THIS ANNOUNCEMENT, INCLUDING THE APPENDIX, AND THE INFORMATION CONTAINED HEREIN, IS NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, OR REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH IT WOULD BE UNLAWFUL TO DO SO.
("fastjet", the “Company” or the “Group”)
21 July 2016
Proposed Placing and Open Offer
fastjet, the low-cost African airline, is pleased to announce a proposed capital raising to raise gross proceeds of £15 million through the issue of new ordinary shares by way of a placing (the “Placing”) and additional gross proceeds of up to approximately £4.2 million (being the €5 million maximum amount permitted not requiring the publication by the Company of a prospectus under the Prospectus Rules) through the issue of up to 8,302,762 new ordinary shares by way of an open offer (the “Open Offer”) (together the “Capital Raising”), all at 50 pence per new ordinary share (the “Issue Price”).
The Issue Price of 50 pence represents a significant premium of approximately 116 per cent to the closing price of each existing ordinary share of fastjet of 23.13 pence on 20 July 2016 (being the last practicable date prior to publication of this Announcement). The Issue Price has been set at a premium to the current share price so as to enable a number of the existing shareholders to satisfy their internal ownership limits. These shareholders, representing over 50% of the share register, have indicated they are supportive of the proposed Placing which will provide the Company with sufficient funds to execute its new business plan.
The Placing which is being conducted by way of an accelerated book-building process to qualifying investors will be launched immediately following this Announcement, in accordance with the terms and conditions set out in the Appendix to this Announcement.
Participants in the Placing and Open Offer will, if the Capital Raising becomes unconditional, also be issued with warrants (“Warrants”) on the basis of one Warrant to subscribe for one new ordinary share in the Company for every new ordinary share subscribed under the Capital Raising. The Warrants will have an exercise price of 31.5 pence per share (based on a share weighted average of the 23.13 pence closing price on 20 July and the Issue Price) and an exercise period from the date of issue until 31 July 2021. The Warrants will be exercisable immediately from the date of issue but will not be initially listed or admitted to trading. However, the Company intends to seek a listing and admission to trading of the Warrants on an appropriate exchange as soon as practicable.
Liberum Capital Limited (“Liberum”) is acting as sole bookrunner (“Bookrunner”) on the Placing. The Placing and Open Offer are not being underwritten.
The Placing and Open Offer are each conditional upon, inter alia, the approval by shareholders in a General Meeting of the Company (“General Meeting”) and admission of the ordinary shares placed pursuant to the Capital Raising to trading on AIM (“Admission”).
The Company will shortly be publishing a circular (the “Circular”) in connection with the Capital Raising and will be convening a General Meeting to approve certain matters necessary to implement the Capital Raising (the “Authorising Resolutions”).
This announcement contains inside information which is disclosed in accordance with the Market Abuse Regulation.
Expected timetable of principal events
Record Date for entitlement under the Open Offer
6.00 p.m. on 20 July
Posting of shareholder circular, the Form of Proxy and, to Qualifying non-CREST shareholders only, the Application Forms
Latest time and date for receipt of Forms of Proxy from
10:00 a.m. on 4 August
Latest time and date for receipt of completed Application Forms and payment in full under the Open Offer
11:00 a.m. on 5 August
General Meeting of the Company
10:00 a.m. on 8 August
Admission and commencement of dealings in the new ordinary shares
The times and dates set out in the table above and mentioned throughout this announcement are indicative only and may be adjusted by the Company (in consultation with Liberum).
Background to the Capital Raising
2015 was a challenging year for fastjet, in which the Company encountered difficult macroeconomic conditions in its markets, delays in obtaining flying rights into Kenya, and new international routes performing below expectations, as well as various changes to executive management and the Board. These challenges contributed to the disappointing financial results and poor cash flow, which were set out in the Annual Report and Accounts 2015.
2015 was also a year of network and fleet growth for fastjet, having raised US$75m by way of an equity fundraising. The fleet grew from three to six aircraft in 2015, including the acquisition of the Group’s first owned aircraft. A second airline and base were launched in Zimbabwe in 2015 and the two airlines currently operate 13 routes to 11 destinations in six countries in Africa.
Since the launch of fastjet Tanzania in 2012, fastjet has carried over 2 million passengers. In 2015, over 775,000 passengers were carried, a 30 per cent. increase on the prior year.
