2(e) of the Regulation (EU) 2017/1129, as amended (the "EU
Prospectus Regulation") ("Qualified Investors"); and (b) in the United
Kingdom, persons who are "qualified investors" within the meaning of Article 2
of Regulation (EU) 2017/1129 as it forms part of UK domestic law by virtue of
the European Union (Withdrawal) Act 2018 (the "UK Prospectus Regulation") and
who (i) have professional experience in matters relating to investments
falling within Article 19(5) (Investment Professionals) of the Financial
Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended
(the "Order"); or (ii) are persons falling within Article 49(2)(a) to (d) of
the Order; or (iii) are persons to whom it may otherwise by lawfully
communicated to (all such persons in (b) together being referred to as
"Relevant Persons"). Any investment in connection with the Capital Raising
will only be available to, and will only be engaged with, Relevant Persons.
Any person who is not a Relevant Person should not act or rely on this
Announcement or any of its contents.
This Announcement and the information in it must not be acted on or relied on
by persons in member states of the EEA who are not Qualified Investors and
persons in the United Kingdom who are not Relevant Persons. Persons
distributing this Announcement must satisfy themselves that it is lawful to do
so. Any investment or investment activity to which this Announcement relates
is available only to persons in member states of the EEA who are Qualified
Investors and in the United Kingdom to Relevant Persons and will be engaged in
only with such persons. This announcement does not itself constitute an offer
for sale or subscription of any securities in the Company.
This Announcement has been issued by and is the sole responsibility of the
Company. No representation or warranty, express or implied, is or will be made
as to, or in relation to, and no responsibility or liability is or will be
accepted by Cenkos (apart from the responsibilities or liabilities that may be
imposed by the FSMA or other regulatory regime established thereunder) or by
any of its affiliates or agents as to, or in relation to, the accuracy or
completeness of this Announcement or any other written or oral information
made available to or publicly available to any interested party or its
advisers, and any liability therefore is expressly disclaimed.
The distribution of this Announcement and the offering of the New Ordinary
Shares in certain jurisdictions may be restricted by law. No action has been
taken by the Company or Cenkos that would permit an offering of such shares or
possession or distribution of this Announcement or any other offering or
publicity material relating to such shares in any jurisdiction where action
for that purpose is required. Persons into whose possession this Announcement
comes are required to inform themselves about, and to observe, such
restrictions.
The Announcement does not constitute a recommendation concerning any
investor's options with respect to the Fundraising. Recipients of this
Announcement who are considering acquiring New Ordinary Shares should conduct
their own due diligence, analysis and evaluation of the business and data
described in this Announcement, including the New Ordinary Shares. The price
and value of securities can go down as well as up. Past performance is not a
guide to future performance. The contents of this Announcement are not to be
construed as financial, legal, business or tax advice. If you do not
understand the contents of this Announcement you should consult an authorised
financial adviser, legal adviser, business adviser or tax adviser for
financial, legal, business or tax advice.
No statement in this Announcement is intended to be a profit forecast or
estimate, and no statement in this Announcement should be interpreted to mean
that earnings per share of the Company for the current or future financial
years would necessarily match or exceed the historical published earnings per
share of the Company.
Neither the content of the Company's website (or any other website) nor the
content of any website accessible from hyperlinks on the Company's website (or
any other website) is incorporated into or forms part of this Announcement.
Information to Distributors
Solely for the purposes of the product governance requirements of Chapter 3 of
the FCA Handbook Product Intervention and Product Governance Sourcebook (the
"UK Product Governance Requirements"), and disclaiming all and any liability,
whether arising in tort, contract or otherwise, which any 'manufacturer' (for
the purposes of the UK Product Governance Requirements) may otherwise have
with respect thereto, the New Ordinary Shares have been subject to a product
approval process, which has determined that such Placing Shares are: (a)
compatible with an end target market of retail investors and investors who
meet the criteria of professional clients and eligible counterparties, each as
defined in Chapter 3 of the FCA Handbook Conduct of Business Sourcebook; and
(b) eligible for distribution through all permitted distribution channels (the
"UK Target Market Assessment"). Notwithstanding the UK Target Market
Assessment, distributors should note that: the price of the New Ordinary
Shares may decline and investors could lose all or part of their investment;
the New Ordinary Shares offer no guaranteed income and no capital protection;
and an investment in the New Ordinary Shares is compatible only with investors
who do not need a guaranteed income or capital protection, who (either alone
or in conjunction with an appropriate financial or other adviser) are capable
of evaluating the merits and risks of such an investment and who have
sufficient resources to be able to bear any losses that may result therefrom.
The UK Target Market Assessment is without prejudice to the requirements of
any contractual, legal or regulatory selling restrictions in relation to the
Fundraising. Furthermore, it is noted that, notwithstanding the UK Target
Market Assessment, Cenkos will only procure investors (pursuant to the
Placing) who meet the criteria of professional clients and eligible
counterparties.
For the avoidance of doubt, the UK Target Market Assessment does not
constitute: (a) an assessment of suitability or appropriateness for the
purposes of Chapters 9A or 10A, respectively of the FCA Handbook Conduct of
Business Sourcebook; or (b) a recommendation to any investor or group of
investors to invest in, or purchase, or take any other action whatsoever with
respect to the Placing Shares. Each distributor is responsible for undertaking
its own target market assessment in respect of the New Ordinary Shares and
determining appropriate distribution channels.
APPENDIX 1- TERMS AND CONDITIONS OF THE PLACING
IMPORTANT INFORMATION FOR INVITED PLACEES ONLY REGARDING THE PLACING.
THIS ANNOUNCEMENT, INCLUDING THE APPENDICES AND THE INFORMATION CONTAINED
HEREIN (TOGETHER THE "ANNOUNCEMENT") IS RESTRICTED AND IS NOT FOR RELEASE,
PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN
OR INTO OR FROM THE UNITED STATES (INCLUDING ITS TERRITORIES AND POSSESSIONS,
ANY STATE OF THE UNITED STATES AND THE DISTRICT OF COLUMBIA) ("UNITED
STATES"), AUSTRALIA, CANADA, JAPAN, NEW ZEALAND, THE REPUBLIC OF SOUTH AFRICA
OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION
WOULD BE UNLAWFUL. THIS ANNOUNCEMENT HAS NOT BEEN APPROVED BY THE LONDON STOCK
EXCHANGE, NOR IS IT INTENDED THAT IT WILL BE SO APPROVED.
MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THIS
ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND IS DIRECTED ONLY AT: (A)
PERSONS IN MEMBER STATES OF THE EUROPEAN ECONOMIC AREA ("EEA") WHO ARE
QUALIFIED INVESTORS WITHIN THE MEANING OF ARTICLE 2(e) OF REGULATION (EU)
2017/1129, AS AMENDED FROM TIME TO TIME (THE "EU PROSPECTUS REGULATION")
("QUALIFIED INVESTORS"); AND (B) IN THE UNITED KINGDOM, PERSONS WHO ARE
"QUALIFIED INVESTORS" WITHIN THE MEANING OF REGULATION 2017/1129/EU AS IT
FORMS PART OF UK DOMESTIC LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT
2018 (THE "UK PROSPECTUS REGULATION") AND WHO: (I) HAVE PROFESSIONAL
EXPERIENCE IN MATTERS RELATING TO INVESTMENTS FALLING WITHIN ARTICLE 19(5)
(INVESTMENT PROFESSIONALS) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000
(FINANCIAL PROMOTION) ORDER 2005, AS AMENDED (THE "ORDER"); (II) ARE PERSONS
FALLING WITHIN ARTICLE 49(2)(A) TO (D) (HIGH NET WORTH COMPANIES,
UNINCORPORATED ASSOCIATIONS, ETC.) OF THE ORDER; OR (III) ARE PERSONS TO WHOM
IT MAY OTHERWISE BE LAWFULLY COMMUNICATED (ALL SUCH PERSONS IN (B) TOGETHER
BEING REFERRED TO AS "RELEVANT PERSONS").
THIS ANNOUNCEMENT AND THE INFORMATION IN IT MUST NOT BE ACTED ON OR RELIED ON
BY PERSONS IN MEMBER STATES OF THE EEA WHO ARE NOT QUALIFIED INVESTORS AND
PERSONS IN THE UNITED KINGDOM WHO ARE NOT RELEVANT PERSONS. PERSONS
DISTRIBUTING THIS ANNOUNCEMENT MUST SATISFY THEMSELVES THAT IT IS LAWFUL TO DO
SO. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS ANNOUNCEMENT RELATES
IS AVAILABLE ONLY TO PERSONS IN MEMBER STATES OF THE EEA WHO ARE QUALIFIED
INVESTORS AND IN THE UNITED KINGDOM TO RELEVANT PERSONS AND WILL BE ENGAGED IN
ONLY WITH SUCH PERSONS. THIS ANNOUNCEMENT DOES NOT ITSELF CONSTITUTE AN OFFER
FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN FULCRUM UTILITY SERVICES LIMITED
(THE "COMPANY").
THIS ANNOUNCEMENT IS NOT AN OFFER OF SECURITIES FOR SALE INTO THE UNITED
STATES. THE PLACING SHARES (AS DEFINED BELOW) HAVE NOT BEEN AND WILL NOT BE
REGISTERED UNDER THE UNITED STATES SECURITIES ACT 1933, AS AMENDED (THE
"SECURITIES ACT"), OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR
OTHER JURISDICTION OF THE UNITED STATES, AND MAY NOT BE OFFERED, SOLD, RESOLD,
TRANSFERRED OR DELIVERED, DIRECTLY OR INDIRECTLY, WITHIN, INTO OR IN THE
UNITED STATES EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN
COMPLIANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OR OTHER
JURISDICTION OF THE UNITED STATES. NO PUBLIC OFFERING OF THE PLACING SHARES IS
BEING MADE IN THE UNITED STATES, THE UNITED KINGDOM OR ELSEWHERE. NO MONEY,
SECURITIES OR OTHER CONSIDERATION FROM ANY PERSON INSIDE THE UNITED STATES IS
BEING SOLICITED AND, IF SENT IN RESPONSE TO THE INFORMATION CONTAINED IN THIS
ANNOUNCEMENT, WILL NOT BE ACCEPTED.
EACH PLACEE SHOULD CONSULT WITH ITS ADVISERS AS TO LEGAL, TAX, BUSINESS,
FINANCIAL AND RELATED ASPECTS OF AN INVESTMENT IN THE PLACING SHARES. THE
DISTRIBUTION OF THIS ANNOUNCEMENT, ANY PART OF IT OR ANY INFORMATION CONTAINED
IN IT MAY BE RESTRICTED BY LAW IN CERTAIN JURISDICTIONS, AND ANY PERSON INTO
WHOSE POSSESSION THIS ANNOUNCEMENT, ANY PART OF IT OR ANY INFORMATION
CONTAINED IN IT COMES SHOULD INFORM THEMSELVES ABOUT, AND OBSERVE, SUCH
RESTRICTIONS.
