REG - Kew Soda Ltd - WE Soda Confirms Intention to Float

Solvay SAAnnouncement

07/06/2023 08:15

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RNS Number : 8749B  Kew Soda Ltd  07 June 2023

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INDIRECTLY, IN OR INTO OR FROM AUSTRALIA, CANADA, JAPAN OR THE UNITED STATES
OR ANY OTHER JURISDICTION WHERE IT IS UNLAWFUL TO DISTRIBUTE THIS
ANNOUNCEMENT.

 

This announcement is an advertisement for the purposes of the Prospectus
Regulation Rules of the Financial Conduct Authority and not a prospectus and
not an offer of shares for sale in any jurisdiction, including in or into
Australia, Canada, Japan or the United States.

 

Neither this announcement, nor anything contained herein, shall form the basis
of, or be relied upon in connection with, any offer or commitment whatsoever
in any jurisdiction. Investors should not purchase any securities referred to
in this announcement except solely on the basis of the information contained
in a prospectus in its final form (together with any supplementary prospectus,
if relevant, the "Prospectus"), including the risk factors set out therein,
that may be published by Kew Soda Ltd (the "Company", together with its
subsidiaries, the "Group" or "WE Soda"), in due course in connection with a
possible offer of ordinary shares in the capital of the Company (the "Shares")
and the possible admission of such Shares to the premium listing segment of
the Official List of the UK Financial Conduct Authority (the "FCA") and to
trading on the main market of London Stock Exchange plc (the "London Stock
Exchange"). A copy of any Prospectus will, if published, be available on WE
Soda's website at www.wesoda.co.uk (http://www.wesoda.co.uk) subject to
certain access restrictions.

 

7 June 2023

 

Kew Soda Ltd((1))

 

WE Soda Confirms Intention to Float on the London Stock Exchange

 

Following the announcement made on 31 May 2023 of its expected intention to
float, WE Soda today confirms its intention to undertake an initial public
offering (the "IPO" or the "Offer") and certain details of the Offer.

 

WE Soda intends to apply for admission of its Shares to the premium listing
segment of the Official List of the FCA and to trading on the main market for
listed securities of the London Stock Exchange ("Admission").

 

The final offer price in respect of the Offer (the "Offer Price"), together
with the maximum number of Shares to be sold in the Offer, will be determined
following a book-building process.

(1)       WE Soda is the trading name for the Kew Soda Ltd holding
group.

Alasdair Warren, CEO of WE Soda, said:

 

"We have received considerable interest from potential investors, giving us
the confidence to confirm our intention to undertake an IPO of our Company on
the London Stock Exchange.

 

"We are the world's largest producer of natural soda ash, one of the lowest
cost producers of soda ash and the fastest growing. Because of our unique
operating capabilities, we have developed the most environmentally friendly
and sustainable production process within our industry. We are able to deliver
high operating margins and generate strong free cash flow which allows us to
invest for future growth while also maintaining a prudent balance sheet and
being able to distribute attractive dividends to our shareholders.

 

"We believe that all these factors together make for a compelling investment
proposition, and I look forward to the next stage of our development as a
listed company."

 

Confirmation of Offer Details:

 

·      The Company's shares will be admitted to the premium listing
segment of the Official List of the FCA and to trading on the main market of
the London Stock Exchange.

·      The Offer will be wholly comprised of ordinary shares to be sold
by the existing shareholder. The existing shareholder intends to repay,
directly and indirectly, certain intercompany loans made by WE Soda to
affiliates within the Ciner Group from the net proceeds of the Offer. The
indirect net proceeds received by WE Soda, expected to be approximately $800
million, will be used to reduce its net debt by way of repayment of
outstanding amounts under certain debt facilities (approximately $500
million), with the remainder used for general corporate purposes
(approximately $300 million). In addition to the indirect net proceeds to be
received by the Company, the existing shareholder may decide to sell a further
number of ordinary shares during the book-building process.

·      The Offer will be a targeted offering to institutional investors
outside the United States in offshore transactions pursuant to Regulation S
under the United States Securities Act of 1933, as amended (the "Securities
Act") and to qualified institutional buyers in the United States pursuant to
Rule 144A under the Securities Act.

