|Proposed placing to raise gross proceeds of up to £750,000*|
THIS ANNOUNCEMENT, INCLUDING THE APPENDIX, AND THE INFORMATION CONTAINED HEREIN, IS NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN OR THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH IT WOULD BE UNLAWFUL TO DO SO.
THIS ANNOUNCEMENT, INCLUDING THE APPENDIX, IS FOR INFORMATION PURPOSES ONLY AND DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN THE COMPANY. THIS ANNOUNCEMENT AND THE APPENDIX DOES NOT CONSTITUTE OR CONTAIN ANY INVITATION, SOLICITATION, RECOMMENDATION, OFFER OR ADVICE TO ANY PERSON TO SUBSCRIBE FOR, OTHERWISE ACQUIRE OR DISPOSE OF ANY SECURITIES OF INFRASTRATA PLC IN ANY JURISDICTION IN WHICH ANY SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE MARKET ABUSE REGULATIONS (EU) NO. 596/2014 ("MAR"). IN ADDITION, MARKET SOUNDINGS WERE TAKEN IN RESPECT OF THE MATTERS CONTAINED IN THIS ANNOUNCEMENT, WITH THE RESULT THAT CERTAIN PERSONS BECAME AWARE OF SUCH INSIDE INFORMATION. UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN AND SUCH PERSONS SHALL THEREFORE CEASE TO BE IN POSSESSION OF INSIDE INFORMATION AS A RESULT OF SUCH MARKET SOUNDINGS.
27 February 2017
("InfraStrata" or the "Company")
InfraStrata plc (AIM: INFA), the independent gas storage company, announces its intention to conduct a placing (the "Placing") of new ordinary shares to raise a total of up to £750,000 (before expenses)*. It is intended that the new ordinary shares will be issued at 0.5 pence per new ordinary share (the "Placing Price"). It is intended that the new ordinary shares to be issued in connection with the Placing (the "Placing Shares") will be issued on a non-pre-emptive basis, within the Company's existing share allotment authorities.
The Placing will be conducted by way of an accelerated book build ("Bookbuild"), which will be launched immediately following this announcement, led by Allenby Capital Limited ("Allenby Capital" or the "Bookrunner"), the Company's broker. The number of Placing Shares and the aggregate proceeds to be raised through the Placing will be finally determined following completion of the Bookbuild process. The Placing is conditional on the Company raising gross proceeds of at least £500,000. A further announcement in respect of these details will be made following completion of the Bookbuild process. The timing of the closing of the book and allocations are at the discretion of the Bookrunner, after discussion with the Company. Additional information on the Placing and its terms and conditions are included further below.
* In the event of excess investor demand, the Company has authorised the Bookrunner to place additional new ordinary shares in the Company representing up to a further £190,000 at the Placing Price.
Background to the Placing
On 4 November 2016, the Company announced that, following the completion of a tendering process, it had selected Front-End Engineering Design ("FEED") contractors for the above-ground facilities and the sub-surface elements of its Islandmagee gas storage project (the "Project") and associated loan funding from the contractors to partially finance the development of the Project ("Contractor Loans").
It was also announced that, in addition to the EU grant funding and the Contractor Loans, a further amount of £3 million would be required (the "Funding Requirement") to complete the FEED and commercialisation process on the Project, of what is a gross £6 million programme (which includes a £4 million engineering budget and funds for corporate overheads, working capital and bridging finance until receipt of the remaining European Commission grant funds following completion of the FEED programme). Drawdown of the Contractor Loans are subject to InfraStrata securing the funds necessary to complete the FEED.
Over the course of the last few months, the Directors have been focused on pursuing fundraising options to cover the financing needs of the FEED and commercialisation programme, as detailed in the announcement on 4 November 2016 (the "November Announcement"), and making preparations for these work streams to be commenced. The Board has explored various options to secure the Funding Requirement and this process and discussions are ongoing. In the meantime, however, and having received indications of support from potential investors, including existing shareholders, the Company is proposing the Placing in order to strengthen the Company's balance sheet by repaying the amount drawn down on the loan facility with Baron Oil plc ("Baron Oil") and securing additional working capital, whilst working to start the first phase of the FEED.
The net proceeds of the Placing will therefore be utilised as follows:
On 5 January 2017, the Company entered into a secured loan facility agreement with Baron Oil of up to £300,000 (the "Baron Loan") to meet its short term working capital needs, of which £200,000 has been drawn. The Baron Loan was intended to be temporary pending securing of the Funding Requirement, due to the terms and security arrangements associated with it, and it is a condition to drawdown of the Contractor Loans (as described in the November Announcement) that the Baron Loan's security arrangements are released through repayment. Accordingly, £200,000 of the net proceeds of the Placing will be applied towards the repayment of the amount drawn down on the Baron Loan in full.
Part of the net proceeds of the Placing will be used to provide additional working capital and cover the anticipated costs on the Project until the end of the year, depending on progress with the first phase of the FEED.
The first phase of the FEED is known as Concept Evaluation. During this phase the FEED contractors will undertake a value enhancement exercise on the current design basis. The objective is to identify opportunities in which the current design and phasing could be optimised to enhance overall project value and in particular to assess the potential to accelerate delivery of capacity (or part thereof) to the market. The outcome of Concept Evaluation will be key inputs to the completion of the FEED scope in a fully integrated programme of work and deliverables, for which further funding beyond the Placing will be required.