No action has been taken by the Company, Cenkos Securities plc ("Cenkos") or
any of their respective affiliates, agents, directors, officers or employees
that would permit an offer of the Placing Shares or possession or distribution
of this Announcement or any other offering or publicity material relating to
such Placing Shares in any jurisdiction where action for that purpose is
required.
This Announcement is for information only and neither this Announcement nor
any part of it constitutes or forms part of any offer to issue or sell, or the
solicitation of an offer to acquire, purchase or subscribe for, any securities
in the United States, Australia, Canada, Japan, New Zealand, the Republic of
South Africa or any other jurisdiction in which the same would be unlawful. No
public offering of the Placing Shares is being made in any such jurisdiction.
All offers of the Placing Shares will be made pursuant to an exemption under
the UK Prospectus Regulation from the requirement to produce a prospectus. In
the United Kingdom, this Announcement is being directed solely at persons in
circumstances in which section 21(1) of the Financial Services and Markets Act
2000 (the "FSMA") does not apply.
The Placing Shares have not been approved or disapproved by the US Securities
and Exchange Commission, any state securities commission or other regulatory
authority in the United States, nor have any of the foregoing authorities
passed upon or endorsed the merits of the Fundraising or the accuracy or
adequacy of this Announcement. Any representation to the contrary is a
criminal offence in the United States. The relevant clearances have not been,
nor will they be, obtained from the securities commission of any province or
territory of Canada, no prospectus has been lodged with, or registered by, the
Australian Securities and Investments Commission, the Financial Markets
Authority of New Zealand or the Japanese Ministry of Finance; the relevant
clearances have not been, and will not be, obtained for the South Africa
Reserve Bank or any other applicable body in the Republic of South Africa in
relation to the Placing Shares and the Placing Shares have not been, nor will
they be, registered under or offering in compliance with the securities laws
of any state, province or territory of Australia, Canada, Japan, New Zealand
or the Republic of South Africa. Accordingly, the Placing Shares may not
(unless an exemption under the relevant securities laws is applicable) be
offered, sold, resold or delivered, directly or indirectly, in or into
Australia, Canada, Japan, New Zealand or the Republic of South Africa or any
other jurisdiction outside the United Kingdom.
Persons (including, without limitation, nominees and trustees) who have a
contractual right or other legal obligations to forward a copy of this
Announcement should seek appropriate advice before taking any action.
This Announcement should be read in its entirety. In particular, you should
read and understand the information provided in this "Important Information"
section of this Announcement.
The Company proposes to raise capital by way of a conditional placing (the
"Placing") and open offer (together with the Placing, the "Fundraising").
By participating in the Placing, each person who is invited to and who chooses
to participate in the Placing by making an oral or written offer to
subscribe for Placing Shares (including any individuals, funds or others on
whose behalf a commitment to subscribe for Placing Shares is given) (a
"Placee"), will be deemed to have read and understood this Announcement in its
entirety, to be participating, making an offer and acquiring new ordinary
shares in the Company in the Placing (the "Placing Shares") on the terms and
conditions contained herein and to be providing the representations,
warranties, indemnities, acknowledgements and undertakings contained in this
Appendix 1.
In particular, each such Placee represents, warrants, undertakes, agrees and
acknowledges (amongst other things) that:
1. If it is in the United Kingdom it is a
Relevant Person and if it is in a member state of the EEA it is a Qualified
Investor (each a "Relevant State"), and it undertakes that it will acquire,
hold, manage or dispose of any Placing Shares that are allocated to it for the
purposes of its business;
2. in the case of any Placing Shares acquired by
it as a financial intermediary, as that term is used in Article 5(1) of the EU
Prospectus Regulation:
2.1 the Placing Shares acquired by it in the Placing
have not been acquired on behalf of, nor have they been acquired with a view
to their offer or resale to, persons in a Relevant State other than Qualified
Investors or in circumstances in which the prior consent of Cenkos has been
given to the offer or resale; or
2.2 where Placing Shares have been acquired by it on
behalf of persons in a Relevant State other than Qualified Investors, the
offer of those Placing Shares to it is not treated under the EU Prospectus
Regulation as having been made to such persons;
3. in the case of any Placing Shares acquired by
it as a financial intermediary, as that term is used in Article 5(1) of the UK
Prospectus Regulation:
3.1 the Placing Shares acquired by it in the Placing
have not been acquired on behalf of, nor have they been acquired with a view
to their offer or resale to, persons in the United Kingdom other than Relevant
Persons or in circumstances in which the prior consent of Cenkos has been
given to the offer or resale; or
3.2 where Placing Shares have been acquired by it on
behalf of persons in the United Kingdom other than Relevant Persons, the offer
of those Placing Shares to it is not treated under the UK Prospectus
Regulation as having been made to such persons;
4. it is acquiring the Placing Shares for its
own account or is acquiring the Placing Shares for an account with respect to
which it exercises sole investment discretion and has the authority to make
and does make the representations, warranties, indemnities, acknowledgements,
undertakings and agreements contained in this Announcement;
5. it understands (or if acting for the account
of another person, such person has confirmed that such person understands) the
resale and transfer restrictions set out in this Appendix 1; and
6. it (and any person on whose account it is
acting) is outside the United States and acquiring the Placing Shares in an
"offshore transaction" as defined in and in accordance with Regulation S under
the Securities Act.
No prospectus
No prospectus or other offering document has been or will be submitted to be
approved by the Financial Conduct Authority ("FCA") or London Stock Exchange
plc in relation to the Fundraising or the Placing Shares and Placees'
commitments will be made solely on the basis of the information contained in
this Announcement and any information publicly announced through a Regulatory
Information Service (as defined in the AIM Rules for Companies) by or on
behalf of the Company on or prior to the date of this Announcement (the
"Publicly Available Information") and subject to any further terms set forth
in the form of confirmation to be sent to individual Placees.
Each Placee, by participating in the Placing, agrees that the content of this
Announcement is exclusively the responsibility of the Company and confirms
that it has neither received nor relied on any other information (other than
the Publicly Available Information), representation, warranty or statement
made by or on behalf of the Company, Cenkos or any other person and none of
the Company, Cenkos or any other person acting on such person's behalf nor any
of their respective affiliates has or shall have any liability for any
Placee's decision to participate in the Placing based on any other
information, representation, warranty or statement. Each Placee acknowledges
and agrees that it has relied on its own investigation of the business,
financial or other position of the Company in accepting a participation in the
Placing. Nothing in this paragraph shall exclude the liability of any person
for fraudulent misrepresentation.
Details of the Placing Agreement
Cenkos has today entered into a placing and open offer agreement (the "Placing
Agreement") with the Company under which, on the terms and subject to the
conditions set out in the Placing Agreement, Cenkos, as agent for and on
behalf of the Company, has agreed to use its reasonable endeavours to procure
placees for the Placing Shares at 12 pence per Placing Share (the "Issue
Price").
The Placing Shares will, when issued, be subject to the articles of
association of the Company (the "Articles") and credited as fully paid and
will rank pari passu in all respects with the existing ordinary shares in
the capital of the Company, including the right to receive all dividends and
other distributions declared, made or paid in respect of such ordinary shares
after the date of issue of the Placing Shares.
Bookbuild
Following this Announcement, Cenkos will today commence the bookbuilding
process in respect of the Placing (the "Bookbuild") to determine demand for
participation in the Placing by Placees. The book will open with immediate
effect. This Appendix 1 gives details of the terms and conditions of, and the
mechanics of participation in, the Placing. No commissions will be paid to
Placees or by Placees in respect of any Placing Shares. Members of the public
are not entitled to participate.
Cenkos and the Company shall be entitled to effect the Placing by such
alternative method to the Bookbuild as they may, in their absolute discretion,
determine.
Application for admission to trading
Application will be made to the London Stock Exchange for admission of the
Placing Shares to trading on AIM ("Admission").
It is expected that Admission will take place no later than 8.00 a.m. on 10
January 2022 and that dealings in the Placing Shares on AIM will commence at
the same time.
Principal terms of the Placing
1. Cenkos is acting as placing agent and broker
in connection with the Placing, as agent for and on behalf of the Company.
Cenkos is authorised and regulated in the United Kingdom by the FCA and is
acting exclusively for the Company and no one else in connection with the
matters referred to in this Announcement and will not be responsible to anyone
other than the Company for providing the protections afforded to the customers
of Cenkos or for providing advice in relation to the matters described in this
Announcement.
2. Participation in the Placing will only be
available to persons who may lawfully be, and are invited by Cenkos to
participate. Cenkos and any of its respective affiliates are entitled to
participate in the Placing as principal.
3. The price per Placing Share is 12 pence and
is payable to Cenkos as agent of the Company by all Placees. The number of
Placing Shares to be issued will be agreed between Cenkos and the Company
following completion of the Bookbuild. The number of Placing Shares will be
announced on a Regulatory Information Service following the completion of the
Bookbuild.
4. Each prospective Placee's allocation is
determined by Cenkos in its discretion following consultation with the Company
and will be confirmed orally by Cenkos and a form of confirmation will be
dispatched as soon as possible thereafter. That oral confirmation will
constitute an irrevocable, legally binding commitment by that person (who will
at that point become a Placee), in favour of Cenkos and the Company, under
which it agrees to acquire the number of Placing Shares allocated to the
Placee at the Issue Price and otherwise on the terms and subject to the
conditions set out in this Appendix 1 and in accordance with the Articles.
Except with the prior written consent of the Cenkos, such commitment will not
be capable of variation or revocation at the time at which it is submitted.
5. Each Placee's allocation and commitment will
be evidenced by a form of confirmation issued to such Placee by Cenkos. The
terms of this Appendix 1 will be deemed incorporated in that form of
confirmation.
6. Each Placee will have an immediate, separate,
irrevocable and binding obligation, owed to Cenkos as agent for the Company,
to pay to them (or as they may direct) in cleared funds an amount equal to the
product of the Issue Price and the number of Placing Shares such Placee has
agreed to acquire.
7. Cenkos may choose to accept or reject bids,
either in whole or in part, on the basis of allocations determined in
agreement with the Company and may scale down any bids for this purpose on
such basis as they may determine. Cenkos may also, and subject to prior
consent of the Company (i) allocate Placing Shares after the time of any
initial allocation to any person submitting a bid after that time and (ii)
allocate Placing Shares after the Bookbuild has closed to any person
submitting a bid after that time. The Company reserves the right (upon
agreement with Cenkos) to reduce or seek to increase the amount to be raised
pursuant to the Placing, in its absolute discretion.
8. Irrespective of the time at which a Placee's
allocation(s) pursuant to the Placing is/are confirmed, settlement for all
Placing Shares to be acquired pursuant to the Placing will be required to be
made at the same time, on the basis explained below under "Registration and
Settlement".
9. All obligations of Cenkos under the Placing
will be subject to fulfilment or (where applicable) waiver of the conditions
referred to below under "Conditions of the Placing" and to the Placing not
being terminated on the basis referred to below under "Termination of the
Placing".
