TIDMZEG
RNS Number : 9439M
Zegona Communications PLC
14 January 2019
NOT FOR DISTRIBUTION, PUBLICATION OR RELEASE, IN WHOLE OR IN
PART, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM THE UNITED STATES
OR TO ANY US PERSON, CANADA, AUSTRALIA, JAPAN, THE REPUBLIC OF
SOUTH AFRICA, THE EEA OR TO ANY PERSON LOCATED OR RESIDENT IN AN
EEA STATE OTHER THAN THE UK, BELGIUM, THE NETHERLANDS, ITALY,
IRELAND AND SPAIN, OR ANY OTHER JURISDICTION IN WHICH THE
DISTRIBUTION, PUBLICATION OR RELEASE WOULD BE UNLAWFUL.
This announcement is an advertisement and does not constitute a
prospectus in connection with an offering of securities of Zegona.
Investors must neither accept any offer for, nor acquire, any
securities to which this document refers, unless they do so on the
basis of the information contained in the applicable prospectus to
be published by Zegona, a copy of which will, when published, be
available at Zegona's registered office at 20 Buckingham Street,
London WC2N 6EF, and Zegona's website, www.zegona.com. The
subscription or purchase of ordinary shares of Zegona is subject to
specific legal or regulatory restrictions in certain jurisdictions.
Persons distributing this communication must satisfy themselves
that it is lawful to do so. Zegona assumes no responsibility in the
event there is a violation by any person of such restrictions.
ZEGONA COMMUNICATIONS PLC
14 January 2019
ZEGONA CONFIRMS FINANCING ARRANGEMENTS TO INCREASE ITS
INVESTMENT IN EUSKALTEL
On 21 December 2018, Zegona Communications plc ("Zegona")
announced it would no longer proceed with its proposed tender offer
to acquire shares in Euskaltel, S.A. ("Euskaltel") at a price of
EUR7.751 per share. Zegona's strategy is now focussed on increasing
its ownership position in Euskaltel by up to a maximum of 12.5%
through market purchases(2) at a price it considers attractive for
its shareholders based on prevailing market conditions.
Following good support from existing and new investors, Zegona
today announces a proposed placing of a minimum of 95,238,096 new
ordinary shares in the capital of the company to raise equity
proceeds of at least GBP100 million (the "Placing")(3) . Zegona has
also entered into loan agreements with the Virgin Group and
Barclays Bank PLC under which it can draw a maximum of GBP30
million. Zegona intends to utilise the equity and loan proceeds4 to
increase its ownership in Euskaltel at a price it considers
attractive for its shareholders and use its increased influence to
work constructively with the Euskaltel board of directors and
management to improve the performance of the business.
In addition, Zegona has entered into a shareholder agreement
with Talomon Capital Limited. Talomon is a shareholder of both
Zegona and Euskaltel (with an existing stake of approximately 1.4%
in the latter) and under the agreement has an ownership entitlement
of up to 2.4% in Euskaltel.
The Placing will require approval by Zegona shareholders for the
issuance of additional equity on a non-pre-emptive basis at a
shareholders' meeting to be held on 7 February 2019.
1 Representing a premium of 18% to the closing share price of
Euskaltel shares of EUR6.58 on 18 October 2018, being the day
before Zegona's original announcement of its intended tender offer
on 19 October 2018
2 Market purchases may also include privately negotiated
transactions to acquire Euskaltel shares
3 Gross proceeds. Zegona will conduct an accelerated
bookbuilding with new and existing investors to finalise the size
of the Placing
4 Proceeds used are expected to total at least GBP124.5 million,
comprising the proceeds of the Placing and amounts assumed to be
drawn down under the Virgin Funding and Barclays Facility, less
amounts required for general corporate purposes and to pay costs
related to the Placing and the acquisition of ordinary shares in
Euskaltel
Enquiries
Tavistock (Public Relations adviser - UK)
Tel: +44 (0)20 7920 3150
Jos Simson - jos.simson@tavistock.co.uk
Lulu Bridges - lulu.bridges@tavistock.co.uk
Llorente y Cuenca (Public Relations adviser - Spain)
Tel: +34 (0) 91 563 7722
Jorge López-Zafra - jlopez@llorenteycuenca.com
Further Information
Expected timetable of events
Publication of the Circular and Prospectus 14 January 2019
Latest time and date for receipt of Forms 10 a.m. on 5 February
of Proxy and CREST Proxy Instructions for 2019
the General Meeting
Record Time for those Shareholders on the 6 p.m. on 5 February
Register of Members entitled to attend 2019
or vote at the General Meeting
General Meeting 10 a.m. on 7 February
2019
Admission of the New Zegona Shares 8 a.m. on 11 February
2019
All references are to London times unless otherwise stated. The
dates and times given are indicative only and are based on the
Zegona's current expectations and may be subject to change. If any
of the times and/or dates above change, the revised times and/or
dates will be notified to Shareholders by announcement through a
regulatory information service.
The Placing and Updated Transaction Information
The Placing is expected to raise gross proceeds of at least
GBP100 million through the issue of a minimum of 95,238,096 new
ordinary shares in the capital of the company (the "New Zegona
Shares") at 105 pence per share (the "Placing Price"). The Placing
will be made on the terms and conditions set out in Appendix 1
below.
Zegona's board is also pleased to confirm that Marwyn Asset
Management Limited, in its capacity as agent for and on behalf of
its discretionary clients, has agreed to invest in the Placing, is
fully supportive of the Placing and Zegona's intention to purchase
additional Euskaltel shares, and intends to remain Zegona's largest
shareholder upon completion of the Placing. Certain members of
Zegona's management, Eamonn O'Hare, Robert Samuelson and Howard
Kalika, also intend to participate in the Placing. Artemis
Investment Management LLP, an existing shareholder in Euskaltel, is
expected to become a material shareholder in Zegona as a result of
the Placing.
On 14 January 2019, the Zegona Group entered into the Virgin
Funding, as discussed further below, which will allow the Zegona
Group to draw down up to GBP10 million to fund in part the
acquisition of further Euskaltel shares and to pay costs related to
the acquisition of further Euskaltel shares and the Placing.
On 14 January 2019, the Zegona Group entered into the Barclays
Facility, as discussed further below, which will allow the Zegona
Group to draw down up to GBP30 million, which will be reduced to
GBP20 million to the extent the Virgin Funding is drawn down, to
fund in part the acquisition of further Euskaltel shares, pay costs
related to the acquisition of further Euskaltel shares and the
Placing and for general corporate purposes.
Zegona intends to use the net proceeds from the Placing and the
funds expected to be drawn under the Virgin Funding and Barclays
Facility (the "Available Funds")(5) for the acquisition of ordinary
shares in Euskaltel through market purchases or privately
negotiated transactions up to a maximum of 12.5% of the outstanding
issued share capital of Euskaltel at a price Zegona considers
attractive for its shareholders based on prevailing market
conditions. Assuming Zegona raises gross equity proceeds of GBP100
million, at the Euskaltel share price of EUR7.26 (being the closing
price at 11 January 2019), the Available Funds would not be
sufficient to increase Zegona's interest by 12.5%.
Zegona currently anticipates drawing substantially all of the
GBP30 million available to it under the Virgin Funding and Barclays
Facility if there is sufficient availability in the market for it
to purchase Euskaltel Shares at a price it considers attractive for
Zegona shareholders based on prevailing market conditions. The
Virgin Funding and Barclays Facility are expected to remain largely
undrawn until substantially all of the net proceeds of the Placing
have been used, though Zegona may draw down and use a portion of
the Barclays Facility to purchase Euskaltel Shares prior to
Admission.
As Zegona has previously stated, it considers Euskaltel to be a
strategically attractive business with a strong competitive
position in its home markets and a range of opportunities to
deliver further profitable growth. Zegona believes there is the
potential to create additional value by driving efficiency
improvements, increasing revenues in existing regions and
accelerating expansion outside the current footprint.
To the extent that Zegona has not used all or substantially all
of the Available Funds to acquire Euskaltel Shares as described
above over a time period considered reasonable by the Directors, or
if Zegona has chosen not to acquire further Euskaltel Shares (for
example, as a result of a significant increase in Euskaltel's share
price), subject to retaining any amounts required for general
corporate and working capital purposes, any voluntary or mandatory
repayments of the new facilities, Zegona currently intends to
return any excess to Zegona shareholders through an appropriate and
equitable mechanism, including through a potential buyback of
Zegona Shares in the market, which could have adverse tax
consequences for Zegona shareholders.
