REG - Portmeirion Group - Proposed Placing, Subscription and Open Offer
THIS ANNOUNCEMENT, INCLUDING THE APPENDICES AND THE INFORMATION CONTAINED HEREIN, IS RESTRICTED AND IS NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM THE UNITED STATES, AUSTRALIA, CANADA, THE REPUBLIC OF IRELAND, THE REPUBLIC OF SOUTH AFRICA, JAPAN OR ANY JURISDICTION IN WHICH THE SAME WOULD BE UNLAWFUL. THIS ANNOUNCEMENT SHALL NOT CONSTITUTE AN OFFER TO SELL OR ISSUE OR THE SOLICITATION TO BUY, SUBSCRIBE FOR OR OTHERWISE ACQUIRE ANY ORDINARY SHARES OF PORTMEIRION GROUP PLC IN ANY JURISDICTION IN WHICH ANY SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL.
THE SECURITIES TO WHICH THIS ANNOUNCEMENT RELATE HAVE NOT BEEN REGISTERED UNDER THE US SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES ABSENT REGISTRATION OR AN EXEMPTION FROM, OR A TRANSACTION NOT SUBJECT TO, REGISTRATION UNDER THE SECURITIES ACT. THERE WILL BE NO PUBLIC OFFERING OF THE SECURITIES IN THE UNITED STATES.
THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED BY THE COMPANY TO CONTAIN INSIDE INFORMATION AS STIPULATED UNDER THE MARKET ABUSE REGULATION ("MAR"). UPON THE PUBLICATION OF THE ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS INFORMATION IS CONSIDERED TO BE IN THE PUBLIC DOMAIN AND SUCH PERSONS SHALL THEREFORE CEASE TO BE IN POSSESSION OF INSIDE INFORMATION.
10 June 2020
Portmeirion Group PLC
("Portmeirion", the "Company" or the "Group")
Proposed Placing to raise approximately £10 million
Subscription and Open Offer
PDMR Dealings
Proposed Placing to raise approximately £10 million, Subscription to raise £0.66 million and Open Offer to raise up to £2.0 million (together the "Fundraising")
Portmeirion Group PLC, the designer, manufacturer and worldwide distributor of high quality homewares under the Portmeirion, Spode, Royal Worcester, Pimpernel, Wax Lyrical and Nambé brands, today announces a proposed issue of new Ordinary Shares in the Company by way of a Placing via an accelerated bookbuild (the "Bookbuild") to raise gross proceeds of approximately £10 million at an issue price of not less than 375 pence per share. The results of the Placing and the final issue price per share ("Issue Price") will be announced as soon as possible following completion of the Bookbuild. The Company is also pleased to announce a direct subscription with the Company to raise gross proceeds of £0.66 million at the Issue Price.
In addition, in order to provide Qualifying Shareholders with an opportunity to participate in the Fundraising at the Issue Price, subject to the successful closing of the Placing, Qualifying Shareholders may subscribe for Open Offer Shares, to raise up to a further £2.0 million for the Company. The number of Open Offer Shares shall be determined following confirmation of the Issue Price. Shareholders subscribing for their full Basic Entitlement under the Open Offer will also be invited to apply for additional Open Offer Shares through an Excess Application Facility. The Open Offer is not underwritten.
Background to and reasons for the Fundraising
The Group is a cash generative and profitable business which has seen 11 years of consecutive revenue growth and has a strong balance sheet in the form of significant net assets and as at 9 June 2020 has net debt of £12 million and total borrowing facilities of £27 million. Key sales markets include the UK, US and South Korea. The Group benefits from a new management team with a refreshed strategy focused on growth and margin improvement. Although Group sales, have in the short term, been significantly impacted by COVID-19 due to lockdowns around the world and retailer closures, we have seen accelerated trends and opportunities, including the growth of ecommerce sales and the consumer trend for home dining. Therefore, the Board believes it is in the long-term interests of all shareholders to capitalise on significant growth opportunities.
The Board currently intends to use the majority of the net proceeds from the Fundraising to accelerate its growth strategy and margin improvement, in particular to:
· accelerate all online channel sales growth and increase next day delivery warehouse capacity;
· extend the Wax Lyrical line to hand and body products;
· build a more significant presence in Canada and revitalise the Canadian market;
· invest in UK manufacturing efficiencies driving improved operating margins; and
· maintain a strong balance sheet.
Completion of the Fundraising will be conditional, inter alia, upon the approval by Shareholders of certain of the resolutions to be proposed at a general meeting of the Company which is expected to be convened and held on 29 June 2020 at the registered office of the Company. The completion of the Fundraising is also dependent upon Admission occurring.
The Placing
The Placing will be conducted by way of the Bookbuild which will be launched immediately following this Announcement in accordance with the Terms and Conditions set out in Appendix II. The Placing will be made to new and existing eligible institutional and other investors, and the books are expected to close no later than 4.30 p.m. London time on 10 June 2020.
Details of the number of Placing Shares, the Issue Price, the number of Subscription Shares and the Open Offer Shares and the gross proceeds of the Placing will be notified by the Company via an announcement to a Regulatory Information Service as soon as practicable after the closing of the Bookbuild (the "Results Announcement"). Neither the Placing, the Subscription nor the Open Offer are underwritten.
Panmure Gordon is acting as nominated adviser and joint bookrunner, and N+1 Singer is acting as joint bookrunner, in connection with the Placing and Bookbuild.
Subscription and PDMR dealings
Concurrent with the Placing, certain directors and a member of the Company's senior management team, along with certain other existing Shareholders have agreed to subscribe for an aggregate amount of approximately £0.66 million at the Issue Price pursuant to the Subscription. Further details of the PDMR dealings are set out below.
At the date of this Announcement1
Name2
Number of Existing Ordinary Shares
Percentage of Existing Ordinary Shares
Subscription Amount3
Mike Raybould (Chief Executive)
-
n/a
£10,000
David Sproston (Group Finance Director)
-
n/a
£5,000
Phil Atherton (Group Sales & Marketing Director)
16,499
0.15%
£5,000
Mick Knapper (Operations Director)
2,511
0.02%
£5,000
Dick Steele (Non-executive Chairman)
27,000
0.25%
3,000 Subscription Shares
Angela Luger (Non-executive Director)
-
n/a
£15,000
Robert Findler (PGUK Production Director)
-
n/a
£5,000
1As at 9 June 2020 (being the latest practicable date prior to the notification of this Announcement).
2 Includes the interests of immediate families and persons closely associated with each PDMR (within the meaning of MAR) (all of which are beneficial unless otherwise stated).
3 Committed Subscription amount, subject to rounding, at the Issue Price.
The Subscription Shares have been subscribed for on the basis agreed pursuant to subscription letters with the Company, rather than pursuant to the terms and conditions of the Placing contained in Appendix II to this Announcement.
The Placing, Subscription and Open Offer are conditional, inter alia, on the approval of the relevant resolutions by Shareholders at the General Meeting to be held at 12.00 noon on 29 June 2020 at Portmeirion Group PLC's registered office at London Road, Stoke-on-Trent, Staffordshire, ST4 7QQ. The Placing, Subscription and Open Offer is also conditional upon Admission of the New Ordinary Shares to trading on AIM. The Subscription and Open Offer are both conditional on the Placing; however, neither the Placing nor the Subscription are conditional on the Open Offer and the Placing is not conditional on the Subscription or the Open Offer. It is expected that Admission will become effective and that dealings in the New Ordinary Shares will commence at 8.00 a.m. on 30 June 2020. The expected timetable of principal events is set out in Appendix I below.
The terms and conditions of the Open Offer, including the Excess Application Facility, will be set out in the Circular to be sent to Shareholders, which will also include a notice convening the General Meeting. It is expected that the Circular will be dispatched on or around 11 June 2020 and will also be available at this time to Qualifying Shareholders on the Company's website at https://www.portmeiriongroup.com/investors.
The Fundraising summary above should be read in conjunction with the further details of the Placing, Subscription and Open Offer which are set out in Appendix I to this Announcement. The capitalised terms used in this Announcement have the meaning set out in Appendix III to this Announcement.
For the purposes of MAR and Article 2 of Commission Implementing Regulation (EU) 2016/1055, this Announcement is being made on behalf of the Company by Moira MacDonald, Company Secretary.
For more information, please contact:
Portmeirion Group PLC Tel: +44 (0) 1782 743 444
Mike Raybould, Chief Executive mraybould@portmeiriongroup.com
David Sproston, Group Finance Director dsproston@portmeiriongroup.com
Hudson Sandler: Tel: +44 (0) 207 796 4133
Dan de Belder ddebelder@hudsonsandler.com
Nick Moore nmoore@hudsonsandler.com
Panmure Gordon: Tel: +44 (0) 207 886 2500
Freddy Crossley / Emma Earl / Joanna Langley Corporate Finance
James Stearns Corporate Broking
N+1 Singer: Tel: +44 (0) 207 496 3000
Peter Steel / Ben Farrow / James Fischer Corporate Finance
Rachel Hayes Corporate Broking
IMPORTANT NOTICE
This Announcement has been issued by, and is the sole responsibility of, the Company. The distribution of this Announcement or any information contained in it, and the offering or sale of securities in jurisdictions other than the United Kingdom may be restricted by law, and therefore persons coming into possession of this Announcement and/or any related communications should inform themselves about and observe such restrictions. Any failure to comply with such restrictions may constitute a violation of the securities law of any such jurisdiction.
No prospectus will be made available in connection with the matters contained in this Announcement and no such prospectus is required (in accordance with the Prospectus Regulation (EU) 2017/1129) to be published. Persons needing advice should consult an independent financial adviser.
Panmure Gordon (UK) Limited, which is a member of the London Stock Exchange, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority (the "FCA"), is acting as nominated adviser and joint broker to the Company for the purposes of the AIM Rules for Companies and the AIM Rules for Nominated Advisers in connection with the Fundraising, and is not acting for, and will not be responsible to, any person other than the Company for providing the protections afforded to customers of Panmure Gordon (UK) Limited or for advising any other person on any transaction or arrangement referred to in this Announcement. Panmure Gordon's responsibilities as the Company's nominated adviser under the AIM Rules are owed solely to the London Stock Exchange and are not owed to the Company, any director of the Company or to any other person. No representation or warranty, express or implied, is made by Panmure Gordon as to, and no liability is accepted by Panmure Gordon in respect of, any of the contents of this Announcement.
Nplus1 Singer Advisory LLP, which is a member of the London Stock Exchange, which is authorised and regulated in the United Kingdom by the FCA, is acting as joint broker to the Company in connection with the Placing. N+1 Singer is not acting for, and will not be responsible to, any person other than the Company for providing the protections afforded to the customers of N+1 Singer or for advising any other person on the contents of this Announcement or on any transaction or arrangement referred to in this Announcement.
