REG - Hornby PLC - Issue of Equity
21/02/2020 07:00
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RNS Number : 6788D Hornby PLC 21 February 2020
21 February 2020
THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED IN IT IS NOT FOR RELEASE,
PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN
OR INTO THE UNITED STATES OF AMERICA, CANADA, AUSTRALIA, JAPAN OR THE REPUBLIC
OF SOUTH AFRICA OR IN OR INTO ANY OTHER JURISDICTION WHERE TO DO SO MIGHT
CONSTITUTE A VIOLATION OR BREACH OF ANY APPLICABLE LAW OR REGULATION.
THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT CONSTITUTE OR
CONTAIN ANY INVITATION, SOLICITATION, RECOMMENDATION, OFFER OR ADVICE TO ANY
PERSON TO SUBSCRIBE FOR, OTHERWISE ACQUIRE OR DISPOSE OF ANY SECURITIES IN
HORNBY PLC OR ANY OTHER ENTITY IN ANY SUCH JURISDICTION.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF THE MARKET
ABUSE REGULATION (EU) NO. 596/2014.
Hornby PLC
("Hornby", the "Company")
Placing and Open Offer of 41,666,666 New Ordinary Shares to raise £15.0
million
and
Amendment and Restatement of Sale and Purchase Agreement relating to shares in
LCD Enterprises Limited
and
Notice of General Meeting
Hornby PLC, the international models and collectibles group, announces that it
proposes to raise, in aggregate, approximately £15.0 million (before
expenses) through the issue of up to 41,666,666 New Ordinary Shares at an
issue price of 36.0 pence per New Ordinary Share, pursuant to a Placing and
Open Offer.
The Placing is being conducted through an accelerated book building process
(the "Accelerated Book Build") which will be launched immediately following
the release of this announcement (the "Announcement") and which is expected to
close no later than 4.00 pm (GMT) today. Liberum Capital Limited ("Liberum
Capital") is acting as sole bookrunner in connection with the Placing and Open
Offer.
The Company also announces that, conditional on shareholder approval, it has
extended the lock-in period of the sale and purchase agreement, entered into
on November 2017 between the Company, Lyndon Charles Davies and Catherine
Enrico Davies in respect of the acquisition by the Company of 49 per cent. of
the issued ordinary share capital of LCD Enterprises Limited, to 8 December
2023.
Highlights
The Placing and Open Offer
· Approximately £15.0 million to be raised via a proposed Placing
and Open Offer at an issue price of 36.0 pence per New Ordinary Share. Phoenix
Asset Management Partners and Artemis Investment Management LLP (in its
capacity as investment adviser of certain discretionary funds), who currently
own 74.66 per cent. and 14.56 per cent. of the issued ordinary share capital
of the Company, respectively, have indicated that they are wholly supportive
of the Placing and Open Offer, intend to participate in the Placing and have
irrevocably undertaken to vote in favour of the relevant resolutions at a to
be convened general meeting
· Net proceeds of the Placing and Open Offer expected to be
utilised as follows:
o To reinvigorate the Group's key brands through accelerated product
development and additional capital expenditure
o To invest in digital marketing to more efficiently find customers and
establish a platform to build relationships with customers.
o To upgrade central systems building a scalable operating platform for
future growth
o To strengthen the Group's Balance Sheet providing flexibility to invest in
further growth opportunities
· Placing comprising:
o Firm Placing element of up to 37,177,974 New Ordinary Shares to raise
approximately £13.4 million
o Conditional Placing element of up to a further 4,488,692 New Ordinary
Shares to raise up to approximately £1.6 million, subject to clawback to
satisfy take-up of the Open Offer by Qualifying Shareholders. Phoenix and
Artemis are not Qualifying Shareholders and, accordingly, will not participate
in the Open Offer
o Open Offer of up to 4,488,692 New Ordinary Shares to raise up to
approximately £1.6 million which is expected to be made on the basis that:
§ Qualifying Shareholders may subscribe for 1 Open Offer Share for every
3.006268641288 Existing Ordinary Shares held
§ Qualifying Shareholders may also make applications in excess of their pro
rata initial entitlement under an Excess Application Facility
· The Issue Price of 36.0 pence per New Ordinary Share is equal to
the Closing Price per Existing Ordinary Share on 20 February 2020 (being the
latest practicable date prior to publication of this Announcement)
The Amendment and Restatement of the Sale and Purchase Agreement
· On 8 December 2017 the Company completed the acquisition of 49
per cent. of the issued ordinary share capital of LCD Enterprises, for a
consideration of £1.6 million payable in cash pursuant to the LCD SPA
· LCD Enterprises holds majority interests in the Oxford Diecast
Group, which supplies diecast model vehicles and railway products to the
collector, gift and hobby markets globally
· On 20 February 2020, the Company entered into the Amendment and
Restatement Agreement, a conditional agreement pursuant to which the LCD SPA
will be amended and restated such that the end of the Lock-In Period relating
to certain rights of the Company and Lyndon Davies and Catherine Davies, is
extended to 8 December 2023, being the sixth anniversary of completion of the
LCD SPA
· The Amendment and Restatement Agreement is conditional on the
passing of an ordinary resolution by the Shareholders at a general meeting of
the Company which is expected to be held at 10.00 a.m. on 10 March 2020. If
the resolution is not approved by Shareholders at the general meeting, the
Amendment and Restatement Agreement will not be implemented
Lyndon Davies, Chief Executive
"There is momentum at Hornby. A lot has changed over the last two years and we
continue to make good progress. The strengthening of our balance sheet
provides a solid foundation for the next steps in our journey. We have a bold
vision. We will take advantage of technology within our products and how we
engage with our customers. We will fully harness the energy of the broad range
brands we own. These are sometimes forgotten, so it is worth reminding all
about the ammunition we have at our disposal - Hornby, Scalextric, Airfix,
Corgi, Humbrol, Jouef, Lima, Rivarossi, Bassett-Lowke, Electrotren, Triang,
MKD, Pocher. These are some of the most powerful brands that exist in the
markets in which we operate. They have history, heritage and an exciting
future. This fundraise provides us with the means to take steps towards fully
realising their great potential."
The Accelerated Book Build
The Placing is being conducted by way of an Accelerated Book Build led by
Liberum Capital as sole bookrunner.
Completion of the Placing and Open Offer will be conditional upon, inter
alia, the approval of certain resolutions by Shareholders at a general meeting
of the Company, which is expected to be held on 10 March 2020 (the "General
Meeting") and Admission occurring.
Accordingly, the Company expects to publish a circular (the "Circular") in
connection with the Placing and Open Offer shortly following the successful
closure of the Accelerated Book Build, in order to convene the General Meeting
to approve certain matters necessary to implement the Placing and Open Offer
and the Amendment and Restatement of the SPA (the "Resolutions"). Full details
of the Open Offer, to be undertaken at the Issue Price, will also be included
in the Circular.
The Company has today entered into the Placing and Open Offer Agreement with
Liberum Capital which contains customary terms and conditions, as will be
described in more detail in the Circular. Pursuant to the Placing and Open
Offer Agreement, Liberum Capital has conditionally agreed, as agent for the
Company, to use its reasonable endeavours to procure Placees for the Placing
Shares at the Issue Price.
Your attention is drawn to the detailed terms and conditions of the Placing
described in the Appendix to this Announcement (which forms part of this
Announcement).
The books for the Accelerated Book Build will open with immediate effect. The
books are expected to close no later than 4.00 pm (GMT) today. The timing of
the closing of the books and the making of allocations may be accelerated or
delayed at Liberum Capital's sole discretion. The Appendix to this
Announcement contains the detailed terms and conditions of the Placing and
basis on which investors may participate in the Accelerated Book Build. The
Placing is not being underwritten by Liberum Capital. Details of the number of
Placing Shares conditionally placed with institutional and other investors
pursuant to the Placing and gross proceeds will be announced as soon as
practicable after the close of the Accelerated Book Build.
Investors who are invited, and who choose, to participate in the Accelerated
Book Build may do so 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, including the Appendix, and to be making such offer on the
terms and subject to the conditions contained herein and to be making the
representations, warranties, undertakings and acknowledgements contained in
the Appendix to this Announcement.
The Placing Shares will be issued and credited as fully paid and will rank
pari passu with the Existing Ordinary Shares and Open Offer Shares, including
the right to receive all dividends and other distributions (if any) declared,
made or paid on or in respect of such shares after the date of their issue.
Circular and Notice of General Meeting
The Company expects to publish a circular (the "Circular") later today in
connection with the Placing and Open Offer and the Amendment and Restatement
of the SPA, which will contain a notice convening the General Meeting in order
to approve certain matters necessary to implement the Placing and Open Offer
and the Amendment and Restatement of the SPA. The Circular will be posted to
Shareholders later today and a copy will be made available on the Company's
website www.hornby.plc.uk (http://www.hornby.plc.uk) .
The General Meeting is expected to be held at the offices of the Company's
solicitors, Taylor Wessing LLP, 5 New Street Square, London EC4A 3TW at 10.00
a.m. on 10 March 2020. The actions that Shareholders should take to vote on
the Resolutions and/or apply for Open Offer Shares will be set out in the
Circular, along with the recommendations of the Independent Directors.
Defined terms used in this Announcement will have the meaning (unless the
context otherwise requires) as set out in this Announcement and in the
Circular which is expected to be posted to Shareholders today and which will
be made available on the Company's website www.hornby.plc.uk.
The information contained within this Announcement is deemed by the Company to
constitute inside information stipulated under the Market Abuse Regulation
(EU) No. 596/2014. Upon the publication of this announcement via the
Regulatory Information Service, this inside information is now considered to
be in the public domain.
- ends -
For further information contact:
Hornby PLC 01843 233500
Lyndon Davies, CEO
Kirstie Gould, CFO
Liberum Capital Limited 020 3100 2222
Andrew Godber
Edward Thomas
Kane Collings
Financial PR Advisor 07788 144993
Scott Fulton
IMPORTANT INFORMATION
This Announcement contains (or may contain) certain forward-looking statements
with respect to certain of the Company's plans and its current goals and
expectations relating to its future financial condition and performance and
which involve a number of risks and uncertainties. The Company cautions
readers that no forward-looking statement is a guarantee of future performance
and that actual results could differ materially from those contained in the
forward-looking statements. These forward-looking statements can be identified
by the fact that they do not relate only to historical or current facts.
Forward-looking statements sometimes use words such as "aim", "anticipate",
"target", "expect", "estimate", "intend", "plan", "goal", "believe", or other
words of similar meaning. By their nature, forward-looking statements involve
risk and uncertainty because they relate to future events and circumstances,
including, but not limited to, economic and business conditions, the effects
of continued volatility in credit markets, market-related risks such as
changes in the price of commodities or changes in interest rates and foreign
exchange rates, the policies and actions of governmental and regulatory
authorities, changes in legislation, the further development of standards and
interpretations under International Financial Reporting Standards (IFRS)
applicable to past, current and future periods, evolving practices with regard
to the interpretation and application of standards under IFRS, the outcome of
pending and future litigation or regulatory investigations, the success of
future explorations, acquisitions and other strategic transactions and the
impact of competition. A number of these factors are beyond the Company's
control. As a result, the Company's actual future results may differ
materially from the plans, goals, and expectations set forth in the Company's
forward-looking statements. Any forward-looking statements made in this
Announcement by or on behalf of the Company speak only as of the date they are
made. Except as required by the Financial Conduct Authority (the FCA), the
London Stock Exchange or applicable law, the Company expressly disclaims any
obligation or undertaking to release publicly any updates or revisions to any
forward-looking statements contained in this Announcement to reflect any
changes in the Company's expectations with regard thereto or any changes in
events, conditions or circumstances on which any such statement is based.
