REG - Springfield Props. - Acquisition of Tulloch Homes and Proposed Placing
01/12/2021 07:00
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RNS Number : 1233U Springfield Properties PLC 01 December 2021
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THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT CONSTITUTE OR
CONTAIN ANY INVITATION, SOLICITATION, RECOMMENDATION, OFFER OR ADVICE TO ANY
PERSON TO PURCHASE AND/OR SUBSCRIBE FOR, OTHERWISE ACQUIRE OR DISPOSE OF ANY
SECURITIES IN SPRINGFIELD PROPERTIES PLC OR ANY OTHER ENTITY IN ANY
JURISDICTION. NEITHER THIS ANNOUNCEMENT NOR THE FACT OF ITS DISTRIBUTION,
SHALL FORM THE BASIS OF, OR BE RELIED ON IN CONNECTION WITH ANY INVESTMENT
DECISION IN RESPECT OF SPRINGFIELD PROPERTIES PLC.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF
EU REGULATION 596/2014 (WHICH FORMS PART OF DOMESTIC UK LAW PURSUANT TO THE
EUROPEAN UNION (WITHDRAWAL) ACT 2018) ("UK MAR").
Springfield Properties plc
("Springfield" or the "Company")
Acquisition of Tulloch Homes
and
Proposed Placing
The Board of Springfield (AIM: SPR), a leading housebuilder in Scotland
delivering private and affordable housing, is pleased to announce the
conditional acquisition of Thistle SPV2 Limited, the owner of Tulloch Homes,
an Inverness-based housebuilder focused on building high-quality private
housing in the Scottish Highlands, for a net consideration of £56.4 million*
(the "Acquisition").
The Company also announces a proposed placing of 15,714,286 new ordinary
shares (the "Placing Shares") at a price of 140 pence per Placing Share (the
"Placing Price") to raise gross proceeds of £22.0 million (the "Placing").
The net proceeds of the Placing will be used to re-finance part of the initial
cash consideration of the Acquisition.
Acquisition Highlights
· Acquisition of Tulloch Homes, a profitable, cash generative and
well-run housebuilder with significant land ownership in the Scottish
Highlands in and around Inverness.
· Under the terms of the Acquisition, total net consideration of
£56.4 million, being gross consideration of £77.6 million less expected net
cash in the Tulloch Homes business, on completion, of not less than £21.2
million, is comprised of:
o Initial net cash consideration of £43.4 million; and
o Deferred cash consideration of £13.0 million.
· The Directors believe the Acquisition will:
o Accelerate the growth of Springfield;
o Enhance the Company's foothold in an area of high demand in Scotland, and
where Springfield has been organically building a presence in recent years, in
line with the Company's strategy of expanding via acquisition and into new
territories to accelerate growth;
o Reinforce supply chain capabilities such as gaining access to labour and
subcontractors;
o Strengthen the Company's private housing land bank and create opportunity
for affordable housing;
o Bring a strong, established management team into the Company; and
o Enhance earnings from the current financial year and significantly enhance
earnings from first full year of ownership.
· Completion of the Acquisition is conditional upon binding
commitments being received from investors in the Placing of not less than
£22.0 million (or such lesser amount as Springfield may in its absolute
discretion elect).
Placing Highlights
· Proposed placing of 15,714,286 Placing Shares at a price of 140 pence
per Placing Share to raise gross proceeds of £22.0m before expenses.
· The net proceeds will be used to fund the Acquisition by repaying
part of a bridging finance facility with Bank of Scotland that will partially
finance the initial cash consideration for the Acquisition.
· The Placing Price represents a discount of approximately 4.4 per
cent. to the closing price on 30 November 2021, being the last practicable
trading day prior to the release of this announcement.
· The Placing is being conducted by way of an Accelerated Bookbuild
which will commence immediately following this announcement in accordance with
the terms and conditions set out in Appendix II to this announcement.
· Singer Capital Markets Securities Limited ("SCM") is acting as
Sole Placing Agent, Bookrunner and Broker in connection with the Placing.
· The Placing is conditional, inter alia, upon the approval of the
Placing by Shareholders at a general meeting of the Company, which is expected
to be convened for 9 a.m. on 20 December 2021 (the "General Meeting").
Expanded Revolving Credit Facility and Bridging Finance Facility
The Company has entered into an amendment and restatement agreement with Bank
of Scotland in relation to its existing facilities agreement, pursuant to
which it has increased the amounts available to it under its Revolving Credit
Facility, and has established new term loan facilities for the purposes of
funding the Acquisition.
Increased Revolving Credit Facility
The amount available under the Company's Revolving Credit Facility has been
increased from £64.5 million to £87.5 million. Part of the increase under
the Revolving Credit Facility will be used to fund a portion of the initial
cash consideration in relation to the Acquisition. The margin and basis of
interest calculation remain the same under the increased Revolving Credit
Facility as they were prior to the increase.
Bridging Finance Facilities
Three term loan facilities, totalling £43.2 million, were established under
the Company's facilities agreement, for the purposes of financing the
Acquisition. The bridging finance facilities will be repaid using the net cash
of Tulloch Homes on completion and the proceeds of the Placing.
Current Trading
In the Company's results for the year ended 31 May 2021, published on 14
September 2021, the Company noted that it had entered the 2022 financial year
delivering against a strong order book, was continuing to receive excellent
demand across the business and expected to report strong growth for the year
to 31 May 2022 (on an underlying basis, to exclude the contribution from land
sales in 2021).
This momentum has been maintained throughout the first half of the 2022
financial year, with good reservations in private housing and the Company
continuing to deliver against its record order book in affordable housing. The
Company will also commence receiving income from housing for the private
rented sector this financial year. With sustained house price inflation and
active management of cost and supply chain pressures, the Company continues to
trade in line with market expectations for FY2022.
Notwithstanding the increase in the Company's share capital as a result of the
Acquisition and the Placing, the Company intends to pay a final dividend per
Ordinary Share in respect of the year ending 31 May 2022 in line with previous
expectations.
Innes Smith, CEO of the Company, commented on the Acquisition of Tulloch
Homes:
"This is another great acquisition for Springfield - and our third since
coming to the market in 2017. Tulloch Homes has an excellent reputation for
building high-quality homes in the Scottish Highlands in and around Inverness.
This is an area of high demand where we have been organically building a
presence in recent years. As a result, it will significantly strengthen our
foothold in an area of strategic importance and accelerate our growth, being
earnings enhancing from the current year. We welcome all of the Tulloch Homes
employees to the Springfield group and we look forward to working together to
continue to grow our business."
Application will be made for the Placing Shares to be admitted to AIM and
Admission is expected to take place on 21 December 2021 at 8:00 am.
Immediately following Admission of the Placing Shares, the Company's issued
share capital will consist of 118,270,051 ordinary shares with voting rights.
This figure may be used by Shareholders as the denominator for the
calculations by which they will determine if they are required to notify their
interest in, or a change to their interest in, the share capital of the
Company under the FCA's Disclosure Guidance and Transparency Rules.
A circular convening a general meeting of the Company's shareholders (the
"Circular") is expected to be posted in the coming days, and will provide
details of, and the background to, the Acquisition and the Placing, and sets
out the reasons why the Board believes that the Placing is in the best
interests of the Company and its Shareholders and to seek Shareholder approval
of the Resolutions at the forthcoming General Meeting.
Expected timetable
Posting of the Circular and Form of Proxy 3 December 2021
Latest time and date for receipt of the Forms of Proxy 9 a.m. on 16 December 2021
Time and date of General Meeting 9 a.m. on 20 December 2021
Admission and commencement of dealings in the Placing Shares 8 a.m. on 21 December 2021
Each of the times and dates above refer to London time and are subject to
change by the Company. Any such change will be notified to shareholders by an
announcement on a Regulatory Information Service.
*Gross consideration of £77.6m less expected net cash on completion of not
less than £21.2m
Enquiries
Springfield Properties
Sandy Adam, Chairman +44 1343 552550
Innes Smith, Chief Executive Officer
Singer Capital Markets (Nomad, Sole Bookrunner and Broker)
Shaun Dobson, Rachel Hayes, James Moat +44 20 7496 3000
(Investment Banking)
Luther Pendragon
Harry Chathli, Claire Norbury +44 20 7618 9100
Appendix II to this Announcement (which forms part of this Announcement) sets
out further information relating to the Bookbuild and the terms and conditions
of the Placing.
Unless otherwise stated, capitalised terms in this Announcement have the
meanings ascribed to them in Appendix I (which forms part of this
Announcement).
This Announcement should be read in its entirety. In particular, you should
read and understand the information provided in the "Important Notice" section
below and the Appendices to this Announcement (which form part of this
Announcement) which includes the terms and conditions of the Placing. Persons
who have chosen to participate in the Placing, by making an oral or written
offer to acquire Placing Shares, will be deemed to have read and understood
this Announcement in its entirety (including the Appendices) and to be making
such offer on the terms and subject to the conditions herein and, in respect
of those persons participating in the Placing, to be providing the
representations, warranties, agreements, confirmations, acknowledgements and
undertakings contained in Appendix II.
IMPORTANT NOTICE
Neither this Announcement (including the appendices and the information
contained in them), nor any copy of it, may be taken or transmitted, published
or distributed, directly or indirectly, in or into the United States,
Australia, Canada, Japan, New Zealand or the Republic of South Africa or to
any persons in any of those jurisdictions or any other jurisdiction where to
do so would constitute a violation of the relevant securities laws of such
jurisdiction. This Announcement is for information purposes only and does not
constitute an offer to sell or issue, or the solicitation of an offer to buy,
acquire or subscribe for any shares in the capital of the Company in the
United States, Australia, Canada, Japan, New Zealand, or the Republic of South
Africa or any other state or jurisdiction in which such offer or solicitation
is not authorised or to any person to whom it is unlawful to make such offer
or solicitation. Any failure to comply with these restrictions may constitute
a violation of securities laws of such jurisdictions.
This Announcement has been issued by, and is the sole responsibility of, the
Company. The distribution of this announcement or any information contained in
it, and the offering or sale of securities in jurisdictions other than the
United Kingdom may be restricted by law, and therefore persons coming into
possession of this announcement and/or any related communications should
inform themselves about and observe such restrictions. Any failure to comply
with such restrictions may constitute a violation of the securities law of any
such jurisdiction.