No representation or warranty, express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by Panmure Gordon, nor N+1 Singer nor any of their affiliates or agents (or any of their respective directors, officers, employees or advisers) for the contents of the information contained in this Announcement, or any other written or oral information made available to or publicly available to any interested party or its advisers, or any other statement made or purported to be made by or on behalf of Panmure Gordon, N+1 Singer nor any of their affiliates in connection with the Company, the New Ordinary Shares or the Placing, Subscription or Open Offer and any responsibility and liability whether arising in tort, contract or otherwise therefore is expressly disclaimed.
This Announcement does not identify or suggest, or purport to identify or suggest, the risks (direct or indirect) that may be associated with an investment in the New Ordinary Shares. Any investment decision to buy Placing Shares in the Placing must be made solely on the basis of publicly available information, which has not been independently verified by Panmure Gordon nor N+1 Singer.
The Placing Shares to be issued pursuant to the Placing will not be admitted to trading on any stock exchange other than the AIM market of the London Stock Exchange.
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.
Appendix II to this Announcement set out the terms and conditions of the Placing.
By participating in the Placing, each person who is invited to and who chooses to participate in the Placing (a "Placee") by making an oral and legally binding offer to acquire Placing Shares will be deemed to have read and understood this Announcement in its entirety (including the appendices) and to be making such offer on the terms and subject to the conditions herein, and to be providing the representations, warranties and acknowledgements contained in the appendices.
Members of the public are not eligible to take part in the Placing and no public offering of securities will be made.
This Announcement is not being distributed by, nor has it been approved for the purposes of section 21 of FSMA by, a person authorised under FSMA. This Announcement is being distributed and communicated to persons in the United Kingdom only in circumstances in which section 21(1) of FSMA does not apply.
This Announcement and the terms and conditions set out herein are for information purposes only and are directed at and may only be communicated to: (a) persons in member states of the European Economic Area ("EEA") who are qualified investors ("qualified investors") as defined in Article (2)(e) of the Prospectus Regulation; and (b) in the United Kingdom, qualified investors who are persons (1) who have professional experience in matters relating to investments falling within Article 19(1) (Investment Professionals) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended) (the "Order"); (2) falling within Article 49(2)(a) to (d) (High net worth companies, unincorporated associations, etc.) of the Order; or (3) other persons to whom it may otherwise lawfully be communicated without being accompanied by any further statements and/or warnings required by the Order and not included in this Announcement.
This Announcement may not be published, distributed, forwarded or transmitted directly or indirectly, in whole or in part, in or into the United States, Australia, Canada, Japan, the Republic of Ireland, the Republic of South Africa or of any other jurisdiction where to do so would be unlawful. These materials do not constitute an offer to sell, or a solicitation of an offer to buy, securities in the United States.
This Announcement and the information contained herein are not an offer of securities for sale in the United States.
The New Ordinary Shares described in this Announcement have not been, and will not be, registered under the US Securities Act of 1933, as amended (the "Securities Act") or under the securities laws of any state or other jurisdiction of the United States, and may not be offered, sold, resold, transferred or delivered, directly or indirectly, within, in or into the United States, unless registered under the Securities Act or pursuant to an available exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and, in each case, in compliance with any applicable securities laws of any state or other jurisdiction of the United States. The New Ordinary Shares are being offered and sold solely outside of the United States in offshore transactions in accordance with Regulation S under the Securities Act ("Regulation S"). There will be no public offering of the New Ordinary Shares in the United States. No representation is being made as to the availability of any exemption under the Securities Act for the reoffer, resale, pledge or transfer of the New Ordinary Shares.
The New Ordinary Shares have not been approved or disapproved by the United States Securities and Exchange Commission, 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 Fundraising or the accuracy or adequacy of this announcement. Any representation to the contrary is a criminal offence in the United States.
Furthermore, the New Ordinary Shares have not been and will not be registered under the applicable laws of any of Australia, Canada, Japan, the Republic of Ireland, the Republic of South Africa or of any other jurisdiction where to do so would be unlawful and, consequently, may not be offered or sold to any national, resident or citizen thereof. The distribution of this Announcement and the placing of the New Ordinary Shares as set out in this Announcement in certain jurisdictions may be restricted by law. No action has been taken that would permit an offering of such shares or possession or distribution of this Announcement or any other offering or publicity material relating to such shares in any jurisdictions where action for that purpose is required. Persons into whose possession this Announcement comes are required to inform themselves about, and to observe, such restrictions. Any failure to comply with the applicable restrictions may constitute a violation of the securities laws of any such jurisdiction.
This Announcement contains (or may contain) certain forward-looking statements with respect to certain of the Company's current expectations and projections about future events and the Company's future financial condition and performance. These statements, which sometimes use words such as "aim", "anticipate'', "believe", "may", "will", "should", "intend", "plan", "assume'', "estimate", "expect' (or the negative thereof) and words of similar meaning, reflect the current beliefs and expectations of the directors of the Company and involve known and unknown risks, uncertainties and assumptions, many of which are outside the Company's control and difficult to predict, that could cause actual results and performance to differ materially from any expected future results or performance expressed or implied by the forward-looking statement. The important factors that could cause the Company's actual results, performance or achievements to differ materially from those in the forward-looking statements include, among others, global events (such as pandemics), economic and business cycles, the terms and conditions of the Company's financing arrangements, foreign currency rate fluctuations, competition in the Company's principal markets, acquisitions or disposals of businesses or assets and trends in the Company's principal industries. Due to such uncertainties and risks, readers are cautioned not to place reliance on such forward-looking statements, which speak only as of the date hereof. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements in this Announcement may not occur.
The information contained in this Announcement speaks only as of the date of this Announcement and is subject to change without notice and the Company does not assume any responsibility or obligation to, and does not intend to, update or revise publicly or review any of the information contained to this Announcement, whether as a result of new information, future events or otherwise, except to the extent required by the FCA, the AIM Rules, MAR, the rules of the London Stock Exchange or by applicable law.
Any information in this Announcement in respect of past performance (including without limitation past performance of the Company, its group, shares in the Company cannot be relied upon as a guide to future performance. The price of shares and the income from them may fluctuate upwards or downwards and cannot be guaranteed.
No statement in this Announcement is intended to be a profit forecast or estimate, and no statement in this Announcement should be interpreted to mean that earnings per share of the Company for the current or future financial years would necessarily match or exceed the historical published earnings per share of the Company.
APPENDIX I
PROPOSED PLACING, SUBSCRIPTION AND OPEN OFFER
Introduction
The Company is proposing to raise approximately £10 million (before expenses) through a conditional Placing at an issue price of not less than 375 pence per Placing Share. The Issue Price per share will be determined through the Bookbuild. The Company is also raising a further £0.66 million through a direct subscription with the Company at the Issue Price per share.
In addition, the Company is providing all Qualifying Shareholders with the opportunity to subscribe for Open Offer Shares at the Issue Price to raise up to approximately £2.0 million. Qualifying Shareholders subscribing for their Basic Entitlement under the Open Offer may also request additional Open Offer Shares through the Excess Application Facility.
The Placing Shares are not subject to clawback and are not part of the Open Offer.
The Fundraising is conditional, inter alia, on the passing of Resolutions 1 and 2 by Shareholders at the General Meeting, which is being convened for 12.00 noon on 29 June 2020. Application will be made to the London Stock Exchange for Admission of the New Ordinary Shares. It is expected that Admission of the New Ordinary Shares will become effective and that dealings in the New Ordinary Shares will commence at 8.00 a.m. on 30 June 2020 (being the Business Day following the General Meeting).
If the conditions relating to the issue of the Placing Shares are not satisfied, or the Placing and Open Offer Agreement is terminated in accordance with its terms, the Placing Shares will not be issued and the Company will not receive the related placing monies. In this scenario, the Open Offer and Subscription will similarly not proceed.
Further information about the Fundraising and the Company's current trading and prospects is set out below and will be contained in the Circular.
Background to and reasons for the Fundraising
Portmeirion Group PLC has a combined group history of over 700 years across its six brands: Portmeirion, Spode, Royal Worcester, Pimpernel, Wax Lyrical and Nambé. Its well-diversified business sells products with timeless designs in over 70 countries. The Group has established global sales channels, two in-house UK factories with capacity for growth as well as partnerships with premium quality factories around the world.
The Group is a cash generative and profitable business which has seen 11 years of consecutive revenue growth and has a strong balance sheet in the form of significant net assets. The Group's key growth markets include the UK, US and Korea. The Group benefits from a new management team with a refreshed strategy focused on growth and margin improvement through six key areas:
· acceleration of online transformation and the growth opportunities therein;
· leveraging the Group's strong brands and product development to drive sales growth;
· ongoing discipline and diversification to protect the Group's brands long term;
· leveraging the Group's Wax Lyrical and Nambé acquisitions by expanding into new, adjacent product categories and ROW market expansion;
· more targeted focus on key ROW growth opportunities; and
· driving operating and procurement efficiency and capabilities in the Group's factories and warehousing, processes and across global teams.
Continuous brand and product development remains at the heart of the Group's operations.
On 30 March 2020, the Group announced recent trading had been impacted by COVID-19 and its wider effects. As a result of the guidance provided and instructions issued by the UK government, including the strict UK-wide lockdown, stores retailing the Group's products were closed and the Group's Stoke-on-Trent ceramic factory was temporarily closed. On 6 May 2020, the ceramic factory was able to partially reopen at a reduced capacity to fulfil existing export orders as new safe social distancing procedures had been put in place. UK and US warehouses have continued to operate safely and efficiently, servicing the ecommerce business without any disruption. The Group continues to ship export orders to the Far East, where retail stores have been reopened, and has seen a significant uplift in online sales in the UK and US. The Group's own ecommerce site sales were up by more than 100% in April and May 2020 over the same period last year. The Group's UK home fragrance company, Wax Lyrical, repurposed production lines at its Cumbria based factory and has been producing hand sanitiser for the community, NHS and pharmacies. The Board forecasts that in excess of 1 million units of hand sanitiser will be produced during the second quarter of 2020.
The ongoing effects of COVID-19 are expected to continue to have a significant impact on sales via stores whilst countries remain in a form of lockdown. While some restrictions are beginning to be eased in many countries, with non-essential retailers in the UK expected to begin opening from 15 June 2020, many restrictions and safety measures are likely to remain in place for some time which are expected to impact on trading in stores. However, COVID-19 has accelerated certain trends and opportunities, including the growth of ecommerce sales, the consumer trend for buying homewares and the demand for a new hand sanitiser product line, which the Group intends to capitalise on through the Fundraising.
The Placing is expected to raise approximately £10 million in gross proceeds in addition to gross proceeds from the Subscription of £0.66 million and up to a further £2 million via the Open Offer. The Board currently intends to use the majority of funds raised to accelerate its growth strategy and margin improvement plans, in particular to:
· accelerate all online channel sales growth and increase next day delivery warehouse capacity;
· extend the Wax Lyrical line to hand and body products;
· build a more significant presence in Canada and revitalise the Canadian market;
· invest in UK manufacturing efficiencies driving improved operating margins; and
· maintain a strong balance sheet.
