REG - Haydale Graphene Ind - Proposed Fundraise to raise up to £3.5 million
25/10/2024 14:15
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RNS Number : 7316J Haydale Graphene Industries PLC 25 October 2024
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THIS ANNOUNCEMENT SHOULD BE READ IN ITS ENTIRETY. IN PARTICULAR, YOU SHOULD
READ AND UNDERSTAND THE INFORMATION PROVIDED IN THE APPENDIX WHICH CONTAINS
THE TERMS AND CONDITIONS OF THE PLACING.
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INFORMATION.
25 October 2024
HAYDALE GRAPHENE INDUSTRIES PLC
("Haydale" or the "Company")
Fundraising to raise up to £3.5 million, comprising
Placing and Subscription to raise £2.5 million
Retail Offer to raise up to £0.5 million, each at 0.1325 pence per Ordinary
Share
Issue of Convertible Loan Notes to raise £0.5 million,
Capital Reorganisation
and
General Meeting
Haydale (AIM:HAYD), the global advanced materials group, today announces its
intention to conduct a fundraising of up to £3.5 million in aggregate,
including a Placing of 1,640,000,002 New Ordinary Shares at the Issue Price of
0.1325 pence per New Ordinary Share, to raise in aggregate £2.17 million.
The Placing will be conducted by way of an accelerated bookbuild ("ABB") which
will be launched immediately following this announcement in accordance with
the terms and conditions set out in the appendix to this Announcement.
The Company proposes to raise a further £52,000 from the Participating
Directors, comprising the issue of 39,245,280 New Ordinary Shares at the Issue
Price. Certain Directors, namely Keith Broadbent, Theresa Wallis and Gareth
Kaminski-Cook, intend to participate by way of the Subscription with David
Banks intending to participate via the Placing.
Further, certain subscribers have conditionally agreed to subscribe for
Convertible Loan Notes up to an aggregate value of £0.5 million.
In addition, the Company intends to carry out a separate retail offer of up to
377,358,490 New Ordinary Shares at the Issue Price via the Bookbuild Platform
to raise further gross proceeds of up to £0.5 million to provide existing
retail shareholders in the United Kingdom with an opportunity to participate
in the Fundraising. A separate announcement will be made shortly regarding the
Retail Offer and its terms. The Placing, Subscriptions and Convertible Loan
Notes are not conditional upon the Retail Offer, but the Fundraising as a
whole is conditional upon the Capital Reorganisation. For the avoidance of
doubt the Retail Offer forms no part of the Placing and Subscriptions or
Convertible Loan Notes. Completion of the Retail Offer, the Subscriptions, the
Capital Reorganisation and the issue of the Convertible Loan Notes are
conditional, inter alia, upon completion of the Placing.
The proceeds of the Fundraising will be used to fund the general working
capital needs of the business.
Placing Highlights:
· Haydale intends to raise approximately £2.17 million before
expenses through a Placing arranged by Cavendish of 1,640,000,002 New Ordinary
Shares at the Issue Price with new and existing investors.
· Certain of the Directors of Haydale, namely Keith Broadbent,
Theresa Wallis and Gareth Kaminski-Cook, have indicated their intention to
participate in the Fundraising by way of Subscription. David Banks has further
indicated his intention to participate via the Placing, which, together with
the subscribing Directors represents in aggregate, 39,245,280 New Ordinary
Shares, raising a further £52,000.
· Further, certain subscribers have conditionally agreed to
subscribe for Convertible Loan Notes for an aggregate value of £0.5 million.
In addition the Company intends to carry out a separate retail offer of up to
377,358,490 New Ordinary Shares at the Issue Price via the Bookbuild Platform
to raise further gross proceeds of up to £0.5 million.
· The Placing, Subscriptions, and the Retail Offer are eligible to
those investors seeking to claim EIS relief in relation to their subscriptions
and with VCTs.
· To provide it with additional flexibility, Haydale is proposing
to complete a Capital Reorganisation of the Existing Ordinary Share capital of
the Company immediately prior to the allotment of the New Ordinary Shares
pursuant to the Fundraising. Each of the Existing Ordinary Shares will
therefore be subdivided into one new Ordinary Share of 0.01 pence each and one
Deferred Share of 0.09 pence each.
· The funds raised from the Fundraising, which are expected to
amount to between £3.0 million and £3.5 million, depending on the take up of
the Retail Offer, will be used to fund general working capital needs of the
Company.
· The Fundraising is conditional (amongst other things) upon the
passing of resolutions to effect the Capital Reorganisation and to authorise
the issue of the New Ordinary Shares and the Convertible Loan Notes on a
non-pre-emptive basis. A General Meeting is therefore being convened for the
purpose of considering the Resolutions at 11:00 a.m. on 11 November 2024.
Admission is expected to take place on or around 12 November 2024.
· Following the Fundraising, a significantly reconstituted Board
will undertake a full and rigorous review of all aspects of the business with
a view to reprioritising those areas offering up near term (as well as long
term) profitability, positive cash generation, and other strategic options
which align with Haydale's core strengths and accelerate certain commercial
activities.
For further information:
Haydale Graphene Industries plc Tel: +44 (0) 1269 842 946
Keith Broadbent, CEO www.haydale.com (http://www.haydale.com)
Patrick Carter, CFO
Cavendish Capital Markets Limited (Nominated Adviser, Broker and Retail Offer Tel: +44 (0) 20 7220 0500
Coordinator)
Julian Blunt / Edward Whiley / Trisyia Jamaludin, Corporate Finance
Andrew Burdis / Harriet Ward, ECM
Each of the times and dates above refer to London time and are subject to
change by the Company. Any such change will be notified to Shareholders by an
announcement on a Regulatory Information Service.
Further information on the Fundraising and Admission is included in the
section headed 'Additional Information' below. Attention is also drawn to the
section headed 'Important Information' of this Announcement and the terms and
conditions of the Placing (representing important information for Placees
only) in the Appendix to this Announcement.
Capitalised terms used but not defined in this Announcement shall have the
meanings given to such terms in the section headed 'Definitions' below save
that any capitalised term defined in the Appendix shall have such meaning in
the Appendix to the exclusion, in the Appendix only, of any definition of such
term elsewhere in this Announcement.
ADDITIONAL INFORMATION
Reasons for the Fundraising and Use of Proceeds
During the course of FY24 the Company has continued to focus its activities
within its two key product areas, namely functionalised nano-materials and
silicon carbide tooling. Within each, focus has been absolute in terms of
pursuit of projects capable of yielding commercial scale revenues for Haydale
in the shortest possible timeframe. However, the Company also recognises that
progress has not proceeded with sufficient pace and therefore is using this
fundraise as a catalyst for pan-organisational change. A significantly
reconstituted Board will undertake a full and rigorous review of all aspects
of the business with a view to reprioritising those areas offering up near
term (as well as long term) profitability, positive cash generation, and other
strategic options which align with Haydale's core strengths and accelerate
certain commercial activities. A key objective is to bring forwards the
Group's break-even point compared to the current plan.
Within nano-materials the Group's IP commercialisation strategy is based
around providing plasma functionalisation as a service to third-parties and
working with specific industry partners looking to use functionalised
nano-materials in an end-product of their own, providing application based
consultancy with the intent of securing longer term volume supply agreements
in due course. The Group's interactions during FY24 and beyond have been
with increasingly high profile and, in the Board's view, promising strategic
partners such as Petronas and Saint Gobain as well as a number of other highly
prominent partners operating in, amongst others, the defence and chemicals
sectors. In the context of a global graphene market currently projected to
be worth c$0.57bn in 2024 and forecast to grow at a compound annual growth
rate of approximately 32 per cent. through to 2032 (Source:
https://www.fortunebusinessinsights.com/graphene-market-102930
(https://www.fortunebusinessinsights.com/graphene-market-102930) ) the Group's
pipeline has built significantly, both in terms of number and range of
opportunities now being progressed. Since the signing of a 2½ year
collaboration contract with Petronas in August 2023 Haydale has grown the
scope and number of active projects with Petronas from 8 to 16 with Haydale
demonstrating ongoing success against client target criteria; Haydale now
awaits Petronas' determination of those projects it wishes to pursue at
volume. In a similar vein, Haydale's collaboration with Saint Gobain
recently demonstrated success in functionalising Boron Nitride to improve
performance with Saint-Gobain themselves flagging their own ADAPTIFLEX(TM), a
new line of surface modified boron nitride powders, enhanced using Haydale's
functionalisation process. Saint Gobain has now launched the product and the
Company awaits formal orders.
The Company has also successfully demonstrated the effective use of its core
graphene-based heater ink products in underfloor heating applications (which
3(rd) party tests have indicated could be up to 70% more efficient than wired
solutions) and in other low power domestic appliance applications. Haydale
is now working with some large industrial partners such as Staircraft (part of
the Travis Perkins group) and Cadent, to get products validated and taken to
market. Similarly, the Group continues to work on a graphene enhanced heat
transfer fluid with its partner Hydratech; latest tests have demonstrated an
improvement in thermal conductivity of circa 20 per cent. compared to existing
thermal fluids and water and application trials have now commenced.
As regards the Group's silicon carbide tooling activities in the United
States, FY24 was dominated by the frustration that the expected volume orders
took longer to crystallise than expected, as alluded to in the Group's update
of 20 May 2024 (exacerbated by a delay in the securing of a key agreement in
China in July 2024). As announced at the time this was due to testing cycles
taking longer than anticipated and a short-term US supply chain issue in June
which temporarily reduced stock availability; this latter issue has now been
resolved and the Board now anticipates a much-improved FY25 in the US.
Despite the frustration through FY24 the Group was active in terms of:
· investing in developing its channels to market including further
additions to the manufacturer representative network, website launch and
development of a third-party white label distribution capability (to serve
both the US and European markets);
· building its US tooling pipeline, currently worth approximately
US$22.2m per annum as at the end of September 2024, of which US$4.7m was in
testing, and a further US$6.2m was awaiting scheduling for testing. Testing is
a critical step in the Company's process before progressing to a commercial
contract with a partner. The main criteria are tool life and pricing and
Haydale continuously scores well on both of these against its competition;
· pipeline development in Europe, through the Group's emerging
relationship with a global white label supplier of precision tools; and
· pipeline development in China/Asia, through the successful
completion in July 2024 of the negotiation of a five-year deal with a Chinese
tooling manufacturing company to facilitate the distribution of Haydale's
Silicon Carbide whisker reinforced cutting tool parts to new markets in
Asia. The contract has a minimum financial commitment from the partner of
US$4.0m over its duration. The Board expects this agreement to enhance the
availability and accessibility of Haydale's silicon carbide product to a
broader range of industries in China, including the aerospace, automotive, and
industrial manufacturing sectors. The Chinese Silicon Carbide cutting tool
market has been estimated at c.US$214 million in 2024 with a compound annual
growth rate of 6.2 per cent. (Source: Global Silicon Carbide Fibres Market
Report 2021 - 2028, Market Insight Reports). Importantly, the agreement will
also provide Haydale with exclusive access to its new partner's range of
proprietary Carbide and Cermet products for the US and non-exclusive access
for UK and EU markets (although there is no minimum financial commitment set
for this element) which, together with another agreement signed earlier this
year by Haydale with a China based Cubic Boron Nitride (CBN) tooling
manufacturer, will allow Haydale to provide a one stop shop offering to its
customers across a wide range of tooling requirements. The global CBN market
alone was projected to be worth $1.3bn in 2023 and forecast to grow at 4.2 per
cent. on a compound basis through to 2033.