This Announcement is for information purposes only and shall not constitute an
offer to buy, sell, issue, or subscribe for, or the solicitation of an offer
to buy, sell, issue, or subscribe for any securities, nor shall there be any
sale of securities in any jurisdiction in which such offer, solicitation or
sale would be unlawful prior to registration or qualification under the
securities laws of any such jurisdiction.
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 Liberum Capital Limited or by any of its affiliates or agents as
to, or in relation to, the accuracy or completeness of this Announcement or
any other written or oral information made available to or publicly available
to any interested party or its advisers, and any liability therefore is
expressly disclaimed.
Liberum Capital Limited, which is authorised and regulated in the United
Kingdom by the FCA, is acting for the Company and for no-one else in
connection with the Placing, and will not be responsible to anyone other than
the Company for providing the protections afforded to its customers or for
providing advice to any other person in relation to the Placing or Open Offer
any other matter referred to herein.
The distribution of this Announcement and the offering of the Placing Shares
in certain jurisdictions may be restricted by law. No action has been taken by
the Company or Liberum Capital Limited 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 and Liberum Capital Limited to
inform themselves about, and to observe such restrictions.
Persons (including, without limitation, nominees and trustees) who have a
contractual or other legal obligation to forward a copy of the Appendix or
this Announcement should seek appropriate advice before taking any action.
The Placing Shares to which this Announcement relates may be illiquid and / or
subject to restrictions on their resale. Prospective purchasers of the Placing
Shares should conduct their own due diligence on the Placing Shares. If you do
not understand the contents of this Announcement you should consult an
authorised financial adviser.
Neither the content of the Company's website nor any website accessible by
hyperlinks on the Company's website is incorporated in, or forms part of, this
Announcement.
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 "MiFID II Product Governance Requirements"), and disclaiming
all and any liability, whether arising in tort, contract or otherwise, which
any "manufacturer" (for the purposes of the MiFID II Product Governance
Requirements) may otherwise have with respect thereto, the Placing Shares have
been subject to a product approval process, which has determined that the
Placing Shares 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 should note that: the price of the Placing Shares may
decline and investors could lose all or part of their investment; the Placing
Shares offer no guaranteed income and no capital protection; and an investment
in the Placing Shares is compatible only with investors who do not need a
guaranteed income or capital protection, who (either alone or in conjunction
with an appropriate financial or other adviser) are capable of evaluating the
merits and risks of such an investment and who have sufficient resources to be
able to bear any losses that may result therefrom. The Target Market
Assessment is without prejudice to the requirements of any contractual, legal
or regulatory selling restrictions in relation to the Placing and Open Offer.
Furthermore, it is noted that, notwithstanding the Target Market Assessment,
Liberum Capital 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
Placing Shares or Open Offer Shares.
Each distributor is responsible for undertaking its own target market
assessment in respect of the Placing Shares and determining appropriate
distribution channels.
FURTHER DETAILS OF THE PROPOSED PLACING AND OPEN OFFER AND PROPOSED AMENDMENT
AND RESTATEMENT OF THE SALE AND PURCHASE AGREEMENT
1 Introduction
Amendment and restatement of the LCD SPA
1.1 On 8 December 2017 the Company completed the
acquisition of 49 per cent. of the issued ordinary share capital of LCD
Enterprises, for a consideration of £1.6 million payable in cash pursuant to
the LCD SPA. LCD Enterprises holds majority interests in the Oxford Diecast
Group, which supplies diecast model vehicles and railway products to the
collector, gift and hobby markets globally.
1.2 The LCD SPA also contains rights in favour of the
parties to buy or sell (as applicable) certain LCD Enterprises shares in
specified circumstances as follows:
(a) if Lyndon Davies ceases to hold the position of Chief Executive Officer of the Company for any reason other than his death or incapacity, during the Lock-In Period, Lyndon Davies will become entitled to acquire the 49 ordinary shares of £1.00 each in the capital of LCD Enterprises that were acquired by the Company from Lyndon Davies pursuant to the terms of the LCD SPA, for a purchase price of £1,600,000;
(b) if, at the expiry of the Lock-In Period, Lyndon Davies continues to hold the position of Chief Executive Officer of the Company, the Company will become entitled to acquire the remaining 51 ordinary shares of £1.00 each in the capital of LCD Enterprises held by Lyndon Davies and Catherine Davies for an aggregate purchase price of £1,600,000 or at a price to be negotiated (capped at £7 million) in the event that the underlying after tax earnings (with extraordinary, exceptional and non-recurring items deducted and added back) of LCD Enterprises and the Oxford Diecast Group (as derived from the most recently completed financial year of LCD Enterprises for which audited accounts have been published), are materially (materially for this purpose meaning a 10 per cent. increase or decrease) different to those of the Oxford Diecast Group for the financial year ending on 31 December 2016; and
(c) in the event of the death or incapacity of Lyndon Davies during the Lock-In Period, the Company will be obliged to purchase the remaining 51 ordinary shares of £1.00 each in the capital of LCD Enterprises held by Lyndon Davies and Catherine Davies at a price of four times the underlying after tax earnings (with extraordinary, exceptional and non-recurring items deducted and added back) of LCD Enterprises and the Oxford Diecast Group (capped at £7 million) as derived from the most recently completed financial year of LCD Enterprises for which audited accounts have been published.
1.3 For the duration of the Lock-in Period each of Lyndon
Davies and Catherine Davies have undertaken that each of them shall not
dispose of, or agree to dispose of, directly or indirectly, any of their
remaining shares in LCD Enterprises (the "Restricted Shares") or any interest
in or right to them or charge or agree to charge or otherwise encumber any of
the Restricted Shares or interest in them.
1.4 On 20 February 2020, the Company entered into the
Amendment and Restatement Agreement, a conditional agreement pursuant to which
the LCD SPA will be amended and restated such that the end of the Lock-In
Period is extended to 8 December 2023, being the sixth anniversary of
completion of the LCD SPA.
1.5 The Amendment and Restatement Agreement is conditional
on the passing of an ordinary resolution by the Shareholders at the General
Meeting, which has been convened for 10.00 a.m. on 10 March 2020. If the
resolution is not approved by Shareholders at the General Meeting, the
Amendment and Restatement Agreement will not be implemented. Subject to the
resolution being passed at the General Meeting, it is expected that the
Amendment and Restatement Agreement will complete on 10 March 2020.
2 Background to and reasons for the PROPOSED PLACING and Open Offer AND THE PROPOSED AMENDMENT AND RESTATEMENT AGREEMENT
The Progress of the Turnaround
2.1 As was most recently stated in the Company's Christmas
trading update announcement of 6 January 2020 and in the Company's half-year
results announcement for the period ended 30 September 2019, released on 28
November 2019, the Company has been working through a turnaround plan since
Lyndon Davies joined as CEO on 3 October 2017. The strategy included a number
of different strands, but a key part was ending the discounting of product to
rebuild brand integrity. This strategy is starting to bear fruit as trust is
returning and sales are reverting to a growth trajectory. There is still much
work to do with regards to the turnaround, but the Company has positive
momentum and would like to capitalise on this by investing at a faster rate.
The Board believes that this will allow the Company to accelerate the progress
back to profitability.
Accelerate Product Development
2.2 The future revenue and profitability of the Company
will be defined by the level of innovation and the quality of the products
delivered to its customers. Having learned from the first full year of
products designed by the restructured engineering teams, the Board has
confidence in the Company's ability to be more ambitious about plans for its
product lines over the next few years. It takes between 1½ - 2 years from
inception to develop and deliver most of the Company's products. The Company
has found that its customers appreciate the care and attention it pays to
getting the details right and maintaining industry leading quality standards.
The Company must continue to get these important aspects right, but it must
also accelerate the development of new products in order to accelerate its
sales. The Board believes that this will be facilitated by increased
investment.
2.3 The Company announced some exciting new innovations at
the start of this year at their trade previews including an app-based
Bluetooth analogue controller for its model railways. This is just the start
of the Company's pipeline of development and innovation and the benefits of
accelerating these types of product to market are now becoming evident.
2.4 The Company is proposing to deploy part million of the
proceeds of the Placing and Open Offer to invest in both inventory and capital
expenditure, which the Board believes will accelerate the next stage of the
turnaround.
Build Modern Routes to Market
2.5 The Company's customers are increasingly researching,
finding and buying its products online. However, the Company's online presence
is one of the weakest parts of its infrastructure but is perhaps becoming the
most important portal for its customers. This is a new challenge and the
Company has been studying it in detail. Following a great deal of work with
various technical advisors, it has become apparent that a significant overhaul
of the Company's website and its approach to engaging with customers online is
required. The Company also recognises it must ramp up and modernise its
efforts to find new customers through the various social platforms online too.
2.6 In pursuit of the Company's aim to be the gold
standard of the industry, extra investment in people and infrastructure is
needed which was not budgeted for in the original turnaround plan. The Company
expects to deploy part of the proceeds of the Placing and Open Offer on this
as part of the turnaround. The Board expects this investment to deliver
benefits derived both from finding new customers and from nurturing the
loyalty of existing ones.
Upgrade Central Systems & Processes
2.7 Having been through approximately 2 years of
streamlining systems, people and processes in respect of central functions,
the Company has made a great deal of savings but has also identified some
bottlenecks in the basic infrastructure on which its business runs. The
Company has identified ways in which it will need to upgrade its systems in
order to make sure it can remain efficient and keep staff focussed on the
customer, as opposed to internal administrative burdens. The Board believes
the best way to ensure the Company's infrastructure is effective and scalable
is to migrate and upgrade the Company's systems and processes to the latest
cost-effective technology. Furthermore, the Board believes this project will
assist with the upgrade of the Company's online presence.
2.8 The Board anticipates that this aspect of the
turnaround will require investment to deliver savings in the back end of the
Company's business.
Improve Balance Sheet Strength & Efficiency
2.9 The Company's business has a seasonal working capital
profile requiring significant stock orders before Christmas to ensure its
customers receive timely deliveries over the Christmas period. This absorbs
cash, and the Company must strengthen its balance sheet to make sure it has a
margin of balance sheet surplus to absorb any unforeseen events.
2.10 Part of the net proceeds of the Placing and Open Offer is
proposed to be deployed to temporarily pay back debt which will then be drawn
back down as the Company pays for deliveries before Christmas. The Company has
strong relationships with its two current lenders, one of which is Phoenix
which provides the Company with a £9 million secured credit facility, and
will keep the full extent of its debt facilities in place. This means the
Company will have a much larger margin of safety during its peak working
capital requirements. This change will have the added benefit of saving
interest costs during the quieter parts of the year.
