Company Announcements

Trading Update, Financing and Proposed Placing

Source: RNS
RNS Number : 8407M
Scapa Group PLC
14 May 2020
 

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS DEFINED UNDER THE MARKET ABUSE REGULATION (EU) NO. 596/2014 AND THE INFORMATION CONTAINED HEREIN IS NOT FOR PUBLICATION, RELEASE, OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN, OR INTO, THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, SOUTH AFRICA (EACH, A "RESTRICTED JURISDICTION") OR ANY JURISDICTION IN WHICH THE SAME WOULD BE UNLAWFUL. THE INFORMATION CONTAINED HEREIN DOES NOT CONSTITUTE AN OFFER OF SECURITIES FOR SALE IN ANY RESTRICTED JURISDICTION OR IN ANY OTHER JURISDICTION IN WHICH THE SAME WOULD BE UNLAWFUL.

 

For immediate release

 

14 May 2020

Scapa Group plc

("Scapa", "the Company" or "the Group")

 

Trading Update, Financing Arrangements and Proposed Placing

 

Scapa Group plc (AIM: SCPA), the diversified Healthcare and Industrial company focused on bringing best-in-class innovation, design and manufacturing solutions to its customers, today issues an update on trading and management actions during a period of unprecedented disruption as a result of the COVID-19 pandemic.  In addition, the Group announces it has received credit committee approval from its lending banks for a new £15 million short-term facility, to sit alongside the Group's existing £80 million Revolving Credit Facility ("RCF"), and for certain temporary revisions to its covenant arrangements.

 

The Group also announces its intention to carry out a placing of new ordinary shares of 5 pence each ("Ordinary Shares") in the Company (the "Placing Shares"), (the "Placing"). The Placing is being conducted through an accelerated bookbuild (the "Bookbuild") which will be launched immediately following release of this announcement (such announcement and its Appendix together being this "Announcement"). Numis Securities Limited ("Numis") and Joh. Berenberg, Gossler & Co. KG, London Branch ("Berenberg") are acting as Joint Bookrunners (the "Joint Bookrunners") in relation to the Placing.

 

In conjunction with the Placing, Heejae Chae, CEO, and Non-Executive Directors David Blackwood, Brendan McAtamney and Tim Miller, as well as certain members of the senior management team of the Company, intend to subscribe for new Ordinary Shares (the "Subscription Shares") at the Placing Price (as defined below) to contribute approximately £335,000 in aggregate (the "Subscription").

 

The Placing Shares and the Subscription Shares will be issued on a non pre-emptive basis and will together represent up to approximately 19.99% of the Company's existing issued share capital.

 

 

Key highlights

 

·    Trading update - The Group is expected to deliver record revenues for the year ended 31 March 2020, despite the loss of the ConvaTec contract. Statutory Group revenue increased 2.8% (1.1% constant FX) to £320.6 million.

 

·    COVID-19 background and management actions - The Group is currently executing a well-developed COVID-19 action plan focused on cash management and actions taken to preserve liquidity based on immediate, short term (<90 days) and medium term (3-6 months) actions. The Group is expecting a period where revenues will be substantially impacted, particularly in Q1 FY 2021 and in early Q2 FY 2021, before returning to more normal levels, and in-line with management's pre-COVID-19 budget, from Q3 FY 2021 onwards.

 

·    Bank facilities - The Group has received credit committee approval from its existing banking syndicate for a new £15 million short-term facility to sit alongside the Group's existing £80 million RCF, in order to provide additional liquidity, and for certain temporary revisions to its existing covenant arrangements.

 

·    Proposed equity Placing and Subscription - The Group is proposing to raise up to approximately £30 million to strengthen the Group's balance sheet and provide flexibility to support future growth initiatives post-COVID-19. The Board consider it prudent to take action now in order to withstand the adverse financial impact caused by the disruption as well as to have sufficient resources to support ongoing operations and to provide flexibility to capitalise on any potential opportunities in a post-COVID-19 environment.

 

Trading update

 

For the financial year ended 31 March 2020 ("FY 2020"), the Group is expected to deliver record revenues despite the loss of the ConvaTec contract. Statutory Group revenue increased 2.8% (1.1% constant FX) to £320.6m. Revenues on a continuing basis were flat with prior year.

 

Healthcare revenues grew 5.1% on a continuing basis (2.0% constant FX) for the year. Excluding ConvaTec, Healthcare revenues grew 29.8% on a continuing basis (26.3% constant FX) with the full year impact of Systagenix revenues being the main driver. Industrial revenues were 1.1% below prior year (-1.9% constant FX), this being primarily the result of adverse macroeconomic conditions, particularly in the automotive and specialty products markets.

 

Trading profit for FY 2020 is expected to be approximately £28 million, as announced in the trading update on 12 February 2020. Adjusted net debt as at 31 March 2020 of £54.4 million excludes the impact of IFRS16 Finance Leases and includes the impact of deferring £2.0 million of payments to the Group's pension schemes.

 

As announced on 7 May 2020, the Group expects to announce its results for FY 2020 on 23 June 2020.

 

COVID-19 background and management actions

 

The COVID-19 pandemic has impacted all territories and market segments in which the Group operates and, as such, all of the Group's sites are operating under government control measures enforcing mandatory lockdowns. Despite the ongoing lockdowns, all of the Group's operations, with the exception of India, are open, as both the Healthcare and the Industrial businesses have been classified as essential businesses.

 

The current restrictions on travel require strong local and frontline management to respond quickly to a very dynamic situation. The collaboration and positive relationships with the Group's employees and their respective representatives have been essential to the maintenance of our ongoing operations. Scapa has proactively implemented strict health and safety measures to ensure that any employee concerns are addressed and the Company is safeguarding their wellbeing.

 

The Company is currently executing a well-developed COVID-19 action plan that focuses on immediate, short term (<90 days) and medium term (3-6 months) actions.   

 

Upon the commencement of the lockdown restrictions, the Group put in place a series of cash preservation actions. These included a reduction in the use of contractors within the Group's operations and minimal capex across the Group. Certain members of the Board and Executive management team have agreed to a voluntary temporary pay reduction of 20%, effective from 1 May 2020, and no cash payments in respect of the executive management bonus scheme are expected to be paid in respect of this current financial year. There has also been a deferral of any pay increases. 

 

In addition, the Board has determined that the final dividend, which would ordinarily be paid in July 2020, should be suspended.  The Group has also agreed with the Pension Scheme Trustee to defer the bi-annual contributions to the Group's UK defined benefit pension schemes for a set period of time to create additional flexibility.

 

The Group continues to assess government schemes in each operating jurisdiction that may provide either liquidity or tax benefits. These include the deferral of Canadian tax payments (expected to result in a deferral of c. £1.1 million) and reclaiming the French corporate tax payment of EUR200,000 which was made in March 2020. In addition, the Group is exploring additional liquidity schemes such as UK furloughing and has commenced applications to government schemes in France, Italy and the UK. The Group has been approved in the US under the Payment Protection Program and has received a government grant of c.$5 million; the grant is in the form of a loan which will be forgiven if Scapa's US headcount is not reduced for a period of eight weeks.    

 

Over the medium-term (next 3 - 6 months), management will look to make further efficiency savings across the Group, including streamlining the organisational structure and re-aligning the geographic focus of the Group, re-adjusting the supply chain and re-engineering production capabilities, reviewing the product portfolio, reducing and standardising the Group's SKUs and focusing on e-commerce capabilities. 

 

COVID-19 outlook

 

The Group has modelled a significant downside scenario ("COVID-19 scenario") that reflects the on-going and potential disruption to its business. Scapa is expecting a period where revenues will be substantially impacted, particularly in Q1 FY 2021 and in early Q2 FY 2021, before returning to more normal levels, and in-line with management's pre-COVID-19 budget, from Q3 FY 2021 onwards. As described above, the Company is undertaking a number of cost and cash preservation exercises and is adjusting working capital in-line with its revised revenue forecasts.

 

Under the COVID-19 scenario, the Group is expecting to generate FY 2021 revenue of around £272 million, being approximately 80% of the previously budgeted revenues for the year, generating approximately half of the trading profit that was originally forecast in management's FY 2021 pre-COVID-19 budget.

 

The Board believe a number of further opportunities will arise in Healthcare.  Postponed elective surgeries will be carried out and the currently reduced healthcare consumer spending should return towards more normal levels once the current restrictions are lifted.  Many healthcare companies will review their extended supply chains, particularly in Asia, which should benefit Scapa as those companies look to on-shore their supply chain.  An increase in technology transfer opportunities is expected as companies look to streamline their footprints and product portfolios, to minimise cash expenditure, and to increase outsourcing in order to leverage partners' resources. Finally, it is expected that there will be an increase in M&A opportunities at more attractive valuations than those experienced recently.

 

The Industrial portfolio is generally well diversified across both geographies and different industries and has a resilient and non-cyclical portfolio of products. In particular, management believe that COVID-19 will have a minimal impact on its cable segment, which should continue to be strong.

 

Similar to Healthcare, the Group believes there are a number of key areas within Industrial that could help facilitate a strong trading period post-COVID-19. The re-opening of retail channels and an improvement within the automotive industry will provide a return in demand.  In addition, there is an opportunity to benefit from on-shoring of Asian supply chains and from e-commerce where the Group could capture market share from a shift in consumer behaviour

 

The Board therefore believe that revenue and profits will recover in FY 2022. It is expected that Group revenue will grow by between 5 and 10 per cent. from the FY 2021 level in FY 2022. Trading profit is also expected to grow significantly from FY 2021 with a return to double digit margins, driven predominantly by volume recovery in both businesses, underpinned by the operational leverage and cost reductions across the Group and on-going restructuring in Healthcare.

 

The Board believe that, should revenue recover more slowly than anticipated, the Company has the necessary levers to protect and drive earnings through further cost optimisation in both businesses, a clear contingency plan that can be implemented and further restructuring, margin improvement and footprint consolidation.