Despite the commercial progress noted above, as previously reported, revenue
development in the US has been delayed through FY24 which has meant that
establishing debt funding in the US, as was previously envisaged, has had to
be deferred pending the delayed forecast tooling sales coming through. Overall
Group liquidity has been managed carefully with monthly net cash burn
improving over FY24 to approximately £300,000 per month on a normalised
basis, Whilst there has been some adverse impact in FY25 Q1 arising from the
planned biannual production of silicon carbide and time taken to convert
tooling opportunities in the US pipeline, cash burn is expected to reduce as
sales progressively improve albeit subject to further restructuring as
described above. The Group's ongoing losses have continued to deplete cash
reserves, which stood at £1.72 million as at 30 June 2024 and £0.79 million
at 30 September 2024. Accordingly the Company is now seeking to raise further
capital to fund the Group's ongoing requirements, which will see continued
delivery and development of the business partnerships and key product markets
to which the Company is committed. The Directors anticipate more pronounced
revenue growth in the US in FY25 which they expect will be capable of
sustaining local asset-based funding (improving overall Group liquidity) and
developing towards month-on-month cash generation in the US business during
the fourth quarter of FY25, with the Group moving towards being Adjusted
EBITDA positive in H2 FY26.
The Directors have concluded that proceeding with the Placing and
Subscriptions, alongside the Retail Offer and the issue of Convertible Loan
Notes, is the most suitable option available to the Company for raising
additional funds and that issuing the New Ordinary Shares at the level of
discount represented by the Issue Price is fair and reasonable so far as all
existing Shareholders are concerned. The Issue Price has been set by the
Directors following their assessment of market conditions and following
discussions with a number of institutional investors.
In view of the Group's current cash position and cash burn rate as noted above
and in the absence of alternative funding proposals, the Group will not have
sufficient funds required to meet its immediate working capital requirements.
The Board therefore strongly recommends that Shareholders vote in favour of
the resolutions required to approve the Fundraising.
It is anticipated that the net proceeds of the Fundraising will not alone be
sufficient to fund the cash requirements of the Group for the next 12 months
from the date of this announcement, nor through to a position where it is able
to fund itself from its own cashflow, which is currently expected to occur in
the second half of FY26. The Board intends to take further action to mitigate
the current rate of cash burn and to raise further funding, either by way of
equity or debt. As regards mitigating action, initiatives could include
(though are not limited to) selective headcount reduction and other operating
cost savings, closure of one or more subsidiary offices in Asia, renegotiation
of underperforming contracts, and disposal of the Group's US operation.
Following the Fundraising, and as noted above, the Board will undertake a full
and rigorous review of all aspects of the business with a view to
reprioritising those areas offering up near term (as well as long term)
profitability, positive cash generation, and other strategic options which
align with Haydale's core strengths and accelerate certain commercial
activities.
As regards additional funding, the Group has received indicative term sheets
during the course of FY24 from a US lender for a revolving credit line of
between US$1.0m and US$1.5m secured against accounts receivable in the US
silicon carbide business. Thus far these term sheets have not been
progressed owing to the lower than expected performance of the Group's US
business in FY24, as previously noted. The Board remains in dialogue with
the proposed lender and intends to progress from term sheet to agreed facility
in the amount of US$1.5m during FY25 and is confident that the anticipated
improving performance through FY25 in the US business will be capable of
sustaining asset backed lending of this type and in this amount. The Group
will also look at the possibility of securing additional equity funding as
FY25 progresses, including from larger contract counterparties with whom the
Group is in discussion.
In the event that debt facilities or further equity funding were not available
or are unavailable in sufficient quantum during the course of FY25, as the
proceeds of the Fundraising are run-down, it is very likely that the Board
would need to make further operational cost savings, curtail parts of the
Group's operations and in extremis, consider the Group's ongoing viability as
a going concern. Whilst the Directors believe that future debt and/or equity
funding could be available, there can be no guarantee that sufficient funds
could be raised at a later date. Any additional equity financing may be
dilutive to Shareholders and any debt facilities may be subject to onerous
terms.
Trading Update and Outlook
FY24 closed out slightly ahead of revised expectations at the revenue level
with revenue of approximately £4.8* million which represents a 12 per cent.
increase on prior year revenues, gross profit of approximately £2.8* million
and a loss before interest, tax, depreciation and amortisation ("adjusted
LBITDA") at £3.2* million, just behind the Board's original expectations for
that year. Capital Expenditure in FY24 was £0.02* (excluding right of use
assets) million and year end cash stood at £1.72 million. Cash as at 30
September 2024 stood at £0.79 million.
FY25 is expected to see revenues continue to build with further progress in
our US Silicon Carbide sales on the back of the progressive conversion of its
pipeline and good growth in UK revenues as the increasing client portfolio
continues to bear fruit. Whilst there are full year impacts of the human
infrastructure required to deliver the planned growth, adjusted LBITDA for
FY25 is expected to narrow compared to the prior year, reflecting the building
revenues offset by the annualised impact of inflationary cost pressures
within the Group's operating units. Save as regards measurers taken to
preserve cash pending the outcome of the Fundraising, during the year to date
the Company has continued to trade in line with the Directors' expectations
with the Group continuing to make progress with its various commercial
partners. As noted above, the Board will also need to access additional
funding both to secure the Group's requirements through FY25 and to provide
the required bridge through to the point at which the Group is capable of
generating sufficient monthly cashflow to sustain itself, which is currently
expected to occur in the second half of FY26. The Company expects to announce
audited results for the year ended 30 June 2024 during November 2024.
* Source: Haydale management information - subject to audit
The Placing
The Company is proposing to raise approximately £2.17 million (before
expenses) pursuant to the Placing at the Issue Price. The Issue Price
represents a discount of approximately 50 per cent. from the mid-market price
of the Existing Ordinary Shares immediately before this announcement. It is
anticipated the Placing Shares will represent approximately 40.4 per cent. of
the Enlarged Share Capital following Admission (assuming full take up of the
Retail Offer).
The Placing will be conducted by the Company in accordance with the terms and
conditions set out in the Appendix to this Announcement. The Placing is being
conducted by way of an ABB which will commence immediately following this
Announcement and is expected to close this evening, but may be closed at such
earlier or later time as Cavendish may, after consultation with the Company,
in its absolute discretion, determine. The ABB will determine final demand for
and participation in the Placing. Allocations of Placing Shares will be
determined by Cavendish in consultation with the Company and will be confirmed
orally or by email by Cavendish following the close of the ABB. A further
announcement will be made following the completion of the ABB (the "Result of
ABB Announcement").
The Placing is conditional, amongst other things, on the passing of the
Resolutions at the General Meeting (including in respect of the Capital
Reorganisation), which is proposed to be held on or around 11 November 2024.
It is expected that a circular incorporating notice of the General Meeting
(the "Circular") will be posted to Shareholders on or around 25 October 2024
and will be made available to shareholders on the Company's website,
https://haydale.com (https://haydale.com) , in line with AIM Rule 26.
The New Ordinary Shares will be free of all liens, charges and encumbrances
and will, when issued and fully paid, be identical to and rank pari passu in
all respects with the Existing Ordinary Shares, including the right to receive
all future distributions, declared, paid or made in respect of the Existing
Adjusted Ordinary Shares following the date of Admission.
The Placing Agreement
The Company has entered into the Placing Agreement pursuant to which Cavendish
has agreed, in accordance with its terms, to use reasonable endeavours to
procure placees ("Placees") for the Placing Shares and to co-ordinate the
offering of the Retail Shares, in each case at the Issue Price. Neither the
Placing, the Subscription nor the Retail Offer is underwritten.
In accordance with the terms of the Placing Agreement, the Placing is
conditional upon, amongst other things, Cavendish having received legally
binding commitments from Placees to subscribe for the Placing Shares, the
passing of the Resolutions, completion of the Subscriptions and receipt by the
Company of the duly executed Convertible Loan Notes Subscription
Confirmations, and the Placing Agreement not having been terminated and
Admission occurring on or before 8.00 a.m. on 12 November 2024 (or such later
date as Cavendish and the Company may agree being not later than 8.00 a.m. on
20 December 2024). The Convertible Loan Notes will be issued on the date of
Admission.
The Placing Agreement contains certain warranties given by the Company In
favour of Cavendish concerning, amongst other things, the accuracy of
information given in this Announcement and the Circular and other matters
relating to the Group and its business.
The Placing Agreement is terminable by Cavendish in certain circumstances up
until the time of Admission, including, inter alia, in the event of a material
breach of a warranty contained in the Placing Agreement the happening of a
force majeure event or the occurrence of a material adverse change to or
affecting the business of the Company or the Group. The Company has also
agreed to indemnify Cavendish against all losses, costs, charges and expenses
which Cavendish may suffer or incur, which are occasioned by or attributable
to the carrying out of its duties under the Placing Agreement.
The Placing is not conditional on the Retail Offer proceeding or on any
minimum take-up under the Retail Offer.
The Appendix (which forms a part of this Announcement) contains the detailed
terms and conditions of the Placing.
The Subscriptions
Each of the following Directors, namely Keith Broadbent, Theresa Wallis and
Gareth Kaminski-Cook, intend to enter into Subscription Agreements to
participate in the Fundraising, in addition to David Banks, who intends to
participate via the Placing at the Issue Price for an aggregate total of
£52,000. In addition, Anthony Best and Jehova Guernsey Holdings Ltd (a
company associated with Nick Money-Kyrle) intend to participate in the
Fundraising via the Subscriptions and subscribe for approximately £0.3
million in aggregate.
The Convertible Loan Notes
Octopus Investments, via Octopus AIM VCT and Octopus AIM VCT 2 have signed
Convertible Loan Note Subscription Confirmations to subscribe for £0.5
million in aggregate of Convertible Loan Notes. The Convertible Loan Notes are
unsecured, repayable after 5 years and carry an interest rate of 10 per cent.
per annum. Interest will accrue daily and be payable upon the redemption of
the Convertible Loan Notes. The issue of the Convertible Loan Notes is subject
to the Placing Agreement becoming unconditional and not having been terminated
in accordance with its terms and the passing of the Resolutions. The
Convertible Loan Notes will be issued on Admission. If this condition is not
satisfied, the Convertible Loan Notes will not be issued and any monies
received from subscribers will be returned (at the subscriber's risk and
without interest) as soon as possible thereafter.
The principal amount of the Convertible Loan Notes and all accrued interest is
convertible into Ordinary Shares of the Company at the repayment date at the
noteholders option or otherwise, upon the occurrence of certain events,
including a fundraising, business sale or takeover, (an "Exit Event") at the
lower of (i) the Issue Price; (ii) the subscription price of the last
funding round prior to a conversion event; and (iii) in respect of an Exit
Event, at a 25 per cent. discount to the price per share on any such Exit
Event.
