REG - Hornby PLC - Proposed £15m Placing and Admission to AIM <Origin Href="QuoteRef">HRN.L</Origin> - Part 1
RNS Number : 5011QHornby PLC18 June 2015
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, OUTSIDE OF THE UNITED KINGDOM, INCLUDING IN OR INTO THE UNITED STATES OF AMERICA, AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF THAT JURISDICTION
18 June 2015
Hornby PLC
("Hornby" or "the Company" or "the Group")
Proposed Delisting and Admission to AIM
Proposed Placing of 15,789,474 new Ordinary Shares at 95 pence per share
Proposed amendment to Articles of Association
Notice of General Meeting
The Company today announces that it has secured new equity funding of 15 million (before expenses) by way of a placing of 15,789,474 new Ordinary Shares at a price of 95 pence per new Ordinary Share (the "Placing") and that it will use part of the proceeds of the Placing to repay part of the Existing Bank Debt.
Unless otherwise defined herein, terms used in this announcement are as defined in the circular issued to Shareholders of the Company today (the "Circular").
In conjunction with the Placing, the Board is proposing to cancel the Group's shares from the Main Market and seek admission to trading on AIM. It is also seeking Shareholder approval to replace the Company's current articles of association with new articles of association which contain more modern provisions and are more appropriate for an AIM company.
The Company has also reached an agreement with Barclays, the Company's existing debt provider, to extend its revolving credit facility for 4 years but with a reduced revolving facility commitment of 10,000,000. These arrangements have been negotiated with a view to materially deleveraging the Company's balance sheet and, in conjunction with the Placing, to provide the Company with a strengthened and sustainable long term capital structure. Further details regarding the RCF Extension are set out in the Circular. The RCF Extension, Placing, Delisting and Admission to AIM are all inter-conditional and can only take place if all of the Transaction Resolutions are passed at the General Meeting.
In order to effect the Proposals, the Company will require Shareholder approval and will today post the Circular to Shareholders convening a General Meeting at which it will ask Shareholders to vote in favour of each of the Resolutions in order to effect the Proposals.
The Board believes that the Proposals are in the best interests of the Company and Shareholders as a whole. Shareholders should note that, unless all of the Transaction Resolutions are passed, none of the Proposals can be implemented. In such circumstances, the Placing cannot occur and, as such, the Company will not receive the Placing proceeds. Whilst the Company would have sufficient working capital to trade, it could not do so in accordance with its existing business plan and as such the Group's ability to implement its new strategic plan would be delayed or suspended. Furthermore, without the proceeds of the Placing, the Company does not currently have the ability to repay part of the Existing Bank Debt which falls for renewal in December of this year. The Board believes that, if it is required to renegotiate the terms of the Existing Bank Debt or secure alternative bank finance later in the year when the Existing Bank Debt comes to the end of its term, any such new arrangements may not be on as favourable terms as would be the case if the Company had the benefit of the Placing proceeds.
In addition to the above, if all of the Transaction Resolutions are not passed, and the Placing does not therefore proceed, the Board may find itself unable to prepare accounts on a going concern basis without first securing further external bank finance and/or other alternative sources of financing which may, or may not, be forthcoming before the Existing Bank Debt expires. Furthermore, there is a heightened risk that, were the economic environment or trading performance of the Group to deteriorate materially from its current position, and the Company did not take steps to delay, or if necessary suspend, implementation of the Group's strategic plan, the Company may fail to comply with one or more financial covenants that are in place under the terms of the Existing Bank Debt. In such circumstances, the Company would be obliged to enter into further negotiation with Barclays to relax the relevant covenant(s) or request that any breach of the relevant covenant(s) be waived.
In light of this, the Directors believe that the Proposals are in the best interests of Shareholders and that it is very important that Shareholders vote in favour of the Transaction Resolutions so that the Proposals can be implemented.
Enquiries
Hornby Plc
Richard Ames, Chief Executive
Nick Stone, Group Finance Director
01843 233500
Investor Relations
Broker Profile
Simon Courtenay
020 7448 3244
Financial Adviser and Broker
Numis Securities Limited
Rupert Krefting, Tom Ballard
020 7260 1000
For more information on Hornby visit www.hornby.com
Further Information
Neither the content of the Company's website (or any other website) nor any website accessible by hyperlinks on the Company's website (or any other website) is incorporated in, or forms part of, this announcement.
Any person receiving this announcement is advised to exercise caution in relation to the Placing. If in any doubt about any of the contents of this announcement, independent professional advice should be obtained.
Numis Securities Limited ("Numis Securities"), which is authorised and regulated in the United Kingdom by the FCA, is acting for the Company in connection with the Delisting, Admission and Placing and is not acting for any other persons in relation to the Delisting, Admission and Placing. Numis Securities is retained by the Company in connection with the Delisting, Admission and Placing and shall not be responsible to any other party for providing advice or taking any other action in relation to the Delisting, Admission and Placing. Persons receiving this announcement should note that Numis Securities will not be responsible to anyone other than the Company for providing the protections afforded to clients of Numis Securities or for advising any other person on the arrangements described in this announcement. Numis Securities has not authorised the contents of, or any part of, this announcement and no liability whatsoever is accepted by Numis Securities nor does it make any representation or warranty, express or implied, for the accuracy of any information or opinion contained in this announcement or for the omission of any information. Numis Securities disclaims all and any responsibility or liability whether arising in tort, contract or otherwise which it might otherwise have in respect of this announcement. Nothing in this paragraph shall serve to exclude or limit any responsibilities which Numis Securities may have under FSMA or the regulatory regime established thereunder.
This announcement contains (or may contain) certain forward-looking statements with respect to the Company and certain of its goals and expectations relating to its future financial condition and performance which involve a number of risks and uncertainties. No forward-looking statement is a guarantee of future performance and actual results could differ materially from those contained in any forward-looking statements. All statements, other than statements of historical facts, contained in this announcement, including statements regarding the Group's future financial position, business strategy and plans, business model and approach and objectives of management for future operations, are forward-looking statements. Generally, the forward-looking statements in this announcement use words such as "aim", "anticipate", "target", "expect", "estimate", "plan", "goal", "believe", "will", "may", "could", "should", "future", "intend" "opportunity, "potential", "project", "seek" and other words having a 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 changes in interest rates and foreign exchange rates, changes in legislation, changes in consumer habits and other factors outside the control of the Company, that may cause actual results, performance or achievements to be materially different from any results, performance or achievements expressed or implied by such forward-looking statements. All forward-looking statements contained in this announcement are based upon information available to the Directors at the date of this announcement and the release of this announcement shall not give rise to any implication that there has been no change in the facts set forth herein since such date. Investors are urged to read this entire announcement carefully before making an investment decision. The forward-looking statements in this announcement are based on the relevant Directors' beliefs and assumptions and information only as of the date of this announcement, and the forward-looking events discussed in this announcement might not occur. Therefore, investors should not place any reliance on any forward-looking statements. Except as required by law or regulation, the Directors undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future earnings or otherwise.
IMPORTANT NOTICE
THE MATERIAL SET FORTH HEREIN IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT INTENDED, AND SHOULD NOT BE CONSTRUED, AS AN OFFER OF SECURITIES FOR SALE IN THE UNITED STATES OR ANY OTHER JURISDICTION. SECURITIES MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES ABSENT REGISTRATION OR AN EXEMPTION FROM REGISTRATION. THE SECURITIES OF THE COMPANY DESCRIBED HEREIN HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE LAWS OF ANY STATE OF THE UNITED STATES OR ANY JURISDICTION THEREOF, AND MAY NOT BE OFFERED, SOLD OR RE-SOLD, TRANSFERRED OR DELIVERED, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, ABSENT REGISTRATION OR PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN COMPLIANCE WITH THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION IN THE UNITED STATES.