Acquisitions
2.11 The Company has no current plans to acquire external
brands but does have a "wishlist" of specific, heritage brands were they to
become available for sale. The Company owns 49 per cent. of LCD Enterprises
which owns the long standing Oxford Diecast brand and may have the opportunity
to acquire the rest of this company in the near future, as outlined in
paragraph 2.12.
Amendment and Restatement Agreement
2.12 The parties to the LCD SPA have agreed to enter into the
Amendment and Restatement Agreement to extend the period within which the
parties to the LCD SPA may exercise certain options as described in paragraph
1.2. After discussion with the owners of LCD Enterprises (which include the
Company's CEO, Lyndon Davies), it was mutually agreed that the Board should
continue to focus capital and management resource on accelerating the
Company's return to profitability and that an acquisition by the Company of
the remaining 51 per cent. shareholding in LCD Enterprises at this stage in
the turnaround would absorb resources which could be put to use in the
existing brands. After thinking through the roadmap in both businesses, it was
deemed a better long term strategy for all parties involved to maintain
flexibility to consider the acquisition at a later date.
Incentive Arrangements
2.13 Following completion of the Placing and Open Offer, the
Board intends to put in place appropriate incentive arrangements for the
executive team of the Group, in order to align their interests with those of
Shareholders. A further announcement in connection with this will be made in
due course.
3 Use of Proceeds
It is currently expected that the net proceeds of the Placing and Open Offer,
expected to be £14.7 million, will be utilised as follows:
· To reinvigorate the Group's key brands through accelerated
product development and additional capital expenditure.
· To invest in a modern digital strategy.
· To upgrade our central systems.
· To reduce interest costs during non-peak working capital months,
provide a margin of safety on the balance sheet and allow the business to do
opportunistic acquisitions. The Company intends to reduce the balance drawn on
both the £12 million Asset Based Lending facility with PNC Credit Limited and
the £9 million loan facility Phoenix Asset Management Partners. Both of these
facilities are intended to remain in place to continue to be drawn upon as
required going forwards.
4 Current trading and prospects
4.1 Revenue and gross profit for the 10 months ended 31
January 2020 are ahead of prior year and in line with management expectations.
The Directors expect this trend to continue to year end. Whilst the operating
loss for the 10 months ended 31 January 2020 has narrowed from the prior year
the Company is in the middle of the turnaround plan and further investment is
required to complete the transition and return to profitability.
4.2 As at 31 January 2020, the Company's cash balance was
£1,349,000 with £4,564,000 available to be drawn under the Company's loan
facilities.
5 Details of the PROPOSED Placing and Open Offer
5.1 The Company is proposing to raise, in aggregate,
approximately £15 million (before expenses) through the issue of 41,666,666
New Ordinary Shares pursuant to a Placing and an Open Offer at the Issue
Price. Under the Firm Placing, 37,177,974 Placing Shares are expected to be
placed firm with the Firm Placees and with a further 4,488,692 Placing Shares
expected to be placed conditionally pursuant to the Conditional Placing with
the Conditional Placees, subject to take-up of those shares by Qualifying
Shareholders under the Open Offer. Accordingly, up to 4,488,692 New Ordinary
Shares are expected to be offered to Qualifying Shareholders pursuant to the
Open Offer at the Issue Price. Phoenix and Artemis are not Qualifying
Shareholders and, accordingly, will not participate in the Open Offer. The
Conditional Placing is intended to ensure that any Open Offer Shares not
applied for under the Open Offer may instead be taken up by the Conditional
Placees pursuant to the Placing.
5.2 The Issue Price is equal to the Closing Price of 36.0 pence per Ordinary Share on 20 February 2020.
5.3 The aggregate number of New Ordinary Shares to be
issued pursuant to the Placing and Open Offer is expected to, on Admission,
represent approximately 24.96 per cent. of the Enlarged Share Capital.
5.4 The Placing and Open Offer could result in a
proportionate dilution of the holdings of existing Shareholders. On Admission,
Shareholders who do not participate in the Placing or the Open Offer will
experience an immediate dilution of approximately 24.96 per cent.
5.5 Application will be made to the London Stock Exchange
for the New Ordinary Shares to be admitted to trading on AIM. On the
assumption that, amongst other things, the necessary resolutions are passed by
Shareholders at the General Meeting, it is expected that Admission of the New
Ordinary Shares will become effective at 8.00 a.m. on 12 March 2020.
5.6 The New Ordinary Shares will be issued credited as
fully paid and will rank in full for all dividends and other distributions
declared, made or paid after Admission in respect of Ordinary Shares and will
otherwise rank on Admission pari passu in all respects with the Existing
Ordinary Shares. The New Ordinary Shares are not being made available to the
public and are not being offered or sold in any jurisdiction where it would be
unlawful to do so.
The Open Offer
5.7 The Company considers it important that Shareholders
who have not taken part in the Placing to have an opportunity to participate
in the proposed fundraising in order that they are able to maintain their
existing proportional shareholding in the Company. The Company will therefore
provide all Qualifying Shareholders other than Phoenix and Artemis with the
opportunity to subscribe for up to 4,488,692 Open Offer Shares at the Issue
Price pursuant to an Open Offer to raise, in aggregate, up to £1.6 million
(before expenses). This will allow Qualifying Shareholders to participate on a
proportional basis.
5.8 Subject to fulfilment of the conditions set out below,
the Open Offer will provide Qualifying Shareholders with the opportunity to
apply to acquire Open Offer Shares at the Issue Price pro rata to their
holdings of Existing Ordinary Shares held by Qualifying Shareholders as at the
Open Offer Record Date on the following basis:
1 Open Offer Share for every 3.006268641 Existing Ordinary Shares held by
Qualifying Shareholders
and in proportion for any other number of Existing Ordinary Shares held by
Qualifying Shareholders.
5.9 Entitlements to apply to acquire Open Offer Shares
will be rounded down to the nearest whole number and any fractional
entitlements to Open Offer Shares will be disregarded in calculating an Open
Offer Entitlement and will be aggregated and made available to Qualifying
Shareholders pursuant to the Excess Application Facility.
5.10 The Open Offer will be conditional upon, inter alia, the
passing of the necessary resolutions at the General Meeting and Admission. The
proceeds of the Open Offer are anticipated to amount to up to £1.6 million,
before expenses. If the conditions of the Open Offer are not satisfied, the
Open Offer will not be implemented and any Open Offer Entitlements admitted to
CREST will thereafter be disabled and application monies under the Open Offer
will be refunded to the applicants, by cheque (at the applicant's risk) in the
case of Qualifying Non-CREST Shareholders and by way of a CREST payment in the
case of Qualifying CREST Shareholders, without interest, as soon as
practicable, but within 14 days, thereafter.
Excess Applications
5.11 The Open Offer will be structured to allow Qualifying
Shareholders to subscribe for Open Offer Shares at the Issue Price pro rata to
their holdings of the Existing Ordinary Shares held by Qualifying
Shareholders. Qualifying Shareholders will also be able to make applications
in excess of their pro rata initial entitlement up to an amount equal to the
total number of Open Offer Shares available under the Open Offer less an
amount equal to such Qualifying Shareholder's Open Offer Entitlement. To the
extent that pro rata entitlements to Open Offer Shares are not subscribed for
by Qualifying Shareholders, such Open Offer Shares will be available to
satisfy such excess applications. Applications under the Excess Application
Facility may be allocated in such manner as the Directors may determine, in
their absolute discretion, and no assurance can be given that any applications
under the Excess Application Facility by Qualifying Shareholders will be met
in full or in part or at all.
5.12 Qualifying Shareholders should note that the Open Offer
is not a rights issue. Qualifying Non-CREST Shareholders should be aware that
the Application Form is not a negotiable document and cannot be traded.
Qualifying Shareholders should also be aware that in the Open Offer, unlike in
a rights issue, any Open Offer Shares not applied for will not be sold in the
market nor will they be placed for the benefit of Qualifying Shareholders who
do not apply under the Open Offer.
Overseas Shareholders
5.13 Certain Overseas Shareholders may not be permitted to
subscribe for Open Offer Shares pursuant to the Open Offer and should refer to
of Part 3 of the Circular.
Placing and Open Offer Agreement
5.14 A placing and open offer agreement has been entered into
between (1) the Company and (2) Liberum Capital in connection with the Placing
and Open Offer and pursuant to which Liberum Capital has agreed, in accordance
with its terms, to use reasonable endeavours to place the Placing Shares with
Placees. The terms of the Placing and Open Offer Agreement provide that the
Placing is conditional, amongst other things, on:
(a) the passing of the necessary resolutions at the General Meeting;
(b) the conditions in the Placing and Open Offer Agreement being satisfied or (if applicable) waived and the Placing and Open Offer Agreement not having been terminated in accordance with its terms prior to Admission; and
(c) Admission becoming effective by no later than 8.00 a.m. on 12 March 2020 (or such later time and/or date, being no later than 8.00 a.m. on 31 March 2020 as the Company and Liberum Capital may agree in writing).
The Placing and Open Offer Agreement contains customary warranties given by
the Company to Liberum Capital as to matters relating to the Group and its
business and a customary indemnity given by the Company to Liberum Capital in
respect of liabilities arising out of or in connection with the Placing and
Open Offer. Liberum Capital is entitled to terminate the Placing and Open
Offer Agreement in certain circumstances prior to Admission including
circumstances where there is a breach of warranty or on the occurrence of
certain force majeure events.
Admission, settlement and dealings
5.15 Application will be made to the London Stock Exchange for
the New Ordinary Shares, to be admitted to trading on AIM. Subject to certain
conditions, it is expected that Admission will become effective and that
dealings in respect of such New Ordinary Shares will commence at 8.00 a.m. on
12 March 2020. Further information in respect of settlement and dealings in
the Open Offer Shares is set out in Part 3 of the Circular.
5.16 The action to be taken for Qualifying Shareholders to
apply for Open Offer Shares is described in paragraph 10 of this Part 1.
6 Related party transactions
Amendment and Restatement Agreement
6.1 Lyndon Davies is a director of the Company. Catherine
Davies is a related party to Lyndon Davies.
6.2 The participation of Lyndon Davies and Catherine
Davies in the Amendment and Restatement Agreement is, for the purposes of AIM
Rule 13, considered a "Related Party Transaction". The LCD SPA Independent
Directors (in respect of the Amendment and Restatement Agreement) consider,
having consulted with the Company's nominated adviser, Liberum Capital, that
the terms of the Amendment and Restatement Agreement are fair and reasonable
insofar as Shareholders are concerned.
7 SUBSTANTIAL PROPERTY TRANSACTION
As Lyndon Davies is a director of the Company, and Catherine Davies is a
person "connected with" Lyndon Davies as defined under section 252 of the Act,
and due to the fact that the consideration which will become payable in the
event that either (i) the Company purchases the remaining 51 per cent. stake
in LCD Enterprises from Lyndon Davies and Catherine Davies or (ii) Lyndon
Davies re-acquires the 49 per cent. stake in LCD Enterprises, will be in
excess of £100,000, these possible subsequent share transfers constitute,
collectively and individually, substantial property transactions under
sections 190 and 191 of the Act. Sections 190 and 191 of the Act require that
any substantial property transaction with a director of a company must be
approved in advance by shareholders at a general meeting of such company.