The Convertible Loan Notes will not be admitted to trading on AIM or any other
investment exchange.
The Retail Offer
In addition, the Company intends to use the Bookbuild Platform to conduct a
Retail Offer on behalf of the Company. The terms and conditions of the Retail
Offer will be set out in a separate announcement which will contain details of
how existing shareholders can participate in the Retail Offer via Bookbuild.
Related Party Transactions
David Banks, Keith Broadbent, Theresa Wallis and Gareth Kaminski-Cook being
Directors of the Company, have indicated their intention to subscribe for an
aggregate of 39,245,280 New Ordinary Shares through the Fundraising (the
"Participating Directors"). It is expected that the Participating Directors'
interests following completion of the Fundraising (assuming full take up under
the Retail Offer) will be as follows:
Director Number of Existing Ordinary Shares Percentage of existing issued share capital Number of New Ordinary Shares subscribed for Total number of Ordinary Shares held following Admission Percentage of Enlarged Share Capital following Admission*
David Banks 8,000,000 0.44 18,867,924 26,867,924 0.66
Keith Broadbent 4,952,381 0.28 7,547,169 12,499,550 0.31
Theresa Wallis 2,011,904 0.11 11,320,754 13,332,658 0.33
Gareth Kaminski-Cook - - 1,509,433 1,509,433 0.04
*Assuming the Retail Offer is subscribed in full
The issue of New Ordinary Shares to the Participating Directors constitutes a
related party transaction pursuant to Rule 13 of the AIM Rules by virtue of
their status as Directors of the Company. The independent director, being
Patrick Carter, having consulted with the Company's nominated adviser,
Cavendish, considers that the terms of the participation in the Fundraising by
the Participating Directors are fair and reasonable insofar as the Company's
Shareholders are concerned.
Additionally, the issuance of £0.5 million of Convertible Loan Notes to
Octopus Investments via Octopus AIM VCT and Octopus AIM VCT 2 for £0.3
million and £0.2 million, respectively, constitutes a related party
transaction pursuant to Rule 13 of the AIM Rules by virtue of their status as
Substantial Shareholder of the Company. The Directors having consulted with
the Company's nominated adviser, Cavendish, consider that the terms of the
participation in the Fundraising by Octopus AIM VCT and Octopus AIM VCT 2 is
fair and reasonable insofar as the Company's Shareholders are concerned.
Proposed Capital Reorganisation of Ordinary Shares
In order to provide future flexibility to the Company, Haydale is proposing to
complete a Capital Reorganisation of the Existing Ordinary Share capital of
the Company. Each of the Existing Ordinary Shares will be subdivided into one
new Ordinary Share of 0.01 pence each and one Deferred Share of 0.09 pence
each.
The Capital Reorganisation will not of itself affect the value of the shares
held by Shareholders. After the Capital Reorganisation there will be the same
number of Existing Adjusted Ordinary Shares in issue as there are Existing
Ordinary Shares in issue (prior to completion of the Fundraising) and
therefore current shareholdings will not be diluted by the Capital
Reorganisation alone, unless the Fundraising (or any other further equity
fundraising) is completed by the Company.
The Existing Adjusted Ordinary Shares will have the same rights as those
currently accruing to the Existing Ordinary Shares in issue, including those
relating to voting and entitlement to dividends.
The Deferred Shares will rank equally with the existing deferred shares of the
Company. They will have no significant rights attached to them and carry no
right to vote or participate in distribution of surplus assets and will not be
admitted to trading on the AIM market of the London Stock Exchange. Therefore,
the Deferred Shares will effectively carry no value.
Assuming Shareholder approval of the Resolutions at the General Meeting,
application will be made for the Existing Adjusted Ordinary Shares to be
admitted to trading on AIM in place of the Existing Ordinary Shares and it is
expected that Admission will become effective and that dealings in the
Existing Adjusted Ordinary Shares will commence on 12 November 2024. No
application for admission to trading on AIM will be made in respect of the
Deferred Shares.
Assuming Shareholder approval of the Resolutions at the General Meeting,
Shareholders who hold Existing Ordinary Shares in uncertificated form will
have such shares disabled in their CREST accounts on the Capital
Reorganisation Record Date and their CREST accounts will be credited with the
Existing Adjusted Ordinary Shares following Admission, which is expected to
take place on 12 November 2024. The ISIN and SEDOL number of the Existing
Adjusted Ordinary Shares will be the same as the Existing Ordinary Shares and
any share certificates for the Existing Ordinary Shares will remain valid for
the Existing Adjusted Ordinary Shares. No share certificates will be issued in
respect of the Deferred Shares following the Capital Reorganisation.
Holders of options over Existing Ordinary Shares will maintain the same rights
as those currently accruing to them and will not be issued with new option
certificates.
Resolution 2 in the Notice of General Meeting is proposed to amend the
existing articles of association of the Company to set out the rights
pertaining to the Deferred Shares relative to the Existing Adjusted Ordinary
Shares. Resolution 2 is conditional upon the passing of Resolution 1. A copy
of the amended articles of association will be available for inspection
throughout the General Meeting.
Relationship Agreement
Quidos Technologies Limited ("Quidos") is a proposed key strategic investor in
the Placing in the amount of £0.9 million and will on completion of the
Fundraising ("Completion") own (together with parties acting in concert with
it) approximately 17.7 per cent. of the Enlarged Issued Share Capital,
assuming the Retail Offer is fully subscribed.
Accordingly, with effect from Completion the Company and Quidos will enter
into a Relationship Agreement pursuant to which the Company and Quidos agree
to regulate aspects of the continuing relationship between them. In
particular, Quidos has agreed to ensure that the Company is capable at all
times of carrying on its business independently of Quidos (together with any
associates and/or persons with whom it is acting in concert) and that
transactions between the parties are on arms' length terms and on a normal
commercial basis. In addition, for so long as Quidos continues to hold
Ordinary Shares representing in excess of 15 per cent. of the issued share
capital of the Company, Quidos will have the right to nominate and appoint a
director of the Board.
Board
With effect from completion of the Fundraise, David Banks, currently Chair,
will step down from the Board. At the same time Keith Broadbent, currently
Chief Executive Officer, will also step down from the Board to become Chief
Operating Officer (non-Board). A search for a new Chief Executive will begin
in due course and, in the interim, Gareth Kaminski-Cook will act as Executive
Chair and will assume responsibility for the overall management of Haydale.
Once a new CEO is appointed Gareth will revert to Non-Executive Chair. The
Board would like to place on record its thanks to David Banks for his
considerable contribution to the Group.
The Board also intends to appoint Simon Turek as a Non-Executive Director with
effect from Admission, subject to completion of the Fundraising and customary
due diligence. Simon will serve as a Board representative of Quidos and will
accordingly not be deemed to be an independent Director for the purposes of
the Company's Corporate Governance policies.
Simon brings over 15 years of experience in environmental and financial
markets. He is currently the Chair, and previously served as Managing Director
of PNZ Carbon, a leading carbon market project developer. His background
includes being Executive Director at CME Group, where he managed international
government relations, as well as roles in financial regulation within the UK
and EU. He began his career as a lawyer in New Zealand. Simon has been a Chair
and Non-Executive Director on several boards, in financial services and the
social housing sector, and a trustee of several charities.
Further disclosure will be provided in relation to Mr Turek in due course,
when he is formally appointed to the Board.
Expected Timetable
2024
Announcement of the ABB (Launch) 25 October
Announcement of the Retail Offer 25 October
Launch of Retail Offer via Bookbuild platform 25 October
Announcement of the results of the ABB (Close) 25 October
Publication and posting of the Circular and Form of Proxy 25 October
Close of Retail Offer via Bookbuild platform 04.30 p.m. 28 October
Announcement of the results of the Retail Offer 28 October
Latest time and date for receipt of Forms of Proxy or electronic proxy 11.00 a.m. 7 November
appointments for use at the General Meeting
General Meeting 11.00 a.m. 11 November
Capital Reorganisation Record Date 6.00 p.m. 11 November
Announcement of results of the General Meeting 11 November
Admission, and commencement of dealings in the Existing Adjusted Ordinary 8.00 a.m. on 12 November
Shares and the New Ordinary Shares
CREST accounts to be credited for the Existing Adjusted Ordinary Shares and 12 November
the New Ordinary Shares to be held in uncertificated form
Dispatch of (i) definitive share certificates New Ordinary Shares to be held week commencing 18 November
in certificated form and (ii) certificates for Convertible Loan Notes
Notes:
1. Each of the above times and/or dates is subject to change at
the absolute discretion of the Company and Cavendish. 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.
Admission, settlement and CREST
The New Ordinary Shares, when issued, will be fully paid and will rank pari
passu in all respects with the Existing Adjusted Ordinary Shares, including
the right to receive all dividends and other distributions declared, made or
paid after the date of issue.
Applications will be made to the London Stock Exchange for admission of the
New Ordinary Shares and the Existing Adjusted Ordinary Shares to trading on
AIM. It is expected that Admission will take place on or before 8.00 a.m. on
12 November 2024 and that dealings in the New Ordinary Shares and Existing
Adjusted Ordinary Shares on AIM will commence at the same time.
In accordance with the provisions of the Disclosure and Transparency Rules of
the FCA, the Company confirms that, immediately following Admission, it
expects its issued share capital will comprise 4,062,612,993 ordinary shares
of 0.01 pence each (assuming full take up of the Placing, Subscriptions and
Retail Offer). All ordinary shares shall have equal voting rights and,
following the Fundraising, none of the ordinary shares will be held in
treasury. The total number of voting rights in the Company immediately
following Admission will therefore be 4,062,612,993 (assuming full take up of
the Retail Offer).
IMPORTANT INFORMATION
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 Cavendish or by any of their respective 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.
This Announcement is released by Haydale Graphene Industries Plc and contains
inside information for the purposes of Article 7 of the Market Abuse
Regulation (EU) 596 / 2014 which forms part of UK law by virtue of the
European Union (Withdrawal) Act 2018 ("MAR"). It is disclosed in accordance
with the Group's obligations under Article 17 of MAR.
For the purposes of MAR and Article 2 of Commission Implementing Regulation
(EU) 2016/1055 which forms part of UK law by virtue of the European Union
(Withdrawal) Act 2018, this Announcement is being made on behalf of the Group
by Cavendish. This Announcement does not constitute, or form part of, a
prospectus relating to the Company, nor does it constitute or contain any
invitation or offer to any person, or any public offer, to subscribe for,
purchase or otherwise acquire any shares in the Company or advise persons to
do so in any jurisdiction, nor shall it, or any part of it form the basis of
or be relied on in connection with any contract or as an inducement to enter
into any contract or commitment with the Company. In particular, the New
Ordinary Shares have not been, and will not be, registered under the United
States Securities Act of 1933 as amended or qualified for sale under the laws
of any state of the United States or under the applicable laws of any of
Canada, Australia, Japan, New Zealand or the Republic of South Africa, and,
subject to certain exceptions, may not be offered or sold in the United States
or to, or for the account or benefit of, US persons (as such term is defined
in Regulation S under the Securities Act) or to any national, resident or
citizen of Canada, Australia, Japan, New Zealand or the Republic of South
Africa.