5 Available Funds are expected to total at least GBP124.5
million, comprising the proceeds of the Placing and amounts assumed
to be drawn down under the Virgin Funding and Barclays Facility,
less amounts required for general corporate purposes and to pay
costs related to the Placing and the acquisition of ordinary shares
in Euskaltel
The Shareholder Relationship Agreement
On 14 January 2019, Zegona entered into the Shareholder
Relationship Agreement with Talomon Capital Limited ("Talomon"), an
experienced TMT and telecommunications sector investor. Talomon is
a current shareholder in both Euskaltel and Zegona and, pursuant to
the Shareholder Relationship Agreement, has agreed formally to
support Zegona's strategy. Under the Shareholder Relationship
Agreement, Talomon is permitted to own up to 2.4% of the
outstanding issued share capital of Euskaltel and, as of the date
of that agreement, owned approximately 1.4%. In order to avoid any
mandatory offer requirements under Spanish law, for so long as the
agreement is in effect, the Directors believe that the Zegona Group
is only permitted to increase its stake in Euskaltel by a further
approximately 12.5% (or 22,330,000 Euskaltel Shares) from its
current approximate 15% shareholding position at the date of this
Document, such that the aggregate shareholding of the Zegona Group
and Talomon would not exceed 29.9%.
The Virgin Funding and the Barclays Facility
In addition to the Placing, Zegona has arranged a strategic
investment from Virgin of up to GBP10 million in the form of a loan
(the "Virgin Funding"). The Directors believe that Virgin's
participation demonstrates its strategic support for Zegona's
strategy. The Virgin Funding, which Zegona entered into on 14
January 2019, will allow Zegona to draw down up to GBP10 million to
partially fund, if required, the acquisition of further Euskaltel
shares and to pay costs related to the acquisition of further
Euskaltel shares and the Placing. The Virgin Funding is subject to
at least GBP100 million of gross proceeds being raised in the
Placing (and an amount equal to the greater of GBP90,000,000 and
90% of net proceeds of the Placing having been applied towards the
purchase of Euskaltel shares or the payment of costs) and other
customary conditions precedent.
From the date on which funds are drawn down under the Virgin
Facility, interest will accrue daily at an annual interest rate of
LIBOR plus 5%, payable quarterly in arrears, on any drawn amount.
The Virgin Funding matures on 30 April 2020. The Virgin Funding
will also be repayable: if certain events occur with respect to
Zegona or Euskaltel (including any significant fundraisings other
than the Placing or the Barclays Facility being drawn in an amount
greater than GBP20 million); if there is a drop in the value of
Euskaltel shares to EUR3.42 or below; upon a change in control of
Euskaltel or Zegona; in the event that the Zegona Group sells more
than 25% of its Euskaltel shares; or upon the occurrence of other
customary events of default. The Virgin Funding will also be
repayable with the net proceeds of any disposals by the Zegona
Group (subject to limited exemptions) and may be repaid early
without penalty. Any voluntary prepayment of amounts drawn under
the Barclays Facility will require the prepayment in whole of the
Virgin Funding.
The Virgin Funding will initially be unsecured but will be
secured as described below upon (i) any amount being drawn down
under the Barclays Facility and (ii) a request for funds being made
or any amount drawn down under the Virgin Funding.
Zegona has also arranged for the provision of a facility by
Barclays of up to GBP30 million, entered into on 14 January 2019,
which will be reduced to GBP20 million if and to the extent the
Virgin Funding is drawn down (the "Barclays Facility"), such that
the maximum amount that may be drawn down under the Virgin Funding
and Barclays Facility in aggregate is limited to GBP30 million.
The Barclays Facility may, subject to satisfaction of certain
customary conditions precedent, be used to fund the acquisition of
further Euskaltel shares, pay costs related to the acquisition of
further Euskaltel shares and the Placing and for general corporate
purposes. Zegona may draw down and use a portion of the Barclays
Facility to purchase Euskaltel Shares prior to Admission. The first
drawdown under the Barclays Facility must occur by 28 February 2019
and a maximum amount of GBP15 million may be drawn down for general
corporate purposes. Interest will be payable quarterly in arrears
on any drawn amount at a rate of 2.6% per annum above the 3-month
LIBOR interest rate. Zegona has the right to prepay the loan at any
time, but if it does so before the first anniversary of the date of
the draw down, it must pay a make whole amount calculated at 2.6%
per annum multiplied by the prepaid amount for the period between
the date of prepayment and that first anniversary. The Barclays
Facility matures 24 months from the date of execution of the
facilities agreement and any amounts owed will become immediately
repayable on the occurrence of certain events of default including
a drop in the value of Euskaltel shares to EUR3.42 or below, a
change of control of Euskaltel and other customary events of
default.
The Barclays Facility is secured by a charge over Euskaltel
shares held by members of the Zegona Group or acquired by them
(though Euskaltel shares acquired in the market only have to be
charged after each date that the Zegona Group has acquired
Euskaltel shares representing at least 2% of the outstanding issued
share capital of Euskaltel). By no later than the date upon which
the Barclays Facility is drawn, all of the Euskaltel shares owned
by the Zegona Group will be secured (other than certain shares
which are already pledged in favour of Euskaltel, and others which
are intended to be kept free of security) in favour of Barclays or
Virgin Holdings Limited (if a request for funds has been made or
any amount has been drawn under the Virgin Funding).
The Virgin Funding and the Barclays Facility do not impact
Zegona's intention to pass through to its shareholders all
dividends received from Euskaltel. There are restrictions under the
Barclays Facility which would prevent any excess funds not utilised
for the acquisition of shares in Euskaltel or for general corporate
purposes being returned to shareholders before at least an
additional 6% of the share capital of Euskaltel has been acquired,
unless the Barclays Facility is repaid in full contemporaneously
with such return of capital to shareholders.
Notice of General Meeting
The Placing is conditional on, inter alia, Shareholder approval
to grant the Directors authority to allot and issue the New Zegona
Shares as if the applicable statutory pre-emption rights did not
apply. Approval will be sought at a General Meeting to be convened
at 10 a.m. on 7 February 2019 at the offices of Travers Smith LLP,
10 Snow Hill, London EC1A 2AL, notice of which will be set out in
the Circular. If the necessary resolutions are not passed at the
General Meeting, the Placing will not proceed and, in the event
that Zegona has commenced acquiring Euskaltel Shares funded by a
drawdown of the Barclays Facility prior to the General Meeting,
Zegona may choose to cease the acquisition of additional Euskaltel
Shares funded by the Barclays Facility.
Zegona expects to post to Shareholders a circular containing a
Notice of General Meeting and a Form of Proxy for the General
Meeting (the "Circular") today.
Admission and Prospectus
Application will be made to the FCA for admission of the Placing
Shares to the standard listing segment of the official list
maintained by the FCA (the "Official List") and to the London Stock
Exchange plc (the "London Stock Exchange") for admission to trading
of the New Zegona Shares on the London Stock Exchange's main market
for listed securities (together, "Admission").
In connection with Admission, Zegona expects to publish a final
prospectus (the "Prospectus") on 14 January 2019, following
approval by the FCA in accordance with the Prospectus Rules.
Availability of Documents
The Prospectus, Circular and Form of Proxy will, once published,
be available at Zegona's registered office at 20 Buckingham Street,
London WC2N 6EF, and Zegona's website, www.zegona.com, subject to
certain access restrictions. They will also be submitted to the UK
Listing Authority via the National Storage Mechanism and will be
available to the public for inspection shortly after their
publication at www.morningstar.co.uk/uk/NSM.
This announcement contains inside information.
LEI: 213800ASI1VZL2ED4S65
Important Notice
This announcement has been prepared in accordance with English
law, the Listing Rules and the Disclosure Guidance and Transparency
Rules and information disclosed may not be the same as that which
would have been prepared in accordance with the laws of
jurisdictions outside England.
The distribution of this announcement in jurisdictions outside
the United Kingdom may be restricted by law and therefore persons
into whose possession this announcement comes should inform
themselves about, and observe such restrictions. Any failure to
comply with the restrictions may constitute a violation of the
securities law of any such jurisdiction.
This announcement is for information purposes only and does not
constitute an offer or an invitation to induce an offer by any
person to acquire, purchase or subscribe for securities. Potential
investors should read the prospectus for detailed information about
the offering of securities referred to herein and before deciding
whether or not to invest in such securities.
Certain information in this announcement is based on management
estimates. By their nature, estimates may not be correct or
complete. Accordingly, no representation or warranty (express or
implied) is given that such estimates are correct or complete or
founded on reasonable grounds. No representation or warranty
(express or implied) is given that such estimates are founded on
reasonable grounds. Zegona does not undertake any obligation to
correct or complete any estimate whether as a result of being aware
of information (new or otherwise), future events or otherwise.
The information contained in this document is for background
purposes only and does not purport to be full or complete. No
reliance may be placed by any person for any purpose on the
information contained in this document or its accuracy, fairness or
completeness. All information in this announcement in respect of
Euskaltel and its group has been obtained from publicly available
information and has not been verified.
