REG - Solid State PLC - Acquisition, Placing to raise c.£25m & Open Offer
12/07/2022 16:45
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RNS Number : 2283S Solid State PLC 12 July 2022
THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED BY THE COMPANY TO
CONSTITUTE INSIDE INFORMATION AS STIPULATED UNDER ARTICLE 7 OF THE EU
REGULATION 596/2014 AS IT FORMS PART OF THE UK LAW BY VIRTUE OF THE EUROPEAN
UNION (WITHDRAWAL) ACT 2018 ("MAR"). UPON THE PUBLICATION OF THIS ANNOUNCEMENT
VIA A REGULATORY INFORMATION SERVICE, THIS INFORMATION IS CONSIDERED TO BE IN
THE PUBLIC DOMAIN.
THIS ANNOUNCEMENT, INCLUDING THE APPENDICES TO THIS ANNOUNCEMENT, AND THE
INFORMATION CONTAINED IN IT, IS RESTRICTED AND IS NOT FOR PUBLICATION, RELEASE
OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE
UNITED STATES, CANADA, AUSTRALIA, REPUBLIC OF IRELAND, JAPAN OR THE REPUBLIC
OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH IT WOULD BE UNLAWFUL TO DO
SO.
THIS ANNOUNCEMENT, INCLUDING THE APPENDICES TO THIS ANNOUNCEMENT, IS FOR
INFORMATION PURPOSES ONLY AND DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR
SUBSCRIPTION OF ANY SECURITIES IN THE COMPANY. THIS ANNOUNCEMENT AND THE
APPENDICES DO NOT CONSTITUTE OR CONTAIN ANY INVITATION, SOLICITATION,
RECOMMENDATION, OFFER OR ADVICE TO ANY PERSON TO SUBSCRIBE FOR, OTHERWISE
ACQUIRE OR DISPOSE OF ANY SECURITIES OF SOLID STATE PLC IN ANY JURISDICTION IN
WHICH ANY SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL.
THIS ANNOUNCEMENT SHOULD BE READ IN ITS ENTIRETY. IN PARTICULAR, YOU SHOULD
READ AND UNDERSTAND THE INFORMATION PROVIDED IN THE APPENDICES INCLUDING
APPENDIX III WHICH CONTAINS THE TERMS AND CONDITIONS OF THE PLACING. THE
DEFINITIONS USED IN THIS ANNOUNCEMENT ARE SET OUT IN APPENDIX II OF THIS
ANNOUNCEMENT.
12 July 2022
Solid State plc
Proposed Acquisition
Proposed Placing to raise approximately £25 million
Open Offer to raise up to approximately £2 million
Solid State plc (AIM:SOLI), the specialist value added component supplier and
design-in manufacturer of computing, power and communications products,
announces that it has entered into a conditional agreement to acquire Custom
Power LLC. Custom Power is a battery systems manufacturer and energy solutions
provider based near Los Angeles in the United States of America.
Pursuant to the terms of the Acquisition, the Company has agreed to acquire
the entire equity interest in Custom Power for a maximum consideration of
$45.0 million (c.£36.0 million) on a debt free, cash free and normalised
working capital basis. Initial cash consideration of $30.0 million (c.£24.0
million) less a non-refundable deposit of $1 million (c.£0.8 million) which
has already been paid, is payable in cash on Completion. Deferred
consideration of $10.0 million (c.£8.0 million) is payable in two equal
tranches at six and 12 months post Completion. Further earn-out consideration
of up $5 million (c.£4 million) subject to a revenue performance target, is
payable in cash. Further details of the terms of the Acquisition are set out
in the paragraph headed "Terms of the Acquisition" in the Additional
Information section of this Announcement.
In addition to part finance the Acquisition, the Company announces a proposed
equity fundraise of approximately £27.15 million, before expenses, comprising
a Placing to raise approximately £25 million, an Open Offer to raise up to
approximately £2 million and a Directors' Subscription to raise approximately
£0.15 million (to be undertaken, when permitted, in compliance with MAR).
Pursuant to the Fundraising, the Company will issue up to 2,647,669 new
ordinary shares of 5 pence each comprising an estimated 2,439,025 Placing
Shares, up to 194,498 Open Offer Shares and up to 14,146 Directors'
Subscription Shares in each case at a price of 1,025 pence per New Ordinary
Share. The Acquisition is conditional, inter alia, on the Placing being
completed.
The Company's existing share authorities which permit it to allot shares on a
non-pre-emptive basis are insufficient to extend to the New Ordinary Shares.
As a result, the conditions to the Placing, Open Offer and Directors
Subscription include the approval by the Company's Shareholders at the General
Meeting of the Resolution, granting authority to the Directors to allot the
New Ordinary Shares on a non-pre-emptive basis.
The Issue Price represents a discount of approximately 10.5 per cent. to the
closing mid-market price of 1,145 pence per Existing Ordinary Share on 11 July
2022, being the latest practicable date prior to the publication of this
Announcement. The Issue Price has been set by the Directors after consultation
with the Joint Bookrunners, following their assessment of market conditions
and discussions with a number of institutional investors.
WH Ireland Limited and finnCap Limited are acting as Joint Bookrunners in
connection with the Placing. The Placing is to be conducted by way of an
accelerated bookbuild process which will commence immediately following this
Announcement and will be subject to the terms and conditions set out in
Appendix III to this Announcement and will close on 13 July 2022.
About Custom Power
Acquisition highlights
· For its financial year ended 31 December 2021, Custom Power
generated revenues of approximately $29.8 million (c.£23.8 million) and an
underlying EBITDA of $3.5million (£2.8 million). The Directors consider that
the underlying profits, adjusted for US GAAP and non-recurring items would
have been pre-tax of $3.1 million (c.£2.5 million) and on a post-tax basis
$2.5 million (c.£2.0 million). Custom Power reported an EBITDA margin of 11.7
per cent. and profit after tax margin of 6.3 per cent, (pro forma 8.5 per
cent.). As at 31 December 2021, Custom Power had net assets of $8.9million
(c.£7.1 million). The Directors consider the underlying net assets being
acquired amount to $6.8 million (c.£5.5 million) having been adjusted for
intangibles and net debt.
· The Directors believe the Acquisition will be earnings enhancing
in its first full year, being the Company's year ending 31 March 2024.
· The Directors consider that Custom Power has made a satisfactory
start to its financial year and its orderbook as at 31 May 2022 stood at $18.7
million (c.£15.0 million).
· The Directors consider that the Acquisition will add scale to the
Group's power capabilities particularly in the defence, medical and industrial
markets which have high barriers to entry.
· The Directors believe that the Acquisition will bring benefits
that are highly complementary to the Group and in-line with the key tenets of
the Group's strategy being to:
o internationalise the Group: the Acquisition provides Solid State with
additional US manufacturing capability and a contract manufacturing
relationship in Mexico and sales channels for own brand power products and
systems to service new international Tier 1 customers;
o develop the Group's "own brand" product portfolio: the Acquisition
provides Solid State with a portfolio of "own-brand" semi-standard battery
products adopted in the security and defence, medical and industrial markets;
o broaden complementary product/ technology portfolio: Custom Power has
significant engineering expertise and strong tooling and test capabilities.
The Acquisition broadens the Group's product portfolio with a tailorable suite
of technologies and provides Solid State the opportunity to cross sell its
enhanced offering to its enlarged customer base; and
o invest in and develop its talent: the Acquisition will strengthen
engineering team adding electronic engineering and battery management systems
software capabilities and experience to the Group.
The Fundraising
Fundraising highlights
· Fundraising by way of the Placing, Open Offer and Directors
Subscription to raise in aggregate approximately £27.15 million (before
expenses, assuming full subscription under the Open Offer and the issue of the
maximum number of Directors' Subscription Shares).
· The Placing with institutional investors to raise in aggregate
approximately £25 million (before expenses) through the issue of an aggregate
of up to 2,439,025 Placing Shares at the Issue Price.
· The Open Offer to Shareholders is intended to raise up to
approximately £2 million (assuming full subscription under the Open Offer and
before expenses) through the issue of an aggregate of up to 194,498 Open Offer
Shares at the Issue Price.
· The Directors intend to subscribe for up to 14,146 Directors'
Subscription Shares as soon as they are able to do so, following the release
of the Company's results for year ended 31 March 2022 (when they are not in a
MAR Closed period).
· The Issue Price represents a discount of approximately 10.5 per
cent. to the closing mid-market price of 1,145 pence per Existing Ordinary
Share on 11 July 2022, being the latest practicable date prior to the
publication of this Announcement.
· The net proceeds of the Placing together with a new £13 million
term loan with Lloyds Bank will be used to fund, inter alia, the Initial
Consideration.
· The net proceeds of the Open Offer and the Directors'
Subscription will be used to supplement the Company's existing cash resources.
· The New Ordinary Shares, assuming full take-up under the Placing,
the Open Offer and the Directors' Subscription, will represent approximately
23.6 per cent. of the Enlarged Issued Share Capital.
The Fundraising comprises the Placing, Open Offer and the Directors'
Subscription. The Placing, Open Offer and Directors' Subscription are each
conditional on, among other matters, the passing of the Resolution to be
proposed at the General Meeting, granting authority to the Directors to allot
the New Ordinary Shares on a non-pre-emptive basis, and on Admission.
The timing of the closing of the Bookbuild and the allocation of Placing
Shares to be issued at the Issue Price are to be determined at the discretion
of the Joint Bookrunners.
A further announcement will be made following the close of the Bookbuild,
confirming final details of the Placing.
The Fundraising is not being underwritten.
The expected timetable of principal events is set out in Appendix I of this
Announcement.
A circular containing details of the Acquisition, the Fundraising and a notice
of General Meeting, together with a proxy form and (for Qualifying Non-CREST
Shareholders) an Open Offer Application Form will be despatched to
Shareholders following the announcement of the result of the Placing and will
be available after that time on the Company's website at www.solidstateplc.com
(http://www.solidstateplc.com) .
The expected timetable of principal events is set out in Appendix I to this
Announcement. The Placing is subject to the terms and conditions set out in
Appendix III to this Announcement. Capitalised terms have the meaning set out
in Appendix II to this Announcement.
The basis of translation of dollars into pounds sterling for the purposes of
inclusion in this Announcement is $1.25/£1.00.