The distribution or transmission of this Announcement and the offering of the
New Ordinary Shares in certain jurisdictions other than the UK may be
restricted or prohibited by law or regulation. Persons distributing this
Announcement must satisfy themselves that it is lawful to do so. Any failure
to comply with these restrictions may constitute a violation of the securities
laws of any such jurisdiction. No action has been taken by the Company 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 by the Company to
inform themselves about, and to observe, such restrictions. In particular,
this Announcement may not be distributed, directly or indirectly, in or into a
Restricted Jurisdiction. Overseas Shareholders and any person (including,
without limitation, nominees and trustees), who have a contractual or other
legal obligation to forward this Announcement to a jurisdiction outside the UK
should seek appropriate advice before taking any action.
This Announcement includes "forward-looking statements" which includes all
statements other than statements of historical fact, including, without
limitation, those regarding the Company's financial position, business
strategy, plans and objectives of management for future operations, or any
statements preceded by, followed by or that include the words "targets",
"believes", "expects", "aims", "intends", "will", "may", "anticipates",
"would", "could" or similar expressions or negatives thereof. Such
forward-looking statements involve known and unknown risks, uncertainties and
other important factors beyond the Company's control that could cause the
actual results, performance or achievements of the Group to be materially
different from future results, performance or achievements expressed or
implied by such forward-looking statements. Such forward-looking statements
are based on numerous assumptions regarding the Company's present and future
business strategies and the environment in which the Company will operate in
the future. These forward-looking statements speak only as at the date of this
Announcement. The Company expressly disclaims any obligation or undertaking to
disseminate any updates or revisions to any forward-looking statements
contained herein to reflect any change in the Company's expectations with
regard thereto or any change in events, conditions or circumstances on which
any such statements are based unless required to do so by applicable law or
the AIM Rules.
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.
Cavendish, which is authorised and regulated by the FCA in the United Kingdom,
is acting as nominated adviser, lead broker and bookrunner to the Company in
connection with the Placing. Cavendish will not be responsible to any person
other than the Company for providing the protections afforded to clients of
Cavendish or for providing advice to any other person in connection with the
Placing or any acquisition of shares in the Company. Cavendish is not making
any representation or warranty, express or implied, as to the contents of this
Announcement. Cavendish has not authorised the contents of, or any part of,
this Announcement, and no liability whatsoever is accepted by Cavendish for
the accuracy of any information or opinions contained in this Announcement or
for the omission of any material information.
The New Ordinary Shares will not be admitted to trading on any stock exchange
other than the AIM market of the London Stock Exchange.
The Appendix to this Announcement (which forms part of this Announcement) sets
out the terms and conditions of the Placing. By participating in the Placing,
each person who is invited to and who chooses to participate in the Placing by
making or accepting an oral and legally binding offer to acquire Placing
Shares will be deemed to have read and understood this Announcement in its
entirety (including the Appendix) and to be making such offer on the terms and
subject to the conditions set out in this Announcement and to be providing the
representations, warranties, undertakings and acknowledgements contained in
the Appendix.
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.
DEFINITIONS
The following definitions apply throughout this Announcement unless the
context otherwise requires:
"ABB" or "ABB process" the accelerated bookbuilding process through which the Placing is to be
conducted by Cavendish as described in this Announcement
"Act" the Companies Act 2006, as amended
"Admission" admission of the New Ordinary Shares and the Existing Adjusted Ordinary Shares
to trading on AIM becoming effective in accordance with the AIM Rules
"AIM" the market of that name operated by the London Stock Exchange
"AIM Rules" the AIM Rules for Companies governing the admission to and operation of AIM
published by the London Stock Exchange as amended from time to time
"Adjusted EBITDA" profit before tax, interest, depreciation, amortisation, foreign exchange
movements and share based payment charges
"Announcement" this announcement, including the Appendix
"Articles" the articles of association of the Company as amended pursuant to the passing
of the Resolutions
"Bookbuild" or "Bookbuild Platform" the online platform through which the Retail Offer is being conducted.
"Capital Reorganisation" means the proposed subdivision of the Company's 1,798,462,051 Existing
Ordinary Shares of 0.1p pence into 1,798,462,051 ordinary shares of 0.01 pence
and 1,798,462,051 Deferred Shares of 0.09 pence in accordance with Resolution
1, contained in the Notice of General Meeting set out within the Circular
"Capital Reorganisation Record Date" the record date for the Capital Reorganisation being 6.00 p.m. on 11 November
2024
"Cavendish" Cavendish Capital Markets Limited or Cavendish Securities (as the case may be)
(registered in England and Wales with registered number 06198898) whose
registered office is at 1 Bartholomew Close, London, England, EC1A 7BL, the
Company's nominated adviser and broker
"certificated form" or "in certificated form" an Ordinary Share recorded on a company's share register as being held in
certificated form (namely, not in CREST)
"Circular" the circular to be posted to Shareholders in connection with the Fundraising
(and containing the notice of the General Meeting)
"CLNs" or "Convertible Loan Notes" the 10 per cent. fixed rate unsecured convertible loan notes of the Company
constituted by the Convertible Loan Note Instrument to be issued to Octopus
Investments
"Convertible Loan Note Instrument" the convertible loan note instrument of the Company dated 25 October 2024
constituting the Convertible Loan Notes
"Convertible Loan Note Subscription Confirmations" the confirmations of agreement to subscribe for Convertible Loan Notes to be
delivered to the Company by each of the subscribers for the Convertible Loan
Notes as a condition of the Placing
"Company" or "Haydale" Haydale Graphene Industries Plc, a company incorporated in England and Wales
(company number 07228939) whose registered office is at Clos Fferws, Parc
Hendre, Capel Hendre, Ammanford, Carmarthenshire, SA18 3BL
"CREST" the relevant system (as defined in the CREST Regulations 2001) for the
paperless settlement of trades and the holding of uncertificated securities,
operated by Euroclear.
"CREST Regulations" the Uncertificated Securities Regulations 2001 (SI 2001 No. 3875), as amended
"Deferred Shares" deferred shares of 0.09 pence each in the capital of the Company to be created
pursuant to the Capital Reorganisation
"Directors" or "Board" the directors of the Company or any duly authorised committee thereof
"Enlarged Share Capital" together, the Existing Adjusted Ordinary Shares and the New Ordinary Shares
"Enterprise Investment Scheme" or "EIS" the Enterprise Investment Scheme whose rules are contained in Part 5 of the
Income Tax Act 2007 (income tax) and sections 150A to 150C of, and Schedule 5B
to, the Taxation and Chargeable Gains Act 1992 (capital gains tax)
"EU Prospectus Regulation" Regulation (EU) 2017/1129 on the prospectus to be published when securities
are offered to the pubic or admitted to trading on a regulated market in the
EU
"Euroclear" Euroclear UK & International Limited, the operator of CREST
"Existing Adjusted Ordinary Shares" means the 1,798,462,051 Ordinary Shares 0.01 pence each in issue in the
capital of the Company following the Capital Reorganisation being approved at
the General Meeting (but not including the New Ordinary Shares)
"Existing Ordinary Shares" the 1,798,462,051 ordinary shares in the capital of the Company of 0.1 pence
each in issue as at the date of this document, all of which are admitted to
trading on AIM
"FCA" the Financial Conduct Authority of the UK
"Form of Proxy" the form of proxy for use in connection with the General Meeting which
accompanies the Circular
"FSMA" the Financial Services and Markets Act 2000 (as amended)
"Fundraising" or "Fundraise" together, the Placing, the Subscriptions, the issue of the Convertible Loan
Notes and the Retail Offer
"General Meeting" the general meeting of the Company to be held at 11:00 a.m. on 11 November
2024 or any adjournment thereof, notice of which will be set out at the end of
the Circular
"Group" together, the Company and its subsidiary undertakings
"Intermediaries" any intermediary financial institution that is appointed by the Company in
connection with the Retail Offer after the date of the Placing Agreement
pursuant to an Intermediaries Agreement and "Intermediary" shall mean any one
of them
"ISIN" International Securities Identification Number
"Issue Price" 0.1325 pence per New Ordinary Share
"London Stock Exchange" London Stock Exchange plc
"MAR" EU Regulation 596/2014, which forms part of UK law by virtue of the European
Union (Withdrawal) Act 2018
"Money Laundering Regulations" The Money Laundering, Terrorist Financing and Transfer of Funds (Information
on the Payer) Regulations 2017, the Criminal Justice Act 2003 and the Proceeds
of Crime Act 2002
"New Shares" or "New Ordinary Shares" together, the ordinary shares of 0.01 pence each in the capital of the Company
to be issued pursuant to the Fundraising following the Capital Reorganisation
"Notice of General Meeting" the notice convening the General Meeting which will form part of the Circular
"Octopus AIM VCT" means Octopus AIM VCT plc
"Octopus AIM VCT 2" means Octopus AIM VCT 2 plc
"Octopus Investments" means together, Octopus AIM VCT and Octopus AIM VCT 2
"Overseas Shareholders" Shareholders with registered addresses, or who are citizens or residents of,
or incorporated in, countries outside of the United Kingdom
"Participating Directors" the Directors subscribing for New Ordinary Shares in the Fundraising, being
David Banks, Keith Broadbent, Theresa Wallis and Gareth Kaminski-Cook
"Placees" persons who agree to subscribe for Placing Shares under the Placing
"Placing" the conditional placing by Cavendish, as agent of and on behalf of the
Company, of the Placing Shares at the Issue Price on the terms and subject to
the conditions in the Placing Agreement
"Placing Agreement" the conditional agreement dated 25 October 2024 between the Company and
Cavendish, relating to the Placing and the Retail Offer
"Placing Shares" the 1,640,000,002 New Ordinary Shares to be issued pursuant to the Placing
"Proposals" together, the Capital Reorganisation, the Fundraising and Admission
"Prospectus Regulation Rules" the prospectus regulation rules made by the FCA pursuant to section 73A of
FSMA
"Registrars" Share Registrars Limited, 3 The Millennium Centre, Crosby Way, Farnham, Surrey
GU9 7XX
"Regulatory Information Service" a service approved by the London Stock Exchange for the distribution to the
public of AIM announcements and included within the list on the website of the
London Stock Exchange
"Resolutions" the resolutions to be proposed at the General Meeting the text of which will
be contained in the Notice of General Meeting which forms part of the Circular
"Restricted Jurisdictions" the United States, Canada, Australia, Japan, New Zealand or the Republic of
South Africa or any other jurisdiction where the extension or availability of
the Placing would breach any applicable law
"Result of ABB announcement" the announcement to be made once the ABB has closed confirming the result of
the Placing
