TIDMDIA
RNS Number : 7324N
Dialight PLC
26 September 2023
THIS ANNOUNCEMENT (INCLUDING THE APPIX) (THE "ANNOUNCEMENT") AND
THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR
RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY
OR INDIRECTLY, IN, INTO OR FROM THE UNITED STATES (INCLUDING ITS
TERRITORIES AND DEPENCIES, ANY STATE OF THE UNITED STATES AND THE
DISTRICT OF COLUMBIA), AUSTRALIA, CANADA, JAPAN, NEW ZEALAND OR THE
REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH SUCH
RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.
THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT
CONSTITUTE OR CONTAIN ANY INVITATION, SOLICITATION, RECOMMATION,
OFFER OR ADVICE TO ANY PERSON TO SUBSCRIBE FOR, OTHERWISE ACQUIRE
OR DISPOSE OF ANY SECURITIES IN DIALIGHT PLC OR ANY OTHER ENTITY IN
ANY JURISDICTION. NEITHER THIS ANNOUNCEMENT NOR THE FACT OF ITS
DISTRIBUTION SHALL FORM THE BASIS OF, OR BE RELIED ON IN CONNECTION
WITH, ANY INVESTMENT DECISION IN RESPECT OF DIALIGHT PLC.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF ARTICLE 7 OF THE UK VERSION OF EU REGULATION 596/2014 WHICH
FORMS PART OF UK LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL)
ACT 2018 ("MAR").
26 September 2023
Dialight plc
("Dialight", the "Company" or the "Group")
Proposed Placing and Retail Offer to raise approximately
GBP10.55 million
Dialight (LSE: DIA.L) a global leader in sustainable LED
lighting for industrial applications today announces a proposed
fundraising of up to GBP10.55 million through the issue of new
ordinary shares of 1.89 pence each ("Ordinary Shares") by way of a
placing to institutional investors (the "Placing") and an offer to
retail investors (the "REX Retail Offer") (together, the
"Fundraising") at a price of 159 pence per ordinary share (the
"Issue Price"). For the avoidance of doubt, the REX Retail Offer is
not part of the Placing and the REX Retail Offer Shares are not
Placing Shares.
The Placing is being conducted via an accelerated bookbuild
process (the "Bookbuild"), which will be launched immediately
following this announcement (the "Announcement") and is subject to
the terms and conditions set out in the appendix to this
Announcement (which forms part of this Announcement) (the
"Appendix"). The Placing is being conducted by Peel Hunt LLP. The
Bookbuild will be closed at the discretion of Peel Hunt LLP.
Highlights
-- At the time of the Group's interim results for the six months
ended 30 June 2023, announced on 18 September 2023, the Group set
out details of a significant transformation plan structured around
three key objectives:
o Streamlining the Group to focus on the core industrial
lighting business
o Resetting and realigning the Group's cost base; and
o Accelerating growth in key lighting markets.
-- The transformation plan includes capability and capital
investment of c.GBP27.4m over the next three financial years. The
Group's current high level of net indebtedness presents elevated
risk in a challenging market and will impede the speed at which the
transformation plan can be implemented.
-- The Directors believe that the Fundraising will enable
implementation of the transformation plan to be accelerated and
de-risked by providing increased headroom to support near term
investment commitments.
-- Acceleration and successful execution of the transformation
plan would help enable the Group to meet its recently published
medium term financial targets in its 2026 financial year
("FY2026")
o Revenue net of non-core divestments to c. GBP180m
o Gross margins of c.40%
o Underlying EBIT margins >10%
-- The implementation of the transformation plan is expected to
return the Group to a net cash funding position before the end of
FY2026 and the Board is committed to returning any excess cash
generated by the transformation plan to shareholders as part of a
reset capital allocation strategy.
-- The Board is committed to delivering the transformation plan,
with the Directors of Dialight expected to participate in the
Placing for at least GBP0.2m, in aggregate.
Placing highlights
-- Proposed Placing and REX Retail Offer of up to 6,635,257 New
Ordinary Shares, at an Issue Price of 159 pence per share to raise
gross proceeds of approximately GBP10.55 million.
-- The New Ordinary Shares represent approximately 19.99 per
cent. of the Company's existing issued share capital as at the date
of this Announcement.
-- The Issue Price represents a discount of approximately 9.4
per cent. to the closing mid-market price of 175.5 pence per share
on 26 September 2023, being the last practicable date prior to the
release of this Announcement.
-- All Directors of the Company have indicated their intention
to subscribe for 138,363 New Ordinary Shares amounting to
approximately GBP0.22 million at the Issue Price.
-- The Placing is being conducted through an accelerated
bookbuild process which will commence immediately following this
Announcement in accordance with the terms and conditions set out in
the Appendix.
-- The Placing is being conducted by Peel Hunt LLP, subject to certain conditions.
-- A separate announcement will be made shortly regarding the REX Retail Offer and its terms.
-- Applications will be made to the Financial Conduct Authority
("FCA") for the New Ordinary Shares to be admitted to the Official
List of the FCA and to London Stock Exchange plc for the New
Ordinary Shares to be admitted to trading on the Main Market
("Admission").
-- It is expected that participation of certain of the Company's
shareholders may constitute a related party transaction pursuant to
Listing Rule 11 requiring shareholder approval in accordance with
Listing Rule 11.1.7R. Accordingly, depending on the results of the
Fundraising, settlement of the Placing Shares and Admission may be
conditional on approval by the Company's shareholders at a general
meeting. If required, the Company will make further announcements
in due course regarding the timing of such general meeting.
-- The New Ordinary Shares, when issued and fully paid, will
rank pari passu in all respects with Dialight's existing ordinary
shares and will rank pari passu for all dividends or other
distributions declared, made or paid after the date of issue of the
New Ordinary Shares.
Neil Johnson, Non-Executive Chairman of Dialight, said:
"I took over as Chair in May post the AGM. The time since has
been a busy period with the newly formed Board having reviewed our
strategy and visited our sites in Mexico, our largest manufacturing
plants. I have also met with all of the senior team and visited our
US sites in Farmingdale and Roxboro. The new Board has significant
experience that will be invaluable in supporting the executive
team.
Our observations are that Dialight has many positive attributes
including great core products in lighting and good engineering
capabilities. However, the key part of our transformation plan is
to simplify the Group. This will include possible divestments,
investment in manufacturing efficiency through greater automation
and strengthening the team. The executive team has built plans
based on this requirement, which the Board has reviewed and agreed.
We expect that over the medium term this will create substantial
profit growth and shareholder value."
Market Abuse Regulation
The information contained within this Announcement is deemed by
the Company to constitute inside information as stipulated under
MAR. Upon the publication of this Announcement via a regulatory
information service, this inside information is now considered to
be in the public domain.
For the purposes of MAR and Article 2 of Commission Implementing
Regulation (EU) 2016/1055 as it forms part of UK law by virtue of
the European Union (Withdrawal) Act 2018, the person responsible
for arranging release of this Announcement on behalf of the Company
is Richard Allan, Group General Counsel and Company Secretary.
In addition, market soundings (as defined in MAR) were taken in
respect of the Fundraising 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 being made by the Company today. Therefore, those
persons that received inside information in a market sounding are
no longer in possession of such inside information relating to the
Company and its securities.
Terms used but not defined elsewhere in this Announcement shall
have the meanings given to such terms in the Definitions section of
the Appendix to this Announcement.
Enquiries:
Dialight plc +44 (0)203 058 3542
Neil Johnson, Non-Executive Chairman
Fariyal Khanbabi, Group Chief Executive
Peel Hunt LLP (Bookrunner and Corporate Broker) +44 (0) 20 7418 8900
Mike Bell / Ed Allsopp / Tom Graham (Investment
Banking)
Sohail Akbar / Jock Maxwell Macdonald / Nick
Wilks (Equity Syndicate)
Background to and reasons for the Placing
Launch of the Group's transformation plan
As set out in the Group's 2023 interim results, following a
review of the strategy and operations of the Group during 2023, the
Board has approved a comprehensive transformation plan for
Dialight, which is designed to address legacy issues associated
with excess cost and complexity within the organisation, whilst at
the same time focusing more resources on the most attractive growth
opportunities within its core industrial LED lighting market.
The Directors believe that the transformation plan has the
potential to increase growth and improve profitability materially
in the medium term, delivered through numerous initiatives,
structured around three key objectives:
-- to streamline the Group;
-- to reset the business' cost and productivity profile; and
-- to accelerate growth in key lighting products and market niches.
The Directors believe that the Group's core industrial LED
lighting market is an attractive one, with a current addressable
market of c.$3.6bn, which is expected to see structural growth in
scale over the long term as legacy lighting is converted to LED
technology which delivers improved efficiency and sustainability
outcomes for customers.
