REG - Ocado Group PLC - Proposed Convertible Bond Offering

OcadoAnnouncement

29/07/2024 16:45

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RNS Number : 2677Y  Ocado Group PLC  29 July 2024

THIS ANNOUNCEMENT, INCLUDING THE APPENDICES AND THE INFORMATION IN THEM, IS
RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION, DISTRIBUTION OR FORWARDING,
DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO, OR TO ANY PERSON
LOCATED OR RESIDENT IN, OR AT ANY ADDRESS IN, THE UNITED STATES (INCLUDING ITS
TERRITORIES AND POSSESSIONS, ANY STATE OF THE UNITED STATES AND THE DISTRICT
OF COLUMBIA), AUSTRALIA, JAPAN, SOUTH AFRICA OR  TO U.S. PERSONS (AS DEFINED
IN REGULATION S ("REGULATION S") UNDER THE U.S. SECURITIES ACT OF 1933 (THE
"SECURITIES ACT")) OR ANY OTHER JURISDICTION IN WHICH SUCH PUBLICATION,
RELEASE OR DISTRIBUTION WOULD BE PROHIBITED BY APPLICABLE LAW.

 

THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND IS NOT AN OFFER OF
SECURITIES IN ANY JURISDICTION.

 

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION.

 

For immediate release

 

29 July 2024

 

Ocado Group plc

 

Proposed Convertible Bond Offering

 

Ocado Group plc ("Ocado" or the "Company") is today launching an offering of
approximately £250 million of guaranteed senior unsecured convertible bonds
due 2029 (the "Bonds") (the "Convertible Bond Offering").

 

Concurrently with the Convertible Bond Offering the Company has today also
announced its intention to offer £350 million in aggregate principal amount
of sterling-denominated senior unsecured notes due 2029 (the "High Yield
Offering", and together with the Convertible Bond Offering, the "Offerings").
The Offerings are intended to raise total gross proceeds of approximately
£600 million.

 

The Convertible Bond Offering will be offered via an accelerated bookbuild
which will be launched immediately following this Announcement only to
institutional investors. Barclays Bank PLC, BNP PARIBAS and Goldman Sachs
International are acting as Joint Global Coordinators (the "Joint Global
Coordinators") and the Joint Global Coordinators together with Deutsche Bank
AG, London Branch are acting as Joint Bookrunners (together, the "Joint
Bookrunners") in respect of the Convertible Bond Offering.

 

The final terms of the Convertible Bond Offering are expected to be announced
at the end of the accelerated bookbuild.

 

The Company has today also announced an invitation to the holders of Ocado's
outstanding 0.875% senior unsecured convertible bonds due 2025 and 3.875%
senior unsecured notes due 2026 (together, the "Target Securities") to tender
such Target Securities (the "Tender Offer").  The Tender Offer was extended
to holders of the Target Securities who are non-US persons and located outside
the United States.

 

Use of Proceeds

 

The net proceeds from the Offerings, together with cash from the balance sheet
to the extent needed, are intended to be used to fund the Tender Offer.

 

To the extent the net proceeds of the Offerings exceed the amount required to
purchase the Target Securities pursuant to the Tender Offer, Ocado expects to
retain such funds to be used to reduce leverage over time, whether at maturity
of the relevant debt or otherwise.

 

The purpose of these financing transactions is, amongst other things, to
proactively extend the maturity profile of Ocado's debt. An appropriate
financing policy and sufficient liquidity position continue to be an important
foundation to enable investment in Ocado's growth plans while maintaining a
healthy financial profile.

 

Current trading within Ocado evidencing positive momentum

 

On 16 July 2024 Ocado reported strong H1 earnings demonstrating continuing
financial, operational and strategic progress. The Company reported revenue
growth of £1.5 billion, up +12.6%, with good profit flow through, resulting
in a raise of FY24 margin guidance to mid-teens percentage, as well as an
improvement to underlying cash flow. As evidenced by the recent reported
growth of online for grocers, it is clear that the global channel shift to
grocery online has now resumed and Ocado is uniquely well-positioned to take
advantage of this opportunity.