10. By participating in the Placing, each Placee will
agree that its rights and obligations in respect of the Placing will terminate
only in the circumstances described below and will not be capable of
rescission or termination by the Placee.
11. To the fullest extent permissible by law and
applicable FCA rules, none of (a) Cenkos, (b) any of its affiliates, agents,
directors, officers, consultants, (c) to the extent not contained within (a)
or (b), any person connected with Cenkos as defined in the FSMA ((b) and (c)
being together "affiliates" and individually an "affiliate" of Cenkos), (d)
any person acting on behalf of Cenkos, shall have any liability (including to
the extent permissible by law, any fiduciary duties) to Placees or to any
other person whether acting on behalf of a Placee or otherwise. In particular,
neither of the Cenkos nor any of their respective affiliates shall have any
liability (including, to the extent permissible by law, any fiduciary duties)
in respect of their conduct of the Fundraising or of such alternative method
of effecting the Fundraising as Cenkos and the Company may agree.
Registration and Settlement
If Placees are allocated any Placing Shares in the Placing they will be sent a
form of confirmation or electronic confirmation by Cenkos, as soon as it is
able which will confirm the number of Placing Shares allocated to them, the
Issue Price and the aggregate amount owed by them to Cenkos.
Each Placee will be deemed to agree that it will do all things necessary to
ensure that delivery and payment is completed as directed by Cenkos in
accordance with either the standing CREST or certificated settlement
instructions which they have in place with Cenkos.
Settlement of transactions in the Placing Shares (ISIN: KYG368851047)
following Admission will take place within the CREST system, subject to
certain exceptions. Settlement through CREST is expected to take place on 10
January 2022 unless otherwise notified by the Cenkos and Admission is expected
to occur no later than 8.00 a.m. on 10 January 2022 unless otherwise notified
by Cenkos. Settlement will be on a delivery versus payment basis. However, in
the event of any difficulties or delays in the admission of the Placing Shares
to CREST or the use of CREST in relation to the Placing, the Company and
Cenkos may agree that the Placing Shares should be issued in certificated
form. Cenkos reserves the right to require settlement of the Placing Shares,
and to deliver the Placing Shares to Placees, by such other means as they deem
necessary if delivery or settlement to Placees is not possible or practicable
within the CREST system or would not be consistent with regulatory
requirements in a Placee's jurisdiction.
Interest is chargeable daily on payments not received from Placees on the due
date in accordance with the arrangements set out above, in respect of either
CREST or certificated deliveries, at the rate of 2 percentage points above
prevailing LIBOR as determined by Cenkos.
Each Placee agrees that if it does not comply with these obligations, Cenkos
may sell, charge by way of security (to any funder of Cenkos) or otherwise
deal with any or all of their Placing Shares on their behalf and retain from
the proceeds, for either the Broker's own accounts and benefit, an amount
equal to the aggregate amount owed by the Placee plus any interest due and any
costs and expenses properly incurred by Cenkos as a result of the Placee's
failure to comply with its obligations. The relevant Placee will, however,
remain liable for any shortfall below the amount owed by it and for any stamp
duty or stamp duty reserve tax or similar taxes (together with any interest,
fines or penalties relating thereto) which may arise upon the sale of their
Placing Shares on their behalf. Legal and/or beneficial title in and to any
Placing Shares shall not pass to the relevant Placee until such time as it has
fully complied with its obligations hereunder. By communicating a bid for
Placing Shares, each Placee confers on Cenkos all such authorities and powers
necessary to carry out any such sale and agrees to ratify and confirm all
actions which Cenkos lawfully takes in pursuance of such sale.
If Placing Shares are to be delivered to a custodian or settlement agent,
Placees must ensure that, upon receipt, the conditional form of confirmation
is copied and delivered immediately to the relevant person within that
organisation. Insofar as Placing Shares are registered in a Placee's name or
that of its nominee or in the name of any person for whom a Placee is
contracting as agent or that of a nominee for such person, such Placing Shares
should, subject as provided below, be so registered free from any liability to
United Kingdom stamp duty or stamp duty reserve tax. If there are any
circumstances in which any other stamp duty or stamp duty reserve tax or other
similar taxes (and/or any interest, fines or penalties relating thereto) is
payable in respect of the allocation, allotment, issue or delivery of the
Placing Shares (or for the avoidance of doubt if any stamp duty or stamp duty
reserve tax is payable in connection with any subsequent transfer of or
agreement to transfer Placing Shares), neither Cenkos nor the Company shall be
responsible for the payment of such amounts. Placees will not be entitled to
receive any fee or commission in connection with the Placing.
Conditions of the Placing
The Placing is conditional upon the Placing Agreement becoming unconditional
and not having been terminated in accordance with its terms.
The obligations of Cenkos under the Placing Agreement are, and the Placing is,
conditional upon, inter alia:
(a) Admission taking place not later than 8.00 a.m. on 10
January 2022 or such later date as is agreed in writing between the Company
and Cenkos, but in any event not later than 8.00 a.m. on 24 January 2022 (the
"Long Stop Date");
(b) the Company complying in all material respects with its
obligations under the Placing Agreement to the extent that the same fall to be
performed prior to Admission;
(c) the general meeting to be held by the Company having
taken place on the date set out in the notice of general meeting, no
adjournment of the general meeting having occurred without the prior written
consent of Cenkos and the relevant resolutions having been passed by the
requisite majority at the general meeting without amendment;
(d) the warranties in the Placing Agreement being true and
accurate and not misleading as at certain defined times as though they had
been given and made on such dates by reference to the facts and circumstances
then subsisting, save to the extent as would not in the opinion of Cenkos
(acting in good faith) be material in the context of the Fundraising,
(all conditions to the obligations of the Cenkos included in the Placing
Agreement being together, the "conditions").
If any of the conditions set out in the Placing Agreement are not fulfilled
or, where permitted, waived in accordance with the Placing Agreement within
the stated time periods (or such later time and/or date as the Company and the
Cenkos may agree), or becomes incapable of being fulfilled or the Placing
Agreement is terminated in accordance with its terms, the Placing will lapse
and the Placee's rights and obligations shall cease and terminate at such time
and each Placee agrees that no claim can be made by or on behalf of the Placee
(or any person on whose behalf the Placee is acting) in respect thereof.
By participating in the Placing, each Placee agrees that its rights and
obligations cease and terminate only in the circumstances described above and
under "Termination of the Fundraising" below and will not be capable of
rescission or termination by it.
Certain conditions may be waived in whole or in part by Cenkos, in their
absolute discretion, by notice in writing to the Company and Cenkos may also
agree in writing with the Company to extend the time for satisfaction of any
condition. Any such extension or waiver will not affect Placees' commitments
as set out in this Announcement.
Cenkos may terminate the Placing Agreement in certain circumstances, details
of which are set out below.
Neither Cenkos, the Company nor any of their respective affiliates, agents,
directors, officers or employees shall have any liability to any Placee (or to
any other person whether acting on behalf of a Placee or otherwise) in respect
of any decision any of them may make as to whether or not to waive or to
extend the time and/or date for the satisfaction of any condition to the
Placing nor for any decision any of them may make as to the satisfaction of
any condition or in respect of the Placing generally and by participating in
the Placing each Placee agrees that any such decision is within the absolute
discretion of Cenkos.
Termination of the Fundraising
Cenkos may terminate the Placing Agreement, in accordance with its terms, at
any time prior to Admission if, inter alia:
1. any of the warranties in the Placing
Agreement were untrue or inaccurate, or were misleading when given, save to
the extent as would not in the opinion of Cenkos (acting in good faith) be
material in the context of the Fundraising;
2. the Company has failed in any material
respect to comply with its obligations under the Placing Agreement;
3. any statement contained in the Fundraising
Documents (as defined in the Placing Agreement) has become or been discovered
to be untrue, inaccurate or misleading in any material respect or there has
been a material omission from the Fundraising Documents;
4. in the opinion of Cenkos (acting in good
faith) there has occurred a material adverse change in the business of the
Group or in the financial or trading position or prospects of the Group or the
Company; or
5. there has occurred certain market disruption
or force majeure events.
Upon such termination, the parties to the Placing Agreement shall be released
and discharged (except for any liability arising before or in relation to such
termination) from their respective obligations under or pursuant to the
Placing Agreement, subject to certain exceptions. If the Placing Agreement is
terminated in accordance with its terms, the rights and obligations of each
Placee in respect of the Placing as described in this Announcement shall cease
and terminate at such time and no claim can be made by any Placee in respect
thereof.
By participating in the Placing, each Placee agrees with the Company and
Cenkos that the exercise by the Company or the Cenkos of any right of
termination or any other right or other discretion under the Placing Agreement
shall be within the absolute discretion of the Company or Cenkos and that none
of the Company nor Cenkos need make any reference to or consult with or seek
consent from such Placee and that none of the Company, Cenkos nor any of their
respective affiliates, agents, directors, officers or employees shall have any
liability to such Placee (or to any other person whether acting on behalf of a
Placee or otherwise) whatsoever in connection with any such exercise.
By participating in the Placing, each Placee agrees that its rights and
obligations terminate only in the circumstances described above and under the
"Conditions of the Fundraising" section above and will not be capable of
rescission or termination by it.
Restrictions on further issues of securities
The Company has undertaken that it will not at any time between the date of
the Placing Agreement and the date which is 90 days after Admission without
the prior written consent of Cenkos enter into certain transactions involving
or relating to the allotment and issue of Ordinary Shares, subject to certain
customary carve-outs agreed between the Company and Cenkos.
By participating in the Placing, Placees agree that the exercise by Cenkos of
any power to consent to waive the undertaking by the Company of a transaction
which would otherwise be subject to the lock-up under the Placing Agreement
shall be within the absolute discretion of Cenkos, and that it does not need
to make any reference to, consult with, or seek consent from, Placees and that
Cenkos shall have no liability to Placees whatsoever in connection with any
such exercise of the power to grant consent or failure so to exercise.