Based on its proprietary technology and commercial strategy, the
Group has established a leading position in the US industrial LED
lighting market and has developed an effective and growing key
account commercial strategy which is supporting sales growth
internationally. Whilst these factors reaffirm its confidence in
the opportunity for the industrial LED lighting business, the
Board's review of the Group's strategy and operations has
identified several underlying factors which it believes have
contributed to disappointing financial performance:
-- a fragmented organisation, comprising five distinct businesses;
-- a disparate manufacturing footprint, with historic
underinvestment resulting in low levels of automation;
-- a product range which is too broad and complex; and
-- an ageing product portfolio in certain areas.
To address these challenges, a number of initiatives are to be
implemented as part of the transformation plan, including:
-- a review of the Group's businesses, with any deemed non-core to be exited;
-- consolidation of manufacturing operations and investment in increased automation;
-- realignment of the cost base;
-- reduction in the product range and increased standardisation; and
-- consolidation of supply chains.
Streamlining the Group
LED Lighting for industrial applications is the Group's largest
business, representing over 65% of revenues in 2022. Alongside
industrial LED Lighting, the Group has four smaller businesses
focused on niches within the wider lighting market: Components (16%
of Group revenues in 2022); Traffic (7% of Group revenues in 2022);
Vehicle (6% of Group revenues in 2022); and Obstruction (5% of
Group revenues in 2022). Whilst each of these businesses has
attractive facets within their respective niche markets, the Board
does not believe that all of them have the potential to generate
returns over the long term that are accretive to the industrial LED
Lighting business. In part this reflects the scale and outlook of
the markets involved, but also reflects the investment required in
product development as well as resources required from a
manufacturing perspective. The Board has initiated a review of the
Group's portfolio. However, the timing and terms of any potential
divestment arising from this are uncertain.
Resetting costs and productivity
The Group has four principal manufacturing sites with two in
Mexico, one in North Carolina, USA and one in Malaysia. The
Directors believe that reducing complexity in our product range and
site network will be part of streamlining the business enabling
more efficient operations and ultimately a reduction in the cost
base. As part of this footprint re-configuration, a potential site
has been identified located close to the Group's existing location
in Ensenada, Mexico which would provide scope for a new, purpose
built 200,000 sq ft facility into which existing operations could
be consolidated. The Directors intend to enter into agreements
prior to the end of 2023 to initiate the development of the site,
which would enable production to be transferred during 2025.
Alongside the reducing complexity in our operational footprint,
the Directors believe there are significant cost, capacity and
productivity benefits to be achieved through increasing the level
of automation in the manufacturing processes. The transformation
plan necessitates an overall investment of c.GBP19.5m in
consolidation and automation of manufacturing operations, which the
Directors believe would enable annualised cost savings of circa
GBP9m once fully implemented.
Accelerating growth in industrial LED lighting
Alongside the growth in LED Lighting demand, the Group is also
seeing a rapid evolution in technology as customers seek
ever-increasing levels of productivity and efficiency from their
sites. The integration of monitoring, safety and productivity
features within lighting fixtures represents an immediate
opportunity to enhance the Dialight's products. Over the longer
term the Directors see the potential for the lighting networks
within buildings to play a key role in industrial connectivity, and
that Dialight's key areas of product differentiation, technology
expertise, open architecture and excellent customer relationships
make it well placed to benefit from this technological development
of its products. In addition to this, there is an opportunity to
further monetise the Group's technology expertise through selling
component elements of this, for example, power supply topology, as
separate products into markets where Dialight does not operate. As
a result of these additional areas of commercial focus, the Group
is targeting new product revenues of at least GBP10m per annum by
FY2026.
Financial effects of the transformation plan
The Fundraising will enable the Group to initiate key actions
within the transformation plan before the end of 2023 and so enable
it to be delivered on an accelerated timeframe. On this accelerated
basis, the transformation plan requires investment of c.GBP27.4m
over the period through to the end of FY2026, with the phasing of
this expected to be: GBP0.5m in 2023; GBP5.7m in 2024; GBP19.2m in
2025; and GBP2.0m in 2026.
Execution on this transformation plan timetable would enable
significantly improved financial performance in the medium term.
Reflecting this, the Board has set the following financial targets
to be achieved in FY2026:
-- Group revenues of c.GBP180m, with growth in industrial LED
lighting to more than offset any revenue lost through
divestment
-- Gross margin of c.40%, with incremental improvement to be achieved from 2024
-- Underlying EBIT margin of greater than 10%, with any
divestments expected to be initially dilutive and with the largest
cost savings to be realised FY2026
-- Group leverage to remain below 1.0x through the key implementation period of 2024 and 2025
Additional details of the Fundraising
All Directors of the Company have indicated their intention to
participate in the Placing, which amounts to expected gross
proceeds of approximately GBP0.2 million in aggregate:
Name Number Percentage Number Number of Percentage
of of existing of New Ordinary Shares of
existing issued Ordinary on Admission Enlarged
Ordinary share Shares Share
Shares capital Capital
on
Admission
Neil
Johnson 0 0.00% 62,893 62,893 0.16%
---------- ------------ ------------------------------------------------ ---------------------------------------------------------------------- -----------
Fariyal 26,338 0.08% 12,578 38,916 0.10%
Khanbabi
---------- ------------ ------------------------------------------------ ---------------------------------------------------------------------- -----------
Nigel 5,000 0.02% 6,289 11,289 0.03%
Lingwood
---------- ------------ ------------------------------------------------ ---------------------------------------------------------------------- -----------
Steve 0 0.00% 31,446 31,446 0.08%
Blair
---------- ------------ ------------------------------------------------ ---------------------------------------------------------------------- -----------
Lynn 0 0.00% 25,157 25,157 0.06%
Brubaker
---------- ------------ ------------------------------------------------ ---------------------------------------------------------------------- -----------
Certain of the Company's shareholders holding 10% or more of the
issued ordinary share capital have indicated their intention to
participate in the Placing. Depending on the results of the
Fundraising, the participation of such shareholders may constitute
a related party transaction pursuant to Listing Rule 11 requiring
shareholder approval in accordance with Listing Rule 11.1.7R.
Accordingly, Admission may be conditional on obtaining shareholder
approval, in which case the Company would publish a notice of
general meeting to convene a shareholders' meeting to seek the
requisite shareholder approval. The Company can call a general
meeting on 21 clear days' notice. If required, the Company will
make further announcements in due course regarding such general
meeting.
The Company is issuing New Ordinary Shares amounting to
approximately 19.99 per cent. of its existing issued ordinary share
capital on a non-pre-emptive basis pursuant to the Fundraising, and
members of the Board have consulted with the Company's major
institutional shareholders ahead of the release of this
Announcement. A cashbox structure has been chosen for the
Fundraising as it minimises cost, time to completion, as well as
exposure to market volatility. The consultation has confirmed the
Board's view that the Fundraising is in the best interests of
shareholders, as well as wider stakeholders in the Company. The
Company also considers it important that retail shareholders have
an opportunity (where it is practicable for them to do so) to
participate in the Fundraising on equivalent terms and conditions
to the Placing. Accordingly, the Company is offering its existing
retail shareholders the opportunity to participate through the REX
Retail Offer.
About Dialight
Dialight (LSE: DIA.L) is a global leader in sustainable LED
lighting for industrial applications. Dialight's LED products are
providing the next generation of lighting solutions that deliver
reduced energy consumption and create a safer working environment.
Our products are specifically designed to provide superior
operational performance, reliability, and durability, reducing
energy consumption and ongoing maintenance, and achieving a rapid
return on investment. The company is headquartered in the UK with
operations in Australia, the Netherlands, Malaysia, Mexico,
Singapore and the USA.
Details of the Placing and use of proceeds
The Company intends to raise approximately GBP10 million gross
proceeds (after expenses of approximately GBP0.6 million pursuant
to the Placing). The net proceeds of the Fundraising will be used
to reduce the Company's net indebtedness and fund the
transformation plan investment expected to be made before the end
of 2024. The balance of the net proceeds of the Fundraising is
expected to be used to fund working capital and for general
corporate purposes.
The Placing will be conducted by Peel Hunt pursuant to a placing
agreement between the Company and Peel Hunt (the "Placing
Agreement") and in accordance with the terms and conditions set out
in the appendix of this announcement. The Bookbuild will determine
demand for and participation in the Placing.
The Bookbuild will commence with immediate effect following this
announcement and is expected to close later today. The final number
of Placing Shares to be issued pursuant to the Placing will be
agreed by Peel Hunt and Dialight following the close of the
Bookbuild. The timing of the close of the Bookbuild is at the
absolute discretion of Peel Hunt in consultation with the Company
and Peel Hunt reserves the right to close the Bookbuild earlier or
later without further notice. The allocations will be determined by
Peel Hunt in its absolute discretion following consultation with
the Company and will be confirmed orally by Peel Hunt following the
close of the bookbuilding process. A further announcement and
results of the Placing will then be made as soon as practicable
following the completion of the Bookbuild.