"Retail Investors" those existing shareholders of the Company to whom the Retail Offer will be
made available via one of more intermediaries
"Retail Offer" the conditional offer of up to 377,358,490 New Ordinary Shares at the Issue
Price through Intermediaries via the Bookbuild platform
"Retail Shares" the up to 377,358,490 New Ordinary Shares to be issued pursuant to the Retail
Offer subject to, inter alia, the passing of the Resolutions
"Securities Act" the United States Securities Act of 1933, as amended
"Shareholders" registered holders from time to time of Ordinary Shares
"Subscribers" each of Keith Broadbent, Theresa Wallis, Gareth Kaminski-Cook Anthony Best and
Jehova Guernsey Holdings Ltd, being persons who have indicated an intention to
subscribe for the Subscription Shares pursuant to the Subscription Agreements
"Subscriptions" the proposed conditional subscriptions by the Subscribers for the Subscription
Shares at the Issue Price proposed to be made on the terms and subject to the
conditions set out in the Subscription Agreements
"Subscription Agreements" the conditional agreements proposed to be entered into between the Company and
each of the Subscribers, relating to the Subscriptions
"Subscription Shares" the 246,792,450 New Ordinary Shares which are proposed to be issued pursuant
to the Subscriptions
"UK Prospectus Regulation" Regulation (EU) 2017/1129 on the prospectus to be published when securities
are offered to the pubic or admitted to trading on a regulated market, as it
forms part of the domestic law of the United Kingdom by virtue of the European
Union (Withdrawal) Act 2018
"uncertificated" or " in uncertificated form" a share or other security recorded on the relevant register of the share or
security concerned as being held in uncertificated form in CREST and title to
which, by virtue of the CREST Regulations, may be transferred by means of
CREST
"United Kingdom" or "UK" the United Kingdom of Great Britain and Northern Ireland
"VCT" or "Venture Capital Trust" a company which is, or which is seeking to become, approved as a venture
capital trust under the provisions of Part 6 of the ITA
"£" or "Pounds" UK pounds sterling, being the lawful currency of the United Kingdom
APPENDIX
TERMS AND CONDITIONS OF THE PLACING
IMPORTANT INFORMATION FOR PLACEES ONLY
MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THIS
ANNOUNCEMENT (INCLUDING THE APPENDIX) AND THE TERMS AND CONDITIONS SET OUT
HEREIN (TOGETHER, THIS "ANNOUNCEMENT") ARE DIRECTED ONLY AT PERSONS WHOSE
ORDINARY ACTIVITIES INVOLVE THEM IN ACQUIRING, HOLDING, MANAGING AND DISPOSING
OF INVESTMENTS (AS PRINCIPAL OR AGENT) FOR THE PURPOSES OF THEIR BUSINESS AND
WHO HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS AND ARE:
(1) IF IN A MEMBER STATE OF THE EUROPEAN ECONOMIC AREA ("EEA"), QUALIFIED
INVESTORS AS DEFINED IN ARTICLE 2(e) OF THE PROSPECTUS REGULATION (EU)
2017/1129 (THE "EU PROSPECTUS REGULATION") ("EU QUALIFIED INVESTORS"); (2) IF
IN THE UNITED KINGDOM, QUALIFIED INVESTORS WHO (A) FALL WITHIN ARTICLE 19(5)
OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER
2005, AS AMENDED (THE "ORDER") (INVESTMENT PROFESSIONALS) OR (B) FALL WITHIN
ARTICLE 49(2)(a) TO (d) (HIGH NET WORTH COMPANIES, UNINCORPORATED
ASSOCIATIONS, ETC.) OF THE ORDER AND ARE QUALIFIED INVESTORS WITHIN THE
MEANING OF ARTICLE 2(e) OF REGULATION (EU) 2017/1129 AS AMENDED, AS IT FORMS
PART OF UK LAW AS RETAINED EU LAW AS DEFINED IN, AND BY VIRTUE OF, THE
EUROPEAN UNION (WITHDRAWAL) ACT 2018 (AS AMENDED) (THE "UK PROSPECTUS
REGULATION") ("UK QUALIFIED INVESTORS"); OR (3) ARE PERSONS TO WHOM IT MAY
OTHERWISE LAWFULLY BE COMMUNICATED (ALL SUCH PERSONS TOGETHER BEING REFERRED
TO AS "RELEVANT PERSONS").
DISTRIBUTION OF THIS ANNOUNCEMENT IN CERTAIN JURISDICTIONS MAY BE RESTRICTED
OR PROHIBITED BY LAW OR REGULATION. PERSONS DISTRIBUTING THIS ANNOUNCEMENT
MUST SATISFY THEMSELVES THAT IT IS LAWFUL TO DO SO.
The Placing Shares have not been and will not be registered under the United
States Securities Act of 1933, as amended (the "Securities Act") or under the
securities laws of any state or other jurisdiction of the United States and
may not be offered, sold, resold or delivered, directly or indirectly, in or
into the United States, except pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the Securities
Act. No public offering of the Placing Shares is being made in the United
States. The Placing (as defined below) is being made solely outside the United
States to persons in offshore transactions (as defined in Regulation S under
the Securities Act ("Regulation S")) meeting the requirements of Regulation S.
Persons receiving this announcement (including custodians, nominees and
trustees) must not forward, distribute, mail or otherwise transmit it in or
into the United States or use the United States mails, directly or indirectly,
in connection with the Placing.
This Announcement does not constitute an offer to sell or issue or a
solicitation of an offer to buy or subscribe for Placing Shares in any
Restricted Jurisdiction. This announcement and the information contained
herein are not for publication or distribution, directly or indirectly, to
persons in a Restricted Jurisdiction unless permitted pursuant to an exemption
under the relevant local law or regulation in any such jurisdiction. No
action has been taken by the Company, Cavendish or any Cavendish Affiliates or
Haydale Affiliates (as defined below) that would permit an offer of the
Placing Shares or possession or distribution of this Announcement or any other
publicity material relating to such Placing Shares in any jurisdiction where
action for that purpose is required. Persons receiving this Announcement are
required to inform themselves about and to observe any such restrictions.
All offers of the Placing Shares will be made pursuant to an exemption under
the UK Prospectus Regulation and the EU Prospectus Regulation from the
requirement to produce a prospectus. 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 Placing 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 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 offered in compliance with the securities laws of
any state, province or territory of Canada, Australia, 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 Canada,
Australia, 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 or other legal obligation to forward a copy of this Announcement
should seek appropriate advice before taking any action.
Any indication in this Announcement of the price at which the Existing
Ordinary Shares have been bought or sold in the past cannot be relied upon as
a guide to future performance. Persons needing advice should consult an
independent financial adviser.
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.
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.
Cavendish, which is authorised and regulated in the United Kingdom by the FCA,
is acting for Haydale and for no one else in connection with the Placing and
will not regard any other person (whether or not a recipient of this document)
as a client in relation to the Placing or Admission and will not be
responsible to anyone other than Haydale for providing the protections
afforded to clients of Cavendish or for affording advice in relation to the
Placing or Admission, or any other matters referred to herein.
By participating in the Placing, each person who is invited to and who chooses
to participate in the Placing (a "Placee") by making or accepting an oral
and/or written legally binding offer to subscribe for Placing Shares is deemed
to have read and understood this Announcement in its entirety (including this
Appendix) and to be providing the representations, warranties, undertakings,
agreements and acknowledgements contained herein.
EACH PLACEE SHOULD CONSULT WITH ITS OWN ADVISERS AS TO LEGAL, REGULATORY, TAX,
BUSINESS AND RELATED ASPECTS OF A SUBSCRIPTION FOR PLACING SHARES.
Details of the Placing Agreement and the Placing Shares
The Company has today entered into a Placing Agreement with Cavendish.
Pursuant to the Placing Agreement, Cavendish has, subject to the passing of
the Resolutions and to the other terms and conditions set out therein, agreed
to use reasonable endeavours, as agent of the Company, to procure subscribers
for the Placing Shares pursuant to the ABB Process described in this
Announcement and as set out in the Placing Agreement.
None of the Placing, the Subscriptions or the Retail Offer are being
underwritten.
The Placing Shares will, when issued, be subject to the Articles, be credited
as fully paid and rank pari passu in all respects with each other and with
the Existing Adjusted Ordinary Shares then in issue, including the right to
receive all dividends and other distributions declared, made or paid in
respect of the Existing Adjusted Ordinary Shares after the date of Admission.
The Placing Shares will be issued free of any encumbrance, lien or other
security interest.
Application for admission to trading on AIM
Application will be made to the London Stock Exchange for the Placing Shares
to be admitted to AIM. Subject to the satisfaction or waiver of the conditions
of the Placing Agreement ("Conditions"), it is expected that (i) Admission
will take place on or before 8.00 a.m. on 12 November 2024 and that dealings
in the Existing Adjusted Ordinary Shares and the New Ordinary Shares on AIM
will commence at the same time.
ABB Process
Commencing today, Cavendish will be conducting the ABB Process to determine
demand for participation in the Placing by Placees. This Announcement gives
details of the terms and conditions of, and the mechanics of participation
in, the Placing. However, Cavendish will be entitled to effect the Placing by
such alternative method to the ABB Process as it may, after consultation with
the Company, determine. No commissions will be paid by or to Placees in
respect of any participation in the Placing or subscription for Placing
Shares.
Participation in, and principal terms of, the ABB Process
Participation in the Placing is by invitation only and will only be available
to persons who may lawfully be, and are, invited to participate by Cavendish.
Cavendish and Cavendish Affiliates are entitled to participate as Placees in
the ABB Process.
The ABB Process will establish the number of Placing Shares to be issued
pursuant to the Placing.
The book will open with immediate effect. The ABB Process is expected to close
not later than this evening, but may be closed at such earlier or later time
as Cavendish may, in its absolute discretion (after consultation with the
Company), determine. The Result of ABB Announcement will be released following
the close of the ABB Process.
A bid in the ABB Process will be made on the terms and conditions set out in
this Announcement and, subject thereto, will be legally binding on the Placee
on behalf of which it is made and, except with Cavendish's consent, will not
be capable of variation or revocation after the time at which it is submitted.
A Placee who wishes to participate in the ABB Process should communicate its
bid by telephone to its usual sales contact at Cavendish. Each bid should
either state the number of Placing Shares which the prospective Placee wishes
to subscribe for or a fixed monetary amount at, in either case, the Issue
Price. If successful, Cavendish will re-contact and confirm orally to Placees
following the close of the ABB Process the size of their respective
allocations and a trade confirmation will be despatched as soon as possible
thereafter. Cavendish's oral confirmation of the size of allocations and each
Placee's oral commitments to accept the same will constitute an irrevocable
legally binding agreement in favour of the Company and Cavendish pursuant to
which each such Placee will be required to accept the number of Placing Shares
allocated to it at the Issue Price on the terms and subject to the conditions
set out herein and in accordance with the Articles. Each Placee will be deemed
to have read and understood the Announcement in its entirety. Each Placee's
allocation and commitment will be evidenced by a trade confirmation issued to
such Placee by Cavendish. The terms of this Appendix will be deemed
incorporated in that trade confirmation.