Consequently, completion of the Amendment and Restatement Agreement is
conditional upon obtaining the approval of Shareholders. Resolution 1 is an
ordinary resolution that seeks Shareholder approval of the Amendment and
Restatement Agreement.
8 GEneral meeting
8.1 The Directors currently have existing authorities to
allot shares and disapply pre-emption rights under section 551 and section 570
of the Act which were obtained at the Company's Annual General Meeting held on
25 September 2019. However, these are insufficient to enable the Company to
allot and issue the full amount of New Ordinary Shares pursuant to the Placing
and Open Offer. Accordingly, in order for the Company to allot and issue the
New Ordinary Shares, the Company needs to first obtain approval from its
Shareholders to grant to the Board additional authority to allot the New
Ordinary Shares and disapply statutory pre-emption rights which would
otherwise apply to such allotment. The Company is therefore also seeking
Shareholder authority to increase the Director's general authority to allot
securities and disapply pre-emption rights pursuant to sections 551 and 570 of
the Act respectively.
8.2 As previously described, the Company is also seeking
Shareholder approval of the Amendment and Restatement Agreement.
8.3 A notice convening the General Meeting of the Company
to be held at the offices of the Company's solicitors, Taylor Wessing LLP at 5
New Street Square, London EC4A 3TW on 10 March 2020 at 10.00.a.m. will be
contained in the Circular to be posted to Shareholders, at which the
Resolutions will be proposed.
8.4 The Resolutions can be summarised as follows:
(a) Resolution 1 - this will be proposed as an ordinary resolution and seeks the approval of Shareholders to the Amendment and Restatement Agreement, which is a substantial property transaction for the purposes of the Act;
(b) Resolution 2 - this will be proposed as an ordinary resolution and seeks the approval of Shareholders to authorise the Directors to allot the New Ordinary Shares in connection with the Placing and Open Offer; and
(c) Resolution 3 - this will be proposed as a special resolution and seeks the approval of Shareholders to authorise the Directors to disapply pre-emption rights in connection with the allotment of the New Ordinary Shares.
8.5 Save in respect of the allotment of the Placing Shares
and Open Offer Shares, the grant of options to employees under employee share
plans or other similar incentive arrangements and pursuant to any exercise of
existing options in respect of Ordinary Shares, the Directors have no current
intention to allot shares, or rights to subscribe or convert into shares, in
the capital of the Company.
8.6 Shareholders should note that, if Resolution 1 is not
passed by Shareholders at the General Meeting, the Amendment and Restatement
Agreement will not be implemented.
8.7 Shareholders should note that, if the Resolutions 2
and 3 are not passed by Shareholders at the General Meeting, the Placing and
Open Offer will not be implemented.
9 Irrevocable undertakings
9.1 John Stansfield, a Director who holds 64,052 Existing
Ordinary Shares, representing 0.05 per cent. of the issued Existing Ordinary
Shares, has given an irrevocable undertaking to vote or, where applicable, to
procure the casting of votes by his connected persons (as defined in section
252 of the Act), in favour of the Resolutions in respect of his own (or, as
applicable, his connected persons') beneficial holding of Existing Ordinary
Shares.
9.2 Lyndon Davies, a Director who holds 596,670 Existing
Ordinary Shares, representing 0.48 per cent. of the issued Existing Ordinary
Shares, has given an irrevocable undertaking to vote or, where applicable, to
procure the casting of votes by his connected persons (as defined in section
252 of the Act), in favour of Resolutions 2 and 3 in respect of his own (or,
as applicable, his connected persons') beneficial holding of Existing Ordinary
Shares.
9.3 Kirstie Gould, a Director who holds 41,276 Existing
Ordinary Shares, representing 0.03 per cent. of the issued Existing Ordinary
Shares, has given an irrevocable undertaking to vote or, where applicable, to
procure the casting of votes by her connected persons (as defined in section
252 of the Act), in favour of the Resolutions in respect of her own (or, as
applicable, her connected persons') beneficial holding of Existing Ordinary
Shares.
9.4 James Wilson, a Director who holds 31,000 Existing
Ordinary Shares, representing 0.02 per cent. of the issued Existing Ordinary
Shares, has given an irrevocable undertaking to vote or, where applicable, to
procure the casting of votes by his connected persons (as defined in section
252 of the Act), in favour of Resolution 1 in respect of his own (or, as
applicable, his connected persons') beneficial holding of Existing Ordinary
Shares.
9.5 Phoenix (in its capacity as manager of certain
discretionary funds which hold, in aggregate 74.66 per cent. of the issued
ordinary share capital of the Company) has given an irrevocable undertaking to
vote or, where applicable, to procure the casting of votes by its relevant
funds, in favour of the Resolutions.
9.6 Artemis (in its capacity as manager of certain
discretionary funds which hold, in aggregate 14.56 per cent. of the issued
ordinary share capital of the Company) has given an irrevocable undertaking to
vote or, where applicable, to procure the casting of votes by its relevant
funds, in favour of the Resolutions.
10 Intentions of the directors in relation to the open offer
The Directors intend to subscribe for their full pro rata entitlements under
the Open Offer and do not intend to subscribe for any further Shares under the
Excess Application Facility.
11 Recommendations
Amendment and Restatement Agreement
11.1 Shareholders should note that, if Resolution 1 is not
passed by Shareholders at the General Meeting, the Amendment and Restatement
Agreement will not be implemented.
11.2 The LCD SPA Independent Directors consider the terms of
the Amendment and Restatement Agreement to be in the best interests of
Shareholders and of the Company as a whole.
11.3 Accordingly, the LCD SPA Independent Directors
unanimously recommend that Shareholders vote in favour of Resolution 1 at the
General Meeting. The LCD SPA Independent Directors confirm that they have
irrevocably committed to vote in favour of Resolution 1 in respect of their
beneficial holdings amounting, in aggregate, to 136,328 Existing Ordinary
Shares, representing approximately 0.11 per cent. of the existing issued
Ordinary Share capital of the Company.
Placing and Open Offer
11.4 Shareholders should note that, if the Resolutions 2 and 3 are not passed by Shareholders at the General Meeting, the Placing and Open Offer will not be implemented.
11.5 The Independent Directors consider the terms of the
Placing and Open Offer to be in the best interests of Shareholders and of the
Company as a whole.
11.6 Accordingly, the Independent Directors unanimously
recommend that Shareholders vote in favour of Resolutions 2 and 3 at the
General Meeting. The Independent Directors confirm that they have irrevocably
committed to vote in favour of Resolutions 2 and 3 in respect of their
beneficial holdings amounting, in aggregate, to 701,998 Existing Ordinary
Shares, representing approximately 0.56 per cent. of the existing issued
Ordinary Share capital of the Company.
DEFINITIONS
The following definitions apply throughout this Announcement, unless the
context requires otherwise:
"Act" the Companies Act 2006 (as amended)
"Admission" the admission of the New Ordinary Shares to trading on AIM becoming effective
in accordance with the AIM Rules
"AIM" AIM, a market operated by the London Stock Exchange
"AIM Rules" the AIM Rules for Companies published by the London Stock Exchange from time
to time
"Amendment and Restatement Agreement" the amendment and restatement agreement entered into between (1) the Company,
(2) Lyndon Charles Davies and (3) Catherine Enrico Davies dated 20 February
2020 in connection with the extension of the Lock In Period from 3 years to 6
years from 8 December 2017
"Announcement" this announcement (including the Appendix and information contained therein)
"Application Form" the personalised application form accompanying the Circular (where
appropriate) pursuant to which Qualifying Non-CREST Shareholders (other than
certain Overseas Shareholders) may apply to subscribe for Open Offer Shares
under the Open Offer
"Artemis" Artemis Investment Management LLP (in its capacity as investment adviser of
certain discretionary funds)
"Board" or "Directors" the directors of the Company for the time being as at the date of this
announcement
"Circular" the circular which is expected to be dispatched to Shareholders in connection
with the Placing and Open Offer and for the purpose of convening the General
Meeting
"certificated" or "in certificated form" a share or other security not held in uncertificated form (i.e. not in CREST)
"Closing Price" the closing middle market quotation of the Existing Ordinary Shares, as
derived from the Daily Official List of the London Stock Exchange
"Company" or "Hornby" Hornby PLC, a company incorporated in England & Wales and with registered
number 01547390
"Conditional Placee(s)" any placee or placees who conditionally agreed to subscribe for up to
4,488,692 Placing Shares, subject to clawback by Qualifying Shareholders to
satisfy valid applications made by it or them to subscribe for New Ordinary
Shares under the Open Offer and "Conditional Placee" shall mean any one of
them
"Conditional Placing" the conditional placing by Liberum Capital of 4,488,692 Placing Shares at the
Issue Price with the Conditional Placees pursuant to the Placing and Open
Offer Agreement
"CREST" a relevant system (as defined in the CREST Regulations) in respect of which
Euroclear is the Operator (as defined in the CREST Regulations)
"CREST Regulations" the Uncertificated Securities Regulations 2001 (SI 2001/3755), including any
enactment or subordinate legislation which amends or supersedes those
regulations and any applicable rules made under those regulations or any such
enactment or subordinate legislation for the time being in force
"Enlarged Share Capital" the issued ordinary share capital of the Company as enlarged by the issue of
the New Ordinary Shares
"€" or "Euros" the single European currency unit
"Excess Application Facility" the arrangement pursuant to which Qualifying Shareholders may apply for such
number of Open Offer Shares in excess of their Open Offer Entitlement provided
that they have agreed to take up their Open Offer Entitlement in full
"Existing Ordinary Shares" the 125,261,172 existing Ordinary Shares in issue as at 20 February 2020
(being the latest practicable date prior to publication of this Announcement)
"FCA" the Financial Conduct Authority in its capacity as the competent authority for
the purposes of Part VI of FSMA
"Firm Placees" those placees whose Placing Shares have been placed firm with them pursuant to
the Firm Placing and "Firm Placee" shall mean any one of them
"Firm Placing" the placing by Liberum Capital of 37,177,974 Placing Shares at the Issue Price
with the Firm Placees pursuant to the Placing and Open Offer Agreement
"FSMA" the Financial Services and Markets Act 2000 (as amended)
"General Meeting" the general meeting of the Company to be held at the offices of the Company's
solicitors, Taylor Wessing LLP, 5 New Street Square, London EC4A 3TW at 10.00