The Company's planning is based on completing the FEED in 2017 and therefore the aim of the Placing is to enable the Company to start work on the FEED, whilst continuing fundraising discussions with interested parties to provide the full Funding Requirement. Plans are being made and contractors are lined up to commence the Concept Evaluation work in mid- to late March. However, there can be no guarantee at this stage that the Company will be successful in its ongoing discussions with potential investors to secure the balance of the Funding Requirement. If the Board considers that the Company will not be able to secure the full Funding Requirement necessary to complete the FEED and commercialisation programme, in order to preserve available working capital, the Company may halt progress with the first phase of the FEED and place the Project on care and maintenance and consider utilising remaining funds from the Placing to explore other options for the Company, which may include a sale of the Project and/or its assets. Much will depend on the outcome of the Company's discussions with investors over the coming weeks and months. Further announcements will be made in due course as appropriate.
The Directors remain confident that the Project is economically viable, and that, following the completion of the FEED and commercialisation programme, the Project would be capable of attracting further new investment for the Company and the Project.
The Company has continued to implement cost reductions to reflect a focus on the project management of the FEED and commercialisation programme whilst keeping general corporate overheads to a minimum.
Further details regarding the Placing
The Placing Shares will not be offered generally to the Company's existing shareholders on a pre-emptive basis. Participation in the Placing will be limited to certain qualifying institutional investors who are invited, and who choose, to participate. Certain of the Company's existing significant shareholders have indicated their intention to participate in the Placing. The Placing Shares are not being made available to the public and are not being offered or sold in, into or from the United States of America, Canada, the Republic of South Africa, Australia, Japan or any other jurisdiction where it would be unlawful to do so.
The Company anticipates that the entirety of the Placing will be raised within the Company's existing share allotment authorities. A further announcement in respect of the total number of Placing Shares to be issued, the aggregate proceeds to be raised through the Placing and the timing of the admission of the Placing Shares to trading on AIM will be made in due course, as soon as is practicable, once these details have been finally determined. The Placing is not being underwritten.
Following admission to trading on AIM, the Placing Shares will be issued credited as fully paid and will rank pari passu with the Company's existing ordinary shares, including the right to receive all dividends and other distributions declared, made or paid on or in respect of such shares after the date of issue.
Advance assurance has been applied for and received from HMRC that the Company's business qualifies for enterprise investment scheme (EIS) relief and is a qualifying business for venture capital trust (VCT) relief. Although qualifying investors should obtain tax relief on their investments under EIS relief or VCT relief, neither the Company nor the Directors can provide any warranty or guarantee in this regard. Investors must seek independent advice on which they are able to rely.
Neither the Company nor the Directors give any warranties or undertakings in this document that EIS relief or VCT relief, if granted, will not be withdrawn. Investors must take their own advice and rely on it. If the Company carries on activities beyond those disclosed to HMRC, then Shareholders may cease to qualify for the tax benefits.
Market Abuse Regulation
The Market Abuse Regulation ("MAR") became effective from 3 July 2016. Market soundings, as defined in MAR, were taken in respect of the Placing, with the result that certain persons became aware of inside information, as permitted by MAR. That inside information is set out in this announcement and has been disclosed as soon as possible in accordance with paragraph 7 of article 17 of MAR. Therefore, those persons that received inside information in a market sounding are no longer in possession of inside information relating to the Company and its securities.
Attention is drawn to the section headed 'Important Information' below and to the Appendix containing the terms and conditions of the Placing (representing important information for potential placees only).
For further information, please contact:
Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.
This announcement does not constitute, or form part of, a prospectus relating to the Company, nor does it constitute or contain any invitation or offer to any person, or any public offer, to subscribe for, purchase or otherwise acquire any shares in the Company or advise persons to do so in any jurisdiction, nor shall it, or any part of it form the basis of or be relied on in connection with any contract or as an inducement to enter into any contract or commitment with the Company.
The content of this announcement has not been approved by an authorised person within the meaning of the Financial Services and Markets Act 2000 ("FSMA").
This announcement is not for publication or distribution, directly or indirectly, in or into the United States of America. This announcement is not an offer of securities for sale into the United States. The securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"), and may not be offered or sold in the United States, except pursuant to an applicable exemption from registration. No public offering of securities is being made in the United States. This announcement is not for release, publication or distribution, directly or indirectly, in or into the United States, Australia, Canada, the Republic of South Africa, Japan or any jurisdiction where to do so might constitute a violation of local securities laws or regulations (a "Prohibited Jurisdiction"). This announcement and the information contained herein are not for release, publication or distribution, directly or indirectly, to persons in a Prohibited Jurisdiction unless permitted pursuant to an exemption under the relevant local law or regulation in any such jurisdiction. This announcement has been issued by and is the sole responsibility of the Company.
Allenby Capital Limited is acting solely as nominated adviser and broker exclusively for the Company and no one else in connection with the contents of this announcement and will not regard any other person (whether or not a recipient of this announcement) as its client in relation to the contents of this announcement nor will it be responsible to anyone other than the Company for providing the protections afforded to its clients or for providing advice in relation to the contents of this announcement. Apart from the responsibilities and liabilities, if any, which may be imposed on Allenby Capital Limited by FSMA or the regulatory regime established thereunder, Allenby Capital Limited accepts no responsibility whatsoever, and makes no representation or warranty, express or implied, for the contents of this announcement including its accuracy, completeness or verification or for any other statement made or purported to be made by it, or on behalf of it, the Company or any other person, in connection with the Company and the contents of this announcement, whether as to the past or the future. Allenby Capital Limited accordingly disclaims all and any liability whatsoever, whether arising in tort, contract or otherwise (save as referred to above), which it might otherwise have in respect of the contents of this announcement or any such statement.