For further information please contact:
Solid State plc 01527 830 630
Gary Marsh - Chief Executive investor.information@solidstateplc.com
(mailto:investor.information@solidstateplc.com)
Peter James - Group Finance Director
WH Ireland (Nominated Adviser & Joint Broker) 0202 220 1666
Mike Coe / Sarah Mather (Corporate Finance)
Fraser Marshall (Corporate Broking/ Sales)
finnCap (Joint Broker) 020 7220 0500
Ed Frisby / Kate Bannatyne (Corporate Finance)
Rhys Williams / Tim Redfern (Sales / ECM)
Walbrook PR (Financial PR) 020 7933 8780
Tom Cooper / Paul Vann 0797 122 1972
tom.cooper@walbrookpr.com (mailto:tom.cooper@walbrookpr.com)
Analyst Research Reports: For further analyst information and research see
the Solid State plc website: https://solidstateplc.com/research/
(https://urldefense.proofpoint.com/v2/url?u=https-3A__solidstateplc.com_research_&d=DwMFAg&c=euGZstcaTDllvimEN8b7jXrwqOf-v5A_CdpgnVfiiMM&r=05PHl3GHdShYuaCii2fBRpoqaNr9B1d97X09daeosu0&m=JmX-gQVke87P3UDBxQzNglNm9FfzH5yZtIa_SmElSS4&s=ib8r3ul2tCaEvJ39SnR1LT7nCa7gAcRQzgO-kNoyZoM&e=)
Notes to Editors:
Solid State plc (SOLI) is a value added electronics group supplying
commercial, industrial and military markets with durable components,
assemblies and manufactured units for use in specialist and harsh
environments. The Group's mantra is - 'Trusted technology for demanding
applications'. To see an introductory video on the Group
- https://bit.ly/3kzddx7 (https://bit.ly/3kzddx7)
Operating through two main divisions: Systems (Steatite & Active Silicon)
and Components (Solid State Supplies, Pacer, Willow Technologies & AEC);
the Group specialises in complex engineering challenges often requiring
design-in support and component sourcing for computing, power, communications,
electronic, electro-mechanical and opto-electronic products.
Headquartered in Redditch, UK, Solid State employs approximately 300 staff
across UK and US, serving specialist markets in industrial, defence and
security, transportation, medical and energy.
Solid State was established in 1971 and admitted to AIM in June 1996. The
Group has grown organically and by acquisition - having made 12 acquisitions
since 2002.
Additional Information
Background and reasons for, the Acquisition and Fundraising
Solid State has a clear and established strategy to grow organically and
through expanding its range of specialist applications and international reach
through the acquisition of high-quality businesses across both its Components
and Systems Divisions. The Board believes that the acquisition of Custom
Power, a profitable and cash generative business, represents a further step in
building the Systems Division and in particular its power capabilities, and
has a clear fit with the Group's strategy.
The Board believes that the Acquisition will bring benefits that are highly
complementary to the Group and in-line with the key tenets of the Group's
strategy being to:
· internationalise the Group: the Acquisition provides Solid State
with additional US manufacturing capability and a contract manufacturing
relationship in Mexico and sales channels for own brand power products and
systems to service new international Tier 1 customers;
· develop the Group's "own brand" product portfolio: the
Acquisition provides Solid State with a portfolio of "own-brand" semi-standard
battery products adopted in the security and defence, medical and industrial
markets;
· broaden complementary product/ technology portfolio: Custom Power
has significant engineering expertise and strong tooling and test
capabilities. The Acquisition broadens the Group's product portfolio with a
tailorable suite of technologies and provides Solid State with the opportunity
to cross sell its enhanced offering to its enlarged customer base; and
· invest in and develop its talent: the Acquisition will strengthen
the engineering team adding electronic engineering and battery management
systems software capabilities and experience to the Group.
Custom Power's markets are technology led and priorities for government backed
funding and its products and solutions are niche engineered high
reliability/performance applications where size weight and power matter. The
Director's believe Custom Power will provide a step change in the scale and
reach of the Group's power capabilities particularly in the defence, medical
and industrial markets which have high barriers to entry.
Both Solid State and Custom Power focus on battery pack manufacturing which
comprises the battery management systems, module design and pack materials and
pack assembly. This is the final stage of the battery pack supply chain and UK
Research and Innovation: Faraday Battery Challenge estimate it represents
approximately 26 per cent. of its value. Following the Acquisition, the Group
will have a substantial power business unit which the Directors believe will
account for circa 30 per cent. of the Enlarged Group's revenue.
The Directors believe Custom Power is a highly complementary business and will
be a good cultural fit with the existing Group. It has an experienced
leadership team with strong engineering expertise, consistent business values
and principles, an aligned commercial approach and comparable operational
procedures. The Directors believe that these factors will help reduce
integration risk.
In order to obtain the Earn-out Consideration Custom Power will need to
generate revenue of $37.5 million (c.£30.0 million) on a last 12 month basis
within 18 months of Completion. The last 12 month revenue hurdle will be
assessed at six monthly intervals with the final assessment taking place 18
months post Completion. The Directors expect this revenue hurdle to be
achieved and that the Earn-out Consideration will be paid. On the basis that
this $37.5 million (c.£30.0 million) of revenue is achieved and if the 2021
pro forma net margin is maintained, the profit after tax of Custom Power would
be approximately $3.2 million (c.£2.6 million) for the 12 months prior to the
achievement of the Earn-out Consideration.
The Board believes the Acquisition will be earnings enhancing in its first
full year, being the Company's year ending 31 March 2024.
The Board has concluded that it is appropriate to fund the Initial
Consideration of the Acquisition through a combination of new debt and equity.
In addition, they consider that issuing the New Ordinary Shares at a discount
is fair and reasonable so far as Shareholders are concerned.
The net proceeds of the Placing are expected to be approximately £23.8
million. These net proceeds together with new term loan facilities totalling
£13 million, will be used to fund, inter alia, the Initial Consideration. The
net proceeds of the Open Offer (assuming full subscription under the Open
Offer) will be approximately £2 million. The net proceeds of the Directors'
Subscription (assuming the issue of the maximum number of Directors'
Subscription Shares) will be approximately £0.15 million. The net proceeds of
the Open Offer and the Directors' Subscription will be used to supplement the
Company's existing cash resources.
Information on Custom Power
Custom Power is a manufacturer of highly customised as well as off-the-shelf
energy solutions for portable and stationary products used in medical,
defence, aerospace and industrial markets. It has a single facility of 36,000
sq. ft. which is not fully utilised and has capacity for growth, near Los
Angeles in California, USA. It has approximately 100 employees (made up of 80
full time employees and 20 temporary staff members) and an experienced, stable
senior management team. Custom Power is controlled by HOB Power Holdings LLC,
a company established by private equity group Elan Growth Partners LLC.
Custom Power was established over 30 years ago and is an experienced battery
assembly/battery pack manufacturer and distributor in the United States with
an established sales and distribution network. Custom Power provides battery
pack assemblies in various chemistries and it has commercialised products and
solutions with high reliability and performance in applications where size,
weight and power matter such as in medical devices and military equipment
emergency lighting systems as well as in industrial applications.
For its financial year ended 31 December 2021, Custom Power generated revenues
of approximately $29.8 million (c.£23.8 million) and an underlying EBITDA of
$3.5 million (c.£2.8 million). The Directors consider that the underlying
profits, adjusted for US GAAP and non-recurring items for FY21 would have been
a pre-tax of $3.1million (c.£2.5 million) and on a post-tax basis $2.5
million (c.£2.0 million). In FY21 Custom Power reported an EBITDA margin of
11.7 per cent. and profit after tax margin of 6.3 per cent (pro forma 8.5 per
cent.). As at 31 December 2021 Custom Power had net assets of $8.9million
(c.£7.1 million). The Directors consider the underlying net assets being
acquired amount to $6.8 million (c.£5.4million) having been adjusted for
intangibles and net debt.
The Directors consider that Custom Power has made a satisfactory start to its
financial year and its orderbook as at 31 May 2022 stood at $18.7 million
(c.£15.0 million).
Terms of the Acquisition
Custom Power will be acquired on a cash free debt free basis with normalised
working capital where the Purchaser will acquire all of the equity interests
of Custom Power for a maximum consideration of $45.0 million (c.£36.0
million) payable in cash. The Consideration comprises an initial consideration
of $30.0 million (c.£24.0 million), subject to a closing working capital
adjustment, a deferred consideration of $10.0 million (c.£8.0 million)
payable in two equal tranches at six and 12 months and an earn-out
consideration of up to $5 million (c.£4.0 million).
The Initial Consideration, less a non-refundable deposit of $1.0 million (c.£
0.8 million) that has already been paid, is payable in cash on Completion.
This $1.0 million (c.£0.8 million) deposit will be held in escrow pending the
agreement of a working capital adjustment. This adjustment will either lead
to:
(i) an increase in the Consideration by the amount, if any, by
which the Closing Working Capital is greater than the Target Closing Working
Capital, or
(ii) a decrease in the Consideration by the amount, if any, by
which the Closing Working Capital is less than the Target Closing Working
Capital;
where Target Closing Working Capital is based on normalised working capital to
operate the business under normal operating conditions and Closing Working
Capital is the actual working capital of Custard Power as at Completion.
The Deferred Consideration is payable in cash in two tranches of $5.0 million
(c.£4.0 million). The first tranche is payable six months after Completion
and the second tranche 12 months after Completion.
The Earn-out Consideration is payable in cash to the extent Custom Power meets
or exceeds the revenue target of $37.5 million (c.£30.0million) on a last 12
month basis with three assessments being made in respect of the 12 month
periods ending six,12 and 18 months after Completion.
During the earn-out period, Solid State has agreed to operate the business of
Custom Power on a reasonable basis taking into consideration Custom Power's
past practices and has agreed not to take any actions that would prejudice the
attainment of the revenue target, the achievement of which triggers the
payment of the Earn-out Consideration.
Trading update
The Company expects to release its results for the year ended 31 March 2022 on
or around 26 July 2022. The results are expected to be consistent with those
indicated in the Company's trading update of 21 April 2022, being revenue of
£85 million (2021: £66.3 million) and adjusted profit before tax of no less
than £7.2 million (2021: £5.4 million). Due to the impact of non-recurring
acquisition costs and charges, reported profit after tax is expected to be
approximately £3.9 million.
The Group has had a strong start to the first quarter of the year ending 31
March 2023 with revenues and margins running ahead of the equivalent period
last year. Unaudited net debt at the end of May 2022 was £3.4 million.
The open orderbook has continued to build and at the end of May 2022 stood at
£89.7 million which, combined with the strong start to the year, gives the
Directors confidence in the Company's performance in the current financial
year.
Banking facilities
The Company has conditionally entered into new term loan facilities totalling
£13 million with Lloyds Bank to part finance the Initial Consideration. This
comprises £6.5 million repayable over five years and a £6.5 million of
interest only loan committed for three years. In addition, Lloyds Bank has
also committed to provide two $5.0 million (c.£4.0 million) standby letters
of credit providing security over the Deferred Consideration. These new
facilities will sit alongside the Group's existing bank facilities, including
but not limited to a £7.5 million revolving credit facility committed until
November 2023 and a £3.0 million multi-currency overdraft.
The Company's banking facilities are subject to standard financial covenants,
which have all been reset to be consistent across all the facilities.
Details of the Fundraising
The Company is raising approximately £25 million (before expenses) pursuant
to the Placing, up to approximately £2 million (before expenses) pursuant to
the Open Offer and up to £0.15 million (before expenses) pursuant to the
Directors' Subscription. The Issue Price of 1,025 pence per New Ordinary Share
represents a discount of 10.5 per cent. to the closing mid-market price of
1,145 pence on 11 July 2022, being the latest practicable date prior to
publication of this Announcement.