The Placing Shares will represent approximately 16.7% of the
existing issued share capital and will, when issued, be credited as
fully paid and will rank pari passu in all respects with the
Company's existing ordinary shares of 1.89 pence each in the
capital of the Company. This includes the right to receive all
dividends and other distributions declared, made or paid in respect
of such shares after the date of issue of the Placing Shares.
Pursuant to the Placing Agreement, Peel Hunt has agreed, subject
to the terms and conditions set out therein, to use its reasonable
endeavours to procure placees for the Placing Shares at the Issue
Price.
Applications will be made to the FCA for the Placing Shares to
be admitted to listing on the Official List of the FCA and to
London Stock Exchange plc for the Placing Shares to be admitted to
trading on the Main Market. Certain of the Company's shareholders
holding 10% or more of the issued ordinary share capital have
indicated their intention to participate in the Placing. Depending
on the results of the Fundraising, it is expected that the
participation of such shareholders may constitute a related party
transaction pursuant to Listing Rule 11 requiring shareholder
approval in accordance with Listing Rule 11.1.7R. Accordingly,
settlement of the Placing Shares and Admission would take place
following shareholder approval being obtained at the relevant
general meeting. The Placing is conditional upon Admission becoming
effective and the Placing Agreement not being terminated in
accordance with its terms.
As part of the Placing, all Directors have indicated their
intention to subscribe for Placing Shares at the Issue Price.
Further details of the Placing and any participation by the
Directors will be set out in the announcement to be made on the
closing of the Placing.
The Placing is subject to the terms and conditions set out in
the appendix (the "Appendix") to this Announcement (which forms
part of this announcement, such announcement and the Appendix
together being, this "Announcement").
Persons who have chosen to participate in the Placing, by making
an oral or written offer to acquire Placing Shares, will be deemed
to have read and understood this announcement in its entirety
(including the appendix) and to be making such offer on the terms
and subject to the conditions herein, and to be providing the
representations, warranties, agreements, acknowledgements and
undertakings contained in the appendix.
APPIX
TERMS AND CONDITIONS OF THE PLACING
IMPORTANT INFORMATION ON THE PLACING FOR INVITED PLACEES
ONLY
MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE
PLACING.
THIS ANNOUNCEMENT (INCLUDING THIS APPIX) AND THE TERMS AND
CONDITIONS SET OUT HEREIN (TOGETHER, THIS "ANNOUNCEMENT") ARE FOR
INFORMATION PURPOSES ONLY AND ARE DIRECTED ONLY AT PERSONS WHOSE
ORDINARY ACTIVITIES INVOLVE THEM IN ACQUIRING, HOLDING, MANAGING
AND DISPOSING OF INVESTMENTS (AS PRINCIPAL OR AGENT) FOR THE
PURPOSES OF THEIR BUSINESS AND WHO HAVE PROFESSIONAL EXPERIENCE IN
MATTERS RELATING TO INVESTMENTS AND ARE: (A) IF IN THE UNITED
KINGDOM, PERSONS WHO ARE QUALIFIED INVESTORS WITHIN THE MEANING OF
ARTICLE 2(E) OF THE PROSPECTUS REGULATION (EU) 2017/1129, AS AMED
(THE "EU PROSPECTUS REGULATION") AS IT FORMS PART OF UK LAW BY
VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018 AND THE EUROPEAN
UNION (WITHDRAWAL AGREEMENT) ACT 2020, AS AMED (THE "UK PROSPECTUS
REGULATION") AND WHO ARE: (I) "INVESTMENT PROFESSIONALS" WITHIN THE
MEANING OF ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT
2000 (FINANCIAL PROMOTION) ORDER 2005 AS AMED (THE "ORDER"); OR
(II) PERSONS FALLING WITHIN ARTICLE 49(2)(A) TO (D) OF THE ORDER;
OR (B) IF IN A MEMBER STATE OF THE EEA, PERSONS WHO ARE "QUALIFIED
INVESTORS" (AS DEFINED IN ARTICLE 2(E) OF THE EU PROSPECTUS
REGULATION, INCLUDING ANY RELEVANT IMPLEMENTING MEASURE IN ANY
MEMBER STATE); OR (C) OTHER PERSONS TO WHOM IT MAY OTHERWISE BE
LAWFULLY COMMUNICATED (ALL SUCH PERSONS IN (A), (B) AND (C)
TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS").
THIS ANNOUNCEMENT MUST NOT BE ACTED ON OR RELIED ON BY PERSONS
WHO ARE NOT RELEVANT PERSONS. PERSONS DISTRIBUTING THIS
ANNOUNCEMENT MUST SATISFY THEMSELVES THAT IT IS LAWFUL TO DO SO.
ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS ANNOUNCEMENT
AND THE TERMS AND CONDITIONS SET OUT HEREIN RELATE IS AVAILABLE
ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT
PERSONS.
THIS ANNOUNCEMENT DOES NOT CONSTITUTE AN OFFER FOR SALE OR
SUBSCRIPTION OF, OR THE SOLICITATION OF AN OFFER TO ACQUIRE OR
SUBSCRIBE FOR, ANY SECURITIES IN THE COMPANY.
THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS
RESTRICTED AND IS NOT FOR PUBLICATION, RELEASE, TRANSMISSION,
FORWARDING OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN
PART, IN OR INTO THE UNITED STATES (INCLUDING ITS TERRITORIES AND
DEPENCIES, ANY STATE OF THE UNITED STATES AND THE DISTRICT OF
COLUMBIA) (COLLECTIVELY, THE "UNITED STATES"), AUSTRALIA, CANADA,
JAPAN OR THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN
WHICH THE SAME WOULD BE UNLAWFUL.
THE PLACING SHARES HAVE NOT BEEN AND WILL NOT BE REGISTERED
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMED (THE
"SECURITIES ACT") OR WITH ANY SECURITIES REGULATORY AUTHORITY OF
ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES, AND MAY NOT
BE OFFERED, SOLD, PLEDGED, TAKEN UP, EXERCISED, RESOLD OR
TRANSFERRED OR DELIVERED, DIRECTLY OR INDIRECTLY, IN OR INTO THE
UNITED STATES EXCEPT PURSUANT TO AN APPLICABLE EXEMPTION FROM, OR
IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT AND IN COMPLIANCE WITH ANY APPLICABLE SECURITIES
LAWS OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES.
SUBJECT TO LIMITED EXCEPTIONS, THE PLACING SHARES ARE BEING
OFFERED AND SOLD ONLY OUTSIDE OF THE UNITED STATES IN "OFFSHORE
TRANSACTIONS" WITHIN THE MEANING OF, AND IN ACCORDANCE WITH,
REGULATION S UNDER THE SECURITIES ACT ("REGULATION S") AND
OTHERWISE IN ACCORDANCE WITH APPLICABLE LAWS. NO PUBLIC OFFERING OF
THE PLACING SHARES IS BEING MADE IN THE UNITED STATES, THE UNITED
KINGDOM OR ELSEWHERE.
THE CONTENTS OF THIS ANNOUNCEMENT HAVE NOT BEEN REVIEWED BY ANY
REGULATORY AUTHORITY IN THE UNITED KINGDOM OR ELSEWHERE. YOU ARE
ADVISED TO EXERCISE CAUTION IN RELATION TO THE PLACING. EACH PLACEE
SHOULD CONSULT WITH ITS OWN ADVISERS AS TO LEGAL, TAX, FINANCIAL,
BUSINESS AND RELATED ASPECTS OF AN ACQUISITION OF PLACING SHARES.
THE PRICE OF SHARES AND THE INCOME FROM THEM (IF ANY) MAY GO DOWN
AS WELL AS UP AND INVESTORS MAY NOT GET BACK THE FULL AMOUNT
INVESTED ON DISPOSAL OF SHARES.
None of the Company, Peel Hunt LLP or any of its or their
respective affiliates or any of its or their respective directors,
officers, partners, employees, consultants, advisers or agents
makes any representation or warranty, express or implied to any
Placees (as defined below) regarding any investment in the
securities referred to in this Announcement under the laws
applicable to such Placees.
By participating in the Placing, Placees (including individuals,
funds or otherwise) by whom or on whose behalf a commitment to
subscribe for Placing Shares is given will be deemed to have read
and understood this Announcement in its entirety and to be
participating in the Placing on the terms and conditions, and to be
providing (and shall only be permitted to participate in the
Placing on the basis that they have provided) the representations,
warranties, acknowledgements, confirmations, indemnities and
undertakings, contained in this Appendix. In particular, each
Placee represents, warrants and acknowledges that:
1. it is a Relevant Person and undertakes that it will acquire,
hold, manage or dispose of any Placing Shares that are allocated to
it for the purposes of its business;
2. unless otherwise agreed with the Company, it is acquiring the
Placing Shares in an "offshore transaction" in accordance with
Regulation S; or
3. if it is a financial intermediary, as that term is used in
Article 5(1) of the EU Prospectus Regulation or the UK Prospectus
Regulation (as applicable), that it understands the resale and
transfer restrictions set out in this Appendix that 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 to Relevant Persons, or in circumstances in
which the prior consent of Peel Hunt has been given to each such
proposed offer or resale.