This announcement is not for release, publication, distribution,
directly or indirectly, in or into the United States (including its
territories and possessions and any state or other jurisdiction of
the United States) or to any US person. This announcement does not
constitute or form a part of any offer to sell or solicitation to
purchase or subscribe for securities in the United States or in any
other jurisdictions. The securities referred to in this
announcement have not been, and will not be, registered under the
United States Securities Act of 1933, as amended (the "US
Securities Act") or the securities laws of any state of the United
States or with any securities regulatory authority of any state or
other jurisdiction of the United States or any state securities
laws of the United States and may be offered and sold (a) in the
United States, and to US persons outside the United States, only to
persons who are both "qualified institutional buyers" (as defined
in Rule 144A under the US Securities Act) and "qualified
purchasers" (as defined in Section 2(a)(51) of the US Investment
Company Act of 1940, as amended (the "US Investment Company Act"),
in transactions exempted from, or not subject to, the registration
requirements of the US Securities Act, and (b) outside the United
States only to non-US persons in "offshore transactions" as defined
in, and in reliance on, Regulation S under the US Securities Act.
Zegona has not intended and does not intend to make any public
offer of securities in the United States. No registration has been
or will be made under the US Investment Company Act.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION
This announcement includes statements that are, or may be deemed
to be, "forward-looking statements". These forward-looking
statements can be identified by the use of forward-looking
terminology, including the terms "believes", "estimates",
"envisages", "plans", "anticipates", "targets", "aims",
"continues", "expects", "intends", "hopes", "may", "will", "would",
"could" or "should" or, in each case, their negative or other
variations or comparable terminology. These forward-looking
statements include matters that are not facts. By their nature,
forward-looking statements involve risk and uncertainty because
they relate to future events and circumstances. A number of factors
could cause actual results and developments to differ materially
from those expressed or implied by the forward-looking statements,
including, without limitation: Euskaltel's failure to work with
Zegona to improve the performance of the business, a condition to
the Placing not being satisfied, expected cost savings not being
realised, changing demands of consumers of telecommunications
services, the increasing adoption of free-to-home and
direct-to-home television services, changing business or other
telecommunications market conditions, and general economic
conditions. These and other factors could adversely affect the
outcome and financial effects of the plans and events described in
this announcement. Forward-looking statements contained in this
announcement based on past trends or activities should not be taken
as a representation that such trends or activities will continue in
the future. Subject to any requirement under the Listing Rules, the
Prospectus Rules, the Disclosure Guidance and Transparency Rules or
other applicable legislation or regulation, Zegona does not
undertake any obligation to update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise. Investors should not place undue reliance on
forward-looking statements, which speak only as of the date of this
announcement.
Barclays Bank PLC and Oakley Advisory Limited
Barclays Bank PLC, acting through its Investment Bank
("Barclays") and which is authorised in the United Kingdom by the
Prudential Regulation Authority and regulated by the Financial
Conduct Authority ("FCA") and the Prudential Regulation Authority,
is appointed as Zegona's global co-ordinator and underwriter only
and is therefore acting only for Zegona in connection with the
Placing and is not acting for or advising any other person, or
treating any other person as its client, in relation thereto and
will not be responsible for providing the regulatory protection
afforded to clients of Barclays or advice to any other person in
relation to the matters contained herein. Neither Barclays nor any
of its directors, officers, employees, advisers or agents accepts
any responsibility or liability whatsoever for this announcement,
its contents or otherwise in connection with it or any other
information relating to Zegona, whether written, oral or in a
visual or electronic format.
Oakley Advisory Limited ("Oakley"), which is authorised and
regulated in the United Kingdom by the FCA, is appointed as
Zegona's financial advisor and co-bookrunner only and is therefore
acting only for Zegona in connection with the matters described in
this announcement and is not acting for or advising any other
person, or treating any other person as its client, in relation
thereto and will not be responsible for providing the regulatory
protection afforded to clients of Oakley Advisory Limited or advice
to any other person in relation to the matters contained herein.
Neither Oakley Advisory Limited nor any of its directors, officers,
employees, advisers or agents accepts any responsibility or
liability whatsoever for this announcement, its contents or
otherwise in connection with it or any other information relating
to Zegona, whether written, oral or in a visual or electronic
format.
Information for Distributors
Solely for the purposes of the product governance requirements
contained within: (a) EU Directive 2014/ 65/EU on markets in
financial instruments, as amended ("MiFID II"); (b) Articles 9 and
10 of Commission Delegated Directive (EU) 2017/593 supplementing
MiFID II; and (c) local implementing measures (together, the "MiFID
II Product Governance Requirements"), and disclaiming all and any
liability, whether arising in tort, contract or otherwise, which
any manufacturer (for the purposes of the MiFID II Product
Governance Requirements) may otherwise have with respect thereto,
the Zegona Shares being the subject of the Placing have been
subject to a product approval process, which has determined that
such Zegona Shares are: (i) compatible with an end target market of
retail investors and investors who meet the criteria of
professional clients and eligible counterparties, each as defined
in MiFID II; and (ii) eligible for distribution through all
distribution channels as are permitted by MiFID II (the "Target
Market Assessment").
Notwithstanding the Target Market Assessment, distributors
should note that: the price of the Zegona Shares may decline and
investors could lose all or part of their investment; the Zegona
Shares offer no guaranteed income and no capital protection; and an
investment in the Zegona Shares is compatible only with investors
who do not need a guaranteed income or capital protection, who
(either alone or in conjunction with an appropriate financial or
other adviser) are capable of evaluating the merits and risks of
such an investment and who have sufficient resources to be able to
bear any losses that may result therefrom. The Target Market
Assessment is without prejudice to the requirements of any
contractual, legal or regulatory selling restrictions in relation
to the Placing. Furthermore, it is noted that, notwithstanding the
Target Market Assessment, Barclays and Oakley will only procure
investors who meet the criteria of professional clients and
eligible counterparties.
For the avoidance of doubt, the Target Market Assessment does
not constitute: (a) an assessment of suitability or appropriateness
for the purposes of MiFID II; or (b) a recommendation to any
investor or group of investors to invest in, or purchase, or take
any other action whatsoever with respect to the Zegona Shares.
Each distributor is responsible for undertaking its own target
market assessment in respect of the Zegona Shares and determining
appropriate distribution channels.
Company Website
Neither the content of Zegona's website, nor the content on any
website accessible from hyperlinks on its website for any other
website, is incorporated into, or forms part of, this announcement
nor, unless previously published by means of a recognised
information service, should any such content be relied upon in
reaching a decision as to whether or not to acquire, continue to
hold, or dispose of, securities in Zegona.
The person responsible for arranging for the release of this
announcement on behalf of Zegona is Dean Checkley, whose business
address is 20 Buckingham Street, London WC2N 6EF.
Appendix 1
Terms and Conditions
THIS APPIX AND THE INFORMATION CONTAINED HEREIN IS NOT FOR
RELEASE, PUBLICATION OR DISTRIBUTION BY YOU, IN WHOLE OR IN PART,
DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES OF AMERICA
(INCLUDING ITS TERRITORIES AND DEPENCIES, ANY STATE OF THE UNITED
STATES AND THE DISTRICT OF COLUMBIA), CANADA, AUSTRALIA, JAPAN, THE
REPUBLIC OF SOUTH AFRICA, OR TO ANY RESIDENT THEREOF, OR ANY OTHER
JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION
WOULD BE UNLAWFUL.
NOT FOR DISTRIBUTION, PUBLICATION OR RELEASE, IN WHOLE OR IN
PART, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM THE EEA OR TO ANY
PERSON LOCATED OR RESIDENT IN AN EEA STATE OTHER THAN THE UK,
BELGIUM, THE NETHERLANDS, ITALY, IRELAND AND SPAIN.
IMPORTANT INFORMATION ON THE PLACING FOR INVITED PLACEES
ONLY.
MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE
PLACING. THIS ANNOUNCEMENT AND THE APPICES AND THE TERMS AND
CONDITIONS SET OUT HEREIN 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 (1)
IN MEMBER STATES OF THE EUROPEAN ECONOMIC AREA (THE "EEA"), ARE
"QUALIFIED INVESTORS" WITHIN THE MEANING OF ARTICLE 2.1(e)(i), (ii)
OR (iii) OF DIRECTIVE 2003/71/EC AS AMED (INCLUDING BY DIRECTIVE
2010/73/EC) AND INCLUDES ANY RELEVANT IMPLEMENTING DIRECTIVE
MEASURE IN ANY MEMBER STATE (THE "PROSPECTUS DIRECTIVE") AND (2) IN
THE UNITED KINGDOM FALL WITHIN ARTICLE 19(5) OF THE FINANCIAL
SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005, AS
AMED (THE "ORDER") OR FALL WITHIN ARTICLE 49(2)(a) TO (d) ("HIGH
NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC.") OF THE
ORDER (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT
PERSONS"). THIS ANNOUNCEMENT AND THE APPICES AND THE TERMS AND
CONDITIONS SET OUT HEREIN (AND THE ANNOUNCEMENT OF WHICH IT FORMS
PART) MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT
RELEVANT PERSONS. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH
THIS ANNOUNCEMENT AND THE APPICES AND THE TERMS AND CONDITIONS SET
OUT HEREIN RELATES IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL
BE ENGAGED IN ONLY WITH RELEVANT PERSONS.