The distribution of this announcement in jurisdictions other than the United Kingdom may be restricted by law and, therefore, any persons who are subject to the laws of any jurisdiction other than the United Kingdom should inform themselves about, and observe, any applicable requirements. Failure to comply with any such restrictions may constitute a violation of the securities laws of any jurisdiction.
This announcement does not constitute an offer of, or the solicitation of an subscribe for or purchase, any ordinary shares to any person in any jurisdiction to whom or in which such offer or solicitation is unlawful, and therefore persons into whose possession this announcement comes should inform themselves about and observe any such restrictions. In particular, this announcement is not for distribution in or into, the United States, Australia, Canada, Japan or the Republic of South Africa.
No action has been or will be taken by the Company or Numis to permit a public offering of the ordinary shares under the applicable securities laws of any jurisdiction. Other than in the United Kingdom, no action has been taken or will be taken to he possession or distribution of this announcement in any jurisdiction where action for that purpose may be required or where doing so is restricted by law. Accordingly, neither this announcement, nor any advertisement, nor any other offering material may be distributed or published in any jurisdiction except under circumatances that will result in compliance with any applicable laws and regulations. Persons into whose possession this announcement comes should inform themselves about any observe any such restrictions. Any faiure to comwith such restrictions may constitute a violation of the securities laws of any such jurisdiction.
This summary should be read in conjunction with the full text of the announcement which follows.
Hornby PLC
Proposed Delisting and Admission to AIM
Proposed Placing of 15,789,474 new Ordinary Shares at 95 pence per share
Proposed amendment to Articles of Association
Notice of General Meeting
The following is an extract from the Chairman's letter contained in the Circular.
Introduction
The Company is pleased to announce that it is proposing to raise, in aggregate, 15 million (before expenses) by way of a placing of 15,789,474 new Ordinary Shares at a price of 95 pence per new Ordinary Share and to use part of the proceeds of such Placing to repay part of the Existing Bank Debt. The Placing Price represents a 4.2 per cent. discount to the Closing Price of 99.125 pence per Ordinary Share on 17 June 2015.
In conjunction with the Placing, the Board is proposing to cancel the listing of the Existing Ordinary Shares on the premium segment of the Official List and to remove such Existing Ordinary Shares from trading on the Main Market and to apply for admission of both the Existing Ordinary Shares and the Placing Shares to trading on AIM. It is also taking the opportunity to seek Shareholder approval to replace the Company's current articles of association with new articles of association which contain more modern provisions and are more appropriate for an AIM company.
The Company has also negotiated the RCF Extension with a view to materially deleveraging the Company's balance sheet and, in conjunction with the Placing, to provide the Company with a strengthened and sustainable long term capital structure. The RCF Extension can only take place if all of the Transaction Resolutions are passed at the General Meeting and the Delisting, Admission and Placing therefore all occur.
The Placing is conditional upon, amongst other things, the approval of Resolution 1 to authorise the Directors to effect the Delisting and Admission, Resolution 2 to authorise the Related Party
Transaction, Resolution 3 to authorise the Directors to issue the Placing Shares and Resolution 4 to authorise the Directors to disapply pre-emption rights in connection with the issue of the Placing Shares. Therefore, if any one of these Resolutions is not approved by Shareholders at the General Meeting, the Placing will not proceed and, as a result, the RCF Extension would also not be possible.
Background to and reasons for the Proposals
Background to the Placing and use of proceeds
The Board's strategic mission remains the significant improvement of Shareholder value by focussing upon ongoing investment in the key areas of the Company's business for growth and development. The first stage of this work involved improving supplier partnerships and establishing better working practices in the Company's Asia business in order to improve the reliability of the Company's supply chain. The next phase, which has been implemented in part, involves a rationalisation of the Group's European warehouse arrangements and an upgrade to its systems in order to consolidate and centralise key activities and improve the data available to support decision-making in the business. The final phase requires investment to improve the dialogue and relationship that the Company has with its partners and customers, for example, through social media content.
As previously disclosed in the Company's interim condensed consolidated half-yearly financial report for the six months to 30 September 2014, the Board has set in motion various internal changes to enhance sales and profits, including successfully moving the Company's UK warehouse operations to DS Logistics in Canterbury and implementing new Critical Path and Tooling Database systems to improve production and supply chain processes. The UK implementation of the new ERP system is well advanced and expected to go live by the end of June 2015. The system will then be rolled out across the Group's European operations and which will enable the closure of the Group's warehouses in Europe and their consolidation into the new operation in Canterbury. The Board believes that these changes will enable cost savings and a greater efficiency of operations.
The net proceeds of the Placing of 14 million will be used by the Company to repay part of the Existing Bank Debt, which comprises the Company's core debt excluding seasonal working capital needs. The balance of the net proceeds of the Placing is intended to be applied towards the continued investment in the Group's business.
In particular, the net proceeds of the Placing will be used:
(a) to repay part of the Company's Existing Bank Debt
8m
(b) by the Company to accelerate the implementation of the Group's growth strategy
3m
(c) for the general working capital requirements of the Company
3m
(d) to pay individual transaction costs in connection with the Proposals
1m
Shareholders should note that, unless all of the Transaction Resolutions are passed by Shareholders at the General Meeting, none of the Proposals can be implemented. In such circumstances, the Placing cannot occur and, as such, the Company will not receive the Placing proceeds. Whilst the Company would have sufficient working capital to trade, it could not do so in accordance with its existing business plan. For example, the Group's ability to implement its new strategic plan would be delayed or suspended in the absence of alternative available sources of financing, reflecting the limited operational and financial flexibility and headroom available to the Company under the Existing Bank Debt. Furthermore, without the proceeds of the Placing, the Company does not currently have the ability to repay part of the Existing Bank Debt which falls for renewal in December of this year. The Board believes that, if it is required to renegotiate the terms of the Existing Bank Debt or secure alternative bank finance later in the year when the Existing Bank Debt comes to the end of its term, any such new arrangements may not be on as favourable terms as would be the case if the Company had the benefit of the Placing proceeds.
In addition to the above, if all of the Transaction Resolutions are not passed, and the Placing does not therefore proceed, whilst the Company would like to continue to execute its stated strategy, it would be required to immediately delay or, more likely suspend, the execution of such strategy due to the absence of the available cash resources which approval of the Transaction Resolutions and completion of the Placing would otherwise provide. The Company would be unable to implement the Group's proposed strategy and the Board may find itself unable to prepare accounts on a going concern basis without first securing further external bank finance and/or other alternative sources of financing which may, or may not, be forthcoming before the Existing Bank Debt expires. Furthermore, there is a heightened risk that, were the economic environment or trading performance of the Group to deteriorate materially from its current position, and the Company did not take steps to delay, or if necessary suspend, implementation of the Group's strategic plan, the Company may fail to comply with one or more financial covenants that are in place under the terms of the Existing Bank Debt. In such circumstances, the Company would be obliged to enter into further negotiation with Barclays to relax the relevant covenant(s) or request that any breach of the relevant covenant(s) be waived.