The Group intends to invest in accelerating online penetration in 2020-21 in order to achieve significant sales growth from this channel at gross margins above the Group's average. In 2019, the UK/US markets' total online sales were c.30% (+17%), The Group's own ecommerce business was £6.3m (+16%) and the customer list grew c.100%. The Group's own ecommerce business had c.100% year-on-year growth in April and May 2020, following increased investment in its online channels and a focus on retailer e-commerce sales. The Group intends to invest in customer acquisition with the objective of boosting lifetime values of direct consumer relationships, launch new UK/US websites in the second half of 2020 and build out its internal digital resources. In addition, the Group intends to increase UK ecommerce fulfilment capacity and to ensure the critical next day dispatch promise continues to be achieved, including during peak times.
In the Wax Lyrical division, the Group intends to build out its body range product lines as part of its long-term strategy. This would be a profitable new revenue stream using existing UK factory capacity. The Group intends to develop two to three new ranges under its current brands, leveraging the experience, market knowledge and contacts built up in the first phases of the project during COVID-19. Investment will be made in a long-term manufacturing line and sales will be focused on online and current customers in the UK, US and Far East.
The Group also has an opportunity to grow and revitalise its presence in the Canadian market: Canada sales were £1.1 million in 2019 as part of a joint venture arrangement with Royal Selangor Inc. The Group is in discussions to buy Royal Selangor Inc.'s entire shareholding in H2 2020 such that Portmeirion Canada Inc. (the vehicle for the joint venture) would become a wholly owned subsidiary. The Group would then leverage its US team's online skills and reposition Canada to drive revenue growth and profit.
Targeted manufacturing investments include improved UK factory facilities, heat release machines and digital printing, all with a view to achieving more efficient energy usage and overall lower unit costs.
Current Trading and Prospects
On 19 March 2020, the Group announced its audited results for the year ended 31 December 2019. Group revenue increased by 3.6% to £92.8 million (2018: £89.6 million), including the benefit of Nambé sales post-acquisition. Like-for-like revenue declined by 5.1% to £85.0 million (2018: £89.6 million). The Group's operating margin was reduced as a result of the short-term South Korea market impact. Headline basic earnings per share were 56.32p (2018: 72.12p). 2019 saw strong growth in online sales in the Group's core UK and USA markets of 17%, as well as growth in South Korea; ROW sales were down due to control of parallel shipping of the Group's Botanic Garden product range into South Korea.
The Group has agreed debt facilities with Lloyds Bank, totalling £28 million. This consists of a £10 million revolving credit facility repayable in full in May 2022, a £5 million overdraft facility on an annual renewal cycle, a £10 million term loan repayable in equal annual instalments over 5 years from May 2016, of which £3 million was outstanding at the year end, and a £10 million term loan repayable over 4.5 years from January 2020. At the year end, the Group had net debt of £12.3 million with significant headroom on its borrowing facilities and net assets of £48 million. The Board remains confident that the Group's borrowing facilities can be renewed as necessary at the end of the relevant term.
Subsequent to the year end, and as summarised above, the Company has announced various updates in relation to the significant impact of Covid-19 on the Group's operations and sales. In order to preserve cash and minimise the impact of reduced sales on the Group's profit, the Group has implemented a number of cash retention initiatives, including deferring dividend payments, stripping back capital expenditure and cutting non-essential spend. The Group has also used the UK Government's Coronavirus Job Retention Schemes to reduce its short-term operational cost base. The Board is confident that early and swift action taken to minimise cash burn will put the Group in a strong position to expand margins once lockdown restrictions are lifted around the world with the Group's current cash resources and access to liquidity under the Group's borrowing facilities providing sufficient headroom through 2020. The Directors expect the Group's cash burn in Q2 2020 to be less than £1 million.
Further to these market updates, since acquiring the Nambé brand in July 2019 for $12 million, anticipated cost synergies of £0.5m per annum from 2020 are on track to be achieved and the integration of Nambé and the Group's other US operations has been completed. Anticipated sales synergies for the US and Canada, UK and the ROW are currently on hold pending the COVID-19 retailer lockdown being lifted and retail footfall generally improving. Having identified over-supply of the Botanic Garden products which were being parallel shipped into South Korea in Q1 2019, the Group has reduced ROW Botanic Garden sales to potential parallel ship markets, implemented tighter processes with the South Korea distributor and hired a new market sales manager.
The Wax Lyrical division is now poised for a return to growth following a challenging Q4 2019. New export distributors have been agreed in Q1 2020 for China, Taiwan, Portugal and Greece; new USA agents have been in place since Q1 2020 and the new website launched in March 2020. Further new product launches are expected in Q2 and Q3 2020.
Principal terms of the Fundraising
The Company proposes to raise approximately £10 million (before expenses) through a Placing at an issue price of not less than 375 pence per share. The Issue Price will be determined following completion of the Bookbuild. The Company is also raising £0.66 million (before expenses) through the issue of Subscription Shares pursuant to the Subscription at the Issue Price. Alongside the Placing and Subscription, the Company is making an Open Offer pursuant to which it may raise a further amount of up to £2.0 million (before expenses) at the Issue Price.
Placing
Pursuant to the terms of the Placing and Open Offer Agreement, Panmure Gordon and N+1 Singer, as agents for the Company, have conditionally agreed to use reasonable endeavours to place the Placing Shares at the Issue Price.
The Placing is conditional, inter alia, on the following:
i. Resolutions 1 and 2 being passed at the General Meeting (details of which will be contained in the Circular to be published by the Company);
ii. the Placing and Open Offer Agreement not being terminated prior to Admission of the Placing Shares and becoming unconditional in all respects; and
iii. Admission of the Placing Shares having become effective on or before 8.00 a.m. on 30 June 2020 (or such later date and/or time as the Company, Panmure Gordon and N+1 Singer may agree, being no later than 14 July 2020).
The Placing and Open Offer Agreement contains customary warranties given by the Company to the Joint Brokers as to matters in relation to, inter alia, the accuracy of the information in this Announcement and other matters relating to the Group and its business. In addition, the Company has provided a customary indemnity to the Joint Brokers in respect of liabilities arising out of or in connection with the Placing and Open Offer. The Joint Brokers are entitled to terminate the Placing and Open Offer 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, the failure of the Company to comply in any material respect with any of its obligations under the Placing and Open Offer Agreement, the occurrence of certain force majeure events or a material adverse change affecting the condition, or the earnings or business affairs or prospects of the Group as a whole, whether or not arising in the ordinary course of business.
Application will be made for the Placing Shares to be admitted to trading on AIM subject to the passing of the Resolutions 1 and 2 at the General Meeting. It is expected that Admission will become effective on or around 30 June 2020 and that dealings for normal settlement in the Placing Shares will commence at 8.00 a.m. on or around 30 June 2020.
The Placing Shares will, when issued and fully paid, rank pari passu in all respects with the Existing Ordinary Shares, including the right to receive all dividends and other distributions declared, made or paid after the date of Admission. The Placing Shares are not subject to clawback and are not part of the Open Offer. The Placing is not underwritten.
The allotment and issue of the Open Offer Shares is conditional on Admission of the Placing Shares but the Placing is not conditional on Admission of the Open Offer Shares; if the Placing does not complete, then the Open Offer will also not complete. However, if the Open Offer does not complete, then this will not prevent the Placing from completing. The Placing is not conditional on either the Subscription or the Open Offer.
Subscription
Pursuant to the terms of subscription letters, the Subscribers have conditionally subscribed for £0.66 million in aggregate directly with the Company, at the Issue Price.
The Subscription Shares will, when issued, be credited as fully paid and will rank pari passu with the Existing Ordinary Shares, including the right to receive all dividends and other distributions declared, made or paid in respect of Ordinary Shares after Admission. Completion of the Subscription is conditional upon receipt of the subscription monies by the Company; upon the Placing Agreement becoming unconditional in all respects (save in relation to any condition relating to the Subscription Letters becoming unconditional) and Admission.
Under the terms of the relevant Subscription Agreements the Executive Directors, Mike Raybould and David Sproston, have agreed that they will not, during the period of six months from the date of Admission, dispose of any interest in the relevant Ordinary Shares they own or any rights to such shares. The lock-in arrangements are subject to certain customary exceptions.
Open Offer
Subject to the fulfilment of the conditions set out below, Qualifying Shareholders may subscribe for Open Offer Shares at the Issue Price in proportion to their holding of Existing Ordinary Shares held on the Record Date. Shareholders subscribing for their full Basic Entitlement under the Open Offer may also request additional Open Offer Shares as an Excess Entitlement, up to the total number of Open Offer Shares available to Qualifying Shareholders under the Open Offer. The Open Offer is not underwritten.
The Open Offer is conditional, inter alia, on the following:
i. Resolutions 1 and 2 being passed at the General Meeting;
ii. the Placing and Open Offer Agreement not being terminated prior to Admission of the Placing Shares and having become unconditional in all respects; and
iii. Admission of the Open Offer Shares becoming effective on or before 8.00 a.m. on 30 June 2020 (or such later date and/or time as the Company, Panmure Gordon and N+1 Singer may agree, being no later than 14 July 2020.
The allotment and issue of the Open Offer Shares is conditional on Admission of the Placing Shares but the Placing is not conditional on Admission of the Open Offer Shares; if the Placing does not complete, then the Open Offer will also not complete. However, if the Open Offer does not complete, then this will not prevent the Placing from completing.
If these and the other conditions to the Open Offer are not satisfied or waived (where capable of waiver), the Open Offer will lapse and will not proceed and any applications made by Qualifying Shareholders will be rejected. In these circumstances, application monies received by the Receiving Agent in respect of Open Offer Shares will be returned (at the Applicant's sole risk), without payment of interest, as soon as reasonably practicable thereafter. Lapsing of the Open Offer cannot occur after dealings in the Open Offer Shares have begun.
Further details on the Open Offer and the terms and conditions of the Open Offer will be set out in the Circular to be dispatched to Shareholders on or around 11 June 2020.
General Meeting
The Circular will contain a notice convening a General Meeting to be held at Portmeirion Group PLC's registered office, London Road, Stoke-on-Trent, ST4 7QQ on 29 June 2020 at 12 noon in order to consider and, if thought appropriate, pass the Resolutions to grant the issue of the New Ordinary Shares.
