RNS Number:9447R
D1 Oils Plc
09 April 2008
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO THE UNITED STATES OF
AMERICA, AUSTRALIA, CANADA OR JAPAN
D1 Oils plc
9 April 2008
D1 Oils plc
Proposed Placing of 64,384,000 new Ordinary Shares
D1 Oils plc ("D1" or the "Company") plans to raise �16.1 million (approximately
�14.9 million after expenses) through a placing with existing shareholders of
64,384,000 new Ordinary Shares in the Company at 25 pence per Ordinary Share
(the "Placing Shares").
Highlights
* Placing of 64,384,000 new Ordinary Shares at 25 pence per share raising
�16.1 million before expenses
* Proceeds of the Placing will be used to fund inter alia:
o Revised strategy and growth of the business
o D1's continued investment in its plant science business
o D1's future cash contributions in relation to its joint venture with BP
This announcement includes the text of a letter from the Chairman of the Company
included in a circular to shareholders to be posted on 9 April 2008, which
includes further information on the Placing and an update on current
developments of the business of the Company.
Dresdner Kleinwort Securities Limited, Broker to the Company, is placing the
Placing Shares with existing shareholders as agent for the Company. Dresdner
Kleinwort Limited is Nominated Adviser to the Company.
The Placing is subject to shareholder approval at an Extraordinary General
Meeting to be held on 9 May 2008.
The Placing Price represents a discount of approximately 34 per cent. to the
closing middle market price of 37.75 pence per share on 8 April 2008, the last
Business Day prior to this announcement.
The full terms and conditions of the Placing are set out in Appendix II to this
announcement.
Lord Oxburgh of Liverpool, Non-Executive Chairman of D1, said,
"The political momentum to reduce emissions from transport and enhance energy
security remains substantial in the majority of developed economies, and there
is growing recognition of the potential for farmers in the developing world to
meet this demand. Against this background there is real concern that it will not
be possible to meet demand for both fuel and food without threatening forests in
developing countries. In this situation, Jatropha curcas brings the advantages
of reforestation and sequestration of CO2 in the trees and their root systems,
the production of a feedstock oil for biodiesel from the grain, and the creation
of jobs in some of the poorest parts of the world. The short-term challenges
facing the European biofuels industry only serve to reinforce the long-term
global requirement for low-cost, alternative feedstocks to produce biofuels.
This reinforces the imperative at the heart of D1's business strategy: the need
to develop low-cost supplies of alternative, sustainable raw materials for
biofuels that are not subject to the same price pressures as food-grade crops.
We are therefore refocusing the business on the upstream breeding, planting and
managing of new varieties of sustainable, commercial biofuel crops, principally
Jatropha curcas, and intend to withdraw from refining and trading operations in
the UK. The outcome of this placing and the significant levels of interest shown
by the investment community demonstrate the continuing market confidence in the
potential of D1's business plan and its strategy to build a leadership position
in the global biofuels industry."
Enquiries:
D1 Oils plc
Graham Prince, Director, Corporate Communications
Tel: +44 (0) 3043 8732
Mob: +44 (0)7973 323 840
Brunswick Group
Kate Holgate
Tel: +44 (0) 20 7404 5959
Dresdner Kleinwort
David Hutchison, Managing Director
Keith Welch, Vice President
Tel: +44 (0) 20 7623 8000
This announcement does not constitute an offer to sell or an invitation to
subscribe for, or the solicitation of an offer to buy or to subscribe for,
Ordinary Shares in any jurisdiction in which such an offer or solicitation is
unlawful and is not for distribution in or into Canada, Japan, the United States
or Australia (a "Prohibited Jurisdiction"). The Ordinary Shares have not been
and will not be registered under the Securities Act or under the applicable
securities laws of any state in the United States or any Prohibited Jurisdiction
and, unless an exemption under such acts or laws is available, may not be
offered for sale or subscription or sold or subscribed directly or indirectly
within a Prohibited Jurisdiction or for the account or benefit of any national,
resident or citizen of a Prohibited Jurisdiction. The distribution of this
announcement in other jurisdictions may be restricted by law and therefore
persons into whose possession this announcement comes should inform themselves
about and observe any such restrictions. Any failure to comply with these
restrictions may constitute a violation of the securities laws of such
jurisdictions.
The contents of this announcement are not to be construed as legal, financial or
tax advice. If necessary, each recipient of this announcement should consult
his, her or its own legal adviser, financial adviser or tax adviser for legal,
financial or tax advice.
Dresdner Kleinwort Limited and Dresdner Kleinwort Securities Limited, who are
authorised and regulated by the Financial Services Authority, and Dresdner Bank
AG, London Branch, which is authorised by BAFin and by the Financial Services
Authority and which is regulated by the Financial Services Authority for the
conduct of designated investment business in the United Kingdom, are 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 clients of Dresdner Bank AG, London Branch, Dresdner Kleinwort
Securities Limited and Dresdner Kleinwort Limited, or for affording advice in
relation to the Placing, or any other matters referred to herein. The
responsibilities of Dresdner Kleinwort Limited, as Nominated Adviser under the
AIM Rules, are owed solely to the London Stock Exchange and are not owed to the
Company or to any of the Directors.
No representation or warranty, express or implied, is made by Dresdner Kleinwort
Limited, Dresdner Kleinwort Securities Limited and/or Dresdner Bank AG, London
Branch as to any of the contents of this announcement for which D1 is solely
responsible.
This announcement contains certain statements that are or may be
forward-looking. These statements typically contain words such as "intends",
"expects", "anticipates", "estimates" and words of similar import. By
their nature, forward-looking statements involve risk and uncertainty because
they relate to events and depend on circumstances that will occur in the future
and therefore undue reliance should not be placed on such forward-looking
statements. Forward-looking statements speak only as of the date they are made
and the Company undertakes no obligation to update publicly any of them in light
of new information or future events except as required by the AIM Rules. There
are a number of factors that could cause actual results and developments to
differ materially from those expressed or implied by such forward-looking
statements.
THE SECURITIES REFERRED TO IN THIS ANNOUNCEMENT HAVE NOT BEEN REGISTERED WITH,
RECOMMENDED, APPROVED OR DISAPPROVED BY ANY UNITED STATES FEDERAL OR STATE
SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING
AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS
ANNOUNCEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENCE IN THE
UNITED STATES.
The following is an abridged version of the text of the letter from the Chairman
of the Company included in a circular to be sent to Shareholders on 9 April
2008.
"Introduction
Your Board has today announced that the Company plans to raise �16.1 million
before expenses (approximately �14.9 million after expenses) through a placing
with existing shareholders, underwritten by DBAG, of 64,384,000 Ordinary Shares
in the Company at 25 pence per Ordinary Share. The purpose of this document is
to provide you with further information on the Placing and to convene the EGM to
seek the approval of Shareholders for the Resolutions necessary to effect the
Placing.
Development of the business to date
Since D1 was listed on AIM in October 2004, the Company has made significant
progress in seeking to establish a global biodiesel business. In June 2005, we
raised funding of �24.4 million to enable the business to work towards a vision
of creating value from "earth to engine" through three core activities of
agronomy, refining and trading. In December 2006, a further �49.2 million was
raised to fund the development of our plant science programme and to expand our
UK refining capacity.
In June 2007, we announced our 50/50 joint venture with BP, which was approved
by our shareholders at an extraordinary general meeting in July. The
establishment of the joint venture vehicle, D1-BP Fuel Crops, recognises the
potential for the development of biofuels that make use of marginal land. In
operational terms, we believe it is turning the range of jatropha planting
operations and relationships established by D1 internationally since 2005 into a
cohesive, integrated and sustainable production base for the supply of crude
jatropha oil at competitive prices.
With effect from 1 October 2007, all of D1's planting of Jatropha curcas has
been through D1-BP Fuel Crops and it is now able to approach planting and supply
chain activities with greater thoroughness; calculating the performance of
existing planting more accurately; concentrating planting on areas where the
crop is proven to grow well; evaluating the likely logistical costs of bringing
oil to market and assessing the ability of third party grain and oil supply
partners to deliver.
Total planting and rights to off-take at 31 March 2008 was 192,016 hectares
worldwide. D1-BP Fuel Crops is evaluating a range of options for organising
planting operations along with different models to seek to optimise the future
delivery of oil to market. We expect that D1-BP Fuel Crops will produce its
first modest volumes of jatropha oil during the second half of 2008.