a.m. on 10 March 2020, or any adjournment thereof, notice of which is set out
at the end the Circular
"Group" the Company and its subsidiary undertakings
"Independent Directors" the Directors other than James Wilson
"Irrevocable Undertakings" the irrevocable undertakings described at paragraph 9 of this announcement
"Issue Price" the price at which the New Ordinary Shares are to be issued and allotted
pursuant to the Placing and Open Offer, being 36.0 pence per New Ordinary
Share
"LCD Enterprises" LCD Enterprises Limited, a company incorporated in England & Wales and
with registered number 03005140
"LCD SPA" the sale and purchase agreement entered into between (1) the Company, (2)
Lyndon Charles Davies and (3) Catherine Enrico Davies dated 17 November 2017
in respect of the acquisition by the Company of 49 per cent. of the issued
ordinary share capital of LCD Enterprises
"LCD SPA Independent Directors" the Directors other than Lyndon Davies
"Liberum Capital" Liberum Capital Limited, the Company's nominated advisor and broker in
connection with the Placing and Open Offer
"Lock-In Period" the period beginning on the date of the LCD SPA (being 17 November 2017) and
ending on the third anniversary of 8 December 2017
"London Stock Exchange" London Stock Exchange plc
"New Ordinary Shares" The 41,666,666 new Ordinary Shares to be issued pursuant to the Placing and
the Open Offer
"Notice of General Meeting" the notice of General Meeting as set out in the Circular
"Official List" the Official List of the FCA
"Open Offer" the conditional invitation made by the Company to Qualifying Shareholders to
subscribe for the Open Offer Shares at the Issue Price on the terms and
subject to the conditions set out in Part 3 of the Circular and, in the case
of Qualifying Non-CREST Shareholders, in the Application Form
"Open Offer Entitlement" the entitlement of a Qualifying Shareholder, pursuant to the Open Offer, to
apply to subscribe for 1 Open Offer Share for every 3.006268641 Existing
Ordinary Shares registered in its name as at the Open Offer Record Date
"Open Offer Record Date" the record date in relation to the Open Offer, being 5.00 p.m. on 19 February
2020
"Open Offer Shares" 4,488,692 New Ordinary Shares to be issued by the Company to Qualifying
Shareholders in connection with the Open Offer
"Ordinary Shares" the ordinary shares of 1 pence each in the share capital of the Company
"Overseas Shareholders" Shareholders with registered addresses in, or who are citizens, residents or
nationals of, jurisdictions outside of the UK
"Oxford Diecast Group" Oxford Diecast Limited, a company incorporated in England and Wales, Oxford
Diecast (HK) Limited, a company incorporated in Hong Kong, and Oxford Diecast
USA LLC, a partnership incorporated in USA
"Phoenix" Phoenix Asset Management Partners Limited
"Placees" the Firm Placees and the Conditional Placees
"Placing" the conditional placing by Liberum Capital on behalf of the Company of the
Placing Shares with the Placees pursuant to the Placing and Open Offer
Agreement, comprising the Firm Placing and the Conditional Placing
"Placing and Open Offer Agreement" the conditional agreement dated 21 February 2020 entered into between the
Company and Liberum Capital in respect of the Placing and Open Offer
"Placing Shares" 37,177,974 New Ordinary Shares to be placed for cash with Firm Placees and up
to 4,488,692 New Ordinary Shares to be placed for cash with Conditional
Placees (subject to clawback by Qualifying Shareholders to satisfy valid
applications made by them to subscribe for New Ordinary Shares under the Open
Offer)
"Prospectus Regulation" the Prospectus Regulation Rules Instrument published by the FCA (FCA 2019/80),
implementing the EU Prospectus Regulation 2017/1129
"Qualifying Shareholders" holders of Existing Ordinary Shares on the register of members of the Company
on the Open Offer Record Date with the exclusion (subject to exemptions) of:
(i) persons with a registered address or located or resident in a Restricted
Jurisdiction; and (ii) Phoenix and Artemis, and "Qualifying Shareholder" shall
mean any one of them
"Registrar" or "Receiving Agent" Link Asset Services, a trading name of Link Market Services Limited, a private
limited company incorporated in England & Wales under registered number
02605568 and having its registered office at The Registry, 34 Beckenham Road,
Beckenham, Kent, BR3 4TU, United Kingdom the Company's registrar and
receiving agent. Link Asset Services can be contacted on +44 (0)371 664 0321.
Calls are charged at the standard geographic rate and will vary by provider.
Calls outside the United Kingdom will be charged at the applicable
international rate. The helpline is open between 9.00 a.m. - 5.30 p.m., Monday
to Friday excluding public holidays in England and Wales. Please note that
Link Asset Services cannot provide any financial, legal or tax advice and
calls may be recorded and monitored for security and training purposes
"Regulatory Information Service" has the meaning given in the AIM Rules
"Resolutions" the resolutions to be proposed at the General Meeting, as set out in the
Notice of General Meeting and "Resolution" shall be a reference to any one of
them
"Restricted Jurisdiction" any jurisdiction where local laws or regulations may result in a significant
risk of civil, regulatory or criminal exposure for the Company if information
or documentation concerning the proposals set out in this announcement sent or
made available to Shareholders in that jurisdiction including, without
limitation, the United States of America, Canada, Australia, Japan and the
Republic of South Africa
"Shareholders" the holders of Existing Ordinary Shares and "Shareholder" shall mean any one
of them
"uncertificated" or "in uncertificated form" recorded on the register of members of the Company 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
"United States" or "US" the United States of America
"US Securities Act" the US Securities Act of 1933, as amended from time to time and the rules and
regulations promulgated thereunder
"£" or "Pounds" UK pounds sterling, being the lawful currency of the United Kingdom
APPENDIX: TERMS AND CONDITIONS OF THE PLACING
THIS ANNOUNCEMENT, INCLUDING THIS APPENDIX (TOGETHER, THE "ANNOUNCEMENT") AND
THE INFORMATION IN IT IS RESTRICTED AND IS NOT FOR PUBLICATION, RELEASE OR
DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE
UNITED STATES, AUSTRALIA, CANADA, JAPAN, OR THE REPUBLIC OF SOUTH AFRICA OR
ANY OTHER JURISDICTION IN WHICH SUCH PUBLICATION OR DISTRIBUTION WOULD BE
UNLAWFUL.
IMPORTANT INFORMATION ON THE PLACING FOR INVITED PLACEES ONLY.
MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THIS
APPENDIX AND THE TERMS AND CONDITIONS SET OUT HEREIN ARE FOR INFORMATION
PURPOSES ONLY AND ARE DIRECTED ONLY AT: (A) PERSONS WHO ARE IN A MEMBER STATE
OF THE EUROPEAN ECONOMIC AREA AND ARE "QUALIFIED INVESTORS" AS DEFINED IN
ARTICLE 2(1)(E) OF THE EU PROSPECTUS REGULATION (WHICH MEANS REGULATION (EU)
2017/1129 (AS AMENDED OR SUPERSEDED) (THE PROSPECTUS REGULATION); AND (B) IN
THE UNITED KINGDOM, PERSONS WHO ARE: (I) "INVESTMENT PROFESSIONALS" WITHIN THE
MEANING OF ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000
(FINANCIAL PROMOTION) ORDER 2005 (THE ORDER) OR PERSONS FALLING WITHIN ARTICLE
49(2)(A) TO (D) ("HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS,
ETC.") OF THE ORDER, AND (II) "QUALIFIED INVESTORS" AS DEFINED IN SECTION 86
OF FSMA AND (C) PERSONS TO WHOM IT MAY OTHERWISE BE LAWFULLY COMMUNICATED (ALL
SUCH PERSONS TOGETHER BEING REFERRED TO AS RELEVANT PERSONS). THIS APPENDIX
AND THE TERMS AND CONDITIONS SET OUT HEREIN MUST NOT BE ACTED ON OR RELIED ON
BY PERSONS WHO ARE NOT RELEVANT PERSONS. ANY INVESTMENT OR INVESTMENT ACTIVITY
TO WHICH THIS APPENDIX AND THE TERMS AND CONDITIONS SET OUT HEREIN RELATES IS
AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT
PERSONS. THIS APPENDIX DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR
SUBSCRIPTION OF ANY SECURITIES IN THE COMPANY. THIS ANNOUNCEMENT IS NOT AN
OFFER OF OR SOLICITATION TO PURCHASE OR SUBSCRIBE FOR SECURITIES IN THE UNITED
STATES. THE SECURITIES REFERRED TO HEREIN HAVE NOT BEEN AND WILL NOT BE
REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE SECURITIES
ACT), AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES, EXCEPT PURSUANT TO
AN APPLICABLE EXEMPTION FROM, OR AS PART OF A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. NO OFFERING OF SECURITIES IS
BEING MADE IN THE UNITED STATES. NO MONEY, SECURITIES OR OTHER CONSIDERATION
FROM ANY PERSON INSIDE THE UNITED STATES IS BEING SOLICITED AND, IF SENT IN
RESPONSE TO THE INFORMATION CONTAINED IN THIS ANNOUNCEMENT, WILL NOT BE
ACCEPTED.
EACH PLACEE SHOULD CONSULT WITH ITS OWN ADVISERS AS TO LEGAL, TAX, BUSINESS
AND RELATED ASPECTS OF AN INVESTMENT IN PLACING SHARES (AS DEFINED BELOW).
Persons (the Placees) who are invited to and who choose to participate in the
Firm Placing or Conditional Placing (together the Placing), by making (or on
whose behalf there is made) an oral or written offer to subscribe for Firm
Placing Shares or Conditional Placing Shares (together the Placing Shares),
will be deemed to have read and understood this Announcement, including this
Appendix, in its entirety and to be making such offer on the terms and
conditions, and to be providing the representations, warranties,
acknowledgements, and undertakings contained in this Appendix. In particular
each such Placee represents, warrants and acknowledges to the Company and
Liberum Capital that:
1. it is a Relevant Person (as defined above) and undertakes
that it will acquire, hold, manage or dispose of any Placing Shares that are
allocated to it for the purposes of its business;
2. in the case of any Placing Shares acquired by it as a
financial intermediary, as that term is used in Article 3(2) of the 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 European Economic Area other
than Qualified Investors or in circumstances in which the prior consent of
Liberum Capital 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 Qualified Investors, the offer of those Placing Shares to
it is not treated under the Prospectus Regulation as having been made to such
persons;
3. it is acquiring the Placing Shares in an "offshore
transaction" as defined in and pursuant to Regulation S under the Securities
Act; and
4. it understands (or if acting for the account of another
person, such person has confirmed that such person understands) the resale and
transfer restrictions set out in this Appendix.
The Company and Liberum Capital will rely upon the truth and accuracy of the
foregoing representations, acknowledgements and agreements.
This Announcement does not constitute an offer, and may not be used in
connection with an offer, to sell or issue or the solicitation of an offer to
buy or subscribe for Placing Shares in any jurisdiction in which such offer or
solicitation is or may be unlawful. This Announcement and the information
contained herein is not for publication or distribution, directly or
indirectly, to persons in the United States, Australia, Canada, Japan or the
Republic of South Africa or in any other jurisdiction in which such
publication or distribution is unlawful. Persons into whose possession this
Announcement may come are required by the Company to inform themselves about
and to observe any restrictions of transfer of this Announcement. No public
offer of securities of the Company is being made in the United Kingdom, the
United States or elsewhere.