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
Record Date for entitlements under the Open Offer
Close of business on
9 June 2020
Announcement of the proposed Placing, Subscription and Open Offer
7.00 a.m. on 10 June 2020
Announcement of the result of the Placing
by 4.30 p.m. on 10 June 2020
Ex-entitlement Date of the Open Offer
8.00 a.m. on 11 June 2020
Posting of the Circular, the Application Form and Form of Proxy
by 11 June 2020
Basic Entitlements and Excess Entitlements credited to stock accounts in CREST for Qualifying Shareholders
12 June 2020
Recommended latest time and date for requesting withdrawal of Basic Entitlements and Excess Entitlements from CREST
4.30 p.m. on 22 June 2020
Latest time and date for depositing Basic Entitlements and Excess Entitlements into CREST
3.00 p.m. on 23 June 2020
Latest time and date for splitting Application Forms (to satisfy bona fide market claims only)
3.00 p.m. on 24 June 2020
Latest time and date for receipt of completed Application Forms and payment in full under the Open Offer or settlement of relevant CREST instructions (as appropriate)
11.00 a.m. on 26 June 2020
Latest time and date for receipt of Forms of Proxy
12.00 noon on 27 June 2020
Time and date of General Meeting
12.00 noon on 29 June 2020
Announcement of the results of the General Meeting and Open Offer
29 June 2020
Admission to trading on AIM and commencement of dealings in Placing Shares, Subscription Shares and Open Offer Shares
8.00 a.m. on 30 June 2020
CREST accounts to be credited for New Ordinary Shares to be held in uncertificated form
30 June 2020
Expected date of despatch of definitive share certificates for the New Ordinary Shares in certificated form
5 Business Days after crediting CREST (7 July 2020)
(1) Each of the times and dates in the above timetable is subject to change. If any of the above times and/or dates change, the revised times and/or dates will be notified to Shareholders by announcement on a Regulatory Information Service.
(2) All of the above times, and other time references in this Announcement, refer to London time.
APPENDIX II
TERMS AND CONDITIONS OF THE PLACING
IMPORTANT INFORMATION FOR PLACEES ONLY REGARDING THE PLACING.
THIS ANNOUNCEMENT, INCLUDING THIS APPENDIX, AND THE INFORMATION IN IT, IS RESTRICTED, AND IS NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART TO U.S. PERSONS OR, IN OR INTO THE UNITED STATES, THE PLACING RESTRICTED JURISDICTIONS OR ANY OTHER JURISDICTION IN WHICH SUCH PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.
THE PLACING SHARES THAT ARE THE SUBJECT OF THE PLACING ARE NOT BEING OFFERED OR SOLD TO ANY PERSON IN THE EUROPEAN UNION OR THE UK, OTHER THAN TO QUALIFIED INVESTORS, WHICH INCLUDES LEGAL ENTITIES WHICH ARE REGULATED BY THE FCA OR ENTITIES WHICH ARE NOT SO REGULATED WHOSE CORPORATE PURPOSE IS SOLELY TO INVEST IN SECURITIES.
MEMBERS OF THE PUBLIC IN THE UK OR ELSEWHERE ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THIS ANNOUNCEMENT (INCLUDING THIS APPENDIX) AND THE TERMS AND CONDITIONS SET OUT HEREIN ARE FOR INFORMATION PURPOSES ONLY AND ARE DIRECTED ONLY AT: (A) QUALIFIED INVESTORS; (B) IN THE UNITED KINGDOM, QUALIFIED INVESTORS WHO ARE PERSONS WHO (I) FALL WITHIN ARTICLE 19(5) OF THE ORDER, FALL WITHIN ARTICLE 49(2)(A) TO (D) OF THE ORDER; OR ARE PERSONS TO WHOM IT MAY OTHERWISE BE LAWFULLY COMMUNICATED AND (II) ARE A "PROFESSIONAL CLIENT" OR AN "ELIGIBLE COUNTERPARTY" WITHIN THE MEANING OF CHAPTER 3 OF THE FCA'S CONDUCT OF BUSINESS SOURCEBOOK; OR (C) OTHER PERSONS TO WHOM IT MAY LAWFULLY BE COMMUNICATED (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS"). THIS ANNOUNCEMENT (INCLUDING THIS APPENDIX) AND THE TERMS AND CONDITIONS SET OUT HEREIN MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS ANNOUNCEMENT (INCLUDING THIS APPENDIX) AND THE TERMS AND CONDITIONS SET OUT HEREIN RELATES IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS.
THIS APPENDIX, AND THE ANNOUNCEMENT OF WHICH IT FORMS PART, IS FOR INFORMATION PURPOSES ONLY AND DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN THE COMPANY. IF YOU ARE IN ANY DOUBT AS TO WHETHER YOU ARE A RELEVANT PERSON YOU SHOULD CONSULT A PROFESSIONAL ADVISER FOR ADVICE.
THIS ANNOUNCEMENT, INCLUDING THIS APPENDIX, IS NOT AN OFFER FOR SALE OR SUBSCRIPTION IN ANY JURISDICTION IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL UNDER THE SECURITIES LAWS OF ANY SUCH JURISDICTION. THIS ANNOUNCEMENT, INCLUDING THIS APPENDIX, IS NOT AN OFFER OF OR SOLICITATION TO PURCHASE OR SUBSCRIBE FOR SECURITIES IN THE UNITED STATES.
THE COMPANY DOES NOT MAKE ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED TO ANY PLACEES REGARDING ANY INVESTMENT IN THE SECURITIES REFERRED TO IN THIS ANNOUNCEMENT UNDER THE LAWS APPLICABLE TO SUCH PLACEES.
EACH PLACEE SHOULD CONSULT WITH ITS OWN ADVISERS AS TO LEGAL, TAX, BUSINESS AND RELATED ASPECTS OF AN INVESTMENT IN PLACING SHARES. THE PRICE OF THE PLACING SHARES IN THE COMPANY AND THE INCOME FROM THEM (IF ANY) MAY GO DOWN AS WELL AS UP AND INVESTORS MAY NOT GET BACK THE FULL AMOUNT INVESTED ON DISPOSAL OF THE PLACING SHARES.
ANY INDICATION IN THIS ANNOUNCEMENT OF THE PRICE AT WHICH THE EXISTING ORDINARY SHARES HAVE BEEN BOUGHT OR SOLD IN THE PAST CANNOT BE RELIED UPON AS A GUIDE TO FUTURE PERFORMANCE. PERSONS NEEDING ADVICE SHOULD CONSULT AN INDEPENDENT FINANCIAL ADVISER. NO STATEMENT IN THIS ANNOUNCEMENT IS INTENDED TO BE A PROFIT FORECAST AND NO STATEMENT IN THIS ANNOUNCEMENT SHOULD BE INTERPRETED TO MEAN THAT EARNINGS PER SHARE OF THE COMPANY FOR THE CURRENT OR FUTURE FINANCIAL YEARS WOULD NECESSARILY MATCH OR EXCEED THE HISTORICAL PUBLISHED EARNINGS PER SHARE OF THE COMPANY.
Placees will be deemed to have read and understood this Announcement and these terms and conditions in their entirety and to be making such offer on the terms and conditions and to be providing the representations, warranties, acknowledgements, and undertakings contained in this Appendix. In particular, each such Placee represents, warrants and acknowledges that:
1. it is a Relevant Person 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; and
2. in the case of any Placing Shares acquired by it as a financial intermediary, as that term is used in Article 5(1) of the Prospectus Regulation, (i) the Placing Shares acquired by it have not been acquired on behalf of, nor have they been acquired with a view to their offer or resale to, persons in any Member State of the EEA or the UK other than Qualified Investors or in circumstances in which the prior consent of the Joint Brokers has been given to the offer or resale; or (ii) where Placing Shares have been acquired by it on behalf of persons in any Member State of the EEA or the UK other than Qualified Investors, the offer of those Placing Shares to it is not treated under the Prospectus Regulation as having been made to such persons.
The Company and the Joint Brokers will rely upon the truth and accuracy of the foregoing representations, acknowledgements and agreements. Neither of the Joint Brokers makes any representation to any Placee regarding an investment in the Placing Shares referred to in this Announcement (including this Appendix).
This Announcement (including this Appendix) does not constitute an offer, and may not be used in connection with an offer, to sell or issue or the solicitation of an offer to buy or subscribe for Placing Shares in any jurisdiction in which such offer or solicitation is or may be unlawful. This Announcement (including this Appendix) and the information contained herein is not for publication or distribution, directly or indirectly, to persons in the United States, the Placing Restricted Jurisdictions or in any jurisdiction in which such publication or distribution is unlawful. Persons who come into possession of this Announcement are required by the Company to inform themselves about and to observe any restrictions of transfer of this Announcement. No public offer of securities of the Company under the Placing is being made in the United Kingdom, the United States or any Placing Restricted Jurisdictions.
In particular, the Placing Shares referred to in this Announcement have not been and will not be registered under the US Securities Act of 1933, as amended (the "Securities Act") or under any laws of, or with any securities regulatory authority of, any state or other jurisdiction of the United States, and may not be offered, sold, resold, transferred or delivered, directly or indirectly, in the United States or to, or for the account or benefit of, U.S. Persons, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and, in each case, in compliance with any applicable securities laws of any state or other jurisdiction in the United States. The Placing Shares are only being offered and sold outside the United States in "offshore transactions" within the meaning of, and in accordance with, Regulation S under the Securities Act.
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 the Placing Shares have not been, nor will they be, registered under or offered in compliance with the securities laws of any state, province or territory of any of the Placing Restricted Jurisdictions. Accordingly, the Placing Shares may not (unless an exemption under the relevant securities laws is applicable) be offered, sold, resold or delivered, directly or indirectly, in or into the Placing Restricted Jurisdictions 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
The Joint Brokers have entered into the Placing and Open Offer Agreement with the Company under which the Joint Brokers have, on the terms and subject to the conditions set out therein, undertaken to use their reasonable endeavours to procure, as agents for the Company, subscribers for the Placing Shares at the Issue Price.
The Placing and Open Offer Agreement contains customary warranties given by the Company to the Joint Brokers as to matters relating to the Company and its business and a customary indemnity given by the Company to the Joint Brokers in respect of liabilities arising out of, or in connection with, the Placing.
The Joint Brokers (after consultation with the Company) reserve the right to scale back the number of Placing Shares to be subscribed by any Placee in the event of applications in excess of the target amount under the Placing. The Company and the Joint Brokers also reserve the right not to accept offers to subscribe for Placing Shares or to accept such offer in part rather than in whole. The Joint Brokers shall be entitled to effect the Placing by such method as they shall in their sole discretion determine. To the fullest extent permissible by law, neither of the Joint Brokers nor any holding company of a Joint Broker nor any subsidiary branch or affiliate of a Joint Broker (each an affiliate) nor any person acting on behalf of any of the foregoing shall have any liability to the Placees (or to any other person whether acting on behalf of a Placee or otherwise). In particular, neither of the Joint Brokers, nor any affiliate thereof nor any person acting on their behalf shall have any liability to Placees in respect of their conduct of the Placing.