 

Update on financing arrangements

 

As highlighted in its COVID-19 update, released on 27 March 2020, the Group has been exploring necessary contingency plans in light of recent COVID-19 headwinds, and Scapa today announces it has received credit committee approval from its existing lenders, Santander, HSBC and Bank of Ireland (the "Lenders"), for the Lenders to provide a £15 million short-term facility (the "Additional Debt Facility") to sit alongside the Group's existing £80 million RCF. The Additional Debt Facility is expected to be available from 1 June 2020 and to have a term of 12 months.

 

Currently, the Group has two financial covenants on its RCF, the ratio of adjusted EBITDA to net finance charges must be above 4:1 (the "Existing Interest Cover Covenant") and the ratio of total net debt to adjusted EBITDA must be less than 3:0 (the "Existing Leverage Covenant"). Scapa has received credit committee approval from the Lenders for the Existing Leverage Covenant to be temporarily suspended. It is proposed that it will not be tested in September 2020 and will next be tested in March 2021.  During the period from the date of the amendment of the existing RCF and commencement of the Additional Debt Facility until the later of the expiry of the Additional Debt Facility and the date on which the Group returns to compliance with both the Existing Interest Cover Covenant and the Existing Leverage Covenant, it is expected that the Existing Interest Cover Covenant will be tested quarterly and two additional financial covenants will apply (the "New Temporary Covenant Tests"). The New Temporary Covenant Tests, which are tied to the Group's COVID-19 scenario, will apply to both the existing RCF and the Additional Debt Facility. They comprise a minimum EBITDA test (which requires EBITDA to be at least 80% of LTM EBITDA in Q1, Q2 and Q3 FY 2020), and a liquidity test, tested quarterly (which requires available liquidity to cashflow servicing obligations in the next quarter to be at least 1.5:1). Additionally, there is a requirement that capital expenditure does not exceed 110% of the amount forecast in the COVID-19 scenario. The Group has strong headroom against these covenants in the COVID-19 scenario.

 

The Placing

 

The Placing Shares will be offered by way of the Bookbuild, which will be launched immediately following the release of this Announcement, and the Placing is subject to the terms and conditions set out in the Appendix to this Announcement. The timing for the close of the Bookbuild will be determined by Numis, Berenberg and the Company.  

 

The final number of Placing Shares, and the price at which such shares will be subscribed (the "Placing Price"), will be agreed by Numis, Berenberg and the Company at the close of the Bookbuild and the result (together with details of the number of Subscription Shares subscribed for) will be announced as soon as practicable thereafter.

 

In conjunction with the Placing Heejae Chae, CEO, and Non-Executive Directors David Blackwood, Brendan McAtamney and Tim Miller, as well as certain members of the senior management team of the Company, intend to subscribe for Subscription Shares at the Placing Price, contributing approximately £335,000 in aggregate.

 

The net proceeds of the Placing and the Subscription will be used to strengthen the Group's balance sheet and provide flexibility to support future growth initiatives post-COVID-19.  The Board consider it prudent to take action now in order to withstand the adverse financial impact caused by the disruption as well as to have sufficient resources to support ongoing operations and to provide flexibility to capitalise on any potential opportunities in a post-COVID-19 environment.

 

The Subscription Shares will be subscribed on the basis agreed pursuant to a subscription letter which is intended to be entered into between the Company and the relevant individuals immediately following the making of this Announcement, rather than pursuant to the terms and conditions of the Placing contained in the Appendix to this Announcement.

 

Rationale for the Placing

 

Given the uncertainties around the COVID-19 crisis, the Board believes the Placing and the Subscription are in the best interests of all shareholders in order further to strengthen the Group's balance sheet.  The Placing and the Subscription represent a prudent move that will protect the business in this period of disruption and provide flexibility to capitalise on any potential opportunities in a post-COVID-19 environment.  The Placing and the Subscription are also part of a wider range of mitigating actions that the Group is continuing to take as part of a well-developed action plan in response to COVID-19.

 

Taking together the impact of the management cost reduction initiatives, the Placing, the Subscription and the Additional Debt Facility, the Group is expecting adjusted net debt of approximately £34 million at the end of FY 2021. Consequently, the Company projects that, following the Placing and the Subscription, the Company's FY 2021 Net Debt / EBITDA ratio will be approximately 1.4x, compared to approximately 2.6x without the Placing and the Subscription. 

 

The Board believes that following the implementation of the mitigating actions described in this Announcement, the Group will have sufficient working capital and liquidity in the event of a prolonged COVID-19-related downside scenario.

 

Looking ahead, and beyond the current COVID-19 crisis, the Board believe that, following the Placing and the Subscription, the strength of its balance sheet will allow the Group to capitalise on opportunities and provide the Company with a strong financial position to support its growth.

 

Details of the Placing and the Subscription

 

The Placing is subject to the terms and conditions set out in the Appendix to this Announcement.

 

The Joint Bookrunners will commence the Bookbuild immediately following the release of this Announcement. The Placing Price will be determined at the close of the Bookbuild.

 

The book will open with immediate effect following the release of this Announcement. The timing of the closing of the book, pricing and allocations are at the absolute discretion of the Joint Bookrunners and the Company. Details of the Placing Price and the numbers of Placing Shares and Subscription Shares will be announced as soon as practicable after the close of the Bookbuild.

 

The Placing Shares and the Subscription Shares, when issued, will be fully paid and will rank pari passu in all respects with each other and with the existing Ordinary Shares, including, without limitation, as regards the right to receive all dividends and other distributions declared, made or paid after the date of issue.

 

An application will be made for the Placing Shares and the Subscription Shares to be admitted to trading on AIM ("Admission") and it is expected that Admission will become effective on or around 19 May 2020.

 

The Placing is conditional upon Admission becoming effective not later than 8.00am on 19 May 2020, or such later time and / or date as the Company, Numis and Berenberg may agree (being not later than 8.00am on 2 June 2020). The Placing is also conditional upon, among other things, the placing agreement between the Company and the Joint Bookrunners (the "Placing Agreement") becoming unconditional in all respects and not being terminated in accordance with its terms. The Appendix to this Announcement sets out further information relating to the terms and conditions of the Placing.

 

The Subscription is conditional only upon Admission becoming effective.

 

Shareholder consultation

 

The Company has consulted with the majority of its major institutional shareholders ahead of the release of this Announcement. The Board have concluded that the Placing and the Subscription are in the best interests of shareholders and wider stakeholders and will promote the long term success of the Company.  This conclusion has been endorsed by that consultation. The Placing structure minimises cost and time to completion at an important and unprecedented time for the Company.

 

Heejae Chae, Group Chief Executive of Scapa, commented:

 

"We believe there are strong tailwinds emerging in our two business segments, Healthcare and Industrial, and a strengthened balance sheet will provide flexibility to fully realise potential opportunities in a post-COVID-19 environment.

 

We are confident that both the proposed Placing and debt re-financing, alongside cost saving initiatives, will enable Scapa to cement its strong market position, trusted partner status and ability to quickly support its customers."

 

This Announcement contains inside information for the purposes of MAR. In addition, market soundings (as defined in MAR) were taken in respect of the Placing with the result that certain persons became aware of inside information (as defined in MAR), as permitted by MAR.  This inside information is set out in this Announcement. Therefore, those persons who received inside information in a market sounding are no longer in possession of such inside information relating to the Company and its securities.

 

For the purposes of MAR and Article 2 of Commission Implementing Regulation (EU) 2016/1055, this Announcement is being made on behalf of the Company by Wendy Baker, Company Secretary.

 

This Announcement should be read in its entirety. In particular, your attention is drawn to the "Important Notices" section below of this Announcement and to the detailed terms and conditions of the Placing set out in the Appendix. By choosing to participate in the Placing and by making an oral and legally binding offer to acquire Placing Shares, investors will be deemed to have read and understood this Announcement in its entirety and to be making such offer on the terms and subject to the conditions in it, and to be providing the representations, warranties and acknowledgements contained in the Appendix.

 

 

For further information, please contact:

 

Scapa Group plc

Heejae Chae - Group Chief Executive

Oskar Zahn - Chief Finance Officer

+44 (0)161 301 7430

Numis Securities Limited

(Nominated Adviser, Joint Bookrunner and Joint Broker)

Mark Lander /  Freddie Barnfield / Duncan Monteith

+44 (0)20 7260 1000

 

 

Berenberg

(Joint Bookrunner and Joint Broker)

Chris Bowman / Toby Flaux / Richard Salmond

+44 (0)20 3207 7800

FTI Consulting

(Media Relations)

Simon Conway / Victoria Foster Mitchell

+44 (0)20 3727 1000

 

Important Notices

 

This Announcement does not constitute or form part of an offer to sell or issue or a solicitation of an offer to buy, subscribe for or otherwise acquire any securities in any jurisdiction including, without limitation, the Restricted Jurisdictions or any other jurisdiction in which such offer or solicitation would be unlawful. This Announcement and the information contained in it is not for publication or distribution, directly or indirectly, to persons in a Restricted Jurisdiction unless permitted pursuant to an exemption under the relevant local law or regulation in any such jurisdiction.

 

In particular, this Announcement is not for publication or distribution, directly or indirectly, in or into the United States of America. This Announcement is not an offer of securities for sale into the United States. The securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"), and may not be offered or sold in the United States, except pursuant to an applicable exemption from registration. No public offering of securities is being made in the United States.

 

No action has been taken by the Company, the Joint Bookrunners, any of their respective affiliates (within the meaning of Rule 405 under the Securities Act) ("Affiliates") or any of their respective directors, partners (limited or unlimited), officers or employees or any other person that would permit an offer of the Placing Shares, or possession or distribution of this Announcement or any other publicity material relating to such Placing Shares, in any jurisdiction where action for that purpose is required. Persons receiving this Announcement are required to inform themselves about and to observe any restrictions contained in this Announcement.