In tandem with the formation of D1-BP Fuel Crops, D1's plant science programme
has been established as a separate company, wholly owned by D1 Oils plc. D1 Oils
Plant Science Limited ("DOPSL") now acts as the exclusive supplier to D1-BP Fuel
Crops of elite planting material. It also implements its Sustainable Oil Supply
Programme (SOSP) to enable oil production forecasting and to monitor the
implementation of sustainability policies.
Our plant science operations have made solid progress throughout the year and
have been expanded to support joint venture planting in each region.
2007 brought significant challenges for the biofuels industry, including rising
feedstock prices and growing concerns in Europe over the sustainability of some
feedstocks. Imports of heavily subsidised biodiesel from the United States into
the EU market have exacerbated these issues. These challenges, we believe, have
reinforced the imperative at the heart of D1's business strategy: the need to
develop low-cost, long-term supplies of sustainable, alternative, feedstock for
biofuels that are not subject to the same price pressures as food-grade crops.
We believe that the development of alternative, sustainable biofuels feedstocks,
of which Jatropha curcas is one of the most promising, offers significant
opportunities for growth in the biofuels sector.
In light of this potential and the continuing difficulties facing biodiesel
refining in EU markets, D1 intends to cease its refinery and trading operations
and, instead, to refocus its business exclusively on technology and services
required for the upstream breeding, development and planting of new varieties of
commercial biofuel crops. As announced on 7 March 2008, we have already
commenced a consultation process with employees at both our Middlesbrough and
Bromborough sites. Insofar as we have not done so already, we will consult with
employees in relation to the future of the sites including their potential
closure/sale.
Update on activities
Plant science and technology
We have continued to make solid progress in our plant science programme. We have
expanded our collection of Jatropha curcas accessions from around the globe, and
began putting the most promising varieties from our already significant
collection through commercial breeding and product placement trials to identify
optimal adaptation to different cultivation conditions. As at 31 December 2007,
we had a total of 33 product placement and research trial sites for jatropha in
operation worldwide.
We have established a central breeding and development facility in Cape Verde
and transferred our global collection of jatropha material to this site. We are
expanding our research and testing infrastructure worldwide in anticipation of
the growth in business from the D1-BP Fuel Crops joint venture. We have begun to
establish new plant science development centres, and further facilities are
planned for other countries in which D1-BP Fuel Crops will operate, enabling D1
to support fully the joint venture's planting activities.
We have continued the development of our breeding programme to create the first
cultivars for future selection of high-yielding jatropha varieties.
Multiplication of our first generation E1 material, selected for higher yield
and good biodiesel profile, has begun in all three operating regions. D1-BP Fuel
Crops has already commenced planting selected E1 seedlings and intends to plant
a total of approximately 50,000 hectares with E1 material in 2008. All of D1's
seed orchards are now operational and have to date delivered some 20 tonnes of
planting seed, sufficient to plant approximately 10,000 hectares of the E1
planting planned for 2008.
D1 is also building relationships with leading agricultural and plant science
research institutions in operating regions. We recently signed an agreement with
ICRISAT to undertake research into jatropha in Andhra Pradesh in India. ICRISAT
(www.icrisat.org) undertakes agricultural research and capacity building for
sustainable development in the dry tropics through better agriculture. D1 Oils
Plant Science will work with ICRISAT to collect, screen and identify jatropha
with high yield potential and oil content, develop suitable agronomy practices
for sole cropping and identify the most profitable food and feed crops for
intercropping with jatropha.
A significant development in 2007 was D1's exclusive worldwide service agreement
with Keygene NV of the Netherlands (www.keygene.com), one of the global leaders
in the science of genetic fingerprinting, in particular molecular markers and
marker-assisted breeding approaches. The agreement provides D1 with the
exclusive rights to contract research and molecular services carried out by
Keygene on jatropha. We believe this technology has the potential to increase
significantly the effectiveness of D1's breeding programme for jatropha.
During 2007, we introduced our SOSP to seek to implement optimal agronomy
practices for the development of Jatropha curcas as a sustainable feedstock.
Central to the programme is the surveying of jatropha plantations to identify
key success and risk factors for sustainable planting. D1 began survey activity
in the first half of the year in co-operation with joint venture partners and
farmers, and continues in co-operation with D1-BP Fuel Crops. The surveys record
performance data to enable grain and oil production forecasts and also gather
wider information on planting and stewardship practices. The latter form the
basis of the ongoing development of recommended planting and maintenance
methods, training manuals and guidance for the optimisation of oil yields.
Initially focusing on planting and cultivation, the surveys will also extend to
harvesting and expelling techniques, logistics and storage. The programme also
monitors the implementation of policies for social, economic and environmental
sustainability.
In addition to focusing on jatropha, we are undertaking early stage
investigation into a range of alternative, sustainable crops for the production
of biofuel. Under the terms of our joint venture arrangements, D1-BP Fuel Crops
has a right to access (with the agreement of its shareholders) any new biodiesel
crops that D1 may develop.
The plant science team is also leading our programme to develop a commercial
technology for the removal of anti-nutritional compounds present in jatropha
meal after oil extraction. Having quantified compounds present in the meal and
having measured their bioactivity, we have developed a laboratory extraction
method to test extracted fractions and ensure the removal of unwanted elements.
We are now moving to the next stage of the development process to create a
large-scale extraction method.
Between 10 August 2004 and 26 November 2004, D1 entered into a number of
agreements in India with Nandan Biomatrix Limited, an Indian plant science
company, for the supply and development of jatropha seeds. On 17 June 2005,
Nandan submitted a claim to D1 for Rs. 80,796,029 (c.�1.0m), alleging that D1
was in breach of these agreements and that a termination agreement
(extinguishing Nandan's claims) is a forgery. D1 considers these claims
groundless. On 10 August 2005, Nandan attempted to refer the dispute to
arbitration, but failed on procedural grounds. Nandan have attempted this again
and its application to appoint an arbitrator is currently before the Indian
courts. On 25 March 2008, Nandan obtained a "freezing" injunction in the Indian
courts against the incorrectly named "D1 Oils Limited". Having taken Indian
legal advice, D1 does not consider the injunction to be of any effect, although
steps are being taken to dissolve it on substantive grounds.
D1-BP Fuel Crops
D1-BP Fuel Crops began operations on 1 October 2007. The new company is
expanding its international team to handle the range of new functions that will
be required for the delivery of crude jatropha oil to the market, including
sustainability and supply chain management. These new areas of expertise are
being added to the core group of experienced D1 managers and field staff in the
regions.
D1-BP Fuel Crops has commenced a strategic review of its business and is
evaluating a range of options for organising planting operations, logistics and
processing to seek to optimise the future delivery of oil to the developing
international market for biofuels. Key to this planning process is establishing
oil forecasts. Based on data gathered to date through surveys on the cropped
area being undertaken through the SOSP provided by D1, D1-BP Fuel Crops is
expecting to deliver the first quantities of jatropha oil during the second half
of 2008. Initial quantities of oil are expected to be modest but should increase
year on year as existing trees mature and as new trees become productive.
Planting and planting relationships now managed by the D1-BP Fuel Crops group
include the significantly expanded jatropha footprint achieved by D1 during the
first half of 2007. This includes planting undertaken by D1 in partnership with
Williamson Magor, one of India's leading tea companies, in North East India
which now stands at over 62,000 hectares. Planting in South East Asia, which
expanded steadily during the year, includes relationships established with new
partners in Indonesia, including PT Astra Agro Lestari, part of the Jardine
Matheson Group, for the creation of a 500 hectare pilot jatropha plantation.
As knowledge and experience of the performance of Jatropha curcas in different
climate and soil conditions and under different planting and maintenance regimes
increases, D1-BP Fuel Crops is assessing the performance and commercial
viability of the area planted to date and the viability of planting areas in
terms of logistics and access to markets. Greater rigour is being introduced
into relationships with third party oil and seed suppliers. Relationships with
suppliers and the reliability of their planting and ability to deliver grain are
regularly assessed. Where felt appropriate, D1-BP Fuel Crops is remeasuring the
quantity of planting achieved as well as seeking to develop new ways to better
measure and monitor planted areas in future. Relationships with suppliers whose
planting is unlikely to be viable or who are unable to deliver grain will,
subject to the terms thereof, likely be replaced with agreements with new
partners whom the joint venture judges to be better positioned to deliver over
the longer term.
The table below indicates the broad geographic locations and types of
arrangements associated with jatropha planting worldwide in which D1-BP Fuel
Crops has an interest. The level of investment costs and security of future oil
supply will depend on the degree of direct involvement by D1-BP Fuel Crops and
its joint venture partners. It is the policy of D1-BP Fuel Crops that where
trees are lost due to natural wastage or mortality, or where planting has not
taken, such agricultural risks are reflected in the planting table as soon as
they are identified. This is in contrast to the previous policy of D1 whereby
either replanting or new planting was undertaken in the following planting
season and only the net increase in planting recorded. Where D1-BP Fuel Crops
considers replanting inappropriate or not possible, a provision is made and the
planting reported net. D1-BP Fuel Crops' policy, which will be utilised by D1
from hereon, may lead to greater volatility in reported planting.