Representations, warranties and further terms
By submitting a bid and/or participating in the Placing, each prospective
Placee (and any person acting on such Placee's behalf) irrevocably represents,
warrants, acknowledges, undertakes and agrees (for itself and for any such
prospective Placee) with the Company and Cenkos that in each case as a
fundamental term of such Placee's application for Placing Shares:
1. it has read and understood this Announcement
in its entirety and that its participation in the Bookbuild and the Placing
and its acquisition of the Placing Shares is subject to and based upon all the
terms, conditions, representations, warranties, indemnities, acknowledgements,
agreements and undertakings and other information contained herein and that it
has not relied on, and will not rely on, any information given or any
representations, warranties or statements made at any time by any person in
connection with Admission, the Fundraising, the Company, the Placing Shares or
otherwise, other than the information contained in this Announcement and the
Publicly Available Information;
2. it has not and will not received a prospectus
or other offering document in connection with the Placing and acknowledges
that no prospectus or other offering document: (a) is required under the EU
Prospectus Regulation or UK Prospectus Regulation; and (b) has been or will be
prepared in connection with the Placing;
3. the ordinary shares of the Company are
admitted to trading on AIM, and that the Company is therefore required to
publish certain business and financial information in accordance with the AIM
Rules, which includes a description of the nature of the Company's business
and the Company's most recent balance sheet and profit and loss account and
that it is able to obtain or access such information without undue difficulty,
and is able to obtain access to such information or comparable information
concerning any other publicly traded company, without undue difficulty;
4. it has made its own assessment of the
Company, the terms of the Placing and the Placing Shares and has relied on its
own investigation of the business, financial or other position of the Company
in accepting a participation in the Placing and none of Cenkos, the Company
nor any of their respective affiliates, agents, directors, officers or
employees or any person acting on behalf of any of them has provided, and will
not provide, it with any material regarding the Placing Shares or the Company
or any other person other than the information in this Announcement; nor has
it requested any of Cenkos, the Company, any of their respective affiliates,
agents, directors, officers or employees or any person acting on behalf of any
of them to provide it with any such information;
5. neither Cenkos nor any person acting on
behalf of them or any of their respective affiliates, agents, directors,
officers or employees has or shall have any liability for any Publicly
Available Information, or any representation relating to the Company, provided
that nothing in this paragraph excludes the liability of any person for
fraudulent misrepresentation made by that person;
6.
6.1 the only information on which it is entitled to
rely on and on which it has relied in committing to subscribe for the Placing
Shares is contained in the Publicly Available Information, such information
being all that it deems necessary to make an investment decision in respect of
the Placing Shares and it has made its own assessment of the Company, the
Placing Shares and the terms of the Placing based on Publicly Available
Information;
6.2 none of the Company, Cenkos nor any of their
respective affiliates, agents, directors, officers or employees has made any
representation or warranty to it, express or implied, with respect to the
Company, the Placing or the Placing Shares or the accuracy, completeness or
adequacy of the Publicly Available Information;
6.3 it has conducted its own investigation of the
Company, the Placing and the Placing Shares, satisfied itself that the
information is still current and relied on that investigation for the purposes
of its decision to participate in the Placing; and
6.4 has not relied on any investigation that Cenkos or
any person acting on their behalf may have conducted with respect to the
Company, the Placing or the Placing Shares;
7. the content of this Announcement has been
prepared by and is exclusively the responsibility of the Company and that
neither of Cenkos nor any persons acting on behalf of them are responsible for
or has or shall have any liability for any information, representation,
warranty or statement relating to the Company contained in this Announcement
nor will they be liable for any Placee's decision to participate in the
Placing based on any information, representation, warranty or statement
contained in this Announcement or otherwise. Nothing in this Appendix 1 shall
exclude any liability of any person for fraudulent misrepresentation;
8. the Placing Shares have not been registered
or otherwise qualified, and will not be registered or otherwise qualified, for
offer and sale nor will a prospectus be cleared or approved in respect of any
of the Placing Shares under the securities laws of the United States, or any
state or other jurisdiction of the United States, Australia, Canada, Japan,
New Zealand or the Republic of South Africa and, subject to certain
exceptions, may not be offered, sold, taken up, renounced or delivered or
transferred, directly or indirectly, within the United States, Australia,
Canada, Japan, New Zealand, the Republic of South Africa or in any country or
jurisdiction where any such action for that purpose is required;
9. it and/or each person on whose behalf it is
participating:
9.1 is entitled to acquire Placing Shares pursuant to
the Placing under the laws and regulations of all relevant jurisdictions;
9.2 has fully observed such laws and regulations;
9.3 has capacity and authority and is entitled to
enter into and perform its obligations as an acquirer of Placing Shares and
will honour such obligations; and
9.4 has obtained all necessary consents and
authorities (including, without limitation, in the case of a person acting on
behalf of a Placee, all necessary consents and authorities to agree to the
terms set out or referred to in this Appendix 1) under those laws or otherwise
and complied with all necessary formalities to enable it to enter into the
transactions contemplated hereby and to perform its obligations in relation
thereto and, in particular, if it is a pension fund or investment company it
is aware of and acknowledges that it is required to comply with all applicable
laws and regulations with respect to its subscription for Placing Shares;
10. it is not, and any person who it is acting on
behalf of is not, and at the time the Placing Shares are subscribed will not
be, a resident of, or with an address in, or subject to the laws of, the
United States, Australia, Canada, Japan, New Zealand or the Republic of South
Africa and it acknowledges and agrees that the Placing Shares have not been
and will not be registered or otherwise qualified under the securities
legislation of the United States, Australia, Canada, Japan, New Zealand or the
Republic of South Africa and may not be offered, sold, or acquired, directly
or indirectly, within those jurisdictions;
11. the Placing Shares have not been, and will not be,
registered under the Securities Act or with any securities regulatory
authority of any state or jurisdiction of the United States, and may not be
offered, sold, resold, transferred or delivered, directly or indirectly,
within, in or into or from the United States except pursuant to an exemption
from, or in a transaction not subject to, the registration requirements of the
Securities Act and in compliance with any applicable securities laws of
anystate or other jurisdiction of the United States; and no representation is
being made as to the availability of any exemption under the Securities Act
for the reoffer, resale, pledge or transfer of the Placing Shares;
12. it and the beneficial owner of the Placing Shares
is, and at the time the Placing Shares are acquired will be, outside the
United States and acquiring the Placing Shares in an "offshore transaction" as
defined in, and in accordance with, Regulation S under the Securities Act;
13. it (and any account for which it is purchasing) is
not acquiring the Placing Shares with a view to any offer, sale or
distribution thereof within the meaning of the Securities Act;
14. it will not distribute, forward, transfer or
otherwise transmit this Announcement or any part of it, or any other
presentational or other materials concerning the Fundraising in or into or
from the United States (including electronic copies thereof) to any person,
and it has not distributed, forwarded, transferred or otherwise transmitted
any such materials to any person;
15. neither the Company nor Cenkos, nor their
respective affiliates, agents, directors, officers or employees nor any person
acting on behalf of any of them is making any recommendations to it, advising
it regarding the suitability of any transactions it may enter into in
connection with the Placing and that participation in the Placing is on the
basis that it is not and will not be a client of Cenkos and Cenkos have no
duties or responsibilities to it for providing the protections afforded to its
clients or for providing advice in relation to the Placing nor in respect of
any representations, warranties, undertakings or indemnities contained in the
Placing Agreement nor for the exercise or performance of any of its rights and
obligations thereunder including any rights to waive or vary any conditions or
exercise any termination right;
16. it has the funds available to pay for the Placing
Shares for which it has agreed to subscribe and acknowledges and agrees that
it will make payment to Cenkos for the Placing Shares allocated to it in
accordance with the terms and conditions of this Announcement on the due times
and dates set out in this Announcement, failing which the relevant Placing
Shares may be placed with others on such terms as Cenkos may, in its absolute
discretion determine without liability to the Placee and it will remain liable
for any shortfall below the net proceeds of such sale and the placing proceeds
of such Placing Shares and may be required to bear any stamp duty or stamp
duty reserve tax or similar taxes (together with any interest, fines or
penalties relating thereto) due pursuant to the terms set out or referred to
in this Announcement which may arise upon the sale of such Placee's Placing
Shares on its behalf;
17. no action has been or will be taken by any of the
Company, Cenkos or any person acting on their behalf that would, or is
intended to, permit a public offer of the Placing Shares in the United States
or in any country or jurisdiction where any such action for that purpose is
required;
18. the person who it specifies for registration as
holder of the Placing Shares will be: (a) the Placee; or (b) a nominee of the
Placee, as the case may be. None of the Company or Cenkos will be responsible
for any liability to stamp duty or stamp duty reserve tax or similar tax
resulting from a failure to observe this requirement. Each Placee and any
person acting on behalf of such Placee agrees to acquire Placing Shares
pursuant to the Placing and agrees to pay the Company and Cenkos in respect of
the same (including any interest, fines or penalties relating thereto) on the
basis that the Placing Shares will be allotted to a CREST stock account of
Cenkos or transferred to a CREST stock account of Cenkos who will hold them as
nominee on behalf of the Placee until settlement in accordance with its
standing settlement instructions with it;
19. it is acting as principal only in respect of the
Placing or, if it is acting for any other person (including as fiduciary or
agent for one or more investor accounts) (a) it is duly authorised to do so
and has full power and authority to make and does make the acknowledgments,
representations, warranties, undertakings and agreements herein on behalf of
each such person(s) and (b) it is and will remain liable to the Company and
Cenkos for the performance of all its obligations as a Placee in respect of
the Placing (regardless of the fact that it is acting for such person(s));
20. the allocation, allotment, issue and delivery to
it, or the person specified by it for registration as holder, of Placing
Shares will not give rise to a stamp duty or stamp duty reserve tax liability
under (or at a rate determined under) any of sections 67, 70, 93 or 96 of the
Finance Act 1986 (depository receipts and clearance services) and that it is
not participating in the Placing as nominee or agent for any person or persons
to whom the allocation, allotment, issue or delivery of Placing Shares would
give rise to such a liability;
21. it will not make an offer to the public of the
Placing Shares and it has not offered or sold and will not offer or sell any
Placing Shares to persons in the United Kingdom or in the EEA prior to the
expiry of a period of six months from Admission except to persons whose
ordinary activities involve them in acquiring, holding, managing or disposing
of investments (as principal or agent) for the purposes of their business or
otherwise in circumstances which have not resulted and which will not result
in an offer to the public in the United Kingdom within the meaning of section
85(1) of the FSMA or within the meaning of the UK Prospectus Regulation, or an
offer to the public in any member state of the EEA within the meaning of the
EU Prospectus Regulation;
22. if it is within the United Kingdom, it and any
person acting on its behalf (if within the United Kingdom) is a Relevant
Person and if it is within a member state of the EEA, it is a Qualified
Investor. For such purposes, it undertakes that it will acquire, hold, manage
and (if applicable) dispose of any Placing Shares that are allocated to it for
the purposes of its business only;
23. it has only communicated or caused to be
communicated and it will only communicate or cause to be communicated any
invitation or inducement to engage in investment activity (within the meaning
of section 21 of the FSMA) relating to Placing Shares in circumstances in
which section 21(1) of the FSMA does not apply and it acknowledges that this
Announcement is not being issued by Cenkos as an authorised person under
Section 21 of FSMA and therefore is not subject to the same controls
applicable to a financial promotion made by an authorised person;
24. it has complied and it will comply with all
applicable laws with respect to anything done by it or on its behalf in
relation to the Placing Shares (including all relevant provisions of the FSMA