The Fundraising comprises the Placing, the Open Offer and the Directors'
Subscription. The Placing, the Open Offer and the Directors' Subscription are
each conditional, among other matters, on the passing of the Resolution to be
proposed at the General Meeting granting authority to the Directors to allot
the New Ordinary Shares on a non-pre-emptive basis, and on Admission.
The Directors are currently prohibited under MAR from participating in the
Placing, as they are in a closed period due to the forthcoming release of the
Company's results for year ended 31 March 2022 which are expected to be
released on or around 26 July 2022 and in any event before Admission. All of
the Directors have indicated their intention to subscribe for New Ordinary
Shares at the Issue Price, when they are able to do so. Their aggregate
subscription is expected to amount to £0.15 million, being 14,146 Directors'
Subscription Shares.
Pursuant to the Placing and Open Offer Agreement, the Joint Bookrunners, as
agents for the Company, have conditionally agreed severally to use reasonable
endeavours to procure subscribers at the Issue Price for the Placing Shares.
The Joint Bookrunners intend to conditionally place the Placing Shares with
certain institutional and other investors.
The Placing and Open Offer Agreement contains customary warranties from the
Company in favour of the Joint Bookrunners in relation to, inter alia, the
accuracy of the information in this Announcement and other matters relating to
the Company and its business. In addition, the Company has agreed to indemnify
the Joint Bookrunners in relation to certain liabilities that they may incur
in respect of the Placing and Open Offer.
The Joint Bookrunners (acting in good faith) have the right to terminate the
Placing and Open Offer Agreement in certain circumstances prior to Admission
in respect of the New Ordinary Shares, including (but not limited to): in the
event that there has, in the opinion of a Joint Bookrunner (acting in good
faith) been a breach, or an alleged breach, of any of the warranties in the
Placing and Open Offer Agreement or there has been in the opinion of a Joint
Bookrunner (acting in good faith) a significant change affecting the condition
(financial, operational, legal or otherwise), earnings, management, funding
position, solvency, business affairs or operations of the Group, whether or
not foreseeable as at the date of the Placing and Open Offer Agreement and
whether or not arising in the ordinary course of business. The Joint
Bookrunners may also terminate the Placing and Open Offer Agreement if there
has been a significant change in certain international financial markets, a
suspension or material limitation in trading on certain stock exchanges or a
material disruption in commercial banking or securities settlement or
clearance which a Joint Bookrunner considers (acting in good faith) makes it
impractical or inadvisable to proceed with the Placing or Admission.
The Fundraising is not being underwritten.
Details of the Open Offer
The Company considers it important that Qualifying Shareholders have an
opportunity (where it is practicable for them to do so) to participate at the
same price per Ordinary Share as investors in the Placing and, accordingly,
the Company is making the Open Offer to Qualifying Shareholders.
The Company is proposing, subject to the successful closing of the Bookbuild,
to raise up to approximately £2 million in the Open Offer (before expenses)
(assuming full take up of the Open Offer) through the issue of up to 194,498
Open Offer Shares at the Issue Price.
Subject to the terms and conditions to be set out in a circular to
shareholders (and, in the case of Qualifying Non-CREST Shareholders, in the
Application Form), Qualifying Shareholders (including Qualifying Shareholders
who are also participants in the Placing) are being given the opportunity
under the Open Offer to apply for Open Offer Shares at the Issue Price of
1,025 pence per Open Offer Share, pro rata to their holdings of Existing
Ordinary Shares as at the Record Date, payable in full on application. Any
Open Offer Shares not applied for by Qualifying Shareholders will be available
to other Qualifying Shareholders, provided they have taken up their Open Offer
Entitlement in full, under the Excess Application Facility.
Qualifying Shareholders may apply for their Open Offer Entitlement under the
Open Offer pro rata to their holdings of Existing Ordinary Shares as at the
Record Date at the Issue Price on the following basis:
1 Open Offer Share for every 44 Existing Ordinary Shares held
Entitlements of Qualifying Shareholders will be rounded down to the nearest
whole number of Open Offer Shares, with fractional entitlements being
aggregated and made available under the Excess Application Facility. The
Excess Application Facility will enable Qualifying Shareholders to apply for
further Open Offer Shares in excess of their Open Offer Entitlements as
described below. Not all Shareholders will be Qualifying Shareholders;
Shareholders who are located in, or are citizens of, or have a registered
office in, Restricted Jurisdictions will not qualify to participate in the
Open Offer.
Valid applications by Qualifying Shareholders will be satisfied in full up to
their Open Offer Entitlements. Applicants can apply for less or more than
their entitlements under the Open Offer but the Company cannot guarantee that
any application for Excess Shares under the Excess Application Facility will
be satisfied as this will depend, in part, on the extent to which other
Qualifying Shareholders apply for less than or more than their own Open Offer
Entitlements. Applications made under the Excess Application Facility may be
allocated in such manner as the Directors may determine in their absolute
discretion if applications are received from Qualifying Shareholders for more
than the available number of Open Offer Shares, and no assurance can be given
that excess applications by Qualifying Shareholders will be met in full, or in
part, or at all.
Qualifying Shareholders should be aware that the Open Offer is not a rights
issue. Qualifying Non-CREST Shareholders should also note that their
respective Application Forms are not negotiable documents and cannot be
traded. Open Offer Shares not applied for under the Open Offer will not be
sold in the market for the benefit of those who do not apply under the Open
Offer. Any Open Offer Shares which are not applied for by Qualifying
Shareholders under the Open Offer will not be issued by the Company as the
Open Offer is not underwritten.
The Open Offer is conditional upon the Placing becoming or being declared
unconditional in all respects and not being terminated before Admission. The
principal conditions to the Placing include (amongst other things) the Placing
and Open Offer Agreement not having been terminated, the passing of the
Resolution to be proposed at the General Meeting, granting authority to the
Directors to allot the New Ordinary Shares on a non-pre-emptive basis, the
MIPA having been entered into and becoming unconditional in all respects prior
to Admission, save for Admission, and Admission occurring on or before 8.00
a.m. on 2 August 2022 (or such later date and/or time as the Joint Bookrunners
and the Company may agree, being no later than 8.00 a.m. on 16 August 2022).
Accordingly, if the conditions to the Placing are not satisfied or waived
(where capable of waiver), the Open Offer will not proceed and the Open Offer
Shares will not be issued and all monies received by the Receiving Agent will
be returned to the applicants (at the applicant's risk and without interest)
as soon as possible, but within 14 days thereafter. Any Open Offer
Entitlements admitted to CREST will thereafter be disabled.
IMPORTANT NOTICES
This Announcement includes statements that are, or may be deemed to be,
"forward-looking statements". These forward-looking statements can be
identified by the use of forward-looking terminology, including the terms
"believes", "estimates", "forecasts", "plans", "prepares", "anticipates",
"projects", "expects", "intends", "may", "will", "seeks", "should" or, in each
case, their negative or other variations or comparable terminology, or by
discussions of strategy, plans, objectives, goals, future events or
intentions. These forward-looking statements include all matters that are not
historical facts. They appear in a number of places throughout this
Announcement and include statements regarding the Company's and the Directors'
intentions, beliefs or current expectations concerning, amongst other things,
the Company's prospects, growth and strategy. By their nature, forward-looking
statements involve risks and uncertainties because they relate to events and
depend on circumstances that may or may not occur in the future.
Forward-looking statements are not guarantees of future performance. The
Company's actual performance, achievements and financial condition may differ
materially from those expressed or implied by the forward-looking statements
in this Announcement. In addition, even if the Company's results of
operations, performance, achievements and financial condition are consistent
with the forward-looking statements in this Announcement, those results or
developments may not be indicative of results or developments in subsequent
periods. Any forward-looking statements that the Company makes in this
Announcement speak only as of the date of such statement and (other than in
accordance with their legal or regulatory obligations) neither the Company,
nor the Joint Bookrunners nor any of their respective associates, directors,
officers or advisers shall be obliged to update such statements. Comparisons
of results for current and any prior periods are not intended to express any
future trends or indications of future performance, unless expressed as such,
and should only be viewed as historical data.
WH Ireland, which is authorised and regulated in the United Kingdom by the
FCA, is acting as Nominated Adviser and Joint Bookrunner exclusively for the
Company and no one else in connection with the contents of this document and
will not regard any other person (whether or not a recipient of this document)
as its client in relation to the contents of this document nor will it be
responsible to anyone other than the Company for providing the protections
afforded to its clients or for providing advice in relation to the contents of
this document. Apart from the responsibilities and liabilities, if any, which
may be imposed on WH Ireland by FSMA or the regulatory regime established
thereunder, WH Ireland accepts no responsibility whatsoever, and makes no
representation or warranty, express or implied, for the contents of this
document including its accuracy, completeness or verification or for any other
statement made or purported to be made by it, or on behalf of it, the Company
or any other person, in connection with the Company and the contents of this
document, whether as to the past or the future. WH Ireland accordingly
disclaims all and any liability whatsoever, whether arising in tort, contract
or otherwise (save as referred to above), which it might otherwise have in
respect of the contents of this document or any such statement. The
responsibilities of WH Ireland as the Company's nominated adviser under the
AIM Rules for Companies and the AIM Rules for Nominated Advisers are owed
solely to London Stock Exchange and are not owed to the Company or to any
director or shareholder of the Company or any other person, in respect of its
decision to acquire shares in the capital of the Company in reliance on any
part of this document, or otherwise.
finnCap, which is authorised and regulated in the United Kingdom by the FCA,
is acting solely as Joint Bookrunner exclusively for the Company and no one
else in connection with the contents of this document and will not regard any
other person (whether or not a recipient of this document) as its client in
relation to the contents of this document nor will it be responsible to anyone
other than the Company for providing the protections afforded to its clients
or for providing advice in relation to the contents of this document. Apart
from the responsibilities and liabilities, if any, which may be imposed on
finnCap by FSMA or the regulatory regime established thereunder, finnCap
accepts no responsibility whatsoever, and makes no representation or warranty,
express or implied, for the contents of this document including its accuracy,
completeness or verification or for any other statement made or purported to
be made by it, or on behalf of it, the Company or any other person, in
connection with the Company and the contents of this document, whether as to
the past or the future. finnCap accordingly disclaims all and any liability
whatsoever, whether arising in tort, contract or otherwise (save as referred
to above), which it might otherwise have in respect of the contents of this
document or any such statement.
The New Ordinary Shares have not been and will not be registered under the
Securities Act or with any securities regulatory authority of any state or
other jurisdiction of the United States and may not be offered, sold, pledged,
taken up, exercised, resold, renounced, transferred or delivered, directly or
indirectly, in or into the United States absent registration under the
Securities Act, except pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act and in
compliance with any applicable securities laws of any state or other
jurisdiction of the United States. The New Ordinary Shares have not been
approved, disapproved or recommended by the U.S. Securities and Exchange
Commission, any state securities commission in the United States or any other
U.S. regulatory authority, nor have any of the foregoing authorities passed
upon or endorsed the merits of the offering of the New Ordinary Shares.