The Company and Peel Hunt will rely upon the truth and accuracy
of the foregoing representations, warranties, acknowledgements and
agreements.
The relevant clearances have not been, nor will they be,
obtained from the securities commission of any province or
territory of Canada; no prospectus has been lodged with or
registered by the Australian Securities and Investments Commission
or the Japanese Ministry of Finance or the South African Reserve
Bank; and the Placing Shares have not been, nor will they be,
registered under or offered in compliance with the securities laws
of any state, province or territory of Australia, Canada, Japan or
the Republic of South Africa. Accordingly, the Placing Shares may
not (unless an exemption under the relevant securities laws is
applicable) be offered, sold, resold or delivered, directly or
indirectly, in or into Australia, Canada, Japan the Republic of
South Africa or any other jurisdiction in which such offer, sale,
resale or delivery would be unlawful.
The distribution of this Announcement and the Placing or issue
of the Placing Shares in certain jurisdictions may be restricted by
law. No action has been taken by the Company, Peel Hunt or any of
their respective affiliates that would permit an offer of the
Placing Shares or possession or distribution of this Announcement
or any other offering or publicity material relating to such
Placing Shares in any jurisdiction where action for that purpose is
required. Persons into whose possession this Announcement comes are
required by the Company and Peel Hunt to inform themselves about
and to observe any such restrictions.
This Announcement is being distributed and communicated to
persons in the UK only in circumstances to which section 21(1) of
the Financial Services and Markets Act 2000, as amended ("FSMA")
does not apply.
Persons (including, without limitation, nominees and trustees)
who have a contractual or other legal obligation to forward a copy
of this Appendix or the Announcement of which it forms part should
seek appropriate advice before taking any action.
Bookbuild
Peel Hunt will today commence the bookbuilding process in
respect of the Placing (the "Bookbuild") to determine demand for
participation in the Placing by Placees. The book will open with
immediate effect and will close at the discretion of the Company
and Peel Hunt. This Appendix gives details of the terms and
conditions of, and the mechanics of participation in, the Placing.
No commissions will be paid to Placees or by Placees in respect of
any Placing Shares. Members of the public are not entitled to
participate in the Placing.
Peel Hunt and the Company shall be entitled to effect the
Placing by such alternative method to the Bookbuild as they may, in
their sole discretion, determine.
Details of the Placing Agreement and the Placing Shares
Peel Hunt has today entered into the Placing Agreement (the
"Placing Agreement") under which, subject to the terms and
conditions set out therein, Peel Hunt has agreed to use reasonable
endeavours to procure subscribers for the Placing Shares and, to
the extent that any Placee defaults in paying the Placing Price (as
defined below) in respect of any of the Placing Shares allocated to
it, Peel Hunt has agreed to subscribe for such Placing Shares at
the Placing Price.
The price per Placing Share is GBP1.59 (the "Placing Price").
The final number of Placing Shares will be decided following the
close of the Bookbuild and the execution of the terms of sale by
the Company and Peel Hunt (the "Terms of Sale"). The timing of the
closing of the book and allocations are at the discretion of the
Company and Peel Hunt. Details of the number of Placing Shares will
be announced as soon as practicable after the close of the
Bookbuild.
The Placing Shares will, when issued, be subject to the articles
of association of the Company, be credited as fully paid and will
rank pari passu in all respects with the existing Ordinary Shares,
including the right to receive all dividends and other
distributions declared, made or paid in respect of such Ordinary
Shares after the date of issue of such Placing Shares.
The allotment and issue of the Placing Shares will be effected
by way of a cash box placing. In accordance with the Placing
Agreement and a subscription and transfer agreement entered into
between the Company, a Jersey-incorporated subsidiary of the
Company ("Newco") and Peel Hunt, the Company will allot and issue
the Placing Shares on a non-pre-emptive basis to Peel Hunt, as bare
nominee for the Placees (pending transfer of legal title to the
Placees through CREST) and/or to the Placees themselves, as Peel
Hunt shall direct, in consideration for the transfer to the Company
by Peel Hunt of certain shares which it holds in Newco.
Accordingly, instead of receiving cash as consideration for the
issue of Placing Shares the Company will, conditional on Admission
and following the conclusion of the Placing, own all of the issued
share capital of Newco, whose only asset will be its cash reserves,
which will represent an amount approximately equal to the net
proceeds of the Placing. The proceeds raised through the Placing
(net of expenses) will be retained for the benefit of the
Company.
Applications for listing and admission to trading
Applications will be made for the Placing Shares to be admitted
to the premium listing segment of the Official List of the
Financial Conduct Authority (the "FCA") and to be admitted to
trading on the main market for listed securities of the London
Stock Exchange ("Admission"). If Shareholder Approval is not
required, it is expected that Admission will become effective not
later than 8.00 a.m. (London time) on or around 29 September 2023
(or such later time and/or date as may be agreed between the
Company and Peel Hunt) and that dealings in the Placing Shares will
commence at that time. If Shareholder Approval is required, subject
to the Resolution being passed at the General Meeting, it is
expected that Admission will become effective not later than 8.00
a.m. (London time) on or around the first dealing day after the
date of the General Meeting (or such later time and/or date as may
be agreed between the Company and Peel Hunt) and that dealings in
the Placing Shares will commence at that time. The General Meeting
can be called on 21 clear days' notice by the Company.
Participation in, and principal terms of, the Placing
1. Peel Hunt is acting as sole bookrunner and agent of the
Company in connection with the Placing. Participation in the
Placing will only be available to persons who are Relevant Persons
or who may lawfully be, and are, invited to participate by Peel
Hunt.
2. Peel Hunt and its affiliates and/or agents are each entitled
to participate in the Placing as principal.
3. The Placing Shares will be issued to Placees at the Placing Price.
4. To bid in the Bookbuild, prospective Placees should
communicate their bid by telephone and/or in writing to their usual
sales contact at Peel Hunt. Each bid should state the number of
Placing Shares which the prospective Placee wishes to subscribe for
at the Placing Price. Peel Hunt reserves the right not to accept a
bid from a potential Placee. Bids may also be scaled down by Peel
Hunt on the basis referred to in paragraph 6 below.
5. Each prospective Placee's allocation in the Bookbuild
("Placing Participation") will be determined by the Company in
consultation with Peel Hunt and their Placing Participation will be
confirmed orally and/or via written correspondence by Peel Hunt as
agent of the Company. That oral and/or written confirmation
constitutes an irrevocable legally binding commitment upon that
person (who will at that point become a Placee) in favour of the
Company and Peel Hunt to subscribe for the number of Placing Shares
allocated to it at the Placing Price on the terms and conditions
set out in this Appendix and in accordance with the articles of
association of the Company.
6. The Bookbuild will open with immediate effect. The timing of
the closing of the Bookbuild, pricing and allocations are at the
absolute discretion of the Company and Peel Hunt. Peel Hunt may, in
agreement with the Company, accept bids that are received after the
Bookbuild has closed and allocate Placing Shares after the time of
any initial allocation to any person submitting a bid after that
time. Peel Hunt reserves the right to scale back the number of
Placing Shares to be subscribed for by any Placee on such basis as
it may determine. Peel Hunt (in agreement with the Company) also
reserves the right not to accept offers for Placing Shares or to
accept such offers in part rather than in whole. The Company
reserves the right (in agreement with Peel Hunt) to reduce or seek
to reduce the amount to be raised pursuant to the Placing.
7. Each Placee also has an immediate, separate, irrevocable and
binding obligation, owed to Peel Hunt to pay it (or as it may
direct) in cleared funds in Sterling at the relevant time in
accordance with the requirements set out below under "Registration
and Settlement", an amount equal to the product of the Placing
Price and the number of Placing Shares such Placee has agreed to
subscribe for and the Company has agreed to allot and issue to that
Placee, conditional upon Admission becoming effective.
8. Irrespective of the time at which a Placee's Placing
Participation is confirmed, settlement for all Placing Shares to be
acquired pursuant to the Placing will be required to be made on the
same day, on the basis explained below under "Registration and
Settlement".
9. Completion of the Placing is subject to the fulfilment or,
where applicable, waiver of the conditions referred to below under
"Conditions of the Placing" and to the Placing not being terminated
on the basis referred to below under "Termination of the Placing
Agreement". In the event that the Placing Agreement does not become
unconditional in all respects or is terminated, the Placing will
not proceed.