·      Immediately following Admission, the Company will target a free
float of at least 10% of issued share capital and expects that it would be
eligible for inclusion in the FTSE UK indices. In addition, it is expected
that Shares representing up to a further 15% of the Offer will be made
available pursuant to an over-allotment option.

·      Any additional details in relation to the Offer, together with
any changes to corporate governance arrangements, will be disclosed in the
Prospectus.

·      The Company has engaged J.P. Morgan Securities plc (which
conducts its UK investment banking activities as J.P. Morgan Cazenove) ("J.P.
Morgan") as Sole Sponsor, Joint Global Co-ordinator and Joint Bookrunner, BNP
PARIBAS ("BNPP") and Goldman Sachs International ("Goldman Sachs") as Joint
Global Co-ordinators and Joint Bookrunners, and, Deutsche Bank AG, London
Branch ("Deutsche Bank"), Liberum Capital Limited ("Liberum"), Morgan Stanley
& Co. International plc ("Morgan Stanley"), MUFG Securities EMEA plc
("MUFG"), and Numis Securities Limited ("Numis") as Joint Bookrunners of the
Offer.

·      Separately from, and in addition to, the Offer, the Company is
also considering making an exempt public offer of Shares to retail investors
in the UK through the PrimaryBid platform (the "PrimaryBid Offer").  It would
be a condition of any PrimaryBid Offer that the value of Shares sold pursuant
to it will not exceed €8,000,000 equivalent (approximately £6,950,000). If
the Company decides to proceed with the PrimaryBid Offer, details, including
its terms, will be announced separately in due course.

About WE Soda

·      WE Soda is the world's largest producer of natural soda ash,
based on the Group's own estimates and Advancy research and analysis. In the
year ended 31 December 2022 ("YE 2022"), the Group produced approximately
5.0 million metric tonnes ("mt") of product, comprising approximately 4.6
million mt of soda ash (95%) and approximately 0.4 million mt of sodium
bicarbonate (5%).

·      Soda ash is a simple, safe, alkali salt that is the tenth most
highly consumed inorganic industrial ingredient in the world. It is an
essential component in a wide variety of industrial processes with no
economically feasible and environmentally viable substitute in almost all such
processes, and without which most of the industrial consumers of soda ash
cannot operate.

·      Soda ash is a critical ingredient in glass manufacturing, which
Advancy estimate accounted for approximately 60% of global soda ash demand in
YE 2022. It is also used in many other applications and products which play an
important role in facilitating the energy transition and an essential role in
in everyday modern life, including architectural flat glass used in building
construction to improve thermal efficiency, PV glass used in solar panels,
container glass used to produce glass bottles (many of which are recyclable or
reusable), and the manufacture of lithium carbonate (used in EV batteries),
powdered detergents, and silicates and sodium chemicals (including those used
in water and flue gas treatments).

·      WE Soda benefits from attractive and resilient end markets. From
almost 65 million mt of total global demand in 2022, the annual demand for
soda ash globally is forecast by Advancy to grow by a further 16 million mt
per annum ("mtpa"), reaching almost 81 million mtpa by 2030, equivalent to a
CAGR of 2.8% or approximately 2.0 million mtpa of additional global soda ash
demand every year. Demand for soda ash is resilient partly because
approximately 75% of forecast global growth by 2030 is expected to be driven
by sustainable applications facilitating the energy transition, most of which
exhibit long-term, non-cyclical structural growth.

·      WE Soda defines its purpose as "to responsibly produce essential
ingredients for a sustainable future". Sustainability is at the core of its
strategy and it is embedded throughout the Group's governance and management
framework. Morningstar Sustainalytics((2)) performed a broad-based Corporate
ESG Assessment of the Group dated 16 May 2023. The Group received an
industry-leading Corporate ESG Assessment score of 14.7, which placed WE Soda
in the "low risk" category and, as of the date of the Corporate ESG
Assessment, this score would place the Group as first in the entire
Morningstar Sustainalytics global commodity chemicals subsector and as having
the fifth best ESG risk rating score in the wider Morningstar Sustainalytics
global chemicals sector.