In December 2015, fastjet announced it had been granted approval by the Kenyan government to operate flights between Kenya and Tanzania. Flights between Dar es Salaam and Nairobi were launched in January 2016. However, ticket sales on this route have been lower than anticipated as fastjet experienced delays in setting up distribution channels and competitors reduced their fares.
The trading environment in which the Company operates remains challenging. Although the yield per passenger continues to improve from its low point in October 2015, passenger numbers remain lower than expected. We are pleased to report that domestic routes within Tanzania are showing signs of recovery, however, international services remain challenging.
Passenger numbers for the half year ended 30 June 2016 were approximately 390,000 (2015: 363,726) but load factors have declined to 47 per cent. (2015: 70 per cent.) due to the increase in available capacity from the enlarged fleet in the past 12 months. Although the ongoing cost reduction programme and the recent reduction in routes and fleet size are yielding material benefits, the Group continues to be cash flow negative and, as previously announced, expects to report a trading loss for 2016.
Following a review of the Company’s financial performance in 2015 and scrutiny of its operations, the Board’s revised business plan which includes input from the new CEO, Nico Bezuidenhout, initially prioritises the initiatives required to stabilise the business in the short term. These include continuing with the cost reduction programme and ensuring careful management of the Company’s current cash resources, rationalising routes to match capacity with demand and paring back expansion, with no new routes expected to launch for the remainder of 2016. A more flexible approach to the traditional low cost carrier model will also be employed. Better alignment of the Company’s infrastructure and fleet to its stage of development and ensuring overheads are appropriate for the size of fastjet’s operations is essential, in the Board’s opinion, to achieving the desired improvement in cost management.
There are a number of revenue generating initiatives currently underway. In June 2016 the Company introduced a new mobile payment platform which offers a faster and more convenient means of payment for customers as well as lower transaction costs for fastjet compared with the previous platform. The new system provides improved tracking and data analysis and broadens the geographical scope of fastjet’s mobile money facilities, expecting to reach fastjet customers in more countries and with an estimated 30% reduction in transactions costs.
A new consolidated call centre opened in South Africa in June 2016 offering multi-lingual services and covering Tanzania, Kenya, Uganda, Zambia, Zimbabwe and South Africa markets. The call centre is expected to improve sales conversions and improve the quality of service provided to customers located in those important African markets.
The planned introduction of a Global Distribution System (GDS) in September 2016 is expected to increase sales through improved accessibility to travel agents and compatibility with other airlines’ schedules and ticketing as well as facilitating new and existing interline agreements. The new GDS will offer travel agents greater visibility of fastjet’s routes and schedules and agents will be able to access fastjet seats at better prices compared with the current structure.
Strengthening the Board and its composition is another priority for the Group. As announced on 9 June 2016 Nico Bezuidenhout will be joining the Group on 1 August 2016 as its Chief Executive Officer. Mr Bezuidenhout joins fastjet from Mango Airlines, the low-cost carrier subsidiary of South African Airways, where he has been CEO since Mango commenced operations ten years ago. During his tenure, Mr Bezuidenhout grew the airline's market share to 25 per cent of the South African domestic air travel market and the fleet to ten Boeing 737-800 aircraft. He also achieved the lowest unit cost within the South African aviation industry through high aircraft utilisation and sustained good load factors.
The Board believes that Mr Bezuidenhout will bring strong commercial and strategic skills and a wealth of experience of operating a low-cost carrier in Africa. This experience, together with his detailed knowledge of the markets in which fastjet operates, will be invaluable to the Company as it seeks to stabilise the business and capture the growth opportunities in the region.
Although he has yet to join the Company, the Board and Mr Bezuidenhout have already identified a number of opportunities to stabilise the business and address many of the challenges the Company faces. These include a fundamental review of the fleet, both the size and type of aircraft operated, the routes flown, revenue generation initiatives and the relocation of the Head Office to Africa.
Mr Bezuidenhout will be based in Africa and will oversee the relocation of support functions and management closer to its operations and market. The Company intends to further strengthen the Board with additional Non-Executive Directors in due course.