10. By participating in the Bookbuild and 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
after confirmation (oral or otherwise) by Peel Hunt and is not
subject to any further conditions or requirements other than those
set out in this Announcement or Placing Agreement.
11. Except as required by law or regulation, no press release or
other announcement will be made by Peel Hunt or the Company using
the name of any Placee (or its agent), in its capacity as Placee
(or agent), other than with such Placee's prior written
consent.
12. To the fullest extent permissible by law, none of Peel Hunt,
the Company or any of their respective affiliates or any of its or
their respective directors, officers, partners, employees,
consultants, advisers or agents shall have any liability to Placees
(or to any other person whether acting on behalf of a Placee or
otherwise). In particular, none of Peel Hunt, the Company or any of
their respective affiliates or any of its or their respective
directors, officers, partners, employees, consultants, advisers or
agents shall have any responsibility or liability (whether in
contract, tort or otherwise and including to the extent permissible
by law, any fiduciary duties) in respect of the conduct of the
Bookbuild (including entering or not entering into the Terms of
Sale by Peel Hunt and/or the Company) or of such alternative method
of effecting the Placing as Peel Hunt and the Company may
agree.
Conditions of the Placing
The Placing is conditional, inter alia, upon (where Shareholder
Approval is required) approval by Shareholders of the Resolution
and the Placing Agreement becoming unconditional and not having
been terminated in accordance with its terms. If Shareholder
Approval is required and the Resolution is not passed at the
General Meeting, the Placing will not proceed.
The obligations of Peel Hunt under the Placing Agreement in
respect of the Placing Shares are conditional on, inter alia:
1. each of the warranties in the Placing Agreement being true
and accurate and not misleading by reference to the facts and
circumstances then subsisting;
2. in the opinion of Peel Hunt (acting in good faith), there not
having occurred a material adverse change in the Company or in the
Group (taken as a whole), whether or not foreseeable at the date of
the Placing Agreement;
3. the Company having complied with its obligations under the
Placing Agreement which fall to be performed or satisfied on or
prior to Admission;
4. Peel Hunt and the Company entering into the Terms of Sale;
5. if Shareholder Approval is required, the formal approval by
the FCA of the Shareholder Circular in accordance with the Listing
Rules) and the Company despatching the Shareholder Circular
containing notice of the General Meeting and the Resolution being
passed at the General Meeting;
6. if Shareholder Approval is not required, Admission taking
place not later than 8.00 a.m. (London time) on 6 October 2023 or
such later date as the Company and Peel Hunt may otherwise agree;
and
7. if Shareholder Approval is required, Admission taking place
not later than 8.00 a.m. (London time) on the first dealing day
after the General Meeting, or such later date as the Company and
Peel Hunt may otherwise agree.
Peel Hunt may, in its absolute discretion and upon such terms as
it thinks fit, waive fulfilment or agree an extension in time for
their satisfaction, in whole or in part, of any or all of the
conditions in the Placing Agreement, other than that relating to,
inter alia, Admission (to the extent permitted by law or
regulations), by giving notice in writing to the Company. Any such
waiver or extension will not affect Placees' commitments as set out
in this Announcement. If Shareholder Approval is required, the
latest date for satisfaction or fulfilment of the conditions will
be not later than the earlier of (i) the fifth Dealing Day after
the date of the General Meeting, and (ii) 10 November 2023.
If (i) any of the conditions contained in the Placing Agreement
have not been fulfilled or, where permitted, waived by Peel Hunt by
the applicable time or date where specified (or such later time
and/or date as the Company and Peel Hunt may agree), (ii) any of
the conditions contained in the Placing Agreement becomes incapable
of being satisfied or (iii) the Placing Agreement is terminated in
accordance with its terms (as summarised below), the Placing will
not proceed and the Placees' rights and obligations 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.
By participating in the Placing each Placee agrees that none of
Peel Hunt, the Company or any other person shall have any
responsibility or liability (whether in contact, tort or otherwise)
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 or for entering or not entering
into the Terms of Sale and by participating in the Placing each
Placee agrees that any such decision is within the absolute
discretion of Peel Hunt and the Company.
Termination of the Placing Agreement
Peel Hunt is entitled, at any time before Admission and in
accordance with its terms, to terminate the Placing Agreement by
giving notice to the Company if, inter alia, in Peel Hunt's
opinion:
1. any of the warranties given by the Company in the Placing
Agreement were untrue, inaccurate or misleading when made;
2. any statement in this Announcement is untrue or inaccurate in
any material respect or misleading;
3. the Company has not complied with any of its obligations
under the Placing Agreement (to the extent such obligations fall to
be performed prior to Admission) or either the Company or Newco is
in breach of any of its obligations under the initial subscription
and option agreement or the subscription and transfer agreement in
respect of the Placing and such breach is, in the opinion of Peel
Hunt (acting in good faith) material in the context of the Placing,
the REX Retail Offer and/or Admission;
4. a material adverse change has occurred, whether or not
foreseeable at the date of the Placing Agreement;
5. there has occurred:
a. an actual or prospective material adverse change in United
Kingdom taxation affecting the Ordinary Shares or the transfer
thereof; or
b. a suspension or material limitation in trading in securities
generally on the London Stock Exchange's market for listed
securities; or
c. a general moratorium on commercial banking activities in
London or New York or a material disruption in commercial banking
or securities settlement or clearance services in the United
Kingdom or the United States; or
d. an incident of terrorism or the outbreak or escalation of
hostilities involving the UK, any other EU Member State or the
United States or the declaration by the UK, any other EU Member
State or the United States of a national emergency or war or the
occurrence of any other calamity or crisis resulting in a change in
financial, political, market or economic conditions or currency
exchange rates in the UK or the United States and whether or not
foreseeable at the date of the Placing Agreement,
which in each case, in the opinion of Peel Hunt (acting in good
faith), would be likely to prejudice the success of the Placing,
the REX Retail Offer or Admission or would make it impractical or
inadvisable to continue with the Placing, the REX Retail Offer or
Admission.
Upon such termination, Peel Hunt and the Company 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, and the Placing will not proceed.
By participating in the Placing, Placees agree that the exercise
by Peel Hunt of any right of termination or by Peel Hunt of any
other discretion under the Placing Agreement, shall be within the
absolute discretion of Peel Hunt and that it need not make any
reference to Placees and that it shall have no liability to Placees
whatsoever in connection with any such exercise or failure so to
exercise.
Lock-up
The Company has undertaken to Peel Hunt that, between the date
of the Placing Agreement and 120 calendar days from the date of
Admission, it will not, without the prior written consent of Peel
Hunt, issue Ordinary Shares or enter into certain transactions
involving or relating to the Ordinary Shares, subject to certain
customary carve-outs agreed between Peel Hunt and the Company.
By participating in the Placing, Placees agree that the exercise
by Peel Hunt of any power to grant consent to waive the undertaking
by the Company of a transaction which would otherwise be subject to
such undertaking under the Placing Agreement shall be within the
absolute discretion of Peel Hunt and that Peel Hunt need not make
any reference to, or consultation with, Placees and that Peel Hunt
shall have no liability to Placees whatsoever in connection with
any such exercise of the power to grant consent.
No Prospectus
The Placing Shares are being offered to Relevant Persons only
and will not be offered in such a way as to require a prospectus in
the United Kingdom, any member state of the EU or elsewhere. No
offering document or prospectus has been or will be prepared or
submitted to be approved by the FCA (or any other authority) in
relation to the Placing and Placees' commitments will be made
solely on the basis of their own assessment of the Company and its
Group, the Placing and the Placing Shares based on the information
contained in this Announcement and any information publicly
released to a Regulatory Information Service by or on behalf of the
Company on or prior to the date of this Announcement and subject to
any further terms set forth in the contract note or trade
confirmation to be provided to the individual prospective
Placees.
Each Placee, by accepting a participation in the Placing, agrees
that the content of this Announcement (including this Appendix) and
all other publicly available information previously or
simultaneously published by or on behalf of the Company by
notification of a Regulatory Information Service or otherwise filed
by the Company is exclusively the responsibility of the Company.
Each Placee, by accepting a participation in the Placing, confirms
that it has neither received nor relied on any other information,
representation, warranty, or statement made by or on behalf of the
Company or Peel Hunt or any other person and neither the Company
nor Peel Hunt nor any of their respective affiliates 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 (regardless of whether or not such information,
representation, warranty or statement was given or made by or on
behalf of any such persons). Each Placee acknowledges and agrees
that it has relied on its own investigation of the business,
financial or other position of the Company and its Group in
participating in the Placing. Nothing in this paragraph shall
exclude or limit the liability of any person for fraudulent
misrepresentation.