All offers of Placing Shares will be made pursuant to an exemption under the
Regulation (EU) 2017/1129 as it forms part of domestic
law by virtue of the European Union (Withdrawal) Act 2018 (the
"Prospectus Regulation") as amended from time to time from the requirement to
produce a prospectus. No prospectus will be made available in connection with
the matters contained in this announcement and no such prospectus is required
(in accordance with the Prospectus Regulation) to be published. 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 SCM, the Nomad nor any of their affiliates or agents (or any of their
respective directors, officers, employees or advisers) for the contents of the
information contained in this Announcement, or any other written or oral
information made available to or publicly available to any interested party or
its advisers, or any other statement made or purported to be made by or on
behalf of SCM, the Nomad nor any of their affiliates in connection with the
Company, the Placing Shares or the Placing or the Acquisition and any
responsibility and liability whether arising in tort, contract or otherwise
therefore is expressly disclaimed.
This Announcement does not identify or suggest, or purport to identify or
suggest, the risks (direct or indirect) that may be associated with an
investment in the Placing Shares. Any investment decision to buy Placing
Shares in the Placing must be made solely on the basis of publicly available
information, which has not been independently verified by SCM. None of the
information in this Announcement has been independently verified or approved
by SCM or any of its directors, officers, employees, advisers, consultants,
affiliates or agents. Save for any responsibilities or liabilities, if any,
imposed on SCM by FSMA or by the regulator regime established under it, no
responsibility or liability is accepted by SCM or any of its directors,
officers, employees, advisers, consultants, affiliates or agents for any
errors, omissions or inaccuracies in such information or opinions or for any
loss, cost or damage suffered or incurred howsoever arising, directly or
indirectly, from any use of this Announcement or its contents or otherwise in
connection with this Announcement or from any acts or omissions of the Company
in relation to the Placing.
This Announcement does not constitute a recommendation concerning any
investor's investment decision with respect to the Placing. 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. The contents of
this Announcement are not to be construed as legal, business, financial or tax
advice. Each investor or prospective investor should consult his, her or its
own legal adviser, business adviser, financial adviser or tax adviser for
legal, financial, business or tax advice.
The Placing Shares to be issued pursuant to the Placing will not be admitted
to trading on any stock exchange other than the AIM market of the London Stock
Exchange.
Neither the content of the Company's website (or any other website) nor any
website accessible by hyperlinks on the Company's website (or any other
website) is incorporated in, or forms part of, this announcement.
By participating in the Bookbuild and the Placing, each Placee by making an
oral or written and legally binding offer to subscribe for and/or purchase
Placing Shares will be deemed (i) to have read and understood this
Announcement (including the appendices) in its entirety, (ii) to be
participating, making an offer and acquiring Placing Shares on the terms and
conditions contained in Appendix II to this Announcement and (iii) to be
providing the representations, warranties, indemnities, acknowledgements and
undertakings contained in Appendix II to this Announcement.
This Announcement and the information contained herein are not an offer of
securities for sale in the United States. The Placing Shares described in this
Announcement have not been, and will not be, registered under the US
Securities Act of 1933, as amended (the "Securities Act") or under the
securities laws of any state or other jurisdiction of the United States, and
may not be offered, sold, resold, transferred or delivered, directly or
indirectly, within, in or into the United States, unless registered under the
Securities Act or pursuant to an available exemption from, or in a transaction
not subject to, the registration requirements of the Securities Act and, in
each case, in compliance with any applicable securities laws of any state or
other jurisdiction of the United States. The Placing Shares are being offered
and sold solely outside of the United States in offshore transactions in
accordance with Regulation S under the Securities Act ("Regulation S"). There
will be no public offering of the Placing Shares in the United States. No
representation is being made as to the availability of any exemption under the
Securities Act for the reoffer, resale, pledge or transfer of the Placing
Shares.
The Placing Shares have not been approved or disapproved by the United States
Securities and Exchange Commission, any state securities commission or any
other regulatory authority in the United States, nor have any of the foregoing
authorities passed upon or endorsed the merits of the Fundraising or the
accuracy or adequacy of this announcement. Any representation to the contrary
is a criminal offence in the United States.
Furthermore, the Placing Shares have not been and will not be registered under
the applicable laws of any of Australia, Canada, Japan, the Republic of
Ireland, the Republic of South Africa or of any other jurisdiction where to do
so would be unlawful and, consequently, may not be offered or sold to any
national, resident or citizen thereof. The distribution of this Announcement
and the placing of the Placing Shares as set out in this Announcement in
certain jurisdictions may be restricted by law. No action has been taken that
would permit an offering of such shares or possession or distribution of this
Announcement or any other offering or publicity material relating to such
shares in any jurisdictions where action for that purpose is required.
Persons into whose possession this Announcement comes are required to inform
themselves about, and to observe, such restrictions. Any failure to comply
with the applicable restrictions may constitute a violation of the securities
laws of any such jurisdiction.
Singer Capital Markets Securities Limited, which is authorised and regulated
in the United Kingdom by the FCA, is acting as broker and bookrunner
exclusively to the Company and to no-one else in connection with the Placing
and Admission and will not be responsible to anyone (including any Placees)
other than the Company for providing the protections afforded to its clients,
nor for providing advice in relation to the Placing or Admission or any other
matters referred to in this Announcement.
Singer Capital Markets Advisory LLP, which is authorised and regulated in the
United Kingdom, is acting as nominated adviser to the Company for the purposes
of the AIM Rules in connection with the Placing and Admission and to no-one
else in connection with the Placing and Admission and will not be responsible
to any person other than the Company for providing the protections afforded to
its clients, nor for providing advice in relation to the Placing or Admission
or any other matters referred to in this Announcement. Singer Capital Markets
Advisory LLP's responsibilities as the Company's nominated adviser under the
AIM Rules are owed solely to the London Stock Exchange and are not owed to the
Company, any director of the Company or to any other person.
This Announcement contains (or may contain) certain forward-looking statements
with respect to certain of the Company's current expectations and projections
about future events and the Company's future financial condition and
performance. These statements, which sometimes use words such as "aim",
"anticipate'', "believe", "may", "will", "should", "intend", "plan",
"assume'', "estimate", "expect' (or the negative thereof) and words of similar
meaning, reflect the current beliefs and expectations of the directors of the
Company and involve known and unknown risks, uncertainties and assumptions,
many of which are outside the Company's control and difficult to predict, that
could cause actual results and performance to differ materially from any
expected future results or performance expressed or implied by the
forward-looking statement. The important factors that could cause the
Company's actual results, performance or achievements to differ materially
from those in the forward-looking statements include, among others, global
events (such as pandemics), economic and business cycles, the terms and
conditions of the Company's financing arrangements, foreign currency rate
fluctuations, competition in the Company's principal markets, acquisitions or
disposals of businesses or assets and trends in the Company's principal
industries. Due to such uncertainties and risks, readers are cautioned not to
place reliance on such forward-looking statements, which speak only as of the
date hereof. In light of these risks, uncertainties and assumptions, the
events described in the forward-looking statements in this Announcement may
not occur.
The information contained in this Announcement speaks only as of the date of
this Announcement and is subject to change without notice and the Company does
not assume any responsibility or obligation to, and does not intend to, update
or revise publicly or review any of the information contained to this
Announcement, whether as a result of new information, future events or
otherwise, except to the extent required by the FCA, the AIM Rules, UK MAR,
the rules of the London Stock Exchange or by applicable law.
Information to Distributors
Solely for the purposes of the product governance requirements contained
within Chapter 3 of the FCA Handbook Production Intervention and Product
Governance Sourcebook (the "UK Product Governance Requirements"), and
disclaiming all and any liability, whether arising in tort, contract or
otherwise, which any "manufacturer" (for the purposes of the UK Product
Governance Requirements) may otherwise have with respect thereto, the Placing
Shares have been subject to a product approval process, which has determined
that such securities are: (i) compatible with an end target market of
investors who meet the criteria of retail investors, investors who meet the
criteria of professional clients and eligible counterparties, each as defined
in the UK Product Governance Requirements; and (ii) eligible for distribution
through all distribution channels as are permitted by UK Product Governance
Requirements (the "Target Market Assessment"). Notwithstanding the Target
Market Assessment, distributors (for the purposes of UK Product Governance
Requirements) should note that: (a) the price of the Placing Shares may
decline and investors could lose all or part of their investment; (b) the
Placing Shares offer no guaranteed income and no capital protection; and (c)
an investment in the Placing Shares is compatible only with investors who do
not need a guaranteed income or capital protection, who (either alone or in
conjunction with an appropriate financial or other adviser) are capable of
evaluating the merits and risks of such an investment and who have sufficient
resources to be able to bear any losses that may result therefrom. The Target
Market Assessment is without prejudice to the requirements of any contractual,
legal or regulatory selling restrictions in relation to the Placing.
Furthermore, it is noted that, notwithstanding the Target Market Assessment,
SCM 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
Chapter 9A or 10A respectively of the FCA Handbook Conduct of Business
Sourcebook; 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.
APPENDIX I
Extracts from the Circular
1. Introduction
The Company today announces that it has conditionally acquired Tulloch
Homes, an Inverness-based housebuilder focused on building high-quality
private housing in the Scottish Highlands, for a net consideration of £56.4
million (being gross consideration of £77.6 million less expected net cash on
completion of not less than £21.2 million). The Company also announces a
proposed placing of 15,714,286 Placing Shares at 140 pence per Placing
Share with certain new and
existing investors. The Placing will raise gross proceeds for the
Company of £22.0 million.
The net consideration for the Acquisition comprises:
(a) initial cash consideration of £43.4 million; and
(b) deferred cash consideration of £13.0 million.
The issue of the Placing Shares pursuant to the Placing is conditional, inter
alia, upon the approval by Shareholders of the Resolutions to be proposed at
the General Meeting of the Company, convened for 20 December 2021.
Subject to Shareholders approving the Resolutions, it is expected that Admission of the Placing Shares will
take place on or around 21 December 2021.
The Placing Shares are not being offered on a pro rata basis to existing
Shareholders and, accordingly, the Placing is conditional, inter alia, upon
Shareholders resolving to dis-apply statutory pre-emption rights. Shareholders
will receive, on or around 3 December 2021, a Notice of General Meeting which
has been convened for 9 a.m. on 20 December 2021, at which the Resolutions
will be proposed to approve the allotment and issue of the Placing Shares and
to dis-apply statutory pre-emption rights in respect of such allotment.
2. Background to and reasons for the Acquisition and
Placing
Background to the Group
Springfield Properties plc is an award-winning housebuilder developing a mix
of private, affordable and private rented sector housing in Scotland. The
Group's business model focuses on securing land for residential use, which
often requires considerable remediation works and significant investment in
infrastructure prior to commencing development of private or affordable
houses.
The Group offers both private and affordable housing through its two operating
divisions. In addition to developing affordable housing on new private
developments under Section 75 agreements, the Affordable division also
includes developments which consist entirely of affordable housing using a
proven business model. The Company will also commence receiving income from
housing for the private rented sector this financial year.