Upon joining the Company in August 2016 Mr Bezuidenhout will initiate a review of the business. It is envisaged that existing cost cutting programme will be complete by Q4 2016 when the second phase will be initiated. Further to the review, the Company expects further route rationalisation in Q4 2016 when it expects to announce the decision on its fleet. The decision on the head office relocation and its implementation are also expected to commence in Q4 2016. With new revenue initiatives due to commence in Q4 2016, the Company is targetting a cash-flow break even position by the end of 2017.
With stability established, the Company’s medium to long term strategy remains to realise its vision of becoming a pan-African low-cost carrier.
Although the ongoing cost reduction programme and the recent reduction in routes and fleet size are yielding material benefits the Group continues to be cash flow negative. Accordingly the funds raised from this proposed Placing will provide the Group with essential working capital and importantly the resources to effect the necessary changes to our operations and fleet, to reduce costs further and pursue revenue generating initiatives. In addition, funds received from the Open Offer will allow the Board additional flexibility as they execute their new business plan.
With funding in place, the Board will implement its revised business plan and expects to see future growth as markets improve.
The Board believes that with a new CEO, who has a proven track record of successfully operating a low cost carrier in Africa, combined with a more pragmatic approach to operating the business, a much reduced cost base and management positioned in proximity to our markets and customers the Group has a viable and attractive future.
Use of proceeds
The Company will use the proceeds of the Capital Raising (after expenses) as follows:
In addition to the Capital Raising, the Company is intending to sell its owned Airbus A319 in the course of the next 6-12 months. There can be no certainty that a sale on commercially acceptable terms will be achievable but should a sale be completed, the net proceeds of the sale will augment the use of proceeds set out above.
The Directors believe that following receipt of the proceeds of the Placing, the Company will have sufficient working capital to finance its operations for at least the next 12 months.
Details of the Placing, Open Offer and Warrants to Subscribe
Details of the Placing
The Placing is being conducted by way of an Accelerated Book-Build led by Liberum as Sole Bookrunner.
Based on the Issue Price, the proceeds of the Placing net of expenses will be approximately £14.3 million. Liberum will receive its professional fees pursuant to the Placing in the form of new ordinary shares in the Company at the Issue Price.
Details of the number of new ordinary shares conditionally placed with institutional and other investors pursuant to the Placing (“Placing Shares”) and gross proceeds will be announced as soon as practicable after the close of the book-building process.
The books for the Accelerated Book-Build will open with immediate effect. The books are expected to close no later than 3.00 pm (London) today. The timing of the closing of the books and the making of allocations may be accelerated or delayed at the Bookrunner’s sole discretion. The Appendix to this Announcement contains the detailed terms and conditions of the Accelerated Book-Build. The Placing is not being underwritten by Liberum or any other person.
Qualifying investors who are invited, and who choose, to participate in the Accelerated Book-Build by making an oral and legally binding offer to acquire Placing Shares, will be deemed to have read and understood this Announcement in its entirety, including the Appendix, and to be making such offer on the terms and subject to the conditions contained herein and to be making the representations, warranties, undertakings and acknowledgements contained in the Appendix to this Announcement.
The Placing Shares will be issued credited as fully paid and will rank pari passu with existing ordinary shares of the Company (“Existing Ordinary Shares”), including the right to receive all dividends and other distributions (if any) declared, made or paid on or in respect of such shares after the date of their issue.
The Company has entered into a placing agreement (the “Placing Agreement”) with the Bookrunner on customary terms and conditions pursuant to which the Bookrunner has conditionally agreed, as agents for the Company, to use its reasonable endeavours to procure Placees for the Placing Shares at the Issue Price.
Your attention is drawn to the detailed terms and conditions of the Placing described in the Appendix to this announcement (which forms part of this announcement) (together, the “Announcement”).
Details of the Open Offer
Subject to the fulfilment of certain conditions, Qualifying Shareholders are being given the opportunity to subscribe for new ordinary shares pursuant to the Open Offer (“Open Offer Shares”) at a price of 50 pence per Open Offer Share, pro rata to their holdings of Existing Ordinary Shares on the Record Date on the basis of:
1 Open Offer Share for every 8 Existing Ordinary Shares
Open Offer Entitlements will be rounded down to the nearest whole number of Open Offer Shares.
Qualifying Shareholders are also being given the opportunity, provided that they take up their Open Offer Entitlement in full, to apply for Excess Shares through the Excess Application Facility.
The Open Offer Shares will be allotted and issued following and conditional on, inter alia, the passing of the Authorising Resolutions at the General Meeting.