Cavendish reserves the right to scale back the number of Placing Shares to be
subscribed by any Placee in the event that the Placing is
oversubscribed. Cavendish also reserves the right not to accept offers to
subscribe for Placing Shares or to accept such offers in part rather than in
whole. The acceptance and, if applicable, scaling back of offers shall be at
the absolute discretion of Cavendish.
Each Placee's obligations will be owed to the Company and to Cavendish.
Following the oral confirmation referred to above, each Placee will also have
an immediate, separate, irrevocable and binding obligation, owed to the
Company and Cavendish, as agent of the Company, to pay to Cavendish (or as
Cavendish may direct) in cleared funds an amount equal to the product of
the Issue Price and the number of Placing Shares allocated to such Placee.
All obligations under the Placing will be subject to fulfilment 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 "Right to
terminate under the Placing Agreement". 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.
To the fullest extent permissible by law, none of Cavendish, any holding
company of Cavendish, any subsidiary of Cavendish, any subsidiary of any such
holding company, any branch, affiliate or associated undertaking of any such
company nor any of their respective directors, officers and employees (each an
"Cavendish Affiliate") nor any person acting on their behalf shall have any
liability to Placees (or to any other person whether acting on behalf of a
Placee or otherwise). In particular, none of Cavendish, any Cavendish
Affiliate nor any person acting on their behalf shall have any liability
(including, to the extent legally permissible, any fiduciary duties), in
respect of its conduct of the ABB Process or of such alternative method of
effecting the Placing as Cavendish may determine.
Information to Distributors
Solely for the purposes of the product governance requirements contained
within: (a) EU Directive 2014/65/EU on markets in financial instruments, as
amended ("MiFID II"); (b) Articles 9 and 10 of Commission Delegated Directive
(EU) 2017/593 supplementing MiFID II; and (c) local implementing measures
(together, the "Product Governance Requirements"), which form part of UK law
by virtue of the European Union (Withdrawal) Act 2018 and disclaiming all and
any liability, whether arising in tort, contract or otherwise, which any
"manufacturer" (for the purposes of the Product Governance Requirements) may
otherwise have with respect thereto, the securities referred to in this
Announcement will be subject to a product approval process, which is expected
to determine that the securities are: (i) 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 MiFID II; and (ii)
eligible for distribution through all distribution channels as are permitted
by MiFID II (the "Target Market Assessment").
Notwithstanding the Target Market Assessment, distributors and recipients of
this Announcement should note that: the price of the securities may decline
and investors could lose all or part of their investment; the securities offer
no guaranteed income and no capital protection; and an investment in the
securities 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 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 Target Market
Assessment, Cavendish will only procure investors who meet the criteria of
professional clients and eligible counterparties. For the avoidance of doubt,
the Target Market Assessment does not constitute: (a) an assessment of
suitability or appropriateness for the purposes of MiFID II; 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 securities.
Each distributor is responsible for undertaking its own Target Market
Assessment in respect of the securities and for determining appropriate
distribution channels.
Persons who are invited to and who choose to participate in the Placing, by
making an oral and legally binding offer to acquire Placing Shares will be
deemed to have read and understood this Announcement in its entirety and to be
making such offer to acquire Placing Shares on the terms and conditions, and
to be providing the representations, warranties, acknowledgements and
undertakings contained in this Appendix.
In this Appendix, unless the context otherwise requires, "Placee" means a
Relevant Person (including individuals, funds or others) by whom or on whose
behalf a commitment to take up Placing Shares has been given and who has been
invited to participate in the Placing by Cavendish.
All obligations of Cavendish under the Placing will be subject to fulfilment
of the conditions referred to in this Announcement including without
limitation those referred to below under "Conditions of 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 Cavendish under the Placing Agreement in respect of the
Placing are conditional, amongst other things, on:
1. the warranties on the part of the Company contained in the Placing
Agreement being true and accurate and not misleading on and as of the date of
the Placing Agreement and at all times during the period up to and including
Admission;
2. the Resolutions being validly passed at the General Meeting without
amendment and remaining in full force and effect and the Capital
Reorganisation becoming effective;
3. the Convertible Loan Note Subscription Confirmations having been duly
delivered to the Company and remaining in full force and effect;
4. the Convertible Loan Note Instrument having been duly entered into by
the parties thereto and remaining in full force and effect;
5. the performance by the Company of its obligations under the Placing
Agreement to the extent that they fall to be performed prior to Admission;
6. the obligations of Cavendish not having been terminated (as described
below under "Right to terminate under the Placing Agreement");
7. the Company allotting, subject only to Admission, the Placing Shares in
accordance with the Placing Agreement; and
8. Admission occurring not later than 8.00 a.m. on or around 12 November
2024 or such later time and/or date as Cavendish may agree in writing with the
Company (but in any event not later than 8.00 a.m. on 20 December 2024).
If (a) the Conditions of the Placing are not fulfilled (or to the extent
permitted under the Placing Agreement waived by Cavendish), or (b) the Placing
Agreement is terminated in the circumstances specified below, the Placing will
lapse and each Placee's rights and obligations hereunder shall cease and
determine at such time and no claim may be made by a Placee in respect
thereof. None of Cavendish, the Company, any Cavendish Affiliate, nor any
holding company of the Company, any subsidiary of the Company, any subsidiary
of any such holding company, any branch, affiliate or associated undertaking
of any such company nor any of their respective directors, officers and
employees (each a "Haydale Affiliate") 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 it may make as to whether or not to waive or to extend
the time and/or date for the satisfaction of any condition in the Placing
Agreement or in respect of the Placing generally.
By participating in the Placing, each Placee agrees that Cavendish's rights
and obligations in respect of the Placing terminate, inter alia, in the
circumstances described below under "Right to terminate under the Placing
Agreement".
Right to terminate under the Placing Agreement
Cavendish may, at any time before Admission and in its absolute discretion,
terminate the Placing Agreement with immediate effect if, amongst other
things:
1. any statement contained in any investor presentation, circular or any
announcement relating to the Placing is untrue, incorrect or misleading in any
respect which Cavendish consider material in the context of the Placing or
Admission;
2. any of the warranties, was, when given, or becomes, untrue, inaccurate
or misleading in a respect which Cavendish considers to be material in the
context of the Placing;
3. the Company has failed to comply materially with any of its obligations
under the Placing Agreement, the Companies Act, FSMA or the AIM Rules;
4. any of the Conditions of the Placing have become incapable of
fulfilment;
5. there has occurred (in the sole judgement of Cavendish) any material
adverse change affecting the financial or trading position or prospects of the
Company and its subsidiaries; or
6. there has occurred any change in national or international financial,
economic, political, military or market conditions, including fluctuations in
exchange rates, acts of terrorism, the outbreak of hostilities, any epidemic,
pandemic or other health emergency, or the suspension of trading in securities
generally on the London Stock Exchange or the New York Stock Exchange, the
declaration of a banking moratorium in London or by the US Federal or New York
State authorities or material disruption to any commercial banking or
securities settlement services in the US or the UK which, in any such case is
likely to have a materially prejudicial effect on the Placing.
By participating in the Placing, each Placee agrees with Cavendish that the
exercise by Cavendish of any right of termination or other discretion under
the Placing Agreement shall be within the absolute discretion of Cavendish and
that Cavendish need not make any reference to the Placees in this regard and
that, to the fullest extent permitted by law, neither the Company, Cavendish,
any Cavendish Affiliate nor any Haydale Affiliate shall have any liability
whatsoever to the Placees in connection with any such exercise or failure to
so exercise.
Post Placing Covenants
The Company will not during the period commencing on the date of Admission and
expiring six months from Admission, without the prior consent of Cavendish
(not to be unreasonably withheld or delayed), amongst other things:
1. vary or cancel or surrender any options or share awards granted
pursuant to any employee share scheme;
2. issue, allot, offer, pledge, sell, contract to sell, grant any option
over or engage in certain other activities relating to its securities, other
than the grant of options under, or the allotment and issue of shares pursuant
to, options or share awards under, any existing employee share schemes of the
Company in accordance with its normal practice; or
3. enter into any agreement, commitment or arrangement which is or may be
material in the context of the business or affairs of the Group or the
Placing.
Additionally, the Company shall use all reasonable endeavours to ensure that
it does not do anything which will prejudice the eligibility of the Placing
Shares for relief under the Enterprise Investment Scheme.
No Prospectus
No offering document, admission document or prospectus has been or will be
prepared in relation to the Placing and no such prospectus is required (in
accordance with the EU Prospectus Regulation or the UK Prospectus Regulation)
to be published or submitted to be approved by the FCA and Placees'
commitments will be made solely on the basis of the information contained in
this Announcement (including this Appendix). 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 (as amended) does
not apply.
Each Placee, by accepting a participation in the Placing, agrees that the
content of this Announcement is exclusively the responsibility of the Company
and confirms to Cavendish and the Company that it has neither received nor
relied on any information, representation, warranty or statement made by or on
behalf of Cavendish (other than the amount of the relevant Placing
participation in the oral confirmation given to Placees and the trade
confirmation referred to below), any Cavendish Affiliate, any persons acting
on its or their behalf or the Company or any Haydale Affiliate and none of
Cavendish, any Cavendish Affiliate, any persons acting on their behalf, the
Company, any Haydale Affiliate nor any persons acting on their behalf will be
liable for the decision of any Placee to participate in the Placing based on
any other information, representation, warranty or statement which the Placee
may have obtained or received (regardless of whether or not such information,
representation, warranty or statement was given or made by or on behalf of any
such persons). By participating in the Placing, each Placee acknowledges to
and agrees with Cavendish for itself and as agent for the Company that,
except in relation to the information contained in this Announcement, it has
relied on its own investigation of the business, financial or other position
of the Company in deciding whether to participate in the Placing. Nothing in
this paragraph shall exclude the liability of any person for fraudulent
misrepresentation. No Placee should consider any information in this
Announcement to be legal, tax or business advice. Each Placee should consult
its own attorney, tax adviser and business adviser for legal, tax and business
advice regarding an investment in the Placing Shares.
Registration and settlement
Settlement of transactions in the Placing Shares following Admission will take
place within the CREST system, using the DVP mechanism, subject to certain
exceptions. Cavendish reserves the right to require settlement for and
delivery of the Placing Shares to Placees by such other means as Cavendish may
deem necessary, including, without limitation, if delivery or settlement is
not possible or practicable within the CREST system within the timetable set
out in this Announcement or would not be consistent with the regulatory
requirements in the Placee's jurisdiction.
The expected timetable for settlement will be as follows:
Placing Shares, Retail Shares and Subscription Shares Trade Date 8 November 2024
Placing Shares, Retail Shares and Subscription Shares Settlement Date 12 November 2024
ISIN Code GB00BKWQ1135
SEDOL BKWQ113
CREST ID for Cavendish 601
Following the close of the ABB Process, each Placee allocated Placing Shares
in the Placing will be sent a trade confirmation stating the number of Placing
Shares allocated to it, the Issue Price, the aggregate amount owed by such
Placee to Cavendish and settlement instructions. Placees should settle
against the Cavendish CREST ID shown above. It is expected that such trade
confirmation will be despatched on the expected trade date shown above. Each
Placee agrees that it will do all things necessary to ensure that delivery and
payment is completed in accordance with either the standing CREST or
certificated settlement instructions which it has in place with Cavendish.