As stated above, in the event of the Transaction Resolutions not being passed, the Company would need to delay or suspend implementation of the Group's strategic plan in order to ensure that its accounts are prepared on a going concern basis and that it complies with the current financial covenants that are in place under the Existing Bank Debt. Barclays have been supportive of the Company to date and most recently in the context of the RCF Extension and the Directors therefore believe that it is likely that the Group would be able to secure any such amendment or waiver but that such an amendment or waiver would be likely to require the payment of additional fees and potentially to result in the imposition of more onerous obligations and restrictions on the Group than those which the Group has negotiated to date. In the event that Barclays were not supportive of the Company and any such amendment or waiver were not possible to agree, a failure to comply with financial covenants would be an event of default under the Existing Bank Debt and would entitle Barclays to demand repayment of all outstanding amounts and to cancel the Existing Bank Debt.
In light of the above, the Directors believe that the Proposals are in the best interests of Shareholders and that it is very important that Shareholders vote in favour of the Transaction Resolutions so that the Proposals can be implemented.
Background to and reasons for the Delisting and Admission
The Board believes that a move to AIM will provide a market and environment more suited to the Company's current size and strategic intent and will allow the Company to enhance Shareholder value.
The Board believes that growth and general trading of the Company will be more difficult in the absence of a move to AIM due to the less competitive position of the Company when seeking to complete the current re-organisation and systems upgrade or, for example, acquisitive deals or raising equity finance compared to operating with an AIM quotation and the ability to raise finance without the need to produce a prospectus. The Board believes that this would significantly slow the rate at which the Company can deliver enhanced value to Shareholders. For example, AIM has the benefit of lower transactional costs, reduced ongoing costs and simpler administrative and regulatory requirements that are more appropriate to the Company's size. The Delisting and Admission will offer greater flexibility to the Company, particularly with regard to corporate transactions, and should therefore enable the Company to execute certain transactions more quickly and cost effectively when compared to the requirements of the Official List. Given the Company's size and strategic intent, the Board believes that the move is likely to be of significant benefit to the Company going forward.
AIM will also provide Shareholders with a market on which to potentially trade their Ordinary Shares whilst, in the Directors' opinion, providing the Company with continued access to equity capital, including the ability to improve future liquidity for the benefit of all Shareholders. Importantly, as a Main Market company, and due to its size and current market capitalisation, the Company is currently unable to raise sufficient funds in the market to complete the current re-organisation of its European operations nor to support organic growth in the short term or longer term growth by acquisition without having to publish a prospectus under the Prospectus Rules, an exercise which, without raising funds, it cannot afford to do. Provided that Shareholders approve the Transaction Resolutions, the Directors will be in a stronger position to raise equity finance without the requirement to publish a prospectus. The Directors anticipate that raising equity financing will also help to increase liquidity through placing more Ordinary Shares into public hands.
Current trading and prospects
It is pleasing that, after a year of hard work and numerous challenges for the Group, the Company has returned to profit at the underlying level. Having identified and focused on the key immediate priorities for the business, the Company has been able to make significant headway towards delivering value to Shareholders, customers and colleagues. It will be necessary to build upon this progress in order to enable the Group to operate at its full potential, but the Board is of a view that the Company is heading in the right direction and that many of the targets required to be met in order for the Company to be more profitable in the future have either already been achieved or are progressing well into development.
In particular, these include the following:
(a) The Group is improving product deliveries and product quality from its partners based in the Far East.
(b) The Company is operating from a new warehouse and distribution facility in Hersden, Kent run by its new 3PL Partner, DS Logistics.
(c) The Company has moved to a new head office in Discovery Park, Sandwich.
(d) The Company has opened a new office in Shoreditch, London to house our growing ecommerce team.
(e) The Company is preparing to launch a new Group-wide ERP IT system starting with the UK in Q2 2015 and rolling out across Europe during 2015/16.
As 2015 continues, the Board will further review the Group's performance and capabilities. Improvements in manufacturing, new product development processes and sales and marketing capabilities around the Group are priorities and will receive immediate attention. As the stock situation that has held back the Group over the last few months is resolved, the opportunity to benefit from improvements in other areas of the business will rise in importance and become integral to the Boards plan to return the Group to profitability. This process will continue through 2015 to 2017 and the Board is confident that the Group has the brands, team and know-how to bring the Company back to past levels of financial performance and beyond.
Trading in the current year so far is in line with the Board's expectations. The Company continues to focus on clearing the older elements of stock, with Group stock currently some 0.2 million lower than at year end. Whilst the delivery of the transformation plan comes with execution risk, the Group has a portfolio of fantastic brands that, if managed well, will offer plenty of potential for long-term growth. The Board intends to further update Shareholders in the future on the progress made in delivering the transformation plan. Group net debt as at 12 June 2015 was 11.5 million, in line with usual seasonal working capital outflows (9.7 million as at 8 June 2014).
Save as disclosed in the Circular, there has been no significant change in the financial or trading position of the Group which has occurred since 31 March 2015, being the date to which the Group's most recently published audited financial statements have been prepared.
Details of the Placing
The Company is proposing to raise, in aggregate, 15 million (before expenses) by way of a placing of 15,789,474 new Ordinary Shares at the Placing Price with Placees. The Placing Shares represent 40.3 per cent. of the issued share capital of the Company as at 17 June 2015 and will, on Admission, represent approximately 28.7 per cent. of the enlarged issued share capital of the Company. The Placing will result in a dilution of the proportionate holdings of existing Shareholders who do not participate in the Placing. On Admission, Shareholders will experience an immediate dilution of approximately 28.7 per cent. as a result of the Placing.
The Placing Price represents a discount of 4.2 per cent. to the Closing Price of 99.125 pence per Ordinary Share as at 17 June 2015. The Placing Price has been set by the Directors following their assessment of market conditions and following a "book-building" exercise, which is a mechanism through which investor support for a fundraising such as the Placing is ascertained.
In connection with the Placing, the Company has entered into the Placing Agreement pursuant to which Numis Securities has agreed, in accordance with its terms, to use reasonable endeavours to place the Placing Shares with Placees.
As part of the Placing, New Pistoia and Phoenix have subscribed for 3,679,500 and 5,034,474 Placing Shares, respectively. Immediately following Admission, their holdings are expected to respectively represent 23.3 per cent. and 20.5 per cent. of the issued ordinary share capital of the Company.
The Placing is conditional, amongst other things, on:
(a) the passing of the Transaction Resolutions;
(b) the conditions in the Placing Agreement being satisfied or (if applicable) waived and the Placing 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 August 2015 (or such later time and/or date, being no later than 5.00 p.m. on 26 August 2015 as the Company and Numis Securities may agree in writing).
The Placing Agreement contains customary warranties given by the Company to Numis Securities as to matters relating to the Group and its business and a customary indemnity given by the Company to Numis Securities in respect of liabilities arising out of or in connection with the Placing. Numis Securities is entitled to terminate the Placing Agreement in certain circumstances prior to Admission including circumstances where any of the warranties are found not to be true or accurate or were misleading in any respect or on the occurrence of certain force majeure events.
The Placing 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 Placing 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.
Application will be made to the London Stock Exchange for both the Existing Ordinary Shares and the Placing Shares to be admitted to trading on AIM. On the assumption that, amongst other things, all of the Transaction Resolutions are passed by Shareholders at the General Meeting, it is expected that Admission of both the Existing Ordinary Shares and the Placing Shares will become effective on or around 8.00 a.m. 12 August 2015.