Information on the Acquisition
Overview
Tulloch Homes is an Inverness-based housebuilder, focused on building
high-quality private housing in the Scottish Highlands. Tulloch Homes has an
established and respected brand and strong management. The Tulloch Group sold
219 houses (160 private and 59 affordable) in its financial year ended 30 June
2021, at average selling prices of £237,000 (private) and £136,000
(affordable). Tulloch Group's average number of employees in the year ended 30
June 2021 was 136.
Land bank
Tulloch Group has a land bank of 1,791 plots, of which 87 per cent. have
planning permission. The total GDV of the land bank is approximately £375.4
million, and equates to approximately 7 years of development at current rates
of activity.
Tulloch Group has 11 active sites, representing 558 units, with a target gross
margin of around 21 per cent..
In relation to the composition of Tulloch Group's land bank, 91 per cent. is
owned and paid for and 9 per cent. is contracted. In addition to its land
bank, the Tulloch Group also has an option over land at Welltown of Leys,
Inverness for 600 homes for future development.
Financial information
In its financial year ended 30 June 2021, the Tulloch Group sold 219 homes. In
the year ended 30 June 2021, the Tulloch Group generated revenue of £46.4
million, an operating profit of £6.3 million and profit before tax of £6.0
million.
In the three years to 30 June 2021 the Tulloch Group had an adjusted average
gross margin of 21 per cent..
As at 30 June 2021, the Tulloch Group had net assets of approximately £71.8
million. On a pro forma basis, excluding two sites that were not included in
the Acquisition and reflecting the revaluation of two sites which had
historically been impaired and have subsequently received planning permission,
the Tulloch Group had net assets of £74.6m.
Consideration
Under the terms of the Acquisition, the total net consideration of £56.4
million, being gross consideration of £77.6 million less net expected cash in
the Tulloch Homes business on completion of not less than £21.2 million, will
be satisfied by:
· initial net cash consideration of £43.4 million, to be financed
as follows:
o £22.0 million under a new term loan facility which has been established
for the purposes of providing bridge finance for the Acquisition (Bridging
Facility B), which will be repaid in full through the issue of the Placing
Shares; and
o £21.4 million to be drawn under the Company's increased Revolving Credit
Facility; and
· deferred cash consideration of £13.0 million, (£6.5 million of
which is payable in December 2022 (i.e. one year after completion of the
Acquisition) and the remaining £6.5 million of which is payable in August
2023 (i.e. 20 months after completion of the Acquisition)).
The Company has also established two further additional term loan facilities
to provide bridge finance during the period between completion of the
Acquisition and the Company being able to access the net cash in the Tulloch
Group (which is expected to be not less than £21.2 million), being:
· a term loan facility (Bridging Facility A Tranche 1) in the
amount of £9.1 million (which will be repaid within two Business Days of the
Acquisition from cash in the Tulloch Group); and
· a term loan facility (Bridging Facility A Tranche 2) in the
amount of £12.1 million (which will be repaid on or before 17 January 2022
from cash in the Tulloch Group).
The consideration assumes that the Tulloch Group had, at completion of the
Acquisition, not less than £21.2 million of net cash in its business.
Accordingly, the enterprise value in respect of the Acquisition is £56.4
million (i.e. gross consideration of £77.6 million, less £21.2 million of
net cash). In the event that the Tulloch Group had less than £21.2 million of
net cash in its business at completion of the Acquisition (to be determined by
reference to a set of completion accounts which will be prepared in due
course) the sellers of Tulloch Homes are required to pay Springfield £ for £
in respect of any shortfall. No additional consideration is payable by
Springfield in the event that the net cash in the Tulloch Group's business is
in excess of £21.2 million.
Rationale for the Acquisition
The Acquisition, which is in line with the Company's stated strategy of
expanding via acquisition and into new territories to accelerate growth, is
expected to enhance earnings per share from the current year and significantly
enhance earnings in its first full year of ownership, before consideration of
potential synergies. The Board considered that the terms of the Acquisition
and the valuation of Tulloch Homes were attractive given that it expands the
Company's land bank in the Highlands of Scotland around Inverness, which is an
area of high and growing demand where the Company has been strategically
building a presence over the last few years. Furthermore, the acquisition of
an established housebuilder has the advantage of being able to benefit from
existing supply chains with access to labour and subcontractors in the local
area whilst strengthening the Company's private housebuilding land bank and
creating opportunities for affordable housing. The Company is also gaining a
strong, established management team through the Acquisition.
The enlarged Group
Following the Acquisition, the Group will have a land bank GDV of
approximately £3.5 billion, equating to approximately 14 years of development
at current rates of activity. The enlarged Group's total land bank will
comprise 17,072 plots (56% with planning) across 56 active sites and 83
planned future sites.
The Directors intend to maintain Tulloch Homes' strong brand identity and will
operate it as a separate business unit within the enlarged Group with an
independent sales team and business targets. Tulloch Homes will be led by the
newly appointed Managing Director, Alexander (Sandy) Grant, who has been with
the business for 18 years, succeeding the longstanding CEO, George Fraser who
will be retiring. Tulloch Homes' office in Inverness will be retained to
maintain presence in the region and there are no immediate plans to
rationalise Tulloch Homes' operational employees.
3. Current Trading and Prospects
In the Company's results for the year ended 31 May 2021, published on 14
September 2021, the Company noted that it had entered the 2022 financial year
delivering against a strong order book, was continuing to receive excellent
demand across the business and expected to report strong growth for the year
to 31 May 2022 (on an underlying basis to exclude the contribution from land
sales in 2021).
This momentum has been maintained throughout the first half of the 2022
financial year, with good reservations in private housing and the Company
continuing to deliver against its record order book in affordable housing. The
Company will also commence receiving income from housing for the private
rented sector this financial year. With sustained house price inflation and
active management of cost and supply chain pressures, the Company continues to
trade in line with market expectations for FY2022.
Notwithstanding the increase in the Company's share capital as a result of the
Acquisition and the Placing, the Company intends to pay a final dividend per
Ordinary Share in respect of the year ending 31 May 2022 in line with previous
expectations.
4. Banking Facilities
The Company has entered into an amendment and restatement agreement with Bank
of Scotland in relation to its existing facilities agreement, pursuant to
which it has increased the amounts available to it under its Revolving Credit
Facility, and has established new term loan facilities for the purposes of
funding the Acquisition.
Increased Revolving Credit Facility
Pursuant to the terms of the amendment and restatement agreement, the amount
available under the Company's Revolving Credit Facility has been increased
from £64.5 million to £87.5 million. The margin and basis of interest
calculation remain the same under the increased Revolving Credit Facility as
they were prior to the increase.
Bridging Finance Facilities
Pursuant to the terms of the amendment and restatement agreement, three term
loan facilities were established under the Company's facilities agreement, for
the purposes of financing the Acquisition. These comprise:
· a £9.1 million term loan facility (named Bridging Facility A,
Tranche 1);
· a £12.1 million term loan facility (named Bridging Facility A,
Tranche 2); and
· a £22.0 million term loan facility (named Bridging Facility B).
Each of these term loan facilities was used for the purposes of funding the
initial cash consideration in relation to the Acquisition, and in particular:
· Bridging Facility A, Tranche 1 and Bridging Facility A, Tranche 2
(being in aggregate £21.2 million) is being used for the purposes of bridging
the period between payment of the initial gross consideration of £64.6
million and release of the net cash in the Tulloch Group at completion
(expected to be not less than £21.2 million); and
· Bridging Facility B is being used for the purposes of bridging
the period between payment of the initial gross consideration and receipt of
the proceeds from the Placing.
5. The Placing
The Company is proposing to raise £22.0 million, before expenses, by the
issue of the Placing Shares at 15,714,286 pence per Placing Share to certain
new and existing investors. When issued, the Placing Shares will represent
13.3 per cent of the enlarged issued share capital of the Company and will
rank pari passu with the Existing Ordinary Shares in the Company.
The Placing is not being underwritten. The issue of the Placing Shares is
conditional, inter alia, upon the approval by Shareholders of the Resolutions
to be sought at the General Meeting convened for 20 December 2021 and upon
Admission becoming effective on 21 December 2021 (or such later date as the
Company and SCM may agree but not later than 7 January 2022).
On 1 December 2021, the Company, the Nomad and SCM entered into the Placing
Agreement pursuant to which the SCM agreed, subject to certain conditions, to
procure subscribers for the Placing Shares at the Placing Price. The Placing
Agreement contains provisions entitling the Nomad and SCM to terminate the
Placing (and the arrangements associated with it), at any time prior to
Admission in certain circumstances, including in the event of a material
breach of the warranties given in the Placing Agreement, the failure of the
Company to comply with its obligations under the Placing Agreement, the
occurrence of a force majeure event which in the Nomad's or SCM's reasonable
opinion may be material and adverse to the Company or the Placing, or a
material adverse change affecting the financial position or business or
prospects of the Company. If this right is exercised, the Placing will not
proceed, any monies that have been received in respect of the Placing will be
returned to the applicants without interest and Admission will not occur. The
Placing is not being underwritten by the Nomad or SCM.
The Company has agreed to pay SCM, upon Admission, a placing commission and
all other costs and expenses of, or in connection with, the Placing, plus any
VAT thereon.
The Directors believe that raising new funds by way of the Placing is the most
appropriate method of funding the Company at the present time. The Board
considers that a general offer to existing Shareholders by way of rights or
other pre-emptive issue is not appropriate at this stage of the Company's
development due to the significant additional costs that would be incurred.
6. Sale and Purchase Agreement
On 1 December 2021, the Company entered into a share purchase agreement
("SPA") pursuant to which the Company agreed to purchase the entire issued
share capital of Tulloch Homes from its shareholders. The initial
consideration to be paid is £64.6 million, all of which will be paid in cash
on 1 December 2021 subject to binding commitments being received from
investors in the Placing of not less than £22.0 million (or such lesser
amount as Springfield may in its absolute discretion elect). Deferred
consideration of £13.0 million is payable in cash (£6.5 million of which is
payable in December 2022, on the anniversary of completion of the Acquisition,
and the remaining £6.5 million of which is payable in August 2023, being 20
months after completion of the Acquisition).
The SPA provides that in the event that the net cash in the Tulloch Group as
at completion (i.e. 1 December 2021) is less than £21.2 million then the
consideration will be reduced by the amount by which the net cash is less than
£21.2 million, with each seller being severally obliged to pay to Springfield
that seller's relevant proportion of the amount by which the net cash is less
than £21.2 million. The consideration is not subject to increase in the event
that the net cash is greater than £21.2 million.