Each Placee's obligations will be owed to the Company and to the Joint Brokers. Following the confirmation referred to below in the paragraph entitled "Participation in, and principal terms of, the Placing", each Placee will also have an immediate, separate, irrevocable and binding obligation, owed to the Joint Brokers, to pay to the Joint Brokers (or as the Joint Brokers may direct) in cleared funds an amount equal to the product of the Issue Price and the number of Placing Shares which such Placees has agreed to acquire.
Each Placee agrees to indemnify on an after tax basis and hold each of the Joint Brokers, the Company, and their respective affiliates harmless from any all costs, claims, liabilities and expenses (including legal fees and expenses) arising directly or indirectly out of or in connection with any breach of the acknowledgments, undertakings, representations, warranties and agreements set forth in these terms and conditions and any contract note and further agrees that the provisions of this Appendix shall survive after completion of the Placing.
The Placing is also conditional upon the Placing and Open Offer Agreement becoming unconditional and the Placing and Open Offer Agreement not being terminated in accordance with its terms. Further details of conditions in relation to the Placing are set out below in the paragraph entitled "Conditions of the Placing".
A Placee agrees to become a member of the Company and agrees to subscribe for those Placing Shares allocated to it by the Joint Brokers at the Issue Price, conditional on: (i) Admission occurring and becoming effective by 8.00 a.m. on 30 June 2020 (or such later time and/or date, not being later than 8.00 a.m. on 14 July 2020, as the Company and the Joint Brokers may agree); (ii) the Placing and Open Offer Agreement becoming otherwise unconditional in all respects and not having been terminated in accordance with its terms on or before the date of Admission; and (iii) the Joint Brokers confirming to the Placees their allocation of Placing Shares.
To the fullest extent permitted by law, each Placee acknowledges and agrees that it will not be entitled to exercise any remedy of rescission at any time. This does not affect any other rights the Placee may have. Fractions of Placing Shares will not be issued.
APPLICATION FOR ADMISSION TO TRADING
Application will be made to the London Stock Exchange for Admission. It is expected that settlement of any such New Ordinary Shares (including the Placing Shares) and Admission will become effective on or around 8.00 a.m. on 30 June 2020 and that dealings in the New Ordinary Shares (including the Placing Shares) will commence at that time.
PAYMENT FOR SHARES
Each Placee has a separate, irrevocable and binding obligation to pay the Issue Price in cleared funds for the number of Placing Shares duly allocated to the Placee under the Placing in the manner and by the time directed by the Joint Brokers. If any Placee fails to pay as so directed and/or by the time directed, the relevant Placee's application for Placing Shares shall at the Joint Brokers' discretion either be rejected or accepted in which case the paragraph below entitled "Registration and Settlement" shall apply to such application.
PARTICIPATION IN, AND PRINCIPAL TERMS OF, THE PLACING
The Joint Brokers (whether through themselves or any of their affiliates) are arranging the Placing as agents of the Company for the purpose of using reasonable endeavours to procure Placees at the Issue Price for the Placing Shares.
Participation in the Placing will only be available to persons who may lawfully be, and are, invited to participate by the Joint Brokers. The Joint Brokers and their affiliates may participate in the Placing as principal.
By participating in the Placing, Placees will be deemed to have read and understood this Announcement, including this Appendix, in its entirety and to be participating and making an offer for Placing Shares on the terms and conditions, and to be providing the representations, warranties, acknowledgements, agreements and undertakings contained in this Appendix.
This Appendix gives details of the terms and conditions of, and the mechanics of participation in, the Placing. No commissions will be paid to Placees or by Placees in respect of any Placing Shares.
The number of Placing Shares to be issued, and the extent of each Placee's participation in the Placing (which will not necessarily be the same for each Placee), will be agreed between the Joint Brokers, (following consultation with the Company) following completion of the bookbuilding process in respect of the Placing (the "Bookbuild"). No element of the Placing will be underwritten. The aggregate number of Placing Shares will be announced on a Regulatory Information Service following completion of the Bookbuild. The Issue Price will be jointly agreed between the Joint Brokers and the Company following completion of the Bookbuild and will be payable by the Placees in respect of the Placing Shares allocated to them.
A Placee's commitment to acquire a fixed number of Placing Shares under the Placing will be agreed orally with a Joint Broker as agent of the Company. Each Placee's allocation will be confirmed to Placees orally or by email by the relevant Joint Broker, and a form of confirmation or contract note will be dispatched as soon as possible thereafter. The oral or email confirmation to such Placee will constitute an irrevocable legally binding commitment upon such person (who will at that point become a Placee) in favour of the Joint Brokers and the Company, under which it agrees to acquire the number of Placing Shares allocated to it at the Issue Price on the terms and conditions set out in this Appendix and in accordance with the articles of association of the Company.
Except as required by law or regulation, no press release or other announcement will be made by a Joint Broker 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.
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 the paragraph entitled "Registration and Settlement".
All obligations under the Placing will be subject to fulfilment or (where applicable) waiver of, amongst other things, the conditions referred to below and to the Placing not being terminated on the basis referred to below.
By participating in the Placing, each Placee will agree that its rights and obligations in respect of the Placing will terminate only in the circumstances described below and will not be capable of rescission or termination by the Placee.
To the fullest extent permissible by law, none of the Company, the Joint Brokers or any of their respective affiliates shall have any liability to Placees (or to any other person whether acting on behalf of a Placee or otherwise under these terms and conditions). In particular, none of the Company, the Joint Brokers or any of their respective affiliates shall have any liability (including to the fullest extent permissible by law, any fiduciary duties) in respect of the Joint Brokers' conduct of the Placing. Each Placee acknowledges and agrees that the Company is responsible for the issue of the Placing Shares to the Placees and the Joint Brokers shall have no liability to the Placees for the failure of the Company to fulfil those obligations.
CONDITIONS OF THE PLACING
The Placing is conditional upon the Placing and Open Offer Agreement becoming unconditional and not having been terminated in accordance with its terms.
The Joint Brokers' obligations under the Placing and Open Offer Agreement in respect of the Placing Shares are conditional on, inter alia:
1. the Company allotting, subject only to Admission, the Placing Shares in accordance with the Placing and Open Offer Agreement and the Placing and Open Offer Agreement not being terminated prior to Admission of the Placing Shares and becoming unconditional in all respects;
2. the passing of certain required shareholder resolutions to be proposed at the general meeting of the Company to be held on or around 29 June 2020, or any adjournment thereof; and
3. Admission taking place not later than 8.00 a.m. on 30 June 2020 (or such later date as may be agreed in writing between the Company and the Joint Brokers).
If (a) any of the conditions contained in the Placing and Open Offer Agreement in relation to the Placing Shares are not fulfilled or waived by the Joint Brokers by the respective time or date where specified (or such later time or date as the Company and the Joint Brokers may agree not being later than 5.00 p.m. on 14 July 2020 (the "Final Date")); or (b) the Placing and Open Offer Agreement is terminated as described below, the Placing in relation to the Placing Shares will lapse and the Placee's rights and obligations hereunder in relation to the Placing Shares shall cease and terminate at such time and each Placee agrees that no claim can be made by the Placee in respect thereof.
The Placing is not conditional on the Open Offer.
Subject to certain exceptions, the Joint Brokers may, at their absolute discretion and upon such terms as they think fit, waive, or extend the period (up to the Final Date) for, compliance by the Company with the whole or any part of any of the Company's obligations in relation to the conditions in the Placing and Open Offer Agreement. Any such extension or waiver will not affect Placees' commitments as set out in this Announcement.
Neither the Joint Brokers nor the Company shall have any liability to any Placee (or to any other person whether acting on behalf of a Placee or otherwise) in respect of any decision they may make as to whether or not to waive or to extend the time and/or date for the satisfaction of any condition to the Placing nor for any decision they may make as to the satisfaction of any condition or in respect of the Placing generally and by participating in the Placing each Placee agrees that any such decision is within the absolute discretion of the Joint Brokers.
RIGHT TO TERMINATE UNDER THE PLACING AND OPEN OFFER AGREEMENT
Either Joint Broker is entitled, at any time before Admission, to terminate the Placing and Open Offer Agreement by giving notice to the Company in certain circumstances, including, inter alia:
1. the Company failing to comply with any of its obligations under the Placing and Open Offer Agreement which is material in the context of the Fundraising and/or Admission; or
2. any of the warranties given by the Company to the Joint Brokers under the Placing and Open Offer Agreement not being true or accurate or being misleading when given or deemed given or repeated or deemed repeated (by reference to the facts and circumstances in each case then existing) in a respect which is material in the context of the Placing and/or Admission.
Following Admission, the Placing and Open Offer Agreement is not capable of termination to the extent that it relates to the Placing of the Placing Shares.
The rights and obligations of the Placees shall terminate only in the circumstances described in these terms and conditions and in the Placing and Open Offer Agreement and will not be subject to termination by the Placee or any prospective Placee at any time or in any circumstances. By participating in the Placing, Placees agree that the exercise by a Joint Broker of any right of termination or other discretion under the Placing and Open Offer Agreement shall be within the absolute discretion of such Joint Broker, and that it need not make any reference to Placees and that it shall have no liability to Placees whatsoever in connection with any such exercise or decision not to exercise. Placees will have no rights against the Joint Brokers, the Company or any of their respective directors or employees under the Placing and Open Offer Agreement pursuant to the Contracts (Rights of Third Parties) Act 1999 (as amended).
NO PROSPECTUS
The Placing Shares are being offered to Relevant Persons only and will not be offered in such a way as to require a prospectus in the United Kingdom or elsewhere. No offering document or prospectus has been or will be submitted to be approved by the FCA in relation to the Fundraising (including the Placing) and Placees' commitments will be made solely on the basis of the information contained in this Announcement (including this Appendix) .
Each Placee, by accepting a participation in the Placing, agrees that the content of this Announcement, including this Appendix, is exclusively the responsibility of the Company and confirms that it has not relied on any other information , representation, warranty, or statement made by or on behalf of the Company or a Joint Broker or any other person and neither of the Joint Brokers nor the Company nor any other person will be liable for any Placee's decision to participate in the Placing based on any other information, representation, warranty or statement which the Placees may have obtained or received. 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.
REGISTRATION AND SETTLEMENT
Settlement of transactions in the Placing Shares (ISIN: GB0006957293 ) following Admission will take place within CREST provided that, subject to certain exceptions, the Joint Brokers reserve the right to require settlement for, and delivery of, the Placing Shares (or a portion thereof) to Placees by such other means that they deem necessary if delivery or settlement is not possible or practicable within CREST within the timetable set out in this Announcement or would not be consistent with the regulatory requirements in any Placee's jurisdiction.
Each Placee allocated Placing Shares in the Placing will be sent a trade confirmation or contract note stating the number of Placing Shares allocated to it at the Issue Price, the aggregate amount owed by such Placee to the relevant Joint Broker (as agent for the Company) and settlement instructions. Each Placee agrees that it will do all things necessary to ensure that delivery and payment is completed in accordance with either the CREST or certificated settlement instructions that it has in place with the relevant Joint Broker.