 

Most recently, Ocado announced a new order from Kroger to install its latest
proprietary automation across multiple Customer Fulfilment Centres in the
United States. Ocado remains resolutely focused on making continued progress
over the rest of the financial year and beyond, as the business continues to
grow into a profitable, cash-generating, technology business.

 

Details of the Convertible Bond Offering

 

The Bonds will be issued by Ocado and initially guaranteed by Ocado Holdings
Limited, Ocado Operating Limited, Ocado Central Services Limited, Ocado
Innovation Limited, Ocado Solutions Limited, Ocado Solutions USA Inc., Ocado
Solutions (US) ProCo LLC, Ocado Solutions Canada Inc., and Ocado Intelligent
Automation Limited (together, the "Guarantors"), with the Guarantors subject
to change in certain circumstances.

 

The Bonds will be issued at par and are expected to carry a coupon of
between 5.75% and 6.25% per annum payable semi-annually in arrears in equal
instalments on 6 February and 6 August of each year, commencing on 6 February
2025. The Bonds will be convertible into ordinary shares in the capital of the
Company ("Ordinary Shares"). The initial conversion price is expected to be
set at a premium of between 45% and 50% above the clearing price of an
existing Ordinary Share determined in the concurrent Delta Placement (as
defined below). The conversion price will be subject to adjustment in certain
circumstances in line with market practice.

 

To facilitate hedging for certain subscribers of the Bonds, the Joint Global
Coordinators will, on behalf of certain subscribers of the Bonds, organise a
simultaneous placement of existing Ordinary Shares (the "Delta Placement") to
purchasers procured by the Joint Global Coordinators.

 

The Ordinary Shares to be sold in the Delta Placement will be part of the
accelerated bookbuilding process, but the Company will not receive any
proceeds from the sale of these Ordinary Shares as these are not being issued
by, or sold on behalf of, the Company.

 

The Company has no responsibility or liability for stamp duty or any other
transfer tax which may arise from or be due on the sale of these Ordinary
Shares.

 

Settlement and delivery of the Bonds is expected to take place on or
about 6 August 2024 (the "Closing Date"). If not previously converted,
redeemed or purchased and cancelled, the Bonds will be redeemed at par on 6
August 2029. The Company will have the option to redeem all outstanding Bonds
on or after 27 August 2027, at par plus accrued interest, if the parity value
on each of at least 20 dealing days in a period of 30 consecutive dealing days
shall have exceeded 130% of the principal amount.

 

The Company will also have the option to redeem all outstanding Bonds, at par
plus accrued interest, at any time if 85% or more of the principal amount of
the Bonds originally issued shall have been previously redeemed, converted or
repurchased and cancelled.

 

The Convertible Bond Offering will be directed to institutional investors
outside the United States, Australia, South Africa and Japan, and any other
jurisdiction in which such distribution would be prohibited by applicable law.
The final terms of the Bonds are expected to be announced later today.

 

Application is intended to be made for the Bonds to be admitted to trading on
the unregulated open market (Freiverkehr) of the Frankfurt Stock Exchange
after the Closing Date but prior to the first interest payment date.

 

In the context of the Convertible Bond Offering, the Company will agree to a
lock-up relating to equity and equity-related securities for a period
commencing on pricing and ending 90 calendar days following the Closing Date,
subject to certain exceptions.

 

Lazard & Co., Limited is acting as independent financial adviser to Ocado
Group plc in relation to the Offerings.

 

This Announcement should be read in its entirety. In particular, you should
read and understand the information provided in the "Important Notice" section
of this Announcement.

 

This Announcement relates to the disclosure of information that qualified, or
may have qualified, as inside information within the meaning of Article 7(1)
of the Market Abuse Regulation (EU) 596/2014, as amended, and including as it
forms part of UK domestic law by virtue of the European Union (Withdrawal) Act
2018.