·      Soda ash is produced by two main methods: (i) the so-called
"natural" production method, where naturally occurring underground trona ore
is extracted using either the solution-extraction or conventional underground
mining methods and then processed typically using the "monohydrate" process to
produce "natural" soda ash; and (ii) the so-called "synthetic" production
method, predominately using the "Ammonia" process (also known as the "Solvay"
process), where limestone (calcium carbonate) is heated (or calcinated) at
over 1,000°C to produce carbon dioxide, which is then reacted with ammonia
(as a catalyst) dissolved in a sodium chloride brine solution to produce
"synthetic" soda ash.

·      WE Soda only produces natural soda ash using the
solution-extraction production method, which is significantly more
environmentally friendly than synthetic production methods, with significantly
lower energy intensity((3)), CO(2)e emissions intensity((4)), water
intensity((5)) and significantly lower waste. We believe WE Soda is the only
soda ash producer outside China to produce natural soda ash on a commercial
scale using the solution-extraction production method.

·      Based on Advancy research and analysis, WE Soda is one of the
lowest cost producers of soda ash globally, primarily because the Group
produces natural soda ash using the solution-extraction production method
which has a significantly lower cash cost of production by comparison with
synthetic soda ash production, mainly because it has lower energy intensity
and lower raw material input costs.

·      WE Soda also has industry-leading operating margins, with a
Netback Margin((6)) of almost 60% for YE 2022, mainly driven by its low-cost
production and efficient global customer supply chain. The Group is also
pursuing a number of initiatives through which it is seeking to further
improve its operating margins per mt in the short to medium term, by either
generating a price premium for its low carbon, sustainably produced products
relative to other soda ash producers or by reducing its cost of delivery,
mainly through driving increased efficiency and reduced cost in its global
customer supply chain whilst maintaining or increasing its levels of customer
service and supply chain reliability.

·      WE Soda currently operates two large-scale, modern production
facilities located near Ankara in Turkey, known as Eti Soda and Kazan Soda,
which in YE 2022 produced approximately 2.0 million mt and 3.0 million mt,
respectively, of soda ash and sodium bicarbonate, combined. The Group also has
a non-controlling approximately 20% effective interest in the Sisecam Wyoming
production facility in the US, operated by Sisecam Chemicals USA Inc.
("Sisecam").

·      The Group's modern, well invested facilities require low levels
of sustaining capital expenditure, supporting strong and stable Free Cash
Flow((7)) generation, enabling the Group to invest in and expand its
production capacity while also maintaining a strong financial profile, and
being able to distribute dividends to its shareholders.

·      WE Soda aims to more than double total production from 5 million
mtpa to 11 million mtpa by 2030, of which more than 90% will be soda ash, by
investing approximately $5.0 billion into three major projects, including two
greenfield projects located in Wyoming, US, and at its existing Kazan Soda
facility in Turkey:

o  Kazan Soda: expansion of the existing facility to increase production from
approximately 3.0 million mtpa to approximately 4.0 million mtpa by 2026.

o  Pacific Soda: an early-stage greenfield development project, currently in
the preliminary engineering design, research and development and permitting
phase, which is 60% owned and controlled by Sisecam with WE Soda owning the
remaining 40% and providing the solution-extraction "know-how" for the
project. If developed as planned, the targeted production capacity is 5.4
million mtpa, with production expected to start by 2027, at the earliest.

o  West Soda: an early-stage greenfield development project, still in the
conceptual early design and pre-permitting phase, which is 100% owned by WE
Soda. This project is currently not expected to come onstream before 2030 and,
if developed as planned based on preliminary management estimates, will have a
targeted production capacity of 2.5-3.0 million mtpa.

·      The Europe region (comprising Western Europe, Central Europe,
Turkey and the Middle East and Africa ("MEA")) is the Group's core geographic
market and in YE 2022 represented 73% of the Group's combined sales by volume
of soda ash and sodium bicarbonate. Western Europe and Turkey are the Group's
single largest markets globally, representing 45% and 20%, respectively, of
global sales by volume in YE 2022 and almost 90% of Group sales within the
Europe region. South America ("SAM") is also a core regional market for the
Group, and in YE 2022 16% of Group sales by volume were to the Americas region
(including North America ("NAM") and SAM), of which almost all was sold to
SAM, and Brazil was the Group's single largest market within in the Americas
region, representing approximately 75% of Group sales by volume within that
region.