It is expected that settlement in respect of the Placing Shares will be on or around 30 June 2020 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 the relevant Joint Broker.
Each Placee is deemed to agree that, if it does not comply with these obligations, the Joint Brokers may sell any or all of the Placing Shares allocated to that Placee on such Placee's behalf and retain from the proceeds, for the relevant Joint Broker's account and benefit (as agent for the Company), an amount equal to the aggregate amount owed by the Placee plus any interest due. Any excess proceeds will pass to the relevant Placee at its risk. The relevant Placee will, however, remain liable and shall indemnify the Joint Brokers on demand for any shortfall below the aggregate amount owed by it and may be required to bear any stamp duty or stamp duty reserve tax or securities transfer tax (together with any interest or penalties) which may arise upon the sale of such Placing Shares on such Placee's behalf. By communicating a bid for Placing Shares, each Placee confers on the Joint Brokers all such authorities and powers necessary to carry out any such sale and agrees to ratify and confirm all actions which the Joint Brokers lawfully take in pursuance of such sale.
If Placing Shares are to be delivered to a custodian or settlement agent, Placees should ensure that the trade confirmation or contract note is copied and delivered immediately to the relevant person within that organisation.
Insofar as Placing Shares are registered in a Placee's name or that of its nominee or in the name of any person for whom a Placee is contracting as agent or that of a nominee for such person, such Placing Shares should, subject as provided below, be so registered free from any liability to UK stamp duty or stamp duty reserve tax or securities transfer tax. Placees will not be entitled to receive any fee or commission in connection with the Placing.
REPRESENTATIONS, WARRANTIES AND FURTHER TERMS
By participating in the Placing, each Placee (and any person acting on such Placee's behalf) makes the following representations, warranties, acknowledgements, agreements and undertakings (as the case may be) to the Company and the Joint Brokers, namely that, each Placee (and any person acting on such Placee's behalf):
1. represents and warrants that it has read and understood this Announcement, including this Appendix, in its entirety and that its subscription 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 (including this Appendix);
2. acknowledges that no offering document or prospectus has been or will be prepared in connection with the placing of the Placing Shares and represents and warrants that it has not received a prospectus or other offering document in connection therewith;
3. that it has relied on its own assessment and investigation of the business, financial or other position of the Company in determining whether to participate in the placing, and (a) has satisfied itself concerning legal, regulatory, tax, business, currency, financial and other economic considerations in connection herewith to the extent it deems necessary; (b) had access to review publicly available information concerning the Company that it considers necessary or appropriate and sufficient in making an investment decision and to determine whether to participate in the Placing; (c ) reviewed such information as it believes necessary or appropriate in connection with its subscription of the Placing Shares; and (d) made its investment decision based solely upon its own judgment, due diligence and analysis and not upon any view expressed or information provided by or on behalf of Panmure Gordon or N+1 Singer, the Company or any other person otherwise than as set out in this Announcement;
4. acknowledges that the content of this Announcement (including this Appendix) is exclusively the responsibility of the Company, and that neither of the Joint Brokers, their affiliates or any person acting on their behalf has or shall have any liability for any information, representation or statement contained in this Announcement (including this Appendix) or any information previously or concurrently published by or on behalf of the Company, and will not be liable for any Placee's decision to participate in the Placing based on any information, representation or statement contained in this Announcement (including this Appendix) or otherwise.
5. represents, warrants and agrees that the only information on which it is entitled to rely and on which such Placee has relied in committing itself to acquire the Placing Shares is contained in this Announcement (including this Appendix), such information being all that it deems necessary to make an investment decision in respect of the Placing Shares and that it has neither received nor relied on any other information given or representations, warranties or statements made by a Joint Broker, the Company, or any of their respective directors, officers or employees or any person acting on behalf of any of them (including with respect to the Company, the Placing, the Placing Shares or the accuracy, completeness or adequacy of any publicly available information), or, if received, it has not relied upon any such information, representations, warranties or statements, and neither of the Joint Brokers nor the Company will be liable for any Placee's decision to accept an invitation to participate in the Placing based on any other information, representation, warranty or statement. Each Placee further acknowledges and agrees that it may not place the same degree of reliance on this Announcement as it may otherwise place on a prospectus or admission document. The Placee further represents, warrants and agrees that it is not relying on any other information given, or representation or statement made at any time, by any person concerning the Company or the Placing, and in particular, agrees that none of the Company, the Joint Brokers, nor any of their respective officers, agents, employees or advisers, will have any liability for any other information or representation. The Placee irrevocably and unconditionally waives any rights it may have in respect of any other information or representation;
6. if it has received any inside sensitive information about the Company in advance of the Placing, it has not: (i) dealt in the securities of the Company; (ii) encouraged or required another person to deal in the securities of the Company; or (iii) disclosed such information to any person except as permitted by MAR, prior to the information being made publicly available;
7. acknowledges that the Joint Brokers do not have any duties or responsibilities to it, or its clients, similar or comparable to the duties of "best execution" and "suitability" imposed by the Conduct of Business Sourcebook in the FCA's Handbook of Rules and Guidance and that the Joint Brokers are not acting for it or its clients and that the Joint Brokers will not be responsible for providing protections to it or its clients;
8. acknowledges that neither of the Joint Brokers, any of their affiliates or any person acting on behalf of them 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;
9. acknowledges that, save in the event of fraud on the part of the relevant Joint Broker (and to the extent permitted by the FCA), neither of the Joint Brokers, their respective ultimate holding companies nor any direct or indirect subsidiary undertakings of such holding companies, nor any of their respective directors and employees shall be liable to Placees for any matter arising out of either Joint Broker's role as placing agent or otherwise in connection with the Placing and that where any such liability nevertheless arises as a matter of law, Placees will immediately waive any claim against any of such persons which it may have in respect thereof;
10. represents and warrants that it, and any prospective beneficial owner for whose account or benefit it is purchasing the Placing Shares is (i) and at the time the Placing Shares are subscribed for will be, located outside the United States and is acquiring the Placing Shares in an "offshore transaction" as defined in, and in accordance with, Regulation S; and (ii) not subscribing for and/or purchasing Placing Shares as a result of any "directed selling efforts" as defined in Regulation S;
11. understands and acknowledges that the Placing Shares have not been and will not be registered under the Securities Act and may not be offered, sold or resold in or into or from the United States except pursuant to an effective registration under the Securities Act or pursuant to an exemption from the registration requirements of the Securities Act and, in each case, in compliance with any applicable securities laws of any state or other jurisdiction in the United States, and no representation is being made as to the availability of any exemption under the Securities Act for the reoffer, resale, pledge or transfer of the Placing Shares;
12. represents and warrants that it (and any account for which it is purchasing) is not acquiring the Placing Shares with a view to any offer, sale, resale, transfer, delivery or distribution thereof, directly or indirectly into the United States;
13. represents and warrants that it will not distribute, forward, transfer or otherwise transmit this Announcement or any part of it (including electronic copies thereof) in or into or from the United States, and it has not distributed, forwarded, transferred or otherwise transmitted any such materials to any person in the United States;
14. unless otherwise specifically agreed in writing with the Joint Brokers, represents and warrants that neither it nor the beneficial owner of such Placing Shares will be a resident of Placing Restricted Jurisdictions;
15. acknowledges that the Placing Shares have not been and will not be registered under the securities legislation of any Placing Restricted Jurisdictions and, subject to certain exceptions, may not be offered, sold, taken up, renounced or delivered or transferred, directly or indirectly, within those jurisdictions;
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 transfer Placing Shares into a clearance system;
17. represents and warrants that: (i) it has complied with and will continue to comply with its obligations under MAR, the Criminal Justice Act 1993 and Part VIII of FSMA and other applicable law; (ii) in connection with money laundering and terrorist financing, it has complied with its obligations under the Proceeds of Crime Act 2002 (as amended), the Terrorism Act 2000 (as amended), the Terrorism Act 2006, the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) 2017 Regulations, the Money Laundering Sourcebook of the FCA and any other applicable and any related or similar rules, regulations or guidelines issued, administered or enforced by any government agency having jurisdiction in respect thereof (where all such regulations listed under this (ii) shall together be referred to as the "AML Legislation"); and (iii) it is not a person: (1) with whom transactions are prohibited under the Foreign Corrupt Practices Act of 1977 or any economic sanction programmes administered by, or regulations promulgated by, the Office of Foreign Assets Control of the U.S. Department of the Treasury; (2) named on the Consolidated List of Financial Sanctions Targets maintained by HM Treasury of the United Kingdom; or (3) subject to financial sanctions imposed pursuant to a regulation of the EU or a regulation adopted by the United Nations (together, the "Regulations"); and, if making payment on behalf of a third party, that satisfactory evidence has been obtained and recorded by it to verify the identity of the third party as required by the Regulations and pursuant to AML Legislation and has obtained all governmental and other consents (if any) which may be required for the purpose of, or as a consequence of, such purchase, and it will provide promptly to the Joint Brokers or the Company such evidence, if any, as to the identity or location or legal status of any person (including in relation to the beneficial ownership of any underlying investor) which the Joint Brokers or the Company may request from it in connection with the Placing (for the purpose of complying with such Regulations or ascertaining the nationality of any person or the jurisdiction(s) to which any person is subject or otherwise or any other information as may be required to comply with legal or regulatory requirements (including in particular under the AML Legislation)) in the form and manner requested by the Joint Brokers or the Company on the basis that any failure by it to do so may result in the number of Placing Shares that are to be purchased by it or at its direction pursuant to the Placing being reduced to such number, or to nil, as the Joint Brokers may decide at their sole discretion;
18. if a financial intermediary, as that term is used in Article 5(1) of the Prospectus Regulation, 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 or the UK other than Qualified Investors, or in circumstances in which the prior consent of the Joint Brokers has been given to the offer or resale;
19. represents and warrants that it has not offered or sold and will not offer or sell any Placing Shares to persons in the EEA or the UK 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 or the UK within the meaning of the Prospectus Regulation;
20. represents and warrants that it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of 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;
21. represents and warrants that it has complied and will comply with all applicable provisions of the FSMA and the Financial Services Act 2012 with respect to anything done by it in relation to the Placing Shares in, from or otherwise involving, the United Kingdom;
22. if in a Member State of the EEA or the UK, unless otherwise specifically agreed with the Joint Brokers in writing, represents and warrants that it is a Qualified Investor, being a person falling within Article 2(e) of the Prospectus Regulation;
23. if in the United Kingdom, represents and warrants that it is a person who: (i) falls with Articles 49(2)(A) to (D) or 19(5) of the Order or it is a person to whom the Placing Shares may otherwise be lawfully offered under such Order or, if it is receiving the offer in circumstances under which the laws or regulations of a jurisdiction other than the United Kingdom would apply, it is a person to whom the Placing Shares may be lawfully offered under that other jurisdiction's laws and regulations; and (ii) is a "professional client" or an "eligible counterparty" within the meaning of Chapter 3 of the FCA's Conduct of Business Sourcebook;