 

For further information on the Announcement, please contact:

 

Ocado Group plc

 

Stephen Daintith, Chief Financial Officer
 
            +44 (0) 1707 228 000

Nick Coulter, Head of Investor Relations
 
            +44 (0) 1707 228 000

Jamie Kerr, Head of
Communications
            +44 (0) 1707 228 000

 

Lucy Legh, Headland
Consultancy
            +44 (0) 20 3805 4822

ocadogroup@headlandconsultancy.com

 

About Ocado Group

 

Ocado Group is a UK based technology company trading on the London Stock
Exchange (Ticker OCDO). It provides end-to-end online grocery fulfilment
solutions to thirteen of the world's largest grocery retailers and holds a 50%
share of Ocado Retail Ltd in the UK in a Joint Venture with Marks &
Spencer. Ocado has spent two decades innovating for grocery online, investing
in a wide technology estate that includes robotics, AI & machine learning,
simulation, forecasting, and edge intelligence.

 

Person responsible for arranging release of this Announcement:

 

Neill Abrams

Group General Counsel and Company Secretary

Ocado Group plc

Buildings One & Two

Trident Place

Mosquito Way

Hatfield

Hertfordshire AL10 9UL

email: company.secretary@ocado.com

LEI: 213800LO8F61YB8MBC74

 

 

Important Notice

NO ACTION HAS BEEN TAKEN BY THE ISSUER, THE GUARANTORS, THE JOINT BOOKRUNNERS
OR ANY OF THEIR RESPECTIVE AFFILIATES THAT WOULD PERMIT AN OFFERING OF THE
BONDS OR POSSESSION OR DISTRIBUTION OF THIS ANNOUNCEMENT OR ANY OFFERING OR
PUBLICITY MATERIAL RELATING TO THE BONDS IN ANY JURISDICTION WHERE ACTION FOR
THAT PURPOSE IS REQUIRED. PERSONS INTO WHOSE POSSESSION THIS ANNOUNCEMENT
COMES ARE REQUIRED BY THE ISSUER, THE GUARANTORS AND THE JOINT BOOKRUNNERS TO
INFORM THEMSELVES ABOUT, AND TO OBSERVE, ANY SUCH RESTRICTIONS.

THIS ANNOUNCEMENT IS NOT FOR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO
THE UNITED STATES. THIS ANNOUNCEMENT IS NOT AN OFFER TO SELL SECURITIES OR THE
SOLICITATION OF ANY OFFER TO BUY SECURITIES, NOR SHALL THERE BE ANY OFFER OF
SECURITIES IN ANY JURISDICTION IN WHICH SUCH OFFER OR SALE WOULD BE UNLAWFUL.

These materials are not an offer of securities for sale 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 or to or for the account or
benefit of US persons absent registration or an exemption from registration
under the Securities Act. There is no intention to register any securities
referred to herein in the United States or to make a public offering of the
securities in the United States.

THIS ANNOUNCEMENT AND THE OFFERING WHEN MADE ARE ONLY ADDRESSED TO, AND
DIRECTED IN, THE UNITED KINGDOM AND MEMBER STATES OF THE EUROPEAN ECONOMIC
AREA (THE "EEA") AT PERSONS WHO ARE "QUALIFIED INVESTORS" WITHIN THE MEANING
OF THE PROSPECTUS REGULATION ("QUALIFIED INVESTORS"). FOR THESE PURPOSES, THE
EXPRESSION "PROSPECTUS REGULATION" MEANS REGULATION (EU) 2017/1129 AND
REGULATION (EU) 2017/1129 AS IT FORMS PART OF UNITED KINGDOM DOMESTIC LAW BY
VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018 (THE "EUWA").