Registration and Settlement
The Placing
Settlement of transactions in the Placing Shares (ISIN:
GB0033057794) will take place within the system administered by
Euroclear ("CREST"). Settlement will be on a delivery versus
payment basis. However, in the event of any difficulties or delays
in the admission of the Placing Shares to CREST or the use of CREST
in relation to the Placing, the Company and Peel Hunt may agree
that the Placing Shares should be issued in certificated form.
The Company and Peel Hunt reserve the right to require
settlement for the Placing Shares, and to deliver the Placing
Shares (or a portion thereof) to Placees in certificated form or by
such other means as they deem necessary if delivery or settlement
to Placees is not possible or practicable within the CREST system
or would not be consistent with regulatory requirements in a
Placee's jurisdiction.
Each Placee allocated Placing Shares in the Placing will be sent
a contract note or trade confirmation stating the number of Placing
Shares to be allocated to it at the Placing Price. Each such Placee
agrees that it will do all things necessary to ensure that delivery
and payment is completed in accordance with the standing CREST or
certificated settlement instructions as set out in the contract
note or trade confirmation.
The Company will deliver the Placing Shares to a CREST account
operated by Peel Hunt as agent for the Company and Peel Hunt will
enter its delivery (DEL) instruction into the CREST system. Peel
Hunt will hold any Placing Shares delivered to this account as
nominee for the Placees until settlement. 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.
General provisions
If Shareholder Approval is not required, it is expected that
settlement will be on 29 September 2023 in accordance with the
instructions given to Peel Hunt unless otherwise notified by Peel
Hunt.
If Shareholder Approval is required, it is expected that,
subject to the Resolution being passed at the General Meeting,
settlement will be on or about the first dealing day after the date
of the General Meeting in accordance with the instructions given to
Peel Hunt unless otherwise notified by Peel Hunt.
Each Placee is deemed to agree that, if it does not comply with
these obligations, Peel Hunt may sell any or all of the Placing
Shares allocated to that Placee on such Placee's behalf and retain
from the proceeds, for Peel Hunt's account and benefit, an amount
equal to the aggregate amount owed by the Placee plus any interest
due. The relevant Placee will, however, remain liable for any
shortfall below the aggregate amount owed by it and may 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
Placing Shares on such Placee's behalf.
If Placing Shares are to be delivered to a custodian or
settlement agent, Placees should ensure that the electronic
contract note/confirmation is forwarded immediately to the relevant
person within that organisation. Insofar as Placing Shares are
registered in a Placee's name or that of its nominee or in the name
of any person for whom a Placee is contracting as agent or that of
a nominee for such person, such Placing Shares should, subject as
provided below, be so registered free from any liability to United
Kingdom stamp duty or United Kingdom stamp duty reserve tax.
Placees will not be entitled to receive any fee or commission in
connection with the Placing from the Company or Peel Hunt.
If there are any other circumstances in which any stamp duty or
stamp duty reserve tax or other similar taxes (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 Company nor Peel
Hunt shall be responsible for the payment thereof.
Representations and Warranties
By submitting a bid and/or participating in the Placing, each
Placee (and any person acting on such Placee's behalf) irrevocably
represents, warrants, undertakes, acknowledges, confirms and agrees
with the Company and Peel Hunt, in each case as a fundamental term
of its participation in the Placing, that:
1. it has read and understood this Announcement in its entirety
and that its participation in the Bookbuild and the Placing and its
subscription for and acquisition of the Placing Shares is subject
to and based upon all the terms, conditions, representations,
indemnities, warranties, acknowledgements, agreements and
undertakings and other information contained in this
Announcement;
2. none of Peel Hunt, the Company or any of their respective
affiliates or any of its or their respective directors, officers,
partners, employees, consultants, advisers or agents or any person
acting on behalf of any of them has provided, nor will they
provide, it with any material regarding the Placing Shares or the
Company or any other person other than the information contained in
this Announcement; nor has it requested Peel Hunt or the Company,
any of their affiliates or any person acting on behalf of any of
them to provide it with any such material or information;
3. the exercise by Peel Hunt of any right of termination or any
right of waiver exercisable by Peel Hunt contained in the Placing
Agreement including, without limitation, the right to terminate the
Placing Agreement and/or to enter into or refrain from entering
into the Terms of Sale, is within the absolute discretion of Peel
Hunt and Peel Hunt will not have any liability to any Placee
whatsoever in connection with any decision to exercise or not
exercise any such rights;
4. if (i) any of the conditions in the Placing Agreement are not
satisfied (or, where relevant, waived), or (ii) the Placing
Agreement is terminated, or (iii) the Terms of Sale is not executed
by Peel Hunt and the Company, or (iv) the Placing Agreement does
not otherwise become unconditional in all respects, the Placing
will not proceed and its rights (save as to return of funds) and
obligations hereunder shall cease and determine at such time and no
claim shall be made by any Placee in respect thereof;
5. no offering document or prospectus has been, or will be,
prepared in connection with the Placing or is required under the
FSMA, the UK Prospectus Regulation or any other applicable law and
it has not received and will not receive a prospectus or other
offering document in connection therewith;
6. the Ordinary Shares are (and the Placing Shares will be)
listed on the premium listing segment of the Official List of the
FCA and admitted to trading on the main market of the London Stock
Exchange and the Company is therefore required to publish certain
business and financial information in accordance with UK MAR and
the rules and practices of the London Stock Exchange and/or the FCA
(collectively, the "Exchange Information"), which includes a
description of the Company's business and the Company's financial
information, including balance sheets and income statements, and
similar statements for preceding financial years and that it is
able to obtain or access the Exchange Information without undue
difficulty and that it has reviewed such Exchange Information as it
has deemed necessary;
7. it has had access to such financial and other information
(including the business, financial condition, prospects,
creditworthiness, status and affairs of the Company and its Group,
the Placing and the Placing Shares, as well as the opportunity to
ask questions) concerning the Company and its Group, the Placing
and the Placing Shares as it has deemed necessary in connection
with its own investment decision to acquire any of the Placing
Shares and has satisfied itself that the information is still
current and relied on that investigation for the purposes of its
decision to participate in the Placing;
8. that it is not a national or resident of Canada, Australia,
the Republic of South Africa or Japan or a corporation, partnership
or other entity organised under the laws of Canada, Australia, the
Republic of South Africa or Japan and that it will not offer, sell,
renounce, transfer or deliver, directly or indirectly, any of the
Placing Shares in Canada, Australia, the Republic of South Africa
or Japan or to or for the benefit of any person resident in Canada,
Australia, the Republic of South Africa or Japan and each Placee
acknowledges that the relevant exemptions are not being obtained
from the Securities Commission of any province of Canada, that no
document has been or will be lodged with, filed with or registered
by the Australian Securities and Investments Commission or Japanese
Ministry of Finance or the South African Reserve Bank and that the
Placing Shares are not being offered for sale and may not be,
directly or indirectly, offered, sold, transferred or delivered in
or into Canada, Australia, the Republic South Africa or Japan;
9. the Placing Shares have not been and will not be registered
under the Securities Act or with any State or other jurisdiction of
the United States and may not be reoffered or resold in or into the
United States except pursuant to an applicable exemption from, or
in a transaction not subject to, the registration requirements of
the Securities Act and in compliance with any applicable securities
laws of any State or other jurisdiction of the United States;
10. it will not distribute, forward, transfer or otherwise
transmit this Announcement or Appendix, or any other presentational
or other materials concerning the Placing in or into the United
States (including electronic copies thereof) to any person, and it
has not distributed, forwarded, transferred or otherwise
transmitted any such materials to any person;
11. unless otherwise agreed with the Company, it is outside of
the United States and is acquiring the Placing Shares in an
offshore transaction (as defined in Regulation S under the
Securities Act) for its own account or for the account of a person
outside of the United States or it is a dealer or other
professional fiduciary in the United States acquiring Placing
Shares in an offshore transaction on a discretionary basis for the
benefit of a non-US person (other than an estate or trust) (all
such terms as defined in Regulation S);
12. the content of this Announcement is exclusively the
responsibility of the Company and neither Peel Hunt nor any of its
affiliates or any of its or their respective directors, officers,
partners, employees, consultants, advisers or agents nor any person
acting on its or their behalf has or shall have any liability, in
contract, tort or otherwise for any information, representation or
statement contained in, or omission from, this Announcement or any
information previously published by or on behalf of the Company and
will not be liable for any Placee's decision to participate in the
Placing based on any information, representation or statement
contained in this Announcement or otherwise. Each Placee further
represents, warrants and agrees that the only information on which
it is entitled to rely and on which such Placee has relied in
committing itself to subscribe for the Placing Shares is contained
in this Announcement and any information previously or
contemporaneously published by the Company by notification to a
Regulatory Information Service, such information being all that it
deems necessary or appropriate and sufficient to make an investment
decision in respect of the Placing Shares and that it has neither
received nor relied on any other information given, investigation
made or representations, warranties or statements made by either of
Peel Hunt or the Company and neither of Peel Hunt nor the Company
will be liable for any Placee's decision to accept an invitation to
participate in the Placing based on any other information,