 

This Announcement is directed at and is only being distributed to: (A) persons in member states of the European Economic Area who are "qualified investors", as defined in Article 2(e) of the Prospectus Regulation (Regulation (EU) 2017/1129) (the "Prospectus Regulation"), (B) if in the United Kingdom, persons who are qualified investors and have professional experience in matters relating to investments who fall within the definition of "investment professionals" in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Order") or fall within the definition of "high net worth companies, unincorporated associations etc." in Article 49(2)(a) to (d) of the Order  and (C) in the United States to a limited number of "qualified institutional buyers" ("QIBs") as defined in Rule 144A under the Securities Act (all such persons in (A), (B) or (C) together being referred to as "Relevant Persons"). No other person should act on or rely on this Announcement and persons distributing this Announcement must satisfy themselves that it is lawful to do so. By accepting the terms of this Announcement, you represent and agree that you are a Relevant Person. This Announcement must not be acted on or relied on by persons who are not Relevant Persons. Any investment or investment activity to which this Announcement or the Placing relate is available only to Relevant Persons and will be engaged in only with Relevant Persons. As regards all persons other than Relevant Persons, the details of the Placing set out in this Announcement are for information purposes only.

 

The Placing Shares are being offered and sold (a) in the United States only to QIBs in transactions exempt from the registration requirements under the Securities Act and (b) outside the United States in "offshore transactions" within the meaning of, and in accordance with, Regulation S under the Securities Act. No public offering of securities is being made in the United States or elsewhere.

 

Persons (including, without limitation, nominees and trustees) who have a contractual or other legal obligation to forward a copy of this Announcement should seek appropriate advice before taking any action.

 

This Announcement is not being distributed by, nor has it been approved for the purposes of section 21 of Financial Services and Markets Act 2000, as amended ("FSMA") by, a person authorised under FSMA. This Announcement is being distributed and communicated to persons in the United Kingdom only in circumstances in which section 21(1) of FSMA does not require approval of the communication by an authorised person.

 

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.

 

The information contained in this Announcement is for background purposes only and does not purport to be full or complete. No reliance may be placed for any purpose on the information contained in this Announcement or its accuracy, fairness or completeness. None of the information in this Announcement has been independently verified or approved by the Joint Bookrunners or their respective Affiliates.

 

This Announcement includes statements, estimates, opinions and projections with respect to anticipated future performance of the Group and other statements other than statements of historical fact ("forward-looking statements") which reflect various assumptions concerning anticipated results taken from the Group's current business plan or from public sources which may or may not prove to be correct and which are based on the Company's expectations, intentions and projections regarding its future performance, anticipated events or trends and other matters that are not historical facts.. These forward-looking statements can be identified by the use of forward looking terminology, including the terms "anticipates", "target", "believes", "estimates", "expects", "intends", "may", "plans", "projects", "should" or "will", or, in each case, their negative or other variations or comparable terminology or by discussions of strategy, plans, objectives, goals, future events or intentions. Such forward-looking statements reflect current expectations based on the current business plan and various other assumptions and involve significant risks, assumptions and uncertainties and should not be read as guarantees of future performance or results and will not necessarily be accurate indications of whether or not such results will be achieved. As a result, prospective investors should not rely on such forward-looking statements due to the inherent uncertainty therein. No representation or warranty is given as to the completeness or accuracy of the forward-looking statements contained in this Announcement. Forward-looking statements speak only as of the date of such statements and, except as required by the Financial Conduct Authority, the London Stock Exchange, the AIM Rules for Companies or applicable law, the Company, the Joint Bookrunners and their respective Affiliates undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. No statement in this Announcement is intended to be a profit forecast and no statement in this Announcement should be interpreted to mean that earnings per share of the Company for the current or future financial years would necessarily match or exceed the historical published earnings per share of the Company.

 

Any indication in this Announcement of the price at which the Company's shares have been bought or sold in the past cannot be relied upon as a guide to future performance. Persons needing advice should consult an independent financial adviser. No statement in this Announcement is intended to be a profit forecast and no statement in this Announcement should be interpreted to mean that earnings per share of the Company for the current or future financial years would necessarily match or exceed the historical published earnings per share of the Company.

 

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 or on behalf of the Company, the Joint Bookrunners or by their respective Affiliates as to, or in relation to, the accuracy or completeness of this Announcement or any other written or oral information made available to or publicly available to any interested party or its advisers, and any liability therefor is expressly disclaimed. 

Recipients of this Announcement should conduct their own investigation, evaluation and analysis of the business, data and property described in this Announcement. This Announcement does not constitute a recommendation concerning any investor's options with respect to the Placing. The price and value of securities can go down as well as up. Past performance is not a guide to future performance. The contents of this Announcement are not to be construed as legal, business, financial or tax advice. Each shareholder or prospective investor should consult with his or 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 London Stock Exchange's AIM Market.

 

The Appendix to this Announcement sets out the terms and conditions of the Placing. By participating in the Placing, each subscriber for the Placing Shares will be deemed to have read and understood this Announcement in its entirety and to be making such offer to acquire Placing Shares on the terms and subject to the conditions set out in this Announcement and to be providing the representations, warranties, undertakings and acknowledgements contained in the Appendix.

 

Members of the public are not eligible to take part in the Placing and no public offering of Placing Shares is being or will be made.

 

Numis is authorised and regulated in the United Kingdom by the FCA. Berenberg is authorised and regulated by the German Federal Financial Supervising Authority and in the United Kingdom is subject to limited regulation by the FCA. Each of the Joint Bookrunners is acting exclusively for the Company and no one else in connection with the Placing and they will not be responsible to anyone other than the Company for providing the protections afforded to their respective clients nor for providing advice in relation to the Placing and/or any other matter referred to in this Announcement.

 

Neither the content of the Company's website (or any other website) nor the content of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this Announcement.

 

APPENDIX: TERMS AND CONDITIONS OF THE PLACING

 

IMPORTANT INFORMATION ON THE PLACING FOR INVITED PLACEES ONLY

 

THIS ANNOUNCEMENT, INCLUDING THE IMPORTANT NOTICES SECTION AND THIS APPENDIX (TOGETHER THE "ANNOUNCEMENT"), AND THE INFORMATION IN IT IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN, INTO OR WITHIN THE UNITED STATES OF AMERICA, ITS TERRITORIES AND POSSESSIONS, ANY STATE OF THE UNITED STATES OR THE DISTRICT OF COLUMBIA (COLLECTIVELY, THE "UNITED STATES"), AUSTRALIA, CANADA, JAPAN OR SOUTH AFRICA OR ANY OTHER JURISDICTION WHERE TO DO SO MIGHT CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION.

 

THIS ANNOUNCEMENT DOES NOT CONSTITUTE AN OFFER TO SELL OR ISSUE OR THE SOLICITATION OF AN OFFER TO BUY OR ACQUIRE PLACING SHARES IN THE UNITED STATES, AUSTRALIA, CANADA, JAPAN OR SOUTH AFRICA OR ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS OR MAY BE UNLAWFUL. IN PARTICULAR THE PLACING SHARES REFERRED TO IN THIS ANNOUNCEMENT HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE US SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES, AND MAY NOT BE OFFERED, SOLD OR TRANSFERRED, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES ABSENT REGISTRATION UNDER THE SECURITIES ACT OR AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT AND, IN EACH CASE, IN COMPLIANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES. ANY FAILURE TO COMPLY WITH THESE RESTRICTIONS MAY CONSTITUTE A VIOLATION OF THE SECURITIES LAWS OF SUCH JURISDICTION.

 

MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN ARE FOR INFORMATION PURPOSES ONLY AND ARE DIRECTED ONLY AT: (A) IN MEMBER STATES OF THE EUROPEAN ECONOMIC AREA, TO PERSONS WHO ARE QUALIFIED INVESTORS  WITHIN THE MEANING OF ARTICLE 2(E) OF THE PROSPECTUS REGULATION (EU) 2017/1129 (THE "PROSPECTUS REGULATION") ("QUALIFIED INVESTORS"); (B) IN THE UNITED KINGDOM, TO QUALIFIED INVESTORS WHO (I) HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS FALLING WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 (THE "ORDER"); (II) FALL WITHIN ARTICLE 49(2)(A) TO (D) ("HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC") OF THE ORDER; OR (III) ARE PERSONS TO WHOM IT MAY OTHERWISE BE LAWFULLY COMMUNICATED; AND (C) IN THE UNITED STATES TO A LIMITED NUMBER OF "QUALIFIED INSTITUTIONAL BUYERS" ("QIBS") AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT (ALL SUCH PERSONS IN (A), (B) OR (C) TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS").

 

THE PLACING SHARES ARE BEING OFFERED AND SOLD (A) IN THE UNITED STATES ONLY TO QIBS IN TRANSACTIONS EXEMPT FROM THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT AND (B) OUTSIDE THE UNITED STATES IN "OFFSHORE TRANSACTIONS" WITHIN THE MEANING OF, AND IN ACCORDANCE WITH, REGULATION S UNDER THE SECURITIES ACT. NO PUBLIC OFFERING OF SECURITIES IS BEING MADE IN THE UNITED STATES OR ELSEWHERE.

 

THIS ANNOUNCEMENT DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR TO ACQUIRE ANY SECURITIES IN THE COMPANY. THIS ANNOUNCEMENT MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. 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. EACH PLACEE SHOULD CONSULT WITH ITS OWN ADVISERS AS TO LEGAL, TAX, BUSINESS AND RELATED ASPECTS OF AN INVESTMENT IN PLACING SHARES.