·      For YE 2022, WE Soda had revenue of $1,774 million (YE 2021:
$892 million), Adjusted EBITDA((8)) of $838 million (2021: $431 million), with
Adjusted EBITDA per mt almost doubling to $165.5 per mt (YE 2021: $89.1 per
mt). Free Cash Flow for YE 2022 was $741 million (YE 2021: $303 million). For
the three months ended 31 March 2023, the Company had revenue of $495
million and Adjusted EBITDA of $248 million.

·      WE Soda intends to deliver robust dividend distributions to its
shareholders, whilst also retaining sufficient cash to finance the growth and
development of its business by maintaining a strong balance sheet and
financial   liquidity position.

o  Following Proposed Admission, we intend to distribute a dividend equal to
100% of "excess cash", defined as all cash after making deductions for
expected maintenance and expansionary capital expenditures, taxes and debt
service, subject to maintaining a minimum liquidity position of at least $100
million (comprising cash on balance sheet and any undrawn committed credit
facilities). We plan to adopt a progressive dividend policy, aiming to
maintain or grow the dividend each year, but, recognizing that some
fluctuations in our excess cash are to be expected, actual dividend
distributions will reflect the Board's view of our cash generation prospects
and expected cash requirements at the time. In addition, all dividend
distributions will be subject to the availability of distributable reserves in
the stand-alone accounts of the Company, other legal restrictions on the
distribution of profits, and available funds.

o  In the event that the Proposed Admission occurs, the Company intends to
distribute an initial interim dividend of approximately $250 million, or
$0.0813 per share, in early October 2023, entitling each shareholder to
receive a dividend as if they had been a shareholder throughout the first half
of the year. After the announcement of its full year results for YE 2023, the
Company also intends to distribute a final dividend to shareholders on or
around 24 May 2024. It is expected that the final dividend for YE 2023 will be
equal to the unpaid portion of the dividend for the full year, consistent with
our dividend policy, and is expected to be equal to or greater than the
initial interim dividend paid in October 2023.

·      WE Soda is wholly owned by the Ciner Group, one of Turkey's
largest industrial groups with operations in various sectors, including energy
and mining, glass and chemicals, shipping, logistics and media. The Company is
headquartered in the UK and, as of 31 March 2023, employed 1,291 personnel
globally((9)).

(2)       Morningstar Sustinalytics is a leading global provider of ESG
research, ratings and data, which provides research based on its independent
methodology, and publicly available or non-confidential information from
issuers. The Corporate ESG Assessment is not part of any offering, nor shall
it be considered as an offer to buy or sell or invest in any securities,
investment advice, expert option, or an assurance letter as defined by the
applicable legislation. No information provided by Morningstar Sustainalytics
under the Corporate ESG Assessment shall be considered as being a statement,
representation, warranty or argument either in favour or against the
truthfulness, reliability or completeness of any facts or statements that the
Company has made available to Morningstar Sustainalytics for the purpose of
the Corporate ESG Assessment, in light of the circumstances under which such
facts or statements have been presented. Neither the Corporate ESG Assessment,
nor any other information on Morningstar Sustainalytics' website, is or will
be incorporated by reference into the Prospectus.

(3)       Energy intensity is measured as MMBtu energy consumed per mt
of soda ash and sodium bicarbonate production, combined, with energy consumed
being the sum of all renewable, non-renewable and purchased energy consumed
less energy sold.

(4)       CO(2)e emissions intensity is calculated as Scope 1 & 2
market mt of CO(2)e emitted per mt of combined soda ash and sodium bicarbonate
production at Eti Soda and Kazan Soda, combined.

(5)       Water intensity is calculated as m(3) of water withdrawal per
mt of combined soda ash and sodium bicarbonate production at Eti Soda and
Kazan Soda, combined.

(6)       Netback Margin represents Adjusted EBITDA divided by Netback
Revenue, where Netback Revenue represents revenue from sales of soda ash and
sodium bicarbonate after deducting transportation expenses and export expenses
associated with the delivery of product from our production facilities to the
point of delivery for the customer.

(7)       Free Cash Flow is calculated as Adjusted EBITDA minus
Maintenance Capital Expenditures (expenditures incurred to maintain, over the
long term, operating income or operating capacity) minus tax payments.