Accordingly, D1- BP Fuel Crops has made provisions against planting that is
either unlikely to deliver the requisite quantity and quality, or which is too
far from available logistics facilities to make harvest and transport viable. D1
has entered into discussions with D1-BP Fuel Crops and BP as to whether or not
there was a planting shortfall as at 31 July 2007 for the purposes of the
relevant provisions of the joint venture agreement. A provision has been made in
relation to this matter and the Directors' current assessment is that there will
be no further financial obligation arising in this regard and they expect to
reach a satisfactory agreement with their joint venture partner.
Following these provisions, at 31 March 2008 D1-BP Fuel Crops had planted or
obtained rights to offtake 192,016 hectares worldwide (please see table below
for further details). This is lower than original expectations for the end of
the current planting year, but as D1-BP Fuel Crops strengthens its planting and
crop management in the light of improving plant science expertise and greater
experience on the ground, it has been necessary to slow the pace of planting as
locations and partners are reviewed for performance. It has not yet therefore
been possible to replace all of the areas provided against with new planting
elsewhere.
The table below summarises the aggregate worldwide hectares of jatropha planting
over which D1-BP Fuel Crops (or joint venture or partnership arrangements
involving D1-BP Fuel Crops) has rights1:
Managed Contract Seed purchase Total
plantations farming and oil
supply hectares
agreements
India North East - 62,455 - 62,455
South - 5,922 - 5,922
Rest - 2,860 23,833 26,693
-------------------------------------------------
- 71,237 23,833 95,070
-------------------------------------------------
Africa Zambia 2,276 70 23,179 25,525
Swaziland 1,064 210 6,112 7,386
Rest 50 879 13,638 14,567
-------------------------------------------------
3,390 1,159 42,929 47,478
-------------------------------------------------
South East Asia Indonesia 18 19,250 20,132 39,400
Rest - 2,212 7,856 10,068
-------------------------------------------------
18 21,462 27,988 49,468
-------------------------------------------------
Total 3,408 93,858 94,750 192,0161
-------------------------------------------------
-------------------------------------------------
1 As reported to the Company by D1-BP Fuel Crops, as at 31 March 2008
Managed plantations are those farms where land and labour is controlled by D1-BP
Fuel Crops, either through its subsidiaries or joint venture partners. Under
contract farming, the farmer plants his own trees on his own land. D1-BP Fuel
Crops and its partners assist with the provision of seedlings and the
arrangement of bank finance for planting, offer a buyback of harvested grains
with an offtake agreement, subject to a floor price and the achievement of
agreed quality standards, and provide support and advice during cultivation, and
monitor the condition of the crops. Seed and oil supply agreements are
arms-length supply contracts with third parties whereby D1-BP Fuel Crops, either
directly or through joint venture partners, has offtake arrangements in place
over future output from jatropha plantations which the third party is
developing. D1-BP Fuel Crops has limited involvement in this planting and relies
on third parties to measure and manage the crop effectively.
The rights to some planting is shared with third parties, such as joint venture
partners, with whom D1 and D1-BP Fuel Crops have worked to obtain rights to
planting of jatropha. As such, offtake from these areas of planting may well be
shared with those third parties.
Based on the forecasts for oil delivery, D1-BP Fuel Crops is now reviewing where
best to place crushing, expelling and preprocessing assets. As plantations
mature and it moves closer to harvest and the crushing of grain for oil, D1-BP
Fuel Crops is preparing to deploy operational crushing and expelling units in
Zambia, North East India and Indonesia.
Refining and trading
Our activities in refining and trading have been impacted by the ongoing
challenges of high feedstock prices and by subsidised biodiesel imports from the
US. Refining margins across the industry came under increasing pressure from
rising vegetable oil prices. Although we were cushioned by stocks of vegetable
oil previously purchased at lower prices, we were forced to run our refineries
below capacity. Prices continued to rise, however, and having processed existing
stocks we stopped the refining of virgin oil in the third quarter of 2007. We
were, however, able to take advantage of the flexibility of our modular D1 20
refinery units by refining parcels of "off-spec" material purchased from other
suppliers.
The import of heavily subsidised US biodiesel exacerbated the impact of rising
feedstock prices. Subsidised soya methyl ester began to enter the EU in volume
in the form of a 99 per cent. soya biodiesel and 1 per cent. mineral diesel
blend, so-called B99, around the middle of 2007. US producers are currently
eligible for subsidies of US$1 for every gallon (approximately 13 pence per
litre) of biodiesel blended with mineral diesel, which then receives further
subsidy in EU markets. As a result, we believe this largely set market prices in
the EU and further eroded refinery margins. It is estimated that up to one
million tonnes of B99 entered the EU during 2007.
During 2007 we switched from refining virgin oil to purchasing and selling
quantities of B99 to meet our obligations to our principal offtaker, Petroplus
Refining Teeside Limited. Our experience by the end of 2007 was that, given
higher feedstock prices and subsidised imports, prices bid for such contracts
were not at a level where there could be an adequate return. Consequently, our
offtake agreement with Petroplus was not renewed when it ended in December 2007.
We began 2007 with the intention to increase UK refining capacity in advance of
the introduction of the RTFO in 2008. We increased the capacity of our Teesside
site to 42,000 tonnes per annum in the first half of the year with the addition
of a fifth refinery unit. This was the first upgraded D1 30 unit with an
enhanced capacity of 10,000 tonnes per annum. Final commissioning was completed
by the third quarter of 2007. However, as market conditions deteriorated, we
held capacity at Teesside at 42,000 tonnes. Having completed the acquisition of
our Bromborough site in January 2007, we began the conversion of the existing
facilities, which formerly produced fuel and lubricant additives, to create
100,000 tonnes of initial biodiesel refining capacity. As conditions changed, we
slowed the timetable for commissioning the first 50,000 tonnes of this capacity,
and finally suspended the addition of the second 50,000 tonnes.
As a result of the fundamental changes underway in the EU refining market, we
intend to stop refining and trading and to concentrate our efforts exclusively
on developing the upstream plant science services to breed, plant and manage new
commercial biofuels crops. As announced on 7 March 2008, we have already started
a consultation process with employees at both our Middlesbrough and Bromborough
sites. Insofar as we have not done so already, we will consult with employees in
relation to the future of the sites including their potential closure/sale.
Also, in light of the intended cessation of refining and trading operations, D1
is in discussions with Allied Irish Bank (the lessor under certain leases of
refining equipment), with a view to terminating such leases in due course.
Offer period update in relation to the Code
On 20 March 2008, Karl Watkin announced that he was at a very preliminary stage
in evaluating all options with regard to his shareholding in the Company,
including an increase or decrease in his interest, and whether or not to make an
offer for the Company. Consequently, the Company is currently in an offer period
for the purposes of the Code. Shareholders will be asked to approve the Placing
for the purposes of Rule 21 of the Code.
Further announcements will be made by the Board in relation to this matter if
and when appropriate.
Reasons for the Placing
At the time of the formation of D1-BP Fuel Crops, the Board stated, subject to a
number of key assumptions, that it believed that the Company should be able to
fund the delivery of its strategy without further recourse to Shareholders or
option holders. Since that announcement, D1's funding situation has been
adversely affected, inter alia, by heavily subsidised US imports which have
undermined the biodiesel refining market and by the resulting inability to raise
asset finance against operating refineries.
To fund the ongoing development of our business, we are seeking, subject to the
approval of Shareholders, to raise further funds through the Placing to progress
in each of the areas of our business, as follows.
In plant science, the proceeds of the Placing will enable us to continue capital
expenditure and working capital investment in our plant science research and
development business and to invest in our feed programme to develop a commercial
technology for the removal of anti-nutritional compounds present in jatropha
meal.
In planting, we intend to use the proceeds of the Placing to meet future cash
contributions in relation to D1-BP Fuel Crops to accelerate and enhance the
planting strategy. The next intended phase of development will concentrate
planting on areas where economic scale can be achieved and the crop is proven to
grow well. The proceeds are also expected to be used in the deployment of
operational crushing and expelling units in Zambia, North East India and
Indonesia.