FORWARD LOOKING STATEMENTS
This announcement includes "forward-looking statements" which include all statements other than statements of historical facts, including, without limitation, those regarding the Company's business strategy, plans and objectives of management for future operations, or any statements proceeded by, followed by or that include the words "targets", "believes", "expects", "aims", "intends", "will", "may", "anticipates", "would", "could" or similar expressions or negatives thereof. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond the Company's control that could cause the actual results, performance or achievements of the Company to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the Company's present and future business strategies and the environment in which the Company will operate in the future. These forward looking statements speak only as at the date of this announcement. The Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company's expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based, unless required to do so by applicable law or the AIM Rules.
FURTHER DETAILS OF THE PLACING
TERMS AND CONDITIONS
THIS ANNOUNCEMENT, INCLUDING THIS APPENDIX (TOGETHER, THE "ANNOUNCEMENT") AND THE INFORMATION IN IT IS RESTRICTED AND IS NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH SUCH PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.
IMPORTANT INFORMATION ON THE PLACING FOR INVITED PLACEES ONLY.
MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THIS APPENDIX AND THE TERMS AND CONDITIONS SET OUT HEREIN ARE FOR INFORMATION PURPOSES ONLY AND ARE DIRECTED ONLY AT: (A) PERSONS WHO ARE IN A MEMBER STATE OF THE EUROPEAN ECONOMIC AREA AND ARE "QUALIFIED INVESTORS" AS DEFINED IN ARTICLE 2.1(E) OF THE EU PROSPECTUS DIRECTIVE (WHICH MEANS DIRECTIVE 2003/71/EC AND INCLUDES ANY RELEVANT IMPLEMENTING DIRECTIVE MEASURE IN ANY MEMBER STATE) (THE "PROSPECTUS DIRECTIVE"); AND (B) IN THE UNITED KINGDOM, PERSONS WHO ARE: (I) "INVESTMENT PROFESSIONALS" WITHIN THE MEANING OF ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 (THE "ORDER"); (II) PERSONS FALLING WITHIN ARTICLE 49(2)(A) TO (D) ("HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC") OF THE ORDER; OR (III) PERSONS TO WHOM IT MAY OTHERWISE BE LAWFULLY COMMUNICATED (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS"). THIS APPENDIX AND THE TERMS AND CONDITIONS SET OUT HEREIN MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS APPENDIX AND THE TERMS AND CONDITIONS SET OUT HEREIN RELATE IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. THIS APPENDIX DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN THE COMPANY. THIS ANNOUNCEMENT IS NOT AN OFFER OF OR SOLICITATION TO PURCHASE OR SUBSCRIBE FOR SECURITIES IN THE UNITED STATES. THE SECURITIES REFERRED TO HEREIN HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES, EXCEPT PURSUANT TO AN APPLICABLE EXEMPTION FROM, OR AS PART OF A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. NO OFFERING OF SECURITIES IS BEING MADE IN THE UNITED STATES. NO MONEY, SECURITIES OR OTHER CONSIDERATION FROM ANY PERSON INSIDE THE UNITED STATES IS BEING SOLICITED AND, IF SENT IN RESPONSE TO THE INFORMATION CONTAINED IN THIS ANNOUNCEMENT, WILL NOT BE ACCEPTED.
EACH PLACEE SHOULD CONSULT WITH ITS OWN ADVISERS AS TO LEGAL, TAX, BUSINESS AND RELATED ASPECTS OF AN INVESTMENT IN PLACING SHARES.
Persons who have been or who are invited to and who have chosen or choose to participate in the Placing, by making or having made (or on whose behalf there is or has been made) an oral or written offer to subscribe for Placing Shares (the "Placees"), will be deemed to have read and understood the Announcement, including this Appendix, in its entirety and to have made such offer on the terms and conditions, and to have provided the representations, warranties, acknowledgements, and undertakings contained in this Appendix. In particular, each such Placee represents, warrants and acknowledges to the Company and to the Bookrunner that:
1. it is a Relevant Person (as defined above) and undertakes that it will acquire, hold, manage or dispose of any Placing Shares that are allocated to it solely for the purposes of its business;
2. in the case of any Placing Shares acquired by it as a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive, (i) the Placing Shares acquired by it in the Placing have not been acquired on behalf of, nor have they been acquired with a view to their offer or resale to, persons in any Member State of the European Economic Area which has implemented the Prospectus Directive other than Qualified Investors or in circumstances in which the prior consent of the Bookrunner has been given to the offer or resale; or (ii) where Placing Shares have been acquired by it on behalf of persons in any member state of the EEA other than Qualified Investors, the offer of those Placing Shares to it is not treated under the Prospectus Directive as having been made to such persons; and
3. (i) it is not in the United States, and (ii) it is not acting for the account or benefit of a person in the United States, (iii) it has not received any offer, or a solicitation of an offering, to buy the Placing Shares within the United States and (iv) it did not initiate any buy order to purchase Placing Shares whilst in the United States.