in respect of anything done in, from or otherwise involving the United
Kingdom);
25. if it is a financial intermediary, as that term is
used in Article 5(1) of the UK Prospectus Regulation or the EU Prospectus
Regulation, the Placing Shares acquired by it in the Placing will not be
acquired on a non-discretionary basis on behalf of, nor will they be acquired
with a view to their offer or resale to, Relevant Persons in the UK or
Qualified Investors in a member state of the EEA, or in circumstances in which
the express prior written consent of Cenkos has been given to the offer or
resale;
26. neither of Cenkos nor any of their respective
affiliates, agents, directors, officers or employees or any person acting on
behalf of any of them has or shall have any liability for any information,
representation or statement contained in this Announcement or for any
information previously published by or on behalf of the Company or any other
written or oral information made available to or publicly available or filed
information or any representation, warranty or undertaking relating to the
Company, and will not be liable for its decision to participate in the Placing
based on any information, representation, warranty or statement contained in
this Announcement or elsewhere, provided that nothing in this paragraph shall
exclude any liability of any person for fraud;
27. acknowledges and accepts that Cenkos may, in
accordance with applicable legal and regulatory provisions, engage in
transactions in relation to the Placing Shares and/or related instruments for
their own account for the purpose of hedging their underwriting exposure or
otherwise and, except as required by applicable law or regulation, Cenkos will
not make any public disclosure in relation to such transactions;
28. Cenkos and each of its affiliates, each acting as
an investor for its or their own account(s), may bid or subscribe for and/or
purchase Placing Shares and, in that capacity, may retain, purchase, offer to
sell or otherwise deal for its or their own account(s) in the Placing Shares,
any other securities of the Company or other related investments in connection
with the Placing or otherwise. Accordingly, references in this Announcement to
the Placing Shares being offered, subscribed, acquired or otherwise dealt with
should be read as including any offer to, or subscription, acquisition or
dealing by Cenkos and/or any of its respective affiliates, acting as an
investor for its or their own account(s). None of the Company or Cenkos intend
to disclose the extent of any such investment or transaction otherwise than in
accordance with any legal or regulatory obligation to do so;
29. it has complied with its obligations in connection
with money laundering and terrorist financing under the Proceeds of Crime Act
2002 (as amended), the Terrorism Act 2000 (as amended), the Terrorism Act 2006
(as amended) and the Money Laundering, Terrorist Financing and Transfer
of Funds (Information on the Payer) Regulations 2017 (as amended)
(together, the "Regulations") and, if making payment on behalf of a third
party, that satisfactory evidence has been obtained and recorded by it to
verify the identity of the third party as required by the Regulations;
30. it is aware of the obligations regarding insider
dealing in the Criminal Justice Act 1993, FSMA, the Market Abuse Regulation
(EU) No 596/2014 (the "EU Market Abuse Regulation"), the EU Market Abuse
Regulation as it forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 (the "UK Market Abuse Regulation") and the Proceeds of
Crime Act 2002 and confirms that it has and will continue to comply with those
obligations;
31. if it has received any "inside information" as
defined in the UK Market Abuse Regulation and the EU Market Abuse Regulation
or any price sensitive information about the Company in advance of the
Placing, it has not: (i) dealt (or attempted to deal) in the securities of the
Company; (ii) encouraged, recommended, induced or required another person to
deal in the securities of the Company; or (iii) disclosed such information to
any person except as permitted by the UK Market Abuse Regulation and the EU
Prospectus Regulation, prior to the information being made publicly available;
32. in order to ensure compliance with the
Regulations, Cenkos (each for itself and as agent on behalf of the Company) or
the Company's registrars may, in their absolute discretion, require
verification of its identity. Pending the provision to Cenkos or the Company's
registrars, as applicable, of evidence of identity, definitive certificates in
respect of the Placing Shares may be retained at Cenkos' absolute discretion
or, where appropriate, delivery of the Placing Shares to it in uncertificated
form may be delayed at Cenkos' or the Company's registrars', as the case may
be, absolute discretion. If within a reasonable time after a request for
verification of identity Cenkos' (each for itself and as agent on behalf of
the Company) or the Company's registrars have not received evidence
satisfactory to them, Cenkos and/or the Company may, at its absolute
discretion, terminate its commitment in respect of the Placing, in which event
the monies payable on acceptance of allotment will, if already paid, be
returned without interest to the account of the drawee's bank from which they
were originally debited;
33. acknowledges that its commitment to acquire
Placing Shares on the terms set out in this Announcement and in the form of
confirmation will continue notwithstanding any amendment that may in future be
made to the terms and conditions of the Placing and that Placees will have no
right to be consulted or require that their consent be obtained with respect
to the Company's or Cenkos' conduct of the Placing;
34. it has knowledge and experience in financial,
business and international investment matters as is required to evaluate the
merits and risks of subscribing for the Placing Shares. It further
acknowledges that it is experienced in investing in securities of this nature
and is aware that it may be required to bear, and is able to bear, the
economic risk of, and is able to sustain, a complete loss in connection with
the Fundraising. It has relied upon its own examination and due diligence of
the Company and its affiliates taken as a whole, and the terms of the
Fundraising, including the merits and risks involved;
35. it irrevocably appoints any duly authorised
officer of Cenkos as its agent for the purpose of executing and delivering to
the Company and/or its registrars any documents on its behalf necessary to
enable it to be registered as the holder of any of the Placing Shares for
which it agrees to subscribe or purchase upon the terms of this Announcement;
36. time is of the essence as regards its obligations
under this Appendix 1;
37. any document that is to be sent to it in
connection with the Placing will be sent at its risk and may be sent to it at
any address provided by it to Cenkos;
38. the Placing Shares will be issued subject to the
terms and conditions of this Appendix 1;
39. these terms and conditions in this Appendix 1 and
all documents into which this Appendix 1 is incorporated by reference or
otherwise validly forms a part and/or any agreements entered into pursuant to
these terms and conditions and all agreements to acquire shares pursuant to
the Placing will be governed by and construed in accordance with English law
and it submits to the exclusive jurisdiction of the English courts in relation
to any claim, dispute or matter arising out of any such contract, except that
enforcement proceedings in respect of the obligation to make payment for the
Placing Shares (together with any interest chargeable thereon) may be taken by
the Company or Cenkos in any jurisdiction in which the relevant Placee is
incorporated or in which any of its securities have a quotation on a
recognised stock exchange; and
40. the Company, Cenkos and others (including each of
their respective affiliates, agents, directors, officers or employees) will
rely upon the truth and accuracy of the foregoing representations, warranties,
acknowledgements and agreements, which are given to Cenkos and the Company and
are irrevocable.
By participating in the Placing, each Placee (and any person acting on such
Placee's behalf) agrees to indemnify and hold the Company, Cenkos and each of
their respective affiliates, agents, directors, officers and employees
harmless from any and all costs, claims, liabilities and expenses (including
legal fees and expenses) arising out of or in connection with any breach of
the representations, warranties, acknowledgements, agreements and undertakings
given by the Placee (and any person acting on such Placee's behalf) in this
Appendix 1 or incurred by the Company, Cenkos or each of their respective
affiliates, agents, directors, officers or employees arising from the
performance of the Placee's obligations as set out in this Announcement, and
further agrees that the provisions of this Appendix 1 shall survive after the
completion of the Placing.
The agreement to allot and issue Placing Shares to Placees (or the persons for
whom Placees are contracting as agent) free of stamp duty and stamp duty
reserve tax in the United Kingdom relates only to their allotment and issue to
Placees, or such persons as they nominate as their agents, direct by the
Company. Such agreement assumes that the Placing Shares are not being acquired
in connection with arrangements to issue depositary receipts or to transfer
the Placing Shares into a clearance service. If there are any such
arrangements, or the settlement related to any other dealings in the Placing
Shares, stamp duty or stamp duty reserve tax may be payable. In that event,
the Placee agrees that it shall be responsible for such stamp duty or stamp
duty reserve tax or similar tax and none of the Company or Cenkos shall be
responsible for such stamp duty or stamp duty reserve tax or similar tax. If
this is the case, each Placee should seek its own advice and they should
notify Cenkos accordingly. In addition, Placees should note that they will be
liable for any capital duty, stamp duty and all other stamp, issue,
securities, transfer, registration, documentary or other duties or taxes
(including any interest, fines or penalties relating thereto) payable outside
the United Kingdom by them or any other person on the acquisition by them of
any Placing Shares or the agreement by them to acquire any Placing Shares and
each Placee, or the Placee's nominee, in respect of whom (or in respect of the
person for whom it is participating in the Placing as an agent or nominee) the
allocation, allotment, issue or delivery of Placing Shares has given rise to
such non-United Kingdom stamp, registration, documentary, transfer or similar
taxes or duties undertakes to pay such taxes and duties, including any
interest and penalties (if applicable), forthwith and to indemnify on an
after-tax basis and to hold harmless the Company and Cenkos in the event that
any of the Company and/or Cenkos has incurred any such liability to such taxes
or duties.
The representations, warranties, acknowledgements, agreements and undertakings
contained in this Appendix 1 are given to Cenkos and the Company and are
irrevocable.
Each Placee and any person acting on behalf of the Placee acknowledges that
Cenkos do not owe any fiduciary or other duties to any Placee in respect of
any representations, warranties, undertakings, acknowledgements, agreements or
indemnities in the Placing Agreement.
Each Placee and any person acting on behalf of the Placee acknowledges and
agrees that Cenkos may (at their absolute discretion) satisfy their
obligations to procure Placees by itself agreeing to become a Placee in
respect of some or all of the Placing Shares or by nominating any connected or
associated person to do so.
When a Placee or any person acting on behalf of the Placee is dealing with
Cenkos, any money held in an account with Cenkos on behalf of the Placee
and/or any person acting on behalf of the Placee will not be treated as client
money within the meaning of the relevant rules and regulations of the FCA made
under FSMA. Each Placee acknowledges that the money will not be subject to the
protections conferred by the client money rules; as a consequence this money
will not be segregated from Cenkos' money (as applicable) in accordance with
the client money rules and will be held by it under a banking relationship and
not as trustee.
References to time in this Announcement are to London time, unless otherwise
stated.
All times and dates in this Announcement may be subject to amendment.
No statement in this Announcement is intended to be a profit forecast, and no
statement in this Announcement should be interpreted to mean that earnings per
share of the Company for the current or future financial years would
necessarily match or exceed the historical published earnings per share of the
Company.
The price of shares and any income expected from them may go down as well as
up and investors may not get back the full amount invested upon disposal of
the shares. Past performance is no guide to future performance, and persons
needing advice should consult an independent financial adviser.
The Placing Shares to be issued or sold pursuant to the Placing will not be
admitted to trading on any stock exchange other than AIM.
Neither the content of the Company's website nor any website accessible by
hyperlinks on the Company's website is incorporated in, or forms part of, this
Announcement.
APPENDIX 2 - RISK FACTORS
Any investment in the Company or in the Ordinary Shares carries a number of
risks. Prospective investors should review this Announcement carefully and in
its entirety, including the risks and uncertainties described below, and
consult with their professional advisers prior to making any investment
decision relating to the Ordinary Shares. The risks and uncertainties
described below represent those the Directors consider to be material as at
the date of this Announcement, but do not necessarily comprise all those risks
associated with an investment in the Ordinary Shares or the Company. There may
be additional risks and uncertainties not presently known to the Directors, or
that the Directors currently consider to be immaterial, which may affect the
Group's business, financial condition, prospects or results and/or the price
of the Ordinary Shares. In particular, the Group's performance may be affected
by changes in the market and/or economic conditions and in legal, regulatory
or tax requirements. If any or a combination of these risks actually occurs,
the business, financial condition, prospects or results of the Group could be
adversely affected. In such case, the market price of the Ordinary Shares
could decline and you may lose all or part of your investment.