 

THIS ANNOUNCEMENT INCLUDES STATEMENTS, ESTIMATES, OPINIONS AND PROJECTIONS WITH RESPECT TO ANTICIPATED FUTURE PERFORMANCE OF THE GROUP ("FORWARD-LOOKING STATEMENTS") WHICH REFLECT VARIOUS ASSUMPTIONS CONCERNING ANTICIPATED RESULTS TAKEN FROM THE GROUP'S CURRENT BUSINESS PLAN OR FROM PUBLIC SOURCES WHICH MAY OR MAY NOT PROVE TO BE CORRECT. THESE FORWARD-LOOKING STATEMENTS CAN BE IDENTIFIED BY THE USE OF FORWARD LOOKING TERMINOLOGY, INCLUDING THE TERMS "ANTICIPATES", "TARGET", "BELIEVES", "ESTIMATES", "EXPECTS", "INTENDS", "MAY", "PLANS", "PROJECTS", "SHOULD" OR "WILL", OR, IN EACH CASE, THEIR NEGATIVE OR OTHER VARIATIONS OR COMPARABLE TERMINOLOGY OR BY DISCUSSIONS OF STRATEGY, PLANS, OBJECTIVES, GOALS, FUTURE EVENTS OR INTENTIONS. SUCH FORWARD-LOOKING STATEMENTS REFLECT CURRENT EXPECTATIONS BASED ON THE CURRENT BUSINESS PLAN AND VARIOUS OTHER ASSUMPTIONS AND INVOLVE SIGNIFICANT RISKS AND UNCERTAINTIES AND SHOULD NOT BE READ AS GUARANTEES OF FUTURE PERFORMANCE OR RESULTS AND WILL NOT NECESSARILY BE ACCURATE INDICATIONS OF WHETHER OR NOT SUCH RESULTS WILL BE ACHIEVED. AS A RESULT, PROSPECTIVE INVESTORS SHOULD NOT RELY ON SUCH FORWARD-LOOKING STATEMENTS DUE TO THE INHERENT UNCERTAINTY THEREIN. NO REPRESENTATION OR WARRANTY IS GIVEN AS TO THE COMPLETENESS OR ACCURACY OF THE FORWARD-LOOKING STATEMENTS CONTAINED IN THIS ANNOUNCEMENT. FORWARD-LOOKING STATEMENTS SPEAK ONLY AS OF THE DATE OF SUCH STATEMENTS AND, EXCEPT AS REQUIRED BY THE FINANCIAL CONDUCT AUTHORITY (THE "FCA"), THE LONDON STOCK EXCHANGE, THE AIM RULES FOR COMPANIES (THE "AIM RULES") OR APPLICABLE LAW, THE COMPANY UNDERTAKES NO OBLIGATION TO UPDATE OR REVISE PUBLICLY ANY FORWARD-LOOKING STATEMENTS, WHETHER AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE. NO STATEMENT IN THIS ANNOUNCEMENT IS INTENDED TO BE A PROFIT FORECAST AND NO STATEMENT IN THIS ANNOUNCEMENT SHOULD BE INTERPRETED TO MEAN THAT EARNINGS PER SHARE OF THE COMPANY FOR THE CURRENT OR FUTURE FINANCIAL YEARS WOULD NECESSARILY MATCH OR EXCEED THE HISTORICAL PUBLISHED EARNINGS PER SHARE OF THE COMPANY.

 

In this Appendix, unless the context requires otherwise, "Placee" means a Relevant Person (including individuals, funds or others) who has been invited to, and who chooses to, participate in the Placing and by whom or on whose behalf a commitment to acquire Placing Shares has been given.

 

No representation or warranty, express or implied, is made or given by or on behalf of the Company, Joh. Berenberg, Gossler & Co. KG, London Branch ("Berenberg") or Numis Securities Limited ("Numis" and together with Berenberg the "Joint Bookrunners"), the Company's nominated adviser, or any of their respective affiliates (within the meaning of Rule 405 under the Securities Act) ("Affiliates") or any of such persons' directors, partners (limited or unlimited), officers or employees or any other person as to the accuracy, completeness or fairness of the information or opinions contained in this Announcement and no liability whatsoever is accepted by the Company, the Joint Bookrunners or any of such persons' Affiliates, partners (limited or unlimited), directors, officers or employees or any other person for any loss howsoever arising, directly or indirectly, from any use of such information or opinions or otherwise arising in connection therewith.

 

No prospectus has been lodged with, or registered by, the Australian Securities and Investments Commission or the Japanese Ministry of Finance; and the Placing Shares have not been, nor will they be, registered under or offered in compliance with the securities laws of any state, province or territory of Australia, Japan or 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, Japan or South Africa or any other jurisdiction outside the United Kingdom or to, or for the account or benefit of any national, resident or citizen of Australia, Japan or South Africa. No public offering of the Placing Shares is being made in any jurisdiction.

 

This Announcement does not constitute, or purport to include the information required of, a disclosure document under Chapter 6D of the Australian Corporations Act 2001 (the "Corporations Act") or a product disclosure statement under Chapter 7 of the Corporations Act and will not be lodged with the Australian Securities and Investments Commission. No offer of securities is made pursuant to this Announcement in Australia except to a person who is (i) either a "sophisticated investor" within the meaning of section 708(8) of the Corporations Act or a "professional investor" within the meaning of section 9 and section 708(11) of the Corporations Act; and (ii) a "wholesale client" for the purposes of section 761G(7) of the Corporations Act (and related regulations) who has complied with all relevant requirements in this respect. No Placing Shares may be offered for sale (or transferred, assigned or otherwise alienated) to investors in Australia for at least 12 months after their issue, except in circumstances where disclosure to investors is not required under Part 6D.2 of the Corporations Act.

 

Persons who are invited to and who choose 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, including this Appendix, in its entirety and to be making such offer on the terms and conditions, and to be providing the representations, warranties, acknowledgements, and undertakings, contained in this Appendix. In particular, each such Placee represents, warrants and acknowledges that:

 

(a)   it is a Relevant Person (as defined above) 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;

 

(b)   in the case of any Placing Shares acquired by it as a financial intermediary, as that term is used in Article 2(D) of the Prospectus Regulation,  it understands the resale and transfer restrictions set out in this Appendix and any 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 circumstances which may give rise to an offer of securities to the public other than an offer or resale in a Member State of the European Economic Area to Qualified Investors, or in circumstances in which the prior consent of the Joint Bookrunners has been given to the offer or resale; and

 

(c)    except for such person confirming their status as a QIB, having duly executed (or will duly execute) an investor letter to that effect in the form provided to it and having delivered (or will deliver) the same to the Joint Bookrunners or their respective Affiliates (i) it is not within the United States; (ii) it is not in any jurisdiction in which it is unlawful to make or accept an offer to acquire the Placing Shares; and (iii) it is not acquiring the Placing Shares with a view to the offer, sale, resale, transfer, delivery or distribution, directly or indirectly, of any such Placing Shares into the United States or any other jurisdiction referred to in (ii) above.

 

The Company and the Joint Bookrunners will rely upon the truth and accuracy of the foregoing representations, acknowledgements and agreements.

 

No prospectus or admission document will be made available in connection with the matters contained in this Announcement and no such prospectus or admission document is required (in accordance with the Prospectus Regulation or the AIM Rules, respectively) to be published. All offers of the Placing Shares will be made pursuant to an exemption under the Prospectus Regulation from the requirement to produce a prospectus. This Announcement is being distributed to persons in the United Kingdom only in circumstances in which section 21(1) of the Financial Services and Markets Act 2000 as amended ("FSMA") does not apply.

 

The distribution of this Announcement and the offering of the Placing Shares in certain jurisdictions may be restricted by law. No action has been taken by the Company or the Joint Bookrunners, or any of their respective Affiliates, that would, or which is intended to, permit a public offer of the Placing Shares in any jurisdiction or the possession or distribution of this Announcement or any other offering or publicity material relating to the Placing Shares in any jurisdiction where action for that purpose is required. Persons distributing any part of this Announcement must satisfy themselves that it is lawful to do so. Persons (including, without limitation, nominees and trustees) who have a contractual or other legal obligation to forward a copy of this Announcement should seek appropriate advice before taking any action. Any failure to comply with these restrictions may constitute a violation of the securities laws of such jurisdictions. Persons into whose possession this Announcement comes are required by the Joint Bookrunners and the Company to inform themselves about, and observe, any such restrictions.

 

Numis is authorised and regulated in the United Kingdom by the FCA. Berenberg is authorised and regulated by the German Federal Financial Supervising Authority and in the United Kingdom is subject to limited regulation by the FCA. Each of the Joint Bookrunners is acting exclusively for the Company and no one else in connection with the Placing and they will not be responsible to anyone other than the Company for providing the protections afforded to their respective clients nor for providing advice in relation to the Placing and/or any other matter referred to in this Announcement.

 

This Announcement is being issued by and is the sole responsibility of the Company. No representation or warranty, express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by the Joint Bookrunners (apart from the responsibilities or liabilities that may be imposed by the FSMA or the regulatory regime established thereunder) or by any of their respective Affiliates or agents or by any of their respective directors, partners (limited or unlimited), officers, employees, advisers, representatives or shareholders (collectively, "Representatives") 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 the Joint Bookrunners or any of their respective Affiliates or by any of their respective Representatives in connection with the Company, the Placing Shares or the Placing and any responsibility and liability whether arising in tort, contract or otherwise therefore is expressly disclaimed. Each of the Joint Bookrunners and each of their respective Affiliates accordingly disclaim all and any liability, whether arising in tort, contract or otherwise (save as referred to above) in respect of any statements or other information contained in this Announcement and no representation or warranty, express or implied, is made by the Joint Bookrunners or any of their respective Affiliates as to the accuracy, fairness, verification, completeness or sufficiency of the information contained in this Announcement and nothing in this Announcement is, or shall be relied upon as, a promise or representation in this respect, whether as to the past or future.

 

Neither the content of the Company's website nor the content of any website accessible by hyperlinks on the Company's website is incorporated in, or forms part of, this Announcement.

 

This Announcement does not constitute a recommendation concerning any investors' options with respect to the Placing. Investors and prospective investors should conduct their own investigation, analysis and evaluation of the business and data described in this Announcement. The price and value of securities can go down as well as up. Past performance is not a 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.

 

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 the Joint Bookrunners.

 

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 operated by the London Stock Exchange.

 

NOTICE TO PROSPECTIVE INVESTORS IN CANADA

 

This Announcement constitutes an "exempt offering document" as defined in and for the purposes of applicable Canadian securities laws. No prospectus has been filed with any securities commission or similar regulatory authority in Canada in connection with the offer and sale of the Placing Shares being offered herein. No securities commission or similar regulatory authority in Canada has reviewed or in any way passed upon this Announcement or on the merits of the Placing Shares and any representation to the contrary is an offence.