24. represents and warrants that it and any person acting on its behalf is entitled to acquire the Placing Shares under the laws of all relevant jurisdictions and that it has all necessary capacity and has obtained all necessary consents and authorities and taken any other necessary actions to enable it to commit to this participation in the Placing and to perform its obligations in relation thereto (including, without limitation, in the case of any person on whose behalf it is acting, all necessary consents and authorities to agree to the terms set out or referred to in this Announcement (including this Appendix)) and will honour such obligations;
25. where it is acquiring Placing Shares for one or more managed accounts, represents and warrants that it is authorised in writing by each managed account: (i) to acquire the Placing Shares for each managed account; (ii) to make on its behalf the representations, warranties, acknowledgements, undertakings and agreements in this Appendix and the Announcement of which it forms part; and (iii) to receive on its behalf any investment letter relating to the Placing in the form provided to it by a Joint Broker;
26. undertakes that it (and any person acting on its behalf) will make payment for the Placing Shares allocated to it in accordance with this Announcement (including this Appendix) on the due time and date set out herein, failing which the relevant Placing Shares may be placed with other subscribers or sold as the Joint Brokers may in their sole discretion determine and without liability to such Placee and it will remain liable and will indemnify the Joint Brokers on demand for any shortfall below the net proceeds of such sale and the placing proceeds of such Placing Shares and may be required to bear the liability for any stamp duty or stamp duty reserve tax or security transfer tax (together with any interest or penalties due pursuant to or referred to in these terms and conditions) which may arise upon the placing or sale of such Placee's Placing Shares on its behalf;
27. acknowledges that neither of the Joint Brokers, any of their affiliates, or any person acting on behalf of any of them, is making any recommendations to it, advising it regarding the suitability of any transactions it may enter into in connection with the Placing and that participation in the Placing is on the basis that it is not and will not be treated for these purposes as a client of either Joint Broker and that neither of the Joint Brokers has any 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 and Open Offer Agreement nor for the exercise or performance of any of their rights and obligations thereunder, including any rights to waive or vary any conditions or exercise any termination right;
28. 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 of the Joint Brokers nor the Company will be responsible for any liability to stamp duty or stamp duty reserve tax resulting from a failure to observe this requirement. Each Placee and any person acting on behalf of such Placee agrees to participate in the Placing and it agrees to indemnify the Company and the Joint Brokers in respect of the same on the basis that the Placing Shares will be issued to the CREST stock account of a Joint Broker who will hold them as nominee on behalf of such Placee until settlement in accordance with its standing settlement instructions;
29. acknowledges that these terms and conditions and any agreements entered into by it pursuant to these terms and conditions and any non-contractual obligations arising out of or in connection with such agreement shall be governed by and construed in accordance with the laws of England and Wales and it submits (on behalf of itself and on behalf of any person on whose behalf it is acting) to the exclusive jurisdiction of the courts of England and Wales as regards any claim, dispute or matter (including non-contractual matters) arising out of any such contract, except that enforcement proceedings in respect of the obligation to make payment for the Placing Shares (together with any interest chargeable thereon) may be taken by the Company or a Joint Broker in any jurisdiction in which the relevant Placee is incorporated or in which any of its securities have a quotation on a recognised stock exchange;
30. acknowledges that time shall be of the essence as regards to obligations pursuant to this Appendix;
31. acknowledges and agrees that the Company, the Joint Brokers 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 each Joint Brokers on its own behalf and on behalf of the Company and are irrevocable and are irrevocably authorised to produce this Announcement or a copy thereof to any interested party in any administrative or legal proceeding or official inquiry with respect to the matters covered hereby;
32. agrees to indemnify on an after-tax basis and hold the Company, the Joint Brokers 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;
33. acknowledges that no action has been or will be taken by any of the Company, the Joint Brokers or any person acting on behalf of the Company or a Joint Broker 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;
34. acknowledges that it is an institution that has knowledge and experience in financial, business and international investment matters as is required to evaluate the merits and risks of subscribing for the Placing Shares. It further acknowledges that it is experienced in investing in securities of this nature and in this sector and is aware that it may be required to bear, and it, and any accounts for which it may be acting, are able to bear, the economic risk of, and is able to sustain, a complete loss in connection with the Placing. It has relied upon its own examination and due diligence of the Company and its associates taken as a whole, and the terms of the Placing, including the merits and risks involved;
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 the 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. acknowledges that a Joint Broker or any of its affiliates acting as an investor for its own account may take up shares in the Company and in that capacity may retain, purchase or sell for its own account such shares and may offer or sell such shares other than in connection with the Placing;
37. acknowledges that the Placing Shares will be admitted to AIM and the Company is therefore required to publish certain business and financial information in accordance with the rules and practices of London Stock Exchange plc or the FCA (collectively, the "Exchange Information") and that the Placee is able to obtain or access the Exchange Information without undue difficulty;
38. represents and warrants that (i) it (and any person acting on its behalf) is entitled to acquire the Placing Shares under the laws and regulations of all relevant jurisdictions which apply to it; (ii) it has fully observed such laws and regulations and obtained all such governmental and other guarantees and other consents and authorities which may be required thereunder (including, without limitation, in the case of any person on whose behalf it is acting, all guarantees, consents and authorities to agree to the terms set out or referred to in this Announcement) and complied with all necessary formalities to enable it to enter into the transactions contemplated hereby and to perform its obligations in relation thereto; (iii) it has all necessary capacity and authority to commit to participation in the Placing and to perform its obligations in relation thereto and will honour such obligations; (iv) it has paid any issue, transfer or other taxes due in connection with its participation in any territory; and (v) it has not taken any action which will or may result in the Company, the Joint Brokers, any of their respective Affiliates or any person acting on their behalf being in breach of the legal and/or regulatory requirements of any territory in connection with the Placing;
39. 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 the Joint Brokers 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). Each Placee agrees that the provisions of this paragraph 39 shall survive the resale of the Placing Shares by or on behalf of any person for whom it is acting;
40. acknowledges that the Company and/or the Joint Brokers may hold and process personal data (as defined in the General Data Protection Regulation (EU) No. 2016/679 (the "GDPR")) relating to past and present shareholders, and it agrees that such personal data relating to Placees may be processed (as defined in the GDPR) by the Company and/or the Joint Brokers for the following purposes, being: (a) process its personal data to the extent and in such manner as is necessary for the performance of their obligations under the contractual arrangements between them, including as required by or in connection with its holding of Ordinary Shares, including processing personal data in connection with credit and money laundering checks on it; (b) communicate with it as necessary in connection with its affairs and generally in connection with its holding of Ordinary Shares; (c) provide personal data to such third parties as the Company and/or the Joint Brokers may consider necessary in connection with its affairs and generally in connection with its holding of Ordinary Shares or as the GDPR may require, including to third parties outside the EEA; (d) without limitation, provide such personal data to their respective Affiliates for processing, notwithstanding that any such party may be outside the EEA; and (e) process its personal data for the Company's and/or any of the Joint Brokers' internal administration;
41. represents and warrants that it has not been engaged to subscribe for the Placing Shares on behalf of any other person who is not a Qualified Investor unless the terms on which it is engaged enable it to make decisions concerning the acceptance of offers of transferable securities on the client's behalf without reference to the client, as described in section 86(2) of FSMA;
42. represents and warrants that its participation in the Placing would not give rise to an offer being required to be made by it or any person with whom it is acting in concert pursuant to Rule 9 of the City Code on Takeovers and Mergers;
43. represents and warrants that it is not, and any person who it is acting on behalf of is not, and at the time the Placing Shares are subscribed will not be a resident of, or with an address in, or subject to the laws of, any Placing Restricted Jurisdiction and acknowledges that the Placing Shares have not been and will not be registered nor will a prospectus be cleared in respect of the Placing Shares under the securities legislation of any Placing Restricted Jurisdiction and, subject to certain exceptions, may not be offered, sold, taken up, renounced, delivered or transferred, directly or indirectly, within any Placing Restricted Jurisdiction;
44. represents and warrants that, if it is a pension fund or investment company, its purchase of Placing Shares is in full compliance with all applicable laws and regulation; and
45. to the fullest extent permitted by law, it acknowledges and agrees to the disclaimers contained in the Announcement, including this Appendix.
The representations, warranties, acknowledgments and undertakings contained in this Appendix are given to the Joint Brokers and the Company (for their own benefit and, where relevant, the benefit of their respective Affiliates and any person acting on their behalf) and are irrevocable and shall not be capable of termination in any circumstances.
The agreement to settle a Placee's subscription (and/or the subscription of a person for whom such Placee is contracting as agent) free of stamp duty and stamp duty reserve tax depends on the settlement relating only to a subscription by it and/or such person direct from the Company for the Placing Shares in question. Such agreement assumes that the Placing Shares are not being subscribed for in connection with arrangements to issue depositary receipts or to transfer the Placing Shares into a clearance service. If there are any such arrangements, or the settlement relates to any other subsequent dealing in the Placing Shares, stamp duty or stamp duty reserve tax may be payable, for which neither the Company nor the Joint Brokers will be responsible, and the Placee to whom (or on behalf of whom, or in respect of the person for whom it is participating in the Placing as an agent or nominee) the allocation, issue or delivery of Placing Shares has given rise to such UK stamp duty or stamp duty reserve tax undertakes to pay such UK stamp duty or stamp duty reserve tax forthwith and to indemnify on an after-tax basis and to hold harmless the Company and the Joint Brokers in the event that any of the Company and/or the Joint Brokers has incurred any such liability to UK stamp duty or stamp duty reserve tax. If this is the case, each Placee should seek its own advice and notify the Joint Brokers accordingly.
In addition, Placees should note that they will be liable for any stamp duty and all other stamp, issue, securities, transfer, registration, documentary or other duties or taxes (including any interest, fines or penalties relating thereto) payable outside the UK by them or any other person on the subscription by them of any Placing Shares or the agreement by them to subscribe for any Placing Shares.
Each Placee, and any person acting on behalf of the Placee, acknowledges that the Joint Brokers do not owe any fiduciary or other duties to any Placee in respect of any representations, warranties, undertakings or indemnities in the Placing and Open Offer Agreement.
Each Placee and any person acting on behalf of the Placee acknowledges and agrees that a Joint Broker or any of its affiliates may, at their absolute discretion, agree to become a Placee in respect of some or all of the Placing Shares.
When a Placee or person acting on behalf of the Placee is dealing with a Joint Broker, any money held in an account with such Joint Broker 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 the relevant Joint Broker's money in accordance with the client money rules and will be used by that Joint Broker in the course of its own business and the Placee will rank only as a general creditor of that Joint Broker.