Assuming full take-up under the Open Offer, the issue of the Open Offer Shares will raise further gross proceeds of approximately £4.2 million for the Company.
The Open Offer Shares will, upon issue, rank pari passu with the Placing Shares and the Existing Ordinary Shares.
Qualifying Shareholders with holdings of Existing Ordinary Shares in both certificated and uncertificated form will be treated as having separate holdings for the purpose of calculating the Open Offer Entitlements.
It should be noted that the Open Offer is not a rights issue. Accordingly, the Application Form is not a document of title and cannot be traded. Any Open Offer Shares not applied for under the Open Offer will not be sold in the market or placed for the benefit of Qualifying Shareholders who do not take up their rights to subscribe under the Open Offer.
Excess Application Facility
The Excess Application Facility will enable Qualifying Shareholders, provided that they take up their Open Offer Entitlement in full, to apply for Excess Open Offer Entitlements.
Qualifying non-CREST Shareholders who wish to apply to acquire more than their Open Offer Entitlement should complete the relevant sections on the Application Form. Qualifying CREST Shareholders will have Excess CREST Open Offer Entitlements credited to their stock account in CREST and should refer to paragraph 4 of Part III of the Circular for information on how to apply for Excess Shares pursuant to the Excess Application Facility. Open Offer Shares will be available to satisfy Excess Open Offer Entitlements only and to the extent that applications by other Qualifying Shareholders are not made or are made for less than their Open Offer Entitlements. Once subscriptions by Qualifying Shareholders under their respective Open Offer Entitlements have been satisfied, the Company shall, in its absolute discretion, determine whether to meet any excess applications in full or in part and no assurance can be given that applications by Qualifying Shareholders under the Excess Application Facility will be met in full, in part or at all.
Application will be made for the Open Offer Entitlements and Excess Open Offer Entitlements in respect of Qualifying CREST Shareholders to be admitted to CREST. It is expected that such Open Offer Entitlements and Excess Open Offer Entitlements will be admitted to CREST at 8.00 a.m. on 25 July 2016. Such Open Offer Entitlements and Excess Open Offer Entitlements will also be enabled for settlement in CREST at 8.00 a.m. on 25 July 2016. Applications through the means of the CREST system may only be made by the Qualifying Shareholder originally entitled or by a person entitled by virtue of a bona fide market claim.
Qualifying non-CREST Shareholders will receive an Application Form with the Circular which sets out their entitlement to Open Offer Shares as shown by the number of Open Offer Entitlements allocated to them. Qualifying non-CREST Shareholders should note that the Application Form is not a negotiable document and cannot be traded.
Qualifying CREST Shareholders will receive a credit to their appropriate stock accounts in CREST in respect of their Open Offer Entitlements as soon as possible after 8.00 a.m. on 9 August 2016. Qualifying CREST Shareholders should note that although the Open Offer Entitlements and Excess Open Offer Entitlements will be admitted to CREST and be enabled for settlement, applications in respect of entitlements under the Open Offer may only be made by the Qualifying Shareholder originally entitled or by a person entitled by virtue of a bona fide market claim.
If applications are made for less than all of the Open Offer Shares available, then the lower number of Open Offer Shares will be issued and any outstanding Open Offer Entitlements will lapse.
Further information on the Open Offer and the terms and conditions on which it is made, including the procedure for application and payment, are set out in Part III of the Circular.
For Qualifying non-CREST Shareholders, completed Application Forms, accompanied by full payment, should be returned by post or by hand (during normal business hours only) to Neville Registrars Limited at Neville House, 18 Laurel Lane, Halesowen, West Midlands, B63 3DA so as to arrive as soon as possible and in any event so as to be received no later than 11.00 a.m. on 5 August 2016. For Qualifying CREST Shareholders the relevant CREST instructions must have been settled as explained in the Circular by no later than 11.00 a.m. on 5 August 2016.
Warrants to Subscribe
The Warrants to subscribe will be issued to Placees under the terms of the Placing and to Open Offer subscribers under the terms of the Open Offer on the basis of one Warrant to subscribe for one new ordinary share in the Company for every new ordinary share subscribed under the Capital Raising. The Warrants will have an exercise price of 31.5 pence per share and an exercise period from the date of issue until 31 July 2021 and if not exercised prior to that date shall lapse.