The SPA contains certain customary warranties and is accompanied by a tax deed
given by all of the sellers in relation to Tulloch Homes and its business,
subject to certain customary limitations.
7. General Meeting
A notice of a General Meeting, to be held at Alexander Fleming
House, 8 Southfield Drive, Elgin IV30 6GR, at 9 a.m. on 20 December 2021,
will be sent to shareholders
shortly. At this meeting, two resolutions will be proposed:
· the first resolution is an ordinary resolution to grant
a new authority and power to the Directors to permit them to allot the Placing
Shares pursuant to the Placing as described in this announcement; and
· the second resolution, which is a special resolution,
is to grant the Directors the authority to allot the Placing Shares pursuant
to the Placing on a non pre-emptive basis.
DEFINITIONS
"Acquisition" the acquisition of the entire issued share capital of Tulloch Homes
"Act" the Companies Act 2006
"Admission" admission of the Placing Shares to trading on AIM becoming effective in
accordance with the AIM Rules
"AIM" AIM, a market of the London Stock Exchange
"AIM Rules" the AIM Rules for Companies and the AIM Rules for Nominated Advisers, as
applicable
"AIM Rules for Companies" the rules for AIM companies published by the London Stock Exchange, as amended
or re-issued from time to time
"AIM Rules for Nominated Advisers" the rules for nominated advisers to AIM companies published by the London
Stock Exchange, as amended or re-issued from time to time
"Board" or "Directors" the directors of the Company
"Certificated" or "in certificated form" the description of a share or other security which is not in uncertificated
form (that is, not in CREST)
"Company" or "Springfield" Springfield Properties plc, a company incorporated in Scotland with company
number SC031286 and having its registered office at Alexander Fleming House, 8
Southfield Drive, Elgin, Morayshire, IV30 6GR
"CREST" the relevant system (as defined in the CREST Regulations) in respect of which
Euroclear is the Operator (as also defined in the CREST Regulations)
"CREST Regulations" the Uncertificated Securities Regulations 2001 (SI 2001 No. 3755) (as amended
from time to time)
"Existing Ordinary Shares" the Ordinary Shares in issue as at the date of this document
"FCA" the United Kingdom Financial Conduct Authority
"Form of Proxy" the form of proxy accompanying this document for use by Shareholders in
connection with the General Meeting
"FSMA" the UK Financial Services and Markets Act 2000 (as amended) including any
regulations made pursuant thereto
"GDV" estimated gross development value
"General Meeting" or "GM" the general meeting of the Company which has been convened for 9 a.m. on 20
December 2021, notice of which is set out in Part 2 of this document
"Group" the Company and its subsidiaries
"London Stock Exchange" the London Stock Exchange plc
"New Ordinary Shares" or the "Placing Shares" the 15,714,286 new Ordinary Shares to be issued by the Company pursuant to the
Placing
"Nomad" Singer Capital Markets Advisory LLP
"Ordinary Shares" ordinary shares in the share capital of the Company each with a par value of
0.125 pence
"Placing" the conditional placing of the Placing Shares at the Placing Price pursuant to
the Placing Agreement
"Placing Agreement" the conditional agreement dated 1 December 2021 between (1) the Company (2)
Nomad and (3) SCM relating to the Placing
"Placing Price" 140 pence per Placing Share
"Prospectus Regulation Rules" the prospectus regulation rules made by the FCA pursuant to the section 73A of
the FSMA
"Registrar" Link Group, 10(th) Floor, Central Square, 29 Wellington Street, Leeds LS1 4DL
"Resolutions" the resolutions set out in the notice of General Meeting
"Revolving Credit Facility" the Company's revolving credit facility with Bank of Scotland
"Securities Act" the United States Securities Acts of 1933, as amended, and the rules and
regulations promulgated thereunder
"Shareholders" holders of the Ordinary Shares from time to time
"SCM" Singer Capital Markets Securities Limited, the Company's sole bookrunner and
broker
"SPA" has the meaning in paragraph 6 of Part 1 of this document
"Sterling" or "£" pounds sterling, the lawful currency from time to time of the United Kingdom
"Tulloch Homes" Thistle SPV2 Limited, a private company limited by shares incorporated in
Scotland with registered number SC715925 with its registered office at
Exchange Tower, 19 Canning Street, Edinburgh, Scotland EH3 8EH
"Tulloch Group" Tulloch Homes and its subsidiaries
"uncertificated" or "uncertificated form" recorded on the relevant register of the share or security concerned as being
held in uncertificated form in CREST and title to which may be transferred by
of CREST
"United Kingdom" or "UK" the United Kingdom of Great Britain and Northern Ireland
APPENDIX II
TERMS AND CONDITIONS OF THE PLACING
IMPORTANT INFORMATION ON THE PLACING FOR INVITED PLACEES ONLY
MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING
THIS ANNOUNCEMENT (INCLUDING THIS APPENDIX) AND THE TERMS AND CONDITIONS SET
OUT HEREIN (TOGETHER, THIS "ANNOUNCEMENT") ARE DIRECTED ONLY AT PERSONS WHOSE
ORDINARY ACTIVITIES INVOLVE THEM IN ACQUIRING, HOLDING, MANAGING AND DISPOSING
OF INVESTMENTS (AS PRINCIPAL OR AGENT) FOR THE PURPOSES OF THEIR BUSINESS AND
WHO HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS AND ARE:
(1) IF IN A MEMBER STATE OF THE EUROPEAN ECONOMIC AREA ("EEA") QUALIFIED
INVESTORS AS DEFINED IN ARTICLE 2(E) OF REGULATION (EU) 2017/1129 (THE "EU
PROSPECTUS REGULATION"); (2) IF IN THE UNITED KINGDOM, QUALIFIED INVESTORS AS
DEFINED IN ARTICLE 2(E) OF THE EU PROSPECTUS REGULATION AS IT FORMS PART OF
UNITED KINGDOM DOMESTIC LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT
2018 (THE "EUWA") (THE "UK PROSPECTUS REGULATION"); WHO (A) FALL WITHIN
ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL
PROMOTION) ORDER 2005, AS AMENDED (THE "ORDER") (INVESTMENT PROFESSIONALS) OR
(B) FALL WITHIN ARTICLE 49(2)(a) TO (d) (HIGH NET WORTH COMPANIES,
UNINCORPORATED ASSOCIATIONS, ETC.) OF THE ORDER; AND (3) OTHERWISE, PERSONS TO
WHOM IT IS OTHERWISE LAWFUL TO COMMUNICATE IT TO (ALL SUCH PERSONS TOGETHER
BEING REFERRED TO AS "RELEVANT PERSONS").
NEITHER THIS ANNOUNCEMENT NOR THE INFORMATION IN IT SHOULD 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 RELATES IS
AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT
PERSONS. THIS ANNOUNCEMENT DOES NOT ITSELF CONSTITUTE AN OFFER FOR THE SALE OR
SUBSCRIPTION OR A SOLICITATION OF AN OFFER TO BUY OR ACQUIRE OF ANY SECURITIES
IN THE COMPANY IN THE UNITED STATES OR ELSEWHERE.
THE PLACING SHARES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE US
SECURITIES ACT OF 1933, AS AMENDED (THE "US SECURITIES ACT") OR WITH ANY
SECURITIES REGULATORY AUTHORITY OF ANY STATE OR JURISDICTION OF THE UNITED
STATES OR UNDER ANY SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION OF THE
UNITED STATES AND MAY NOT BE OFFERED, SOLD, RESOLD, PLEDGED, TRANSFERRED OR
DELIVERED, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES EXCEPT
PURSUANT TO AN APPLICABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE US SECURITIES ACT, IN EACH CASE, AND IN
COMPLIANCE WITH THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION OF THE
UNITED STATES. THE PLACING SHARES ARE BEING OFFERED AND SOLD ONLY (I) OUTSIDE
OF THE UNITED STATES IN ACCORDANCE WITH REGULATION S UNDER THE US SECURITIES
ACT AND OTHERWISE IN ACCORDANCE WITH APPLICABLE LAWS AND; (II) IN THE UNITED
STATES TO A LIMITED NUMBER OF "QUALIFIED INSTITUTIONAL BUYERS" AS DEFINED IN
RULE 144A UNDER THE US SECURITIES ACT; OR (III) OTHERWISE PURSUANT TO AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE US SECURITIES ACT. ANY
OFFER OR SALE OF PLACING SHARES IN THE UNITED STATES WILL BE MADE ONLY BY
BROKER-DEALERS WHO ARE REGISTERED AS SUCH UNDER THE U.S. EXCHANGE ACT OF 1934,
AS AMENDED. THERE WILL BE NO PUBLIC OFFER OF THE SECURITIES MENTIONED HEREIN
IN THE UNITED STATES. THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN
IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR
IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM THE UNITED STATES,
AUSTRALIA, CANADA, JAPAN, NEW ZEALAND, THE REPUBLIC OF SOUTH AFRICA OR ANY
OTHER JURISDICTION IN WHICH SUCH RELEASE PUBLICATION OR DISTRIBUTION WOULD BE
UNLAWFUL (THE "RESTRICTED JURISDICTIONS"). NO PUBLIC OFFERING OF THE PLACING
SHARES IS BEING MADE IN THE UNITED STATES, THE UNITED KINGDOM OR ELSEWHERE
WHERE SUCH OFFERING WOULD BE UNLAWFUL.
EACH PLACEE SHOULD CONSULT WITH ITS OWN ADVISORS AS TO ANY LEGAL, REGULATORY
TAX, BUSINESS, FINANCIAL AND RELATED ASPECTS OF A PURCHASE OF PLACING SHARES.
All offers of the Placing Shares in the United Kingdom or the EEA will be made
pursuant to an exemption from the requirement to produce a prospectus under
the UK Prospectus Regulation or the EU Prospectus Regulation, as
appropriate. In the United Kingdom, this Announcement is being directed
solely at persons in circumstances in which section 21(1) of the Financial
Services and Markets Act 2000 (as amended) (the "FSMA") does not require the
approval of the relevant communication by an authorised person.
The Placing Shares have not been approved or disapproved by the US Securities
and Exchange Commission, any state securities commission or other regulatory
authority in the United States nor have any of the foregoing authorities
passed upon or endorsed the merits of the Placing or the accuracy or adequacy
of this Announcement. Any representation to the contrary is a criminal offence
in the United States. The relevant clearances have not been, nor will they be,
obtained from the securities commission of any province or territory of
Canada, and 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 Placing Shares 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 or the Republic of South Africa or any other
jurisdiction outside the EEA.
