Lonrho intends to issue 161,280,925 of the New Ordinary Shares
through the Firm Placing and 108,217,870 of the New Ordinary Shares
through the Placing and Open Offer at 10 pence per New Ordinary
Share to raise gross proceeds of GBP26.9 million. In each case, the
New Ordinary Shares have been conditionally placed with
institutional and other investors outside of the United States by
Panmure Gordon and in the United States to QIBs by Auerbach Grayson
(subject, in the case of the Conditional Placing Shares, to
clawback to satisfy valid applications by Qualifying Shareholders
under the Open Offer). The Capital Raising is being fully
underwritten by Panmure Gordon, subject to, and in accordance with,
the terms and conditions of the Placing Agreement.
The Issue Price was set having regard to prevailing market
conditions and the size of the Capital Raising. The Issue Price of
10 pence represents a discount of zero per cent. to the Closing
Price of 10 pence per Ordinary Share on 12 December 2011 (being the
last trading day prior to the date of the announcement of the
Capital Raising).
The New Ordinary Shares will be issued credited as fully paid
and will rank pari passu in all respects with the Ordinary Shares
in issue at the time the New Ordinary Shares are issued pursuant to
the Firm Placing and the Placing and Open Offer, including the
right to receive and retain dividends and other distributions
declared, made or paid by reference to a record date falling after
Admission.
The Capital Raising will result in the issue of 269,498,795 New
Ordinary Shares (representing approximately 20.8 per cent. of the
ordinary share capital prior to Admission, and approximately 17.2
per cent. of the Enlarged Ordinary Share Capital).
Firm Placing
The Firm Placees have conditionally agreed to subscribe for
161,280,925 of the New Ordinary Shares at the Issue Price
(generating gross proceeds of GBP16.1 million and representing
approximately 10.3 per cent. of the Enlarged Ordinary Share
Capital). The Firm Placees required the Firm Placing in order to
give them certainty as to the size of their shareholding in Lonrho
following the Capital Raising. The Firm Placing Shares are not
subject to clawback and are not part of the Placing and Open
Offer.
Placing and Open Offer
Under the Placing and Open Offer, Lonrho intends to issue
108,217,870 New Ordinary Shares at the Issue Price (generating
gross proceeds of GBP10.8 million and representing approximately
6.9 per cent. of the Enlarged Ordinary Share Capital). The Open
Offer provides an opportunity for Qualifying Shareholders to
participate in the Capital Raising by subscribing for their
respective Basic Entitlements and also by subscribing for Excess
Shares under the Excess Application Facility, subject to
availability.
As part of the Placing and Open Offer, 108,217,870 of the New
Ordinary Shares are being allocated to Conditional Placees who have
agreed to subscribe for the Conditional Placing Shares pursuant to
the Placing. However, allocations of the Conditional Placing Shares
are subject to clawback to satisfy valid applications by Qualifying
Shareholders under the Open Offer.
To the extent that valid applications are not received in
respect of Open Offer Shares under the Open Offer, any unallocated
Open Offer Shares will first be allotted to Qualifying Shareholders
to meet any valid applications under the Excess Application
Facility and, to the extent that there remain any unallocated Open
Offer Shares, they will be treated as Conditional Placing Shares
and issued to Conditional Placees.
As part of the Placing and Open Offer, 10,000,000 of the New
Ordinary Shares are being allocated to David Lenigas who has agreed
to subscribe for these Conditional Placing Shares pursuant to the
Placing. However, allocations of these Conditional Placing Shares
are subject to clawback to satisfy valid applications by Qualifying
Shareholders under the Open Offer.
Basic Entitlements
Qualifying Shareholders are being offered the opportunity to
subscribe at the Issue Price for Open Offer Shares on the following
basis:
1 Open Offer Shares for every 12 Existing Ordinary Shares
registered in their name at the close of business on the Record
Date.
Basic Entitlements under the Open Offer will be rounded down to
the nearest whole number of Open Offer Shares and any fractional
entitlements to an Open Offer Share will not be allocated but will
be aggregated and sold for the benefit of Lonrho under the Excess
Application Facility and/or the Placing.
If a shareholder has sold or otherwise transferred all of his
Existing Ordinary Shares before the Ex-Entitlements Date, he is not
entitled to participate in the Open Offer.
Qualifying Shareholders are also being offered the opportunity
to subscribe for Excess Shares in excess of their Basic
Entitlements under the Excess Application Facility as described
below.