 

Canadian investors are advised that this Announcement has been prepared in reliance on section 3A.3 of National Instrument 33-105 Underwriting Conflicts ("NI 33-105"). Pursuant to section 3A.3 of NI 33-105, this Announcement is exempt from the requirement that we and the bookrunners provide Canadian investors with certain conflicts of interest disclosure pertaining to "connected issuer" and/or "related issuer" relationships as would otherwise be required pursuant to subsection 2.1(1) of NI 33-105.

 

Resale Restrictions

 

The offer and sale of the Placing Shares in Canada is being made on a private placement basis only and is exempt from the requirement that we prepare and file a prospectus under applicable Canadian securities laws. Any resale of Placing Shares acquired by a Canadian investor must be made in accordance with applicable Canadian securities laws, which may vary depending on the relevant jurisdiction, and which may require resales to be made in accordance with Canadian prospectus requirements, a statutory exemption from the prospectus requirements, in a transaction exempt from the prospectus requirements or otherwise under a discretionary exemption from the prospectus requirements granted by the applicable local Canadian securities regulatory authority. These resale restrictions may under certain circumstances apply to resales of the Placing Shares outside of Canada.

 

Representations of Purchasers

 

Each Canadian purchaser who purchases the Placing Shares will be deemed to have represented to us, the bookrunners and to each dealer from whom a purchase confirmation is received, as applicable, that the purchaser (i) is purchasing as principal, or is deemed to be purchasing as principal in accordance with applicable Canadian securities laws, for investment only and not with a view to resale or redistribution; (ii) is an "accredited investor" as such term is defined in section 1.1 of National Instrument 45-106 Prospectus Exemptions ("NI 45-106") or, in Ontario, as such term is defined in section 73.3(1) of the Securities Act (Ontario); and (iii) is a "permitted client" as such term is defined in section 1.1 of National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations.

 

Taxation and Eligibility for Investment

 

Any discussion of taxation and related matters contained in this Announcement does not purport to be a comprehensive description of all of the tax considerations that may be relevant to a Canadian purchaser when deciding to purchase the Placing Shares and, in particular, does not address any Canadian tax considerations. No representation or warranty is hereby made as to the tax consequences to a resident, or deemed resident, of Canada of an investment in the Placing Shares or with respect to the eligibility of the Placing Shares for investment by such investor under relevant Canadian federal and provincial legislation and regulations.

 

Rights of Action for Damages or Rescission

 

Securities legislation in certain provinces or territories of Canada may provide a purchaser with remedies for rescission or damages if the offering memorandum (including any amendment thereto) contains a misrepresentation, provided that the remedies for rescission or damages are exercised by the purchaser within the time limit prescribed by the securities legislation of the purchaser's province or territory. The purchaser should refer to any applicable provisions of the securities legislation of the purchaser's province or territory for particulars of these rights or consult with a legal advisor.

 

1.                Details of the placing and Subscription

 

1.1              Berenberg and Numis have today entered into an agreement with the Company (the "Placing Agreement") under which, subject to certain conditions, Berenberg and Numis, as agents for and on behalf of the Company, have severally, and not jointly or jointly and severally, agreed to use their reasonable endeavours to procure placees ("Placees") for the Placing Shares at a price to be determined following completion of the Bookbuilding Process (as defined below) (the "Placing"). Following the Bookbuilding Process and the execution of the Term Sheet, each Joint Bookrunner agrees severally, and not jointly or jointly and severally that, to the extent that Placees fail to take up the Placing Shares at the Placing Price (as defined below), it shall, in its Proportionate Share, take up at the Placing Price, any Placing Shares not so taken up.

 

1.2              The Placing Shares and the Subscription Shares will, when issued, be credited as fully paid and will rank pari passu in all respects with the existing Ordinary Shares, including the right to receive dividends and other distributions declared or made after the date of issue of the Placing Shares. The issue of the Placing Shares is to be effected by way of a cashbox placing. The allotment and issue of the Placing Shares will be made by the Company to Placees in consideration for the transfer to the Company of certain shares in a Jersey-incorporated subsidiary of the Company.

 

1.3              The Company has agreed with the Joint Bookrunners to a 120 day lock-up from Admission, subject to certain exceptions.

 

2.                applications for admission to trading

 

2.1              Application will be made to the London Stock Exchange for admission to trading of the Placing Shares and the Subscription Shares on its AIM market (the "Application").

 

2.2              It is expected that admission of the Placing Shares and the Subscription Shares to trading on AIM ("Admission") will become effective on or around 8.00 a.m. on 19 May 2020 and that dealings in the Placing Shares will commence at that time.

 

3.                participation in, and principal terms of, the Placing

 

3.1              The Joint Bookrunners are acting as joint bookrunners and agents for the Company in connection with the Placing, Application and Admission.

 

3.2              Commencing today, the Joint Bookrunners are conducting an accelerated bookbuilding process (the "Bookbuilding Process") to determine demand for participation in the Placing. This Appendix gives details of the terms and conditions of, and the mechanics of participation in, the Placing. The Joint Bookrunners will be entitled to effect the Placing by such alternative method to the Bookbuilding Process as they may in their sole discretion determine.

 

3.3              Participation in the Placing is only available to persons who may lawfully be, and are, invited to participate in it by the Joint Bookrunners. Each Joint Bookrunner and its Affiliates are each entitled to participate in the Placing and the Bookbuilding Process as principal.

 

3.4              The Bookbuilding Process is intended to establish a single price per Placing Share payable to the Joint Bookrunners by all Placees whose bids are successful (the "Placing Price"). The Placing Price and the number of Placing Shares to be issued will be agreed between the Joint Bookrunners and the Company following completion of the Bookbuilding Process. The Placing Price and the number of Placing Shares will be announced on a Regulatory Information Service following completion of the Bookbuilding Process.

 

3.5              Irrespective of the time at which a Placee's allocation pursuant to the Placing is confirmed, settlement for all Placing Shares to be acquired pursuant to the Placing will be required to be made at the same time, on the basis explained below under "Registration and Settlement."

 

3.6              All obligations under the Placing will be subject to fulfilment of the conditions referred to below under "Conditions of the Placing" and to the Placing not being terminated on the basis referred to below under "Termination of the Placing Agreement."

 

3.7              The Bookbuilding Process is expected to close no later than 6.00 p.m. today, but at the sole discretion of the Joint Bookrunners the timing of the closing of the books, pricing and allocations may be accelerated or delayed. The Joint Bookrunners may, in agreement with the Company, accept bids that are received after the Bookbuilding Process has closed. The Company reserves the right (upon agreement with the Joint Bookrunners) to reduce or seek to increase the amount to be raised pursuant to the Placing in its absolute discretion.

 

3.8              Any prospective Placee who has been invited and wishes to participate in the Bookbuilding Process should communicate their bid by telephone to their usual sales contact at the relevant Joint Bookrunner. Each bid should state the number of Placing Shares which the prospective Placee wishes to acquire at either the Placing Price which is ultimately established by the Company and the Joint Bookrunners or at prices up to a price limit specified in its bid.

 

3.9              Each of the Joint Bookrunners reserves the right not to accept bids or to accept bids in part rather than in whole, on the basis of allocations determined in the Joint Bookrunners' sole discretion (after consultation with the Company) and may scale down any bids for this purpose on such basis as they may determine. The acceptance of the bids shall be at the Joint Bookrunners' absolute discretion. The Joint Bookrunners may also, notwithstanding paragraphs 3.7 and 3.8 above, subject to the prior consent of the Company (i) allocate Placing Shares after the time of any initial allocation to any person submitting a bid after that time; and (ii) allocate Placing Shares after the Bookbuilding Process has closed to any person submitting a bid after that time.

 

3.10            A bid in the Bookbuilding Process will be made on the terms and conditions in this Appendix and will be legally binding on the Placee on behalf of which it is made and, except with the consent of the Joint Bookrunners, will not be capable of variation or revocation after the time at which it is submitted.

 

3.11            Each prospective Placee's allocation will be determined by the Joint Bookrunners in their sole discretion (after consultation with the Company) and confirmed orally by one of the Joint Bookrunners following the close of the Bookbuilding Process. That oral confirmation shall constitute an irrevocable legally binding commitment upon that person (who will at that point become a Placee) to acquire the number of Placing Shares allocated to it at the Placing Price on the terms and subject to the conditions set out in this Appendix and in accordance with the Company's articles of association and each Placee will be deemed to have read and understood this Announcement (including this Appendix) in its entirety.

 

3.12            Each prospective Placee's allocation and commitment will be evidenced by a contract note issued to such Placee by one of the Joint Bookrunners. The terms of this Appendix will be deemed incorporated by reference therein.

 

3.13            Each Placee will also have an immediate, separate, irrevocable and binding obligation, owed to the relevant Joint Bookrunner, to pay as principal to that Joint Bookrunner (or as it may direct) in cleared funds immediately on the settlement date an amount equal to the product of the Placing Price and such number of Placing Shares that such Placee has agreed to acquire and the Company has agreed to allot and issue to that Placee.

 

3.14            By participating in the Placing, each Placee will agree that its rights and obligations in respect of the Placing will terminate only in the circumstances described below and will not be capable of rescission or termination by the Placee.

 

3.15            To the fullest extent permissible by law, neither of the Joint Bookrunners nor any of their Affiliates nor any of the Joint Bookrunners' directors, partners (limited or unlimited), officers, employees or consultants shall have any liability to Placees (or to any other person whether acting on behalf of a Placee or otherwise). In particular, neither of the Joint Bookrunners nor any of their Affiliates nor any of the Joint Bookrunners' directors, partners (limited or unlimited), officers, employees or consultants shall have any liability (including, to the extent permissible by law, any fiduciary duties) in respect of the Joint Bookrunners' conduct of the Bookbuilding Process or of such alternative method of effecting the Placing as the Joint Bookrunners and the Company may determine.

 

3.16            To the fullest extent permitted by law and applicable FCA rules, neither (i) Berenberg, (ii) Numis, (iii) any of Berenberg's or Numis' directors, partners (limited or unlimited), officers, employees or consultants, or (iv) to the extent not contained with (i) to (iii), any person connected with Berenberg or Numis as defined in FSMA, shall have any liability (including to the extent permissible by law, any fiduciary duties) to Placees or to any person other than the Company in respect of the Placing.