The Board's revised business plan has been based upon a number key working
assumptions, namely:
* D1-BP Fuel Crops meets its target of planting one million hectares over
the four year period from its establishment on 1 October 2007;
* First grain will be harvested two years after planting and mature yields
will be attained five years after that;
* The Company's guidance in relation to yields of non-defective seed under
properly managed conditions in favourable climates remains unchanged at 1.7
and 2.7 tonnes per hectare for wild and E1 elite seed respectively.
Acknowledging that not every hectare will be planted in optimal conditions,
average mature yields will be 1.4 tonnes per hectare for wild seed and 2.2
tonnes per hectare for E1;
* The purchase price for jatropha grain will be $132 per tonne from
contract farmers and $145 per tonne under seed purchase agreements;
* The selling price for Crude Jatropha Oil ('CJO') will be $1,000 per
tonne for oil sold in country of origin and $1,300 per tonne for oil
exported to Northern Europe;
* Asset and working capital finance will be available to D1-BP Fuel Crops
over the period 2008 to 2010; and
* A realisation of value from the assets at D1 Oils' refining sites in
Middlesbrough and Bromborough.
In addition to the key assumptions set out above, your attention is drawn to the
risk factors set out in Appendix I to this announcement.
The table below summarises the proposed use of proceeds of the Placing for the
two year period from 1 January 2008 to 31 December 2009 inclusive assuming net
funds raised of �14.9 million. In recognition of the fact that the Company
operates in a dynamic and constantly evolving industry, the Board reserves the
right to re-allocate funds as circumstances and opportunities arise.
�m
----------------------------------------------------------------------------------
Operating costs and working capital 10.7
Capital expenditure 3.0
Feed programme investment 1.8
Joint venture cash contributions 12.9
Interest received and other items (1.2)
Contingency 2.0
----------------------------------------------------------------------------------
Sub total 29.2
Less cash at 1 January 2008 (14.3)
----------------------------------------------------------------------------------
Total 14.9
Based on the Board's revised business plan, the net funds raised of �14.9
million should allow the Company to trade through to the end of 2009.
Details of the Placing
Subject to the passing of the relevant Resolutions at the EGM, the Company is
proposing to raise �16.1 million (approximately �14.9 million after expenses) by
the issue of the Placing Shares. The Placing Shares will represent approximately
103.4 per cent. of the current issued share capital of the Company. DKIB, as
agent for the Company, is placing the Placing Shares with existing holders of
the Company's shares at the Placing Price.
The Placing Price represents a discount of approximately 34 per cent to the
closing middle market price of 37.75 per share on 8 April 2008, the last
Business Day prior to this announcement. The Placing by D1 is being conducted
against the backdrop of volatile equity markets. The Board of D1 believes that
the discount at which the Placing is being effected in part reflects these
market conditions.
The Placing Agreement and the issue of the Placing Shares are each conditional
on, inter alia:
(i) the passing at the EGM of the Resolutions numbered 2, 3 and 5; and
(ii) Admission occurring on or before 8.00 a.m. on 12 May 2008 (or such later
time and date as the Company and Dresdner Kleinwort Securities Limited may agree
being no later than 27 May 2008).
DBAG has agreed that, to the extent that DKIB does not procure Placees to
subscribe for the total number of Placing Shares at a price equal to or in
excess of the Placing Price, DBAG shall itself subscribe as principal for those
Placing Shares at the Placing Price.
The Placing Shares will, when allotted and fully paid, rank pari passu in all
respects with the Existing Ordinary Shares.
Admission is expected to take place and dealings in the Placing Shares to
commence on AIM on 12 May 2008. Share certificates in respect of Placing Shares
to be held in certificated form are expected to be despatched during the week
commencing 19 May 2008. Placing Shares to be held in uncertificated form are
expected to be delivered in CREST by no later than 12 May 2008.
For regulatory reasons the Placing has only been made, and the Placing Shares
will only be issued, to persons (i) in the EU who are also qualified investors
for the purposes of the EU Prospectus Directive or who are other persons to whom
the Placing Shares can otherwise be offered or sold without the publication of a
prospectus (and in the UK who are also persons falling within article 19,
article 49 or, being members of certain bodies corporate, article 43 of the
Financial Services and Markets Act 2000 (Financial Promotion) Order 2001 or are
otherwise persons to whom it may otherwise lawfully be communicated), and (ii)
in other jurisdictions to whom it may lawfully be made. No other person may
participate in the Placing, or rely on any communication relating to the
Placing. The offer of the Placing Shares has not been and will not be made to
Shareholders generally or to the public for the purposes of the Prospectus
Rules. This document does not constitute a prospectus or an admission document
or an offer, or the solicitation of an offer, to subscribe or buy any of the
Placing Shares.
The following directors and employees have committed to subscribe under the
Placing for the following Placing Shares at the Placing Price:
Elliott Mannis 140,000
Lord Oxburgh 80,000
Dr Clive Morton 40,000
Barclay Forrest 40,000
Christopher Tawney 20,000
Christopher Leaver 10,000
Henk Joos 8,000
Graham Prince 6,000
Extraordinary General Meeting
A notice convening the EGM to be held on 9 May 2008 at 11.00 a.m. at the offices
of Dresdner Kleinwort Limited, 30 Gresham Street, London EC2V 7PG, is set out at
the end of the circular to shareholders. The purpose of the EGM is to seek
Shareholders' approval to the Resolutions set out in the notice of EGM. At the
EGM, Resolutions will be proposed to:
(1) increase the Company's authorised share capital from �2,000,000 to
�3,000,000 by the creation of an additional 100,000,000 Ordinary Shares
representing approximately 50 per cent. of the current existing authorised
share capital of the Company;
(2) authorise the Placing for the purposes of Rule 21 of the Code;
(3) authorise the Directors pursuant to section 80 of the Act to allot the
Placing Shares, representing approximately 103.4 per cent. of the existing
issued share capital of the Company as at the date of this document;
(4) authorise the Directors (by way of updated general authority pursuant to
section 80 of the Act) to allot relevant securities (as defined for the
purposes of that section) up to an aggregate nominal amount representing
approximately one third of the Enlarged Issued Share Capital;
(5) authorise the Directors pursuant to section 95 of the Act to allot the
Placing Shares for cash without making a pre-emptive offer to Shareholders;
and
(6) authorise the Directors (by way of updated general authority pursuant to
section 95 of the Act) to allot equity securities (as defined for the
purposes of that section) for cash up to an aggregate nominal amount
representing approximately 5 per cent. of the Enlarged Issued Share Capital.
The Directors unanimously recommend that Shareholders vote in favour of all the
Resolutions, as they have undertaken to do in respect of their own beneficial
holdings. The Directors' reason for putting forward Resolutions 2, 3 and 5 is to
enable the Company to allot the Placing Shares for cash. If Resolutions 2, 3 and
5 are not approved the Placing cannot occur.
By Resolution 1, the Board proposes that the authorised share capital of the
Company is increased to 300,000,000 Ordinary Shares to take the opportunity
afforded by the EGM to increase the authorised share capital of the Company so
that a 'headroom' of existing but unissued share capital is available for
general corporate purposes.
To be passed, Resolutions 1 to 4 (being ordinary resolutions) will require a
simple majority of those Shareholders voting in person or by proxy in favour of
the Resolutions. Resolutions 5 and 6 (being special resolutions) require
approval by not less than 75 per cent. of the votes cast by the Shareholders
voting in person or by proxy."
A copy of the circular is available, free of charge, for one month from the date
of posting at the registered office of the Company, Forty Foot Road,
Middlesbrough, TS2 1HG.