Excess Application Facility
Subject to availability, the Excess Application Facility is
intended to enable Qualifying Shareholders to apply for any whole
number of Excess Shares in excess of their Basic Entitlements up to
a maximum number of Excess Shares equal to approximately 0.2 times
the number of Existing Ordinary Shares registered in their name at
the Record Date.
Applications under the Excess Application Facility may be
allocated in such manner as the Directors determine, in their
absolute discretion, and no assurance can be given that
applications by Qualifying Shareholders under the Excess
Application Facility will be met in full or in part, or at all.
Conditionality
The Capital Raising is subject to the Capital Raising Conditions
being satisfied, which include:
-- the Placing Agreement having become unconditional in all
respects save for the condition relating to Admission; and
-- Admission becoming effective by not later than 8.00 a.m. on 4
January 2012 (or such later time and date as Lonrho and Panmure may
agree, not being later than 8.00 a.m. on 18 January 2012).
Admission will not occur if the Capital Raising Conditions
(other than Admission) are not satisfied or waived.
Prior to Admission, Panmure Gordon may terminate the Placing
Agreement in certain defined circumstances. Following Admission,
the Placing Agreement cannot be terminated.
If the conditions of the Placing Agreement are not fulfilled on
or before 8.00 a.m. on 4 January 2012 (or such later date as
Panmure Gordon and the Company may agree, not being later than 8.00
a.m. on 18 January 2012), application monies will be returned to
Applicants (at the Applicant's risk) without interest as soon as
possible thereafter.
Structure of the Firm Placing and Placing and Open Offer
In structuring the Capital Raising, the Directors have had
regard, inter alia, to the current market conditions, the level of
the Company's share price and the importance of pre-emption rights
to Shareholders. After considering these factors, the Directors
have concluded that the Firm Placing and Placing and Open Offer is
the most suitable option for raising new capital available to the
Company and its Shareholders. The Placing and Open Offer component
of the fundraising provides an opportunity for all Qualifying
Shareholders to participate by subscribing for Open Offer Shares
pro rata to their current holding of Ordinary Shares.
The Firm Placing and the Placing and Open Offer are structured
using a cashbox structure. This is described in more detail in the
following paragraph.
The structure of the Firm Placing together with the Placing and
Open Offer is expected to have the overall effect of creating
distributable reserves equal to the net proceeds of the Firm
Placing and Placing and Open Offer less the par value of the New
Ordinary Shares. For technical reasons, at the conclusion of the
Firm Placing and Placing and Open Offer, instead of issuing New
Ordinary Shares to Applicants and placees in return for cash
subscriptions, Lonrho will issue the New Ordinary Shares to
Applicants and placees in consideration for the transfer to it by
the Newco Subscriber of the issued ordinary shares of Newco held by
the Newco Subscriber and the entire issued redeemable preference
share capital of Newco, which will result in Lonrho owning the
entire issued share capital of Newco the only assets of which will
be its cash resources. These resources will represent the net
proceeds of the Firm Placing and Placing and Open Offer. Lonrho
will be able to utilise this amount by redeeming the redeemable
preference shares it will then hold in Newco and, during any
interim period prior to redemption, by procuring that Newco lends
the amount to Lonrho or another member of the Group. Accordingly,
by applying for New Ordinary Shares in the Open Offer and
submitting a valid payment in respect thereof, a Qualifying
Shareholder instructs the Receiving Agent to (i) hold such payments
on the Applicant's behalf until Admission and, if Admission does
not take place, to return such payment, without interest, to the
Applicant, (ii) following Admission and to the extent of a
successful application under the Open Offer, apply such payment
(after deduction of certain agreed fees, costs and expenses) on
behalf of the Newco Subscriber solely for the purposes of acquiring
preference shares in Newco and (iii) to the extent of an
unsuccessful application under the Open Offer, return the relevant
payment without interest to the Applicant.
Important notice
The New Ordinary Shares are not being made available in whole or
in part to the public except under the terms of the Open Offer.
Subject to certain exceptions, the Open Offer is not being made to
Shareholders who are citizens of or resident or located in any
Prohibited Territory or in any other jurisdiction in which such an
offer or solicitation would be unlawful. Accordingly, Application
Forms are being sent to Qualifying Non-CREST Shareholders and Basic
Entitlements and Excess CREST Open Offer Entitlements are being
credited to Qualifying CREST Shareholders.
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