representation, warranty or statement. Each Placee further
acknowledges and agrees that it has relied on its own investigation
of the business, financial or other position of the Company in
deciding to participate in the Placing;
13. neither it, nor the person specified by it for registration
as a holder of Placing Shares is, or is acting as nominee or agent
for, and that the Placing Shares will not be allotted to, a person
who is or may be liable to stamp duty or stamp duty reserve tax
under any of sections 67, 70, 93 or 96 of the UK Finance Act 1986
(depositary receipts and clearance services), it is not
participating in the Placing as nominee or agent for any person to
whom the allocation, allotment, issue or delivery of the Placing
Shares would give rise to such a liability and the Placing Shares
are not being acquired in connection with arrangements to issue
depositary receipts or to issue or transfer Placing Shares into a
clearance service;
14. it has complied with its obligations under the FSMA, the
CJA, EU MAR and UK MAR and in connection with money laundering and
terrorist financing under the Proceeds of Crime Act 2002 (as
amended), the Terrorism Act 2000, the Terrorism Act 2006, the Money
Laundering and Terrorist Financing (Amendment) Regulations 2019,
and any related or similar rules, regulations or guidelines,
issued, administered or enforced by any government agency having
jurisdiction in respect thereof (the "Regulations") and the Money
Laundering Sourcebook of the FCA and, if making payment on behalf
of a third party, satisfactory evidence has been obtained and
recorded by it to verify the identity of the third party as
required by the Regulations, and that it is not a person: (a) with
whom transactions are prohibited under the Foreign Corrupt
Practices Act of 1977 or any economic sanction programmes
administered by, or regulations promulgated by, the Office of
Foreign Assets Control of the U.S. Department of the Treasury; (b)
named on the Consolidated List of Financial Sanctions Targets
maintained by HM Treasury of the United Kingdom; or (c) subject to
financial sanctions imposed pursuant to a regulation of the
European Union or a regulation adopted by the United Nations 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 all such
regulations;
15. in the case of any Placing Shares acquired by it as a
financial intermediary, as that term is used in Article 5(1) of the
EU Prospectus Regulation and the UK Prospectus Regulation (as
applicable), (i) the Placing Shares acquired by it in the Placing
have not been acquired on behalf of, nor have they been acquired
with a view to their offer or resale to, persons in any Member
State of the EEA which has implemented the EU Prospectus Regulation
other than Qualified Investors, or in the United Kingdom to
qualified investors within the meaning of the UK Prospectus
Regulation ("UK Qualified Investors"), or in circumstances in which
the prior consent of Peel Hunt has been given to the offer or
resale; or (ii) where Placing Shares have been acquired by it on
behalf of persons in any member state of the EEA or the United
Kingdom other than Qualified Investors or UK Qualified Investors
(as applicable), the offer of those Placing Shares to it is not
treated under the EU Prospectus Regulation or the UK Prospectus
Regulation (as applicable) as having been made to such persons;
16. it has not offered or sold and, prior to the expiry of a
period of six months from Admission, will not offer or sell any
Placing Shares to persons in the United Kingdom, except to persons
whose ordinary activities involve them in acquiring, holding,
managing or disposing of investments (as principal or agent) for
the purposes of their business or otherwise in circumstances which
have not resulted and which will not result in an offer to the
public in the United Kingdom within the meaning of section 85(1) of
the FSMA;
17. it has only communicated or caused to be communicated and
will only communicate or cause to be communicated any invitation or
inducement to engage in investment activity (within the meaning of
section 21 of the FSMA) relating to the Placing in circumstances in
which section 21(1) of the FSMA does not require approval of the
communication by an authorised person and it acknowledges this
Announcement has not been approved by Peel Hunt in its capacity as
an authorised person under section 21 of the FSMA and it may
therefore not be subject to the controls which would apply if it
was made or approved as a financial promotion by an authorised
person;
18. it has not offered or sold and will not offer or sell any
Placing Shares to the public in any member state of the EEA except
in circumstances falling within Article 1(4) of the EU Prospectus
Regulation which do not result in any requirement for the
publication of a prospectus pursuant to Article 3 of the EU
Prospectus Regulation;
19. it has complied and will comply with all applicable
provisions of the FSMA with respect to anything done by it in
relation to the Placing from or otherwise involving, the United
Kingdom companies, securities and financial and intermediary
services laws and regulations;
20. that it is acting as principal only in respect of the
Placing or, if it is acting for any other person: (i) it is duly
authorised to do so and has full power to make the acknowledgments,
representations and agreements herein on behalf of each such
person; (ii) it exercises sole investment discretion as to each
such person's account; and (iii) it is and will remain liable to
Peel Hunt and the Company for the performance of all its
obligations as a Placee in respect of the Placing (regardless of
the fact that it is acting for another person);
21. 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;
22. it is a Relevant Person (as defined above);
23. it and any person acting on its behalf is entitled to
subscribe for and purchase the Placing Shares under the laws of all
relevant jurisdictions which would apply to it, and that it and any
person acting on its behalf is in compliance with applicable laws
in the jurisdiction of its residence, the residence of the Company,
or otherwise (including all relevant provisions of EU MAR, UK MAR,
the FSMA and the Financial Services Act 2012 in respect of anything
done in, from or otherwise involving the United Kingdom);
24. it has all necessary capacity and has obtained all necessary
consents and authorities to enable it to commit to its
participation in the Placing and to perform its obligations in
relation thereto (including, without limitation, in the case of any
person on whose behalf it is acting, all necessary consents and
authorities to agree to the terms set out or referred to in this
Announcement) and will honour such obligations;
25. it (and any person acting on its behalf) has the funds
available to pay for, and will make or procure payment for the
Placing Shares allocated to it in accordance with this Announcement
on the due time and date set out herein or as directed by Peel
Hunt, failing which the relevant Placing Shares may be placed with
other subscribers or sold as Peel Hunt may in its discretion
determine and without liability to such Placee, who will remain
liable for any amount by which the net proceeds of such sale falls
short of the product of the Placing Price and the number of Placing
Shares allocated to it and may be required to bear any stamp duty,
stamp duty reserve tax or other similar taxes (together with any
interest or penalties) which may arise upon the sale of such
Placee's Placing Shares;
26. its allocation (if any) of Placing Shares will represent a
maximum number of Placing Shares which it will be entitled, and
required, to subscribe for, and that the Company may call upon it
to subscribe for a lower number of Placing Shares (if any), but in
no event in aggregate more than the aforementioned maximum;
27. neither Peel Hunt, nor any of its affiliates, nor any person
acting on behalf of Peel Hunt, is making any recommendations to it,
advising it or providing intermediary services regarding the
suitability of any transactions it may enter into in connection
with the Placing and that participation in the Placing is on the
basis that it is not and will not be a client of Peel Hunt and that
Peel Hunt (who is acting for the Company and no other person in
connection with the Placing) has no duties or responsibilities to
it for providing the protections afforded to its clients or
customers or for providing advice in relation to the Placing nor in
respect of any representations, warranties, undertakings or
indemnities contained in the Placing Agreement nor for the exercise
or performance of any of its rights and obligations thereunder
including any rights to waive or vary any conditions or exercise
any termination right;
28. the person whom it specifies for registration as holder of
the Placing Shares will be (i) itself or (ii) its nominee, as the
case may be. Neither Peel Hunt nor the Company will be responsible
for any liability to stamp duty or stamp duty reserve tax resulting
from a failure to observe this requirement. Each Placee and any
person acting on behalf of such Placee agrees to participate in the
Placing and it agrees to indemnify the Company and Peel Hunt in
respect of the same on the basis that the Placing Shares will be
allotted to the CREST stock account of Peel Hunt who will hold them
as nominee on behalf of such Placee, in accordance with the
provisions for registration and settlement set out in this
Announcement;
29. neither the Company nor Peel Hunt owes any fiduciary or
other duties to any Placee in respect of any acknowledgements,
confirmations, representations, warranties, undertakings or
indemnities in the Placing Agreement;
30. time is of the essence as regard its obligations in respect
of its participation in the Placing under these terms and
conditions;
31. these terms and conditions and any agreements entered into
by it pursuant to these terms and conditions and any
non-contractual obligations arising out of or in connection with
such agreements shall be governed by and construed in accordance
with the laws of England and Wales and it submits (on behalf of
itself and on behalf of any person on whose behalf it is acting) to
the exclusive jurisdiction of the English courts as regards any
claim, dispute or matter arising out of any such contract, except
that enforcement proceedings in respect of the obligation to make
payment for the Placing Shares (together with any interest
chargeable thereon) may be taken by the Company or Peel Hunt 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;
32. it shall indemnify on an after-tax basis and hold the
Company and Peel Hunt and their respective affiliates and its and
their respective directors, officers, partners, employees,
consultants, advisers or agents harmless from any and all costs,
claims, liabilities and expenses (including legal fees and
expenses) arising out of or in connection with any breach of the
representations, warranties, acknowledgements, agreements and
undertakings in this Appendix and further agrees that the
provisions of this Appendix shall survive after completion of the
Placing;
33. its commitment to subscribe for Placing Shares on the terms
set out herein will continue notwithstanding any amendment that may
in future be made to the terms 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. 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 the subscription by it and/or such
person direct from the Company for the Placing Shares in question.