Subject to certain exceptions, the securities referred to herein may not be
offered or sold in the United States, Australia, Canada, Japan, the Republic
of South Africa or to, or for the account or benefit of, any national,
resident or citizen of the United States, Australia, Canada, Japan, the
Republic of South Africa.
No public offering of securities is being made in the United States.
The relevant clearances have not been, nor will they be, obtained from the
securities commission of any province or territory of Canada; no prospectus
has been lodged with, or registered by, the Australian Securities and
Investments Commission or the Japanese Ministry of Finance; the relevant
clearances have not been, and will not be, obtained for the South Africa
Reserve Bank or any other applicable body in the Republic of South Africa in
relation to the New Ordinary Shares; and the New Ordinary Shares have not
been, and nor will they be, registered under or offered in compliance with the
securities laws of any state, province or territory of Canada, Australia,
Japan or the Republic of South Africa. Accordingly, the New Ordinary Shares
may not (unless an exemption under the relevant securities laws is applicable)
be offered, sold, resold or delivered, directly or indirectly, in or into
Canada, Australia, Japan or the Republic of South Africa or any other
jurisdiction outside the United Kingdom or to, or for the account or benefit
of any national, resident or citizen of Australia, Japan or the Republic of
South Africa or to any investor located or resident in Canada.
No public offering of the New Ordinary Shares is being made in the United
States, United Kingdom or elsewhere. All offers of the New Ordinary Shares
will be made pursuant to an exemption under the UK version of Regulation (EU)
no 2017/1129 of the European Parliament and of the Council of 14 June 2017,
which is part of UK law by virtue of the European Union (Withdrawal) Act 2018,
as amended from time to time, and includes any relevant implementing measure
in any member state (the "UK Prospectus Regulation") from the requirement to
produce a prospectus. This Announcement is being distributed to persons in the
United Kingdom only in circumstances in which section 21(1) of the Financial
Services and Markets Act 2000, as amended does not apply.
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 UK Prospectus Regulation) to be published. This Announcement and the terms
and conditions set out herein are for information purposes only and are
directed only at persons who are: (a) persons in member states ("Member
States") of the European Economic Area ("EEA") who are qualified investors as
defined in section 86(7) of FSMA, as amended ("Qualified Investors"), being
persons falling within the meaning of article 2(e) of Prospectus Regulation
(EU) 2017/1129; and (b) in the United Kingdom, Qualified Investors who are
persons who (i) have professional experience in matters relating to
investments falling within the definition of "investment professionals" in
article 19(5) of the Financial Services and Markets Act 2000 (Financial
Promotion) Order 2005, as amended (the "Order"); (ii) are persons falling
within article 49(2)(a) to (d) ("high net worth companies, unincorporated
associations, etc") of the Order; or (iii) are persons to whom it may
otherwise be lawfully communicated; (all such persons together being referred
to as "relevant persons").
This Announcement and the terms and conditions set out herein must not be
acted on or relied on by persons who are not relevant persons. Persons
distributing this Announcement must satisfy themselves that it is lawful to do
so. Any investment or investment activity to which this Announcement and the
terms and conditions set out herein relates is available only to relevant
persons and will be engaged in only with relevant persons.
The information in this Announcement, which includes certain information drawn
from public sources, does not purport to be comprehensive and has not been
independently verified. This announcement contains statements that are, or may
be deemed forward-looking statements, which relate, inter alia, to the
Company's proposed strategy, plans and objectives. Such forward looking
statements involve known and unknown risks, uncertainties and other important
factors beyond the control of the Company (including but not limited to future
market conditions, legislative and regulatory changes, the actions of
governmental regulators and changes in the political, social or economic
framework in which the Company operates) that could cause the actual
performance or achievements of the Company to be materially different from
such forward-looking statements.
The content of this Announcement has not been approved by an authorised person
within the meaning of the FSMA. Reliance on this announcement for the purpose
of engaging in any investment activity may expose an individual to a
significant risk of losing all of the property or other assets invested. The
price of shares and any income expected from them may go down as well as up
and investors may not get back the full amount invested upon disposal of the
shares. Past performance is no guide to future performance, and persons
needing advice should consult an independent financial adviser.
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 the Joint Bookrunners or by any of its affiliates or agents as to, or in
relation to, the accuracy or completeness of this Announcement or any other
written or oral information made available to or publicly available to any
interested party or its advisers, and any liability therefore is expressly
disclaimed.
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.
The New Ordinary Shares to be issued pursuant to the Fundraising will not be
admitted to trading on any stock exchange other than AIM.
Neither the content of the Company's website nor any website accessible by
hyperlinks on the Company's website is incorporated in, or forms part of, this
Announcement.
APPENDIX I
Expected Timetable for the Fundraising
2022
Record Date for the Open Offer 6.00 p.m. on 12 July
Announcement of the results of the Placing 13 July
Existing Ordinary Shares marked 'ex-entitlement' by the London Stock Exchange 8:00 a.m. on 13 July
Date of Circular and posting of Circular, Application Forms and Forms of Proxy 13 July
Open Offer Entitlements and Excess CREST Open Offer Entitlements credited to 8.00 a.m. on 14 July
CREST stock accounts of Qualifying CREST Shareholders or as soon possible
thereafter
Recommended latest time and date for requesting withdrawal of Open Offer 4.30 p.m. on 22 July
Entitlements and Excess CREST Open Offer Entitlements from CREST
Latest time and date for depositing Open Offer Entitlements and Excess CREST 3.00 p.m. on 25 July
Open Offer Entitlements into CREST
Latest time and date for splitting Application Forms (to satisfy bona 3.00 p.m. on 26 July
fide market claims in relation to Open Offer Entitlements only)
Latest time and date for receipt of completed Forms of Proxy or electronic 11:00 a.m. on 27 July
proxy appointments for use at the General Meeting
Latest time and date for receipt of completed Application Forms and payment in 11:00 a.m. on 28 July
full under the Open Offer or settlement of the relevant CREST instructions (as
appropriate)
General Meeting 11:00 a.m. on 29 July
Expected date of announcement of the results of the General Meeting and Open 29 July
Offer
Admission effective and dealings in the New Ordinary Shares on AIM 8:00 a.m. on 2 August
New Ordinary Shares credited to CREST stock accounts 8:00 a.m. on 2 August
Despatch of definitive share certificates in respect of New Ordinary Shares to by 12 August
be issued in certificated form
Long Stop Date 8:00 a.m. on 16 August
Notes:
(i) References to times in this Announcement are to
London time (unless otherwise stated).
(ii) If any of the above times or dates should change, the
revised times and/or dates will be notified by an announcement to an RIS.
(iii) The timing of the events in the above timetable is
indicative only. In order to subscribe for Open Offer Shares under the Open
Offer, Qualifying Shareholders will need to follow the procedure set out in
the Circular.
APPENDIX II
Definitions
The following definitions apply throughout this Announcement unless the
context requires otherwise or unless it is otherwise specifically provided:
"Acquisition" the proposed acquisition of the entire equity interest in Custom Power
"Admission'' the admission of the New Ordinary Shares to trading on AIM becoming effective
in accordance with Rule 6 of the AIM Rules
"AIM'' the market of that name operated by the London Stock Exchange
"AIM Rules" the AIM Rules for Companies published by the London Stock Exchange from time
to time
"Announcement" this announcement
"Application Form" the personalised application form accompanying the Circular (where
appropriate) pursuant to which Qualifying Non-CREST Shareholders (other than
certain Overseas Shareholders) may apply to subscribe for Open Offer Shares
under the Open Offer
"Articles" the articles of association of the Company (as amended from time to time)
"Bookbuild" the accelerated bookbuilding to be conducted by the Joint Bookrunners pursuant
to the Placing and Open Offer Agreement and this Announcement
"Business Day" any day on which banks are usually open for business in England and Wales for
the transaction of sterling business, other than a Saturday, Sunday or public
holiday
"certificated" or "in certificated form" an Existing Ordinary Share or an Ordinary Share recorded on the Company's
share register as being held in certificated form (namely, not in CREST)
"Circular" the explanatory circular, in the agreed form, to be issued by the Company to
Shareholders explaining, inter alia, the Acquisition, Fundraising and
incorporating the notice of General Meeting
"Closing Working Capital" the actual working capital of Custom Power as at Completion
"Company" ,"Solid State" or "Purchaser" Solid State plc, a company incorporated in England and Wales under the
Companies Act 1985 with registered number 00771335
"Completion" completion of the Acquisition
"Consideration" the aggregate consideration payable pursuant to the MIPA, comprising the
Initial Consideration, the Deferred Consideration and the Earn-out
Consideration
"CREST" or "CREST system" the relevant system (as defined in the CREST Regulations) in respect of which
Euroclear is the operator (as defined in those regulations)
"CREST Regulations" the Uncertificated Securities Regulations 2001 (SI2001/3755)
"Custom Power" Custom Power LLC, a company incorporated in Delaware, United States
"Deferred Consideration" the deferred consideration of $10.0 million (c.£8.0 million) payable pursuant
to the MIPA in two equal tranches six and 12 months following Completion
"Directors" or "Board" the directors of the Company or any duly authorised committee thereof
"Directors' Subscription" the intention of the Directors to subscribe for the Directors' Subscription
Shares at the Issue Price
"Directors' Subscription Shares" up to 14,146 new Ordinary Shares for which the Directors have indicated they
intend to subscribe for when they are permitted to do so
"Earn-out Consideration" the earn-out consideration of up to $5.0 million (c.£4.0 million) payable
pursuant to the MIPA
"Enlarged Group" the Group as enlarged by the Acquisition following Completion
"Enlarged Issued Share Capital" the issued ordinary share capital of the Company immediately following
Admission (assuming full subscription under the Open Offer, the issue of the
maximum number of Directors' Subscription Shares and excluding shares held in
treasury)
"EU" the European Union
"Euroclear" Euroclear UK & International Limited, the operator of CREST
"Excess Application Facility" the facility for Qualifying Shareholders to apply for Excess Shares in excess