PERSONS DISTRIBUTING THIS APPIX (AND THE ANNOUNCEMENT OF WHICH
IT FORMS PART) MUST SATISFY THEMSELVES THAT IT IS LAWFUL TO DO SO.
THIS APPIX (AND THE ANNOUNCEMENT OF WHICH IT FORMS PART) DOES NOT
ITSELF CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY
SECURITIES IN ZEGONA COMMUNICATIONS PLC (THE "COMPANY").
THERE IS NO PUBLIC OFFERING OF SECURITIES OF ZEGONA
COMMUNICATIONS PLC IN THE UNITED STATES. THE ORDINARY SHARES OF
ZEGONA COMMUNICATIONS PLC HAVE NOT BEEN, AND WILL NOT BE,
REGISTERED UNDER THE US 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 WILL ONLY
BE OFFERED AND SOLD (1) IN THE UNITED STATES OR FOR THE ACCOUNT OR
BENEFIT OF A US PERSON (AS DEFINED IN REGULATION S ("REGULATION S")
UNDER THE SECURITIES ACT) ONLY TO PERSONS WHO ARE A QUALIFIED
INSTITUTIONAL BUYER ("QIB"), AS DEFINED IN RULE 144A ("RULE 144A")
UNDER THE SECURITIES ACT, THAT ARE ALSO A QUALIFIED PURCHASER
("QP"), AS DEFINED IN SECTION 2(a)(51) OF THE US INVESTMENT COMPANY
ACT OF 1940, AS AMED (THE "INVESTMENT COMPANY ACT"), WHO HAVE
EXECUTED AND DELIVERED TO THE COMPANY A US QUALIFIED PURCHASER'S
LETTER, IN TRANSACTIONS THAT ARE EXEMPT FROM, OR NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE US SECURITIES ACT, AND (2) TO
NON-US PERSONS (AS DEFINED IN REGULATION S) OUTSIDE OF THE UNITED
STATES IN "OFFSHORE TRANSACTIONS" AS DEFINED IN, AND IN RELIANCE
ON, REGULATION S.
EACH PLACEE SHOULD CONSULT WITH ITS OWN ADVISORS AS TO LEGAL,
TAX, BUSINESS AND RELATED ASPECTS OF PARTICIPATING IN THE OFFERING
DESCRIBED HEREIN.
1. Participation in the Placing
(a) Participation in the Placing will only be available to
persons who may lawfully be, and are, invited to participate by the
Banks.
(b) By participating in the placing of New Zegona Shares (the
"Placing") each person (including individuals, funds or others) by
whom or on whose behalf a commitment to acquire New Zegona Shares
has been given pursuant to the Placing (each, a "Placee") and any
person acting on a Placee's behalf will be deemed:
(i) to have read and understood this announcement (including
this Appendix 1) in its entirety (the "Announcement"), the
preliminary draft of the prospectus dated on or around 9 January
2019 prepared in relation to, amongst other things, the Placing
(the "Preliminary Prospectus"), the placing letter from Barclays
that has been, or will be, made available to Placees (the "Placing
Letter") and the placing results announcement expected to be
published by the Company on or around 14 January 2019, (the
"Placing Results Announcement" and together with the Announcement,
the Preliminary Prospectus and the Placing Letter, the "Placing
Documents");
(ii) to be participating, and making an offer and subscribing
for new ordinary shares of GBP0.01 each in the capital of the
Company to be issued in connection with the Placing ("New Zegona
Shares") on the terms and conditions, and to be providing the
representations, warranties, indemnities, acknowledgements,
agreements and undertakings, contained in the Placing
Documents.
(c) In particular, each such Placee (and any person acting on
such Placee's behalf) represents, warrants and acknowledges
that:
(i) it is a Relevant Person and undertakes that it will acquire,
hold, manage or dispose of any New Zegona Shares that are allocated
to it for the purposes of its business;
(ii) in the case of a Relevant Person in a member state of the
EEA which has implemented the Prospectus Directive (each a
"Relevant Member State") who acquires any New Zegona Shares
pursuant to the Placing:
A. it is a Qualified Investor; and
B. in the case of any New Zegona Shares acquired by it as a
financial intermediary, as that term is used in Article 3(2) of the
Prospectus Directive: (y) the New Zegona 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
Relevant Member State other than Qualified Investors or in
circumstances in which the prior consent of Barclays Bank PLC
("Barclays") and Oakley Advisory Limited ("Oakley", and together
with Barclays, the "Banks") has been given to the offer or resale;
or (z) where New Zegona Shares have been acquired by it on behalf
of persons in any member state of the EEA other than Qualified
Investors, the offer of those New Zegona Shares to it is not
treated under the Prospectus Directive as having been made to such
persons;
(iii) it is subscribing for the New Zegona Shares for its own
account or is subscribing for the New Zegona Shares for an account
with respect to which it exercises sole investment discretion and
has the authority to make and does make the acknowledgements,
representations and agreements contained in the Placing
Documents;
(iv) if it (or any beneficial owner for whose account it is
acting in connection with the Placing) is in the United States or a
US person (as defined in Regulation S) outside the United States,
it has executed and delivered to the Company a US Qualified
Purchaser's Letter, and if it purchases New Zegona Shares during
the 40-day period after the New Zegona Shares are listed on the
London Stock Exchange, then:
A. at the time of such purchase it either (x) will not be a US
person and will be located outside of the United States (within the
meaning of Regulation S), or (y) will be a QIB that is also a QP as
to which the purchaser exercises sole investment discretion;
and
B. such New Zegona Shares so purchased will be offered, resold,
pledged or otherwise transferred only outside the United States to
a purchaser not known by it to be a US person (by pre-arrangement
or otherwise) and in an offshore transaction complying with the
provisions of Rule 904 of the Regulation S (including, for the
avoidance of doubt, a bona fide sale on the London Stock Exchange);
and
(v) if it is purchasing the New Zegona Shares outside the United
States in reliance on Regulation S, it (and any beneficial owner
for whose account it is acting in connection with the Placing) and
each subsequent purchaser of those New Zegona Shares in resales
prior to the expiration of 40 days after the later of the
commencement of the Placing and the closing date:
A. is not a US Person and it and the person, if any, for whose
account it is acquiring the New Zegona Shares, are, or at the time
the New Zegona Shares are offered or purchased pursuant to
Regulation S, will be, the beneficial owner of such New Zegona
Shares and: (y) it was located outside the United States at the
time the buy order for the New Zegona Shares was originated and
continues to be located outside the United States and has not
purchased the New Zegona Shares for the account or benefit of any
person in the United States or entered into any arrangement for the
transfer of such New Zegona Shares or any economic interest therein
to any person in the United States and is acquiring the New Zegona
Shares in an "offshore transaction" (within the meaning of
Regulation S) in reliance on Regulation S; and (z) it is not an
affiliate of the Company or a person acting on its behalf or such
an affiliate;
B. it and the person, if any, for whose account is is acquiring
the New Zegona Shares, understand that the New Zegona Shares have
not been and will not be registered under the Securities Act and
that it will not offer, sell, pledge or otherwise transfer such New
Zegona Shares except to a non-US Person in an offshore transaction
complying with the provisions of Rule 904 of Regulation S;
C. it has not been offered the New Zegona Shares by means of any
"directed selling efforts" as defined under Regulation S and that
neither it, nor any of its affiliates, nor any person acting on its
behalf or on behalf of any of its affiliates, will make any
"directed selling efforts" as defined under Regulation S in the
United States with respect to the New Zegona Shares;
D. any offer, sale, pledge or other transfer made other than in
compliance with the above stated restrictions shall not be
recognised by the Company in respect of the New Zegona Shares;
and
E. it agrees to notify and will be deemed to have notified, and
each subsequent holder is required to notify and will be deemed to
have notified, any purchaser of the New Zegona Shares from it or
such subsequent holder of the resale restrictions referred to
herein.
(d) The distribution of this Announcement (including this
Appendix 1), the Placing Documents and the offer and issue of the
New Zegona Shares in certain jurisdictions may be restricted by
law. No action has been taken by the Company, the Banks or any of
their respective affiliates that would permit an offer of the New
Zegona Shares or possession or distribution of any Placing Document
or any other offering or publicity material relating to such New
Zegona Shares in any jurisdiction where action for that purpose is
required. Persons into whose possession this Announcement
(including this Appendix 1) comes are required by the Company and
the Banks to inform themselves about and to observe any such
restrictions.
2. Placing Timetable
All times and dates in this Appendix 1 may be subject to
amendment. The Banks will notify Placees and any persons acting on
behalf of the Placees of any changes.
3. The Bookbuild and Provisional Placing Allocation
(a) The Company and the Banks have entered into a placing
agreement on the date of this Announcement (the "Placing
Agreement"). Pursuant to the Placing Agreement, Barclays, as global
co-ordinator, and Oakley, as co-bookrunner, are have undertaken
severally (and not jointly or jointly and severally), to use
reasonable endeavours as agents of the Company to procure Placees
for the New Zegona Shares.