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; (C) LOCAL IMPLEMENTING MEASURES IN THE
EEA; (D) REGULATION (EU) NO 600/2014 AS IT FORMS PART OF UNITED KINGDOM
DOMESTIC LAW BY VIRTUE OF THE EUWA ("UK MIFIR"); AND (E) THE FCA HANDBOOK
PRODUCT INTERVENTION AND PRODUCT GOVERNANCE SOURCEBOOK (TOGETHER, THE "PRODUCT
GOVERNANCE REQUIREMENTS"), AND DISCLAIMING ALL AND ANY LIABILITY, WHETHER
ARISING IN TORT, CONTRACT OR OTHERWISE, WHICH ANY "MANUFACTURER" (FOR THE
PURPOSES OF THE PRODUCT GOVERNANCE REQUIREMENTS) MAY OTHERWISE HAVE WITH
RESPECT THERETO, THE BONDS HAVE BEEN SUBJECT TO A PRODUCT APPROVAL PROCESS,
WHICH HAS DETERMINED THAT: (I) THE TARGET MARKET FOR THE BONDS IS (A) IN THE
EEA, ELIGIBLE COUNTERPARTIES AND PROFESSIONAL CLIENTS ONLY, EACH AS DEFINED IN
MIFID II AND (B) IN THE UNITED KINGDOM, ELIGIBLE COUNTERPARTIES (AS DEFINED IN
THE FCA HANDBOOK CONDUCT OF BUSINESS SOURCEBOOK) AND PROFESSIONAL CLIENTS (AS
DEFINED IN UK MIFIR); AND (II) ALL CHANNELS FOR DISTRIBUTION OF THE BONDS TO
ELIGIBLE COUNTERPARTIES AND PROFESSIONAL CLIENTS ARE APPROPRIATE. ANY PERSON
SUBSEQUENTLY OFFERING, SELLING OR RECOMMENDING THE BONDS (A "DISTRIBUTOR")
SHOULD TAKE INTO CONSIDERATION THE MANUFACTURERS' TARGET MARKET ASSESSMENT;
HOWEVER, A DISTRIBUTOR SUBJECT TO MIFID II OR THE FCA HANDBOOK PRODUCT
INTERVENTION AND PRODUCT GOVERNANCE SOURCEBOOK IS RESPONSIBLE FOR UNDERTAKING
ITS OWN TARGET MARKET ASSESSMENT IN RESPECT OF THE BONDS (BY EITHER ADOPTING
OR REFINING THE MANUFACTURERS' TARGET MARKET ASSESSMENT) AND DETERMINING
APPROPRIATE DISTRIBUTION CHANNELS.

THE TARGET MARKET ASSESSMENT IS WITHOUT PREJUDICE TO THE REQUIREMENTS OF ANY
CONTRACTUAL OR LEGAL SELLING RESTRICTIONS IN RELATION TO ANY OFFERING OF THE
BONDS.

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 UK MIFIR; 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 BONDS.

THE BONDS ARE NOT INTENDED TO BE OFFERED, SOLD OR OTHERWISE MADE AVAILABLE TO
AND SHOULD NOT BE OFFERED, SOLD OR OTHERWISE MADE AVAILABLE TO ANY RETAIL
INVESTOR IN THE EEA OR THE UNITED KINGDOM. FOR THESE PURPOSES, A RETAIL
INVESTOR MEANS (A) IN THE EEA, A PERSON WHO IS ONE (OR MORE) OF: (I) A RETAIL
CLIENT AS DEFINED IN POINT (11) OF ARTICLE 4(1) OF MIFID II; OR (II) A
CUSTOMER WITHIN THE MEANING OF DIRECTIVE (EU) 2016/97, WHERE THAT CUSTOMER
WOULD NOT QUALIFY AS A PROFESSIONAL CLIENT AS DEFINED IN POINT (10) OF ARTICLE
4(1) OF MIFID II AND (B) IN THE UNITED KINGDOM, A PERSON WHO IS ONE (OR MORE)
OF (I) A RETAIL CLIENT, AS DEFINED IN POINT (8) OF ARTICLE 2 OF REGULATION
(EU) NO 2017/565 AS IT FORMS PART OF UNITED KINGDOM DOMESTIC LAW BY VIRTUE OF
THE EUWA OR (II) A CUSTOMER WITHIN THE MEANING OF THE PROVISIONS OF THE
FINANCIAL SERVICES AND MARKETS ACT 2000 OF THE UNITED KINGDOM (THE "FSMA") AND
ANY RULES OR REGULATIONS MADE UNDER THE FSMA TO IMPLEMENT DIRECTIVE (EU)
2016/97, WHERE THAT CUSTOMER WOULD NOT QUALIFY AS A PROFESSIONAL CLIENT, AS
DEFINED IN POINT (8) OF ARTICLE 2(1) OF REGULATION (EU) NO 600/2014 AS IT
FORMS PART OF UNITED KINGDOM DOMESTIC LAW BY VIRTUE OF THE EUWA.