Details of the De-listing and AIM Admission
In order to effect the Delisting and Admission, the Company will require, amongst other things, that all of the Transaction Resolutions are passed by Shareholders at the General Meeting. Resolution 1, together with the other Resolutions to be proposed at the General Meeting, are set out in the Notice of the General Meeting in the Circular. Resolution 1 will authorise the Board to cancel the listing of the Existing Ordinary Shares on the Official List, remove such Existing Ordinary Shares from trading on the Main Market and to apply for admission of the Existing Ordinary Shares together with the Placing Shares to trading on AIM.
Conditional on all of the Transaction Resolutions having been approved by Shareholders at the General Meeting, the Company will apply to cancel the listing of the Existing Ordinary Shares on the Official List and to trading on the Main Market and give 20 Business Days' notice of its intention to seek admission to trading on AIM under AIM's streamlined process for companies that have had their securities traded on an AIM Designated Market (which includes the Official List).
Each of Richard Ames, Nick Stone, Charlie Caminada and Roger Canham have given an irrevocable undertaking to vote in favour of the Resolutions in respect of their own respective beneficial holdings of Existing Ordinary Shares (or, where applicable, procured to do, in respect of Ordinary Shares held by their connected persons) together totalling 109,308 Existing Ordinary Shares and representing, in aggregate, 0.28 per cent. of the Existing Ordinary Shares.
It is anticipated that:
(a) the last day of dealings in the Existing Ordinary Shares on the Main Market will be 11 August 2015;
(b) cancellation of the listing of Existing Ordinary Shares on the Official List will take effect at 8.00 a.m. on 12 August 2015, being not less than 20 Business Days from the date of the General Meeting; and
(c) Admission will take place, and dealings in both the Existing Ordinary Shares and the Placing Shares will commence on AIM, at 8.00 a.m. on 12 August 2015.
As the Existing Ordinary Shares are currently listed on the premium segment of the Official List, the AIM Rules do not require an admission document to be published by the Company in connection with the Company's admission to trading on AIM. However, subject to the passing of the Transaction Resolutions at the General Meeting, the Company will, following the General Meeting, publish an announcement which complies with the requirements of Schedule One to the AIM Rules comprising information required to be disclosed by companies transferring their securities from the Official List, as an AIM Designated Market, to AIM.
Although it is their intention, there is no guarantee that the Company will be successful in achieving admission of the Existing Ordinary Shares and the Placing Shares to trading on AIM or that the conditions in the Placing Agreement will be satisfied (or, if applicable, waived).
The audit opinion from the Company' auditors, PricewaterhouseCoopers LLP, for the financial year ended 31 March 2015 contains an emphasis of matter paragraph. This draws the reader's attention to (a) the importance of the Placing and the inter-dependent RCF Extension to the Board's ability to prepare the accounts on a going concern basis and (b) the fact that the Placing and the proposed RCF Extension are both conditional upon the Transaction Resolutions having been passed at a General Meeting of the Company.
Shareholders should note that, unless all of the Transaction Resolutions are passed by Shareholders at the General Meeting, none of the Proposals can be implemented. In such circumstances the Placing and RCF Extension cannot occur and the Company will remain trading on the Main Market.
Risk Factors
For a discussion of the risks and uncertainties which you should take into account when considering whether to vote in favour of the Resolutions, Shareholders should refer to Part 2 of the Circular.
Consequences of the move to AIM
Following Admission, the Company will be subject to the AIM Rules. Shareholders should note that AIM is self-regulated and that the protections afforded to investors in AIM companies are less rigorous than those afforded to investors in companies listed on the premium segment of the Official List.
Shareholders should further note that the share price of AIM companies can be highly volatile, which may prevent Shareholders from being able to sell their Ordinary Shares at or above the price they paid for them. The Offer Price may not be indicative of prices that will prevail in the trading market and investors may not be able to resell the Ordinary Shares at or above the price they paid for them. The market price and the realisable value for the Ordinary Shares could fluctuate significantly for various reasons, many of which are outside the Group's control. In addition, the published market price of the Ordinary Shares will be, typically, their middle market price. Due to the potential difference between the middle market price of the Ordinary Shares and the price at which the Ordinary Shares can be sold, there is no guarantee that the realisable value of the Ordinary Shares will be the same as the published market price.
Whilst there are some similarities in the obligations of a company whose shares are traded on AIM to those of companies whose shares are listed on the premium segment of the Official List, there are also significant differences. For a discussion of these differences Shareholders should refer to paragraph 8.3 of Part 1 of the Circular.
Following Admission, Ordinary Shares that are held in uncertificated form will continue to be held and dealt through CREST. Share certificates representing those Ordinary Shares held in certificated form will continue to be valid and no new certificates will be issued in respect of such Ordinary Shares following a move to AIM.
In addition, the City Code on Takeovers and Mergers will continue to apply to the Company following Admission, as the Company is incorporated in the UK.
The Board does not envisage that there will be any significant alteration to the standards of reporting and governance which the Company currently maintains. The Company will maintain its Audit and Remuneration Committees which will be subject to the same terms and conditions.
Related party transactions
New Pistoia and Phoenix are related parties of the Company for the purposes of the Listing Rules as they have existing shareholdings in the Company that are greater than 10 per cent., being 23.30 per cent. and 15.98 per cent., respectively as at 17 June 2015. Therefore their proposed participation in the Placing will require Shareholder approval.
It is proposed that New Pistoia and Phoenix will participate in the Placing in respect of 3,679,500 and 5,034,474 Placing Shares, respectively. New Pistoia and Phoenix will abstain, and will take all reasonable steps to ensure that their associates (as defined in the Listing Rules) will abstain from voting at the General Meeting in relation to Resolution 2 for the approval of the Related Party Transaction. As detailed below, in respect of the other Resolutions each of New Pistoia and Phoenix have irrevocably undertaken to vote in favour of such Resolutions.
The Directors will not participate in the Placing but may acquire secondary Ordinary Shares in the aftermarket. In the event that any Director does acquire secondary Ordinary Shares in the aftermarket, the Company will issue a regulatory announcement to notify the market of such director dealing.
The Board having been so advised by the Company's sponsor, Numis Securities, consider the terms of the Related Party Transaction are fair and reasonable in so far as the Shareholders are concerned. Roger Canham, who is a director of both Phoenix and the Company, has refrained, in accordance with Listing Rule 13.6.2(1), from taking part in either the Board's consideration of the Related Party Transaction, or the Board's recommendation in connection with the Related Party Transaction.
General Meeting
Set out in the Circular is a notice convening the General Meeting of the Company to be held at 08.30 a.m. on 13 July 2015 at the offices of Berwin Leighton Paisner LLP, Adelaide House, London Bridge, London EC4R 9HA at which the Resolutions summarised below will be proposed:
Resolution 1 - as a special resolution, to authorise the Directors to cancel the listing of the Existing Ordinary Shares on the Official List and to remove such Existing Ordinary Shares from trading on the London Stock Exchange's Main Market and to apply for admission of the Existing Ordinary Shares and the Placing Shares to trading on AIM;
Resolution 2 - as an ordinary resolution, for the Independent Shareholders to approve the Related Party Transaction for the purposes of the Listing Rules;
Resolution 3 - as an ordinary resolution, to authorise the Directors to allot the Placing Shares;
Resolution 4 - as a special resolution, to authorise the Directors under section 570 of the Act, to disapply pre-emption rights in connection with the allotment of the Placing Shares; and
Resolution 5 - as a special resolution to adopt the New Articles as the articles of the association of the Company.