(b) The Banks will today commence the bookbuild to determine
demand for participation in the Placing by Placees (the
"Bookbuild"). The Banks 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.
(c) The price payable in respect of the New Zegona Shares to
Barclays by all Placees whose bids are successful is 105 pence per
New Zegona Share (the "Issue Price").
(d) To bid in the Bookbuild, prospective Placees should
communicate their bid by telephone to their usual sales or equity
capital markets contact at the Banks. Each bid should state the
number of New Zegona Shares which the prospective Placee wishes to
acquire at the Issue Price. Barclays and the Company reserve the
right not to accept bids or accept bids in part, rather than in
whole and may scale down any offers for this purpose on such basis
as they may determine.
(e) A bid will be legally binding on the prospective Placee on
behalf of which it is made and, except with Barclays' consent, will
not be capable of variation or revocation after the time at which
it is submitted. Each prospective Placee will have an immediate,
separate, irrevocable and binding obligation, owed to each Bank, as
an agent of the Company, to pay to Barclays (or as it may direct)
in cleared funds an amount equal to the product of the Issue Price
and the number of New Zegona Shares for which such prospective
Placee has agreed to subscribe.
(f) The Company reserves the right to increase the number of New
Zegona Shares offered in the Placing in response to additional
investor demand.
(g) The Bookbuild is expected to close by no later than 10.00
a.m. (London time) on 14 January 2019 but may be closed earlier or
later at the discretion of Barclays, having consulted with the
Company. Barclays may accept bids that are received after the
Bookbuild has closed.
(h) Each prospective Placee's provisional allocation will be
determined by Barclays in consultation with the Company and will be
confirmed to prospective Placees' orally by Barclays, as agent of
the Company. Barclays' oral confirmation to such prospective Placee
will constitute an irrevocable legally binding commitment upon that
person (who will at that point become a Placee) in favour of the
Banks to subscribe for the number of New Zegona Shares allocated to
it and to pay the relevant price on the terms and conditions of the
Placing Documents and in accordance with the Company's articles of
association (its "Provisional Placing Participation").
(i) Following allocation, the final Placing Letter will be
despatched to Placees. Each Placee will confirm its Provisional
Placing Participation by completing, signing and returning the
letter of confirmation contained in the Placing Letter in
accordance with the instructions therein, and should a Placee fail
to do so, Barclays will retain the right to cancel their allocation
or terminate such irrevocable and legally binding commitment.
(j) Barclays may also, notwithstanding the procedure outlined
above, having consulted with the Company:
(i) allocate New Zegona Shares after the time of any initial
allocation to any person submitting a bid after that time; and
(ii) allocate New Zegona Shares after the Bookbuild has closed
to any person submitting a bid after that time. The acceptance of
such offers shall be at the absolute discretion of Barclays.
4. Final Placing Participation
(a) The final number of New Zegona Shares to be issued under the
Placing will be agreed between Barclays and the Company following
completion of the acceptance period for the Bookbuild and will be
set out in the Placing Results Announcement published through a
regulatory information service following the completion of the
Bookbuild, which is expected to be on or around 14 January 2019,
and may be greater or less than 95,238,096 New Zegona Shares.
(b) Once the Placing Results Announcement has been published,
final allocations of New Zegona Shares will be determined by
Barclays in consultation with the Company. You will be notified of
your final allocation of New Zegona Shares ("Final Placing
Participation"), which will not exceed, but could be less than, the
number of New Zegona Shares comprised in your Provisional Placing
Participation as soon as practicable following the publication of
the Placing Results Announcement.
5. Registration and Settlement
(a) Settlement for all New Zegona Shares to be subscribed for
pursuant to the Placing will be required to be made at the same
time, on the basis explained in this paragraph 5 and in the Placing
Letter.
(b) Each Placee will be notified of any New Zegona Shares
comprised in its Final Placing Participation which it will be
required to take up, and the payment required in respect thereof.
It is anticipated that such notification will take place on or
around 14 January 2019.
(c) It is expected that settlement will be on 11 February 2019.
Payment for value for New Zegona Shares (if any) allocated to each
Placee pursuant to the terms of the Placing Letter will be required
not later than 8.00 a.m. (London time) on 11 February 2019 (or such
later time or date as may be notified to it) (the "Payment
Date").
(d) Each Placee agrees that New Zegona Shares which are required
to be subscribed for by it as part of its Final Placing
Participation will be credited to the CREST member account of
Barclays (or an affiliate of Barclays) as its nominee before
delivery, in uncertificated form, to it.
(e) Following confirmation by us of the number of New Zegona
Shares a Placee is required to subscribe for (which confirmation
will be by way of an email sent to the attention of the settlement
contact notified by it to Barclays), Barclays will enter a delivery
versus payment instruction into CREST for New Zegona Shares (if
applicable) by 4.00 p.m. (London time) on 8 February 2019. The
input into CREST by the Placee of a matching instruction will then
allow delivery of New Zegona Shares to it against payment at the
Issue Price on the Payment Date (as defined below).
(f) To the extent that a Placee does not have a current equities
dealing line set up to enable trading with Barclays, it undertakes,
by 8 a.m. (London time) on 4 February 2019, to either (a) set up a
dealing line; or (b) provide an alternative counterparty who does
have a current dealing line set up with Barclays and who is willing
and able to act as counterparty to Barclays in this transaction as
the Placee's agent or nominee.
(g) Each Placee agrees that it will do all things necessary to
ensure that its CREST account enables settlement, delivery and
acceptance of New Zegona Shares to be made to it against payment at
the Issue Price multiplied by the number of New Zegona Shares it is
required to take up in accordance with the settlement procedures of
CREST. Failure by the Placee to do so may lead to a claim for
interest if settlement in CREST is consequently delayed.
(h) If a Placee does not provide appropriate and sufficient
CREST details to match the transaction to its account in CREST, New
Zegona Shares (if any) allocated to it pursuant to the terms of
this letter will be delivered to it in certificated form provided
that payment has been made in terms satisfactory to Barclays and
all other conditions in relation to the Placing have been satisfied
or waived. Notwithstanding any of the above, Barclays reserves the
right to deliver New Zegona Shares in certificated form.
(i) In the event that settlement to Placees is not practicable
within the CREST system or would not be consistent with regulatory
requirements in a Placee's jurisdiction, Barclays reserves the
right to require settlement for New Zegona Shares by such means as
they deem necessary.
(j) In the event that payment for value for New Zegona Shares
(if any) allocated to a Placee pursuant to the terms of the Placing
Letter is not received from the Placee on or before the Payment
Date, interest is chargeable daily on such payment at the rate of 2
per cent. above LIBOR as determined by Barclays.
6. Placing Shares, the Prospectus and Admission
(a) The Placing Shares will, when issued and fully paid, rank
pari passu in all respects with the existing ordinary shares of 1
penny each in the capital of the Company (the "Ordinary Shares") at
the date of this Announcement and will be free from all
encumbrances or other third party rights of any nature
whatsoever.
(b) The Company will publish the final prospectus (the
"Prospectus") in relation to, amongst other things, the Placing on
or around the date of this Announcement following approval by the
FCA in accordance with the Prospectus Rules.
(c) Application will be made to the FCA for admission of the
Placing Shares to the standard listing segment of the official list
maintained by the FCA (the "Official List") and to the London Stock
Exchange plc (the "London Stock Exchange") for admission to trading
of the New Zegona Shares on the London Stock Exchange's main market
for listed securities (together, "Admission"). It is expected that
Admission will become effective at 8.00 a.m. on 11 February 2019
and that dealings in the New Zegona Shares on the London Stock
Exchange's main market for listed securities will commence at the
same time.
7. Withdrawal Rights
By participating in the Placing, Placees will be deemed to
acknowledge that their respective agreement to subscribe for the
number of New Zegona Shares comprised in their Final Placing
Participations is not by way of acceptance of a public offer made
or to be made in the Prospectus but is by way of a collateral
contract and, accordingly, section 87Q of FSMA does not entitle
Placees to withdraw their acceptance in the event that the Company
publishes a supplementary prospectus in connection with the Placing
and/or Admission. Without prejudice to such acknowledgement, if
Placees are so entitled to withdraw, by accepting the offer of
their respective Final Placing Participations contained in the
Placing Letter, they will irrevocably agree (if applicable) in the
Placing Letter not to exercise any such rights and to confirm their
acceptance of the offer on the same terms immediately after any
such right to withdraw arises.
8. Conditions and Termination Rights in the Placing Agreement
(a) All obligations of a Placee under the Bookbuild and the
Placing will be subject to fulfilment, or where applicable, waiver
of the conditions in the Placing Agreement and to the Placing
Agreement not having being terminated in accordance with its terms
and, by participating in the Bookbuild, each prospective Placee
agrees that its rights and obligations in respect of the Placing
will terminate only in the circumstances set out in this paragraph
8 and will not be capable of rescission or termination by the
prospective Placee.