(8)       Adjusted EBITDA  represents EBITDA adjusted for certain
items, either positive or negative, which we consider to be non-recurring in
nature and further items that we do not consider to be representative of the
underlying performance of the business. EBITDA represents profit/(loss) for
the period from continuing operations before interest in equity-accounted
associates, depreciation and amortisation expenses, finance expenses, net of
finance income and taxation.

(9)       Excluding temporary employees with fixed-term contracts hired
between 31 December 2022 and 31 March 2023.

Enquiries

 

WE Soda

Edward Westropp, Head of Investor Relations

+44 (0) 208 148 5456

Edward.westropp@wesoda.co.uk (mailto:Edward.westropp@wesoda.co.uk)

 

Powerscourt (Public Relations adviser to WE Soda)

Peter Ogden / James White

+44 (0)207 250 1446

wesoda@powerscourt-group.com (mailto:wesoda@powerscourt-group.com)

 

Joint Global Coordinators

 

J.P. Morgan Cazenove

Alex Watkins / Richard Sheppard / Alia Malik / Beau Freker

+44 (0)207 742 4000

 

BNP Paribas

Andreas Bernstorff / Matthew Ponsonby / Tom Snowball / Deepak Sran

+44 (0)207 595 2000

 

Goldman Sachs

Richard Cormack / John Wilkinson / Philipp de la Chevallerie / Louise
Courtney

+44 (0)207 774 1000

 

Joint Bookrunners

 

Deutsche Bank

+44 (0)207 545 8000

 

Liberum

+44 (0)203 100 2000

 

Morgan Stanley

+44 (0)207 425 8000

 

MUFG Securities

+44 (0)207 628 5555

 

Numis

+44 (0)207 260 1000

 

IMPORTANT NOTICE

The contents of this announcement, which have been prepared by and are the
sole responsibility of the Company, have been approved by J.P. Morgan
Securities plc (which conducts its UK investment banking activities as J.P.
Morgan Cazenove) ("J.P. Morgan") and solely for the purposes of Section
21(2)(b) of the Financial Services and Markets Act 2000, as amended.

The information contained in this announcement is for background purposes only
and does not purport to be full or complete. No reliance may be placed by any
person for any purpose on the information contained in this announcement or
its accuracy, fairness or completeness. Each of J.P. Morgan and Goldman Sachs
International ("Goldman Sachs") is authorised by the Prudential Regulation
Authority (the "PRA") and is regulated in the United Kingdom by the FCA and
the PRA. BNP PARIBAS ("BNPP") is authorised and regulated by the European
Central Bank and the Autorité de contrôle prudentiel et de résolution. BNPP
is authorised by the PRA and is subject to regulation by the FCA and limited
regulation by the PRA. Deutsche Bank AG, London Branch ("Deutsche Bank") is
authorised and regulated by the European Central Bank and the German Federal
Financial Supervisory Authority.  With respect to activities undertaken in
the United Kingdom, Deutsche Bank is authorised by the PRA.  It is subject to
regulation by the FCA and limited regulation by the PRA. Liberum Capital
Limited ("Liberum") is authorised and is regulated in the United Kingdom by
the FCA. MUFG Securities EMEA plc ("MUFG") is authorised by the PRA and is
regulated in the United Kingdom by the FCA and the PRA. Morgan Stanley &
Co. International plc ("Morgan Stanley") is authorised by the PRA and in the
United Kingdom by the FCA and the PRA. Numis Securities Limited ("Numis") is
authorised and is regulated in the United Kingdom by the FCA.  Each of J.P
Morgan, BNPP, Goldman Sachs, Deutsche Bank, Liberum, Morgan Stanley, MUFG and
Numis (together, the "Banks") is acting exclusively for the Company and no one
else in connection with the possible Offer, and will not regard any other
person (whether or not a recipient of this document) as their respective
clients in relation to the possible Offer and will not be responsible to
anyone other than the Company for providing the protections afforded to their
respective clients, nor for providing advice in relation to the possible Offer
or any transaction, matter, or arrangement referred to in this announcement.