Irrevocable undertakings
Each of Richard Ames, Nick Stone, Roger Canham and Charlie Caminada have given an irrevocable undertaking to vote or, where applicable, to procure the casting of votes by their connected persons (as defined in section 252 of the Companies Act 2006), in favour of the Resolutions in respect of their own beneficial holdings of Existing Ordinary Shares together totalling 109,308, representing in aggregate 0.28 per cent. of the issued Existing Ordinary Shares.
Recommendations and importance of vote
The Board believes that the Proposals are in the best interests of the Company and Shareholders as a whole. Accordingly, the Board unanimously recommends that Shareholders vote in favour of the Resolutions, as the Directors have irrevocably undertaken to do in respect of their own beneficial shareholdings (or, where applicable, procured to so in respect of Ordinary Shares held by their connected persons) amounting, in aggregate, to 109,308 Existing Ordinary Shares and representing approximately 0.28 per cent. of the Company's existing issued share capital.
Shareholders should note that, unless all of the Transaction Resolutions are passed by Shareholders at the General Meeting, none of the Proposals can be implemented. In such circumstances Admission, the Placing and the RCF Extension cannot occur, the Company will remain trading on the Main Market and the consequences discussed in the section of this announcement entitled 'Background to the Placing and use of proceeds' will apply. In light of this, the Directors believe that the Proposals are in the best interests of Shareholders and that it is very important that Shareholders vote in favour of the Transaction Resolutions so that the Proposals can be implemented.
EXPECTED TIMETABLE
The expected timetable for the principal events is set out below:
Announcement of the Proposals and publication of this
document18 June 2015
Last time and date for receipt of Forms of Proxy
8.30 a.m. on 11 July 2015
General Meeting
8.30 a.m. on 13 July 2015
Publication of Schedule One announcement
14 July 2015
Last day of dealings in the Existing Ordinary Shares on the
Main Market11 August 2015
Cancellation of listing of the Existing Ordinary Shares on
the Official List8.00 a.m. on 12 August 2015
Admission and commencement of dealings in the
Existing Ordinary Shares and the Placing Shares on AIM8.00 a.m. on 12 August 2015
CREST accounts credited with Placing Shares in
uncertificated form8.00 a.m. on 12 August 2015
Dispatch of definitive share certificates in respect of
Placing Shares to be issued in certificated form by24 August 2015
Each of the times and dates in the table above is indicative only and may be subject to change. If any of the details contained in the timetable above should change, the revised times and dates will be notified by means of an announcement through a Regulatory Information Service.
APPENDIX
TERMS AND CONDITIONS
IMPORTANT INFORMATION FOR PLACEES ONLY REGARDING THE PLACING. MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THIS ANNOUNCEMENT (WHICH IS FOR INFORMATION PURPOSES ONLY) AND THE TERMS AND CONDITIONS SET OUT IN THIS APPENDIX ARE DIRECTED ONLY AT: (A) PERSONS IN MEMBER STATES OF THE EUROPEAN ECONOMIC AREA ("EEA") WHO ARE QUALIFIED INVESTORS WITHIN THE MEANING OF ARTICLE 2(1)(E) OF THE EU PROSPECTUS DIRECTIVE (WHICH MEANS DIRECTIVE 2003/71/EC, AS AMENDED FROM TIME TO TIME, AND INCLUDES ANY RELEVANT IMPLEMENTING DIRECTIVE MEASURE IN ANY MEMBER STATE) (THE "PROSPECTUS DIRECTIVE") ("QUALIFIED INVESTORS"); AND (B) IN THE UNITED KINGDOM, QUALIFIED INVESTORS WHO ARE PERSONS WHO (I) HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS FALLING WITHIN ARTICLE 19(1) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 (THE "ORDER"); (II) ARE PERSONS FALLING WITHIN ARTICLE 49(2)(A) TO (D) ("HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC") OF THE ORDER; OR (III) ARE PERSONS TO WHOM IT MAY OTHERWISE BE LAWFULLY COMMUNICATED (ALL SUCH PERSONS 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. PERSONS DISTRIBUTING THIS ANNOUNCEMENT MUST SATISFY THEMSELVES THAT IT IS LAWFUL TO DO SO. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS APPENDIX AND THE TERMS AND CONDITIONS SET OUT HEREIN RELATE 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.
THE SECURITIES MENTIONED HEREIN HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE US SECURITIES ACT OF 1933 (AS AMENDED) (THE "SECURITIES ACT") OR UNDER ANY SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES AND MAY NOT BE OFFERED, SOLD, RESOLD, TRANSFERRED OR DELIVERED, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES EXCEPT PURSUANT TO AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN COMPLIANCE WITH THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES. THERE WILL BE NO PUBLIC OFFER OF THE SECURITIES MENTIONED HEREIN IN THE UNITED STATES.
THE SECURITIES MENTIONED HEREIN HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE US SECURITIES AND EXCHANGE COMMISSION (THE "SEC"), ANY STATE SECURITIES COMMISSION OR ANY OTHER REGULATORY AUTHORITY IN THE UNITED STATES, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF THE PLACING OR THE ACCURACY OR ADEQUACY OF THIS ANNOUNCEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENCE IN THE UNITED STATES.
EACH PLACEE SHOULD CONSULT WITH ITS OWN ADVISERS AS TO LEGAL, TAX, BUSINESS AND RELATED ASPECTS OF AN ACQUISITION OF PLACING SHARES .
Persons who are invited to and who choose to participate in the placing (the "Placing") of 15,789,474 new ordinary shares (the "Placing Shares") in Hornby plc (the "Company"), by making an oral or written offer to acquire Placing Shares, including any individuals, funds or others on whose behalf a commitment to acquire Placing Shares is given (the "Placees"), will (i) be deemed to have read and understood this Announcement, including this Appendix, in its entirety; and (ii) be making such offer on the terms and conditions contained in this Appendix, including being deemed to be providing (and shall only be permitted to participate in the Placing on the basis that they have provided) the representations, warranties, acknowledgements and undertakings set out herein.
In particular each such Placee represents, warrants to the Company and Numis (as defined below) and acknowledges that:
(a) 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;
(b) it is and, at the time the Placing Shares are acquired, will be outside the United States and is acquiring the Placing Shares in an "offshore transaction" in accordance with Rule 903 or Rule 904 of Regulation S under the Securities Act ("Regulation S") and is acquiring beneficial interests in the Placing Shares for its own account; if acquiring the Placing Shares for the account of one or more other persons, it has full power and authority to make the representations, warranties, agreements and acknowledgements herein on behalf of each such account; and
(c) if it is a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive, that any Placing Shares acquired by it in the Placing will not be acquired on a non-discretionary basis on behalf of, nor will they be acquired with a view to their offer or resale to, persons in circumstances which may give rise to an offer of securities to the public other than an offer or resale in a member state of the EEA which has implemented the Prospectus Directive to Qualified Investors, or in circumstances in which the prior consent of Numis (as defined below) has been given to each such proposed offer or resale.
The Company and Numis will rely upon the truth and accuracy of the foregoing representations, warranties, 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.
These materials may not be published, distributed or transmitted by any means or media, directly or indirectly, in whole or in part, in or into the United States. These materials do not constitute an offer to sell, or a solicitation of an offer to buy, securities in the United States. Securities may not be offered or sold in the United States absent (i) registration under the Securities Act or (ii) an available exemption from registration under the Securities Act. The securities mentioned herein have not been, and will not be, registered under the Securities Act and will not be offered to the public in the United States. The Placing Shares are being offered and sold to persons located outside the United States in "offshore transactions" as defined in and pursuant to Regulation S in a transaction exempt from or not subject to the registration requirements of the Securities Act.