(b) By participating in the Placing, each Placee agrees that:
(i) Barclays may, at its sole discretion:
A. without reference to the interests of the Placees, upon such
terms as it thinks fit and without affecting the Placees'
commitments as set out in the Placing Documents, waive fulfilment
of certain of the conditions in the Placing Agreement or extend the
time provided for fulfilment of certain conditions in respect of
all or any part of the performance thereof, save that certain
conditions may not be waived; and
B. exercise any right of termination or any right or other
discretion under the Placing Agreement;
(ii) none of the Banks nor any of their affiliates, shall have
any responsibility or liability to any Placee (or to any other
person whether acting on behalf of a Placee or otherwise) in
respect of:
A. any decision any of them may make as to whether or not to
waive or to extend the time and/or date for the satisfaction of any
condition to the Placing nor for any decision any of them may make
as to the satisfaction of any condition or in respect of the
Placing generally; or
B. any exercise or failure to exercise any right of termination
or any right or other discretion under the Placing Agreement
(c) The obligations of the Banks under the Placing Agreement
are, and the Placing is, conditional on, amongst other things:
(i) publication of the Placing Results Announcement by 5.00 p.m.
(London time) on the date of this Announcement (or such later time
or date as Barclays may agree with the Company);
(ii) the warranties in the Placing Agreement being true and
accurate and not misleading at all times prior to, and at,
Admission, in each case by reference to the facts and circumstances
then subsisting;
(iii) the compliance by the Company with its obligations and
undertakings under the Placing Agreement, including the execution
of the placing memorandum, which will contain the agreed number of
New Zegona Shares, by all the parties thereto;
(iv) the Prospectus being approved by the FCA on or before 5.00
p.m. (London time) on the date of this Announcement (or such later
time or date as Barclays may agree with the Company);
(v) the Prospectus having been filed, published and made
available in the manner specified in the Prospectus Rules, or in
such other manner as Barclays may approve on or before 5.00 p.m.
(London time) on the date of this Announcement (or such later time
as Barclays may agree with the Company);
(vi) any supplementary prospectus that may be required pursuant
to section 87G of the FSMA having been approved, filed, published
and made available in accordance with, as the case may be, the
Listing Rules, section 87G of the FSMA and with the Prospectus
Rules;
(vii) the circular containing a notice convening a general
meeting of the Company having been published and despatched to the
holders of Ordinary Shares in the Company on or before 5.00 p.m.
(London time) on the fifth business day following the date of the
Placing Agreement (or such later time or date as Barclays may agree
with the Company);
(viii) the passing of the shareholder resolution relating to the
Placing (without amendment) at a general meeting of the Company to
be held on or around 6 February 2019 (or such later time or date as
Barclays may agree with the Company);
(ix) Admission having occurred not later than 8.00 a.m. (London
time) on 11 February 2019 (or such later time or date as Barclays
may agree with the Company);
(x) the up to GBP30 million secured term loan facility agreement
to be entered into with Barclays and the up to GBP10 million
secured term loan facility to be entered into with the Virgin Group
(the "Facility Agreements") (i) having been executed and delivered
by the parties thereto and continuing to be effective, binding and
enforceable in accordance with their respective terms, (ii) not
having been terminated, amended or varied, and (iii) in the opinion
of Barclays, no event or circumstance exists, has occurred or
arisen or is about to occur which constitutes or results in, or
could with the giving of notice and/or lapse of time and/or the
making of a relevant determination, constitute, or result in, the
termination, an event of default, an acceleration of any obligation
or breach of any obligation of a Facility Agreement; and
(xi) the concert parties agreement to be entered into between
the Company and Talomon Capital Limited ("Talomon") in respect of
their respective holdings in the ordinary shares of Euskaltel, S.A.
("Euskaltel") (i) having been executed and delivered by the parties
thereto and continuing to be effective, binding, and enforceable in
accordance with their respective terms, (ii) not having been
terminated, amended or varied, and (iii) in the opinion of
Barclays, no event or circumstance exists, has occurred or arisen
or is about to occur which constitutes or results in, or could with
the giving of notice and/or lapse of time and/or the making of a
relevant determination, constitute, or result in, the Company or
Talomon being required to make a mandatory offer for the entire
ordinary share capital of Euskaltel under applicable Spanish law or
otherwise.
If any of the conditions set out in the Placing Agreement are
not fulfilled or, where permitted, waived by Barclays by the time
and date specified or referred to therein (or such later time
and/or date as the Company and Barclays may agree in writing), the
obligations of the parties under the Placing Agreement shall cease
and terminate.
(d) At any time prior to Admission, Barclays, acting jointly and
on behalf of the Banks, may, by notice to the Company, terminate
the Placing Agreement if one or more of the following events
occur:
(i) in the opinion of Barclays, acting in good faith, any matter
referred to in section 87G of the FSMA having arisen which is
adverse in any material respect; and
(ii) an application for Admission is withdrawn or refused by the
FCA or the London Stock Exchange.
9. Company Lock-up
The Company has undertaken to the Banks that from the date of
the Placing Agreement to the date falling 90 days following
Admission, neither it nor any of its subsidiaries or other
affiliates over which it exercises management or voting control,
nor any person acting on its or their behalf will, without the
prior written consent of Barclays, directly or indirectly, issue,
offer, sell, contract to sell, pledge or otherwise dispose of (or
publicly announce any such issuance, offer, sale or disposal of)
any shares in the Company or securities convertible or exchangeable
into or exercisable for shares in the Company or warrants or other
rights to purchase shares in the Company or any security or
financial product whose value is determined directly or indirectly
by reference to the price of the underlying securities, including
equity swaps, forward sales and options, except the issue of the
New Zegona Shares pursuant to the Placing.
10. Further Terms
(a) By participating in the Placing, each Placee (and any person
acting on such Placee's behalf) irrevocably represents, warrants,
acknowledges, undertakes and agrees (as the case may be) with each
Bank and the Company as a fundamental term of their application
that:
(i) it has read and understood the Placing Documents in their
entirety and any other information necessary to make an investment
decision in relation to the New Zegona Shares and that its
acquisition of the New Zegona Shares is subject to and based upon
all the terms, conditions, representations, warranties,
acknowledgements, agreements and undertakings and other information
contained in this Appendix 1, the Placing Letter, the Preliminary
Prospectus and the Placing Results Announcement and undertakes not
to redistribute or duplicate any Placing Document;
(ii) it irrevocably agrees to subscribe for, and purchase the
number of, New Zegona Shares comprised in its Final Placing
Participation at the Issue Price and on the terms set out in the
Placing Documents that it has funds available to do so, and that it
will pay for its Final Placing Participation in full;
(iii) none of the Banks nor the Company nor any of their
affiliates nor any person acting on behalf of any of them has
provided, and will not provide, it with any material regarding the
New Zegona Shares or the Company or any other person other than the
Placing Documents, which are exclusively the responsibility of the
Company and, where applicable, its directors, nor has it requested
any of the Banks, the Company, any of their affiliates or any
person acting on behalf of any of them to provide it with any such
information;
(iv) the entire ordinary share capital of the Company is listed
on the standard listing segment of the Official List of the FCA and
are admitted to trading on the London Stock Exchange's main market
for listed securities and that the Company is therefore required to
publish certain business and financial information in accordance
with the rules and practices of the FCA, which includes a
description of the nature of the Company's business and the
Company's most recent balance sheet and profit and loss account and
that it is able to obtain or access such information without undue
difficulty, and is able to obtain access to such information or
comparable information concerning any other publicly traded
company, without undue difficulty;
(v) it has received and read a copy of the Placing Documents and
all such other information as it deems necessary to make an
investment decision in relation to the New Zegona Shares;
(vi) (A) it has made its own assessment of the Company, the New
Zegona Shares and the terms of the Placing based on its own
investigation of the business, financial or other position of the
Company; (B) none of the Banks, their respective affiliates or the
Company has made any representation to it, express or implied, with
respect to the Company, the Placing or the New Zegona Shares or the
accuracy, completeness or adequacy of the Placing Documents; and
(C) it has conducted its own investigation of the Company, the
Placing and the New Zegona Shares, satisfied itself that the
information is still current and relied on that investigation for
the purposes of its decision to participate in the Placing;
(vii) the content of the Placing Documents and the Prospectus
(including any supplement thereto) are exclusively the
responsibility of the Company and that none of the Banks nor any
person acting on behalf of them nor any of the affiliates or agents
of any such person is responsible for or has or shall have any
liability for any information or representation relating to the
Company contained in the Placing Documents and the Prospectus
(including any supplement thereto), nor will it have any
responsibility or liability for any Placee's decision to
participate in the Placing based on any information,
representation, warranty or statement contained in the Placing
Documents and the Prospectus (including any supplement thereto), or
otherwise. Nothing in the Placing Documents and the Prospectus