Conditions and other information relating to the Capital Raising.
The Placing, the Open Offer and the issue of the Warrants to Subscribe are conditional, inter alia, upon:
Accordingly, if such conditions are not satisfied, or, if applicable, waived, the respective part or parts of the Capital Raising will not proceed. If the Placing does not proceed, the Company will not have sufficient working capital to finance its operations for the next 12 months.
If the Open Offer does not proceed any applications made by Qualifying Shareholders will be rejected and application monies will be returned without payment of interest as soon as practicable.
Related Party Transactions
M&G Investment Management Ltd, by virtue of its holding of more than 10 per cent. of the existing issued share capital of the Company, is considered a related party of the Company and its participation in the Placing is considered a ‘related party transaction’ under the AIM Rules for Companies. The Directors consider having consulted the Company’s Nominated Adviser, Liberum, that the terms of the Placing are fair and reasonable in so far as its Shareholders are concerned.
Application for Admission to trading on AIM
Application will be made to the London Stock Exchange for the New Ordinary Shares to be admitted to trading on AIM. It is expected that Admission will become effective and that dealings for normal settlement in the New Ordinary Shares on AIM will commence at 8.00 a.m. on 9 August 2016.
As at the close of business on 20 July 2016 the price of the Existing Ordinary shares was 23.13 pence which is below their nominal value of £1 per share. The issue of new shares by a UK company at a price below their nominal value is prohibited by UK company law and accordingly it is not possible to effect the Capital Raising without reorganising the Existing Ordinary Shares.
Accordingly the Directors are seeking Shareholders' authority to implement the reorganise the Existing Ordinary Shares so that the nominal value of the Company’s ordinary shares is changed to 1p to enable the Placing and Open Offer Shares to be issued at the Issue Price.
In order to effect the Reorganisation each Existing Ordinary Share of £1 each be subdivided and converted into one New Ordinary Share of 1p and 11 B Deferred Shares of 9p each.
As a consequence of the Reorganisation each Shareholder’s holding of New Ordinary Shares will immediately following the Reorganisation becoming effective be exactly the same as the number of Existing Ordinary Shares held by them on the Record Date.
The New Ordinary Shares will continue to carry the same rights as attached to the Existing Ordinary Shares. The last day of trading on AIM in the Existing Ordinary Shares is expected to be 8 August 2016.
If the Reorganisation is approved, the New Ordinary Shares will be admitted to trading on AIM with no change to the existing ISIN: GB00BWGCH354.
As the number of New Ordinary Shares held be each holder will remain the same following the Reorganisation, no new share certificates will be issued, and existing certificate(s) will remain valid for the quantity shown.
Shareholders who hold their entitlement to Existing Ordinary Shares in uncertificated form through CREST should expect the CREST description of the stock adjusted to reflect their nominal value on 9 August 2016.
Following the Reorganisation Existing Shareholders will hold, in addition to each New Ordinary Share which they hold, 11 B Deferred Shares of 9p each. The B Deferred Shares will be effectively valueless as they will not carry any rights to vote or dividend rights. In addition, holders of B Deferred Shares will only be entitled to a payment on a return of capital or on a winding up of the Company after each of the holders of Ordinary Shares have received a payment of £10,000,000 on each such share. The B Deferred Shares will not be listed or traded on AIM and will not be transferable without the prior written consent of the Board. No share certificates will be issued in respect of the B Deferred Shares, nor will CREST accounts of shareholders be credited in respect of any entitlement to B Deferred Shares.
For more information, contact:
Tel: +44 (0) 20 3651 6307
Colin Child, Executive Chairman
Lisa Mitchell, Chief Financial Officer
UK media - Citigate Dewe Rogerson
Tel: +44 (0) 20 7638 9571
South African media - Tribeca Public Relations
Tel: +27 (0) 11 208 5500
Cian Mac Eochaidh
For investor enquiries please contact:
Liberum Capital Limited - Nominated Adviser and Joint Broker
Tel: +44 (0) 20 3100 2222
W.H. Ireland Ltd.- Joint Broker
Tel: +44 (0) 20 7220 1666
fastjet Plc is the holding company of the low cost airline fastjet which commenced flights under the fastjet brand in Tanzania in November 2012. fastjet Zimbabwe was successfully launched in October 2015. By adhering to international standards of safety, quality, security and reliability; fastjet has brought a new flying experience to the African market at unprecedented low prices. Utilising its fleet of Airbus A319s, fastjet is implementing the low-cost model across Africa and its long-term strategy is to become the continent's first low-cost, pan-African airline.