Persons (including without limitation, nominees and trustees) who have a
contractual right or other legal obligations to forward a copy of this
Announcement should seek appropriate advice before taking any action.
This Announcement should be read in its entirety. In particular, any Placee
should read and understand the information provided in the "Important
Information on the Placing for Invitees Only" section of this Announcement.
By participating in the Bookbuild and the Placing, each Placee will be deemed
to have read and understood this Announcement in its entirety, to be
participating, making an offer and acquiring Placing Shares on the terms and
conditions contained herein and to be providing the representations,
warranties, indemnities, acknowledgements and undertakings contained herein.
EACH PLACEE SHOULD CONSULT WITH ITS OWN ADVISERS AS TO ANY LEGAL, REGULATORY,
TAX, BUSINESS, FINANCIAL AND RELATED ASPECTS OF A SUBSCRIPTION FOR THE PLACING
SHARES.
In particular, each such Placee represents, warrants, undertakes, agrees and
acknowledges (amongst other things) that:
1. it is a Relevant Person and undertakes that it will acquire, hold,
manage or dispose of any Placing Shares that are allocated to it for the
purposes of its business;
2. in the case of a Relevant Person in the United Kingdom who acquires
any Placing Shares pursuant to the Placing:
(a) it is a Qualified Investor within the meaning of Article 2(e) of the UK Prospectus Regulation; and
(b) 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:
(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 the United Kingdom other than Qualified Investors or
in circumstances in which the prior consent of SCM has been given to the offer
or resale; or
(ii) where Placing Shares have been acquired by it on behalf of
persons in the United Kingdom other than Qualified Investors, the offer of
those Placing Shares to it is not treated under the UK Prospectus Regulation
as having been made to such persons;
3. in the case of a Relevant Person in a member state of the EEA (each
a "Relevant State") who acquires any Placing Shares pursuant to the Placing:
(c) it is a Qualified Investor within the meaning of Article 2(e) of the EU Prospectus Regulation; and
(d) 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 EU 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 a Relevant State other than Qualified Investors or in circumstances in which the prior consent of SCM has been given to the offer or resale; or
(ii) where Placing Shares have been acquired by it on behalf of persons in a Relevant State other than Qualified Investors, the offer of those Placing Shares to it is not treated under the EU Prospectus Regulation as having been made to such persons;
4. it is acquiring the Placing Shares for its own account or is
acquiring the Placing Shares for an account with respect to which it exercises
sole investment discretion and has the authority to make and does make the
representations, warranties, indemnities, acknowledgements, undertakings and
agreements contained herein;
5. it understands (or if acting for the account of another person, such
person has confirmed that such person understands) the resale and transfer
restrictions set out in this Announcement;
6. except as otherwise permitted by the Company and subject to any
available exemptions from applicable securities laws, it (and any account
referred to in paragraph 5 above) is outside the United States acquiring the
Placing Shares in offshore transactions as defined in and in accordance with
Regulation S under the Securities Act; and
7. the Company and SCM will rely upon the truth and accuracy of the
foregoing representations, warranties, acknowledgements and agreements.
No prospectus
The Placing Shares are being offered to a limited number of specifically
invited persons only and will not be offered in such a way as to require any
prospectus or other offering document to be published. No prospectus or other
offering document has been or will be submitted to be approved by the FCA in
relation to the Placing or the Placing Shares and Placees' commitments will be
made solely on the basis of their own assessment of the Company, the Placing
Shares and the Placing based on the information contained in this Announcement
and the announcement of the results of the Placing (the "Result of Placing
Announcement") (together, the "Placing Documents") and any information
publicly announced through a regulatory information service ("RIS") by or on
behalf of the Company on or prior to the date of this Announcement (the
"Publicly Available Information") and subject to any further terms set forth
in the trade confirmation sent to Placees.
Each Placee, by participating in the Placing, agrees that the content of the
Placing Documents is exclusively the responsibility of the Company and
confirms that it has neither received nor relied on any information (other
than the Publicly Available Information), representation, warranty or
statement made by or on behalf of SCM or the Company or any other person and
none of SCM, the Company nor any other person acting on such person's behalf
nor any of their respective affiliates has or shall have any responsibility or
liability for any Placee's decision to participate in the Placing based on any
other information, representation, warranty or statement (regardless of
whether or not such information, representation, warranty or statement was
given or made by or on behalf of any such persons). 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. No Placee should consider any information in this Announcement to be
legal, tax or business advice. Each Placee should consult its own legal
advisor, tax advisor and business advisor for legal, tax, business and
financial advice regarding an investment in the Placing Shares. Nothing in
this paragraph shall exclude the liability of any person for fraudulent
misrepresentation.
Details of the Placing Agreement and the Placing Shares
SCM is acting as sole bookrunner in connection with the Placing and has
entered into the Placing Agreement with the Company under which, on the terms
and subject to the conditions set out in the Placing Agreement, SCM, as agent
for and on behalf of the Company, has agreed to use its reasonable endeavours
to procure placees for the Placing Shares. The Placing is not being
underwritten by SCM or any other person.
The price per Ordinary Share at which the Placing Shares are to be placed is
140 pence per Placing Share (the "Placing Price"). The timing of the closing
of the book and allocations are at the discretion of the Company and SCM.
The Placing Shares will be made up of a number of new Ordinary Shares issued
and allotted by the Company. Accordingly, by participating in the Placing,
Placees agree to subscribe for Placing Shares.
The Placing Shares have been or will be duly authorised and will, when issued,
be credited as fully paid up and will be issued subject to the Company's
articles of association and rank pari passu in all respects with the
Existing Ordinary Shares, including the right to receive all dividends and
other distributions declared, made or paid on or in respect of the Ordinary
Shares after the date of issue of the Placing Shares, and will on issue be
free of all pre-emption rights, claims, liens, charges, encumbrances and
equities.
Application for admission to trading
Application will be made to the London Stock Exchange for admission of the
Placing Shares to trading on AIM.
It is expected that Admission of the Placing Shares will occur at 8.00 a.m. on
21 December 2021 (or such later time or date as SCM may agree with the
Company, being no later than 8.00 a.m. on the date falling 10 business days
following 21 December 2021) and that dealings in the Placing Shares will
commence at that time.
Bookbuild
SCM will today commence the accelerated bookbuilding process to determine
demand for participation in the Placing by Placees (the "Bookbuild"). 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.
SCM 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. SCM is acting as sole bookrunner to the Placing, as agent for and
on behalf of the Company, on the terms and subject to the conditions of the
Placing Agreement.
2. Participation in the Placing will only be available to persons who
may lawfully be, and are, invited to participate by SCM. SCM may itself agree
to be a Placee in respect of all or some of the Placing Shares or may nominate
any member of its group to do so.
3. Following a successful completion of the Bookbuild, the Company
will confirm the closing of the Placing via the Result of Placing
Announcement.
4. To bid in the Bookbuild, prospective Placees should communicate
their bid orally by telephone or in writing to their usual sales contact at
SCM. Each bid should state the number of Placing Shares which the prospective
Placee wishes to subscribe for at the Placing Price. Bids may be scaled down
by SCM on the basis referred to in paragraph 6 below. SCM reserves the right
not to accept bids or to accept bids in part rather than in whole. The
acceptance of the bids shall be at SCM's absolute discretion, subject to
agreement with the Company.
5. The Bookbuild is expected to close no later than 4.30 p.m. on 1
December 2021 but may be closed earlier or later at the discretion of SCM. SCM
may, in agreement with the Company, accept bids that are received after the
Bookbuild has closed. The Company reserves the right (upon the prior agreement
of SCM) to vary the number of shares to be issued pursuant to the Placing, in
its absolute discretion.
6. Allocations of the Placing Shares will be determined by SCM after
consultation with the Company (and in accordance with SCM's allocation policy
as has been supplied by SCM to the Company in advance of such consultation).
Allocations will be confirmed orally by SCM and a trade confirmation will be
despatched as soon as possible thereafter. SCM's oral confirmation to such
Placee constitutes an irrevocable legally binding commitment upon such person
(who will at that point become a Placee), in favour of SCM and the Company, to
subscribe for the number of Placing Shares allocated to it and to pay the
Placing Price in respect of each such share on the terms and conditions set
out in this Appendix and in accordance with the Company's articles of
association. A bid in the Bookbuild will be made on the terms and subject to
the conditions in this Appendix and will be legally binding on the Placee on
behalf of which it is made and except with SCM's consent, such commitment will
not be capable of variation or revocation after the time at which it is
submitted.
7. Each Placee's allocation and commitment will be evidenced by a
trade confirmation issued to such Placee. The terms of this Appendix will be
deemed incorporated in that trade confirmation.
8. Irrespective of the time at which a Placee's allocation pursuant to
the Placing is confirmed, settlement for all Placing Shares to be
subscribed/purchased for pursuant to the Placing will be required to be made
at the same time, on the basis explained below under "Registration and
Settlement".
9. All obligations under the Bookbuild and the Placing will be
subject to fulfilment or (where applicable) waiver of the conditions referred
to below under "Conditions of the Placing" and to the Placing not being
terminated on the basis referred to below under "Right to terminate under the
Placing Agreement".
10. 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.
11. To the fullest extent permissible by law, none of SCM, the Company nor
any of their respective affiliates, agents, directors, officers or employees
shall have any responsibility or liability to Placees (or to any other person
whether acting on behalf of a Placee or otherwise). In particular, none of
SCM, the Company, nor any of their respective affiliates, agents, directors,
officers or employees shall have any responsibility or liability (including to
the extent permissible by law, any fiduciary duties) in respect of SCM's
conduct of the Placing or of such alternative method of effecting the Placing
as SCM and the Company may agree.
12. The Placing Shares will be issued subject to the terms and conditions
of this Appendix and each Placee's commitment to subscribe for Placing Shares
on the terms set out herein will continue notwithstanding any amendment that
may in future be made to the terms and conditions of the Placing and Placees
will have no right to be consulted or require that their consent be obtained
with respect to the Company's or SCM's conduct of the Placing.
Conditions of the Placing
The Placing is conditional, amongst others, upon the Placing Agreement
becoming unconditional and not having been terminated in accordance with its
terms. SCM's obligations under the Placing Agreement are conditional on
customary conditions, including (amongst others) (the "Conditions"):
1. Admission occurring no later than 8.00 a.m. on 21 December 2021
(or such later time or date as SCM may otherwise agree with the Company, being
no later than 8.00 a.m. on the date falling 10 business days following 21
December 2021) (the "Closing Date");
2. the passing of the resolutions at the General Meeting;
3. the completion of the Acquisition;
4. there having been no development or event resulting in a material
adverse effect which is material in the context of the Group;
5. the delivery to SCM of a certificate from and signed by the
Company in terms of the warranties being provided by such persons under the
Placing Agreement ("Warranties") dated as of the Closing Date;
6. the Company having complied in all material respects with all its
obligations which fall to be performed on or prior to Admission under the
Placing Agreement; and
7. none of the Warranties on the part of the Company in the Placing
Agreement being untrue or inaccurate in any material respect or misleading on
the date of the Placing Agreement and the Closing Date, as though they had
been given and made on each such date by reference to the facts and
circumstances subsisting at each such time.