The Company and the Bookrunner are relying upon the truth and accuracy of the foregoing undertakings, representations, warranties, acknowledgements and agreements.
This Announcement does not constitute an offer, and may not be used in connection with an offer, to sell or issue or the solicitation of an offer to buy or subscribe for Placing Shares in any jurisdiction in which such offer or solicitation is or may be unlawful. This Announcement and the information contained herein is not for publication or distribution, directly or indirectly, to persons in the United States, Australia, Canada, Japan, the Republic of South Africa or in any jurisdiction in which such publication or distribution would be unlawful. Persons into whose possession this Announcement may come are required by the Company to inform themselves about and to observe any restrictions of transfer of this Announcement. No public offer of securities of the Company is being made in the United Kingdom, the United States or elsewhere.
In particular, the Placing Shares referred to in this Announcement have not been and will not be registered under the Securities Act or any laws of 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 except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and the securities laws of any state or other jurisdiction of the United States. The Placing Shares are being offered and sold only outside the United States in accordance with Regulation S.
The relevant clearances have not been, nor will they be, obtained from the securities commission of any province or territory of Canada; no prospectus has been lodged with or registered by the Australian Securities and Investments Commission or the Japanese Ministry of Finance or the South African Reserve Bank; and the Placing Shares have not been, nor will they be, registered under or offered in compliance with the securities laws of any state, province or territory of Australia, Canada, Japan or the Republic of South Africa. Accordingly, the Placing Shares may not (unless an exemption under the relevant securities laws is applicable) be offered, sold, resold or delivered, directly or indirectly, in or into Australia, Canada, Japan, the Republic of South Africa or any other jurisdiction outside the United Kingdom.
Persons (including, without limitation, nominees and trustees) who have a contractual or other legal obligation to forward a copy of this Appendix or the Announcement of which it forms part should seek appropriate advice before taking any action.
In this Appendix, unless the context otherwise requires, "Placee" means a Relevant Person (including individuals, funds or others) on whose behalf a commitment to subscribe for Placing Shares has been given.
Details of the Placing Agreement and the Placing Shares
Allenby Capital has entered into a Placing Agreement (the "Placing Agreement") with the Company under which Allenby Capital has, on the terms and subject to the conditions set out therein, undertaken to use its reasonable endeavours to procure subscribers for new ordinary shares of 0.01 pence each in the capital of the Company (the "Placing Shares") to raise up to £750,000 gross at a price of 0.5 pence per new ordinary share (the "Placing Price"). In the event of excess investor demand, the Company has authorised the Bookrunner to place additional new ordinary shares in the Company representing up to a further £190,000 at the Placing Price. The Placing is not being underwritten by Allenby Capital or any other person.
The number of Placing Shares will be determined following completion of the Bookbuild (as defined below) as set out in this Announcement.
The Placing Shares will, when issued, be credited as fully paid and will rank pari passu in all respects with the existing issued ordinary shares of 0.01 pence each in the capital of the Company ("Ordinary Shares"), including the right to receive all dividends and other distributions (if any) declared, made or paid on or in respect of the Ordinary Shares after the date of issue of the Placing Shares.
The Company, except pursuant to the Placing, has agreed not to allot, issue or grant any rights in respect of any of its Ordinary Shares in the period from the date of this Announcement until 28 days after Admission (as defined below) without Allenby Capital's prior written consent.
Application for admission to trading
Application will be made to London Stock Exchange plc (the "London Stock Exchange") for admission to trading of the Placing Shares on AIM ("Admission"). It is expected that settlement of any such shares and Admission will become effective on or around 3 March 2017 and that dealings in the Placing Shares will commence at that time.
The Bookrunner will today commence an accelerated bookbuilding process (the "Bookbuild") to determine demand for participation in the Placing by potential Placees at the Placing Price. The Placing is conditional on the Company raising gross proceeds of at least £500,000. This Appendix gives details of the terms and conditions of, and the mechanics of participation in, the Placing. No commissions will be paid to Placees or by Placees in respect of any Placing Shares.
Allenby Capital and the Company shall be entitled to effect the Placing by such alternative method to the Bookbuild as they may, in their sole discretion, determine.
Participation in, and principal terms of, the Placing
1. Allenby Capital is arranging the Placing as agents for, and joint brokers of, the Company.
2. Participation in the Placing is only available to persons who are lawfully able to be, and have been, invited to participate by Allenby Capital. Allenby Capital and its respective affiliates are entitled to participate in the Placing as principal.
3. The Bookbuild will establish the number of Placing Shares to be issued at the Placing Price, which will be agreed between the Bookrunner and the Company following completion of the Bookbuild. The number of Placing Shares will be announced on a Regulatory Information Service following the completion of the Bookbuild.
4. To bid in the Bookbuild, Placees should communicate their bid by telephone to their usual sales contact at Allenby Capital. Each bid should state the number of Placing Shares which the prospective Placee wishes to subscribe for at the Placing Price. Bids may be scaled down by Allenby Capital on the basis referred to in paragraph 8 below.
5. The timing of the closing of the Bookbuild will be at the discretion of Allenby Capital. The Company reserves the right to reduce or seek to increase the amount to be raised pursuant to the Placing, in its absolute discretion.