Definitions
The following definitions apply throughout this announcement (other than
Appendix II to this announcement) unless otherwise stated or the context
requires otherwise:
"Admission" admission of the Placing Shares to trading on AIM and such admission becoming effective as
provided in paragraph 6 of the AIM Rules for Companies
"AIM" the AIM market, a market operated by the London Stock Exchange
"AIM Rules" the AIM Rules for Companies and/or the AIM Rules for Nominated Advisers, as the context requires
"AIM Rules for
Companies" the rules and guidance notes contained in parts one and two of the booklet entitled AIM Rules for
Companies published by the London Stock Exchange, as amended or reissued from time to time
"AIM Rules for
Nominated Advisers" the rules contained in the booklet entitled AIM Rules for Nominated Advisers published by the
London Stock Exchange, as amended or reissued from time to time
"Board" or
"Directors" the board of directors of the Company
"Business Day" any day (excluding Saturdays and Sundays) on which banks are open in London for general non-
automated banking business
"certificated" or
"in certificated
form" an Ordinary Share which is not in uncertificated form
"Code" the City Code on Takeovers and Mergers
"Company" or "we"
or "D1" D1 Oils plc, a public limited company incorporated and registered in England and Wales with
registered number 5212852
"CREST" the computerised settlement system to facilitate the holding of and the transfer of title of
shares in uncertificated form, operated by Euroclear UK & Ireland Limited
"CREST Regulations" the Uncertificated Securities Regulations 2001 (SI 2001 No. 3755), as amended
"this document" the circular of the Company to be published on 9 April 2008
"D1-BP Fuel Crops" D1-BP Fuel Crops Limited, a limited company incorporated and registered in England and Wales with
registered number 05617120 , being the 50/50 joint venture company owned by D1 Oils Trading
Limited and BP International Limited
"D1 Oils Plant
Science" D1 Oils Plant Science Limited, a limited company incorporated and registered in England and Wales
with registered number 06179784
"DBAG" Dresdner Bank AG, London Branch
"DKIB" Dresdner Kleinwort Securities Limited
"EGM" or
"Extraordinary
General Meeting" the extraordinary general meeting of the members of the Company to be convened for 11.00 am on 9
May 2008
"Enlarged Issued
Share Capital" the enlarged issued share capital of the Company following Admission of the Placing Shares and
taking into account the issue of any Ordinary Shares from time to time under the Option Agreement
"EU" the European Union
"Euro" or "Euro" the euro, currency of the EU
"Existing Ordinary
Shares" the 62,241,219 Ordinary Shares in issue as at 8 April 2008
"FSMA" the Financial Services and Markets Act 2000, as amended
"Group" the Company and its subsidiary undertakings
"ICRISAT" the International Crops Research Institute for the Semi-Arid Tropics
"London Stock
Exchange" London Stock Exchange plc
"Option Agreement" the call option and relationship agreement with BP International Limited dated 29 June 2007
"Ordinary Shares" ordinary shares of 1p each in the capital of the Company
"Placees" subscribers for the Placing Shares procured by Dresdner Kleinwort Securities Limited (as agent for
the Company) pursuant to and on the terms of the Placing Agreement
"Placing" the placing of the Placing Shares by Dresdner Kleinwort Securities Limited pursuant to the Placing
Agreement
"Placing Agreement" the conditional agreement dated 9 April 2008 between (1) Dresdner Kleinwort Securities Limited (2)
Dresdner Bank AG, London Branch and (3) the Company relating to the Placing
"Placing Price" the price at which the Placing Shares are placed with Placees, being a price of 25p per Placing
Share
"Placing Shares" 64,384,000 Ordinary Shares to be issued and placed in connection with the Placing at the Placing
Price
"Prospectus Rules" the prospectus rules of the Financial Services Authority forming part of the FSA Handbook
"Resolutions" means the ordinary and special resolutions to be proposed at the EGM
"RTFO" means the "Renewable Transport Fuel Obligation" announced by the UK Government in November 2005
"Securities Act" United States Securities Act of 1933, as amended
"Shareholder(s)" the person(s) who are registered as holder(s) of Ordinary Shares from time to time
"SOSP" D1's Sustainable Oil Supply Programme
"UK" United Kingdom of Great Britain and Northern Ireland
"uncertificated" or
"in uncertificated recorded on the register of Ordinary Shares as being held in uncertificated form in CREST,
form" entitlement to which by virtue of the CREST Regulations, may be transferred by means of CREST
"US" or "United
States" United States of America, each state thereof, its territories and possessions and the District of
Columbia
"US$" or "dollar" United States dollar
"�" United Kingdom pounds sterling
APPENDIX I
Risk Factors
Potential investors should carefully consider the risks described below before
making a decision to invest in the Company. This Appendix I contains what the
Directors believe to be the principal risk factors associated with an investment
in the Company. It should be noted that this list is not exhaustive and that
other risk factors will apply to an investment in the Company. If any of the
following risks actually occur, the Group's business, financial condition and/or
results of future operations could be materially adversely affected. In such
circumstances, the value of the Company's shares could decline and an investor
may lose all or part of his investment. Additional risks and uncertainties not
presently known to the Directors, or which the Directors currently deem
immaterial, may also have an adverse effect on the Group. This document contains
forward-looking statements that involve risks and uncertainties. The Group's
actual results could differ materially from those anticipated in the
forward-looking statements as a result of many factors, including the risks
faced by the Group which are described below and elsewhere in this document.
Prospective investors should carefully consider the other information in this
announcement.
Unforeseen factors and developments
The Group's ability to implement its business strategy may be adversely affected
by factors that the Group cannot currently foresee, such as unanticipated costs
and expenses, interruptions to or delays in production, reduced demand for the
Group's product, technological change, loss of political support for biodiesel
or severe economic downturn. All of these factors may necessitate changes to the
business strategy described in this document.
Competition
There can be no assurance that potential competitors of the Group, which may
have greater financial, research and development, sales and marketing and
personnel resources than the Group, are not currently developing, or will not in
the future develop, products and processes that are equally or more effective
and/or economical than the products developed by the Group or which would
otherwise render the Group's products obsolete. The Group may be forced to
change the nature of its business as a result of competitive factors. Given the
potential for biofuels globally, it is anticipated that the market will become
increasingly competitive over the coming decade. Additionally, several other
biofuels and renewable fuels could be introduced to the market as alternatives
to mineral diesel. Should these alternatives be selected in the market the
demand for biodiesel could be diluted.
Dependence on key personnel
The Group believes that its future success will greatly depend upon the
expertise and continued services of certain key executives and technical
personnel, including the executive Directors. The Group cannot guarantee the
retention of such key executives and technical personnel. As a result, the
Group's business, its results of operations and financial condition may be
adversely affected.
Suitability
Investment in the Ordinary Shares may not be suitable for all readers of this
document. Readers are accordingly advised to consult a person authorised under
the Financial Services and Markets Act 2000 who specialises in investments of
this nature before making any investment decision.
Price volatility and liquidity
The trading prices of the Company's Ordinary Shares may fluctuate. The Ordinary
Share price may fluctuate as a result of a variety of factors, including the
operating and share price performance of other companies in the industries and
markets in which the Company operates; speculation about the Company's business
in the press, media or the investment community; changes to the Company's sales
or profit estimates; the publication of research reports by analysts; and
general market conditions. Investors may realise less than the original amount
invested.
The fact that the Ordinary Shares are admitted to AIM should not be taken as
implying that there is a liquid market for the Ordinary Shares. It may be more
difficult for an investor to realise his investment on AIM than to realise an
investment in a company whose shares are listed on the Official List. Investors
may therefore not be able to recover their original investment, especially since
there may be a limited market for the Ordinary Shares, and market makers may not
publish competing prices.
Economic and market cycles
The Group's business may be affected by the general risks associated with all
companies in the energy industry. The prices received for the Group's goods and
products depend on numerous factors, many of which are beyond its control and
the exact effect of which cannot be accurately predicted. Such factors include
general economic and political activities, including the extent of governmental
regulation and taxation.
An investment could be affected adversely by changes in economic, political,
administrative, taxation or other regulatory factors, whether in the UK or in
any other jurisdictions in which the Group may operate now or in the future. In
the Company's case, this may include the regions of origin of its raw materials
such as Southern Africa, South East Asia and India where such risks are likely
to be significant.
The Directors consider that uncertainty surrounding economies worldwide may
continue in the short to medium term, and this could affect the Group's
financial performance. Though currently stable, political instability in several
of the regions in which the Group operates is not uncommon and should this
occur, could affect the Group's operations in certain regions.
Future funding
Additional capital may be required by the Company in due course. The Directors
cannot be sure that such capital will be available or that such capital will be
available on terms that are acceptable to the Company in the future.
If required funds are not available, the Group may have to reduce expenditure on
maintaining, establishment and development of its business which could have a
material adverse effect on the Company's business, financial conditions and
prospects and the Group may no longer be deemed to be a going concern.
Industry conditions
The Group faces a number of industrial risks, including an ongoing consultation
process with its employees at its Middlesbrough and Bromborough sites and
dependence on key suppliers, both of which may lead to a deterioration in
financial performance.
Intellectual property and know how
The Group may be open to claims in relation to infringement of intellectual
property ("IP") rights. This could lead to long and protracted litigation to
protect the Group's position. This process itself would divert resources away
from the Group's business. Any adverse judgments against the Group could lead to
substantial fees, fines and the inability to manufacture, market or sell any
infringing products. This would lead to substantial losses for the Company and,
further, to the Group as a whole.
The Group can also incur costs in protecting its IP rights. However, there is no
guarantee that protection will be granted, for example through registration.