In the European Economic Area (the "EEA"), this announcement is only addressed
to and directed at persons in member states of the EEA who are "qualified
investors" within the meaning of Article 2(e) of Regulation (EU) 2017/1129 (as
amended) ("Qualified Investors"). In the United Kingdom, this announcement is
only addressed to and directed at persons who are "qualified investors" within
the meaning of Article 2(e) of Regulation (EU) 2017/1129 (as amended), which
forms part of UK law by virtue of the European Union (Withdrawal) Act 2018,
who are also: (i) persons having professional experience in matters relating
to investments who fall within the definition of "investment professionals" in
Article 19(5) of the Financial Services and Markets Act 2000 (Financial
Promotion) Order 2005 (the "Order"); or (ii) high net worth entities falling
within Article 49(2)(a) to (d) of the Order; or (iii) are other persons to
whom it may otherwise lawfully be communicated (all such persons referred to
in (i), (ii) and (iii) together being "Relevant Persons"). This announcement
must not be acted or relied on (i) in the United Kingdom, by persons who are
not Relevant Persons and (ii) in any member state of the EEA by persons who
are not Qualified Investors. Any investment activity to which this
announcement relates (i) in the United Kingdom is available only to, and may
be engaged in only with, Relevant Persons; and (ii) in any member state of the
EEA is available only to, and may be engaged only with, Qualified Investors.

This announcement is not for release, publication or distribution, directly or
indirectly, in or into the United States, Australia, Canada, Japan or South
Africa or in any jurisdiction where, or to any person whom, to do so would
constitute a violation of applicable law or regulation. The distribution of
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persons into whose possession any document or other information referred to
herein comes should inform themselves about and observe any such restriction.
Any failure to comply with these restrictions may constitute a violation of
the securities laws of any such jurisdiction.

This announcement does not constitute or form a part of any offer or
solicitation to purchase or subscribe for, or otherwise invest in securities
to any person in any jurisdiction, including the United States, Australia,
Canada, Japan, or South Africa or any other jurisdiction where to do so would
constitute a violation of the relevant laws of such jurisdiction. The
securities referred to herein have not been and will not be registered under
the U.S. Securities Act of 1933, as amended (the "Securities Act"), or with
any securities regulatory authority of any state or other jurisdiction of the
United States. The securities may not be offered or sold in the United States,
except pursuant to an applicable exemption from 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. No public offering of
the securities referred to herein is being made in the United States.

This announcement may include forward-looking statements, which are based on
current expectations and projections about future events. These statements may
include, without limitation, any statements preceded by, followed by or
including words such as "target", "believe", "expect", "aim", "intend", "may",
"anticipate", "estimate", "plan", "project", "will", "can have", "likely",
"should", "would", "could" and any other words and terms of similar meaning or
the negative thereof. These forward-looking statements are subject to risks,
uncertainties and assumptions about the Company and its subsidiaries and its
investments, including, among other things, the development of its business,
trends in its operating environment, and future capital expenditures and
acquisitions. The forward-looking statements in this announcement speak only
as at the date of this announcement. These statements reflect the beliefs of
the Directors, (including based on their expectations arising from pursuit of
the Group's strategy) as well as assumptions made by the Directors and
information currently available to the Company.

Further, certain forward-looking statements are based upon assumptions of
future events which may not prove to be accurate and none of the Company, the
Banks nor any member of the Group, nor any of such person's affiliates or
their respective directors, officers, employees, agents and/or advisors, nor
any other person(s) accepts any responsibility for the accuracy or fairness of
the opinions expressed in this announcement or the underlying assumptions.
Actual events or conditions are unlikely to be consistent with, and may differ
significantly from, those assumed. In light of these risks, uncertainties and
assumptions, the events in the forward-looking statements may not occur. Past
performance cannot be relied upon as a guide to future performance and should
not be taken as a representation that trends or activities underlying past
performance will continue in the future. Forward-looking statements speak only
as of the date they are made. No representation or warranty is made that any
forward-looking statement will come to pass. No one undertakes to update,
supplement, amend or revise any forward-looking statements. You are therefore
cautioned not to place any undue reliance on forward-looking statements.

Each of the Company, the Banks and their respective directors, officers,
employees, advisers or affiliates, as defined under Rule 501(b) of Regulation
D under the Securities Act ("affiliates"), expressly disclaims any obligation
or undertaking to update, review or revise any forward-looking statement or
any other information contained in this announcement whether as a result of
new information, future developments or otherwise, except to the extent
required by applicable law.