 

4.                Conditions of the placing

 

4.1              Berenberg's and Numis' obligations under the Placing Agreement in respect of the Placing Shares are conditional on, amongst other things:

 

4.1.1           the warranties given by the Company in the Placing Agreement being true and accurate and not misleading on and as of the date of the Placing Agreement, and at all times before Admission at which such warranties are given, by reference to the facts and circumstances then subsisting on each such date;

 

4.1.2           the Company allotting, subject only to Admission, the Placing Shares in accordance with the Placing Agreement;

 

4.1.3           the compliance by the Company with certain publication of announcement obligations (including with respect to this Announcement) and the delivery by the Company to the Joint Bookrunners of certain documentation;

 

4.1.4           the compliance by the Company with all its obligations, and the satisfaction by the Company of all the conditions which are to be satisfied by it, under the Placing Agreement or under the terms and conditions of the Placing, in each case, in all material respects and to the extent required to be performed or satisfied on or prior to Admission;

 

4.1.5           prior to Admission, the Company having been given no reason to believe that (i) the Lenders will not make available the New Facilities to the Company on the basis set out in non-legally binding term sheet agreed with the Lenders, once full form legally binding documentation in relation to the New Facilities has been agreed with the Lenders and (ii) the Company will not be able to satisfy the pre-conditions set out in the term sheet within the timeframes provided for therein;

 

4.1.6           in the sole opinion of the Joint Bookrunners (acting jointly and in good faith), immediately prior to Admission, there not having been a material adverse change affecting, or development reasonably likely to involve a prospective material adverse effect or change to, the Company and the Group (taken as a whole);

 

4.1.7           such obligations not having been terminated in accordance with its terms prior to Admission; and

 

4.1.8           Admission occurring not later than 8.00 a.m. on 19 May 2020 (or such later time and date as the Joint Bookrunners and the Company may agree being not later than 8.00 a.m. on 2 June 2020).

 

4.2              If any condition in the Placing Agreement becomes incapable of being, or is not,  fulfilled (save, where applicable, where waived by the Joint Bookrunners) by the relevant time specified (or such later time and/or date as the Company and the Joint Bookrunners may agree), then the Placing Agreement will terminate in accordance with its terms, the Placing will not proceed and the Placee's rights and obligations hereunder in relation to the Placing Shares shall cease and terminate at such time and each Placee agrees that no claim can be made by the Placee in respect thereof.

 

4.3              The Joint Bookrunners may, acting jointly and in good faith, in their absolute discretion and upon such terms as they think fit, waive fulfilment by the Company of all or any of any the conditions in the Placing Agreement, save that conditions Error! Reference source not found. and Error! Reference source not found. above, relating to the allotment and issuance of the Placing Shares and Admission thereof, may not be waived. Any such waiver or extension of the time and/or date for the satisfaction of any condition to the Placing will not affect the Placees' commitments as set out in this Announcement.

 

4.4              Neither the Joint Bookrunners nor the Company shall have any liability to any Placee (or to any other person whether acting on behalf of a Placee or otherwise) in respect of any decision they may make as to whether or not to waive or to extend the time and/or the date for the satisfaction of any condition to the Placing nor for any decision they may make as to the satisfaction of any condition or in respect of the Placing generally, and by participating in the Placing each Placee agrees that any such decision is within the absolute discretion of the Company and the Joint Bookrunners.

 

5.                termination of the placing agreement

 

5.1              Either Joint Bookrunner may in its absolute discretion, in accordance with the terms of the Placing Agreement, following consultation with the Company where such consultation is reasonably practicable, forthwith at any time prior to Admission, on giving notice to the Company, terminate the Placing Agreement in certain circumstances, including, amongst other circumstances, in the case of a breach of the Company's warranties given to the Joint Bookrunners in the Placing Agreement, the failure of the Company to comply with its obligations under the Placing Agreement in any material respect, a material adverse change in the Group's condition or prospects which, in the opinion of the relevant Joint Bookrunner, makes it impractical or inadvisable to proceed with the Placing or in the case of certain events of force majeure.

 

5.2              Upon such notice being given, 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.

 

5.3              By participating in the Placing, Placees agree that the exercise by either Joint Bookrunner of any right of termination or other discretion under the Placing Agreement shall be within the absolute discretion of the Joint Bookrunners and that they need not make any reference to Placees and that neither the Joint Bookrunners nor the Company (or its directors, officers or employees) shall have any liability to Placees whatsoever in connection with any such exercise.

 

6.                Lock-up

 

The Company has undertaken that it shall not between the date of the Placing Agreement, and the date falling 120 days after Admission, allot or issue any Ordinary Shares (or any other shares or securities in the capital of the Company) or issue any options over Ordinary Shares (or any securities exchangeable for, or convertible into, Ordinary Shares or other shares or securities in the capital of the Company) save (i) for the issue of any options or other interests over the Company's shares pursuant to share option or incentive schemes of the Company or for the issue of Ordinary Shares pursuant to the exercise of any options or other rights under such schemes or (ii) with the prior written consent of the Joint Bookrunners.

 

7.                No prospectus

 

7.1              No offering document or prospectus 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 the information contained in this Announcement (including this Appendix) and the Exchange Information (as defined below), and subject to the further terms set forth in the contract note to be provided to individual prospective Placees.

 

7.2              Each Placee, by accepting a participation in the Placing, agrees that the content of this Announcement is exclusively the responsibility of the Company and confirms that it has neither received nor relied on any other information (other than the Exchange Information), representation, warranty, or statement made by or on behalf of the Company or the Joint Bookrunners or any other person and neither the Joint Bookrunners nor the Company nor any other person will be liable for any Placee's decision to participate in the Placing based on any other information, representation, warranty or statement which the Placees may have obtained or received. Each Placee acknowledges and agrees that it has relied on its own investigation of the business, financial and other position of the Company in accepting a participation in the Placing. Nothing in this paragraph shall exclude the liability of any person for fraudulent misrepresentation by that person.

 

8.                registration and settlement

 

8.1              Settlement of transactions in the Placing Shares (ISIN: GB0007281198) following Admission will take place within the system administered by Euroclear UK & Ireland Limited ("CREST"), subject to certain exceptions. The Joint Bookrunners and the Company reserve the right to require settlement for, and delivery of, the Placing Shares (or a portion thereof) to Placees in certificated form if, in the Joint Bookrunners' and the Company's opinion, delivery or settlement is not possible or practicable within the CREST system within the timetable set out in this Announcement or would not be consistent with the regulatory requirements in any Placee's jurisdiction.

 

8.2              Following close of the Bookbuilding Process, each Placee allocated Placing Shares in the Placing will be sent a contract note trade confirmation stating the number of Placing Shares allocated to it at the Placing Price, the aggregate amount owed by such Placee to the Joint Bookrunners and settlement instructions. Each Placee agrees that it will do all things necessary to ensure that delivery and payment is completed in accordance with either the standing CREST or certificated settlement instructions that it has in place with the Joint Bookrunners.

 

8.3              The Company will deliver the Placing Shares to a CREST account operated by Numis as agent for the Company and Numis will enter its delivery (DEL) instruction into the CREST system. Numis will hold any Placing Shares delivered to this account as nominee for the Placees procured by Numis and as nominee for Berenberg in respect of the Placees procured by Berenberg. 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.

 

8.4              It is expected that settlement will take place on 19 May 2020 on a T+3 basis in accordance with the instructions set out in the contract note.

 

8.5              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 Numis.

 

8.6              Each Placee is deemed to agree that, if it does not comply with these obligations, the Joint Bookrunners may sell any or all of the Placing Shares allocated to that Placee on such Placee's behalf and retain from the proceeds, for and on behalf of the Joint Bookrunners' 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 between the net proceeds of such sale and the placing proceeds of such Placing Shares and will be required to bear any stamp duty or stamp duty reserve tax (together with any interest or penalties) which may arise upon the sale of such Placee's Placing Shares on its behalf.

 

8.7              If Placing Shares are to be delivered to a custodian or settlement agent, Placees should ensure that the contract note is copied and delivered immediately to the relevant person within that organisation.

 

8.8              Insofar as Placing Shares are registered in a Placee's name or that of its nominee or in the name of any person for whom a Placee is contracting as agent or that of a nominee for such person, such Placing Shares should, subject as provided below, be so registered free from any liability to UK stamp duty or stamp duty reserve tax.  If there are any circumstances in which any stamp duty or stamp duty reserve tax (and/or any interest, fines or penalties relating thereto) is payable in respect of the allocation, allotment, issue 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 the Joint Bookrunners nor the Company will be responsible for the payment thereof.