In respect of the Placing, such agreement assumes, and is based on
a warranty from each Placee, that neither it, nor the person
specified by it for registration as holder of Placing Shares is, or
is acting as nominee or agent for, and that the Placing Shares will
not be allotted to, a person who is or may be liable to stamp duty
or stamp duty reserve tax under any of sections 67, 70, 93 and 96
of the UK Finance Act 1986 (depositary receipts and clearance
services). If there are any such arrangements, or the settlement
relates to any other dealing in the Placing, stamp duty, stamp duty
reserve tax or securities transfer tax may be payable. In that
event the Placee agrees that it shall be responsible for such stamp
duty, stamp duty reserve tax or securities transfer tax, and
neither the Company nor Peel Hunt shall be responsible for such
stamp duty, stamp duty reserve tax or securities transfer tax. If
this is the case, each Placee should seek its own advice and notify
Peel Hunt accordingly;
34. unless paragraph 35 below applies, it has neither received
nor relied on any inside information (for the purposes of UK MAR
and section 56 of the CJA) in relation to its participation in the
Placing;
35. if it has received any inside information (for the purposes
of UK MAR and section 56 of the CJA) in relation to the Company and
its securities, it confirms that it has received such information
within the marketing soundings regime provided for in Article 11 of
UK MAR and associated delegated regulations and it has not: (i)
dealt (or attempted to deal) in the securities of the Company; (ii)
encouraged, recommended or induced another person to deal in the
securities of the Company; or (iii) unlawfully disclosed inside
information to any person, prior to the information being made
publicly available;
36. that where it is acquiring Placing Shares for one or more
managed accounts, it is authorised in writing by each managed
account: (i) to acquire the Placing Shares for each managed
account; (ii) to make on its behalf the representations,
warranties, acknowledgements, undertakings and agreements in this
Appendix and this Announcement of which it forms part; and (iii) to
receive on its behalf any investment letter relating to the Placing
in the form provided to it by Peel Hunt, provided that where the
Placee is acting in its capacity as a discretionary investment
manager on behalf of its underlying clients (who include
individuals and/or retail clients), then it is the discretionary
investment manager that is to be regarded as the Placee for the
purpose of this Announcement and not the underlying client and, for
the avoidance of doubt, the representations and warranties given
are to be taken as made on behalf of the Placee itself and not
their underlying client;
37. if it is a pension fund or investment company, its purchase
of Placing Shares is in full compliance with applicable laws and
regulations;
38. the Placing Shares will be allotted and issued subject to
the terms and conditions of this Appendix;
39. no action has been or will be taken by any of the Company,
Peel Hunt or any person acting on behalf of the Company or Peel
Hunt 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;
40. (i) it has such knowledge and experience in financial,
business and international investment matters as is required to
evaluate the merits and risks of subscribing for the Placing
Shares; (ii) it is experienced in investing in securities of a
similar nature to the Ordinary Shares and in the sector in which
the Company and its Group operates and is aware that it may be
required to bear, and is able to bear, the economic risk of, and
are able to sustain a complete loss in connection with the Placing;
(iii) it has relied upon its own examination and due diligence and
analysis of the Company and its associates taken as a whole, and
the terms of the Placing, including the merits and risks involved;
(iv) it has had sufficient time and access to information to
consider and conduct its own investigation with respect to the
offer and purchase of the Placing Shares, including the legal,
regulatory, tax, business, currency and other economic and
financial considerations relevant to such investment and has so
conducted its own investigation to the extent it deems necessary
for the purposes of its investigation, and (v) it will not look to
the Company, Peel Hunt, any of their respective affiliates or any
person acting on their behalf for all or part of any such loss or
losses it or they may suffer; and
41. the Company and Peel Hunt and their respective affiliates
and others will rely upon the truth and accuracy of the foregoing
representations, warranties, acknowledgements and undertakings
which are given for the benefit of the Company and Peel Hunt and to
Peel Hunt on their own behalf and on behalf of the Company and are
irrevocable.
Past performance is no guide to future performance and persons
needing advice should consult an independent financial adviser.
The rights and remedies of Peel Hunt and the Company under these
terms and conditions are in addition to any rights and remedies
which would otherwise be available to each of them and the exercise
or partial exercise of one will not prevent the exercise of
others.
All times and dates in this Announcement may be subject to
amendment. Peel Hunt shall notify the Placees and any person acting
on behalf of the Placees of any changes.
DEFINITIONS
The following definitions apply throughout this Announcement
unless the context otherwise requires:
Admission admission of the Placing Shares to listing
on the Official List of the FCA and to trading
on the main market for listed securities of
the London Stock Exchange becoming effective;
Announcement this announcement (including the Appendix);
Bookbuild the bookbuilding process to be commenced by
Peel Hunt to use reasonable endeavours to
procure Placees for the Placing Shares, as
described in this Announcement and subject
to the terms and conditions set out in this
Announcement and the Placing Agreement;
CJA the Criminal Justice Act 1993;
CREST means the relevant system (as defined in the
Uncertificated Securities Regulations 2001
(SI 2001 No. 3755)) in respect of which Euroclear
is the Operator (as defined in such Regulations)
in accordance with which securities may be
held and transferred in uncertificated form;
EU MAR the Market Abuse Regulation (Regulation (EU)
No. 596/2014);
EU Prospectus the Prospectus Regulation (EU) 2017/1129 as
Regulation supplemented by Commission Delegated Regulation
(EU) 2019/980 and Commission Delegated Regulation
(EU) 2019/979;
Euroclear means Euroclear UK & International Limited,
a company incorporated under the laws of England
and Wales;
FCA the UK Financial Conduct Authority;
FSMA the Financial Services and Markets Act 2000,
as amended;
Fundraising together, the Placing and the REX Retail Offer;
General Meeting if required, the general meeting of the Company
to be convened pursuant to the Shareholder
Circular in connection with the Placing;
Group the Company and its subsidiaries and subsidiary
undertakings;
London Stock Exchange London Stock Exchange plc;
Newco Project Dynamo Funding Limited;
New Ordinary Shares together, the Placing Shares and the REX Retail
Offer Shares;
Ordinary Shares ordinary shares of 1.89 pence each in the
capital of the Company;
Peel Hunt Peel Hunt LLP;
Placee any person (including individuals, funds or
otherwise) by whom or on whose behalf a commitment
to acquire Placing Shares has been given;
Placing the proposed placing of Placing Shares on
the terms and subject to the conditions of
this Announcement and the Placing Agreement;
Placing Agreement the conditional placing agreement entered
into between the Company and Peel Hunt on
the date of this Announcement;
Placing Shares the Ordinary Shares to be offered and sold
pursuant to the Placing;
REX Platform the Peel Hunt Retail Capital Markets "REX"
platform, a proprietary platform owned and
operated by Peel Hunt;
REX Retail Offer the offer of REX Retail Offer Shares to be
made through the REX Platform;
REX Retail Offer the Ordinary Shares to be offered pursuant
Shares to the REX Retail Offer;
Regulation S Regulation S promulgated under the Securities
Act;
Resolution if required, a resolution of the Company's
shareholders to approve any related party
transactions in connection with the Placing
and which will be set out in the notice of
General Meeting;
Securities Act the US Securities Act of 1933, as amended;
Shareholder Approval approval of the Placing by the Company's existing
shareholders pursuant to Listing Rule 11.1.7R;
Shareholder Circular if required, the circular to be despatched
by the Company to its shareholders containing,
inter alia, the notice convening the General
Meeting;
subsidiary has the meaning given in the Companies Act
2006, as amended;
subsidiary undertaking has the meaning given in the Companies Act
2006, as amended;
Terms of Sale the terms of sale to be entered into between
the Company and Peel Hunt in relation to the
Placing;
UK MAR EU MAR as it forms part of UK domestic law
by virtue of the European Union (Withdrawal)
Act 2018, as amended; and
UK Prospectus the EU Prospectus Regulation as amended and
Regulation transposed into the laws of the United Kingdom
pursuant to the European Union (Withdrawal)
Act 2018 and the European Withdrawal Agreement
(Act) 2020, as amended.
This information is provided by RNS, the news service of the
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END
IOEQQLFLXKLBBBL
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