All times and dates in this Announcement (including this Appendix) may be subject to amendment, and Placees' commitments, representations and warranties are not conditional on any of the expected times and dates in this Announcement (including this Appendix) being achieved. The Joint Brokers shall notify the Placees and any person acting on behalf of the Placees of any changes.
Past performance is no guide to future performance and persons needing advice should consult an appropriately qualified independent financial adviser.
A Joint Broker is entitled, at its discretion and out of its own resources, at any time to rebate to some or all of its investors, or to other parties, part or all of its fees relating to the Placing.
MISCELLANEOUS
Solely for the purposes of the product governance requirements contained within: (a) EU Directive 2014/65/EU on markets in financial instruments, as amended ("MiFID II"); (b) Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593 supplementing MiFID II; and (c) local implementing measures (together, the "Product Governance Requirements"), 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 Placing Shares have been subject to a product approval process, which has determined that the Placing Shares are: (i) compatible with an end target market of retail investors and investors who meet the criteria of professional clients and eligible counterparties, each as defined in MiFID II; and (ii) eligible for distribution through all distribution channels as are permitted by MiFID II (the "Target Market Assessment"). Notwithstanding the Target Market Assessment, Placees should note that: the price of the Placing Shares may decline and investors could lose all or part of their investment; the Placing Shares offer no guaranteed income and no capital protection; and an investment in the Placing Shares is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Placing. Furthermore, it is noted that, notwithstanding the Target Market Assessment, the Joint Brokers will only procure investors who meet the criteria of professional clients and eligible counterparties. For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of MiFID II; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the Placing Shares.
Each distributor is responsible for undertaking its own target market assessment in respect of the Placing Shares and determining appropriate distribution channels.
The content of this Announcement has been prepared by, and is the sole responsibility of, Portmeirion Group PLC.
The information contained in this Announcement is given at the date of its publication (unless otherwise marked) and is subject to updating, revision and amendment from time to time. Neither the content of the Company's website nor any website accessible by hyperlinks to the Company's website is incorporated in, or forms part of, this Announcement.
Certain statements in this Announcement are forward-looking statements which are based on the Company's expectations, intentions and projections regarding its future performance, anticipated events or trends and other matters that are not historical facts. These forward-looking statements, which may use words such as "aim", "anticipate", "believe", "could", "intend", "estimate", "expect" and words of similar meaning, include all matters that are not historical facts. These forward-looking statements involve risks, assumptions and uncertainties that could cause the actual results of operations, financial condition, liquidity and dividend policy and the development of the industries in which the Company's businesses operate to differ materially from the impression created by the forward-looking statements. These statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Given those risks and uncertainties, prospective investors are cautioned not to place undue reliance on forward-looking statements. Forward-looking statements speak only as of the date of such statements and, except as required by the FCA, the London Stock Exchange or applicable law, the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
Data Protection
The processing of a Placee's personal data by the Company will be carried out in compliance with the applicable data protection legislation and with its Corporate Privacy Policy, a copy of which can be found on the Company's website www.portmeiriongroup.com.
Each Placee acknowledges that it has read and understood the processing activities carried out by the Company as informed in the referred Corporate Privacy Policy.
APPENDIX III
DEFINITIONS
The following definitions apply throughout this Announcement unless the context requires otherwise:-
"Admission"
in respect of the Placing Shares and Subscription Shares means admission of the Placing Shares and Subscription Shares to trading on AIM becoming effective in accordance with the AIM Rules, and in respect of the Open Offer Shares means admission of the Open Offer Shares to trading on AIM becoming effective in accordance with the AIM Rules
"AIM"
the AIM market operated by the London Stock Exchange
"AIM Rules"
the AIM Rules for Companies, as published by the London Stock Exchange from time to time
"Applicant"
a Qualifying Shareholder or a person by virtue of a bona fide market claim who lodges an Application Form or relevant CREST instruction under the Open Offer
"Application Form"
the application form relating to the Open Offer and enclosed with the Circular for use by Qualifying non-CREST Shareholders
"Announcement"
means this announcement (including its Appendices)
"Basic Entitlement(s)"
the pro rata entitlement for Qualifying Shareholders to subscribe for Open Offer Shares, pursuant to the Open Offer as shall be further described in the Circular
"Board" or "Directors"
the board of directors of the Company
"Business Day"
a day (other than a Saturday, Sunday or public holiday) when banks are usually open for business in London
"certificated or in certificated form"
in relation to a share or other security, a share or other security that is not in uncertificated form, that is not in CREST
"Circular"
the circular of the Company giving (amongst other things) details of the Placing, Subscription and Open Offer and incorporating the Notice of General Meeting, which is to be posted on or around 11 June 2020
"Company" or "Portmeirion"
Portmeirion Group PLC, a company incorporated in England and Wales with registered number 00124842
"CREST"
the relevant system (as defined in the Regulations) in respect of which Euroclear UK & Ireland Limited is the operator (as defined in the Regulations)
"CREST member"
a person who has been admitted by Euroclear as a system-member (as defined in the CREST Regulations)
"CREST Regulations"
the Uncertificated Securities Regulations 2001 (SI 2001-No. 3775), as amended
"Euroclear"
Euroclear UK & Ireland Limited, the operator of CREST
"Excess Application Facility"
the arrangement pursuant to which Qualifying Shareholders may apply for additional Open Offer Shares in excess of the Basic Entitlement in accordance with the terms and conditions of the Open Offer
"Excess Entitlement(s)"
Open Offer Shares in excess of the Basic Entitlement, but not in excess of the total number of Open Offer Shares, allocated to a Qualifying Shareholder pursuant to the Open Offer as described in the Circular
"Ex-entitlement Date"
the date on which the Existing Ordinary Shares are marked 'ex' for entitlement under the Open Offer being 11 June 2020
"Existing Ordinary Shares"
the 10,877,101 Ordinary Shares in issue at the date of this Announcement excluding shares held in Treasury
"FCA"
the Financial Conduct Authority
"Form of Proxy"
the form of proxy for use by Shareholders in connection with the General Meeting, which shall be enclosed with the Circular
"FSMA"
Financial Services and Markets Act 2000 (as amended)
"Fundraising"
together, the Placing, the Subscription and the Open Offer
"General Meeting"
the general meeting of the Company convened for 12.00 noon on 29 June 2020 at which the Resolutions will be proposed, notice of which is set out at the end of the Circular
"Group"
the Company and its Subsidiaries
"ISIN"
International Securities Identification Number
"Issue Price"
the final issue price per New Ordinary Share, to be determined by the Bookbuild
"Joint Brokers"
Panmure Gordon and N+1 Singer
"Link"
Link Asset Services
"London Stock Exchange"
London Stock Exchange plc
"Money Laundering Regulations"
the Anti-Terrorism, Crime and Security Act 2001, the Proceeds of Crime Act 2002 (as amended) and the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (as amended)
"N+1 Singer"
Nplus1 Singer Advisory LLP (together with its affiliate entities), the Company's Joint Broker
"New Ordinary Shares"
the new Ordinary Shares to be issued pursuant to the Fundraising (being the Placing Shares, the Subscription Shares and the Open Offer Shares)
"Open Offer"
the conditional invitation to Qualifying Shareholders to apply for the Open Offer Shares at the Issue Price on the terms and conditions outlined in the Circular and, where relevant, in the Application Form
"Open Offer Entitlements"
entitlements for Qualifying Shareholders to subscribe for Open Offer Shares pursuant to the Basic Entitlement and the Excess Entitlement
"Open Offer Restricted Jurisdiction"
any jurisdiction other than the United Kingdom
"Open Offer Shares"
the New Ordinary Shares to be issued pursuant to the Open Offer
"Ordinary Shares"
the ordinary shares of 5 pence each in the share capital of the Company
"Overseas Shareholders"
Shareholders with registered addresses, or who are citizens or residents of, or incorporated in Restricted Jurisdictions
"Panmure Gordon"
Panmure Gordon (UK) Limited, the Company's Nominated Advisor and Joint Broker
"Placees"
any person who has agreed to subscribe for Placing Shares
"Placing"
the proposed placing by the Company of the Placing Shares at the Issue Price
"Placing and Open Offer Agreement"
the conditional agreement dated 10 June 2020 between the Company, Panmure Gordon and N+1 Singer in connection with the Fundraising, further details of which are set out in the Circular
"Placing Restricted Jurisdiction"
the United States, Australia, Canada, Japan, the Republic of Ireland, the Republic of South Africa and any other jurisdiction where the extension or availability of the Placing would breach any applicable law
"Placing Shares"
the New Ordinary Shares to be conditionally subscribed for in accordance with the terms of the Placing and Open Offer Agreement
"Prospectus Regulation"
Regulation (EU) 2017/1129 on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market
"Prospectus Regulation Rules"
the rules and regulations made by the FCA under Part VI of the Financial Services and Markets Act 2000 (as amended from time to time)
"Qualifying CREST Shareholders"
Qualifying Shareholders holding Existing Ordinary Shares which, on the register of members of the Company on the Record Date, are in uncertificated form in CREST
"Qualifying non-CREST Shareholders"
Qualifying Shareholders holding Existing Ordinary Shares which, on the register of members of the Company on the Record Date, are in certificated form
"Qualifying Shareholders"
holders of Existing Ordinary Shares other than Shareholders with registered addresses, or who are citizens or residents of, or incorporated in an Open Offer Restricted Jurisdiction, whose names appear on the register of members of the Company on the Record Date as holders of Existing Ordinary Shares and who are eligible to be offered Open Offer Shares under the Open Offer in accordance with the terms and conditions set out in the Circular
"Receiving Agent"
Link Asset Services
"Registrar"
Link Asset Services
"Regulation S"
Regulation S under the Securities Act
"Regulations"
the Uncertificated Securities Regulations 2001 (SI 2001 No. 3755)
"Resolutions"
the resolutions to be proposed at the General Meeting and set out in the Notice of General Meeting
"Securities Act"
the United States Securities Act of 1933, as amended
"Shareholder"
a holder of Ordinary Shares
"Subscribers"
certain Directors and senior management of the Company and certain other existing Shareholders
"Subscription"
the conditional subscription by the Subscribers for the Subscription Shares to raise £0.66 million in aggregate
"Subscription Shares"
the New Ordinary Shares subscribed for at the Issue Price pursuant to the Subscription
"UK" or "United Kingdom"
the United Kingdom of Great Britain and Northern Ireland
"uncertificated or in uncertificated form"
a share or other security recorded on the relevant register of the share or security concerned as being held in uncertificated form in CREST and title to which, by virtue of the CREST Regulations, may be transferred by means of CREST
"US or United States"
the United States of America, its territories and possessions, any state of the United States and the District of Columbia
A reference to £ is to pounds sterling, being the lawful currency of the UK.
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