of their Basic Entitlements subject to the terms and conditions of the Open
Offer
"Excess CREST Open Offer Entitlement" in respect of each Qualifying Shareholder, the entitlement (in addition to
his, her or its Open Offer Entitlement) to apply for Open Offer Shares
pursuant to the Excess Application Facility, which is conditional on him, her
or it taking up his, her or its Open Offer Entitlement in full and which may
be scaled back in accordance with the provisions of the Circular
"Excess Shares" Open Offer Shares applied for by Qualifying Shareholders under the Excess
Application Facility
"Existing Ordinary Shares" the 8,557,932 Ordinary Shares (excluding 6,946 Ordinary Shares held in
treasury) in issue as at the date of this this Announcement
"FCA" the Financial Conduct Authority
"finnCap" finnCap Limited, joint bookrunner to the Company in respect of the Placing
"FSMA" the Financial Services and Markets Act 2000
"Form of Proxy" the form of proxy for use by Shareholders in connection with the General
Meeting and which will accompany the Circular
"Fundraise" or "Fundraising" the proposed Placing, Open Offer and Directors' Subscription
"General Meeting" the general meeting of the Company convened for 11 a.m. on 29 July 2022 (or
any adjournment thereof) notice of which will be set out at the end of the
Circular
"Group" Solid State plc and its subsidiary undertakings
"Initial Consideration" the initial cash consideration of $30.0 million (c.£24.0 million) payable
pursuant to the MIPA
"ISIN" International Securities Identification Number
"Issue Price" 1,025 pence per New Ordinary Share
"Joint Bookrunners" WH Ireland and finnCap
"Lloyds Bank" Lloyds Bank plc
"London Stock Exchange" London Stock Exchange plc
"Long Stop Date" 16 August 2022
"MAR" or "Market Abuse Regulation" the Market Abuse Regulation (2014/596/EU) (incorporating the technical
standards, delegated regulations and guidance notes, published by the European
Commission, London Stock Exchange, the FCA and the European Securities and
Markets Authority) as it applies in the UK by virtue of the European Union
(Withdrawal) Act 2018, as amended from time to time
"MIPA" the membership interest agreement governing the terms of the Acquisition to be
entered into between Solid State and the Seller
"Money Laundering Regulations" the Money Laundering, Terrorist Financing and Transfer of Funds (Information
on the Payer) Regulations 2017 (as amended), the money laundering provisions
of the Criminal Justice Act 1993, the Proceeds of Crime Act 2002 and the
Criminal Finances Act 2017
"New Ordinary Shares" the Placing Shares, the Open Offer Shares and the Directors' Subscription
Shares
"Open Offer" the conditional invitation to be made by the Company to Qualifying
Shareholders to subscribe for the Open Offer Shares at the Issue Price on the
terms and subject to the conditions to be set out in the Circular and, in
the case of Qualifying Non-CREST Shareholders, in the Application Form that
will accompany the Circular
"Open Offer Entitlement" the pro rata basic entitlement of a Qualifying Shareholder, pursuant to the
Open Offer, to apply to subscribe for 1 Open Offer Share for every 44 Existing
Ordinary Shares registered in its name as at the Record Date
"Open Offer Shares" up to 194,498 new Ordinary Shares to be issued and allotted by the Company to
Qualifying Shareholders pursuant to the Open Offer
"Ordinary Shares" ordinary shares of 5 pence each in the capital of the Company
"Overseas Shareholders" holders of Existing Ordinary Shares who are neither resident in, nor have a
registered address in, the UK
"Placee" any person subscribing for and/or purchasing New Ordinary Shares pursuant to
the Placing
"Placing Shares" the new Ordinary Shares to be issued pursuant to the Placing, the number of
which will be announced by the Company on completion of the Bookbuild
"Placing" the conditional placing of Placing Shares by the Joint Bookrunners on behalf
of the Company at the Issue Price pursuant to the Placing and Open Offer
Agreement
"Placing and Open Offer Agreement" the agreement dated 12 July 2022 between the Company and the Joint Bookrunners
relating to the Placing and the Open Offer
"Prospectus Regulation" Regulation (EU) 2017/1129 of the European Parliament and Council of 14 June
2017
"Publicly Available Information" any information announced through a Regulatory Information Service by or on
behalf of the Company on or prior to the date of this Announcement
"Qualifying CREST Shareholders" Qualifying Shareholders whose Existing Ordinary Shares on the register of
members of the Company on the Record Date are held in uncertificated form
"Qualifying Non-CREST Shareholders" Qualifying Shareholders whose Existing Ordinary Shares on the register of
members of the Company on the Record Date are held in certificated form
"Qualifying Shareholders" Shareholders on the register of members of the Company on the Record Date with
the exclusion (subject to exemptions) of persons with a registered address or
located or resident in a Restricted Jurisdiction
"Receiving Agent" or "Registrar" Neville Registrars Limited, a limited company registered in England and Wales
(No. 04770411) with its registered office at Neville House, Steelpark Road,
Halesowen, West Midlands, United Kingdom, B62 8HD
"Record Date" the record date in relation to the Open Offer, being 6:00 p.m. on 12 July 2022
"Regulatory Information Service" one of the regulatory information services authorised by the FCA acting in its
capacity as the UK listing authority to receive, process and disseminate
regulatory information
"Resolution" the resolution proposed at the General Meeting to grant authority to the
Directors to allot the New Ordinary Shares and to disapply statutory
pre-emption rights in relation to the Fundraising
"Restricted Jurisdiction" any jurisdiction where local laws or regulations may result in a significant
risk of civil, regulatory or criminal exposure for the Company if information
or documentation concerning the proposals set out in this Announcement are
sent or made available to Shareholders in that jurisdiction including, without
limitation, the United States of America, Canada, Australia, Republic of
Ireland, Japan and the Republic of South Africa
"Securities Act" the United States Securities Act of 1933, as amended
"Seller" HOB Power Holdings LLC, a company established by private equity group Elan
Growth Partners LLC
"Shareholders" the holders of Ordinary Shares (as the context requires) at the relevant time
"SONIA" sterling overnight index average
"Target Closing Working Capital" the estimated working capital of Custom Powder based on the normalised working
capital of Custom Power to operate the business under normal operating
conditions as at Completion
"uncertificated" or "in uncertificated form" recorded on the relevant register of Ordinary Shares as being held in
uncertificated form in CREST and title to which, by virtue of the CREST
Regulations, may be transferred by means of CREST
"United Kingdom" or ''UK" the United Kingdom of Great Britain and Northern Ireland
"United States" or "US" or "USA" the United States of America, its territories and possessions, any state of
the United States of America and the District of Columbia and any other area
subject to its jurisdiction
"US Person" has the meaning set out in Regulation S of the Securities Act
"WH Ireland" WH Ireland Limited, nominated adviser to the Company and joint bookrunner to
the Company in respect of the Placing
"£", "pounds sterling", "pence" or "p" are references to the lawful currency of the United Kingdom
"$" or "dollars" are references to the lawful currency of the United States
APPENDIX III
Terms and conditions of the Placing
THIS ANNOUNCEMENT, INCLUDING THE APPENDICES, (TOGETHER, THE "ANNOUNCEMENT")
AND THE INFORMATION IN IT IS RESTRICTED AND IS NOT FOR PUBLICATION, RELEASE OR
DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE
UNITED STATES OF AMERICA, CANADA, AUSTRALIA, THE REPUBLIC OF IRELAND, JAPAN,
THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH SUCH
PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.
MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THIS
APPENDIX AND THE TERMS AND CONDITIONS SET OUT HEREIN ARE FOR INFORMATION
PURPOSES ONLY AND ARE DIRECTED ONLY AT: (A) PERSONS WHO ARE IN A MEMBER STATE
AND ARE, UNLESS OTHERWISE AGREED BY THE JOINT BOOKRUNNERS, "QUALIFIED
INVESTORS" AS DEFINED IN ARTICLE 2(E) OF THE PROSPECTUS REGULATION; AND (B)
PERSONS IN THE UNITED KINGDOM WHO ARE QUALIFIED INVESTORS WITHIN THE MEANING
OF THE UK PROSPECTUS REGULATIONS WHO ARE ALSO: (I) "INVESTMENT PROFESSIONALS"
WITHIN THE MEANING OF ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT
2000 (FINANCIAL PROMOTION) ORDER 2005 (THE "ORDER"); (II) PERSONS FALLING
WITHIN ARTICLE 49(2)(A) TO (D) ("HIGH NET WORTH COMPANIES, UNINCORPORATED
ASSOCIATIONS, ETC") OF THE ORDER; OR (III) PERSONS TO WHOM IT MAY OTHERWISE BE
LAWFULLY COMMUNICATED (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS
"RELEVANT PERSONS"). THIS APPENDIX AND THE TERMS AND CONDITIONS SET OUT HEREIN
MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. ANY
INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS APPENDIX AND THE TERMS AND
CONDITIONS SET OUT HEREIN RELATE IS AVAILABLE ONLY TO RELEVANT PERSONS AND
WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS.
THIS ANNOUNCEMENT 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 JURISDICTION. THIS ANNOUNCEMENT DOES NOT ITSELF
CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN THE COMPANY.
THIS ANNOUNCEMENT IS NOT AN OFFER OF OR SOLICITATION TO PURCHASE OR SUBSCRIBE
FOR SECURITIES IN THE UNITED STATES. THE SECURITIES REFERRED TO HEREIN HAVE
NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT, AND MAY NOT BE
OFFERED OR SOLD IN THE UNITED STATES, EXCEPT PURSUANT TO AN APPLICABLE
EXEMPTION FROM, OR AS PART OF A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. NEITHER THE UNITED STATES SECURITIES AND
EXCHANGE COMMISSION NOR ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR
OTHER JURISDICTION OF THE UNITED STATES HAS APPROVED OR DISAPPROVED OF AN
INVESTMENT IN THE SECURITIES OR PASSED UPON OR ENDORSED THE MERITS OF THE
PLACING OR THE ACCURACY OR ADEQUACY OF THE CONTENTS OF THIS ANNOUNCEMENT. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENCE IN THE UNITED STATES. NO
PUBLIC OFFERING OF SECURITIES IS BEING MADE IN THE UNITED STATES.
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 SHARES
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 SHARES.
All offers of the Placing Shares will be made pursuant to an exemption under
the UK version of the Prospectus Regulation, which is part of UK law by virtue
of the European Union (Withdrawal) Act 2018, as amended from time to time, and
includes any relevant implementing measure in any member state (the "UK
Prospectus Regulation") from the requirement to produce a prospectus. This
Announcement is being distributed to persons in the United Kingdom only in
circumstances in which section 21(1) of FSMA does not apply.
The relevant clearances have not been, nor will they be, obtained from the
securities commission of any province or territory of Canada; no prospectus
has been lodged with or registered by the Australian Securities and
Investments Commission or the Japanese Ministry of Finance or the South
African Reserve Bank; and the Placing Shares have not been, nor will they be,
registered under or offered in compliance with the securities laws of any
state, province or territory of Australia, Canada, Japan or the Republic of
South Africa. Accordingly, the Placing Shares may not (unless an exemption
under the relevant securities laws is applicable) be offered, sold, resold or
delivered, directly or indirectly, in or into Australia, Canada, Japan, the
Republic of South Africa or any other jurisdiction in which such offer, sale,
resale or delivery would be unlawful.