Prospective investors should consider carefully whether an investment in the
Company is suitable for them in light of the information in this Announcement
and their personal circumstances, the financial resources available to them
and their ability to bear any loss which might result from such investment.
Before making an investment, prospective investors are strongly advised to
consult an appropriate independent financial adviser who is authorised under
FSMA if you are in the United Kingdom or, if not, from another appropriately
authorised independent financial adviser.
RISKS RELATING TO THE GROUP AND THE INDUSTRY IN WHICH IT OPERATES
Adverse developments in the general economic and political conditions in the
United Kingdom may adversely affect the Group.
The Group operates primarily in the United Kingdom. A weak or uncertain
economic environment in the United Kingdom, in particular in the sectors in
which the Group operates, could adversely impact the Group's business and the
demand for its services and solutions. Economic conditions can be impacted by
a number of factors, including volatility in financial markets in the UK and
globally, higher interest rates, inflation, unemployment rates, trade policy
and conflicts, consumer confidence, lower corporate earnings, tighter credit
conditions and both public and private debt levels. The precise nature of all
the risks and uncertainties that the Group faces as a result of the volatility
and uncertainty of the global, and UK economic outlook is difficult to predict
and outside the Group's control. Any economic downturn in the sectors in which
the Group operates or into which it sells its services and solutions, lower
than expected growth or an otherwise uncertain economic outlook, or any
perception thereof by the Group's customers, could have a material adverse
effect on demand for the Group's services and solutions.
Furthermore, the Group may be adversely affected by changes in political
events and developments or trends relating to or a shift in policy relating to
climate change and smart metering. While the Group expects that future market
changes will continue to be driven by the move to decarbonised energy in line
with the UK's 2050 net-zero target, there can be no assurance that there will
be no change to related government policies or priorities, which could all
have an indirect impact on the Group's business and prospects.
Any decline in demand for the Group's services and solutions may lead to
reduced revenues and profitability for the Group, which in turn may have a
material adverse effect on the Group's business, operating results, financial
condition and prospects.
The impact of the ongoing COVID-19 pandemic is unpredictable and may continue
to have a material adverse effect on the Group's operations.
There remains widespread concern about the global COVID-19 pandemic. The
outbreak has had, and continues to have, an unprecedented impact on the global
economy as the respective levels of government have reacted to this public
health crisis, which has created significant ongoing uncertainties. The risks
are continually changing and evolving and include business continuity issues,
restrictions for non-essential travel, potential detrimental impact on the
supply chain and that counterparties could default on contractual obligations.
The ultimate duration of COVID-19 in the United Kingdom cannot be determined
at present. However, the outbreak has caused, and continues to cause, major
disruption to the Group's supply chain and the Group's customers' projects,
which adversely impacts the Group's operations. Further, the COVID-19 pandemic
has affected, and may continue to affect, the Group's financial performance as
a result of delays and associated impacts on customer decision making, which
in turn has disrupted, and may continue to disrupt, the delivery and
completion of specific contracts.
The overall extent of the impact of the pandemic on the Group's business,
results of operations, financial condition or prospects will depend largely on
future developments, including the duration of the pandemic, the impact on
capital and financial markets and the related impact on the supply chain and
customer behaviour, all of which are highly uncertain and cannot be predicted.
There can be no certainty that the Group will be able to successfully
implement its current strategy and growth plans.
The ability of the Group to implement its current strategy and growth plans is
subject to a number of factors, many of which are outside of its control,
including the Group's ability to compete effectively with its competitors,
some of whom have far greater capital resources than the Group, the speed and
quality of delivery of contractors engaged by the Group, technical or
engineering difficulties, changes in regulation and government policies.
The ability of the Group to successfully implement its strategy in rapidly
evolving and competitive markets will require effective management planning
and operational controls. This may place a significant strain on the Group's
management, operational, financial and personnel resources, and the Group's
future growth and prospects will depend on its ability to manage this growth
and to continue to expand and improve operational and financial performance,
whilst at the same time maintaining effective cost controls. Delays, cost
overruns and/or other disruptions affecting the Group's strategy and growth
plans may affect the Group's ability to generate revenue and/or profits as
planned, and may have a material adverse effect on the Group's business,
operating results, financial condition and prospects.
The Group may not have the funding required to deliver on its strategy and
future growth plans. In that event, the Group may look to alternative sources
of financing, including debt financing, which may impact on the Group's
capital structure and future earnings. There can be no assurance that the
Group will be able to raise those funds, whether on acceptable terms or at
all. The Group's ability to operate its business may also be subject to
restrictions. The Group may also be required to reassess the feasibility and
timing for delivery of its strategy and growth plans in the context of the
financial resources available to it.
There can be no certainty that the Group will be able to implement
successfully its stated strategy in a timely manner or at all. See also the
risk factor entitled "The Company may be unable to identify appropriate assets
or complete acquisitions." Even if the Group is able to implement its strategy
as planned, there is risk that the strategy currently being pursued is not the
most effective or efficient and that alternative strategies may be more
appropriate. If the Group fails to realise its strategy and/or growth plans in
full or in part and in a timely manner, or if the underlying assumptions on
which the strategy and growth plans are based prove to be incorrect, its
ability to increase its revenue and profitability could suffer, which may have
a material adverse effect on the Group's business, operating results,
financial condition and prospects.
The Company may be unable to identify appropriate assets or complete
acquisitions.
The Board intends that the net proceeds of the Fundraising will be used
primarily to strengthen the balance sheet in support of the Group's stated
acquisition growth strategy of entering the smart metering market as a MAP as
well as for general working capital purposes to support the Group's revenue
growth. Although the Company has identified a number of potential
opportunities to acquire, directly or indirectly through another operator,
smart meters, including the Potential Acquisitions, no contractually binding
obligations have been, and will not prior to Admission be, entered into. There
can be no certainty that the Company will be able to complete the Potential
Acquisitions or other smart meter opportunities on acceptable terms or at all,
or that any of the opportunities identified in this Announcement will remain
available for purchase after Admission.
Both of the Potential Acquisitions are at early stages of discussions and the
Company is in the process of carrying out a due diligence exercise on the
Potential Acquisitions. The Company may determine not to proceed with either
or both of the Potential Acquisitions as a result of further due diligence
findings or other matters. The Company may not be able to agree acceptable
terms with potential sellers to complete either or both of the Potential
Acquisitions. Furthermore, even if the Company and the seller(s) reach
agreement on the terms of acquisition, the agreement may be subject to
conditions that may not be satisfied, including as a result of matters outside
of the Company's control.
The Fundraising is not conditional upon the completion of either of the
Potential Acquisitions. If none of the Potential Acquisitions complete, the
Directors intend to seek further potential opportunities to fulfil the
Company's stated acquisition strategy. However, there can be no certainty that
such opportunities will present themselves and, even when they do, that the
Company will be able to complete such acquisitions on acceptable terms. There
may be significant competition in some or all of the acquisition opportunities
that the Company may explore. Such competition may for example come from other
market players and strategic buyers, who may possess greater technical,
financial, human and other resources than the Company. The Company cannot
assure investors that it will be successful against such competition. Such
competition may cause the Company to be unsuccessful in executing an
acquisition or may result in a successful acquisition being made at a
significantly higher price than would otherwise have been the case.
Any of the foregoing may have a material adverse effect on the Group's
business, operating results, financial condition and prospects.
Material facts or circumstances may not be revealed in the Company's due
diligence of acquisition opportunities, exposing the Company to unknown risks.
The Company is in the process of undertaking due diligence on the Potential
Acquisitions. The due diligence on the Potential Acquisitions is being
performed to a level considered reasonable and appropriate by the Company. In
respect of further potential acquisition opportunities it identifies to
acquire smart meters, the Company intends to conduct due diligence it deems
reasonable and appropriate prior to completion of such acquisition. However,
these efforts may not reveal all facts or circumstances that would have a
material adverse effect upon the value of the smart meter asset portfolio (or
the operator that owns the portfolio) and all risks and liabilities which may
result in liabilities and costs for the Group. In undertaking due diligence,
the Company will utilise its own resources and may elect to rely upon third
parties to conduct certain aspects of the due diligence process.
Further, the Company may not have the ability to review all documents relating
to the target company and/or assets (as applicable). Any due diligence process
involves subjective analysis and there can be no assurance that due diligence
will reveal all material issues related to the Potential Acquisitions or other
potential acquisition opportunities. Any failure to reveal all material facts
or circumstances relating to the Potential Acquisitions or other potential
acquisition opportunities may result in unexpected liabilities and costs
arising for the Group and the Group may not be able to realise in full the
benefit of the Potential Acquisitions or other potential acquisition
opportunities, and the integration of the relevant businesses or assets into
the Group may exceed expectations.
Any of the foregoing could have a material adverse effect on the Group's
business, operating results, financial condition and prospects.
The Group is dependent on its ability to retain key executives and personnel
and attract qualified personnel in the future.
The Group's success and its ability to develop and maintain its business
depends on its key executives and personnel and its ability to retain them.
The loss of any member of the Group's senior management could harm or delay
the plans of the business either whilst management time is directed to finding
suitable replacements or if no suitable replacement is available to the
Company. In either case, this may have a material adverse effect on the future
of the Group's business.
The Group's future success depends also on the ability to attract, train,
retain and motivate highly skilled technical, sales and customer support
personnel. Competition for personnel with appropriate qualifications is
intense and may become even more so in the future. There can be no assurance
that the Group will be able to attract and secure suitable personnel in the
future.
The markets in which the Group operates is, and will continue to be,
competitive.
The markets in which the Group operates is, and will continue to be,
competitive. The Group may face significant competition, including from
competitors who may be larger and/or have greater capital resources. There is
no assurance that the Group will be able to compete successfully in its
markets in the future.
In addition, the Group cannot predict the pricing or promotional activities of
its competitors or their effect on its ability to market and sell its
services. In order to ensure that its services remain competitive, the Group
may be required to reduce its prices as a result of price reductions by its
competitors. This could adversely affect the Group's results. There are no
assurances that the strength of the Group's competitors will not improve or
that it will win any additional market share from its competitors or maintain
its existing market share. Further, the Group's competitors may be able to
respond more quickly to new or emerging technologies and changes in client
requirements and/or demands. Failure of the Group to respond effectively and
in a timely manner to competitive pressures, technological developments and/or
changes in client demands may cause the Group's current customer base to use
an alternative supplier.
Any of the foregoing could adversely impact the Group's ability to gain or
maintain market share, which may have a material adverse effect on the Group's
business, operating results, financial condition and prospects.
The Group relies on a number of licences, permits and approvals to carry out
its business.