The results of a customer satisfaction survey showed that 100% of customers were likely to recommend fastjet to a friend. In developing its strong brand and identity, fastjet has won and been nominated for a number of awards, including winning three Transform awards for the rebrand and launch of fastjet, the award for "Brand Strategy of the Year" at 2014's Drum Marketing Awards in London, and the Transport Innovator Award at the 8th Transport Africa Awards 2015 in Johannesburg.
fastjet Plc is quoted on the London Stock Exchange's AIM Market.
For more information see www.fastjet.com
This Announcement contains (or may contain) certain forward-looking statements with respect to certain of the Company's plans and its current goals and expectations relating to its future financial condition and performance and which involve a number of risks and uncertainties. The Company cautions readers that no forward-looking statement is a guarantee of future performance and that actual results could differ materially from those contained in the forward-looking statements. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements sometimes use words such as "aim", "anticipate", "target", "expect", "estimate", "intend", "plan", "goal", "believe", or other words of similar meaning. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances, including, but not limited to, economic and business conditions, the effects of continued volatility in credit markets, market-related risks such as changes in the price of commodities or changes in interest rates and foreign exchange rates, the policies and actions of governmental and regulatory authorities, changes in legislation, the further development of standards and interpretations under International Financial Reporting Standards (IFRS) applicable to past, current and future periods, evolving practices with regard to the interpretation and application of standards under IFRS, the outcome of pending and future litigation or regulatory investigations, the success of future explorations, acquisitions and other strategic transactions and the impact of competition. A number of these factors are beyond the Company's control. As a result, the Company's actual future results may differ materially from the plans, goals, and expectations set forth in the Company's forward-looking statements. Any forward-looking statements made in this Announcement by or on behalf of the Company speak only as of the date they are made. Except as required by the Financial Conduct Authority (the FCA), the London Stock Exchange or applicable law, the Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained in this Announcement to reflect any changes in the Company's expectations with regard thereto or any changes in events, conditions or circumstances on which any such statement is based.
This Announcement is for information purposes only and shall not constitute an offer to buy, sell, issue, or subscribe for, or the solicitation of an offer to buy, sell, issue, or subscribe for any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
This Announcement has been issued by and is the sole responsibility of the Company. No representation or warranty, express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by Liberum or by any of their respective affiliates or agents as to, or in relation to, the accuracy or completeness of this Announcement or any other written or oral information made available to or publicly available to any interested party or its advisers, and any liability therefore is expressly disclaimed.
Liberum, which is authorised and regulated in the United Kingdom by the FCA, is acting for the Company and for no-one else in connection with the Placing, and will not be responsible to anyone other than the Company for providing the protections afforded to its customers or for providing advice to any other person in relation to the Placing or any other matter referred to herein.
The distribution of this Announcement and the offering of the Placing Shares in certain jurisdictions may be restricted by law. No action has been taken by the Company or any of Liberum that would permit an offering of such shares or possession or distribution of this Announcement or any other offering or publicity material relating to such shares in any jurisdiction where action for that purpose is required. Persons into whose possession this Announcement comes are required by the Company and Liberum to inform themselves about, and to observe such restrictions.
Persons (including, without limitation, nominees and trustees) who have a contractual or other legal obligation to forward a copy of the Appendix or this Announcement should seek appropriate advice before taking any action.
The Placing Shares to which this Announcement relates may be illiquid and / or subject to restrictions on their resale. Prospective purchasers of the Placing Shares should conduct their own due diligence on the Placing Shares. If you do not understand the contents of this Announcement you should consult an authorised financial adviser.
Neither the content of the Company's website nor any website accessible by hyperlinks on the Company's website is incorporated in, or forms part of, this Announcement.