Solely for the purposes of the product governance requirements contained
within: (a) EU Directive 2014/65/EU on markets in financial instruments, as
amended ("MiFID II"); (b) Articles 9 and 10 of Commission Delegated Directive
(EU) 2017/593 supplementing MiFID II; and (c) local implementing measures
(together, the "MiFID II Product Governance Requirements"), and disclaiming
all and any liability, whether arising in tort, contract or otherwise, which
any "manufacturer" (for the purposes of the 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: (a) retail investors, (b)
investors who meet the criteria of professional clients and (c) eligible
counterparties (each as defined in MiFID II); and (ii) eligible for
distribution through all distribution channels as are permitted by MiFID II
(the "Target Market Assessment"). Notwithstanding the Target Market
Assessment, distributors should note that: the price of the Placing Shares may
decline and investors could lose all or part of their investment; the Placing
Shares offer no guaranteed income and no capital protection; and an investment
in the Placing Shares is compatible only with investors who do not need a
guaranteed income or capital protection, who (either alone or in conjunction
with an appropriate financial or other adviser) are capable of evaluating the
merits and risks of such an investment and who have sufficient resources to be
able to bear any losses that may result therefrom. The Target Market
Assessment is without prejudice to the requirements of any contractual, legal
or regulatory selling restrictions in relation to the offer.
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.
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.
These terms and conditions apply to persons making an offer to acquire Placing
Shares. Each Placee hereby agrees with the Joint Bookrunners and the Company
to be bound by these terms and conditions as being the terms and conditions
upon which Placing Shares will be issued or acquired. A Placee shall, without
limitation, become so bound if the Joint Bookrunners confirms to such Placee
its allocation of Placing Shares.
Upon being notified of its allocation of Placing Shares, a Placee shall be
contractually committed to acquire the number of Placing Shares allocated to
it at the Issue Price and, to the fullest extent permitted by law, will be
deemed to have agreed not to exercise any rights to rescind or terminate or
otherwise withdraw from such commitment.
In this Appendix, unless the context otherwise requires, "Placee" means a
Relevant Person (including individuals, funds or others) on whose behalf a
commitment to subscribe for or acquire Placing Shares has been given.
Details of the Placing and Open Offer Agreement and Placing Shares
The Joint Bookrunners and the Company have entered into a Placing and Open
Offer Agreement, under which the Joint Bookrunners have, on the terms and
subject to the conditions set out therein, agreed severally to use their
reasonable endeavours to procure Placees for the Placing Shares. The Placing
is not being underwritten by the Joint Bookrunners or any other person.
The number of Placing Shares will be determined following completion of the
Bookbuild as set out in this Announcement. The timing of the closing of the
Bookbuild, the number of Placing Shares and allocations are at the discretion
of the Joint Bookrunners and a further announcement confirming these details
will be made in due course.
The Placing Shares will, when issued, be subject to the Articles, will be
credited as fully paid and will rank pari passu in all respects with the
Existing Ordinary Shares, including the right to receive all dividends and
other distributions (if any) declared, made or paid on or in respect of
Ordinary Shares after the date of issue of the Placing Shares.
The Placing Shares will trade on AIM under SOLI with ISIN GB0008237132 .
Application for admission to trading
Applications will be made to London Stock Exchange for admission to trading of
the New Ordinary Shares to be admitted to trading on AIM. It is expected that
Admission will take place on or before 8.00 a.m. on 2 August 2022 and that
dealings will commence at the same time.
Bookbuild
The Joint Bookrunners will today commence the Bookbuild to determine demand
for participation in the Placing by potential Placees at the Issue Price. 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 Joint Bookrunners and the Company shall be entitled to effect the Placing
by such alternative method to the Bookbuild as they may, in their sole
discretion, determine.
Participation in, and principal terms of, the Placing
1. The Joint Bookrunners are arranging the Placing as agents for the
Company.
2. Participation in the Placing is only available to persons who are
lawfully able to be, and have been, invited to participate by the Joint
Bookrunners. The Joint Bookrunners (and any of their affiliates and / or
agents) are entitled to participate in the Placing as principals.
3. To bid in the Bookbuild, Placees should communicate their bid by
telephone or by email to their usual contact at the Joint Bookrunners. Each
bid should state the number of Placing Shares which the prospective Placee
wishes to subscribe for at the Issue Price, and each such placee acknowledges
and agrees that their bid will be irrevocable. Bids may be scaled down by the
Joint Bookrunners on the basis referred to in paragraph 7 below.
4. The timing of the closing of the Bookbuild will be at the discretion of
the Joint Bookrunners. The Company reserves the right to reduce or seek to
increase the amount to be raised pursuant to the Placing, in its absolute
discretion.
5. Each Placee's allocation will be confirmed to Placees orally, or by
email, by the Joint Bookrunners following the close of the Bookbuild and a
trade confirmation or contract note will be dispatched as soon as possible
thereafter. The Joint Bookrunners' oral or emailed confirmation will give rise
to an irrevocable, legally binding commitment by that person (who at that
point becomes a Placee), in favour of the Joint Bookrunners and the Company,
under which it agrees to acquire by subscription or purchase the number of
Placing Shares allocated to it at the Issue Price and otherwise on the terms
and subject to the conditions set out in this Appendix and in accordance with
the Company's articles of association. Except with the Joint Bookrunners'
consent, such commitment will not be capable of variation or revocation.
6. The number of Placing Shares to be issued will be agreed between the
Joint Bookrunners and the Company following close of the Bookbuild. The
Company will make an announcement of the number of Placing Shares to be placed
at the Issue Price via a Regulatory Information Service following the close of
the Bookbuild.
7. Subject to paragraphs 4 and 5 above, the Joint Bookrunners may choose
not to accept bids and/or to accept bids, either in whole or in part, on the
basis of allocations determined at their discretion (after consultation with
the Company) and may scale down any bids for this purpose on such basis as it
may determine. The Joint Bookrunners may also, notwithstanding paragraphs 4
and 5 above, subject to the prior consent of the Company, allocate Placing
Shares after the time of any initial allocation to any person submitting a bid
after that time.
8. A bid in the Bookbuild will be made on the terms and subject to the
conditions in the Announcement (including this Appendix) and will be legally
binding on the Placee on behalf of which it is made and except with Joint
Bookrunners' consent will not be capable of variation or revocation from the
time at which it is submitted.
9. Except as required by law or regulation, no press release or other
announcement will be made by Joint Bookrunners 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.
10. Irrespective of the time at which a Placee's allocation pursuant to the
Placing is confirmed, settlement for all Placing Shares to be placed pursuant
to the Placing will be required to be made at the same time, on the basis
explained below under "Registration and Settlement".
11. All obligations of Joint Bookrunners under the Placing will be subject
to fulfilment of the conditions referred to below under "Conditions of the
Placing" and to the Placing not being terminated on the basis referred to
below under "Right to terminate under the Placing and Open Offer Agreement".
12. By participating in the Placing, each Placee agrees that its rights and
obligations in respect of the Placing will terminate only in the circumstances
described below and will not be capable of rescission or termination by the
Placee.
13. To the fullest extent permitted by law and the applicable rules of the
Financial Conduct Authority ("FCA"), neither the Joint Bookrunners nor any of
each of their affiliates shall have any liability to Placees (or to any other
person whether acting on behalf of a Placee or otherwise whether or not a
recipient of these terms and conditions) in respect of the Placing. Each
Placee acknowledges and agrees that the Company is responsible for the
delivery of the Placing Shares to the Placees and the Joint Bookrunners and
each of their affiliates shall have no liability to the Placees for the
failure of the Company to fulfil those obligations. In particular, none of
the Joint Bookrunners nor any of each of their affiliates shall have any
liability (including to the extent permissible by law, any fiduciary duties)
in respect of Joint Bookrunners' conduct of the Placing.
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 Bookrunners' obligations under the Placing and Open Offer Agreement
in respect of the New Ordinary Shares for Admission are conditional on, among
other things:
A) the Resolution to be proposed at the General Meeting having been duly
passed by the Shareholders without amendment, granting authority to the
Directors to allot the New Ordinary Shares on a non-pre-emptive basis;
B) none of the warranties given by the Company to the Joint Bookrunners
being untrue, inaccurate or misleading in each case by reference to the facts
and circumstances then subsisting;
C) the Company having performed all of its obligations under the Placing
Agreement (to the extent that such obligations fall to be performed prior to
Admission) and not being in breach of the Placing Agreement;
D) there not having occurred, in the opinion of the Banks (acting together
and in good faith), a Material Adverse Change (as such term is defined in the
Placing and Open Offer Agreement) at any time prior to Admission;
E) the MIPA having been entered into and become unconditional in all
respects prior to Admission, save for Admission; and
F) Admission having become effective at or before 8.00 a.m. on 2 August
2022 (or such later time and / or date as the Company and the Joint
Bookrunners may agree in writing, being not later than 8.00 a.m. on 16 August
2022).
If: (i) any of the conditions contained in the Placing and Open Offer
Agreement in relation to the Placing Shares are not fulfilled or waived by
Joint Bookrunners by the respective time or date where specified (or such
later time or date as Joint Bookrunners and Company may agree in writing, not
being later than 8 a.m. on 16 August 2022); (ii) any of such conditions
becomes incapable of being fulfilled at any time prior to Admission and is not
waived by the Joint Bookrunners; or (iii) the Placing and Open Offer Agreement
is terminated in the circumstances specified below, the Placing will lapse and
the Placees' rights and obligations hereunder in relation to the Placing
Shares shall cease and terminate at such time and each Placee agrees that no
claim can be made by the Placee in respect thereof.
The Joint Bookrunners may (acting together), at their sole discretion and upon
such terms as they think fit, waive or extend the period for, compliance by
the Company with the whole or any part of any of the Company's obligations in
relation to the conditions in the Placing and Open Offer Agreement save that
that certain of the conditions, including those relating to Admission and the
Resolution to be put at the General Meeting, granting authority to the
Directors to allot the New Ordinary Shares on a non-pre-emptive basis, being
duly passed by the Shareholders without amendment, may not be waived. Any such
extension or waiver will not affect Placees' commitments as set out in this
Announcement.
Neither the Joint Bookrunners, the Company nor any of their respective
affiliates 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 Bookrunners.
Right to terminate the Placing and Open Offer Agreement
The Joint Bookrunners are entitled, at any time before Admission, to terminate
the Placing Agreement by giving notice to the Company in certain
circumstances, including:
A) any statement contained in the Placing Documents (as defined in the
Placing and Open Offer Agreement) has, in the opinion of the Joint Bookrunners
(acting in good faith), become or is discovered to be untrue, inaccurate or
misleading; or
B) any matters have arisen or have been discovered which would, if the
Placing Documents were to be issued at that time, constitute an omission
therefrom; or
C) any of the conditions to the Placing and Open Offer Agreement has
become incapable of satisfaction before the latest time provided for in the
Placing and Open Offer Agreement or any of the conditions has not been
satisfied before the latest time provided in the Placing and Open Offer
Agreement and in either case has not been waived; or
D) there has, in the opinion of a Joint Bookrunner (acting in good faith),
been a breach, or an alleged breach, of any of the Warranties; or
E) in the opinion of a Joint Bookrunner (acting in good faith), a
Specified Event (as defined in the Placing and Open Offer Agreement) has
occurred; or
F) the Company fails, in any respect which is material in the opinion of a
Joint Bookrunner (acting in good faith), to comply with any of its obligations
under the Placing and Open Offer Agreement; or
G) in the opinion of a Joint Bookrunner (acting in good faith), there has
been a Material Adverse Change (as defined in the Placing and Open Offer
Agreement); or
H) there has been a change in certain international financial markets, a
suspension or material limitation in trading on certain stock exchanges or a
material disruption in commercial banking or securities settlement or
clearance which a Joint Bookrunner considers (acting in good faith) makes it
impractical or inadvisable to proceed with the Placing or Admission; or
I) application for Admission is refused by the London Stock Exchange,
or, in the opinion of WH Ireland (acting in good faith), will not be granted.