Even if protection is granted, the Group may suffer an infringement of its IP
rights. This would lead to costs in order to protect its rights and, as a result
may lead to loss for the Group. Notwithstanding the problems surrounding the
Group's IP rights, it may be that competitors of the Group may produce similar
products without infringing the Group's IP rights. The Group could suffer loss
without possibly having any remedy.
Level of orders
There can be no guarantee that orders will be received for the Group's products
in the anticipated volumes or within the timescales currently envisaged by the
Directors. The placing of orders for the Group's products could be materially
delayed by circumstances such as customer evaluations or integration of the
Group's products taking longer than anticipated.
The Company must also ensure that production capacity is at all times sufficient
to match the level of orders. Failure to do so could lead to the financial
impact of inefficient production, missed sales opportunities and late delivery
to customers.
Risks associated with international sales
The Group intends to continue to expand internationally and therefore its
results could be affected significantly by currency fluctuations (see below).
Other risks from international business activities include complying with
regulatory requirements and standards, tariffs and other trade barriers,
reliance on third parties to distribute products and potentially adverse tax
consequences.
Operational risks
The financial performance of the Company is at all times subject to operational
risks. In the plant science area, there is a risk that improvements in variety
performance, in terms of yield, vitality, disease resistance, etc will not be as
rapid as the Company plans. Plant breeding activities, and the plantation
business itself, D1-BP Fuel Crops, are subject to the agricultural risks
highlighted below. Downstream of the agricultural operation, there is a
requirement for: transportation, expelling, storage and refining (of crude
jatropha oil to produce refined jatropha oil). For some of these activities new
equipment, processes and operating arrangements are required, and could
therefore face unforeseen problems, in which case production and financial
performance would be delayed. Unanticipated additional maintenance of machinery
would also impact the production capacity and revenue projections. The risk of
contamination of the pure vegetable oil exists, should the proper quality
procedures and handling guidelines not be followed. Transportation of crude
jatropha oil from the regions in which the Group operates could be subject to
unforeseen delay.
Raw materials
The principal raw material of the Company's business is jatropha seeds for
planting, and harvested grain for crushing to produce jatropha oil.
The financial performance of the Company may therefore be affected by
fluctuations in the market price of jatropha seeds and jatropha grain and, in
particular, a reduction in the price of jatropha seeds and grain may lead to a
diminution in the value of stocks held.
The Company is also at risk of the contamination of its raw materials supplies
at source which may lead to stock writedowns and an inability to supply
customers. The Company attempts to safeguard against this risk by checking
materials prior to purchase and dispatch and on receipt at the relevant
processing facility.
Agricultural risks
The Group's business may be affected by all general risks associated with
agricultural production. The risk of fire, drought, or other extreme weather is
a factor for all crops and would result in lower crop yields than projected.
Theft is also a concern in certain regions, should trees be deemed valuable as
another commodity in those regions. Where planting is undertaken using seeds or
seedlings bought from the third parties then it can be difficult to vouch for
the quality of the planting material, resulting in poor performance. There is
limited experience of large scale jatropha planting; this means that the best
agronomic and husbandry practices are not yet fully understood. In addition,
where the crop is being grown by third party farmers, direct control over their
day-to-day activities is limited. Therefore there is a risk that optimum crop
performance will not be achieved. In addition, farmers may choose to sell their
harvests to other parties, despite the existence of a contract with D1-BP Fuel
Crops, which would reduce available oil volumes.
Interest rate risk
The Company's borrowing costs in respect of its floating rate borrowings may
increase as a result of rising interest rates, although the Directors believe
the economic effect of interest fluctuations on the Company's financial
performance to be small due to the absolute amounts of such borrowings being
relatively small.
Currency exchange rate fluctuations
The Company conducts much of its business overseas in currencies other than
pound sterling and as such its financial performance is subject to the effects
of fluctuations in foreign exchange rates, in particular the rate of exchange
between the US dollar and pound sterling.
A sustained depreciation in the US dollar against pound sterling may affect the
sterling value of margins achieved in the overseas businesses and the
competitiveness of the Company's operations in the UK vis a vis other parts of
the world.
Market demand and acceptance
Whilst the Directors believe that there will be viable markets for the Group's
products there can be no assurance that the Group's products will prove to be
more successful than competing products now or in the future. If the Group's
products do not gain market acceptance, further expenditure on marketing and
development may be required to make them commercially viable.
The increased demand for biodiesel in the market is largely created by global
policies mandating biodiesel blends as a part of a government's energy strategy.
There is a risk that governments do not enforce their recommended targets, or a
risk that government commitment to their strategy is short term as opposed to
long term.
Securities traded on AIM
The Existing Ordinary Shares are and the Placing Shares will be traded on AIM
rather than listed on the Official List of the UK Listing Authority and traded
in the main market of the London Stock Exchange. An investment in shares traded
on AIM may carry a higher risk than an investment in shares listed on the
Official List.
Investors should be aware that the value of the Ordinary Shares may be volatile
and may go down as well as up and investors may therefore not recover their
original investment.
APPENDIX II
TERMS AND CONDITIONS OF THE PLACING
IMPORTANT INFORMATION FOR PLACEES ONLY
MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THIS
ANNOUNCEMENT AND THE TERMS AND CONDITIONS SET OUT AND REFERRED TO HEREIN ARE
DIRECTED ONLY AT PERSONS SELECTED BY DRESDNER KLEINWORT SECURITIES LIMITED
("DKIB") WHO ARE "INVESTMENT PROFESSIONALS" AS DESCRIBED IN ARTICLE 19, "HIGH
NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS ETC" AS DESCRIBED IN ARTICLE 49
OR MEMBERS OF CERTAIN BODIES CORPORATE AS DESCRIBED IN ARTICLE 43 OF THE
FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 (the
"FPO") OR TO PERSONS WHOM IT MAY OTHERWISE LAWFULLY BE COMMUNICATED (ALL SUCH
PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS"). THIS ANNOUNCEMENT 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 ACTIVITY TO WHICH THIS
DOCUMENT AND THE TERMS AND CONDITIONS SET OUT HEREIN RELATES IS AVAILBLE ONLY TO
RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS.
THE NEW ORDINARY SHARES THAT ARE THE SUBJECT OF THE PLACING (THE "PLACING
SHARES") ARE NOT BEING OFFERED OR SOLD TO ANY PERSON IN THE EUROPEAN UNION,
OTHER THAN TO QUALIFIED INVESTORS AS DEFINED IN SECTION 86(7) OF THE FINANCIAL
SERVICES AND MARKETS ACT 2000 ("FSMA"), BEING PERSONS FALLING WITHIN ARTICLE 2.1
(E)(I), (II) OR (III) OF DIRECTIVE 2003/71/EC (THE "PROSPECTUS DIRECTIVE"),
WHICH INCLUDES LEGAL ENTITIES WHICH ARE REGULATED BY THE FINANCIAL SERVICES
AUTHORITY (THE "FSA") OR ENTITIES WHICH ARE NOT SO REGULATED WHOSE CORPORATE
PURPOSE IS SOLELY TO INVEST IN SECURITIES OR OTHER PERSONS TO WHOM THE PLACING
SHARES MAY OTHERWISE BE LAWFULLY OFFERED OR SOLD WITHOUT THE PUBLICATION OF A
PROSPECTUS.
The Placing Shares have not been and will not be registered under the United
States Securities Act of 1933, as amended (the "Securities Act") or under the
securities laws of any state or other jurisdiction of the United States and may
not be offered, sold, resold or delivered, directly or indirectly, in or into
the United States absent registration except pursuant to an exemption from or in
a transaction not subject to the registration requirements of the Securities
Act. No public offering of the Placing Shares is being made in the United
States. The Placing (as defined below) is being made outside the United States
in offshore transactions (as defined in Regulation S under the Securities Act
("Regulation S")) meeting the requirements of Regulation S under the Securities
Act and may be made within the United States to institutional investors who are
qualified institutional buyers within the meaning of Rule 144A under the
Securities Act ("QIBs"), and also QPs (as defined below) in transactions that
are exempt from, or not subject to, the registration requirements under the
Securities Act. Prospective investors are hereby notified that
Regent plc (the "Company") may be relying on the exemption from the provisions
of Section 5 of the Securities Act provided by Rule 144A.
This announcement (including the terms and conditions set out herein) does not
constitute an offer of securities for sale in the United States nor the
solicitation of an offer to buy any such securities, nor may securities be
offered or sold in the United States, or in any jurisdiction in which such offer
or solicitation is unlawful and the information contained herein is not for
publication or distribution to persons in the United States or any jurisdiction
in which such publication or distribution is unlawful. Persons receiving this
announcement (including custodians, nominees and trustees) must not forward,
distribute, mail or otherwise transmit it in or into the United States or use
the United States mails, directly or indirectly, in connection with the Placing.