Any subscription or purchase of Shares in the possible Offer should be made
solely on the basis of information contained in the Prospectus which may be
issued by the Company in connection with the Offer. The information in this
announcement is subject to change. Before subscribing for or purchasing any
Shares, persons viewing this announcement should ensure that they fully
understand and accept the risks which will be set out in the Prospectus, if
published. No reliance may be placed for any purpose on the information
contained in this announcement or its accuracy or completeness. This
announcement does not constitute, nor form part of, any offer or invitation to
sell or issue, or any solicitation of any offer to acquire, whether by
subscription or purchase, any Shares or any other securities, nor shall it (or
any part of it), or the fact of its distribution, form the basis of, or be
relied on in connection with, or act as any inducement to enter into, any
contract or commitment whatsoever.

The Company may decide not to go ahead with the possible Offer and there is
therefore no guarantee that a Prospectus will be published, the Offer will be
made or Proposed Admission will occur. Potential investors should not base
their financial decision on this announcement. Acquiring investments to which
this announcement relates may expose an investor to a significant risk of
losing all of the amount invested. Persons considering making investments
should consult an authorised person specialising in advising on such
investments. This announcement does not constitute a recommendation concerning
a possible offer. The value of shares can decrease as well as increase.
Potential investors should consult a professional advisor as to the
suitability of a possible offer for the person concerned.

Nothing contained herein constitutes or should be construed as (i) investment,
tax, financial, accounting or legal advice; (ii) a representation that any
investment or strategy is suitable or appropriate to your individual
circumstances; or (iii) a personal recommendation to you.

None of the Banks nor any of their respective affiliates and/or any of their
or their affiliates' directors, officers, employees, advisers and/or agents
accepts any responsibility or liability whatsoever for, or makes any
representation or warranty, express or implied, as to, the truth, accuracy or
completeness of the information in this announcement (or whether any
information has been omitted from the announcement) and/or any other
information relating to Group and/or its associated companies, whether
written, oral or in a visual or electronic form, and howsoever transmitted or
made available, or for any loss howsoever arising from any use of the
announcement or its contents or otherwise arising in connection therewith.

Unless otherwise indicated, market, industry and competitive position data are
estimates (and accordingly, approximate) and should be treated with caution.
Such information has not been audited or independently verified, nor has the
Company ascertained the underlying economic assumptions relied upon therein.

Certain data in this announcement, including financial, statistical, and
operating information has been rounded. As a result of the rounding, the
totals of data presented in this announcement may vary slightly from the
actual arithmetic totals of such data. Percentages in tables may have been
rounded and accordingly may not add up to 100%.

In connection with the possible Offer, any of J.P. Morgan, BNPP, Goldman
Sachs, Deutsche Bank, Liberum, Morgan Stanley, MUFG and Numis (the "Banks" and
each a "Bank") and any of their affiliates, acting as investors for their own
accounts, may take up a portion of the Shares in the possible Offer as a
principal position, and in that capacity may retain, purchase, sell, offer to
sell or otherwise deal for its own accounts in

such Shares and other securities of the Company or related investments and
other securities of the Company or related investments in connection with the
possible Offer or otherwise. Accordingly, references in the Prospectus, once
published, to the Shares being purchased, placed or otherwise dealt in should
be read as including any purchase, placing of or dealing by any Bank and any
of its affiliates acting as an investor for its own accounts. In addition,
certain of the Banks or their affiliates may enter into financing arrangements
(including swaps, warrants or contracts for differences) with investors in
connection with which the Banks (or any of their affiliates) may from time to
time acquire, hold or dispose of Shares. Neither the Banks nor any of their
affiliates intend to disclose the extent of any such investment or
transactions otherwise than in accordance with any legal or regulatory
obligations to do so.