The rights and obligations of the Placees will not be subject to termination
by the Placees or any prospective Placees at any time or in any circumstances.
By participating in the Placing, Placees agree that the exercise by the Joint
Bookrunners of any right of termination or other discretion under the Placing
and Open Offer Agreement shall be within the absolute discretion of the Joint
Bookrunners, as applicable, and that none of them need make any reference to
Placees and that neither the Joint Bookrunners, nor any of its respective
affiliates shall have any liability to Placees whatsoever in connection with
any such exercise.
No Admission Document or Prospectus
The Placing Shares are being offered to a limited number of specifically
invited persons only and have not been nor will be offered in such a way as to
require the publication of an admission document or prospectus in the United
Kingdom or in any other jurisdiction. No offering document, admission document
or prospectus has been or will be submitted to be approved by the FCA in
relation to the Placing, and Placees' commitments will be made solely on the
basis of the information contained in the Announcement (including this
Appendix) and the business and financial information that the Company is
required to publish in accordance with the AIM Rules (the "Exchange
Information").
Each Placee, by accepting a participation in the Placing, agrees that the
content of this Announcement is exclusively the responsibility of the Company
and confirms that it has neither received nor relied on any other information
(other than the Exchange Information), representation, warranty, or statement
made by or on behalf of the Company, or the Joint Bookrunners or any other
person and neither the Joint Bookrunners, the Company nor any other person
will be liable for any Placee's decision to participate in the Placing based
on any other information, representation, warranty or statement which the
Placees may have obtained or received and, if given or made, such information,
representation, warranty or statement must not be relied upon as having been
authorised by the Joint Bookrunners, the Company, or their respective
officers, directors, employees or agents.
Each Placee acknowledges and agrees that it has relied on its own
investigation of the business, financial or other position of the Company in
accepting a participation in the Placing. Neither the Company nor the Joint
Bookrunners are making any undertaking or warranty to any Placee regarding the
legality of an investment in the Placing Shares by such Placee under any
legal, investment or similar laws or regulations. Each Placee should not
consider any information in this Announcement to be legal, tax or business
advice. Each Placee should consult its own solicitor, tax adviser and
financial adviser for independent legal, tax and financial advice regarding an
investment in the Placing Shares. Nothing in this paragraph shall exclude the
liability of any person for fraudulent misrepresentation.
Registration and settlement
Following the close of the Bookbuild, each Placee allocated Placing Shares in
the Placing will be sent a trade confirmation or contract note in accordance
with the standing arrangements in place with the relevant Joint Bookrunner,
stating the number of Placing Shares allocated to it at the Issue Price, the
aggregate amount owed by such Placee (in GBP) and a form of confirmation in
relation to settlement instructions.
Each Placee will be deemed to agree that it will do all things necessary to
ensure that delivery and payment is completed as directed by the Joint
Bookrunners in accordance with the standing CREST settlement instructions
which they have in place with the relevant Joint Bookrunner.
Settlement of transactions in the Placing Shares (ISIN: GB0008237132 )
following Admission will take place within the system administered by
Euroclear UK & Ireland Limited ("CREST") provided that, subject to certain
exceptions, the Joint Bookrunners reserve the right to require settlement for,
and delivery of, the Placing Shares (or a portion thereof) to Placees by such
other means that it deems 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.
It is expected that settlement will be on 2 August 2022 in accordance with the
instructions set out in the form of 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 SONIA.
Each Placee is deemed to agree that, if it does not comply with these
obligations, the Joint Bookrunners 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 appropriate the relevant Joint Bookrunner's account and benefit (as
agents for the Company), an amount equal to the aggregate amount owed by the
Placee plus any interest due. The relevant Placee will, however, remain liable
and shall indemnify the Joint Bookrunners 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 Bookrunners such authorities and powers necessary to
carry out any such sale and agrees to ratify and confirm all actions which the
Joint Bookrunners lawfully takes in pursuance of such sale.
If Placing Shares are to be delivered to a custodian or settlement agent,
Placees should ensure that the form of confirmation is copied and delivered
immediately to the relevant person within that organisation.
Insofar as Placing Shares are registered in a Placee's name or that of its
nominee or in the name of any person for whom a Placee is contracting as agent
or that of a nominee for such person, such Placing Shares should, subject as
provided below, be so registered free from any liability to UK stamp duty or
stamp duty reserve tax or securities transfer tax. Neither the Joint
Bookrunners nor the Company will be liable in any circumstances for the
payment of stamp duty, stamp duty reserve tax or securities transfer tax in
connection with any of the Placing Shares. 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
Joint Bookrunners (for themselves and on behalf of the Company):
1. that it has read and understood this Announcement, including the
Appendices, in its entirety and that its subscription for or purchase of
Placing Shares is subject to and based upon all the terms, conditions,
representations, warranties, acknowledgements, agreements and undertakings and
other information contained herein and undertakes not to redistribute or
duplicate this Announcement;
2. that its obligations are irrevocable and legally binding and shall not
be capable of rescission or termination by it in any circumstances;
3. that the exercise by the Joint Bookrunners of any right or discretion
under the Placing and Open Offer Agreement shall be within the absolute
discretion of the Joint Bookrunners, and the Joint Bookrunners need not have
any reference to it and shall have no liability to it whatsoever in connection
with any decision to exercise or not to exercise any such right and each
Placee agrees that it has no rights against the Joint Bookrunners, or the
Company, or any of their respective officers, directors or employees, under
the Placing and Open Offer Agreement pursuant to the Contracts (Rights of
Third Parties Act) 1999;
4. that these terms and conditions represent the whole and only agreement
between it, the Joint Bookrunners and the Company in relation to its
participation in the Placing and supersedes any previous agreement between any
of such parties in relation to such participation. Accordingly, each Placee,
in accepting its participation in the Placing, is not relying on any
information or representation or warranty in relation to the Company or any of
its subsidiaries or any of the Placing Shares other than as contained in this
Announcement and the Exchange Information. Each Placee agrees that neither the
Company, the Joint Bookrunners nor any of their respective officers, directors
or employees will have any liability for any such other information,
representation or warranty, express or implied;
5. that in the case of any Placing Shares acquired by it as a financial
intermediary, as that term is used in Article 5 of the Prospectus Regulation,
(i) the Placing Shares acquired by it in the Placing have not been acquired on
behalf of, nor have they been acquired with a view to their offer or resale
to, persons in any Member State other than Qualified Investors or in
circumstances in which the prior consent of the Joint Bookrunners 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 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;
6. that 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 UK Prospectus
Regulation, the Placing Shares acquired by it in the Placing will not be
acquired on a non-discretionary basis on behalf of, nor will they be acquired
with a view to their offer or resale to, persons in a Member State or the UK
other than Qualified Investors or Relevant Persons, or in circumstances in
which the prior consent of the Joint Bookrunners has been given to the offer
or resale;
7. that neither it nor, as the case may be, its clients expect the Joint
Bookrunners to have any duties or responsibilities to such persons similar or
comparable to the duties of "best execution" and "suitability" imposed by the
FCA's Conduct of Business Source Book, and that the Joint Bookrunners are not
acting for it or its clients, and that the Joint Bookrunners will not be
responsible for providing the protections afforded to customers of the Joint
Bookrunners or for providing advice in respect of the transactions described
herein;
8. that it has made its own assessment of the Placing Shares and has
relied on its own investigation of the business, financial or other position
of the Company in accepting a participation in the Placing and neither the
Joint Bookrunners nor the Company or any of their respective affiliates,
agents, directors, officers or employees or any person acting on behalf of any
of them has provided, and will not provide, it with any material regarding the
Placing Shares or the Company or any other person other than the information
in this Announcement or the Publicly Available Information; nor has it
requested the Joint Bookrunners, the Company or any of their respective
affiliates, agents, directors, officers or employees or any person acting on
behalf of any of them to provide it with any such information;
9. that it is: (i) unless otherwise agreed in writing with the Joint
Bookrunners, located outside the United States and it is not a US person as
defined in Regulation S under the Securities Act ("Regulation S") and it is
subscribing for the Placing Shares only in "offshore transactions" as defined
in and pursuant to Regulation S, and (ii) it is not subscribing for Placing
Shares as a result of any "directed selling efforts" as defined in Regulation
S or by means of any form of "general solicitation" or "general advertising"
as such terms are defined in Regulation D under the Securities Act;
10. that the Placing Shares have not been and will not be registered under
the Securities Act, or under the securities legislation of, or with any
securities regulatory authority of, any state or other jurisdiction of the
United States and that, subject to certain exceptions, the Placing Shares may
not be offered, sold, pledged, resold, transferred, delivered or distributed
into or within the United States;
11. that the only information on which it is entitled to rely on and on
which it has relied in committing to subscribe for the Placing Shares is
contained in the Announcement and Publicly Available Information, such
information being all that it deems necessary to make an investment decision
in respect of the Placing Shares and it has made its own assessment of the
Company, the Placing Shares and the terms of the Placing based on the
Announcement and Publicly Available Information;
12. that neither the Joint Bookrunners nor the Company or any of their
respective affiliates, agents, directors, officers or employees has made any
representation or warranty to it, express or implied, with respect to the
Company, the Placing or the Placing Shares or the accuracy, completeness or
adequacy of the Publicly Available Information;
13. that unless specifically agreed with the Joint Bookrunners, it is not
and was not acting on a non-discretionary basis for the account or benefit of
a person located within the United States at the time the undertaking to
subscribe for Placing Shares was given and it is not acquiring Placing Shares
with a view to the offer, sale, resale, transfer, delivery or distribution,
directly or indirectly, of any Placing Shares into the United States and it
will not reoffer, resell, pledge or otherwise transfer the Placing Shares
except pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act and otherwise in accordance
with any applicable securities laws of any state or jurisdiction of the United
States;
14. that it is not a national or resident of Canada, Australia, New Zealand,
South Africa or Japan or a corporation, partnership or other entity organised
under the laws of Canada, Australia, New Zealand, the Republic of South Africa
or Japan and that it will not offer, sell, renounce, transfer or deliver,
directly or indirectly, any of the Placing Shares in Canada, Australia, New
Zealand, the Republic of South Africa or Japan or to or for the benefit of any
person resident in Canada, Australia, the Republic of South Africa or Japan
and each Placee acknowledges that the relevant exemptions are not being
obtained from the Securities Commission of any province of Canada, that no
document has been or will be lodged with, filed with or registered by the
Australian Securities and Investments Commission or Japanese Ministry of
Finance and that the Placing Shares are not being offered for sale and may not
be, directly or indirectly, offered, sold, transferred or delivered in or into