 

8.9              Placees will not be entitled to receive any fee or commission in connection with the Placing.

 

9.                representations and warranties

 

9.1              By submitting a bid and/or participating in the Placing, each prospective Placee (and any person acting on such prospective Placee's behalf) irrevocably acknowledges, undertakes, represents, warrants and agrees (as the case may be) with each Joint Bookrunner (in its capacity as a joint bookrunner and as agent of the Company, in each case as a fundamental term of its application for Placing Shares) that:

 

9.1.1           it has read and understood this Announcement (including the Appendix) in its entirety and its acquisition of Placing Shares is subject to and based on the terms and conditions of the Placing as referred to and included in this Announcement and undertakes not to redistribute or duplicate this Announcement;

 

9.1.2           no offering document or prospectus has been prepared in connection with the Placing and that it has not received and will not receive a prospectus or other offering document in connection with the Bookbuilding Process, the Placing or the Placing Shares;

 

9.1.3           the Ordinary Shares are admitted to trading on the AIM market of the London Stock Exchange, and the Company is therefore required to publish certain business and financial information in accordance with the rules and practices of the London Stock Exchange and/or the FCA (collectively "Exchange Information"), 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 or comparable information concerning any other publicly traded company without undue difficulty;

 

9.1.4           (i) it has made its own assessment of the Company, the Placing Shares and the terms and conditions of the Placing and has relied on its own investigation of the business, financial or other position of the Company in accepting a participation in the Placing and has satisfied itself that the information is still current; (ii) neither of the Joint Bookrunners, the Company, any of their respective Affiliates or any person acting on behalf of any of them has provided, or will provide, it with any material regarding the Placing Shares in addition to this Announcement; and (iii) it has not requested Berenberg, Numis 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 information;

 

9.1.5           the content of this Announcement is exclusively the responsibility of the Company and that neither of the Joint Bookrunners nor any of their Affiliates or any person acting on its or their behalf has or shall have any liability for any information, representation or statement contained in this Announcement or any information previously or concurrently published by or on behalf of the Company or any other written or oral information made available to or publicly available or filed information or any representation, warranty or undertaking relating to the Company, and will not be liable for its decision to participate in the Placing based on any information, representation, warranty or statement contained in this Announcement or elsewhere, provided that nothing in this paragraph shall exclude any liability of any person for fraud;

 

9.1.6           the only information on which it has relied in committing itself to acquire Placing Shares is that contained in this Announcement and any Exchange Information and that it has not received or relied on any information given or any representations, warranties or statements, express or implied, made by Berenberg, Numis or the Company or any of their Affiliates or any person acting on behalf of any of them and none of Berenberg, Numis or the Company, any of their Affiliates or any person acting on behalf of any of them will be liable for its decision to accept an invitation to participate in the Placing based on any information, representation, warranty or statement other than that contained in this Announcement and any Exchange Information;

 

9.1.7           it has neither received nor relied on any "inside information" as defined in the EU Market Abuse Regulation 596/2014 concerning the Company in accepting this invitation to participate in the Placing and is not purchasing Placing Shares on the basis of any inside information;

 

9.1.8           it has the funds available to pay for the Placing Shares it agrees to acquire and acknowledges, agrees and undertakes that it will pay the total price per Placing Share in accordance with the terms of this Announcement on the due time and date set out herein, failing which the relevant Placing Shares may be placed with other placees or sold at such price as the Joint Bookrunners determine;

 

9.1.9           it: (i) is entitled to acquire the Placing Shares under the laws of all relevant jurisdictions; (ii) has fully observed such laws; (iii) has the requisite capacity and authority and is entitled to enter into and to perform its obligations to acquire Placing Shares and will honour such obligations; and (iv) has obtained all necessary consents and authorities (including, without limitation, in the case of any person on whose behalf it is acting, all necessary consents and authorities to agree to the terms set out or referred to in this Announcement) to enable it to enter into the transactions contemplated hereby and to perform its obligations in relation thereto and, in particular, if it is a pension fund or investment company it is aware of and acknowledges it is required to comply with all applicable laws and regulations with respect to its acquisition of Placing Shares;

 

9.1.10         unless otherwise specifically agreed with the Joint Bookrunners, it is not, and any person who it is acting on behalf of is not, and at the time the Placing Shares are acquired will not be, a resident of, or with an address in, the United States, Australia, Canada, Japan or South Africa, and it acknowledges and agrees that the Placing Shares have not been and will not be registered or otherwise qualified under the securities legislation of the United States, Australia, Canada, Japan or South Africa and may not be offered, sold, or acquired, directly or indirectly, within those jurisdictions;

 

9.1.11         if in the United Kingdom, it is a person of a kind described in (i) Article 19(5) (Investment Professionals) and/or 49(2) (high net worth companies etc.) of the Order or another person to whom this Announcement and any invitation to engage in investment activity may lawfully be communicated, and it undertakes that it will acquire, hold, manage and (if applicable) dispose of any Placing Shares that are allocated to it for the purposes of its business only;

 

9.1.12         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 this Announcement has not been approved by the Joint Bookrunners in their capacity as an authorised person under section 21 of 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;

 

9.1.13         it is aware of and acknowledges that it has complied with and will comply with all applicable provisions of FSMA with respect to anything done by it in relation to the Placing Shares in, from or otherwise involving, the United Kingdom;

 

9.1.14         if in a Member State of the EEA, it is a Qualified Investor within the meaning of the Prospectus Regulation;

 

9.1.15         it will not make any offer to the public of the Placing Shares and has not offered or sold and will not offer or sell any Placing Shares to persons in the United Kingdom or elsewhere in the European Economic Area prior to Admission except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their business or otherwise in circumstances which have not resulted in and which will not result in an offer to the public in the United Kingdom or any other member state of the European Economic Area within the meaning of the Prospectus Regulation;

 

9.1.16         it has not been engaged to acquire the Placing Shares on behalf of any other person who is not a Qualified Investor unless the terms on which it is engaged enable it to make decisions concerning the acceptance of offers of transferable securities on the client's behalf without reference to the client as described in section 86(2) of FSMA;

 

9.1.17         if in the United Kingdom, it is aware of and acknowledges that it is required to comply and has complied with its obligations in connection with money laundering under the Proceeds of Crime Act 2002, the Terrorism Act 2000, the Terrorism Act 2006 and the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (the "Regulations") and, if making payment on behalf of a third party, that satisfactory evidence has been obtained and recorded by it to verify the identity of the third party as required by the Regulations;

 

9.1.18         if a financial intermediary, as that term is used in Article 2(D) 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 a Member State of the EEA other than Qualified Investors, or in circumstances in which the prior consent of the Joint Bookrunners has been given to the proposed offer or resale;

 

9.1.19         it is aware of the obligations regarding insider dealing in the Criminal Justice Act 1993 and with all applicable provisions of FSMA, the EU Market Abuse Regulation 596/2014 and the Proceeds of Crime Act 2002 and confirms that it has and will continue to comply with those obligations;

 

9.1.20         the allocation, allotment, issue and delivery to it, or the person specified by it for registration as a holder of Placing Shares, will not give rise to a stamp duty or stamp duty reserve tax liability, including under any of sections 67, 70, 93 or 96 of the Finance Act 1986 (depositary receipts and clearance services) and that no instrument under which it acquires Placing Shares (whether as principal, agent or nominee) would be subject to stamp duty or the increased rates referred to in those sections and that it, or the person specified by it for registration as a holder of Placing Shares, is not participating in the Placing as nominee or agent for any person or persons to whom the allocation, allotment, issue or delivery of Placing Shares would give rise to such a liability or in connection with arrangements to issue depositary receipts or to issue or transfer Placing Shares into a clearance service;

 

9.1.21         it, or the person specified by it for registration as a holder of the Placing Shares, will be liable for any stamp duty or stamp duty reserve tax and all other stamp, issue, securities, transfer, registration, documentary or other duties or taxes (including any interest, fines or penalties relating thereto), if any, payable by it or any other person on the acquisition by it or them of any of the Placing Shares or the agreement to acquire the Placing Shares and acknowledges and agrees that none of Berenberg, Numis or the Company, any of their respective Affiliates or any person acting on behalf of them will be responsible for any liability to stamp duty or stamp duty reserve tax resulting from a failure to observe this requirement, including as may arise on a sale of Placing Shares subsequent to their acquisition by it or them. Each Placee and any person acting on behalf of such Placee agrees to participate in the Placing, and agrees to indemnify the Company, Berenberg and Numis on an aftertax basis in respect of the same, on the basis that the Placing Shares will be allotted to the CREST stock account of Numis who will hold them as nominee on behalf of such Placee until settlement in accordance with its standing settlement instructions; neither of the Joint Bookrunners nor any of their Affiliates or any person acting on behalf of any of them, is making any recommendations to it, advising it regarding the suitability of any transactions it may enter into in connection with the Placing and that its participation in the Placing is on the basis that it is not and will not be a client of the Joint Bookrunners and that neither Joint Bookrunner has duties or responsibilities to it for providing the protections afforded to its clients or customers under the rules of the FCA, for providing advice in relation to the Placing, in respect of any representations, warranties, undertakings or indemnities contained in the Placing Agreement or 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;

 

9.1.22         in order to ensure compliance with the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, the Joint Bookrunners (for themselves and as agent on behalf of the Company) or the Company's registrar may, in their absolute discretion, require verification of its identity. Pending the provision to Berenberg's or Numis' or the Company's registrars, as applicable, of evidence of identity, definitive certificates in respect of the Placing Shares may be retained at Berenberg's, Numis' or the Company's registrars absolute discretion or, where appropriate, delivery of the Placing Shares to it in uncertificated form may be retained at Numis' or Berenberg's the Company's registrars', as the case may be, absolute discretion. If within a reasonable time after a request for verification of identity the relevant Joint Bookrunner (for itself and as agent on behalf of the Company) or the Company's registrar has not received evidence satisfactory to them, the relevant Joint Bookrunner 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;

 

9.1.23         each Joint Bookrunner may, and their Affiliates acting as an investor for its or their own account(s) may, acquire and/or purchase Placing Shares and, in that capacity, may retain, purchase, offer to sell or otherwise deal for its or their own account(s) in the Placing Shares, any other securities of the Company or other related investments in connection with the Placing or otherwise. Accordingly, references in this Announcement to the Placing Shares being offered, acquired or otherwise dealt with should be read as including any offer to, or subscription, acquisition or dealing by, Berenberg, Numis and/or any of their respective Affiliates acting as an investor for its or their own account(s). Neither Berenberg, Numis nor the Company intend to disclose the extent of any such investment or transaction otherwise than in accordance with any legal or regulatory obligation to do so;

 

9.1.24         these terms and conditions and any agreements entered into by it pursuant to these terms and conditions, 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 Wales and it submits (on behalf of itself and on behalf of any person on whose behalf it is acting) to the exclusive jurisdiction of the English courts as regards any claim, dispute or matter arising out of any such contract, except that enforcement proceedings in respect of the obligation to make payment for the Placing Shares (together with any interest chargeable thereon) may be taken by the Company, Berenberg, or Numis 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;

 

9.1.25         the Company and the Joint Bookrunners and their respective Affiliates and others will rely upon the truth and accuracy of the foregoing agreements, acknowledgements, representations, warranties and undertakings which are given to the Joint Bookrunners, on its own behalf and on behalf of the Company, and are irrevocable;