The Company does not intend to register the Placing Shares under the Securities
Act.
This announcement does not constitute an offer to sell or issue or a
solicitation of an offer to buy or subscribe for Placing Shares in any
jurisdiction including, without limitation, Canada, Australia, Japan or any
other jurisdiction in which such offer or solicitation is or may be unlawful (a
"Prohibited Jurisdiction"). This announcement and the information contained
herein are not for 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.
The distribution of this announcement, the Placing and/or issue of the Placing
Shares in certain jurisdictions may be restricted by law and/or regulation. No
action has been taken by the Company, DKIB or Dresdner Bank AG, London Branch
("DBAG") or any of their respective Affiliates (as defined below) that would
permit an offer of the Placing Shares or possession or distribution of this
announcement or any other publicity material relating to such Placing Shares in
any jurisdiction where action for that purpose is required. Persons receiving
this announcement are required to inform themselves about and to observe any
such restrictions.
By participating in the Bookbuilding Process (as defined below), each person who
is invited to and who chooses to participate in the Placing (a "Placee") by
making an oral offer to take up Placing Shares is deemed to have read and
understood this announcement in its entirety and to be providing the
representations, warranties, undertakings, agreements and acknowledgements
contained herein.
Details of the Placing Agreement and the Placing Shares
The Company has today entered into a placing agreement (the "Placing Agreement")
with DKIB and DBAG, under which DKIB has, subject to the terms set out therein,
agreed to use its reasonable endeavours, as agent of the Company, to procure
Placees for the Placing Shares (the "Placing"). DBAG has agreed that to the
extent that DKIB does not procure Placees for the Placing Shares, DBAG shall
itself subscribe for such Placing Shares, as principal.
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 1 pence
each in the capital of the Company, including the right to receive all dividends
and other distributions declared, made or paid in respect of such ordinary
shares after the date of issue of the Placing Shares.
The Placing Shares will be issued free of any pre-emption rights, encumbrance,
lien or other security interest. The Company confirms that, following the
passing of the Resolutions (as defined below), it will be entitled to allot the
Placing Shares pursuant to section 80 of the Companies Act 1985 (as amended) as
if section 89(1) of that Act did not apply to such allotment.
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 the AIM market of
the London Stock Exchange ("Admission"). It is expected that Admission will
become effective and that dealings will commence on 12 May 2008, and in any
event no later than 27 May 2008.
Bookbuild
Commencing today, DKIB will be conducting an accelerated bookbuilding process
(the "Bookbuilding Process") to determine demand for participation in the
Placing by Placees. This announcement gives details of the terms and conditions
of, and the mechanics of participation in, the Placing.
Participation in, and principal terms of, the Bookbuilding Process
Each of DKIB and its respective Affiliates (as defined below) is entitled to
participate as a Placee in the Bookbuilding Process.
The Bookbuilding Process will establish a single price (the "Placing Price")
payable to DKIB by all Placees.
The Bookbuilding Process is expected to close around 7.00 a.m. London time on 9
April 2008. A further announcement will be made following the close of the
Bookbuilding Process detailing the Placing Price at which the Placing Shares are
being placed (the "Pricing Announcement"). DKIB may, in its sole discretion,
accept bids that are received after the Bookbuilding Process has closed.
A bid in the Bookbuilding Process will be made on the terms and conditions in
this announcement and will not be capable of variation or revocation after the
close of the Bookbuilding Process.
A Placee who wishes to participate in the Bookbuilding Process should
communicate its bid by telephone to the usual contact at DKIB. If successful,
DKIB will re-contact and confirm orally to Placees following the close of the
Bookbuilding Process the size of their respective allocations and a trade
confirmation (and supporting placing letter) will be dispatched as soon as
possible thereafter. DKIB's oral confirmation of the size of allocations and
each Placee's oral commitments to accept the same will constitute a legally
binding agreement pursuant to which each such Placee will be required to accept
the number of Placing Shares allocated to the Placee at the Placing Price set
out in the Pricing Announcement and otherwise on the terms and subject to the
conditions set out herein and in accordance with the Company's Memorandum and
Articles of Association.
DKIB reserves the right to scale back the number of Placing Shares to be
subscribed by any Placee in the event of an oversubscription under the Placing.
DKIB also reserves the right not to accept offers to subscribe for Placing
Shares or to accept such offers in part rather than in whole. The acceptance of
offers shall be at the absolute discretion of DKIB. DKIB shall be entitled to
effect the Placing by such alternative method to the Bookbuilding Process as it
shall in its sole discretion determine. To the fullest extent permissible by
law, neither DKIB, any holding company thereof, nor any subsidiary, branch or
affiliate of DKIB (each an "Affiliate") nor any person acting on their behalf
shall have any liability to Placees (or to any other person whether acting on
behalf of a Placee or otherwise). In particular, neither DKIB, nor any Affiliate
thereof nor any person acting on their behalf shall have any liability in
respect of its conduct of the Bookbuilding Process or of such alternative method
of effecting the Placing as it may determine. No commissions will be paid to
Placees or by Placees in respect of any Placing Shares.
Each Placee's obligations will be owed to the Company and to DKIB. Following the
oral confirmation referred to above, each Placee will also have an immediate,
separate, irrevocable and binding obligation, owed to DKIB and the Company, to
pay to DKIB (or as DKIB may direct) in cleared funds an amount equal to the
product of the Placing Price and the number of Placing Shares such Placee has
agreed to acquire. The Company shall allot such Placing Shares to a CREST
account operated by DKIB for onward delivery to each Placee following each
Placee's payment to DKIB of such amount.
All obligations of the Company, DBAG and DKIB under the Placing will be subject
to fulfilment of the conditions referred to below under "Conditions of the
Placing".
Conditions of the Placing
The Placing is conditional upon the Placing Agreement becoming unconditional and
not having been terminated in accordance with its terms.
The obligations of DKIB and DBAG under the Placing Agreement are conditional,
inter alia, on:
1. Admission occurring by no later than 12 May 2008 (or such other date as may
be agreed between the Company and DKIB, not being later than 27 May 2008);
2. the Company complying with its obligations under the Placing Agreement to
the extent they fall to be performed prior to Admission including the
delivery, on the day of (and prior to) Admission, to DKIB of a certificate
confirming, inter alia, that none of the representations, warranties and
undertakings given by the Company in the Placing Agreement has been breached
or is unfulfilled or was untrue, inaccurate or misleading when made or would
be breached or unfulfilled or be untrue, inaccurate or misleading were it to
be repeated by reference to the facts subsisting on the date of Admission;
3. the Company passing certain resolutions to be proposed at an extraordinary
general meeting to, inter alia, authorise the Placing for the purposes of
Rule 21 of the Code and authorise the directors of the Company to allot and
issue the Placing Shares pursuant to sections 80 and 95 of the Companies Act
1985 (the "Resolutions"); and
4. the Company allotting prior to Admission, subject only to Admission, the
Placing Shares.
If (a) the conditions are not fulfilled or (to the extent permitted under the
Placing Agreement) waived by DKIB, or (b) the Placing Agreement is terminated in
the circumstances specified below, the Placing will lapse and each Placee's
rights and obligations hereunder shall cease and determine at such time and no
claim may be made by a Placee in respect thereof.
By participating in the Bookbuilding Process, each Placee agrees that its rights
and obligations hereunder terminate only in the circumstances described above
and under 'Right to terminate under the Placing Agreement' below, and will not
be capable of rescission or termination by the Placee.
DKIB reserves the right to waive or to extend the time and/or date for
fulfilment of any of the conditions in the Placing Agreement where such waiver
or extension is permitted under the terms of the Placing Agreement. Any such
extension or waiver will not affect Placees' commitments. DKIB shall not 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 it may make as to whether or
not to waive or to extend the time and/or date for the satisfaction of any
condition in the Placing Agreement or in respect of the Placing generally.
Right to terminate under the Placing Agreement
DKIB may, at any time before Admission, terminate the Placing Agreement by
giving notice to the Company if:
1. in the opinion of DKIB (acting in good faith), any of the warranties given
by the Company in the Placing Agreement are not true and accurate or have
become misleading (or would not be true and accurate or would be misleading
if they were repeated at any time before Admission) by reference to the
facts subsisting at the relevant time provided that DKIB consults with the
Company (where practicable) prior to the giving of any such notice;
2. in the opinion of DKIB (acting in good faith), the Company fails to comply
with any of its obligations under the Placing Agreement and such failure
has, or is likely to have (in the opinion of DKIB, acting in good faith), a
material effect on the Placing;
3. in the opinion of DKIB (acting in good faith) there has been a material
adverse change in the financial or trading position or prospects of the
Group (defined as the Company and its subsidiary undertakings); or
4. in the absolute discretion of DKIB, there has been a change in national or
international financial, political, economic or stock market
conditions (primary or secondary); an incident of terrorism, outbreak or
escalation of hostilities, war, declaration of martial law or any other
calamity or crisis; a suspension or material limitation in trading of
securities generally on any stock exchange; any change in currency exchange
rates or exchange controls or a disruption of settlement systems or a
material disruption in commercial banking as would be likely to prejudice
the success of the Placing.