APPENDIX: TERMS AND CONDITIONS OF THE PLACING
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, OR 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 RELATES 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 are invited to and who choose to participate in the Placing, by making (or on whose behalf there is made) an oral or written offer to subscribe for Placing Shares (the Placees), will be deemed to have read and understood this Announcement, including this Appendix, in its entirety and to be making such offer on the terms and conditions, and to be providing the representations, warranties, acknowledgements, and undertakings contained in this Appendix. In particular each such Placee represents, warrants and acknowledges to the Company and the Bookrunner that:
The Company and the Bookrunner will rely upon the truth and accuracy of the foregoing representations, 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 or the Republic of South Africa or in any other jurisdiction in which such publication or distribution is 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 or 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
Liberum has entered into the Placing Agreement with the Company under which Liberum has conditionally agreed on the terms and subject to the conditions set out therein, as agent for the Company, to use its reasonable endeavours to place the Placing Shares at the Issue Price with certain institutional investors. The Placing is not being underwritten by Liberum or any other person.
The number of Placing Shares at the Issue Price will be determined following completion of the Accelerated Book-Build 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 Ordinary Shares, including the right to receive all dividends and other distributions (if any) declared, made or paid on or in respect of the Existing Ordinary Shares after the date of issue of the Placing Shares.
Application for admission to trading
Application will be made for admission of the Placing Shares to trading on AIM. It is expected that settlement of any such shares and Admission will become effective on or around 8.00 am on 9 August 2016 and that dealings in the Placing Shares will commence at that time.
The Bookrunner will today commence an accelerated book-building process in respect to the Placing to determine demand for participation in the Placing by any Placees at the Issue Price. This Appendix gives details of the terms and conditions of, and the mechanics of participation in, the Accelerated Book-Build. No commissions will be paid to Placees or by Placees in respect of any Placing Shares.
The Bookrunner and the Company shall be entitled to effect the Placing (in whole or in part) by such alternative method to the Accelerated Book-Build as they may, in their sole discretion, determine.
Participation in, and principal terms of, the Placing
Conditions of the Placing
Completion of the Placing is conditional on, inter alia:
If: (i) any of the conditions contained in the Placing Agreement in relation to the Placing Shares are not fulfilled or waived by the Bookrunner by the respective time or date where specified (or such later time or date as the Company and the Bookrunner may agree, but not being later than 8.00 am on 31 August 2016); (ii) any of such conditions becomes incapable of being fulfilled; or (iii) the Placing Agreement is terminated in its entirety (i.e., with no step-in rights being exercised by the Bookrunner) in the circumstances specified below, the Placing will lapse and the Placee’s rights and obligations hereunder in relation to the Placing Shares shall cease and terminate at such time and each Placee agrees that no claim can be made by the Placee against the Bookrunner in respect thereof.
The Bookrunner 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 Liberum nor the Company shall have any liability to any Placee (or to any other person whether acting on behalf of a Placee or otherwise) in respect of any decision they may make as to whether or not to waive or to extend the time and/or date for the satisfaction of any condition to the Placing nor for any decision they may make as to the satisfaction of any condition or in respect of the Placing generally and by participating in the Placing, each Placee agrees that any such decision is within the absolute discretion of the Bookrunner.
Right to terminate under the Placing Agreement
The Bookrunner is entitled, at any time before Admission, to terminate its obligations under the Placing Agreement by giving notice to the Company in certain circumstances, including, inter alia:
Following Admission, the Placing Agreement is not capable of termination to the extent that it relates to the Placing of the Placing Shares. The rights and obligations of the Placees shall terminate only in the circumstances described in these terms and conditions and 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 the Bookrunner of any right of termination or other discretion under the Placing Agreement shall be within the absolute discretion of the Bookrunner, and that it need not make any reference to Placees and that it shall have no liability to Placees whatsoever in connection with any such exercise.
The Placing Shares are being offered to a limited number of specifically invited persons only and will not be offered in such a way as to require a 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 any Placees’ commitments will be made solely on the basis of the information contained in the Announcement (including this Appendix) and the Exchange Information (as defined further below).
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 any of Liberum 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 any of 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
Settlement of transactions in the Placing Shares (ISIN: GB00BWGCH354) following Admission will take place within the system administered by Euroclear UK & Ireland Limited (CREST) provided that, subject to certain exceptions, the Bookrunner reserves the right to require settlement for, and delivery of, the Placing Shares (or a portion thereof) to Placees by such other means that they deem 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.
Following the close of the Accelerated Book-Build, 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 Issue Price, the aggregate amount owed by such Placee to the Bookrunner (in GBP) and settlement instructions. Each Placee agrees that it will do all things
Posted on 21st July 2016