SCM may, at its discretion and upon such terms as it thinks fit, waive
compliance by the Company with the whole or any part of any of its obligations
in relation to the Conditions or extend the time or date provided for
fulfilment of any such Conditions in respect of all or any part of the
performance thereof, save in respect of condition 1 above relating to
Admission taking place. Any such extension or waiver will not affect Placees'
commitments as set out in this Appendix.
If: (i) any of the Conditions are not fulfilled or (where permitted) waived by
SCM by the relevant time or date specified (or such later time or date as SCM
may agree with the Company, being no later than 8.00 a.m. on the date falling
10 business days following the Closing Date); or (ii) the Placing Agreement is
terminated in the circumstances specified below under "Right to terminate
under the Placing Agreement", the Placing will not proceed and the Placees'
rights and obligations hereunder in relation to the Placing Shares shall cease
and terminate at such time and each Placee agrees that no claim can be made by
it or on its behalf (or any person on whose behalf the Placee is acting) in
respect thereof.
Neither SCM or the Company, nor any of their respective affiliates, agents,
directors, officers or employees 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 SCM.
Right to terminate under the Placing Agreement
SCM is entitled, at any time before Admission, to terminate the Placing
Agreement in accordance with its terms in certain circumstances, including
(amongst other things):
1. where any of the Warranties contained in the Placing Agreement
would if repeated at any time up to Admission (by reference to the facts and
circumstances then existing) be untrue, inaccurate or misleading in any
material respect;
2. there has been a development or event resulting in a material
adverse effect which could in the opinion of SCM (acting reasonably),
materially and adversely affect the Placing or dealings in the Ordinary Shares
following the date of the Placing Agreement;
3. where any statement contained in any Placing Document is or has
become untrue, inaccurate or misleading in any material respect, or any matter
has arisen which would, if the Placing was made at that time, constitute a
material omission from the Placing Documents or any of them;
4. the Company fails to comply in any respect with any obligation
under the Placing Agreement or otherwise relating to the Placing which in the
sole judgment of SCM (acting in good faith) considers material in the context
of the Placing and/or Admission; or
5. the occurrence of a material adverse change or certain force
majeure events including, but not limited to, an escalation of the COVID-19
pandemic in the United Kingdom.
Upon termination, the parties to the Placing Agreement shall be released and
discharged (except for any liability arising before or in relation to such
termination) from their respective obligations under or pursuant to the
Placing Agreement, subject to certain exceptions.
By participating in the Placing, each Placee agrees that (i) the exercise by
SCM of any right of termination or of any other discretion under the Placing
Agreement shall be within the absolute discretion of SCM and that it need not
make any reference to, or consult with, Placees and that it shall have no
liability to Placees whatsoever in connection with any such exercise or
failure to so exercise and (ii) its rights and obligations terminate only in
the circumstances described above under "Right to terminate under the Placing
Agreement" and "Conditions of the Placing", and its participation will not be
capable of rescission or termination by it after oral confirmation by SCM of
the allocation and commitments following the close of the Bookbuild.
Registration and Settlement
Settlement of transactions in the Placing Shares following Admission will take
place within the system administered by Euroclear UK & Ireland Limited
("CREST"), subject to certain exceptions. SCM reserves the right to require
settlement for, and delivery of, the Placing Shares (or any part thereof) to
Placees by such other means that they may deem necessary if delivery or
settlement is not possible or practicable within the CREST system or would not
be consistent with the regulatory requirements in the Placee's jurisdiction.
Following the close of the Bookbuild, each Placee to be allocated Placing
Shares in the Placing will be sent a trade confirmation stating the number of
Placing Shares allocated to them at the Placing Price, the aggregate amount
owed by such Placee to SCM and settlement instructions. Each Placee agrees
that it will do all things necessary to ensure that delivery and payment is
completed in accordance with the standing CREST or certificated settlement
instructions in respect of the Placing Shares that it has in place with SCM.
The Company will deliver (or will procure the delivery of) the Placing Shares
to a CREST account operated by SCM as agent for the Company and SCM will enter
its delivery instruction into the CREST system. The input to CREST by a Placee
of a matching or acceptance instruction will then allow delivery of the
relevant Placing Shares to that Placee against payment.
It is expected that settlement in respect of the Placing Shares will take
place within one business day of the delivery of the Placing Shares on a
delivery versus payment basis.
Interest is chargeable daily on payments not received from Placees on the due
date in accordance with the arrangements set out above at the rate of two
percentage points above LIBOR as determined by SCM.
Each Placee is deemed to agree that, if it does not comply with these
obligations, SCM may sell any or all of the Placing Shares allocated to that
Placee on such Placee's behalf and retain from the proceeds, for SCM's account
and benefit, an amount equal to the aggregate amount owed by the Placee plus
any interest due. The relevant Placee will, however, remain liable for any
shortfall below the aggregate amount owed by it and will be required to bear
any stamp duty or stamp duty reserve tax or other taxes or duties (together
with any interest or penalties) imposed in any jurisdiction which may arise
upon the sale of such Placing Shares on such Placee's behalf.
If Placing Shares are to be delivered to a custodian or settlement agent,
Placees should ensure that the trade confirmation is copied and delivered
immediately to the relevant person within that organisation. Insofar as
Placing Shares are issued 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. If there are any circumstances in which any stamp duty or stamp
duty reserve tax or other similar taxes or duties (including any interest and
penalties relating thereto) is payable in respect of the allocation,
allotment, issue, sale, transfer or delivery of the Placing Shares (or, for
the avoidance of doubt, if any stamp duty or stamp duty reserve tax is payable
in connection with any subsequent transfer of or agreement to transfer Placing
Shares), neither SCM or the Company shall be responsible for payment thereof.
Representations, warranties, undertakings and acknowledgements
By participating in the Placing each Placee (and any person acting on such
Placee's behalf) irrevocably acknowledges, confirms, undertakes, represents,
warrants and agrees (as the case may be) with SCM (in its capacity as
bookrunner and placing agent of the Company in respect of the Placing) and the
Company, in each case as a fundamental term of their application for Placing
Shares, the following:
1. it has read and understood this Announcement in its entirety and
its subscription for Placing Shares is subject to and based upon all the
terms, conditions, representations, warranties, acknowledgements, agreements
and undertakings and other information contained herein and it has not relied
on, and will not rely on, any information given or any representations,
warranties or statements made at any time by any person in connection with the
Placing, the Company, the Placing Shares or otherwise other than the
information contained in the Placing Documents and the Publicly Available
Information;
2. the Ordinary Shares are admitted to trading on AIM, and that the
Company is therefore required to publish certain business and financial
information in accordance with the AIM Rules for Companies (the "AIM Rules")
and the Market Abuse Regulation (EU Regulation No. 596/2014) (as it forms part
of United Kingdom domestic law by virtue of the EUWA ("MAR")), which includes
a description of the nature of the Company's business and the Company's most
recent balance sheet and profit and loss account and that it is able to obtain
or access such information without undue difficulty, and is able to obtain
access to such information or comparable information concerning any other
publicly traded company, without undue difficulty;
3. to be bound by the terms of the Company's articles of association;
4. the person whom it specifies for registration as holder of the
Placing Shares will be (a) itself or (b) its nominee, as the case may be.