 

9.1.26         it irrevocably appoints any duly authorised officer of the Joint Bookrunners as its agent for the purpose of executing and delivering to the Company and/or its registrar any documents on its behalf necessary to enable it to be registered as the holder of any of the Placing Shares which it agrees to acquire or purchase upon the terms of this Announcement;

 

9.1.27         it will indemnify on an after tax basis and hold the Company, Berenberg, Numis and their respective Affiliates harmless from any and all costs, claims, liabilities and expenses (including legal fees and expenses) arising out of or in connection with any breach of the representations, warranties, undertakings, agreements and acknowledgements in this Appendix and further agrees that the provisions of this Appendix shall survive after completion of the Placing;

 

9.1.28         it (i) has knowledge and experience in financial, business and international investment matters and is required to evaluate the merits and risks of subscribing for the Placing Shares; (ii) is experienced in investing in securities of this nature and is aware that it may be required to bear, and is able to bear, the economic risk of, and is able to sustain a complete loss in connection with the Placing; and (iii) has relied upon its own examination and due diligence of the Company and its associates taken as a whole, and the terms of the Placing, including the merits and risks involved and has satisfied itself concerning the relevant tax, legal, currency and other economic considerations relevant to its acquisition of Placing Shares;

 

9.1.29         its commitment to acquire Placing Shares on the terms set out herein and in the contract note will continue notwithstanding any amendment that may in future be made to the terms of the Placing and that Placees will have no right to be consulted or require that their consent be obtained with respect to the Company's conduct of the Placing;

 

9.1.30         neither Joint Bookrunner owes any fiduciary or other duties to any Placee in respect of any representations, warranties, undertakings or indemnities in the Placing Agreement;

 

9.1.31         it acknowledges that no action has been or will be taken by any of the Company or the Joint Bookrunners or any person acting on behalf of the Company or the Joint Bookrunners that would, or is intended to, permit a public offer of the Placing Shares in any country or jurisdiction where any such action for that purpose is required;

 

Additional representations and warranties relating to US securities laws

 

9.1.32         it understands, and any account it represents has been advised that, (i) the Placing Shares have not been and will not be registered under the Securities Act or under the securities laws of any state or other jurisdiction of the United States and are being offered in a transaction not involving any public offering in the United States (ii) the Placing Shares are being offered and sold pursuant to Regulation S under the Securities Act or in a transaction exempt from the registration requirements under the Securities Act and (iii) the Placing Shares may not be reoffered, resold, pledged or otherwise transferred except pursuant to an exemption from, or in a transaction not subject to, the registration requirements under the Securities Act;

 

9.1.33         unless it is a QIB in the United States to which the Placing Shares will be offered on a private placement basis, it, and any accounts it represents, (i)is acquiring the Placing Shares in an "offshore transaction" (as defined in, and in accordance with Regulation S) and (ii) will not offer or sell, directly or indirectly, any of the Placing Shares except in an "offshore transaction" as defined in, and in accordance with, Regulation S or in the United States pursuant to an exemption from, or in a transaction not subject to, the registration requirements under the Securities Act;

 

9.1.34         it is not subscribing for any Placing Shares as a result of (i) any "directed selling efforts" as that term is defined in Regulation S under the Securities Act or (ii) any form of "general solicitation or general advertising" within the meaning of Regulation D under the Securities Act;

 

9.1.35         the Placing Shares will not be reoffered, resold, pledged or otherwise transferred by it except (i) outside the United States in an offshore transaction pursuant to Rule 903 or Rule 904 of Regulation S, (ii) in the United States to a person whom the seller reasonably believes is a QIB and to whom notice is given that the offer, sale or transfer is being made in reliance on Rule 144A under the Securities Act, (iii) pursuant to Rule 144 under the Securities Act (if available), (iv) to the Company, (v) pursuant to an effective registration statement under the Securities Act or (vi) pursuant to another available exemption, if any, from registration under the Securities Act, in each case in compliance with all applicable laws;

 

9.1.36         (i) the Placing Shares may constitute an equity interest in a passive foreign investment company within the meaning of Section 1297(a) of the United States Internal Revenue Code of 1986, as amended ("PFIC"), in the current or any future tax year; if the Company is a PFIC, then US taxable investors may be subject to adverse US tax consequences in respect of their investment in the Placing Shares, (ii) neither the Company nor the Joint Bookrunners intend to assess whether the Placing Shares constitute equity interests in a PFIC in any taxable year or to provide such information as may be required to make a "qualified electing fund" election with respect to the Placing Shares and (iii) it is advised to consult with its own tax advisors concerning the impact of any legislation, proposed or enacted, that could affect the application of the PFIC rules;

 

9.1.37         it will notify any transferee to whom it subsequently reoffers, resells, pledges or otherwise transfers the Placing Shares of the foregoing restrictions on transfer; and

 

9.1.38         no representation has been made as to the availability of the exemption provided by Rule 144 or any other exemption under the Securities Act for the reoffer, resale, pledge or transfer of the Placing Shares.

 

9.2              The representations, warranties, indemnities, acknowledgements and undertakings contained in this Appendix are given to the Joint Bookrunners for themselves and on behalf of the Company and are irrevocable.

 

9.3              The agreement to settle a Placee's subscription (and/or the subscription of a person for whom such Placee is contracting as agent) free of stamp duty and stamp duty reserve tax depends on the settlement relating only to a subscription by it and/or such person direct from the Company for the Placing Shares in question. Such agreement assumes that the Placing Shares are not being subscribed for in connection with arrangements to issue depositary receipts or to transfer the Placing Shares into a clearance service. If there are any such arrangements, or the settlement relates to any other subsequent dealing in the Placing Shares, UK stamp duty or stamp duty reserve tax may be payable, for which neither the Company, Berenberg nor Numis will be responsible, and the Placee to whom (or on behalf of whom, or in respect of the person for whom it is participating in the Placing as an agent or nominee) the allocation, allotment, issue or delivery of Placing Shares has given rise to such UK stamp duty or stamp duty reserve tax undertakes to pay such UK stamp duty or stamp duty reserve tax forthwith and to indemnify on an after-tax basis and to hold harmless the Company, Berenberg and/or Numis in the event that any of the Company, Berenberg and/or Numis has incurred any such liability to UK stamp duty or stamp duty reserve tax. If there are any such agreements, each Placee should seek its own advice and notify the relevant Joint Bookrunner accordingly.

 

9.4              Each Placee and any person acting on behalf of each Placee, acknowledges and agrees that the Joint Bookrunners or any of their Affiliates may, at their absolute discretion, agree to become a Placee in respect of some or all of the Placing Shares.

 

9.5              When a Placee or person acting on behalf of the Placee is dealing with the Joint Bookrunners, any money held in an account with either Joint Bookrunner on behalf of the Placee and/or any person acting on behalf of the Placee will not be treated as client money within the meaning of the rules and regulations of the FCA made under FSMA. The Placee acknowledges and agrees that the money will not be subject to the protections conferred by the client money rules; as a consequence, this money will not be segregated from the relevant Joint Bookrunner's money in accordance with the client money rules and will be used by the relevant Joint Bookrunner in the course of its own business; and the Placee will rank only as a general creditor of the relevant Joint Bookrunner (as applicable).

 

9.6              Past performance is no guide to future performance and persons needing advice should consult an independent financial adviser.

 

9.7              Neither the content of the Company's website nor the content of any website accessible by hyperlinks on the Company's website is incorporated in, or forms part of, this Announcement.

 

9.8              All times and dates in this Announcement may be subject to amendment. The Joint Bookrunners shall notify the Placees and any person acting on behalf of a Placee of any changes.

 

10.              Information to Distributors

 

10.1            Solely for the purposes of the product governance requirements contained within: (a) EU Directive 2014/65/EU on markets in financial instruments, as amended ("MiFID II"); (b) Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593 supplementing MiFID II; and (c) local implementing measures (together, the "MiFID II Product Governance Requirements"), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any "manufacturer" (for the purposes of the MiFID II 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 Placing Shares are: (i) compatible with an end target market of retail investors and investors who meet the criteria of professional clients and eligible counterparties, each as defined in MiFID II; and (ii) eligible for distribution through all distribution channels as are permitted by MiFID II (the "Target Market Assessment"). Notwithstanding the Target Market Assessment, Distributors should note that: the price of the Placing Shares may decline and investors could lose all or part of their investment; the Placing Shares offer no guaranteed income and no capital protection; and an investment in the Placing Shares is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Placing. Furthermore, it is noted that, notwithstanding the Target Market Assessment, the Joint Bookrunners will only procure investors who meet the criteria of professional clients and eligible counterparties.

 

10.2            For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of MiFID II; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the Placing Shares.

 

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

 

DEFINITIONS

 

The following definitions apply throughout this Announcement unless the context otherwise requires:

 

"Company" means Scapa Group plc;

 

"Group" means the Company and its subsidiary undertakings;

 

"Lenders" means HSBC UK Bank plc, Santander UK plc and The Governor and Company of the Bank of Ireland;

 

"London Stock Exchange" means London Stock Exchange plc;

 

"New Facilities" means the new or amended borrowing facilities in relation to an £80 million unsecured revolving credit facility and £20 million uncommitted accordion facility (both intended to be made available until 31 October 2022) and a £15 million unsecured revolving credit facility (such facility intended to terminate on 31 May 2021) intended to be provided by the Lenders to the Company;

 

"Ordinary Shares" means the ordinary shares of 5 pence each in the capital of the Company;

 

"Placing Shares" means the new Ordinary Shares to be issued in connection with the Placing;

 

"Proportionate Share" means in relation Berenberg, 50 per cent, and in relation to Numis, 50 per cent;

 

"Subscription" means the subscription of certain Ordinary Shares by certain directors (and employees) of the Company in connection with the Placing;

 

"Subscription Shares" means the Ordinary Shares to be issued by the Company in connection with the Subscription; and

 

"UK" or "United Kingdom" means the United Kingdom of Great Britain and Northern Ireland.

 

 

 

 


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MSCUORURRAUVAUR