In particular, the Placing Shares referred to in this Announcement have not
been and will not be registered under the Securities Act or any laws of or
with any securities regulatory authority of any state or other jurisdiction of
the United States, and may not be offered, sold, pledged or otherwise
transferred within the United States except pursuant to an exemption from, or
in a transaction not subject to, the registration requirements of the
Securities Act and the securities laws of any state or other jurisdiction of
the United States. The Placing Shares are being offered and sold only outside
the United States in accordance with Regulation S.
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 or the South
African Reserve Bank; 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 Australia, Canada, Japan or the Republic of
South Africa. Accordingly, the Placing Shares may not (unless an exemption
under the relevant securities laws is applicable) be offered, sold, resold or
delivered, directly or indirectly, in or into Australia, Canada, Japan 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 Appendix or
the Announcement of which it forms part should seek appropriate advice before
taking any action.
This Announcement should be read in its entirety. In particular, you should
read and understand the information provided in the "Important Notices"
section of this Announcement.
By participating in the Placing, each person who is invited to and who chooses
to participate in the Placing will be deemed to have read and understood this
Announcement in its entirety, to be participating, making an offer and
acquiring Placing Shares on the terms and conditions contained herein and to
be providing the representations, warranties, indemnities, 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) on whose behalf a
commitment to subscribe for Placing Shares has been given.
Details of the Placing and Open Offer Agreement and the Placing Shares
Liberum Capital has entered into the Placing and Open Offer Agreement with the
Company under which Liberum Capital has conditionally agreed on the terms and
subject to the conditions set out therein, as agent for the Company, to use
its reasonable endeavours to place the Placing Shares at the Issue Price with
certain institutional investors. The Placing is not being underwritten by
Liberum Capital or any other person.
The number of Placing Shares at the Issue Price will be determined following
completion of the Accelerated Book Build as set out in this Announcement.
The Firm Placing Shares are not subject to clawback and do not form part of
the Conditional Placing and Open Offer.
The Conditional Placing Shares are being offered, subject to clawback in
respect of valid applications received for Open Offer Shares by Qualifying
Shareholders pursuant to the Open Offer.
Further details of the Placing procedure and terms on which the Firm Placing
Shares and Conditional Placing Shares are being offered are set out below.
All of the Placing Shares will, when issued, be credited as fully paid and
will rank pari passu in all respects with each other, the Open Offer Shares
and the Existing Ordinary Shares, including the right to receive all dividends
and other distributions (if any) declared, made or paid on or in respect of
such Ordinary Shares after the date of issue of the Placing Shares.
Application for admission to trading
Application will be made for admission of the Firm Placing Shares and
Conditional Placing Shares to trading on AIM, alongside the Open Offer Shares.
It is expected that settlement of such shares and Admission will become
effective on or around 8.00 a.m. on 12 March 2020 and that dealings in the
Placing Shares and Open Offer Shares will commence at that time.
Accelerated Book Build
Liberum Capital will today commence an Accelerated Book Building process in
respect to the Placing to determine demand for participation in the Placing by
any Placees at the Issue Price. This Appendix gives details of the terms and
conditions of, and the mechanics of participation in, the Accelerated Book
Build. No commissions will be paid to Placees or by Placees in respect of any
Placing Shares.
Liberum Capital and the Company shall be entitled to effect the Placing (in
whole or in part) by such alternative method to the Accelerated Book Build as
they may, in their sole discretion, determine.
Participation in, and principal terms of, the Placing
1. Liberum Capital is acting as nominated adviser and sole
bookrunner to the Placing, as agent for and on behalf of the Company. Liberum
Capital is regulated by the FCA, is acting exclusively for the Company and no
one else in connection with the matters referred to in this Announcement and
will not be responsible to anyone other than the Company for providing the
protections afforded to the customers of Liberum Capital or for providing
advice in relation to the matters described in this Announcement.
2. Liberum Capital is arranging the Accelerated Book Build and
Placing as an agent of the Company.
3. Participation in the Accelerated Book Build will only be
available to persons who may lawfully be, and are, invited to participate by
Liberum Capital. Liberum Capital and its affiliates are entitled to enter bids
in the Accelerated Book Build as principal.
4. The Accelerated Book Build will establish the number of
Placing Shares to be issued at the Issue Price, which will be agreed between
Liberum Capital and the Company following completion of the Accelerated Book
Build. The number of Placing Shares will be announced on a Regulatory
Information Service following the completion of the Accelerated Book Build.
5. To bid in the Accelerated Book Build, prospective Placees
should communicate their bid by telephone to their usual sales contact at
Liberum Capital. Each bid should state the number of Placing Shares which the
prospective Placee wishes to subscribe for at the Issue Price. Bids may be
scaled down by Liberum Capital on the basis referred to in paragraph 9 below.
6. The Accelerated Book Build is expected to close no later
than 4.00 p.m. (London) today but may be closed earlier or later at the
discretion of Liberum Capital. Liberum Capital may, in agreement with the
Company, accept bids that are received after the Accelerated Book Build has
closed.
7. Each Placee's allocation of Firm Placing Shares and
Conditional Placing Shares will be confirmed to Placees orally, or by email,
by Liberum Capital following the close of the Accelerated Book Build. A
bookrunner's oral or emailed confirmation to such Placee will constitute an
irrevocable legally binding commitment upon such person (who will at that
point become a Placee) in favour of Liberum Capital and the Company, under
which it agrees to subscribe for the number of Placing Shares allocated to it
at the Issue Price (and in the respective numbers of Firm Placing Shares and
Conditional Placing Shares (subject to clawback) so allocated) on the terms
and conditions set out in this Appendix and in accordance with the Company's
Articles of Association. Each Placee acknowledges that the Conditional Placing
Shares are being offered subject to clawback by Qualifying Shareholders who
have made valid applications for Open Offer Shares under the Open Offer in
accordance with the procedure described in the paragraph entitled "Placing
Procedure" below. Accordingly, any bid made in the Accelerated Bookbuild and
the subsequent apportionment of Conditional Placing Shares allocated to a
Placee in the Conditional Placing will be subject to scale back, depending on
the number of Open Offer Shares to be issued in order to satisfy valid
applications received from Qualifying Shareholders.
8. The Company will make a further announcement following the
close of the Accelerated Book Build detailing the number of Firm Shares and
Conditional Placing Shares (subject to clawback) to be issued at the Issue
Price.
9. Subject to paragraphs 5 and 6 above, Liberum Capital may
choose to accept or reject bids, either in whole or in part, on the basis of
allocations determined at its discretion (in consultation with the Company)
and may scale down any bids for this purpose on such basis as they may
determine. Liberum Capital may also, notwithstanding paragraphs 5 and 6 above,
subject to the prior consent of the Company: (i) allocate Placing Shares after
the time of any initial allocation to any person submitting a bid after that
time; and (ii) allocate Placing Shares after the Accelerated Book Build has
closed to any person submitting a bid after that time.
10. A bid in the Accelerated Book Build will be made on the terms
and subject to the conditions in this Announcement and will be legally binding
on the Placee on behalf of which it is made and, except with the consent of
Liberum Capital, will not be capable of variation or revocation after the time
at which it is submitted. Each Placee will also have an immediate, separate,
irrevocable and binding obligation, owed to Liberum Capital, to pay to Liberum
Capital (or as Liberum Capital may direct) in cleared funds an amount equal to
the product of the Issue Price and the number of Firm Placing Shares and, once
apportioned after clawback in accordance with the Placing Procedure outlined
below, any Conditional Placing Shares for which such Placee has agreed to
subscribe. Each Placee's obligations will be owed to Liberum Capital.
11. Except as required by law or regulation, no press release or
other announcement will be made by Liberum Capital or the Company using the
name of any Placee (or its agent), in its capacity as Placee (or agent), other
than with such Placee's prior written consent.
12. Irrespective of the time at which a Placee's allocation
pursuant to the Placing is confirmed, settlement for all Placing Shares to be
acquired pursuant to the Placing will be required to be made at the same time,
on the basis explained below under "Registration and Settlement".
13. All obligations under the Accelerated Book Build and 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 and Open
Offer Agreement".
14. By participating in the Accelerated Book Build, each Placee
agrees 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.
15. To the fullest extent permissible by law and the applicable
rules of the FCA, neither Liberum Capital nor any of its affiliates shall have
any liability to Placees (or to any other person whether acting on behalf of a
Placee or otherwise whether or not a recipient of these terms and conditions)
in respect of the Placing. Each Placee acknowledges and agrees that the
Company is responsible for the allotment of the Placing Shares to the Placees
and Liberum Capital shall have no liability to the Placees for the failure of
the Company to fulfil those obligations. In particular, neither Liberum
Capital nor any of its affiliates shall have any liability (including to the
extent permissible by law, any fiduciary duties) in respect of Liberum
Capital's conduct of the Accelerated Book Build or of such alternative method
of effecting the Placing (in whole or in part) as Liberum Capital and the
Company may agree.
Conditions of the Placing
Completion of both the Firm Placing and Conditional Placing is conditional on,
inter alia:
(a) the issue of the Circular by the Company by 5.00 p.m. on 21
February 2020;
(b) the passing of Resolutions 2 and 3 set out in the notice of
general meeting contained in the Circular (without material amendment);
(c) the Company having complied with its obligations under the
Placing and Open Offer Agreement to the extent that such obligations fall to
be performed prior to Admission;
(d) none of the warranties or undertakings in the Placing and
Open Offer Agreement being untrue, inaccurate or misleading in any material
respect;
(e) Admission becoming effective by no later than 8.00 a.m. on
12 March 2020 (or such later date as the Company and Liberum Capital may agree
(being not later than 8.00 a.m. on 31 March 2020).
If: (i) any of the conditions contained in the Placing and Open Offer
Agreement in relation to the Placing Shares are not fulfilled or waived by
Liberum Capital by the respective time or date where specified (or such later
time or date as the Company and Liberum Capital may agree, but not being later
than 8.00 a.m. on 31 March 2020); (ii) any of such conditions becomes
incapable of being fulfilled and Liberum has not exercised its rights to waive
or extend the time for fulfilment of such conditions; or (iii) the Placing and
Open Offer Agreement is terminated in its entirety in the circumstances
specified below, the Placing will lapse and the Placee's rights and
obligations hereunder in relation to the Placing Shares shall cease and
terminate at such time and each Placee agrees that no claim can be made by the
Placee against Liberum Capital in respect thereof.
Liberum Capital may, at its discretion and upon such terms as it thinks fit,
waive, or extend the period for, compliance by the Company with the whole or
any part of any of the Company's obligations in relation to the conditions in
the Placing and Open Offer Agreement save that the above condition relating to
Admission taking place may not be waived. Any such extension or waiver will
not affect Placees' commitments as set out in this Announcement.
Neither Liberum Capital nor the Company 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 they may make as to whether or not to waive or to
extend the time and/or date for the satisfaction of any condition to the
Placing nor for any decision they may make as to the satisfaction of any
condition or in respect of the Placing generally and by participating in the
Placing, each Placee agrees that any such decision is within the absolute
discretion of Liberum Capital.