Canada, Australia, New Zealand, the Republic of South Africa or Japan;
15. that it does not have a registered address in, and is not a citizen,
resident or national of, any jurisdiction in which it is unlawful to make or
accept an offer of the Placing Shares and it is not acting on a
non-discretionary basis for any such person;
16. that it has not, directly or indirectly, distributed, forwarded,
transferred or otherwise transmitted, and will not, directly or indirectly,
distribute, forward, transfer or otherwise transmit, any presentation or
offering materials concerning the Placing Shares to any persons within the
United States or to any US persons (as that term is defined in Regulation S);
17. that it is entitled to subscribe for Placing Shares under the laws of
all relevant jurisdictions which apply to it and that it has fully observed
such laws and obtained all governmental and other consents which may be
required thereunder or otherwise and it has complied with all necessary
formalities and that it has not taken any action which will or may result in
the Company or the Joint Bookrunners or any of their respective directors,
officers, employees or agents acting in breach of any regulatory or legal
requirements of any territory in connection with the Placing or its
acceptance;
18. that it has obtained all necessary consents and authorities to enable it
to give its commitment to subscribe for the Placing Shares and to perform its
subscription and/or purchase obligations;
19. that where it is acquiring Placing Shares for one or more managed
accounts, it is authorised in writing by each managed account: (a) to acquire
the Placing Shares for each managed account; (b) to make on its behalf the
representations, warranties, acknowledgements, undertakings and agreements in
this appendix and the announcement of which it forms part; and (c) to receive
on its behalf any investment letter relating to the Placing in the form
provided to it by the Joint Bookrunners;
20. that it is either: (a) a person of a kind described in paragraph 5 of
Article 19 (persons having professional experience in matters relating to
investments and who are investment professionals) of the Order; or (b) a
person of a kind described in paragraph 2 of Article 49 (high net worth
companies, unincorporated associations, partnerships or trusts or their
respective directors, officers or employees) of the Order; or (c) a person to
whom it is otherwise lawful for this Announcement to be communicated and in
the case of (a) and (b) undertakes that it will acquire, hold, manage or
dispose of any Placing Shares that are allocated to it for the purposes of its
business;
21. that, unless otherwise agreed by the Joint Bookrunners, it is a
qualified investor (as defined in section 86(7) of FSMA;
22. that, unless otherwise agreed by the Joint Bookrunners, it is a
"professional client" or an "eligible counterparty" within the meaning of
Chapter 3 of the FCA's Conduct of Business Sourcebook and it is purchasing
Placing Shares for investment only and not with a view to resale or
distribution;
23. it has only communicated or caused to be communicated and will only
communicate or cause to be communicated any invitation or inducement to engage
in investment activity (within the meaning of section 21 of FSMA) relating to
the Placing Shares in circumstances in which section 21(1) of FSMA does not
require approval of the communication by an authorised person;
24. it has complied and will comply with all applicable provisions of FSMA
with respect to anything done by it in relation to the Placing Shares in, from
or otherwise involving the United Kingdom;
25. that any money held in an account with each of the Joint Bookrunners (or
its nominee) on its behalf and/or any person acting on its behalf will not be
treated as client money within the meaning of the rules and regulations of the
FCA. Each Placee further acknowledges that the money will not be subject to
the protections conferred by the FCA's client money rules. As a consequence,
this money will not be segregated from the Joint Bookrunners' (or its
nominee's) money in accordance with such client money rules and will be used
by the Joint Bookrunners in the course of its own business and each Placee
will rank only as a general creditor of the Joint Bookrunners;
26. that it will (or will procure that its nominee will) if applicable, make
notification to the Company of the interest in its Ordinary Shares in
accordance with the Disclosure Guidance and Transparency Rules published by
the FCA;
27. that it is not, and it is not acting on behalf of, a person falling
within subsections (6), (7) or (8) of sections 67 or 70 respectively or
subsections (2) and (3) of section 93 or subsection (1) of section 96 of the
Finance Act 1986;
28. that it will not deal or cause or permit any other person to deal in all
or any of the Placing Shares which it is subscribing for under the Placing
unless and until Admission becomes effective;
29. that it appoints irrevocably any director of the Joint Bookrunners as
its agent for the purpose of executing and delivering to the Company and/or
its registrars any document on its behalf necessary to enable it to be
registered as the holder of the Placing Shares;
30. that, as far as it is aware, it is not acting in concert (within the
meaning given in The City Code on Takeovers and Mergers) with any other person
in relation to the Company;
31. that this Announcement does not constitute a securities recommendation
or financial product advice and that neither the Joint Bookrunners nor the
Company has considered its particular objectives, financial situation and
needs;
32. that it 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;
33. that it will indemnify and hold the Company and the Joint Bookrunners
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 Company and the Joint Bookrunners will rely on the truth and
accuracy of the confirmations, warranties, acknowledgements and undertakings
herein and, if any of the foregoing is or becomes no longer true or accurate,
the Placee shall promptly notify the Joint Bookrunners and the Company. All
confirmations, warranties, acknowledgements and undertakings given by the
Placee, pursuant to this Announcement (including this Appendix) are given to
the Joint Bookrunners for themselves and on behalf of the Company and will
survive completion of the Placing and Admission;
34. that time shall be of the essence as regards its obligations pursuant to
this Appendix;
35. that it is responsible for obtaining any legal, tax and other advice
that it deems necessary for the execution, delivery and performance of its
obligations in accepting the terms and conditions of the Placing, and that it
is not relying on the Company or the Joint Bookrunners to provide any legal,
tax or other advice to it;
36. that all dates and times in this Announcement (including this Appendix)
may be subject to amendment and that the Joint Bookrunners shall notify it of
such amendments;
37. that (i) it has complied with its obligations under the Criminal Justice
Act 1993, Part VIII of FSMA and UK MAR and/or MAR, (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 and the Money Laundering Regulations 2007 and
(iii) it is not a person: (a) with whom transactions are prohibited under the
Foreign Corrupt Practices Act of 1977 or any economic sanction programmes
administered by, or regulations promulgated by, the Office of Foreign Assets
Control of the U.S. Department of the Treasury; (b) named on the Consolidated
List of Financial Sanctions Targets maintained by HM Treasury of the United
Kingdom; or (c) subject to financial sanctions imposed pursuant to a
regulation of the European Union or a regulation adopted by the United Nations
(together, the "Regulations"); and, if making payment on behalf of a third
party, that satisfactory evidence has been obtained and recorded by it to
verify the identity of the third party as required by the Regulations and, if
making payment on behalf of a third party, that satisfactory evidence has been
obtained and recorded by it to verify the identity of the third party as
required by the Regulations and it 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
Bookrunners such evidence, if any, as to the identity or location or legal
status of any person which the Joint Bookrunners may request from it in
connection with the Placing (for the purpose of complying with such
Regulations or ascertaining the nationality of any person or the
jurisdiction(s) to which any person is subject or otherwise) in the form and
manner requested by the Joint Bookrunners on the basis that any failure by it
to do so may result in the number of Placing Shares that are to be subscribed
for by it or at its direction pursuant to the Placing being reduced to such
number, or to nil, as the Joint Bookrunners may decide in their absolute
discretion;
38. that it will not make any offer to the public of those Placing Shares to
be subscribed for by it for the purposes of the Prospectus Regulation or UK
Prospectus Regulation, as applicable;
39. that it will not distribute any document relating to the Placing Shares
and it will be acquiring the Placing Shares for its own account as principal
or for a discretionary account or accounts (as to which it has the authority
to make the statements set out herein) for investment purposes only and it
does not have any contract, understanding or arrangement with any person to
sell, pledge, transfer or grant a participation therein to such person or any
third person with respect of any Placing Shares; save that if it is a private
client stockbroker or fund manager it confirms that in purchasing the Placing
Shares it is acting under the terms of one or more discretionary mandates
granted to it by private clients and it is not acting on an execution only
basis or under specific instructions to purchase the Placing Shares for the
account of any third party;
40. that it acknowledges that these terms and conditions and any agreements
entered into by it pursuant to these terms and conditions shall be governed by
and construed in accordance with the laws of England and Wales and it submits
(on behalf of itself and on behalf of any person on whose behalf it is acting)
to the exclusive jurisdiction of the English courts as regards any claim,
dispute or matter arising out of any such contract, except that enforcement
proceedings in respect of the obligation to make payment for the Placing
Shares (together with any interest chargeable thereon) may be taken by the
Company or the Joint Bookrunners 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;
41. that any documents sent to Placees will be sent at the Placees' risk.
They may be sent by post to such Placees at an address notified to the Joint
Bookrunners;
42. that the Joint Bookrunners owe no fiduciary or other duties to any
Placee in respect of any representations, warranties, undertakings or
indemnities in the Placing and Open Offer Agreement;
43. that the Joint Bookrunners 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;
44. that no prospectus or offering document has been or will be prepared in
connection with the Placing and it has not received and will not receive a
prospectus or other offering document in connection with the Placing or the
Placing Shares; and
45. that if it has received any confidential price sensitive information
concerning the Company in advance of the publication of this Announcement, it
has not: (i) dealt in the securities of the Company; (ii) encouraged,
required, recommended or induced another person to deal in the securities of
the Company; or (iii) disclosed such information to any person, prior to such
information being made publicly available.
The Company, the Joint Bookrunners and their respective affiliates will rely
upon the truth and accuracy of each of the foregoing representations,
warranties, acknowledgements and undertakings which are given to the Joint
Bookrunners for themselves and on behalf of the Company and are irrevocable.
The provisions of this Appendix may be waived, varied or modified as regards
specific Placees or on a general basis by the Joint Bookrunners.
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 Bookrunners will be
responsible, and the Placee to whom (or on behalf of whom, or in respect of
the person for whom it is participating in the Placing as an agent or nominee)
the allocation, allotment, issue or delivery of Placing Shares has given rise
to such UK stamp duty or stamp duty reserve tax undertakes to pay such UK
stamp duty or stamp duty reserve tax forthwith and to indemnify on an
after-tax basis and to hold harmless the Company and the Joint Bookrunners in
the event that any of the Company and/or the Joint Bookrunners 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 Bookrunners
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 or purchase by them of any Placing Shares or the agreement by
them to subscribe for or purchase any Placing Shares.
All times and dates in this Announcement (including this Appendix) may be
subject to amendment. The Joint Bookrunners shall notify the Placees and any
person acting on behalf of the Placees of any changes.
This Announcement has been issued by, and is the sole responsibility, of the
Company. No representation or warranty express or implied, is or will be made
as to, or in relation to, and no responsibility or liability is or will be
accepted by the Joint Bookrunners or by any of its respective affiliates or
agents as to or in relation to, the accuracy or completeness of this
Announcement or any other written or oral information made available to or
publicly available to any interested party or its advisers, and any liability
therefore is expressly disclaimed.
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