(including any supplement thereto) shall exclude any liability of
any person for fraudulent misrepresentation;
(viii) the only information on which it is entitled to rely on
and on which such Placee has relied in committing itself to acquire
New Zegona Shares is contained in this Announcement and in the
Placing Documents, such information being all that such Placee
deems necessary or appropriate and sufficient to make an investment
decision in respect of the New Zegona Shares and that it has
neither received nor relied on any other information given, or
representations, warranties or statements made, by either Banks or
the Company nor any of their respective affiliates and none of the
Banks 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, provided
that nothing in the Placing Documents shall exclude any liability
of any person for fraudulent misrepresentation;
(ix) it has neither received nor relied on any inside
information concerning the Company prior to or in connection with
accepting this invitation to participate in the Placing and is not
purchasing New Zegona Shares on the basis of material non-public
information;
(x) it is not, and at the time New Zegona Shares are acquired
will not be, located in, or a resident of Canada, Australia, Japan
or South Africa or any other jurisdiction where to do so may
constitute a violation of the securities laws of such
jurisdiction;
(xi) each of it and the beneficial owner of New Zegona Shares
is, and at the time such New Zegona Shares are acquired will be,
either (A) a QIB that is also a QP, who has executed and delivered
to the Company a US investor letter, and is acquiring the New
Zegona Shares in a transaction that is exempt from, or not subject
to, the registration requirements of the Securities Act; or (B) a
non-US Person (as defined in Regulation S) outside the United
States and acquiring the New Zegona Shares in an "offshore
transaction" in accordance with Rule 903 or Rule 904 of Regulation
S;
(xii) the New Zegona Shares have not been registered or
otherwise qualified, and will not be registered or otherwise
qualified, for offer and sale nor will a prospectus be cleared in
respect of any of the New Zegona Shares under the securities laws
of the Australia, Canada, Japan and South Africa and any other
jurisdiction where the availability of the Placing would breach any
applicable law (the "Excluded Territories") and, subject to certain
exceptions, may not be offered, sold, taken up, renounced or
delivered or transferred, directly or indirectly, within or into
the Excluded Territories;
(xiii) it and, if relevant, each person on whose behalf it is
participating: (A) is entitled to acquire New Zegona Shares
pursuant to the Placing under the laws and regulations of all
relevant jurisdictions; (B) has fully observed such laws and
regulations; (C) has capacity and authority and is entitled to
enter into and perform its obligations as an acquirer of New Zegona
Shares and will honour such obligations; and (D) has obtained all
necessary consents and authorities (including, without limitation,
in the case of a person acting on behalf of a Placee, all necessary
consents and authorities to agree to the terms set out or referred
to the Placing Documents) to enable it to enter into the
transactions contemplated hereby and to perform its obligations in
relation thereto;
(xiv) Barclays: (A) have absolute discretion as to whether to
enforce, waive, vary or extend the time for the exercise of any
conditions, obligations, undertakings, representations or
warranties in the Placing Agreement, and acting in good faith, as
to whether to terminate its obligations under the Placing
Agreement; (B) shall, in connection with the Placees, have no
obligation to consult with it or act in furtherance of or otherwise
take its interests into account or seek its consent in each case
regarding any determination whether to take any of the steps
necessary in sub-clause (A) or to exercise any other right or
discretion given to it or which it is entitled to exercise whether
under the Placing Agreement or otherwise. For the avoidance of
doubt, but without limiting the generality of the foregoing, (y)
Barclays is entitled to act in furtherance of and otherwise take
into account its own interests when determining whether to take or
taking any of the steps set out in sub-clause (A) or deciding
whether to exercise or exercising any other right or discretion
given to it or which it is entitled to exercise whether under the
Placing Agreement or otherwise; and (z) the Banks are not acting in
a fiduciary or advisory capacity with respect to it or its
interests and, as such, owe it no obligations of any nature
whatsoever, other, in connection with the Placees, than those
expressly set out in the Placing Letter and this Announcement
(including Appendix 1); and shall have no responsibility or
liability to it in relation to the taking of any of the steps set
out in sub-clause (A), as applicable, or the exercise of any other
right or discretion given to them or which they are entitled to
exercise whether under the Placing Agreement or otherwise (other
than liability arising out of the fraud or wilful default of the
Banks);
(xv) the New Zegona Shares have not been, and will not be,
registered under the Securities Act or the securities laws of any
state of the United States or with any securities regulatory
authority of any state or other jurisdiction of the United States
and may not be offered, sold, pledged or otherwise transferred
within the United States or to, or for the account or benefit of,
US persons (as defined in Regulation S), except pursuant to an
exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act and applicable
state or local securities laws and in a transaction that is subject
to the Company's reliance on Section 3(c)(7) of the Investment
Company Act that does not cause any requirement to register the
Company under the Investment Company Act;
(xvi) if it is a pension fund or investment company, its
acquisition of New Zegona Shares is in full compliance with
applicable laws and regulations;
(xvii) it will not distribute, forward, transfer or otherwise
transmit the Preliminary Prospectus, this Appendix 1, the
Prospectus, the Placing Results Announcement or any other
presentational or other materials concerning the Placing in or into
the Excluded Territories (including electronic copies thereof) to
any person, and it has not distributed, forwarded, transferred or
otherwise transmitted any such materials to any person;
(xviii) none of the Banks or the Company, nor any of their
affiliates, nor any person acting on behalf of any such person, is
making any recommendations to it, advising it regarding the
suitability or merits 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 the
Banks and that the Banks have no duties or responsibilities to a
Placee for providing protections afforded to their respective
clients or for providing protections afforded to their clients
under the rules of the FCA or for providing advice in relation to
the Placing nor in respect of any representations, warranties,
undertakings or indemnities contained in the Placing Documents
and/or the Placing Agreement nor for the exercise or performance of
any of their rights and obligations thereunder including any rights
to waive or vary any conditions or exercise any termination
right;
(xix) it (and any person acting on its behalf) will make payment
to Barclays in accordance with the terms and conditions of the
Placing Documents on the due time and date set out in this Appendix
1 failing which Barclays may place any and all of the relevant New
Zegona Shares on such terms as Barclays determines in its absolute
discretion and retain from the proceeds, for its own account and
benefit, an amount equal to the aggregate amount owed by you plus
interest due, without responsibility or liability to it, and it
will remain liable for any shortfall below the net proceeds of such
sale and the placing proceeds of such New Zegona Shares and may be
required to bear any stamp duty or stamp duty reserve tax or other
similar taxes imposed in any jurisdiction (together with any
interest or penalties thereon which may arise upon the sale of such
Placee's New Zegona Shares on its behalf;
(xx) its Provisional Placing Participation (if any) of New
Zegona Shares will represent a maximum number of New Zegona Shares
which it will be entitled, and required, to acquire, and that the
Company and the Banks (in their absolute discretion) may call upon
it to acquire a lower number of New Zegona Shares (if any), but in
no event in aggregate more than the aforementioned maximum
(xxi) no action has been or will be taken by any of the Company,
the Banks or any person acting on behalf of the Company or the
Banks that would, or is intended to, permit a public offer of the
New Zegona Shares in any country or jurisdiction where any such
action for that purpose is required;
(xxii) the person who it specifies for registration as holder of
New Zegona Shares will be (A) itself or (B) its nominee, as the
case may be. The Banks and the Company will not be responsible for
any liability to stamp duty or stamp duty reserve tax or other
similar taxes imposed in any jurisdiction (nor any interest and
penalties thereon) resulting from a failure to observe this
requirement. It (and any person acting on its behalf) agrees to
acquire New Zegona Shares pursuant to the Placing and to indemnify
the Company and the Banks on an after-tax basis on the basis that
New Zegona Shares will be allotted to a CREST stock account of one
of the Banks who will hold them as nominee on behalf of the Placee
until settlement in accordance with its standing settlement
instructions with it;
(xxiii) the allocation, allotment, issue and delivery to it, or
the person specified by it for registration as holder, of New
Zegona Shares will not give rise to a stamp duty or stamp duty
reserve tax liability under (or at a rate determined under) any of
sections 67, 70, 93 or 96 of the Finance Act 1986 (depositary
receipts and clearance services) in the UK and that it, and the
person specified by it for registration as holder of New Zegona
Shares (if relevant), is not participating in the Placing as
nominee or agent for any person or persons to whom the allocation,
allotment, issue or delivery of New Zegona Shares would give rise
to such a liability. If there were any such arrangements, or the
settlement related to other dealings in New Zegona Shares, stamp
duty or stamp duty reserve tax may be payable, for which neither
the Company nor the Banks would be responsible and the Placees
shall indemnify the Company and the Banks on an after-tax basis for
any stamp duty or stamp duty reserve tax (together with any
interest or penalties thereon) paid by them in respect of any such
arrangements or dealings. If this is the case, it would be sensible
for Placees to take their own advice and they should notify the
relevant Bank accordingly;
(xxiv) it will be liable for any capital duty, stamp duty and