6. Each Placee's allocation will be confirmed to Placees orally, or by email, by the Bookrunner whom they contact following the close of the Bookbuild and a trade confirmation or contract note will be dispatched as soon as possible thereafter. The Bookrunner's oral or emailed confirmation will give rise to an irrevocable, legally binding commitment by that person (who at that point becomes a Placee), in favour of the Bookrunner and the Company, under which it agrees to acquire by subscription the number of Placing Shares allocated to it at the Placing Price and otherwise on the terms and subject to the conditions set out in this Appendix and in accordance with the Company's articles of association. Except with Allenby Capital consent, such commitment will not be capable of variation or revocation.
7. The Company will make a further announcement following the close of the Bookbuild detailing the number of Placing Shares to be issued at the Placing Price.
8. Subject to paragraphs 4 and 5 above, the Bookrunner may choose to accept bids, either in whole or in part, on the basis of allocations determined at their discretion (in agreement with the Company) and may scale down any bids for this purpose on such basis as it may determine. The Bookrunner may also, notwithstanding paragraphs 4 and 5 above, subject to the prior consent of the Company allocate Placing Shares after the time of any initial allocation to any person submitting a bid after that time.
9. A bid in the Bookbuild will be made on the terms and subject to the conditions in the Announcement (including this Appendix) and will be legally binding on the Placee on behalf of which it is made and, except with the Bookrunner' consent will not be capable of variation or revocation from the time at which it is submitted.
10. Except as required by law or regulation, no press release or other announcement will be made the Bookrunner or the Company using the name of any Placee (or its agent), in its capacity as Placee (or agent), other than with such Placee's prior written consent.
11. Irrespective of the time at which a Placee's allocation pursuant to the Placing is confirmed, settlement for all Placing Shares to be acquired pursuant to the Placing will be required to be made at the same time, on the basis explained below under "Registration and Settlement".
12. All obligations of the Bookrunner under the Placing will be subject to fulfilment of the conditions referred to below under "Conditions of the Placing" and to the Placing not being terminated on the basis referred to below under "Right to terminate under the Placing Agreement".
13. By participating in the Placing, each Placee agrees that its rights and obligations in respect of the Placing will terminate only in the circumstances described below and will not be capable of rescission or termination by the Placee.
14. To the fullest extent permissible by law and the applicable rules of the Financial Conduct Authority ("FCA"), neither Allenby Capital nor any of their affiliates shall have any liability to Placees (or to any other person whether acting on behalf of a Placee or otherwise whether or not a recipient of these terms and conditions) in respect of the Placing. Each Placee acknowledges and agrees that the Company is responsible for the allotment of the Placing Shares to the Placees and Allenby Capital shall have no liability to the Placees for the failure of the Company to fulfil those obligations. In particular, neither Allenby Capital nor any of their affiliates shall have any liability (including to the extent permissible by law, any fiduciary duties) in respect of Allenby Capital's method of effecting the Placing.
Conditions of the Placing
Allenby Capital's obligations under the Placing Agreement in respect of the Placing Shares are conditional on, inter alia:
(a) Allenby Capital, as agent for the Company, having received placing commitments from Placees in respect of not less than £500,000;
(b) the Company allotting the Placing Shares, prior to and conditional only on Admission, in accordance with the terms of the Placing Agreement;
(c) Admission taking place not later than 8.00 a.m. on 3 March 2017 (or such later time or date as the Company and Allenby Capital may agree, not later than 8.00 a.m. on 17 March 2017).
If: (i) any of the conditions contained in the Placing Agreement in relation to the Placing Shares are not fulfilled or waived by Allenby Capital as applicable, by the respective time or date where specified (or such later time or date as the Company and Allenby Capital may agree, not being later than 8.00 a.m. on 17 March 2017); (ii) any of such conditions becomes incapable of being fulfilled; or (iii) the Placing Agreement is terminated in the circumstances specified below, the Placing will lapse and the Placees' rights and obligations hereunder in relation to the Placing Shares shall cease and terminate at such time and each Placee agrees that no claim can be made by the Placee in respect thereof.
Allenby Capital may, at its discretion and upon such terms as it thinks fit, waive, or extend the period for, compliance by the Company with the whole or any part of any of the Company's obligations in relation to the conditions in the Placing Agreement save that the above condition relating to Admission taking place may not be waived. Any such extension or waiver will not affect Placees' commitments as set out in this Announcement.
Neither Allenby Capital, the Company nor any of their respective affiliates shall have any liability to any Placee (or to any other person whether acting on behalf of a Placee or otherwise) in respect of any decision they may make as to whether or not to waive or to extend the time and/or date for the satisfaction of any condition to the Placing nor for any decision they may make as to the satisfaction of any condition or in respect of the Placing generally and by participating in the Placing each Placee agrees that any such decision is within the absolute discretion of Allenby Capital
Right to terminate the Placing Agreement
Allenby Capital is entitled, at any time before Admission, to terminate the Placing Agreement by giving notice to the Company in certain circumstances, including, inter alia:
(a) a breach by the Company of any of its obligations under the Placing Agreement;
(b) any of the warranties given to Allenby in the Placing Agreement not being, or having ceased to be, true and accurate;
(c) the occurrence of a force majeure event which, in the opinion of Allenby Capital would be likely to have an adverse effect on the financial or trading position or the business or prospects of the Group which is material in the context of the Group as a whole or which renders the Placing impracticable or inadvisable.