CONSEQUENTLY, NO KEY INFORMATION DOCUMENT REQUIRED BY REGULATION (EU) NO
1286/2014, AS AMENDED (THE "PRIIPS REGULATION") OR THE PRIIPS REGULATION AS IT
FORMS PART OF UNITED KINGDOM DOMESTIC LAW BY VIRTUE OF THE EUWA (THE "UK
PRIIPS REGULATION") FOR OFFERING OR SELLING THE BONDS OR OTHERWISE MAKING THEM
AVAILABLE TO RETAIL INVESTORS IN THE EEA OR THE UNITED KINGDOM HAS BEEN
PREPARED AND THEREFORE OFFERING OR SELLING THE BONDS OR OTHERWISE MAKING THEM
AVAILABLE TO ANY RETAIL INVESTOR IN THE EEA OR THE UNITED KINGDOM MAY BE
UNLAWFUL UNDER THE PRIIPS REGULATION AND/OR THE UK PRIIPS REGULATION.

IN ADDITION, IN THE UNITED KINGDOM THIS ANNOUNCEMENT IS BEING DISTRIBUTED ONLY
TO, AND IS DIRECTED ONLY AT, QUALIFIED INVESTORS (I) WHO HAVE PROFESSIONAL
EXPERIENCE IN MATTERS RELATING TO INVESTMENTS FALLING WITHIN ARTICLE 19(5) OF
THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005,
AS AMENDED (THE "ORDER") AND QUALIFIED INVESTORS FALLING WITHIN ARTICLE
49(2)(A) TO (D) OF THE ORDER, AND (II) TO WHOM IT MAY OTHERWISE LAWFULLY BE
COMMUNICATED (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT
PERSONS"). THIS ANNOUNCEMENT MUST NOT BE ACTED ON OR RELIED ON (I) IN THE
UNITED KINGDOM, BY PERSONS WHO ARE NOT RELEVANT PERSONS, AND (II) IN ANY
MEMBER STATE OF THE EEA, BY PERSONS WHO ARE NOT QUALIFIED INVESTORS. ANY
INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS ANNOUNCEMENT RELATES IS
AVAILABLE ONLY TO (A) RELEVANT PERSONS IN THE UNITED KINGDOM AND WILL BE
ENGAGED IN ONLY WITH RELEVANT PERSONS IN THE UNITED KINGDOM AND (B) QUALIFIED
INVESTORS IN MEMBER STATES OF THE EEA.

THIS ANNOUNCEMENT HAS NOT BEEN AND WILL NOT BE REGISTERED AS A PROSPECTUS WITH
THE MONETARY AUTHORITY OF SINGAPORE. ACCORDINGLY, THIS ANNOUNCEMENT AND ANY
OTHER DOCUMENT OR MATERIAL IN CONNECTION WITH THE OFFER OR SALE, OR INVITATION
FOR SUBSCRIPTION OR PURCHASE, OF THE SECURITIES MAY NOT BE CIRCULATED OR
DISTRIBUTED, NOR MAY THE SECURITIES BE OFFERED OR SOLD, OR BE MADE THE SUBJECT
OF AN INVITATION FOR SUBSCRIPTION OR PURCHASE, WHETHER DIRECTLY OR INDIRECTLY,
TO ANY PERSON IN SINGAPORE OTHER THAN (I) TO AN INSTITUTIONAL INVESTOR (AS
DEFINED IN SECTION 4A OF THE SECURITIES AND FUTURES ACT 2001 OF SINGAPORE, AS
MODIFIED OR AMENDED FROM TIME TO TIME (THE "SFA")) PURSUANT TO SECTION 274 OF
THE SFA, OR (II) TO AN ACCREDITED INVESTOR (AS DEFINED IN SECTION 4A OF THE
SFA) PURSUANT TO AND IN ACCORDANCE WITH THE CONDITIONS SPECIFIED IN SECTION
275 OF THE SFA.