It is expected that settlement will take place on the Settlement Date shown
above on a DVP basis in accordance with the instructions set out in the trade
confirmation unless otherwise notified by Cavendish.
Interest is chargeable daily on payments not received from Placees on the due
date in accordance with the arrangements set out above at the rate of two
percentage points above the base rate of Barclays Bank Plc.
Each Placee is deemed to agree that if it does not comply with these
obligations, Cavendish may sell any or all of the Placing Shares allocated to
the Placee on such Placee's behalf and retain from the proceeds, for
Cavendish's own account and profit, an amount equal to the aggregate amount
owed by the Placee plus any interest due. The Placee will, however, remain
liable for any shortfall below the aggregate amount owed by such Placee and it
may be required to bear any stamp duty or stamp duty reserve tax (together
with any interest or penalties) which may arise upon the sale of such Placing
Shares on such Placee's behalf.
If Placing Shares are to be delivered to a custodian or settlement agent, the
Placee should ensure that the trade confirmation is copied and delivered
immediately to the relevant person within that organisation.
Insofar as Placing Shares are registered in the Placee's name or that of its
nominee or in the name of any person for whom the Placee is contracting as
agent or that of a nominee for such person, such Placing Shares will, subject
as provided below, be so registered free from any liability to any levy, stamp
duty or stamp duty reserve tax. If there are any circumstances in which any
other stamp duty or stamp duty reserve tax is payable in respect of the issue
of the Placing Shares, neither Cavendish nor the Company shall be responsible
for the payment thereof. Placees will not be entitled to receive any fee or
commission in connection with the Placing.
Representations, warranties and terms
By participating in the Placing, each Placee (and any person acting on such
Placee's behalf):
1. represents and warrants that it has read and understood this
Announcement in its entirety (including this Appendix) and acknowledges that
its participation in the Placing and the issue of the Placing Shares will be
governed by the terms of this Announcement (including this Appendix);
2. acknowledges that no prospectus, admission document or offering
document has been or will be prepared in connection with the Placing and it
has not received and will not receive a prospectus, admission or other
offering document in connection with the ABB Process, the Placing or the
Placing Shares;
3. agrees to indemnify on an after-tax basis and hold harmless each of the
Company, Cavendish, Cavendish Affiliates and Haydale Affiliates and any person
acting on their behalf from any and all costs, losses, 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 in this Announcement and further agrees that the
provisions of this Announcement shall survive after completion of the Placing;
4. acknowledges that the Placing Shares will be admitted to AIM and the
Company is therefore required to publish and has published certain business
and financial information in accordance with the AIM Rules and UK version of
the Market Abuse Regulation (EU 596/2014) which forms part of UK law by
virtue of the European Union (Withdrawal) Act 2018 ("MAR") and other
applicable laws and regulations (the "Exchange Information"), which includes
certain business and financial and the Company's announcements and circulars
published in the past 12 months, and that the Placee is able to obtain or
access this Exchange Information without undue difficulty and is aware of the
contents of the Exchange Information;
5. acknowledges that none of Cavendish, any Cavendish Affiliate or any
person acting on their behalf has provided, and will not provide, it with any
material or information regarding the Placing Shares or the Company; nor has
it requested any of Cavendish, nor any Cavendish Affiliate nor any person
acting on their behalf to provide it with any such material or information;
6. acknowledges that (i) none of Cavendish or any Cavendish Affiliate or
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 Cavendish and that
Cavendish does not have any duties or responsibilities to it (or any person
acting on behalf of a Placee) 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, agreements 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, and (ii) neither it nor, as
the case may be, its clients expect Cavendish to have any duties or
responsibilities to it similar or comparable to the duties of "best execution"
and "suitability" imposed by the Conduct of Business Sourcebook contained in
the FCA's Handbook of Rules and Guidance, and that Cavendish is not acting for
it or its clients, and that Cavendish will not be responsible to any person
other than the Company for providing protections afforded to its clients;
7. acknowledges that the content of this Announcement is exclusively the
responsibility of the Company and that none of Cavendish, nor any Cavendish
Affiliate nor any person acting on its or their behalf will be responsible for
or shall have any liability for any information, representation or statement
relating to the Company contained in this Announcement or any information
previously published by or on behalf of the Company including (without
limitation) any Exchange Information, and none of Cavendish, nor any Cavendish
Affiliate nor any person acting on their behalf will be liable for any
Placee's decision to participate in the Placing based on any information,
representation or statement contained in this Announcement or otherwise. Each
Placee further represents, warrants and agrees that the only information on
which it is entitled to rely and on which such Placee has relied in committing
to subscribe for the Placing Shares is contained in this Announcement, such
information being all that it deems necessary to make an investment decision
in respect of the Placing Shares, and that it has relied on its own
investigation with respect to the Placing Shares and the Company in connection
with its decision to subscribe for the Placing Shares and acknowledges that it
is not relying on any other information whatsoever and in particular it is not
relying on any investigation that Cavendish, any Cavendish Affiliate or any
person acting on their behalf may have conducted with respect to the Placing
Shares or the Company and none of such persons has made any representations to
it, express or implied, with respect thereto;
8. acknowledges that 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 Placing. It has had sufficient time to consider and conduct its own
investigation in connection with its subscription for the Placing Shares,
including all tax, legal and other economic considerations and has relied upon
its own examination of, and due diligence on, the Company, and the terms of
the Placing, including the merits and risks involved and it is aware that an
investment in the Placing Shares involves a considerable amount of risk;
9. unless paragraph 10 applies, represents and warrants that it has
neither received nor relied on any inside information for the purposes of MAR
and section 56 of the Criminal Justice Act 1993 (the "CJA") in relation to the
Company or its participation in the Placing and is not purchasing Placing
Shares on the basis of inside information;
10. acknowledges and agrees that, if it has received any inside information
(for the purpose of MAR and section 56 of the CJA) in relation to the Company
and its securities in advance of the Placing, it has consented to receive
inside information for the purposes of MAR and the CJA and it acknowledges
that it was an insider or a person who has received a market sounding for the
purpose of such legislation and it confirms that it has not: (a) dealt (or
attempted to deal) in the securities of the Company (or cancelled or amended
an order in relation thereto); (b) encouraged, recommended or induced another
person to deal in the securities of the Company (or to cancel or amend an
order in relation thereto); (c) unlawfully disclosed inside information to any
person, in each case, prior to the information being made publicly available;
11. acknowledges that it is not entitled to rely on any information
(including, without limitation, any information contained in any management
presentation given in relation to the Placing) other than that contained in
this Announcement (including this Appendix) and any Exchange Information
(save that in the case of Exchange Information, a Placee's right to rely on
that information is limited to the right that such Placee would have as a
matter of law in the absence of this paragraph) and represents and warrants
that it has not relied on any representations relating to the Placing, the
Placing Shares or the Company other than the information contained in this
Announcement or in any Exchange Information;
12. acknowledges that it has not relied on any information relating to the
Company contained in any research reports prepared by Cavendish or any
Cavendish Affiliate or any person acting on its or their behalf and
understands that (i) none of Cavendish, nor any Cavendish Affiliate nor any
person acting on their behalf has or shall have any liability for any public
information relating to the Company or otherwise or any representation; (ii)
none of Cavendish, nor any Cavendish Affiliate, nor any person acting on their
behalf has or shall have any liability for any additional information that has
otherwise been made available to such Placee, whether at the date of
publication, the date of this Announcement or otherwise; and that (iii) none
of Cavendish, nor any Cavendish Affiliate, nor any person acting on their
behalf makes any representation or warranty, express or implied, as to the
truth, accuracy or completeness of such information, whether at the date of
publication, the date of this Announcement or otherwise;
13. represents and warrants that (i) it is entitled to acquire the Placing
Shares for which it is subscribing under the laws and regulations of all
relevant jurisdictions which apply to it; (ii) it has fully observed such laws
and regulations and obtained all such governmental and other guarantees and
other consents and authorities which may be required or necessary in
connection with its subscription for Placing Shares and its participation in
the Placing and has complied with all other necessary formalities in
connection therewith; (iii) it has all necessary capacity and authority to
commit to participation in the Placing and to perform its obligations in
relation thereto and will honour such obligations; (iv) it has paid any issue,
transfer or other taxes due in connection with its subscription for Placing
Shares and its participation in the Placing in any territory; and (v) it has
not taken any action which will or may result in the Company, Cavendish or any
Cavendish Affiliate or Haydale Affiliate or any person acting on their behalf
being in breach of the legal and/or regulatory requirements of any territory
in connection with the Placing;
14. represents and warrants that it understands that the Placing Shares have
not been and will not be registered under the Securities Act or under the
securities laws of any state or other jurisdiction of the United States and
are not being offered or sold within the United States, except pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act;
15. represents and warrants that its acquisition of the Placing Shares has
been or will be made in an "offshore transaction" as defined in and pursuant
to Regulation S;
16. represents and warrants that it will not offer or sell, directly or
indirectly, any of the Placing Shares in the United States except in
accordance with Regulation S or pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the Securities
Act;
17. represents and warrants that if it is a financial intermediary, as that
term is used in Article 5(1) of the UK Prospectus Regulation: (a) any 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 or to which the UK Prospectus Regulation otherwise applies
other than UK Qualified Investors or in circumstances in which the prior
consent of Cavendish has been given to the offer or resale; or (b) where
Placing Shares have been acquired by it on behalf of persons in the United
Kingdom other than UK Qualified Investors, the offer of those Placing Shares
to it is not treated under the UK Prospectus Regulation as having been made to
such persons;
18. represents and warrants that, if it is a financial intermediary, as that
term is used in Article 5(1) of the EU Prospectus Regulation: (i) 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
any member state of the EEA or to which the EU Prospectus Regulation otherwise
applies other than EU Qualified Investors or in circumstances in which the
prior consent Cavendish has been given to the offer or resale; or (ii) where
Placing Shares have been acquired by it on behalf of persons in any member
state of the EEA other than EU 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;
19. represents and warrants that it has not offered or sold and will not
offer or sell any Placing Shares to the public in any member state of the EEA
or the United Kingdom except in circumstances falling within Article 1(4) of
the EU Prospectus Regulation which do not result in any requirement for the
publication of a prospectus pursuant to Article 3 of the EU Prospectus
Regulation;
20. represents and warrants that it has only communicated or caused to be
communicated and will only communicate or cause to be communicated any
invitation or inducement to engage in investment activity (within the meaning
of section 21 of FSMA) relating to the Placing Shares in circumstances in
which it is permitted to do so pursuant to section 21 of FSMA;
21. represents and warrants that it has complied and will comply with all
applicable provisions of FSMA with respect to anything done by it in relation