The rights and obligations of the Placees will not be subject to termination by the Placee or any prospective Placee at any time or in any circumstances. By participating in the Placing, Placees agree that the exercise by Allenby Capital of any right of termination or other discretion under the Placing Agreement shall be within the absolute discretion of Allenby Capital and that it need not make any reference to Placees and that neither Allenby Capital nor any of its affiliates shall have any liability to Placees whatsoever in connection with any such exercise.
No Admission Document or Prospectus
The Placing Shares are being offered to a limited number of specifically invited persons only and have not been nor will be offered in such a way as to require the publication of an admission document or prospectus in the United Kingdom or in any other jurisdiction. No offering document, admission document or prospectus has been or will be submitted to be approved by the FCA in relation to the Placing, and Placees' commitments will be made solely on the basis of the information contained in the Announcement (including this Appendix) and the business and financial information that the Company is required to publish in accordance with the AIM Rules for Companies (the "Exchange Information"). Each Placee, by accepting a participation in the Placing, agrees that the content of this Announcement is exclusively the responsibility of the Company and confirms that it has neither received nor relied on any other information (other than the Exchange Information), representation, warranty, or statement made by or on behalf of the Company or the Bookrunner or any other person and neither the Bookrunner nor the Company nor any other person will be liable for any Placee's decision to participate in the Placing based on any other information, representation, warranty or statement which the Placees may have obtained or received and, if given or made, such information, representation, warranty or statement must not be relied upon as having been authorised by the Bookrunner, the Company, or their respective officers, directors, employees or agents. Each Placee acknowledges and agrees that it has relied on its own investigation of the business, financial or other position of the Company in accepting a participation in the Placing. Neither the Company nor the Bookrunner are making any undertaking or warranty to any Placee regarding the legality of an investment in the Placing Shares by such Placee under any legal, investment or similar laws or regulations. Each Placee should not consider any information in this Announcement to be legal, tax or business advice. Each Placee should consult its own solicitor, tax adviser and financial adviser for independent legal, tax and financial advice regarding an investment in the Placing Shares. Nothing in this paragraph shall exclude the liability of any person for fraudulent misrepresentation.
Registration and Settlement
Following the close of the Bookbuild, each Placee allocated Placing Shares in the Placing will be sent a trade confirmation or contract note in accordance with the standing arrangements in place with the Bookrunner, stating the number of Placing Shares allocated to it at the Placing Price, the aggregate amount owed by such Placee to the relevant Bookrunner (in GBP) and a form of confirmation in relation to settlement instructions.
Each Placee will be deemed to agree that it will do all things necessary to ensure that delivery and payment is completed as directed by the relevant Bookrunner in accordance with the standing CREST settlement instructions which they have in place with the relevant Bookrunner.
Settlement of transactions in the Placing Shares (ISIN: GB00B28YMP66) following Admission will take place within the system administered by Euroclear UK & Ireland Limited ("CREST") provided that, subject to certain exceptions, the Bookrunner reserve the right to require settlement for, and delivery of, the Placing Shares (or a portion thereof) to Placees by such other means that it deems necessary if delivery or settlement is not possible or practicable within CREST within the timetable set out in this Announcement or would not be consistent with the regulatory requirements in any Placee's jurisdiction.
It is expected that settlement will be on 3 March 2017 on a T+2 basis in accordance with the instructions set out in the form of confirmation.
Interest is chargeable daily on payments not received from Placees on the due date in accordance with the arrangements set out above at the rate of two percentage points above LIBOR.
Each Placee is deemed to agree that, if it does not comply with these obligations, the Bookrunner may sell any or all of the Placing Shares allocated to that Placee on such Placee's behalf and retain from the proceeds, for the Bookrunner's account and benefit (as agent for the Company), an amount equal to the aggregate amount owed by the Placee plus any interest due. The relevant Placee will, however, remain liable for any shortfall below the aggregate amount owed by it and may be required to bear any stamp duty or stamp duty reserve tax or securities transfer tax (together with any interest or penalties) which may arise upon the sale of such Placing Shares on such Placee's behalf. By communicating a bid for Placing Shares, each Placee confers on the Bookrunner such authorities and powers necessary to carry out any such sale and agrees to ratify and confirm all actions which the Bookrunner lawfully takes in pursuance of such sale.
If Placing Shares are to be delivered to a custodian or settlement agent, Placees should ensure that the form of confirmation is copied and delivered immediately to the relevant person within that organisation.
Insofar as Placing Shares are registered in a Placee's name or that of its nominee or in the name of any person for whom a Placee is contracting as agent or that of a nominee for such person, such Placing Shares should, subject as provided below, be so registered free from any liability to UK stamp duty or stamp duty reserve tax or securities transfer tax. Neither the Bookrunner nor the Company will be liable in any circumstances for the payment of stamp duty, stamp duty reserve tax or securities transfer tax in connection with any of the Placing Shares. Placees will not be entitled to receive any fee or commission in connection with the Placing.