THIS DOCUMENT DOES NOT CONSTITUTE AN INVITATION TO SELL OR AN OFFER TO
PURCHASE ANY OF THE TARGET SECURITIES AND THE INVITATION IN RESPECT OF TARGET
SECURITIES IS BEING MADE PURSUANT TO A SEPARATE DOCUMENT. THE INVITATION IS
ONLY AVAILABLE TO HOLDERS OF TARGET SECURITIES THAT ARE NON-US PERSONS LOCATED
OUTSIDE THE UNITED STATES. DOCUMENTS RELATING TO THE TENDER OFFERS ARE NOT FOR
RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO, OR TO ANY PERSON LOCATED OR
RESIDENT IN OR AT ANY ADDRESS IN, THE UNITED STATES OR TO ANY PERSON LOCATED
OR RESIDENT IN ANY OTHER JURISDICTION WHERE IT IS UNLAWFUL TO DISTRIBUTE THE
DOCUMENT OR TO ANY U.S. PERSON AND SHALL NOT BE DISTRIBUTED, TRANSMITTED OR
FORWARDED, DIRECTLY OR INDIRECTLY, IN OR INTO, OR BY USE OF THE MAILS OF, OR
BY ANY MEANS OR INSTRUMENTALITY (INCLUDING, WITHOUT LIMITATION, FACSIMILE
TRANSMISSION, TELEX, TELEPHONE, EMAIL AND OTHER FORMS OF ELECTRONIC
TRANSMISSION) OF INTERSTATE OR FOREIGN COMMERCE OF, OR ANY FACILITY OF A
NATIONAL SECURITIES EXCHANGE OF, THE UNITED STATES, AND PERSONS RECEIVING SUCH
DOCUMENT MUST NOT DISTRIBUTE, FORWARD, MAIL, TRANSMIT OR SEND IT IN, INTO OR
FROM THE UNITED STATES OR TO ANY U.S. PERSON. FOR THE PURPOSES OF THIS
DOCUMENT, "THE UNITED STATES" MEANS THE UNITED STATES OF AMERICA, ITS
TERRITORIES AND POSSESSIONS (INCLUDING PUERTO RICO, THE U.S. VIRGIN ISLANDS,
GUAM, AMERICAN SAMOA, WAKE ISLAND AND THE NORTHERN MARIANA ISLANDS, ANY STATE
OF THE UNITED STATES AND THE DISTRICT OF COLUMBIA) (THE "UNITED STATES).

SINGAPORE SFA PRODUCT CLASSIFICATION: IN CONNECTION WITH SECTION 309B OF THE
SFA AND THE SECURITIES AND FUTURES (CAPITAL MARKETS PRODUCTS) REGULATIONS 2018
OF SINGAPORE (THE "CMP REGULATIONS 2018"), THE ISSUER HAS DETERMINED, AND
HEREBY NOTIFIES ALL RELEVANT PERSONS (AS DEFINED IN SECTION 309A(1) OF THE
SFA), THAT THE SECURITIES ARE 'PRESCRIBED CAPITAL MARKETS PRODUCTS' (AS
DEFINED IN THE CMP REGULATIONS 2018) AND EXCLUDED INVESTMENT PRODUCTS (AS
DEFINED IN MAS NOTICE SFA 04-N12: NOTICE ON THE SALE OF INVESTMENT PRODUCTS
AND MAS NOTICE FAA-N16: NOTICE ON RECOMMENDATIONS ON INVESTMENT PRODUCTS).