This Announcement and the information contained herein is not for publication or distribution, directly or indirectly, to persons in Australia, Canada, Japan or the Republic of South Africa or in any other jurisdiction in which such publication or distribution would be 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 in this Announcement. No public offer of securities of the Company is being made in the United Kingdom or elsewhere.
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; and none of the Placing Shares have 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, none of the Placing Shares may (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.
Details of the Placing Agreement and the Placing Shares
Numis Securities Limited ("Numis") is acting as agent for and on behalf of the Company in connection with the Placing and has entered into a placing agreement (the "Placing Agreement") with the Company under which Numis has agreed to use its reasonable endeavours to procure Placees to take up the Placing Shares at the Placing Price (as defined below), on the terms and subject to the conditions set out therein.
The Placing Shares will, when issued, be credited as fully paid and will rank pari passu in all respects with the existing ordinary shares of 1 pence per share in the capital of the Company (the "Ordinary Shares"), including the right to receive all dividends and other distributions declared, made or paid on or in respect of the Ordinary Shares after the date of issue of the Placing Shares, and will on issue be free of all claims, liens, charges, encumbrances and equities.
Application for admission to trading
Application will be made to the London Stock Exchange plc (the "London Stock Exchange") for admission to trading of the Placing Shares on its AIM Market ("AIM") ("Admission").
It is expected that Admission of the Placing Shares will become effective at or around 8.00 a.m. (London time) on 12 August 2015 (or such later time and/or date as Numis may agree with the Company) (the "Placing Closing Date") and that dealings in the Placing Shares will commence at that time.
Participation in, and principal terms of, the Placing
1 Numis is arranging the Placing as placing agent of the Company for the purpose of procuring Placees at the Placing Price for the Placing Shares.
2 Participation in the Placing will only be available to persons who may lawfully be, and are, invited to participate by Numis.
3 The price per Placing Share (the "Placing Price") is fixed at 95 pence and is payable to Numis (as agent of the Company) by all Placees.
4 Each Placee's allocation is determined by Numis in its discretion following consultation with the Company and has been or will be confirmed orally by Numis and a trade confirmation will be dispatched as soon as possible thereafter. Numis' oral confirmation to such Placee constitutes an irrevocable legally binding commitment upon such person in favour of Numis and the Company, to acquire the number of Placing Shares allocated to it and to pay the relevant Placing Price on the terms and conditions set out in this Appendix and in accordance with the Company's articles of association. Except with Numis' consent, such commitment is not capable of variation or revocation.
5 Each Placee's allocation and commitment will be evidenced by a contract note issued to such Placee by Numis. The terms of this Appendix will be deemed incorporated in that contract note.
6 Each Placee will have an immediate, separate, irrevocable and binding obligation, owed to Numis (as agent for the Company), to pay to Numis (or as Numis directs) in cleared funds an amount equal to the product of the Placing Price and the number of Placing Shares such Placee has agreed to acquire and the Company has agreed to allot and issue to that Placee.
7 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".
8 All obligations of Numis under the Placing will be subject to fulfilment of the conditions referred to below under "Conditions of the Placing" and to the Placing not being terminated on the basis referred to below under "Right to terminate under the Placing Agreement".
9 By participating in the Placing, each Placee will agree that its rights and obligations in respect of the Placing will terminate only in the circumstances described below and will not be capable of rescission or termination by the Placee.
10 Except as required by law or regulation, no press release or other announcement will be made by Numis 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.
11 To the fullest extent permissible by law, neither Numis, the Company nor any of their respective affiliates, agents, directors, officers or employees shall have any responsibility or liability to Placees (or to any other person whether acting on behalf of a Placee or otherwise). In particular, neither Numis, nor the Company, nor any of their respective affiliates, agents, directors, officers or employees shall have any responsibility or liability (including to the extent permissible by law, any fiduciary duties) in respect of Numis' conduct of the Placing or of such alternative method of effecting the Placing as Numis and the Company may agree.
Conditions of the Placing
The Placing is conditional upon the Placing Agreement becoming unconditional and not having been terminated in accordance with its terms.
Numis' obligations under the Placing Agreement in relation to the Placing of the Placing Shares are conditional on, inter alia:
(a) Admission of the Placing Shares occurring at or before 8:00 a.m. (London time) on the Placing Closing Date (or such later time and/or date as the Company and Numis may otherwise agree not being later than 5.00 p.m. on 26 August 2015);
(b) none of the warranties of the Company contained in the Placing Agreement being untrue, inaccurate or misleading at any time before Admission;
(c) the Company having complied with all its obligations to be satisfied under the Placing Agreement on or before the Placing Closing Date; and
(d) certain of the resolutions to be proposed at the general meeting of the Company to be held on or around 13 July 2015 (the "Resolutions") having been duly passed.
If: (i) any of the conditions in relation to the Placing of the Placing Shares contained in the Placing Agreement, including those described above, are not fulfilled or (where permitted) waived by Numis by the relevant time or date specified (or such later time or date as the Company and Numis may agree not being later than 5.00 p.m. on 26 August 2015); or (ii) any of such conditions become incapable of being fulfilled; or (iii) the Placing Agreement is terminated in the circumstances specified below, the Placing will lapse and the Placees' 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 it in respect thereof.
Numis may, at its discretion and upon such terms as it considers fit, waive 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 Agreement save that the above conditions relating to the passing of the Resolutions and to Admission taking place may not be waived. Any such extension or waiver will not affect Placees' commitments as set out in this Announcement.
Numis shall not have any liability to any Placee (or to any other person whether acting on behalf of a Placee or otherwise) in respect of any decision it may make as to whether or not to waive or to extend the time and/or date for the satisfaction of any condition 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 Numis.
Right to terminate under the Placing Agreement
Numis is entitled, at any time before Admission of the Placing Shares, to terminate the Placing Agreement in relation to those shares in accordance with its terms in certain circumstances, including, inter alia: (i) any breach of the warranties given by the Company in the Placing Agreement becoming untrue, incorrect or misleading; (ii) the failure of the Company to comply with obligations under the Placing Agreement or applicable laws; (iii) if there is any event that would or might materially affect the financial position or prospects of the Company or its subsidiaries (together, the "Group") or which will or might be prejudicial to the Group or the Placing or Admission or to the subscription for the Placing Shares by the Placees; or (iv) the occurrence of an adverse macro-economic or political change, or a change in stock market conditions which will or is likely to be prejudicial to the Group or to the Placing or Admission or the subscription for the Placing Shares by the Placees.
By participating in the Placing, Placees agree that the exercise by Numis of any right of termination or other discretion under the Placing Agreement shall be within the absolute discretion of Numis and that it need not make any reference to, or consult with, Placees and that it shall have no liability to Placees whatsoever in connection with any such exercise.
No Admission Document or 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 an admission document or prospectus in the United Kingdom or in any other jurisdiction.
No offering document or prospectus has been or will be submitted to be approved by the London Stock Exchange or any other regulatory body in relation to the Placing.
Placees' commitments will be made solely on the basis of the information contained in this Announcement (including this Appendix) released by the Company today and subject to the further terms set forth in the contract note to be provided to individual prospective Placees. Each Placee, by accepting a participation in the Placing, agrees that the content of this Announcement (including this Appendix) and all other publicly available information previously published by the Company by notification to a Regulatory Information Service or otherwise filed by the Company is exclusively the responsibility of the Company and confirms that it has neither received nor relied on any other information, representation, warranty, or statement made by or on behalf of the Company or Numis or any other person and none of the Company or Numis 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. Each Placee acknowledges and agrees that it has relied on its own investigation of the business, financial or other position of the Company in accepting a participation in the Placing. Nothing in this paragraph shall exclude the liability of any person for fraudulent misrepresentation by that person.