Right to terminate under the Placing and Open Offer Agreement
Liberum Capital is entitled, at any time before Admission, to terminate its
obligations under the Placing and Open Offer Agreement by giving notice to the
Company in certain circumstances, including, inter alia:
(a) a material breach of the warranties given by the Company in
the Placing and Open Offer Agreement; or
(b) the Company has failed to comply with its obligations under
the Placing and Open Offer Agreement, the Companies Act, FSMA, the FS Act,
MAR, the AIM Rules or other applicable law; or
(c) in Liberum Capital's opinion, there having been a material
adverse change in the financial position and/or prospects of the Group; or
(d) the occurrence of a force majeure event which, in the
opinion of Liberum Capital, will or is likely to be prejudicial to the Group
or the Placing.
Following Admission, the Placing and Open Offer Agreement is not capable of
termination to the extent that it relates to the Placing of the Placing
Shares. The rights and obligations of the Placees shall terminate only in the
circumstances described in these terms and conditions and will not be subject
to termination by the Placee or any prospective Placee at any time or in any
circumstances. By participating in the Placing, Placees agree that the
exercise by Liberum Capital of any right of termination or other discretion
under the Placing and Open Offer Agreement shall be within the absolute
discretion of Liberum Capital, and that it need not make any reference to
Placees and that it shall have no liability to Placees whatsoever in
connection with any such exercise.
No Prospectus
The Placing Shares are being offered to a limited number of specifically
invited persons only and will not be offered in such a way as to require a
prospectus in the United Kingdom or in any other jurisdiction. No offering
document, admission document or prospectus has been or will be submitted to be
approved by the FCA in relation to the Placing, and any Placees' commitments
will be made solely on the basis of the information contained in the
Announcement (including this Appendix) and the Exchange Information (as
defined further below).
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 that it has neither received nor relied on any other information
(other than the Exchange Information), representation, warranty, or statement
made by or on behalf of the Company or Liberum Capital or any other person and
neither Liberum Capital nor the Company nor any other person will be liable
for any Placee's decision to participate in the Placing based on any other
information, representation, warranty or statement which the Placees may have
obtained or received and, if given or made, such information, representation,
warranty or statement must not be relied upon as having been authorised by any
of Liberum Capital, the Company, or their respective officers, directors,
employees or agents.
Each Placee acknowledges and agrees that it has relied on its own
investigation of the business, financial or other position of the Company in
accepting a participation in the Placing. Neither the Company nor Liberum
Capital is making any undertaking or warranty to any Placee regarding the
legality of an investment in the Placing Shares by such Placee under any
legal, investment or similar laws or regulations. No Placee should consider
any information in this Announcement to be legal, tax or business advice. Each
Placee should consult its own solicitor, tax adviser and financial adviser for
independent legal, tax and financial advice regarding an investment in the
Placing Shares. Nothing in this paragraph shall exclude the liability of any
person for fraudulent misrepresentation.
Placing Procedure
Placees shall acquire the Firm Placing Shares and Conditional Placing Shares
to be issued pursuant to the Placing (after clawback) and any allocation of
the Firm Placing Shares and Conditional Placing Shares (subject to clawback)
to be issued pursuant to the Placing will be notified to them on or around 10
March 2020 (or such other time and/or date as the Company and Liberum Capital
may agree).
Placees will be called upon to subscribe for, and shall subscribe for, the
Conditional Placing Shares only to the extent that valid applications by
Qualifying Shareholders under the Open Offer are not received by 11.00 a.m. on
9 March 2020 (or by such later time and/or date as the Company may agree with
Liberum Capital) or if applications have otherwise not been deemed to be valid
in accordance with the terms and conditions of the Circular and, in respect of
qualifying non-CREST holders only, the Application Form.
Payment in full for any Firm Placing Shares and Conditional Placing Shares so
allocated in respect of the Placing at the Issue Price must be made by no
later than 11.00 am on 9 March 2020 (or such other date as shall be notified
to each Placee by Liberum Capital) on the closing date for the Open Offer (or
such other time and/or date as the Company and Liberum Capital may agree).
Liberum Capital will notify Placees if any of the dates in these terms and
conditions should change, including as a result of delay in the crediting of
the Open Offer Entitlements in CREST, Admission or otherwise.
Registration and Settlement
Settlement of transactions in the Placing Shares (ISIN: GB00B01CZ652)
following Admission will take place within the system administered by
Euroclear UK & Ireland Limited (CREST) provided that, subject to certain
exceptions, Liberum Capital reserves the right to require settlement for, and
delivery of, the Placing Shares (or a portion thereof) to Placees by such
other means that they deem necessary if delivery or settlement is not possible
or practicable within CREST within the timetable set out in this Announcement
or would not be consistent with the regulatory requirements in any Placee's
jurisdiction. 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 that it has in place
with Liberum Capital.
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 (2)
percentage points above LIBOR as determined by Liberum Capital.
Each Placee is deemed to agree that, if it does not comply with these
obligations, Liberum Capital may sell any or all of the Placing Shares
allocated to that Placee on such Placee's behalf and retain from the proceeds,
for Liberum Capital's account and benefit (as agent for the Company), an
amount equal to the aggregate amount owed by the Placee plus any interest due.
The relevant Placee will, however, remain liable for any shortfall below the
aggregate amount owed by it and may be required to bear any stamp duty or
stamp duty reserve tax or securities transfer tax (together with any interest
or penalties) which may arise upon the sale of such Placing Shares on such
Placee's behalf. By communicating a bid for Placing Shares, each Placee
confers on Liberum Capital all such authorities and powers necessary to carry
out any such sale and agrees to ratify and confirm all actions which Liberum
Capital lawfully takes in pursuance of such sale.
If Placing Shares are to be delivered to a custodian or settlement agent,
Placees should ensure that the trade confirmation or contract note is copied
and delivered immediately to the relevant person within that organisation.
The relevant settlement details are as follows:
Insofar as Placing Shares are registered in a Placee's name or that of its
nominee or in the name of any person for whom a Placee is contracting as agent
or that of a nominee for such person, such Placing Shares should, subject as
provided below, be so registered free from any liability to UK stamp duty or
stamp duty reserve tax or securities transfer tax. Placees will not be
entitled to receive any fee or commission in connection with the Placing.
Representations, Warranties and Further Terms
By participating in the Placing each Placee (and any person acting on such
Placee's behalf) makes the following representations, warranties,
acknowledgements, agreements and undertakings (as the case may be) to the
Company and Liberum Capital:
1. it represents and warrants that it has read and understood
this Announcement, including the Appendix, in its entirety and that its
subscription for Placing Shares is subject to and based upon all the terms,
conditions, representations, warranties, acknowledgements, agreements and
undertakings and other information contained herein and undertakes not to
redistribute or duplicate this Announcement;
2. it acknowledges that no offering document, admission
document or prospectus has been prepared in connection with the Placing and
represents and warrants that it has not received and will not receive a
prospectus, admission document or other offering document in connection
therewith;
3. it acknowledges that the Existing Ordinary Shares are
admitted to trading on AIM, and the Company is therefore required to publish
certain business and financial information in accordance with the AIM Rules
and EU Regulation 596/2014 (collectively "Exchange Information");
4. it acknowledges that none of Liberum Capital, the Company,
any of their respective affiliates or any person acting on behalf of any of
them has provided, and will not provide it, with any material regarding the
Placing Shares or the Company other than this Announcement; nor has it
requested any of Liberum Capital, the Company, any of their respective
affiliates or any person acting on behalf of any of them to provide it with
any such information;
5. it acknowledges that the content of this Announcement is
exclusively the responsibility of the Company, and that none of Liberum
Capital, their respective affiliates or any person acting on behalf of any of
them has or shall have any liability for any information, representation or
statement contained in this Announcement or any information previously or
concurrently published by or on behalf of the Company, and will not 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 itself to acquire the Placing Shares is contained in this
Announcement and any Exchange Information, such information being all that it
deems necessary to make an investment decision in respect of the Placing
Shares and that it has neither received nor relied on any other information
given or representations, warranties or statements made by any of Liberum
Capital or the Company, or, if received, it has not relied upon any such
information, representations, warranties or statements (including any
management presentation that may have been received by any prospective Placee)
and neither Liberum Capital nor the Company will be liable for any Placee's
decision to accept an invitation to participate in the Placing based on any
other information, representation, warranty or statement. Each Placee further
acknowledges and agrees that it has relied solely on its own investigation of
the business, financial or other position of the Company in deciding to
participate in the Placing and it will not rely on any investigation that
Liberum Capital, its affiliates or any person acting on behalf of any of them
has or may have conducted;
6. it represents and warrants that it has neither received nor
relied on any unpublished price sensitive information concerning the Company
in accepting this invitation to participate in the Placing;
7. it acknowledges that none of Liberum Capital, its
affiliates or any person acting on behalf of any of them has or shall have any
liability for the Exchange Information, any publicly available or filed
information or any representation relating to the Company, provided that
nothing in this paragraph excludes the liability of any person for fraudulent
misrepresentation made by that person;
8. it represents and warrants that it is acquiring the Placing
Shares in an "offshore transaction" as defined in and pursuant Regulation S
under the Securities Act;
9. it acknowledges that it is acquiring the Placing Shares for
its own account or for one or more accounts for which, in each case, it
exercises sole investment discretion, for investment purposes and not with a
view to any distribution or for resale in connection with, the distribution
thereof in whole or in part, in the United States and that it has full power
to make the acknowledgements, representations and agreements herein on behalf
of each such account;
10. it acknowledges that the Placing Shares have not been and will
not be registered under the Securities Act or with any state or other
jurisdiction of the United States, nor approved or disapproved by the US
Securities and Exchange Commission, any state securities commission in the
United States or any other United States regulatory authority, and agrees not
to reoffer, resell, pledge or otherwise transfer the Placing Shares except
pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act;
11. unless otherwise specifically agreed in writing with Liberum
Capital, it represents and warrants that neither it nor the beneficial owner
of such Placing Shares will be a resident of the United States, Australia,
Canada, Japan or the Republic of South Africa;
12. it acknowledges that the Placing Shares have not been and will
not be registered under the securities legislation of the United States,
Australia, Canada, Japan or the Republic of South Africa and, subject to
certain exceptions, may not be offered, sold, taken up, renounced or delivered
or transferred, directly or indirectly, within those jurisdictions;
13. it represents and warrants that the issue to it, or the person
specified by it for registration as holder, of Placing Shares will not give
rise to a liability under any of sections 67, 70, 93 or 96 of the Finance Act
1986 (depositary receipts and clearance services) and that the Placing Shares
are not being acquired in connection with arrangements to issue depositary
receipts or to transfer Placing Shares into a clearance system;
14. it represents and warrants that: (i) it has complied with its
obligations in connection with money laundering and terrorist financing under
the Proceeds of Crime Act 2002, the Terrorism Act 2000 (as amended), the
Terrorism Act 2006 and the Money Laundering, Terrorist Financing and Transfer
of Funds (Information on the Payer) Regulations 2017 and (ii) it is not a
person: (a) with whom transactions are prohibited under the Foreign Corrupt
Practices Act of 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 (together, the
Regulations); and, if making payment on behalf of a third party, that
satisfactory evidence has been obtained and recorded by it to verify the
identity of the third party as required by the Regulations and, if making