to the Placing Shares in, from or otherwise involving, the United Kingdom;
22. represents and warrants that it has complied with (i) its obligations
under the CJA and MAR; and (ii) the laws of all relevant jurisdictions which
apply to it and that it has complied, and will fully comply, with all such
laws (including where applicable, the Criminal Justice Act 1988, the Terrorism
Act 2000, the Anti-Terrorism, Crime and Security Act 2001, the Proceeds of
Crime Act 2002 (as amended), the Terrorism Act 2006, the Counter-Terrorism Act
2008 and the Money Laundering, Terrorist Financing and Transfer of Funds
(Information on the Payer) Regulations 2017) and that it is not a person: (a)
with whom transactions are prohibited under the Foreign Corrupt Practices Act
1977 or any economic sanction programmes administered by, or regulations
promulgated by, the Office of Foreign Assets Control of the U.S. Department of
the Treasury; (b) named on the Consolidated List of Financial Sanctions
Targets maintained by HM Treasury of the United Kingdom; or (c) subject to
financial sanctions imposed pursuant to a regulation of the European Union or
a regulation adopted by the United Nations ((i), (ii), (a) and (b), together,
the "Regulations") and rules and guidance on anti-money laundering produced by
the Financial Conduct Authority ("FCA") and, if it is 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;
and it is permitted to subscribe for Placing Shares in accordance with the
laws of all relevant jurisdictions which apply to it and it has complied, and
will fully comply, with all such laws (including where applicable, the
Anti-Terrorism, Crime and Security Act 2001, the Terrorism Act 2006, the
Counter-Terrorism Act 2008, the Proceeds of Crime Act 2002 (as amended) and
the Money Laundering, Terrorist Financing and Transfer of Funds (Information
on the Payer) Regulations 2017);
23. if in the United Kingdom, represents and warrants that: (a) it is a
person having professional experience in matters relating to investments who
falls within the definition of "investment professionals" in Article 19(5) of
the FPO, or (b) it is a person who falls within Article 49(2) (a) to (d) (High
Net Worth Companies, Unincorporated Associations etc.) of the FPO and (c) it
is a qualified investor as defined in Article 2(e) of the UK Prospectus
Regulation and (d) it is person to whom this Announcement may otherwise
lawfully be communicated;
24. represents and warrants that its participation in the Placing would not
give rise to an offer being required to be made by it or any person with whom
it is acting in concert pursuant to Rule 9 of the City Code on Takeovers and
Mergers;
25. undertakes that it (and any person acting on its behalf) will pay for
the Placing Shares acquired by it in accordance with this Announcement and
with any trade confirmation sent by Cavendish (or on its behalf) to it in
respect of its allocation of Placing Shares and its participation in the
Placing on the due time and date set out herein against delivery of such
Placing Shares to it, failing which the relevant Placing Shares may be placed
with other Placees or sold as Cavendish may, in its absolute discretion,
determine 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 (together with any
interest or penalties 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;
26. acknowledges that none of Cavendish, nor any Cavendish Affiliate nor any
person acting on their behalf is making any recommendations to it or advising
it regarding the suitability or merits of any transaction it may enter into in
connection with the Placing, and acknowledges that none of Cavendish, nor any
Cavendish Affiliate nor any person acting on its or their behalf has any
duties or responsibilities to it for providing advice in relation to the
Placing or in respect of any representations, warranties, undertakings or
indemnities contained in the Placing Agreement or for the exercise or
performance of any of Cavendish's rights and obligations thereunder, including
any right to waive or vary any condition or exercise any termination right
contained therein;
27. undertakes that (i) the person whom it specifies for registration as
holder of the Placing Shares will be (a) the Placee or (b) the Placee's
nominee, as the case may be, (ii) neither Cavendish nor the Company will be
responsible for any liability to stamp duty or stamp duty reserve tax
resulting from a failure to observe this requirement and (iii) the Placee and
any person acting on its behalf agrees to acquire the Placing Shares on the
basis that the Placing Shares will be allotted to the CREST stock account of
Cavendish which will hold them as settlement agent as nominee for the Placee
until settlement in accordance with its standing settlement instructions with
payment for the Placing Shares being made simultaneously upon receipt of the
Placing Shares in the Placee's stock account on a delivery versus payment
basis;
28. acknowledges that any agreements entered into by it pursuant to these
terms and conditions, and any non-contractual obligations arising out of or in
connection with such agreements, shall be governed by and construed in
accordance with the laws of England and Wales and it submits (on behalf of
itself and on behalf of any person on whose behalf it is acting) to the
exclusive jurisdiction of the courts of England and Wales as regards any
claim, dispute or matter arising out of any such contract;
29. irrevocably appoints any director of Cavendish as its agent for the
purposes 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 agreed to be taken up by it under the Placing;
30. represents and warrants that it is not a resident of any Restricted
Jurisdiction and acknowledges that the Placing Shares have not been and will
not be registered nor will a prospectus be issued in respect of the Placing
Shares under the securities legislation of any Restricted Jurisdiction and,
subject to certain exceptions, the Placing Shares may not be offered, sold,
taken up, renounced, delivered or transferred, directly or indirectly, within
any Restricted Jurisdiction;
31. represents and warrants that any person who confirms to Cavendish on
behalf of a Placee an agreement to subscribe for Placing Shares and/or who
authorises Cavendish to notify the Placee's name to the Company's registrar,
has authority to do so on behalf of the Placee;
32. acknowledges that the agreement to settle each Placee's acquisition of
Placing Shares (and/or the acquisition of a person for whom it is contracting
as agent) free of stamp duty and stamp duty reserve tax depends on the
settlement relating only to an acquisition by it and/or such person direct
from the Company of the Placing Shares in question. Such agreement assumes
that the Placing Shares are not being acquired in connection with arrangements
to issue depositary receipts or to issue or transfer the Placing Shares into a
clearance service. If there were any such arrangements, or the settlement
related to other dealing in the Placing Shares, stamp duty or stamp duty
reserve tax may be payable, for which neither the Company nor Cavendish will
be responsible. If this is the case, the Placee should take its own advice and
notify Cavendish accordingly;
33. acknowledges that when a Placee or any person acting on behalf of the
Placee is dealing with Cavendish, any money held in an account with Cavendish
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. The 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 in accordance with the client
money rules and will be used by Cavendish in the course of its business and
the Placee will rank only as a general creditor of Cavendish;
34. acknowledges and agrees that in order to ensure compliance with the
Criminal Justice Act 1988, the Terrorism Act 2000, the Anti-Terrorism, Crime
and Security Act 2001, the Proceeds of Crime Act 2002 (as amended) the
Terrorism Act 2006, the Counter-Terrorism Act 2008 and the Money Laundering,
Terrorist Financing and Transfer of Funds (Information on the Payer)
Regulations 2017, and, to the extent applicable, any related or similar rules,
regulations of any body having jurisdiction in respect thereof and the Money
Laundering Sourcebook of the FCA, Cavendish (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 Cavendish or
the Company's registrars, as applicable, of evidence of identity, definitive
certificates in respect of the Placing Shares may be retained at Cavendish's
absolute discretion or, where appropriate, delivery of the Placing Shares to
it in uncertificated form may be delayed at Cavendish's or the Company's
registrars', as the case may be, absolute discretion. If within a reasonable
time after a request for verification of identity Cavendish (for itself and as
agent on behalf of the Company) or the Company's registrars have not received
evidence satisfactory to them, Cavendish 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;
35. acknowledges and understands that the Company, Cavendish, and others
will rely upon the truth and accuracy of the foregoing representations,
warranties, agreements, undertakings and acknowledgements;
36. acknowledges that the basis of allocation will be determined by
Cavendish at its absolute discretion and that the right is reserved to reject
in whole or in part and/or scale back any participation in the Placing;
37. irrevocably authorises the Company and Cavendish to produce this
Announcement pursuant to, in connection with, or as maybe required by any
applicable law or regulation, administrative or legal proceeding or official
inquiry with respect to the matters set forth herein;
38. acknowledges and agrees that its commitment to subscribe for Placing
Shares on the terms set out herein will continue notwithstanding any amendment
that may in future be made to the terms 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 conduct of the Placing;
39. acknowledges and agrees that time is of the essence as regards its
obligations under this Appendix;
40. acknowledges and agrees that 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 Cavendish;
41. acknowledges and agrees that it will be bound by the terms of the
Articles; and
42. acknowledges and agrees that the terms and conditions in this Appendix
and all documents into which this Appendix 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 Cavendish 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.
The acknowledgements, agreements, undertakings, representations and warranties
referred to above are given to each of the Company and Cavendish (for their
own benefit and, where relevant, the benefit of any Cavendish Affiliate or
Haydale Affiliate and any person acting on their behalf) and are irrevocable.
No claim shall be made against the Company, Cavendish, any Cavendish
Affiliate, any Haydale Affiliate, or any other person acting on behalf of any
of such persons by a Placee to recover any damage, cost, loss, charge or
expense which it may suffer or incur by reason of or arising from or in
connection with the performance of its obligations hereunder or otherwise
howsoever in connection with the Placing or Admission.
No UK stamp duty or stamp duty reserve tax should be payable to the extent
that the Placing Shares are issued or transferred (as the case may be) into
CREST to, or to the nominee of, a Placee who holds those shares beneficially
(and not as agent or nominee for any other person) within the CREST system and
registered in the name of such Placee or such Placee's nominee.
Any arrangements to issue or transfer the Placing Shares into a depositary
receipts system or a clearance service or to hold the Placing Shares as agent
or nominee of a person to whom a depositary receipt may be issued or who will
hold the Placing Shares in a clearance service, or any arrangements
subsequently to transfer the Placing Shares, may give rise to stamp duty
and/or stamp duty reserve tax, for which neither the Company nor Cavendish
will be responsible and the Placee to whom (or on behalf 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 stamp duty or stamp duty reserve tax undertakes to pay such
stamp duty or stamp duty reserve tax forthwith and to indemnify on an
after-tax basis and to hold harmless the Company and Cavendish in the event
that any of the Company or any Haydale Affiliate or Cavendish or any
Cavendish Affiliate has incurred any such liability to stamp duty or stamp
duty reserve tax.
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 UK 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.
All times and dates in this Announcement may be subject to amendment.
Cavendish shall notify the Placees and any person acting on behalf of the
Placees of any such changes.
This Announcement has been issued by the Company and is the sole
responsibility of the Company.
Each Placee, and any person acting on behalf of the Placee, acknowledges that
Cavendish does not owe any fiduciary or other duties to any Placee in respect
of any representations, warranties, undertakings or indemnities in the Placing
Agreement.
Each Placee and any person acting on behalf of the Placee acknowledges and
agrees that Cavendish or any Cavendish Affiliate may, at their absolute
discretion, agree to become a Placee in respect of some or all of the Placing
Shares.
The rights and remedies of Cavendish and the Company under these terms and
conditions are in addition to any rights and remedies which would otherwise be
available to each of them and the exercise or partial exercise or partial
exercise of one will not prevent the exercise of others.
Each Placee may be asked to disclose in writing or orally to Cavendish and, if
so, undertakes to provide:
1. if he is an individual, his nationality;
2. if he is a discretionary fund manager, the jurisdiction in which the
funds are managed or owned; and
3. such other "know your client" information as Cavendish may reasonably
request.
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.
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.
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