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"). Subject to certain exceptions, Numis and the Company reserve the right to require settlement for, and delivery of, the Placing Shares (or any part thereof) to Placees by such other means that they deem necessary if delivery or settlement is not possible or practicable within the CREST system within the timetable set out in this Announcement or would not be consistent with the regulatory requirements in the Placee's jurisdiction.
Each Placee allocated Placing Shares in the Placing will be sent a trade confirmation in accordance with the standing arrangements in place with Numis stating the number of Placing Shares allocated to it at the Placing Price, the aggregate amount owed by such Placee to Numis and settlement instructions. Each Placee agrees that it will do all things necessary to ensure that delivery and payment is completed in accordance with the standing CREST or certificated settlement instructions in respect of the Placing Shares that it has in place with Numis.
It is expected that settlement of the Placing Shares will be on 12 August 2015, in accordance with the instructions set out in the trade confirmation.
Interest is chargeable daily on payments not received from Placees on the due date in accordance with the arrangements set out above at the rate of two percentage points above LIBOR as determined by Numis.
Each Placee is deemed to agree that, if it does not comply with these obligations, Numis may sell any or all of the Placing Shares allocated to that Placee on such Placee's behalf and retain from the proceeds, for Numis' account and benefit, 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 (together with any interest or penalties) or other similar taxes imposed in any jurisdiction which may arise upon the sale of such Placing Shares on such Placee's behalf.
If Placing Shares are to be delivered to a custodian or settlement agent, Placees should ensure that the trade confirmation is copied and delivered immediately to the relevant person within that organisation.
Insofar as Placing Shares are registered in 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. 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) irrevocably in favour of the Company and Numis:
1 represents and warrants that it has read and understood the Announcement, including this Appendix, in its entirety and that its acquisition of 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 acknowledges that no offering document or prospectus has been or will be prepared in connection with the Placing and represents and warrants that it has not received and will not receive a prospectus or other offering document in connection with the Placing or the Placing Shares;
3 acknowledges that none of Numis, the Company, any of their respective affiliates, agents, directors, officers or employees or any person acting on behalf of any of them has provided, nor will provide, it with any material regarding the Placing Shares or the Company other than this Announcement; nor has it requested any of Numis, the Company, any of their respective affiliates or any person acting on behalf of any of them to provide it with any such information;
4 acknowledges that the Company's ordinary shares are currently listed on the premium segment of the Official List and are admitted to trading on the Main Market of the London Stock Exchange and that the Company is therefore required to publish certain business and financial information in accordance with the rules and practices of the FCA , which includes a description of the Company's business and the Company's financial information, including balance sheets and income statements, and that it is able to obtain or access to such information, or comparable information concerning other publicly traded companies, in each case without undue difficulty. The Company is intending to de-list from the Main Market of the London Stock Exchange and apply for Admission;
5 acknowledges that none of Numis, any person acting on behalf of it or them, or any of its affiliates has or shall have any liability for 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.
6 acknowledges that the content of this Announcement is exclusively the responsibility of the Company and that none of Numis, nor 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, or omission from, this Announcement or any information previously published by or on behalf of the Company, pursuant to applicable laws, 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 Placing Shares is contained in this Announcement and any information previously published by the Company by notification to a Regulatory Information Service, such information being all that such Placee deems necessary or appropriate and sufficient 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 Numis or the Company nor any of their respective affiliates and none of Numis or 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, provided that nothing in this paragraph excludes the liability of any person for fraudulent misrepresentation made by that person;
7 acknowledges and agrees that it may not rely, and has not relied, on any investigation that Numis, any of their affiliates or any person acting on their behalf, may have conducted with respect to the Placing Shares or the Company, and none of such persons has made any representation, express or implied, with respect to the Company, the Placing Shares or the accuracy, completeness or adequacy of any publicly available or filed information or any representation relating to the Company; each Placee further acknowledges that it has conducted its own investigation of the Company and the Placing Shares and has received all information it believes necessary or appropriate in connection with its investment in the Placing Shares;
8 acknowledges that it has made its own assessment and has satisfied itself concerning the relevant tax, legal, currency and other economic considerations relevant to its investment in the Placing Shares ;
9 acknowledges that none of Numis, their respective affiliates or any person acting on behalf of any of them has or shall have any liability for any information made publicly available by or in relation to the Company or any representation, warranty or statement relating to the Company or the Group contained therein or otherwise, provided that nothing in this paragraph excludes the liability of any person for fraudulent misrepresentation made by that person;
10 acknowledges that the Placing Shares have not been, and will not be, registered under the Securities Act; and represents and warrants that (i) it is and, at the time the Placing Shares are acquired, will be either (a) outside the United States and acquiring the Placing Shares in an "offshore transaction" in accordance with Rule 903 or Rule 904 of Regulation S; (ii) if it is acquiring the Placing Shares for the account of one or more other persons, it has full power and authority to make the representations, warranties, agreements and acknowledgements herein on behalf of each such account; (iii) it is not acquiring the Placing Shares as a result of any "directed selling efforts" as defined in Regulation S or as a result of any form of general solicitation or general advertising (within the meaning of Rule 502(c) of Regulation D under the Securities Act); and (iv) it will not publish, distribute or transmit these or any other documents or information related to the Placing, by any means or media, directly or indirectly, in whole or in part, in or into the United States;
11 acknowledges that in making any decision to acquire Placing Shares it (i) has such knowledge and experience in financial and business matters to be capable of evaluating the merits and risks of subscribing for or purchasing the Placing Shares, (ii) will not look to Numis or the Company for all or part of any such loss it may suffer, (iii) is experienced in investing in securities of this nature in this sector and is aware that it may be required to bear, and is able to bear, the economic risk of an investment in the Placing Shares , (iv) is able to sustain a complete loss of an investment in the Placing Shares and (v) has no need for liquidity with respect to its investment in the Placing Shares;
12 undertakes, unless otherwise specifically agreed with Numis and the Company, that it is not and at the time the Placing Shares are acquired, neither it nor the beneficial owner of the Placing Shares will be, a resident of Australia, Canada, Japan or South Africa and further 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 South Africa and, subject to certain exceptions, may not be offered, sold, transferred, delivered or distributed, directly or indirectly, in or into those jurisdictions;
13 acknowledges that the Placing Shares have not been and will not be registered and that a prospectus will not be cleared in respect of any of the Placing Shares under the securities laws or legislation of the United States or any state or jurisdiction thereof, Australia, Canada, Japan or South Africa and, subject to certain exceptions, may not be offered, sold, or delivered or transferred, directly or indirectly, in or into those jurisdictions;
14 acknowledges that the Placing Shares are being subscribed for investment purposes, and not with a view to offer, resell or distribute within the meaning of the United States securities laws;
15 acknowledges that no representation has been made as to the availability of any exemption under the Securities Act for the reoffer, resale, pledge or transfer of the Placing Shares;
16 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 issue or transfer Placing Shares into a clearance service;
17 represents and warrants that it has complied with its obligations under the Criminal Justice Act 1993, section 118 of the Financial Services and Markets Act 2000 (the "FSMA") and in connection with money laundering and terrorist financing under the Proceeds of Crime Act 2002 (as amended), the Terrorism Act 2000, the Terrorism Act 2006 and the Money Laundering Regulations 2007 and any related or similar rules, regulations or guidelines, issued, administered or enforced by any government agency having jurisdiction in respect thereof (the "Regulations") and the Money Laundering Sourcebook of the FCA 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;