 

In connection with the possible Offer, J.P. Morgan, as Stabilising Manager
(the "Stabilising Manager"), or any of its agents, may (but will be under no
obligation to), to the extent permitted by applicable law and for

stabilisation purposes, on behalf of the Banks, over allot Shares up to a
total of 15 per cent of the total number of Shares included in the Offer or
effect other transactions with a view to supporting the market price of the
Shares or any options, warrants or rights with respect thereto, or other
interest in the Shares or other securities of the Company, in each case at a
higher level than that which might otherwise prevail in the open market. The
Stabilising Manager is not required to enter into such transactions and such
transactions may be effected on any securities market, over the counter
market, stock exchange or otherwise and may be undertaken at any time during
the period commencing on the date of the conditional dealings in the Shares on
the London Stock Exchange and ending no later than 30 calendar days
thereafter. Stabilisation transactions aim at supporting the market price of
the securities during the stabilisation period. Such stabilisation, if
commenced, may be discontinued at any time without prior notice. If such
stabilisation occurs, it will be undertaken at the London Stock Exchange.
However, there will be no obligation on the Stabilising Manager or any of its
agents to effect stabilising transactions and there is no assurance that
stabilizing transactions will be undertaken. In no event will measures be
taken to stabilise the market price of the Shares above the Offer Price.
Except as required by law or regulation, neither the Stabilising Manager nor
any of its agents intends to disclose the extent of any over allotments made
and/or stabilisation transactions conducted in relation to the possible Offer.

 

For the purposes of allowing the Stabilising Manager to cover short positions
resulting from any such over-allotment and/or from sales of Shares effected by
it during the stabilising period, the Stabilising Manager has been granted an
over-allotment option (the "Over-allotment Option") by the selling
shareholder, pursuant to which it may purchase, or procure purchasers for,
additional  Shares (representing, in aggregate, up to 15 per cent of the
total number of Shares included in the possible Offer) at the Offer Price (the
"Over-allotment Shares"). The Over-allotment Option may be exercised in whole
or in part upon notice by the Stabilising Manager at any time on or before the
30th calendar day after the commencement of conditional dealings in the Shares
on the London Stock Exchange. Any Over-allotment Shares made available
pursuant to the Over-allotment Option will be made available on the same terms
and conditions as Shares being offered pursuant to the possible Offer, will
rank pari passu in all respects with all other Shares (Including with respect
to pre-emption rights) and will form a single class with all other Shares for
all purposes, including with respect to voting and for all dividends and
distributions thereafter declared, made or paid on the ordinary share capital
of the Company.

For the avoidance of doubt, the contents of the Group's website, including the
websites of the Group's business units, are not incorporated by reference
into, and do not form part of, this announcement.

Information to Distributors

Solely for the purposes of the product governance requirements contained
within (a) EU Directive 2014/65/EU on markets in financial instruments, as
amended ("MiFID II"); (b) articles 9 and 10 of Commission Delegated Directive
(EU) 2017/593 supplementing MiFID II; (c) local implementing measures (the
"EEA Product Governance Requirements") and (d)  Chapter 3 of the FCA Handbook
Product Intervention and Product Governance Sourcebook (the "UK Product
Governance Requirements" and together with the EEA Product Governance
Requirements, the "Product Governance Requirements"), and disclaiming all and
any liability, whether arising in tort, contract or otherwise, which any
"manufacturer" (for the purposes of the Product Governance Requirements) may
otherwise have with respect thereto, the Shares have been subject to a product
approval process, which has determined that such Shares are: (i) compatible
with an end target market of retail clients and investors who meet the
criteria of professional clients and eligible counterparties, each as defined
in MiFID II or Chapter 3 of the FCA Handbook Conduct of Business Sourcebook
("COBS"), as applicable; and (ii) eligible for distribution through all
permitted distribution channels (the "Target Market Assessment").
Notwithstanding the Target Market Assessment, distributors (for the purposes
of the Product Governance Requirements) should note that: the price of the
Shares may decline and investors could lose all or part of their investment;
the Shares offer no guaranteed income and no capital protection; and an
investment in the 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 any contractual, legal or regulatory
selling restrictions in relation to the possible Offer. Furthermore, it is
noted that, notwithstanding the Target Market Assessment, the Banks will only
procure investors who meet the criteria of professional clients and eligible
counterparties.

For the avoidance of doubt, the Target Market Assessment does not constitute:
(a) an assessment of suitability or appropriateness for the purposes of MiFID
II or Chapters 9A or 10A respectively of COBS; 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 Shares.

Each distributor is responsible for undertaking its own target market
assessment in respect of the Shares and determining appropriate distribution
channels.

 

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