Neither SCM or the Company will be responsible for any liability to stamp duty
or stamp duty reserve tax or other similar taxes or duties imposed in any
jurisdiction (including interest and penalties relating thereto) ("Indemnified
Taxes"). Each Placee and any person acting on behalf of such Placee agrees to
indemnify SCM and the Company on an after-tax basis in respect of any
Indemnified Taxes;
5. neither SCM nor any of its affiliates agents, directors, officers
and employees accepts any responsibility for any acts or omissions of the
Company or any of the directors of the Company or any other person in
connection with the Placing;
6. time is of the essence as regards its obligations under this
Appendix;
7. any document that is to be sent to it in connection with the
Placing will be sent at its risk and may be sent to it at any address provided
by it to SCM;
8. it will not redistribute, forward, transfer, duplicate or
otherwise transmit this Announcement or any part of it, or any other
presentational or other material concerning the Placing (including electronic
copies thereof) to any person and represents that it has not redistributed,
forwarded, transferred, duplicated, or otherwise transmitted any such
documents to any person;
9. it has not received (and will not receive) a prospectus or other
offering document in connection with the Placing and acknowledges that no
prospectus or other offering document (a) is required under the UK Prospectus
Regulation or other applicable law; and (b) has been or will be prepared in
connection with the Placing;
10. in connection with the Placing, SCM and any of its affiliates acting
as an investor for its own account may subscribe for Placing Shares in the
Company and in that capacity may retain, purchase or sell for its own account
such Placing Shares in the Company and any securities of the Company or
related investments and may offer or sell such securities or other investments
otherwise than in connection with the Placing. Accordingly, references in this
Announcement to the Placing Shares being issued, offered or placed should be
read as including any issue, offering or placement of such shares in the
Company to SCM or any of its affiliates acting in such capacity;
11. SCM and its affiliates may enter into financing arrangements and
swaps with investors in connection with which SCM and any of its affiliates
may from time to time acquire, hold or dispose of such securities of the
Company, including the Placing Shares;
12. SCM does not intend to disclose the extent of any investment or
transactions referred to in paragraphs 10 and 11 above otherwise than in
accordance with any legal or regulatory obligation to do so;
13. SCM does not owe any fiduciary or other duties to any Placee in
respect of any representations, warranties, undertakings or indemnities in the
Placing Agreement;
14. its participation in the Placing is on the basis that it is not and
will not be a client of SCM in connection with its participation in the
Placing and that SCM has no duties or responsibilities to it for providing the
protections afforded to its clients or customers or for providing advice in
relation to the Placing nor in respect of any representations, warranties,
undertakings or indemnities contained in the Placing Agreement nor for the
exercise or performance of any of its rights and obligations thereunder
including any rights to waive or vary any conditions or exercise any
termination right;
15. the content of the Placing Documents and the Publicly Available
Information has been prepared by and is exclusively the responsibility of the
Company (and such other persons specifically identified as accepting
responsibility to certain parts thereto) and neither SCM nor any of its
affiliates agents, directors, officers or employees nor any person acting on
behalf of any of them is responsible for or has or shall have any
responsibility or liability for any information, representation or statement
contained in, or omission from, the Placing Documents, the Publicly Available
Information or otherwise nor will they be liable for any Placee's decision to
participate in the Placing based on any information, representation, warranty
or statement contained in the Placing Documents, the Publicly Available
Information or otherwise, provided that nothing in this paragraph 15 excludes
the liability of any person for fraudulent misrepresentation made by such
person;
16. the only information on which it is entitled to rely and on which
such Placee has relied in committing itself to subscribe for Placing Shares is
contained in the Placing Documents or any Publicly Available Information (save
that in the case of Publicly Available Information, a Placee's right to rely
on that information is limited to the right that such Placee would have as a
matter of law in the absence of this paragraph 16), such information being all
that such Placee deems necessary or appropriate and sufficient to make an
investment decision in respect of the Placing Shares;
17. it has neither received nor relied on any other information given, or
representations, warranties or statements, express or implied, made, by SCM
nor the Company nor any of their respective affiliates, agents, directors,
officers or employees acting on behalf of any of them (including in any
management presentation delivered in respect of the Bookbuild) with respect to
the Company, the Placing or the Placing Shares or the accuracy, completeness
or adequacy of any information contained in the Placing Documents, or the
Publicly Available Information or otherwise;
18. neither SCM or the Company nor any of their respective affiliates,
agents, directors, officers or employees or any person acting on behalf of any
of them has provided, nor will provide, it with any material or information
regarding the Placing Shares or the Company or any other person other than the
information in the Placing Documents or the Publicly Available Information;
nor has it requested any of SCM or the Company or any of their respective
affiliates or any person acting on behalf of any of them to provide it with
any such material or information;
19. neither SCM or the Company will be liable for any Placee's decision
to participate in the Placing based on any other information, representation,
warranty or statement, provided that nothing in this paragraph 19 excludes the
liability of any person for fraudulent misrepresentation made by that person;
20. it may not rely, and has not relied, on any investigation that SCM,
any of its affiliates or any person acting on its behalf, may have conducted
with respect to the Placing Shares, the terms of the Placing or the Company,
and none of such persons has made any representation, express or implied, with
respect to the Company, the Placing, the Placing Shares or the accuracy,
completeness or adequacy of the information in the Placing Documents, the
Publicly Available Information or any other information;
21. in making any decision to subscribe for Placing Shares it:
(a) has such knowledge and experience in financial and business matters
to be capable of evaluating the merits and risks of subscribing for the
Placing Shares;
(b) will not look to SCM for all or part of any such loss it may
suffer;
(c) is experienced in investing in securities of this nature in this
sector and is aware that it may be required to bear, and is able to bear, the
economic risk of an investment in the Placing Shares;
(d) is able to sustain a complete loss of an investment in the Placing
Shares;
(e) has no need for liquidity with respect to its investment in the
Placing Shares;
(f) has made its own assessment and has satisfied itself concerning the
relevant tax, legal, currency and other economic considerations relevant to
its investment in the Placing Shares; and
(g) has conducted its own due diligence, examination, investigation and
assessment of the Company and Group, the Placing Shares and the terms of the
Placing and has satisfied itself that the information resulting from such
investigation is still current and relied on that investigation for the
purposes of its decision to participate in the Placing;
22. it is subscribing for the Placing Shares for its own account or for
an account with respect to which it exercises sole investment discretion and
has the authority to make and does make the acknowledgements, representations
and agreements contained in this Appendix;
23. it is acting as principal only in respect of the Placing or, if it is
acting for any other person, it is:
(a) duly authorised to do so and has full power to make the
acknowledgments, representations and agreements herein on behalf of each such
person; and
(b) will remain liable to the Company and/or SCM for the performance of
all its obligations as a Placee in respect of the Placing (regardless of the
fact that it is acting for another person);
24. it and any person acting on its behalf is entitled to subscribe for
the Placing Shares under the laws and regulations of all relevant
jurisdictions that apply to it and that it has fully observed such laws and
regulations, has capacity and authority and is entitled to enter into and
perform its obligations as a subscriber of Placing Shares and will honour such
obligations, and has obtained all such governmental and other guarantees,
permits, authorisations, approvals and consents which may be required
thereunder and complied with all necessary formalities to enable it to commit
to this participation in the Placing and to perform its obligations in
relation thereto (including, without limitation, in the case of any person on
whose behalf it is acting, all necessary consents and authorities to agree to
the terms set out or referred to in this Appendix) and will honour such
obligations and that it has not taken any action or omitted to take any action
which will or may result in SCM or the Company or any of their respective
directors, officers, agents, employees or advisers acting in breach of the
legal or regulatory requirements of any jurisdiction in connection with the
Placing;
25. where it is subscribing for Placing Shares for one or more managed
accounts, it is authorised in writing by each managed account to subscribe for
the Placing Shares for each managed account;
26. it irrevocably appoints any duly authorised officer of SCM as its
agent for the purpose of executing and delivering to the Company and/or its
registrars any documents on its behalf necessary to enable it to be registered
as the holder of any of the Placing Shares for which it agrees to subscribe
for upon the terms of this Appendix;
27. the Placing Shares have not been and will not be registered or
otherwise qualified and that a prospectus will not be cleared in respect of
any of the Placing Shares under the securities laws or legislation of the
Restricted Jurisdictions, or any state, province, territory or jurisdiction
thereof;
28. the Placing Shares may not be offered, sold, or delivered, directly
or indirectly, in or into the Restricted Jurisdictions or any jurisdiction
(subject to certain exceptions) in which it would be unlawful to do so and no
action has been or will be taken by any of the Company or SCM or any person
acting on behalf of the Company or SCM that would, or is intended to, permit a
public offer of the Placing Shares in the Restricted Jurisdictions or any
country or jurisdiction, or any state, province, territory or jurisdiction
thereof, where any such action for that purpose is required;
29. no action has been or will be taken by any of the Company or SCM or
any person acting on behalf of the Company or SCM that would, or is intended
to, permit a public offer of the Placing Shares in the United States or in any
country or jurisdiction where any such action for that purpose is required;
30. unless otherwise specifically agreed with SCM, it is not and at the
time the Placing Shares are subscribed for, neither it nor the beneficial
owner of the Placing Shares will be, a resident of, nor have an address in,
Australia, New Zealand, Japan, the Republic of South Africa or any province or
territory of Canada;
31. it may be asked to disclose in writing or orally to SCM:
(a) if he or she is an individual, his or her nationality; or
(b) if he or she is a discretionary fund manager, the jurisdiction in
which the funds are managed or owned;
32. it is and the prospective beneficial owner of the Placing Shares is,
and at the time the Placing Shares are subscribed for will be outside the
United States and is acquiring the Placing Shares in an "offshore transaction"
as defined in, and in accordance with, Regulation S under the US Securities
Act;
33. it has not been offered to purchase or subscribe for Placing Shares
by means of any "directed selling efforts" as defined in Regulation S under
the US Securities Act or by means of any "general solicitation" or "general
advertising" within the meaning of Regulation D under the US Securities Act;
34. it understands that the Placing Shares have not been, and will not
be, registered under the US Securities Act and may not be offered, sold or
resold, pledged or delivered in or into or from the United States except
pursuant to (i) an effective registration statement under the US Securities
Act; or (ii) pursuant to an exemption from the registration requirements of
the US Securities Act and, in each case, in accordance with applicable United
States state securities laws and regulations;
35. it (and any account for which it is purchasing) is not acquiring the
Placing Shares with a view to any offer, sale or distribution thereof within
the meaning of the US Securities Act;
36. it will not distribute, forward, transfer or otherwise transmit this
Announcement or any part of it, or any other presentational or other materials
concerning the Placing in or into or from the United States (including
electronic copies thereof) to any person, and it has not distributed,
forwarded, transferred or otherwise transmitted any such materials to any
person;
37. it understands that there may be certain consequences under United
States and other tax laws resulting from an investment in the Placing and it
has made such investigation and has consulted its own independent advisers or
otherwise has satisfied itself concerning, without limitation, the effects of
United States federal, state and local income tax laws and foreign tax laws
generally;
38. it understands that the Company has not undertaken to determine
whether it will be treated as a passive foreign investment company ("PFIC")
for US federal income tax purposes for the current year, or whether it is
likely to be so treated for future years and neither the Company nor SCM make
any representation or warranty with respect to the same. Accordingly, neither
the Company nor SCM can provide any advice to United States investors as to
whether the Company is or is not a PFIC for the current tax year, or whether
it will be in future tax years. Accordingly, neither the Company nor SCM
undertakes to provide to United States investors or shareholders any
information necessary or desirable to facilitate their filing of annual
information returns, and United States investors and shareholders should not
assume that this information will be made available to them;
39. if it is within the United Kingdom, it is a Qualified Investor as
defined in Article 2(e) of the UK Prospectus Regulation and if it is within a
Relevant State, it is a Qualified Investor as defined in Article 2(e) of the