Representations, Warranties and Further Terms
By participating in the Placing, each Placee (and any person acting on such Placee's behalf) makes the following representations, warranties, acknowledgements, agreements and undertakings (as the case may be) to the Bookrunner (for itself and on behalf of the Company):
1. that it has read and understood this Announcement, including the Appendix, in its entirety and that its subscription for Placing Shares is subject to and based upon all the terms, conditions, representations, warranties, acknowledgements, agreements and undertakings and other information contained herein and undertakes not to redistribute or duplicate this Announcement;
2. that its obligations are irrevocable and legally binding and shall not be capable of rescission or termination by it in any circumstances;
3. that the exercise by Allenby Capital of any right or discretion under the Placing Agreement shall be within the absolute discretion of Allenby Capital and Allenby Capital need have any reference to it and shall have no liability to it whatsoever in connection with any decision to exercise or not to exercise any such right and each Placee agrees that it has no rights against Allenby Capital or the Company, or any of their respective officers, directors or employees, under the Placing Agreement pursuant to the Contracts (Rights of Third Parties Act) 1999;
4. that each Placee, in accepting its participation in the Placing, is not relying on any information or representation or warranty in relation to the Company or any of its subsidiaries or any of the Placing Shares other than as contained in this Announcement. Each Placee agrees that neither the Company nor the Bookrunner nor any of their respective officers, directors or employees will have any liability for any such other information, representation or warranty, express or implied;
5. that it has neither received nor relied on any inside information concerning the Company in accepting this invitation to participate in the Placing;
6. neither it nor, as the case may be, its clients expect the Bookrunner to have any duties or responsibilities to such persons similar or comparable to the duties of "best execution" and "suitability" imposed by the FCA's Conduct of Business Source Book, and that the Bookrunner are not acting for it or its clients, and that the Bookrunner will not be responsible for providing the protections afforded to customers of the Bookrunner or for providing advice in respect of the transactions described herein;
7. (i) it is not in the United States, and (ii) it is not acting for the account or benefit of a person in the United States, (iii) it has not received any offer, or a solicitation of an offering, to buy the Placing Shares within the United States and (iv) it did not initiate any buy order to purchase Placing Shares whilst in the United States;
8. each Placee acknowledges that (a) the Placing Shares have not been, and will not be, registered under the Securities Act, (b) the Company has not been, and will not be, registered under the US Investment Company Act of 1940 and (c) the Placing Shares may not be offered, sold, pledged or otherwise transferred or delivered within the United States or to, or for the account or benefit of, any US Person as defined in Regulation S of the Securities Act ("US Person");
9. that it is not acquiring the Placing Shares with a view to the offer, sale, resale, transfer, delivery or distribution, directly or indirectly, of such Placing Shares in or into the United States;
10. that it is not a national or resident of Canada, Australia, the Republic of South Africa, or Japan or a corporation, partnership or other entity organised under the laws of Canada, Australia, the Republic of South Africa or Japan and that it will not offer, sell, renounce, transfer or deliver directly or indirectly any of the Placing Shares in Canada, Australia, the Republic of South Africa or Japan or to or for the benefit of any person resident in Canada, Australia, the Republic of South Africa or Japan and each Placee acknowledges that the relevant exemptions are not being obtained from the Securities Commission of any province of Canada, that no document has been or will be lodged with, filed with or registered by the Australian Securities and Investments Commission or Japanese Ministry of Finance and that the Placing Shares are not being offered for sale and may not be, directly or indirectly, offered, sold, transferred or delivered in or into Canada, Australia, the Republic South Africa or Japan;
11. that it has not, directly or indirectly, distributed, forwarded, transferred or otherwise transmitted, and will not, directly or indirectly, distribute, forward, transfer or otherwise transmit, any presentation or offering materials concerning the Placing or the Placing Shares to any persons within the United States or to any US Persons;
12. that it is entitled to subscribe for Placing Shares 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 or otherwise and complied with all necessary formalities and that it has not taken any action which will or may result in the Company or the Bookrunner or any of their respective directors, officers, employees or agents acting in breach of any regulatory or legal requirements of any territory in connection with the Placing or its acceptance;
13. that it has obtained all necessary consents and authorities to enable it to give its commitment to subscribe for the Placing Shares and to perform its subscription obligations;
14. that it is either: (a) a person of a kind described in paragraph 5 of Article 19 (persons having professional experience in matters relating to investments and who are investment professionals) of the Order; or (b) a person of a kind described in paragraph 2 of Article 49 (high net worth companies, unincorporated associations, partnerships or trusts or their respective directors, officers or employees) of the Order; or (c) a person to whom it is otherwise lawful to offer the opportunity to participate in the Placing;
15. that it is a qualified investor (as defined in section 86(7) of the Financial Services and Markets Act 2000, as amended ("FSMA"));
16. that it is a "professional client" or an "eligible counterparty" within the meaning of Chapter 3 of the FCA's Conduct of Business Sourcebook and it is purchasing Placing Shares for investment only and not with a view to resale or distribution;
17. that it will (or will procure that its nominee will) if applicable, make notification to the Company of the interest in its ordinary shares in accordance with the Disclosure Guidance and Transparency Rules published by the FCA;
18. that it is not, and it is not acting on behalf of, a person falling within subsections (6), (7) or (8) of sections 67 or 70 respectively or subsections (2) and (3) of section 93 or subsection (1) of section 96 of the Finance Act 1986;
19. that it is not relying on any representations or warranties or agreements by the Company, the Bookrunner or by any of their respective directors, employees or agents or any other person except as set out in the express terms of this letter;
20. that it will not deal or cause or permit any other person to deal in all or any of the Placing Shares which it is subscribing for under the Placing unless and until Admission becomes effective;
21. to appoint irrevocably any director of the Bookrunner as its agent for the purpose of executing and delivering to the Company and/or its registrars any document on its behalf necessary to enable it to be registered as the holder of the Placing Shares;
22. that, as far as it is aware it is not acting in concert (within the meaning given in The City Code on Takeovers and Mergers) with any other person in relation to the Company;
23. that this Announcement does not constitute a securities recommendation or financial product advice and that neither the Bookrunner nor the Company has considered its particular objectives, financial situation and needs;
24. that it will indemnify and hold the Company and the Bookrunner and their respective affiliates harmless from any and all costs, claims, liabilities and expenses (including legal fees and expenses) arising out of or in connection with any breach of the representations, warranties, acknowledgements, agreements and undertakings in this Appendix and further agrees that the Company and the Bookrunner will rely on the truth and accuracy of the foregoing confirmations, warranties, acknowledgements and undertakings and, if any of the foregoing is or becomes no longer true or accurate, the Placee shall promptly notify the Bookrunner, and the Company. All confirmations, warranties, acknowledgements and undertakings given by the Placee, pursuant to this Announcement (including this Appendix) are given to each of the Bookrunner for itself and on behalf of the Company and will survive completion of the Placing and Admission;
25. that time shall be of the essence as regards obligations pursuant to this Appendix;
26. that it is responsible for obtaining any legal, tax and other advice that it deems necessary for the execution, delivery and performance of its obligations in accepting the terms and conditions of the Placing, and that it is not relying on the Company or the Bookrunner to provide any legal, tax or other advice to it; and
27. that all dates and times in this Announcement (including this Appendix) may be subject to amendment and that the Bookrunner shall notify it of such amendments.