THE BONDS MAY BE SOLD ONLY TO PURCHASERS IN THE PROVINCES OF CANADA
PURCHASING, OR DEEMED TO BE PURCHASING, AS PRINCIPAL THAT ARE ACCREDITED
INVESTORS, AS DEFINED IN NATIONAL INSTRUMENT 45-106 PROSPECTUS EXEMPTIONS OR
SUBSECTION 73.3(1) OF THE SECURITIES ACT (ONTARIO), AND ARE PERMITTED CLIENTS,
AS DEFINED IN NATIONAL INSTRUMENT 31-103 REGISTRATION REQUIREMENTS, EXEMPTIONS
AND ONGOING REGISTRANT OBLIGATIONS. ANY RESALE OF THE BONDS OR SHARES ISSUED
ON CONVERSION OF THE BONDS MUST BE MADE IN ACCORDANCE WITH AN EXEMPTION FROM,
OR IN A TRANSACTION NOT SUBJECT TO, THE PROSPECTUS REQUIREMENTS OF APPLICABLE
SECURITIES LAWS.

ANY DECISION TO PURCHASE ANY OF THE BONDS SHOULD ONLY BE MADE ON THE BASIS OF
AN INDEPENDENT REVIEW BY A PROSPECTIVE INVESTOR OF THE ISSUER'S AND THE
GUARANTORS' PUBLICLY AVAILABLE INFORMATION AND THE TERMS OF THE SECURITIES, AS
APPLICABLE. NEITHER THE JOINT BOOKRUNNERS NOR ANY OF THEIR RESPECTIVE
AFFILIATES ACCEPT ANY LIABILITY ARISING FROM THE USE OF, OR MAKE ANY
REPRESENTATION AS TO THE ACCURACY OR COMPLETENESS OF, THIS DOCUMENT OR THE
ISSUER'S AND THE GUARANTORS' PUBLICLY AVAILABLE INFORMATION. THE INFORMATION
CONTAINED IN THIS ANNOUNCEMENT IS SUBJECT TO CHANGE IN ITS ENTIRETY WITHOUT
NOTICE UP TO THE CLOSING DATE.

EACH PROSPECTIVE INVESTOR SHOULD PROCEED ON THE ASSUMPTION THAT IT MUST BEAR
THE ECONOMIC RISK OF AN INVESTMENT IN THE SECURITIES. NONE OF THE ISSUER, THE
GUARANTORS OR THE JOINT BOOKRUNNERS MAKE ANY REPRESENTATION AS TO (I) THE
SUITABILITY OF THE SECURITIES FOR ANY PARTICULAR INVESTOR, (II) THE
APPROPRIATE ACCOUNTING TREATMENT AND POTENTIAL TAX CONSEQUENCES OF INVESTING
IN THE SECURITIES OR (III) THE FUTURE PERFORMANCE OF THE SECURITIES EITHER IN
ABSOLUTE TERMS OR RELATIVE TO COMPETING INVESTMENTS.

THE JOINT BOOKRUNNERS ARE ACTING ON BEHALF OF THE ISSUER AND THE GUARANTORS
AND NO ONE ELSE IN CONNECTION WITH THE BONDS AND WILL NOT BE RESPONSIBLE TO
ANY OTHER PERSON FOR PROVIDING THE PROTECTIONS AFFORDED TO CLIENTS OF THE
BOOKRUNNERS OR FOR PROVIDING ADVICE IN RELATION TO THE SECURITIES.

Each of the Issuer, the GuarantorS, the JOINT BOOKRUNNERS and their respective
affiliates expressly disclaims any obligation or undertaking to update, review
or revise any statement contained in this ANNOUNCEMENT whether as a result of
new information, future developments or otherwise.

 

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