EU Prospectus Regulation;
40. it has not offered or sold and will not offer or sell any Placing
Shares to persons in the EEA except to Qualified Investors or otherwise in
circumstances which have not resulted in and which will not result in an offer
to the public in any member state of the EEA within the meaning of the
Prospectus Regulation;
41. if it is a financial intermediary, as that term is used in Article
5(1) of the 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 the
United Kingdom other than Qualified Investors, or in circumstances in which
the express prior written consent of SCM has been given to each proposed offer
or resale;
42. if in the United Kingdom, that it is a person (i) having professional
experience in matters relating to investments who falls within the definition
of "investment professionals" in Article 19(5) of the Order or (ii) who falls
within Article 49(2) (a) to (d) ("High Net Worth Companies, Unincorporated
Associations, etc") of the Order, or (iii) to whom it may otherwise lawfully
be communicated;
43. if in the United Kingdom, unless otherwise agreed by SCM, it is a
"professional client" or an "eligible counterparty" within the meaning of
Chapter 3 of the FCA Handbook Conduct of Business Sourcebook ("COBS") and it
is purchasing Placing Shares for investment only and not with a view to resale
or distribution;
44. it has not offered or sold and will not offer or sell any Placing
Shares to persons in the United Kingdom, except to persons whose ordinary
activities involve them in acquiring, holding, managing or disposing of
investments (as principal or agent) for the purposes of their business or
otherwise in circumstances which have not resulted and which will not result
in an offer to the public in the United Kingdom within the meaning of section
85(1) of the Financial Services and Markets Act 2000, as amended ("FSMA");
45. 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 and it
acknowledges and agrees that the Placing Documents have not and will not have
been approved by SCM in its capacity as an authorised person under section 21
of the FSMA and it may not therefore be subject to the controls which would
apply if it was made or approved as a financial promotion by an authorised
person;
46. it has complied and will comply with all applicable laws with respect
to anything done by it or on its behalf in relation to the Placing Shares
(including all applicable provisions in FSMA and MAR) in respect of anything
done in, from or otherwise involving, the United Kingdom);
47. if it is a pension fund or investment company, its subscription
for/purchase of Placing Shares is in full compliance with applicable laws and
regulations;
48. it has complied with its obligations under the Criminal Justice Act
1993 and Articles 8, 10 and 12 of MAR and in connection with money laundering
and terrorist financing under the Proceeds of Crime Act 2002 (as amended), the
Terrorism Act 2000, the Terrorism Act 2006 and the Money Laundering, Terrorist
Financing and Transfer of Funds (Information on the Payer) Regulations 2017
and any related or similar rules, regulations or guidelines, issued,
administered or enforced by any government agency having jurisdiction in
respect thereof (the "Regulations") and the Money Laundering Sourcebook of the
FCA and, if making payment on behalf of a third party, that satisfactory
evidence has been obtained and recorded by it to verify the identity of the
third party as required by the Regulations;
49. in order to ensure compliance with the Regulations, SCM (for itself
and as agent on behalf of the Company) or the Company's registrars may, in
their absolute discretion, require verification of its identity. Pending the
provision to SCM or the Company's registrars, as applicable, of evidence of
identity, definitive certificates in respect of the Placing Shares may be
retained at SCM's absolute discretion or, where appropriate, delivery of the
Placing Shares to it in uncertificated form may be delayed at SCM's or the
Company's registrars', as the case may be, absolute discretion. If within a
reasonable time after a request for verification of identify SCM (for itself
and as agent on behalf of the Company) or the Company's registrars have not
received evidence satisfactory to them, either SCM and/or the Company may, at
its absolute discretion, terminate its commitment in respect of the Placing,
in which event the monies payable on acceptance of allotment will, if already
paid, be returned without interest to the account of the drawee's bank from
which they were originally debited;
50. the allocation, allotment, issue and delivery to it, or the person
specified by it for registration as holder, of Placing Shares will not give
rise to a stamp duty or stamp duty reserve tax liability under (or at a rate
determined under) any of sections 67, 70, 93 or 96 of the Finance Act 1986
(depositary receipts and clearance services) and that the Placing Shares are
not being acquired in connection with arrangements to issue depositary
receipts or to issue or transfer Placing Shares into a clearance service;
51. it (and any person acting on its behalf) has the funds available to
pay for the Placing Shares for which it has agreed to subscribe and
acknowledges and agrees that it will make payment in respect of the Placing
Shares allocated to it in accordance with this Appendix on the due time and
date set out herein, failing which the relevant Placing Shares may be placed
with other subscribers or sold as SCM may in its sole discretion determine and
without liability to such Placee, who will remain liable for any amount by
which the net proceeds of such sale falls short of the product of the relevant
Placing Price and the number of Placing Shares allocated to it and will be
required to bear any stamp duty, stamp duty reserve tax or other taxes or
duties (together with any interest, fines or penalties) imposed in any
jurisdiction which may arise upon the sale of such Placee's Placing Shares;
52. any money held in an account with SCM on behalf of the Placee and/or
any person acting on behalf of the Placee and/or any person acting on behalf
of the Placee will not be treated as client money within the meaning of the
relevant rules and regulations of the FCA made under the FSMA. Each Placee
acknowledges that the money will not be subject to the protections conferred
by the client money rules: as a consequence this money will not be segregated
from SCM's money in accordance with the client money rules and will be held by
it under a banking relationship and not as trustee;
53. its allocation (if any) of Placing Shares will represent a maximum
number of Placing Shares which it will be entitled, and required, to subscribe
for, and that SCM or the Company may call upon it to subscribe for a lower
number of Placing Shares (if any), but in no event in aggregate more than the
aforementioned maximum;
54. neither SCM nor any of its affiliates, nor any person acting on
behalf of them, is making any recommendations to it, advising it regarding the
suitability of any transactions it may enter into in connection with the
Placing and SCM is not acting for it or its clients, and that SCM will not be
responsible for providing the protections afforded to customers of SCM or for
providing advice in respect of the transactions described in this
Announcement;
55. it acknowledges that its commitment to acquire Placing Shares on the
terms set out in this Announcement and in the trade confirmation, contract
note or other (oral or written) confirmation will continue notwithstanding any
amendment that may in future be made to the terms and conditions of the
Placing and that Placees will have no right to be consulted or require that
their consent be obtained with respect to the Company's or SCM's conduct of
the Placing;
56. if it has received any 'inside information' (for the purposes of MAR
and section 56 of the Criminal Justice Act 1993) in relation to the Company
and its securities in advance of the Placing, it confirms that it has received
such information within the market soundings regime provided for in article 11
of MAR and associated delegated regulations and it has not:
(a) used that inside information to acquire or dispose of securities of
the Company or financial instruments related thereto or cancel or amend an
order concerning the Company's securities or any such financial instruments;
(b) used that inside information to encourage, require, recommend or
induce another person to deal in the securities of the Company or financial
instruments related thereto or to cancel or amend an order concerning the
Company's securities or such financial instruments; or
(c) disclosed such information to any person, prior to the information
being made publicly available;
57. the rights and remedies of the Company and SCM under the terms and
conditions in this Appendix are in addition to any rights and remedies which
would otherwise be available to each of them and the exercise or partial
exercise of one will not prevent the exercise of others; and
58. these terms and conditions of the Placing and any agreements entered
into by it pursuant to the terms and conditions of the Placing, and all
non-contractual or other obligations arising out of or in connection with
them, shall be governed by and construed in accordance with the laws of
England and it submits (on behalf of itself and on behalf of any person on
whose behalf it is acting) to the exclusive jurisdiction of the English courts
as regards any claim, dispute or matter arising out of any such contract
(including any dispute regarding the existence, validity or termination of
such contract or relating to any non- contractual or other obligation arising
out of or in connection with such contract), except that enforcement
proceedings in respect of the obligation to make payment for the Placing
Shares (together with any interest chargeable thereon) may be taken by either
the Company or SCM 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.
The foregoing representations, warranties, confirmations, acknowledgements,
agreements and undertakings are given for the benefit of the Company as well
SCM and are irrevocable. SCM, the and the Company and their respective
affiliates and others will rely upon the truth and accuracy of the foregoing
representations, warranties, confirmations, acknowledgements, agreements and
undertakings.
Each prospective Placee, and any person acting on behalf of such Placee,
irrevocably authorises the Company and SCM to produce this Announcement,
pursuant to, in connection with, or as may be required by any applicable law
or regulation, administrative or legal proceeding or official inquiry with
respect to the matters set forth herein.
By participating in the Placing, each Placee (and any person acting on such
Placee's behalf) agrees to indemnify on an after tax basis and hold the
Company, SCM and their respective affiliates, agents, directors, officers and
employees 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 given by the Placee (and any person acting on such Placee's
behalf) in this Appendix or incurred by SCM, the Company or any of their
respective affiliates, agents, directors, officers or employees arising from
the performance of the Placees' obligations as set out in this Announcement,
and further agrees that the provisions of this Appendix shall survive after
completion of the Placing.
No statement in the Placing Documents is intended to be a profit forecast or
estimate, and no statement in the Placing Documents 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. Past performance is no guide to future
performance and persons needing advice should consult an independent financial
adviser.
The Placing Shares will not be admitted to trading on any stock exchange other
than AIM, a market operated by the London Stock Exchange plc.
Singer Capital Markets Securities Limited is authorised and regulated by the
Financial Conduct Authority (the "FCA") in the United Kingdom and is acting as
sole bookrunner exclusively for the Company and no one else in connection with
the Placing and will not be responsible to anyone (including any Placees)
other than the Company for providing the protections afforded to its clients
or for providing advice in relation to the Placing or any other matters
referred to in this Announcement.
Taxation
The agreement to allot and issue certain of the Placing Shares by the Company
to Placees (and/or to persons for whom such Placee is contracting as agent)
free of stamp duty and stamp duty reserve tax relates only to their allotment
and issue to Placees, or such persons as they nominate as their agents, direct
from the Company for the Placing Shares in question.
There should be no liability to stamp duty or SDRT arising on the allotment of
the Placing Shares by the Company. The registration of and the issue of
definitive share certificates to holders of Ordinary Shares should not give
rise to any liability to stamp duty or SDRT.
In addition, neither UK stamp duty nor SDRT should arise on the
transfers/sale of Ordinary Shares on AIM (including instruments transferring
Shares and agreements to transfer Ordinary Shares).
Such agreement also assumes that the Placing Shares are not being acquired in
connection with arrangements to issue depositary receipts or to issue or
transfer the Placing Shares into a clearance service. If there are any such
arrangements, or the settlement relates to any other dealing in the Placing
Shares, stamp duty or stamp duty reserve tax or other similar taxes or duties
may be payable, for which neither the Company nor SCM will be responsible and
the Placees shall indemnify the Company and SCM on an after-tax basis for any
stamp duty or stamp duty reserve tax or other similar taxes or duties
(together with interest, fines and penalties) in any jurisdiction paid by the
Company or SCM in respect of any such arrangements or dealings. If this is the
case, each Placee should seek its own advice and notify SCM accordingly.
Placees are advised to consult with their own advisers regarding the tax
aspects of the subscription for Placing Shares.
The Company and SCM are not liable to bear any taxes that arise on a sale of
Placing Shares subsequent to their acquisition by Placees, including any taxes
arising otherwise than under the laws of any country in the EEA. Each
prospective Placee should, therefore, take its own advice as to whether any
such tax liability arises and notify SCM and the Company accordingly.
Furthermore, each prospective Placee agrees to indemnify on an after-tax basis
and hold SCM and/or the Company and their respective affiliates harmless from
any and all interest, fines or penalties in relation to stamp duty, stamp duty
reserve tax and all other similar duties or taxes in any jurisdiction to the
extent that such interest, fines or penalties arise from the unreasonable
default or delay of that Placee or its agent.
In addition, Placees should note that they will be liable for any stamp duty
and all other stamp, issue, securities, transfer, registration, documentary or
other duties or taxes (including any interest, fines or penalties relating
thereto) payable, whether inside or outside the UK, by them or any other
person on the subscription, acquisition, transfer or sale by them of any
Placing Shares or the agreement by them to subscribe for, acquire, transfer or
sell any Placing Shares.
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