The Group relies on a number of different licences which it requires in order
to carry out its current business operations, including the design, build,
project management, ownership and maintenance of utility infrastructure. In
particular, its gas transportation services are provided by Fulcrum Pipelines
Limited under an independent gas transporter licence granted from Ofgem in
June 2007, and its electricity transportation services are provided by Fulcrum
Electricity Assets Limited under an independent distribution network operator
licence granted from Ofgem in November 2017. These licences impose obligations
and requirements on the operator Fulcrum Pipelines Limited and Fulcrum
Electricity Assets Limited, respectively, as well as the Company as their
ultimate controller. Failures to comply with the licences or obtain additional
required licences to comply with future changes to laws and regulations or to
develop new business operations could adversely affect the operations of the
Group. These laws and regulations impose an administrative burden on the Group
and additional or more stringent requirements could be imposed in the future.
The ability to obtain, sustain or renew licences, registrations,
certifications and accreditations on acceptable terms is subject to changes in
regulations and policies and to the discretion of applicable governmental
authorities. If such licences, registrations, certifications and
accreditations cannot be obtained or renewed, the Company would not be able to
carry out all or part of its business. This may have a material adverse impact
on the Group's business, operating results, financial condition and prospects.
Consolidation in the energy supply sector may adversely affect the Group's
business, operating results, financial condition and prospects.
The UK's energy supply sector has been undergoing a period of consolidation in
recent years. In particular, over 20 energy companies have ceased trading
since the beginning of August 2021 in part due to increased wholesale
electricity and gas prices which suppliers have limited ability to pass on to
end customers as a result of the regulatory price cap set by Ofgem. Customers
of these energy suppliers have largely been acquired by other larger suppliers
under Ofgem's SoLR regime, pursuant to which Ofgem can direct any energy
supplier to act as the SoLR and take over responsibility for a failed
supplier's customers. However, where Ofgem is unable to complete the SoLR
procedure, for example, because the size of the energy supplier that is in
financial distress is such that it would not be feasible or in the best
interests of consumers, the energy supplier may be put into administration
through a special administration regime. Companies placed into administration
under the special administration regime are expected to be run by an
administrator until the company is rescued, sold or its supply activities
transferred to another supplier, and to have the benefit of funding from the
Government to ensure that the administration is managed in a way that protects
customers' supply, effectively nationalising the company while it is under the
special administration regime.
Customer consolidation and competition in the energy supply industry, whether
as a result of acquisitions, transfers under the SoLR regime, or
quasi-nationalisation under the special administration regime, may lead to a
reduced addressable market for the Group, which targets smaller energy
suppliers. The market power and scale of the Group's customers, and therefore,
their negotiating leverage, may also increase as a result of acquisitions,
transfers under the SoLR regime, or quasi-nationalisation under the special
administration regime. This, together with energy suppliers' pressure to lower
their costs to be competitive against their peers and to maintain a
sustainable business in light of rising wholesale electricity and gas prices
may lead to increased pressure on the Group to lower the price it charges its
energy supply customers for the Group's products and services. The energy
supplier market may continue to consolidate in the future and there can be no
assurance that the Group will be able to win any additional market share or
maintain its existing market share. Further, no assurance can be given that
such pricing pressures can be fully offset by reductions in the Group's
operating costs or improved operating efficiencies in order to maintain
current margins or that the Group's competitors will not be in a better
position to react to such pricing pressures. If the Group is unable to
maintain competitive prices for its services, it may not be able to retain
existing business or win new business. These pricing pressures from the
Group's customers could have a material adverse effect on the Group's
business, operating results, financial condition and prospects. See also the
risk factor entitled "The markets in which the Group operates is, and will
continue to be, competitive".
Any failure involving, or a security breach or cyberattack directed at, the
Group's computer systems could significantly disrupt the Group's ability to
operate its business.
The Group depends on information technology ("IT") infrastructure and systems,
hosted internally or outsourced, to process, transmit and store electronic
data and financial information (including proprietary or confidential
information), and manage business operations. While the Group maintains
systems and controls designed to detect and prevent such events from
occurring, the Group may not be able to anticipate, detect or implement
effective preventive measures against all disruptions, cyber-attacks or
security breaches in its IT systems. Cyber-attacks are increasingly
sophisticated, rapidly evolving and may be far-reaching and difficult to
prevent, and may not be recognised until launched.
An IT system failure or non-availability, cyber-attack or breach of systems
security could disrupt the Group's operations, which could result in a loss of
sales and delays to cash flows. It could also cause the loss of, corruption
of, or unauthorised access to sensitive, confidential or personal data or
information or expose the Group to regulatory investigation, litigation or
contractual penalties or other financial loss. The Group's reputation may also
be adversely affected, and customers and counterparties may lose confidence in
the Group's cybersecurity measures resulting in a loss of customers and
business opportunities.
Any of the foregoing may have a material adverse effect on the Group's
business, operating results, financial condition and prospects.
The Group's insurance coverage could prove inadequate.
The Group has taken out insurance policies in relation to a number of risks
associated with its business activities, including with respect to
professional indemnity and public liability; however, there can be no
assurance that it will not incur losses or that no claims will be brought that
exceed the type and scope of its existing insurance coverage. There are
certain types of losses, generally of a catastrophic nature, that may be
uninsurable or are not economically insurable. Should an uninsured loss or a
loss in excess of insured limits occur, the Group may be exposed to
significant liabilities which could have a material adverse effect on it.
Further, insurance premiums payable by the Group may be increased or the terms
and conditions of the insurance coverage may become less favourable in the
event of a major insurance claim, or a number of insurance claims, by the
Group. This may also occur following a general change in the insurance
markets. There can be no assurance that the Group will continue to be able to
obtain sufficient levels of insurance for the respective risks it incurs in
connection with its business operations on terms and conditions that are
economically justifiable. If the Group incurs losses for which there is no, or
only insufficient, insurance coverage, or if higher insurance premiums and/or
restrictions on insurance coverage are required, this may have a material
adverse effect on the Group's business, operating results, financial condition
and prospects.
Changes in legal, tax, accounting and regulatory regimes may adversely impact
the Group.
Changes in legal, tax, accounting and regulatory regimes and standards
relating to the Group's business activities (including changes to the
interpretation and practice) may occur which may have an adverse effect on the
Group and its operations. Such changes may make it necessary or desirable to
make alterations to the Group, its structure and its business and operations,
any of which may involve additional expense and affect the performance and
profitability of the Group.
The Group is subject to risks relating to operating in the utility
infrastructure market.
The Group is subject to risks relating to operating in the utility
infrastructure market, such as reliance on aging infrastructure potential
injury to or loss of human life or equipment, as well as the risk of downtime
or low productivity caused by weather interruptions or equipment failures. Any
of these events may cause disruption to the Group's activities and expose the
Group to litigation or contractual penalties or other financial loss. This may
have a material adverse impact on the Group's business, operating results,
financial condition and prospects.
The Group's operations are subject to health and safety risks.
The Group's operations in building, delivering and maintaining utility
infrastructure involve a number of health and safety risks, including
potential injury to, or loss of, human life. While the Company believes it has
in place robust safety processes and systems, there can be no assurance that
such measures will be effective in eliminating the number of incidents. To the
extent any such incidents occur, this may result in disruption to the Group's
operations, legal and regulatory consequences and reputational damage, any or
all of which may have a material adverse effect on the Group's business,
operating results, financial condition and prospects.
RISKS RELATING TO THE PLACING AND THE OPEN OFFER AND THE ORDINARY SHARES
General
An investment in Ordinary Shares is only suitable for financially
sophisticated investors who are capable of evaluating the merits and risks of
such an investment, or other investors who have been professionally advised
with regard to the investment, and who have sufficient resources to be able
to bear any losses that may arise therefrom (which may be equal to the whole
amount invested). Such an investment should be seen as complementary to
existing investments in a wide spread of other financial assets and should
not form a major part of an investment portfolio. Prospective investors should
not consider investing in the Ordinary Shares unless they already have a
diversified investment portfolio.
Prospective investors should be aware that the value of an investment in the
Company may go down as well as up and investors may therefore not recover
their original investment.
The market value of the Ordinary Shares may fluctuate and may not reflect the
underlying value or prospects of the Group.
The market value of the Ordinary Shares can fluctuate and may not always
reflect the underlying value or prospects of the Group. A number of factors
outside of the control of the Company may materially adversely affect its
performance and the price of the Ordinary Shares including, inter alia, market
appraisal of the Group's current strategy, speculation about the Company's
business in the press, media or investment community, variations in operating
results, announcements of technological innovations or new products and
services by the Group or its competitors, changes in financial estimates and
recommendations by securities analysts, the share price performance of other
companies that investors may deem comparable to the Group, the general market
perception of utility services companies, news reports relating to trends in
the Group's markets, legislative changes in the Group's sector and general
market conditions.
Shareholders are likely to experience dilution in their ownership of the
Company.
If a Qualifying Shareholder who is not a Placee does not take up any of his
Open Offer Entitlements, such Qualifying Shareholder's holding, as a
percentage of the Enlarged Share Capital, will be diluted as a result of the
Fundraising. If a Qualifying Shareholder who is not a Placee takes up his Open
Offer Entitlements in full (assuming it does not participate in the Excess
Application Facility), such Qualifying Shareholder's holding, as a percentage
of the Enlarged Share Capital, will be diluted as a result of the Fundraising.
Shareholders in the United States and, subject to certain exceptions, other
Restricted Jurisdictions will not be able to participate in the Open Offer and
will therefore experience dilution as a result of the Fundraising.
Further issues or a significant sale of Ordinary Shares may adversely impact
the market price of the Ordinary Shares.
The issue of additional Ordinary Shares by the Company as well any sales of a
substantial number of Ordinary Shares in the market, or the perception that
such events might occur, could have an adverse effect on the market price of
the Ordinary Shares. Although the Company does not currently intend to issue
further Ordinary Shares other than in connection with the Fundraising and the
Company's share option schemes, it is possible that the Company may decide to
issue, pursuant to a public offer, an acquisition or otherwise, additional
Ordinary Shares in the future at a price or prices higher or lower than the
Issue Price. An additional offering of Ordinary Shares could dilute the
proportionate ownership interest (and therefore the proportionate voting
interest) of Shareholders. See also the risk factor entitled "Shareholders are
likely to experience dilution in their ownership of the Company".
There may not be a liquid secondary market for the Ordinary Shares, the price
of which may fluctuate significantly and Shareholders could lose all or part
of their investment.
The Ordinary Shares are admitted to trading on AIM. Shareholders do not have a
right for their Ordinary Shares to be redeemed and those Shareholders wishing
to realise their investment will be required to dispose of their Ordinary
Shares on the stock market. There is no guarantee that there will be
sufficient liquidity in the Ordinary Shares to sell or buy any number of
Ordinary Shares at a certain price level. The Company cannot predict the
extent to which an active market for the Ordinary Shares will develop or be
sustained, or how the development of such a market might affect the market
price for the Ordinary Shares. An illiquid market for the Ordinary Shares may
result in lower trading prices and increased volatility, which could adversely
affect the value of any investment. Even if an active trading market is
maintained, the market price for the Ordinary Shares may fall below their
original issue price and Shareholders may not realise their initial
investment.