Each Placee (and any person acting on such Placee's behalf) further represents, warrants and undertakes to the Bookrunner (for itself and for the benefit of the Company) and acknowledges that:
1. it is aware of, has complied with and will continue to comply with any obligations it has under the Market Abuse Regulation (EU) No 596/2014 and the Proceeds of Crime Act 2002 and the Money Laundering Regulations 2007 to the extent applicable to it;
2. it will not make any offer to the public of those Placing Shares to be subscribed by it for the purposes of the Prospectus Rules made by the FCA pursuant to Commission Regulation (EC) No. 809/2004;
3. it will not distribute any document relating to the Placing Shares and it will be acquiring the Placing Shares for its own account as principal or for a discretionary account or accounts (as to which it has the authority to make the statements set out herein) for investment purposes only and it does not have any contract, understanding or arrangement with any person to sell, pledge, transfer or grant a participation therein to such person or any third person with respect of any Placing Shares; save that that if it is a private client stockbroker or fund manager it confirms that in purchasing the Placing Shares it is acting under the terms of one or more discretionary mandates granted to it by private clients and it is not acting on an execution only basis or under specific instructions to purchase the Placing Shares for the account of any third party.
4. acknowledges that these terms and conditions and any agreements entered into by it pursuant to these terms and conditions shall be governed by and construed in accordance with the laws of England and Wales and it submits (on behalf of itself and on behalf of any person on whose behalf it is acting) to the exclusive jurisdiction of the English courts as regards any claim, dispute or matter arising out of any such contract, except that enforcement proceedings in respect of the obligation to make payment for the Placing Shares (together with any interest chargeable thereon) may be taken by the Company or the Bookrunner 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;
5. any documents sent to Placees will be sent at the Placees' risk. They may be sent by post to such Placees at an address notified to the Bookrunner; and
6. the Company, the Bookrunner and their respective affiliates will rely upon the truth and accuracy of each of the foregoing representations, warranties, acknowledgements and undertakings which are given to each of the Bookrunner for itself and on behalf of the Company and are irrevocable.
The agreement to settle a Placee's subscription (and/or the subscription of a person for whom such Placee is contracting as agent) free of stamp duty and stamp duty reserve tax depends on the settlement relating only to a subscription by it and/or such person direct from the Company for the Placing Shares in question. Such agreement assumes that the Placing Shares are not being subscribed for in connection with arrangements to issue depositary receipts or to transfer the Placing Shares into a clearance service. If there are any such arrangements, or the settlement relates to any other subsequent dealing in the Placing Shares, stamp duty or stamp duty reserve tax may be payable, for which neither the Company nor the Bookrunner will be responsible, and the Placee to whom (or on behalf of whom, or in respect of the person for whom it is participating in the Placing as an agent or nominee) the allocation, allotment, issue or delivery of Placing Shares has given rise to such UK stamp duty or stamp duty reserve tax undertakes to pay such UK stamp duty or stamp duty reserve tax forthwith and to indemnify on an after-tax basis and to hold harmless the Company, and the Bookrunner in the event that any of the Company and/or the Bookrunner has incurred any such liability to UK stamp duty or stamp duty reserve tax. If this is the case, each Placee should seek its own advice and notify the Bookrunner accordingly.
In addition, Placees should note that they will be liable for any stamp duty and all other stamp, issue, securities, transfer, registration, documentary or other duties or taxes (including any interest, fines or penalties relating thereto) payable outside the UK by them or any other person on the subscription by them of any Placing Shares or the agreement by them to subscribe for any Placing Shares.
Each Placee, and any person acting on its behalf, acknowledges that the Bookrunner owe no fiduciary or other duties to any Placee in respect of any representations, warranties, undertakings or indemnities in the Placing Agreement.
Each Placee and any person acting on its behalf, acknowledges and agrees that the Bookrunner or any of its respective affiliates may, at their absolute discretion, agree to become a Placee in respect of some or all of the Placing Shares.