all other stamp, issue, securities, transfer, registration,
documentary or other duties or taxes (including any interest or
penalties thereon) payable outside the UK by them or any other
person ("Non-UK Taxes") on the acquisition by them of any New
Zegona Shares or the agreement by them to acquire any New Zegona
Shares and each Placee, or the Placee's nominee, in respect of whom
(or in respect of the person for whom it is participating in the
Placing as nominee) the allocation, allotment, issue or delivery of
New Zegona Shares has given rise to such Non-UK Taxes,
registration, documentary, transfer or similar taxes or duties
undertakes to pay such Non-UK Taxes, forthwith and to indemnify on
an after-tax basis and to hold harmless the Company and the Banks
in the event that any of the Company and/or the Banks has incurred
any such liability to such Non-UK Taxes;
(xxv) (A) if in the UK, it and any person acting on its behalf
falls within Article 19(5) and/or 49(2)(a)-(d) of the Financial
Services and Markets Act 2000 (Financial Promotion) Order 2005, as
amended, and undertakes that it will acquire, hold, manage and (if
applicable) dispose of any New Zegona Shares that are allocated to
it for the purposes of its business only and (B) it and any person
acting on its behalf is entitled to acquire New Zegona Shares
comprised in its allocation under the laws of all relevant
jurisdictions which apply to it and that it has fully observed such
laws and obtained all governmental and other consents which may be
required thereunder and complied with all necessary
formalities;
(xxvi) it has not offered or sold and will not offer or sell any
New Zegona Shares to persons in the UK prior to Admission except to
persons whose ordinary activities involve them in acquiring,
holding, managing or disposing of investments (as principal or
agent) for the purposes of their business or otherwise in
circumstances which have not resulted and which will not result in
an offer to the public in the UK within the meaning of section
85(1) of FSMA;
(xxvii) the Company is not an Alternative Investment Fund for
the purposes of the Alternative Investment Fund Managers
Directive;
(xxviii) it is not located or resident in any member state of
the European Economic Area other than the UK, Spain, Belgium, the
Netherlands, Italy or Ireland, and, if in a Member State of the
EEA, it is a qualified investor as defined in section 86(7) of
FSMA, being a person falling within Article 2.1(e)(i), (ii) or
(iii) of the Prospectus Directive;
(xxix) 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, and does make, the
acknowledgements, representations and agreements herein on behalf
of each such person; and (ii) it is and will remain liable to the
Banks 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);
(xxx) if it is acting as a financial intermediary, as that term
is used in Article 3(2) of the Prospectus Directive, that the New
Zegona Shares subscribed by it in the Placing will not be acquired
on a non-discretionary basis on behalf of, nor will they be
acquired with a view to their offer or resale to, persons in a
member state of the EEA other than qualified investors, or in
circumstances in which the prior consent of the Banks has been
given to the proposed offer or resale;
(xxxi) it has only communicated or caused to be communicated and
it will only communicate or cause to be communicated any invitation
or inducement to engage in investment activity (within the meaning
of section 21 of FSMA) relating to New Zegona Shares in
circumstances in which section 21(1) of FSMA does not require
approval of the communication by an authorised person and it
acknowledges and agrees that the Preliminary Prospectus and the
Prospectus are not being issued by the Banks in their respective
capacities as an authorised person under section 21 of the FSMA and
they may not therefore be subject to the controls which would apply
if they were made or approved as financial promotion by an
authorised person;
(xxxii) it has complied and it will comply with all applicable
provisions of FSMA with respect to anything done by it or on its
behalf in relation to the New Zegona Shares in, from or otherwise
involving, the UK;
(xxxiii) it has not offered or sold and will not offer or sell
any New Zegona Shares to persons in the EEA prior to Admission
except to persons whose ordinary activities involve them in
acquiring, holding, managing or disposing of investments (as
principal or agent) for the purpose of their business or otherwise
in circumstances which have not resulted and which will not result
in an offer to the public in any member state of the EEA within the
meaning of the Prospectus Directive;
(xxxiv) it has complied with its obligations under the Criminal
Justice Act 1993, the Market Abuse Regulation (EU) No. 596/2014,
section 118 of the FSMA and it has complied with its obligations in
connection with money laundering and terrorist financing under the
Proceeds of Crime Act 2002, the Terrorism Act 2000, and the Money
Laundering, Terrorist Financing and Transfer of Funds (Information
on the Payer) Regulations 2017 (the "Regulations") (each as
amended) and, if making payment on behalf of a third party, that
satisfactory evidence has been obtained and recorded by it to
verify the identity of the third party as required by the
Regulations;
(xxxv) it has knowledge and experience in financial, business
and international investment matters as is required to evaluate the
merits and risks of acquiring for the New Zegona Shares. It further
acknowledges that it is experienced in investing in securities of
this nature and (i) is aware that it may be required to bear, and
is able to bear, the economic risk of, and is able to sustain a
complete loss in connection with the Placing, (ii) will not look to
the Banks for all or any part of any such loss it may suffer, and
(iii) has no need for liquidity with respect to its investment in
New Zegona Shares. It has relied upon its own examination and due
diligence of the Company and its associates taken as a whole, and
the terms of the Placing, including the merits and risks
involved;
(xxxvi) its commitment to acquire New Zegona Shares on the terms
set out in this Appendix 1, the Preliminary Prospectus, the Placing
Results Announcement and the Placing Letter 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;
(xxxvii) the Company, the Banks and others will rely upon the truth and accuracy of the foregoing representations, warranties, acknowledgements and agreements, which are irrevocable;
(xxxviii) the New Zegona Shares will be issued to Placees
subject to the terms and conditions of the Placing Documents;
and
(xxxix) it will indemnify on an after-tax basis and hold the
Company, the Banks and their respective affiliates harmless from
any and all costs, claims, liabilities and expenses (including
legal fees and expenses) arising out of or in connection with any
breach of any of the representations, warranties, acknowledgements,
confirmations and undertakings in this Appendix 1 and the Placing
Letter, and it further agrees that that the provisions of the
Placing Letter shall survive after completion of the Placing;
and
(xl) it will promptly notify the Company and the Banks if any of
the acknowledgements, confirmations, undertakings, representations,
warranties and agreements made in connection with its subscription
of New Zegona Shares is no longer accurate.
(b) Each Placee, and any person acting on behalf of a Placee,
acknowledges that neither the Company nor any of the Banks owes any
fiduciary or other duties or responsibilities to it for providing
the protections afforded to their clients nor for providing advice
in relation to the Placing to any Placee in respect of any
representations, warranties, undertakings or indemnities in the
Placing Agreement or the contents of the terms and conditions
contained in this Announcement (including this Appendix 1), the
Preliminary Prospectus and the Placing Letter.
(c) Each Placee and any person acting on behalf of the Placee
acknowledges and agrees that each Bank or any of their respective
affiliates (acting as an investor for its own account) may, in its
absolute discretion, subscribe for New Zegona Shares and in that
capacity may retain, purchase or sell for its own account such New
Zegona Shares and any securities of the Company or related
investments and may offer or sell such securities or other
investments otherwise than in connection with the Placing.
Accordingly, references in this Announcement to shares being
issued, offered or placed should be read as including any issue,
offering or placement of such shares in the Company to any of the
Banks or any of their affiliates acting in such capacity. In
addition each of the Banks may enter into financing arrangements
and swaps with investors in connection with which the Banks may
from time to time acquire, hold or dispose of such securities of
the Company, including the New Zegona Shares. Neither the Banks nor
any of their affiliates intends to disclose the extent of any such
investment or transactions otherwise than in accordance with any
legal or regulatory obligation to do so.
(d) When a Placee or any person acting on behalf of a Placee is
dealing with any Bank, any money held in an account with such Bank
on behalf of that Placee and/or any person acting on behalf of that
Placee will not be treated as client money within the meaning of
the relevant rules and regulations of the FCA made under FSMA. Each
Placee acknowledges that the money will not be subject to the
protections conferred by the client money rules; as a consequence,
this money will not be segregated from such Bank's money in
accordance with the client money rules and will be used by such
Bank in the course of its own business and the Placee will rank
only as a general creditor of such Bank.
11. Governing Law and Jurisdiction
(a) Any agreements entered into pursuant to the terms and
conditions set out in the Placing Documents, and all
non-contractual or other obligations arising out of or in
connection with them, shall be governed by and construed in
accordance with the laws of England and Wales.
(b) Each Placee submits (on behalf of itself and on behalf of
any person on whose behalf it is acting) to the exclusive
jurisdiction of the English courts as regards any claim, dispute or
matter arising out of any such contract (including any dispute
regarding the existence, validity or termination of such contract
or relating to any non-contractual or other obligation arising out
of or in connection with such contract), except that enforcement
proceedings in respect of the obligation to make payment for the
New Zegona Shares (together with any interest chargeable thereon)
may be taken by either the Company or any Bank 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.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
MSCLFFLVLDIVLIA
(END) Dow Jones Newswires
January 14, 2019 02:00 ET (07:00 GMT)
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