18 represents and warrants that it is acting as principal only in respect of the Placing or, if it is acting for any other person: (i) it is duly authorised to do so and has full power to make the acknowledgments, representations and agreements herein on behalf of each such person; and (ii) it is and will remain liable to the Company and/or Numis for the performance of all its obligations as a Placee in respect of the Placing (regardless of the fact that it is acting for another person);
19 if a financial intermediary, as that term is used in Article 3(2) of the EU Prospectus Directive, 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 EEA which has implemented the Prospectus Directive other than Qualified Investors, or in circumstances in which the prior consent of Numis has been given to the offer or resale;
20 represents and warrants that it has not offered or sold and 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 FSMA;
21 represents and warrants that it has not offered or sold and will not offer or sell any Placing Shares to persons in the EEA 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 EEA within the meaning of the Prospectus Directive;
22 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 in which section 21(1) of the FSMA does not require approval of the communication by an authorised person;
23 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;
24 represents and warrants, if in a Member State of the European Economic Area, unless otherwise specifically agreed with Numis and the Company in writing, that it is a "qualified investor" within the meaning of Article 2(1)(e) of the Prospectus Directive;
25 represents and warrants, if in the United Kingdom, that it is a person (i) having professional experience in matters relating to investments who falls within the definition of "investment professionals" in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order") or (ii) who falls within Article 49(2)(a) to (d) ("High Net Worth Companies, Unincorporated Associations, etc") of the Order, or (iii) to whom this Announcement may otherwise lawfully be communicated;
26 acknowledges and agrees that no action has been or will be taken by either the Company or Numis or any person acting on behalf of the Company or Numis 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;
27 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 fully observed such laws and obtained all such governmental and other guarantees, permits, authorisations, approvals and consents which may be required thereunderand complied with all necessary formalities 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 Appendix) and will honour such obligations and that it has not taken any action or omitted to take any action which will or may result in Numis, the Company or any of their respective directors, officers, agents, employees or advisers acting in breach of the legal or regulatory requirements of any jurisdiction in connection with the Placing;
28 undertakes that it (and any person acting on its behalf) will make payment in respect of the Placing Shares allocated to it in accordance with this Appendix on the due time and date set out herein, failing which the relevant Placing Shares may be placed with other acquirers or sold as Numis may in their sole discretion determine and without liability to such Placee, who will remain liable for any amount by which the net proceeds of such sale falls short of the product of the relevant Placing Price and the number of Placing Shares allocated to it and may be required to bear any stamp duty, stamp duty reserve tax or other similar taxes (together with any interest or penalties) which may arise upon the sale of such Placee's Placing Shares;
29 that its allocation (if any) of Placing Shares will represent a maximum number of Placing Shares which it will be entitled, and required, to acquire, and that Numis or the Company may call upon it to acquire a lower number of Placing Shares (if any), but in no event in aggregate more than the aforementioned maximum;
30 acknowledges that none of the Company nor Numis, nor any of their respective affiliates, nor any person acting on behalf 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 its participation in the Placing is on the basis that it is not and will not be a client of Numis in connection with its participation in the Placing and that Numis have no duties or responsibilities to it for providing the protections afforded to their respective 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 Agreement nor for the exercise or performance of any of their respective rights and obligations thereunder including any rights to waive or vary any conditions or exercise any termination right;
31 undertakes that the person whom it specifies for registration as holder of the Placing Shares will be (i) itself or (ii) its nominee, as the case may be. Neither Numis nor the Company will be responsible for any liability to stamp duty or stamp duty reserve tax or other similar taxes resulting from a failure to observe this requirement ("Indemnified Taxes"). Each Placee and any person acting on behalf of such Placee agrees to participate in the Placing and it agrees to indemnify the Company and Numis on an after-tax basis in respect of any Indemnified Taxes on the basis that the Placing Shares will be allotted to the CREST stock account of Numis who will hold them as nominee on behalf of such Placee until settlement in accordance with its standing settlement instructions;
32 acknowledges that these terms and conditions and any agreements entered into by it pursuant to these terms and conditions set out in this Appendix, and all non-contractual or other obligations arising out of or in connection with them, 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 (including any dispute regarding the existence, validity or termination of such contract or relating to any non-contractual or other obligation arising out of or in connection with 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 either the Company or Numis 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;
33 agrees to indemnify on an after tax basis and hold the Company, Numis 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 represents and warrants that it has neither received nor relied on any inside information concerning the Company prior to or in connection with accepting this invitation to participate in the Placing and is not purchasing Placing Shares on the basis of material non-public information;
35 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;
36 if it is a pension fund or investment company, its purchase of Placing Shares is in full compliance with applicable laws and regulations; and
37 agrees that the Company, Numis 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 Numis on their own behalf and on behalf of the Company and are irrevocable and it a irrevocably authorises the Company and Numis to produce this Announcement, pursuant to, in connection with, or as may be required by any applicable law or regulation, administrative or legal proceeding or official inquiry with respect to the matters set forth herein.
The foregoing representations, warranties and confirmations are given to Numis for itself and on behalf of the Company and are irrevocable.
The agreement to allot and issue Placing Shares to Placees (and/or to persons for whom such Placee is contracting as agent) free of stamp duty and stamp duty reserve tax relates only to their allotment and issue to Placees, or such persons as they nominate as their agents, direct from the Company for the Placing Shares in question. Such agreement also assumes that the Placing Shares are not being acquired in connection with arrangements to issue depositary receipts or to issue or transfer the Placing Shares into a clearance service. If there are any such arrangements, or the settlement relates to any other dealing in the Placing Shares, stamp duty or stamp duty reserve tax or other similar taxes may be payable, for which neither the Company nor Numis will be responsible and the Placees shall indemnify the Company and Numis on an after-tax basis for any stamp duty or stamp duty reserve tax paid by them in respect of any such arrangements or dealings. If this is the case, each Placee should seek its own advice and notify Numis accordingly.
The Company and Numis are not liable to bear any transfer taxes that arise on a sale of Placing Shares subsequent to their acquisition by Placees or for transfer taxes arising otherwise than under the laws of the United Kingdom. Each Placee should, therefore, take its own advice as to whether any such transfer tax liability arises and notify Numis accordingly. Furthermore, each Placee agrees to indemnify on an after-tax basis and hold each of Numis and/or the Company and their respective affiliates harmless from any and all interest, fines or penalties in relation to stamp duty, stamp duty reserve tax and all other similar duties or taxes to the extent that such interest, fines or penalties arise from the unreasonable default or delay of that Placee or its agent.
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 acquisition by them of any Placing Shares or the agreement by them to acquire any Placing Shares.
Each Placee, and any person acting on behalf of the Placee, acknowledges that neither the Company nor Numis owe any fiduciary or other duties to any Placee in respect of any representations, warranties, undertakings or indemnities in the Placing Agreement.
Each Placee and any person acting on behalf of the Placee acknowledges and agrees that Numis or any of its affiliates may, at its 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 Numis, any money held in an account with Numis 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 Numis' money in accordance with the client money rules and will be used by Numis in the course of its own business and the Placee will rank only as a general creditor of Numis.
All times and dates in this Announcement may be subject to amendment. Numis shall notify the Placees and any person acting on behalf of the Placees of any changes.
This information is provided by RNSThe company news service from the London Stock ExchangeENDIOEPKFDKBBKKPAD
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