payment on behalf of a third party, that satisfactory evidence has been
obtained and recorded by it to verify the identity of the third party as
required by the Regulations and has obtained all governmental and other
consents (if any) which may be required for the purpose of, or as a
consequence of, such purchase, and it will provide promptly to Liberum Capital
such evidence, if any, as to the identity or location or legal status of any
person which Liberum Capital may request from it in connection with the
Placing (for the purpose of complying with such Regulations or ascertaining
the nationality of any person or the jurisdiction(s) to which any person is
subject or otherwise) in the form and manner requested by Liberum Capital on
the basis that any failure by it to do so may result in the number of Placing
Shares that are to be purchased by it or at its direction pursuant to the
Placing being reduced to such number, or to nil, as Liberum Capital may decide
at its sole discretion;
15. it represents and warrants that, to the extent it has received
any inside information (for the purposes of the Market Abuse Regulation (EU
Regulation No. 596/2014 ("MAR")) and section 56 of the Criminal Justice Act
1993) in relation to the Company and its securities, it has not: (a) dealt (or
attempted to deal) in the securities of the Company; (b) encouraged,
recommended or induced another person to deal in the securities of the
Company; or (c) unlawfully disclosed inside information to any person, prior
to the information being made publicly available;
16. it acknowledges that it has consented to receive information
in respect of securities of the Company and other price-affected securities
(as defined in FSMA) which makes it an "insider" for the purposes of Part V of
FSMA and MAR, and it agrees not to deal in any securities of the Company until
such time as the inside information (as defined in FSMA) of which it has been
made aware has been made public for purposes of FSMA or it has been notified
by Liberum Capital or the Company that the proposed Placing will not proceed
and any unpublished price sensitive information of which it is aware has been
publicly announced, and, other than in respect of its knowledge of the
proposed Placing, it has neither received nor relied on any confidential price
sensitive information concerning the Company or the Placing Shares;
17. if a financial intermediary, as that term is used in Article
5(1) of the Prospectus Regulation, it represents and warrants that the Placing
Shares purchased by it in the Placing will not be acquired on a
non-discretionary basis on behalf of, nor will they be acquired with a view to
their offer or resale to, persons in a Member State of the European Economic
Area other than Qualified Investors, or in circumstances in which the prior
consent of Liberum Capital has been given to the offer or resale;
18. it represents and warrants that it has not offered or sold
and, prior to the expiry of a period of six (6) months from Admission, will
not offer or sell any Placing Shares to persons in the United Kingdom, except
to persons whose ordinary activities involve them in acquiring, holding,
managing or disposing of investments (as principal or agent) for the purposes
of their business or otherwise in circumstances which have not resulted and
which will not result in an offer to the public in the United Kingdom within
the meaning of section 85(1) of the Financial Services and Markets Act 2000
(FSMA);
19. it represents and warrants that it has not offered or sold and
will not offer or sell any Placing Shares to persons in the European Economic
Area prior to Admission except to persons whose ordinary activities involve
them in acquiring, holding, managing or disposing of investments (as principal
or agent) for the purposes of their business or otherwise in circumstances
which have not resulted in and which will not result in an offer to the public
in any member state of the European Economic Area within the meaning of the
Prospectus Regulation;
20. it 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 the FSMA) relating to the Placing Shares
in circumstances which do not require the approval of the communication by an
authorised person under section 21(1) of the FSMA;
21. it represents and warrants that it has complied and will
comply with all applicable provisions of the FSMA with respect to anything
done by it in relation to the Placing Shares in, from or otherwise involving,
the United Kingdom;
22. if in a Member State of the European Economic Area, unless
otherwise specifically agreed with Liberum Capital in writing, it represents
and warrants that it is a Qualified Investor within the meaning of the
Prospectus Regulation;
23. if in the United Kingdom, it represents and warrants that it
is (a) a person who is (i) an investment professional within the meaning of
Article 19(5) of the Order or who falls within Article 49(2)(A) to (D) ("High
Net Worth Companies, Unincorporated Associations, etc.") of the Order and (ii)
a "qualified investor" as defined in section 86 of FSMA or (b) a person to
whom this Announcement may otherwise be lawfully communicated;
24. it represents and warrants that it and any person acting on
its behalf is entitled to acquire the Placing Shares under the laws of all
relevant jurisdictions and that it has all necessary capacity and has obtained
all necessary consents and authorities and taken any other necessary actions
to enable it to commit to this participation in the Placing and to perform its
obligations in relation thereto (including, without limitation, in the case of
any person on whose behalf it is acting, all necessary consents and
authorities to agree to the terms set out or referred to in this Announcement)
and will honour such obligations;
25. where it is acquiring Placing Shares for one or more managed
accounts, it represents and warrants that it is authorised in writing by each
managed account: (a) to acquire the Placing Shares for each managed account;
(b) to make on its behalf the representations, warranties, acknowledgements,
undertakings and agreements in this Appendix and the Announcement of which it
forms part; and (c) to receive on its behalf any investment letter relating to
the Placing in the form provided to you by Liberum Capital;
26. it undertakes that it (and any person acting on its behalf)
will make payment for the Placing Shares allocated to it in accordance with
this Announcement on the due time and date set out herein, failing which the
relevant Placing Shares may be placed with other subscribers or sold as
Liberum Capital may in its sole discretion determine and without liability to
such Placee and it will remain liable for any shortfall below the net proceeds
of such sale and the placing proceeds of such Placing Shares and may be
required to bear the liability for any stamp duty or stamp duty reserve tax or
security transfer tax (together with any interest or penalties due pursuant to
or referred to in these terms and conditions) which may arise upon the placing
or sale of such Placee's Placing Shares on its behalf;
27. it acknowledges that none of Liberum Capital, its affiliates,
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 treated for these purposes as a
client of Liberum Capital and that Liberum Capital has no duties or
responsibilities to it for providing the protections afforded to its clients
or customers or for providing advice in relation to the Placing nor in respect
of any representations, warranties, undertakings or indemnities contained in
the Placing and Open Offer 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;
28. it undertakes that the person whom it specifies for
registration as the holder of the Placing Shares will be (i) itself or (ii)
its nominee, as the case may be. Neither Liberum Capital 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. Each Placee and any
person acting on behalf of such Placee agrees to participate in the Placing
and it agrees to indemnify the Company, Liberum Capital in respect of the same
on the basis that the Placing Shares will be allotted to the CREST stock
account of Liberum Capital who will hold them as nominee on behalf of such
Placee until settlement in accordance with its standing settlement
instructions;
29. it acknowledges that these terms and conditions and any
agreements entered into by it pursuant to these terms and conditions 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 English courts as regards 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 Liberum Capital 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;
30. it acknowledges that time shall be of the essence as regards
to obligations pursuant to this Appendix to the Announcement;
31. it agrees it will be bound by the terms of the Company's
Articles of Association;
32. it agrees that the Company, Liberum Capital, and their
respective affiliates and others will rely upon the truth and accuracy of the
foregoing representations, warranties, acknowledgements and undertakings which
are given to Liberum Capital on their own behalf and on behalf of the Company
and are irrevocable and are irrevocably authorised to produce this
Announcement or a copy thereof to any interested party in any administrative
or legal proceeding or official inquiry with respect to the matters covered
hereby;
33. it agrees to indemnify on an after-tax basis and hold the
Company, Liberum Capital and their respective affiliates harmless from any and
all costs, claims, liabilities and expenses (including legal fees and
expenses) arising out of or in connection with any breach of the
representations, warranties, acknowledgements, agreements and undertakings in
this Appendix and further agrees that the provisions of this Appendix shall
survive after completion of the Placing;
34. it acknowledges that no action has been or will be taken by
any of the Company, Liberum Capital or any person acting on behalf of the
Company or Liberum Capital that would, or is intended to, permit a public
offer of the Placing Shares in any country or jurisdiction where any such
action for that purpose is required;
35. it acknowledges that it is an institution that 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
it, and any accounts for which it may be acting, are able to bear, the
economic risk of, and is able to sustain, a complete loss in connection with
the Placing. It has relied upon its own examination and due diligence of the
Company and its associates taken as a whole, and the terms of the Placing,
including the merits and risks involved; and
36. it acknowledges that its commitment to subscribe for Placing
Shares on the terms set out herein and in the trade confirmation or contract
note 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.
The representations, warranties, acknowledgments and undertakings contained in
this Appendix are given to Liberum Capital for itself and on behalf of the
Company and are irrevocable.
The agreement to settle a Placee's subscription (and/or the subscription of a
person for whom such Placee is contracting as agent) free of stamp duty and
stamp duty reserve tax depends on the settlement relating only to a
subscription by it and/or such person direct from the Company for the Placing
Shares in question. Such agreement assumes that the Placing Shares are not
being subscribed for in connection with arrangements to issue depositary
receipts or to transfer the Placing Shares into a clearance service. If there
are any such arrangements, or the settlement relates to any other subsequent
dealing in the Placing Shares, stamp duty or stamp duty reserve tax may be
payable, for which neither the Company nor Liberum Capital 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 UK stamp duty or stamp duty reserve tax undertakes to pay such UK
stamp duty or stamp duty reserve tax forthwith and to indemnify on an
after-tax basis and to hold harmless the Company and Liberum Capital in the
event that any of the Company and/or Liberum Capital has incurred any such
liability to UK stamp duty or stamp duty reserve tax. If this is the case,
each Placee should seek its own advice and notify Liberum Capital accordingly.
In addition, Placees should note that they will be liable for any 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
subscription by them of any Placing Shares or the agreement by them to
subscribe for any Placing Shares.
Each Placee, and any person acting on behalf of the Placee, acknowledges that
Liberum Capital does not owe any fiduciary or other duties to any Placee in
respect of any representations, warranties, undertakings or indemnities in the
Placing and Open Offer Agreement.
Each Placee and any person acting on behalf of the Placee acknowledges and
agrees that Liberum Capital or any of its affiliates may, at their absolute
discretion, agree to become a Placee in respect of some or all of the Placing
Shares.
When a Placee or person acting on behalf of the Placee is dealing with Liberum
Capital, any money held in an account with Liberum Capital 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 rules and regulations of the FCA made
under the FSMA. 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 from Liberum Capital's money in accordance with
the client money rules and will be used by Liberum Capital in the course of
their own business and the Placee will rank only as a general creditor of
Liberum Capital.
All times and dates in this Announcement may be subject to amendment. Liberum
Capital shall notify the Placees and any person acting on behalf of the
Placees of any changes.
No statement in this Announcement is intended to be a profit forecast, and no
statement in this Announcement should be interpreted to mean that earnings per
share of the Company for the current or future financial years would
necessarily match or exceed the historical published earnings per share of the
Company.
The price of shares and any income expected from them may go down as well as
up and investors may not get back the full amount invested upon disposal of
the shares. Past performance is no guide to future performance, and persons
needing advice should consult an independent financial adviser.
The Placing Shares to be issued or sold pursuant to the Placing will not be
admitted to trading on any stock exchange other than the London Stock
Exchange.
Neither the content of the Company's website nor any website accessible by
hyperlinks on the Company's website is incorporated in, or forms part of, this
Announcement.
-end-
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