A limited number of Shareholders may collectively own a substantial percentage
of the Ordinary Shares after the Fundraising, and could significantly
influence matters requiring Shareholder approval.
Certain institutional Shareholders currently hold, and may continue to hold
after the Fundraising, and other investors may acquire pursuant to the
Fundraising, a significant proportion of the Ordinary Shares. These
Shareholders may, if they act together, exercise significant influence over
all matters requiring Shareholder approval including the election of Directors
and significant corporate actions, and may vote their Ordinary Shares in a
way with which investors do not agree, or delay or prevent a change of control
that could be otherwise beneficial to the Shareholders.
Voting rights of holders of Depository Interests.
Securities issued by non-UK registered companies, such as the Company, cannot
be held or transferred in the CREST system. However, to enable investors to
settle such securities through the CREST system, a depository or custodian can
hold the relevant securities and issue dematerialised depository interests
representing the underlying Ordinary Shares which are held on trust for the
holders of these depository interests. Under the Articles, only those persons
who are Shareholders of record are entitled to exercise voting rights. Persons
who hold Ordinary Shares in the form of depository interests will not be
considered to be record holders of Ordinary Shares that are on deposit with
the Depository and, accordingly, will not be able to exercise voting rights.
However, the Deed Poll provides that the Depository shall pass on, as far as
it is reasonably able, rights and entitlements to vote. In order to direct the
delivery of votes, holders of Depository Interests must deliver instructions
to the Depository by the specified date in the form of a Form of Direction.
Neither the Company nor the Depository can guarantee that holders of
Depository Interests will receive the notice in time to instruct the
Depository as to the delivery of votes in respect of Ordinary Shares
represented by Depository Interests and it is possible that they will not have
the opportunity to direct the delivery of votes in respect of such shares. In
addition, persons who beneficially own Ordinary Shares that are registered in
the name of a nominee must instruct their nominee to deliver votes on their
behalf. Neither the Company nor any nominee can guarantee that holders of
Depository Interests will receive any notice of a solicitation of votes in
time to instruct nominees to deliver votes on behalf of such holders and it is
possible that holders of Depository Interests and other persons who hold
Ordinary Shares through brokers, dealers or other third parties will not have
the opportunity to exercise any voting rights.
DEFINITIONS
The following definitions apply throughout this Announcement unless the
context otherwise requires:
"Admission" admission of the New Ordinary Shares to trading on AIM;
"AIM" AIM, a market operated by the London Stock Exchange;
"Application Form" the personalised application form accompanying the Circular (where
appropriate) pursuant to which Qualifying Non-CREST Shareholders may apply to
subscribe for Open Offer Shares under the Open Offer;
"Announcement" this announcement including the appendices and the information contained
herein;
"Articles of Association" or "Articles" the articles of association of the Company, in force from time to time;
"Board" or "Directors" the directors of the Company as at the date of this Announcement;
"Cenkos" or "Nominated Adviser" Cenkos Securities plc, a company incorporated in England and Wales with
registered number 05210733;
"Ccertificated" or "Ccertificated Fform" not in uncertificated form;
"Company" or "Fulcrum" Fulcrum Utility Services Limited, a company incorporated in the Cayman Islands
under the Companies Act (As Revised) of the Cayman Islands, with registered
number 234240;
"CREST" the facilities and procedures for the time being of the relevant system of
which Euroclear has been approved as "Operator" pursuant to the CREST
Regulations;
"CREST Regulations" the UK Uncertificated Securities Regulations 2001 (SI 2001/3755), as amended;
"Depository" Link Market Services Trustees Limited, a company incorporated in England and
Wales with registered number 02729260;
"Depository Interests" the dematerialised depository interests of the Company created pursuant to and
issued on the terms of the deed poll dated 18 December 2009 between the
Depository and the Company;
"Enlarged Share Capital" the issued ordinary share capital of the Company as enlarged by the issue of
the New Ordinary Shares;
"Euroclear" Euroclear UK & Ireland Limited;
"Ex-Entitlement Date" the time and date on which the Existing Ordinary Shares are marked
"ex-entitlement" to the Open Offer by the London Stock Exchange, being 7.00
a.m. on 16 December 2021;
"Excess Application Facility" the arrangement pursuant to which Qualifying Shareholders may apply for New
Ordinary Shares in excess of their Open Offer Entitlements;
"Excess Open Offer Entitlements" in respect of each Qualifying Shareholder, the conditional entitlement to
apply for Excess Open Offer Shares under the Excess Application Facility,
which are subject to allocation in accordance with the Circular;
"Excess Open Offer Shares" the Open Offer Shares which Qualifying Shareholders will be invited to acquire
pursuant to the Excess Application Facility;
"Existing Ordinary Shares" the existing Ordinary Shares in issue as at the Latest Practicable Date;
"FCA" the UK Financial Conduct Authority (or its successor bodies);
"Form of Direction" the form of direction for use by holders of Depository Interests in connection
with the General Meeting;
"Form of Proxy" the form of proxy for use by Shareholders in connection with the General
Meeting;
"FSMA" the UK Financial Services and Markets Act 2000, as amended;
"Fundraising" the Placing and the Open Offer;
"Fundraising Resolutions" Resolutions 1 and 3 to be proposed at the General Meeting, as set out in the
Notice;
"FY 2022" financial year ending 31 March 2022;
"General Meeting" the general meeting of the Company to be convened pursuant to the Notice;
"Group" the Company and its subsidiary undertakings from time to time;
"H1 2021" six months ended 30 September 2020;
"Issue Price" 12 pence per New Ordinary Share;
"Latest Practicable Date" 14 December 2021, being the latest practicable date prior to the publication
of this Announcement;
"London Stock Exchange" or "LSE" the London Stock Exchange plc;
"New Ordinary Shares" the new Ordinary Shares to be issued pursuant to the Fundraising;
"Notice" the notice convening the General Meeting set out at the end of the Circular;
"Open Offer" the conditional invitation to Qualifying Shareholders to subscribe for Open
Offer Shares at the Issue Price on the terms and subject to the conditions set
out in the Circular and, in the case of the Qualifying Non-CREST Shareholders
only, the Application Form;
"Open Offer Entitlement" or "Basic Entitlement" the entitlement of a Qualifying Shareholder to apply to subscribe for Open
Offer Shares pursuant to the Open Offer;
"Open Offer Shares" the up to 49,976,537 new Ordinary Shares for which Qualifying Shareholders are
being invited to apply to be issued pursuant to the Open Offer;
"Ordinary Shares" ordinary shares of £0.001 each in the capital of the Company, having the
rights, restrictions and entitlements set out in the Articles;
"Placee" any person who has agreed to subscribe for Placing Shares pursuant to the
Placing;
"Placing" the conditional placing of Placing Shares at the Issue Price with Placees
subject to, and in accordance with, the terms and conditions set out Appendix
1 of this Announcement;
"Placing Agreement" the agreement dated 15 December 2021 between the Company and Cenkos relating
to the Fundraising;
"Placing Shares" the new Ordinary Shares to be issued pursuant to the Placing;
"Potential Acquisitions" has the meaning given to it in the paragraph entitled "Asset Ownership
Strategy" of this announcement;
"Qualifying DI Holders" holders of Depository Interests on the register of Depository Interest holders
of the Depository at the Record Time other than, subject to certain limited
exceptions, Restricted Shareholders;
"Qualifying Non-CREST Shareholders" holders of Ordinary Shares on the register of members of the Company at the
Record Time other than, subject to certain limited exceptions, Restricted
Shareholders;
"Qualifying Shareholders" Qualifying Non-CREST Shareholders and Qualifying DI Holders;
"Record Time" the record time for the Open Offer, being 6.00 p.m. on 14 December 2021;
"Regulatory Information Service" or "RIS" one of the regulatory information services authorised by the FCA to receive,
process and disseminate regulated information from listed companies;
"Resolutions" the resolutions to be proposed at the General Meeting, as set out in the
Notice;
"Restricted Jurisdictions" the United States, Australia, Canada, Japan, New Zealand, the Republic of
South Africa and any other jurisdiction in, into or from where the offer,
sale, taking up of, delivery or transfer of New Ordinary Shares would
constitute a breach of local securities laws or regulations;
"Restricted Shareholders" Shareholders with registered addresses in, or who are citizens, residents or
nationals of, the United States or any other Restricted Jurisdiction;
"RPI" retail price index;
"Securities Act" The US Securities Act of 1933, as amended;
"Shareholder" a holder of an Ordinary Share;
"UK" or "United Kingdom" the United Kingdom of Great Britain and Northern Ireland;
"UK Prospectus Regulation" Regulation (EU) 2017/1129 as it forms part of UK domestic law by virtue of the
European Union (Withdrawal) Act 2018, and the regulations made under that Act;
"uncertificated" or "in uncertificated form" recorded on the register of members as being held in uncertificated form in
CREST and title to which may be transferred by means of CREST; and
"US" or "United States" the United States of America, its territories and possessions, any state of
the United States and the District of Columbia.
Glossary
The following terms apply throughout this Announcement, unless the context
requires otherwise.
"EV" electric vehicle;
"I&C" Industrial & Commercial;
"Independent Distribution Network Operator" or "IDNO" an entity with an independent distribution network operator licence granted
from Ofgem;
"Independent Gas Transporter" or "IGT" an entity with a gas transporter licence under section 7 of the Gas Act 1986;
"Meter Asset Manager" or "MAM" an entity that manages and maintains gas meters;
"Meter Asset Provider" or "MAP" an entity that funds and owns meters;
"Meter Operator" or "MOP" an entity that manages and maintains electricity meters;
"Ofgem" Office of the Gas and Electricity Markets, an authority which regulates
certain aspects of the UK gas and electricity markets;
"SMETS1" the UK's first industry-standard type of smart meter;
"SoLR" or "Supplier of Last Resort" a gas or electricity supply licensee appointed by the Ofgem to take over
responsibility for a failed supplier's customers after revocation of the
failed supplier's licence; and
"utility infrastructure provider" a utility infrastructure provider engaged in the provision of infrastructure
services in relation to electricity, water and gas connections.
1 See the Company's announcement of 23 December 2019 for full details of the
sale of the Group's domestic gas connection assets to ESP.
2 Small energy suppliers are defined as those that supply gas to less than
250,000 domestic customers and electricity to less than 250,000 domestic
customers; they may also supply non-domestic sites. Source: BEIS
3 The Potential Acquisitions referred to in this paragraph are subject to
ongoing due diligence by the Company and no contractually binding obligations
have been, and will not prior to Admission be, entered into for their sale and
purchase. There can be no assurance that the Company will determine to proceed
with either of the Potential Acquisitions or be able to agree final terms for
and complete either of the Potential Acquisitions.
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