By participating in the Placing, each Placee agrees with DKIB that the exercise
by DKIB of any right of termination or other discretion under the Placing
Agreement shall be within the absolute discretion of DKIB and that, to the
fullest extent permitted by law, DKIB need not make any reference to the Placee
in this regard and that DKIB shall not have any liability whatsoever to the
Placee in connection with any such exercise.
No Prospectus
No offering document or prospectus has been or will be prepared in relation to
the Placing and Placees' commitments will be made solely on the basis of the
information contained in this announcement and any information previously
published by or on behalf of the Company by notification to a Regulatory
Information Service (as defined in the AIM Rules for Companies of the London
Stock Exchange). 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 to DKIB, DBAG and the Company that it has neither
received nor relied on any information, representation, warranty or statement
made by or on behalf of DKIB (other than the amount of the relevant Placing
participation in the oral confirmation given to Placees and the trade
confirmation referred to below), DBAG, any of their respective Affiliates, any
persons acting on their behalf or the Company and none of DKIB, DBAG or the
Company or any of their respective Affiliates will be liable for the decision of
any Placee to participate in the Placing based on any other information,
representation, warranty or statement which the Placee may have obtained or
received (regardless of whether or not such information, representation,
warranty or statement was given or made by or on behalf of any such persons). By
participating in the Placing, each Placee acknowledges and agrees, to DKIB for
itself and as agent for the Company and to DBAG, that, except in relation to the
information contained in this announcement, it has relied on its own
investigation of the business, financial or other position of the Company in
deciding to participate in the Placing. 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 GB00B02QN400) following
Admission will take place within the CREST system, using the DVP mechanism,
subject to certain exceptions. DKIB reserves the right to require settlement for
and delivery of the Placing Shares to Placees by such other means that it deems
necessary, if delivery or settlement is not possible or practicable within the
CREST system within the timetable set out in this announcement or would not be
consistent with the regulatory requirements in the Placee's jurisdiction.
Each Placee allocated Placing Shares in the Placing will be sent a trade
confirmation stating the number of Placing Shares allocated to it, the Placing
Price, the aggregate amount owed by such Placee to DKIB and settlement
instructions. Placees should settle against CREST ID: 318. It is expected that
such trade confirmation will be despatched on 9 April 2008 and that this will
also be the trade date. Each Placee agrees that it will do all things necessary
to ensure that delivery and payment is completed in accordance with either the
standing CREST or certificated settlement instructions which it has in place
with DKIB.
It is expected that settlement will be on 12 May 2008 on a T+22 basis in
accordance with the instructions set out in the trade 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 2
percentage points above the base rate of Barclays Bank Plc.
Each Placee is deemed to agree that if it does not comply with these
obligations, DKIB may sell any or all of the Placing Shares allocated to the
Placee on such Placee's behalf and retain from the proceeds, for its own account
and profit, an amount equal to the aggregate amount owed by the Placee plus any
interest due. The Placee will, however, remain liable for any shortfall below
the aggregate amount owed by such Placee and it may be required to bear any
stamp duty or stamp duty reserve tax (together with any interest or penalties)
which may arise upon the sale of such Placing Shares on such Placee's behalf.
If Placing Shares are to be delivered to a custodian or settlement agent, the
Placee should ensure that the trade confirmation is copied and delivered
immediately to the relevant person within that organisation.
Insofar as Placing Shares are registered in the Placee's name or that of its
nominee or in the name of any person for whom the Placee is contracting as agent
or that of a nominee for such person, such Placing Shares will, subject as
provided below, be so registered free from any liability to PTM levy, stamp duty
or stamp duty reserve tax. If there are any circumstances in which any other
stamp duty or stamp duty reserve tax is payable in respect of the issue of the
Placing Shares, neither DKIB, DBAG nor the Company shall be responsible for the
payment thereof. Placees will not be entitled to receive any fee or commission
in connection with the Placing.
Representations and Warranties
By participating in the Placing, each Placee (and any person acting on such
Placee's behalf):
1. represents and warrants that it has read and understood this announcement in
its entirety and acknowledges that its participation in the Placing will be
governed by the terms of this announcement;
2. acknowledges that no prospectus or other offering document has been prepared
in connection with the Placing;
3. agrees to indemnify on an after-tax basis and hold harmless the Company,
DKIB, DBAG, any of their respective Affiliates and any person acting on
their behalf 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 announcement and further agrees that the provisions of
this announcement shall survive after completion of the Placing;
4. acknowledges that the ordinary shares of the Company with a nominal value of
1 pence each are listed on the AIM market of the London Stock Exchange, and
the Company is therefore required to publish certain business and financial
information in accordance with the rules and practices of the London Stock
Exchange (collectively, the "Exchange Information"), which includes a
description of the nature of the Company's business and the Company's most
recent balance sheet and profit and loss account, and similar statements for
preceding financial years, and that the Placee is able to obtain or access
the Exchange Information without undue difficulty;
5. acknowledges that none of DKIB, the Company nor any of their respective
Affiliates nor any person acting on DKIB's, the Company's or their
respective Affiliates' behalf has provided, and will not provide it with any
material or information regarding the Placing Shares or the Company; nor has
it requested DKIB, the Company, any of their respective Affiliates or any
person acting on DKIB's, the Company's or their respective Affiliates'
behalf to provide it with any such material or information;
6. acknowledges that the content of this announcement is exclusively the
responsibility of the Company and that none of DKIB, DBAG, any of their
respective Affiliates nor any person acting on their behalf will be
responsible for or shall have any liability for any information,
representation or statement relating to the Company contained in this
announcement or any information previously published by or on behalf of the
Company and none of DKIB, DBAG, any of their respective Affiliates nor any
person acting on their behalf will be liable for any Placee's decision to
participate in the Placing based on any information, representation or
statement contained in this announcement or otherwise. Each Placee further
represents, warrants and agrees that the only information on which it is
entitled to rely and on which such Placee has relied in committing to
subscribe for the Placing Shares is contained in this announcement and any
information that is publicly available, including any Exchange Information,
such information being all that it deems necessary to make an investment
decision in respect of the Placing Shares, and that it has relied on its own
investigation with respect to the Placing Shares and the Company in
connection with its decision to subscribe for the Placing Shares and
acknowledges that it is not relying on any investigation that DKIB, DBAG,
the Company, any of their respective Affiliates or any person acting on
their behalf may have conducted with respect to the Placing Shares or the
Company and none of such persons has made any representations to it, express
or implied, with respect thereto;
7. acknowledges that it has not relied on any information relating to the
Company contained in any research reports prepared by DKIB, any of its
Affiliates or any person acting on DKIB's or any of its Affiliates' behalf
and understands that (i) none of DKIB, any of its Affiliates nor any person
acting on their behalf has or shall have any liability for public
information or any representation; (ii) none of DKIB, any of its Affiliates
nor any person acting on their behalf has or shall have any liability for
any additional information that has otherwise been made available to such
Placee, whether at the date of publication, the date of this announcement or
otherwise; and that (iii) none of DKIB, any of its Affiliates nor any person
acting on their behalf makes any representation or warranty, express or
implied, as to the truth, accuracy or completeness of such information,
whether at the date of publication, the date of this announcement or
otherwise;
8. represents and warrants that it (i) is entitled to acquire the Placing Shares
under the laws and regulations of all relevant jurisdictions which apply to
it; (ii) has fully observed such laws and regulations and obtained all such
governmental and other guarantees and other consents and authorities which
may be required thereunder and complied with all necessary formalities;
(iii) has all necessary capacity to commit to participation in the Placing
and to perform its obligations in relation thereto and will honour such
obligations; (iv) has paid any issue, transfer or other taxes due in
connection with its participation in any territory; and (v) has not taken
any action which will or may result in the Company, DBAG or DKIB, any of
their Affiliates or any person acting on their behalf being in breach of the
legal and/or regulatory requirements of any territory in connection with the
Placing;
9. represents and warrants that the acquisition by the Placee, or the person
specified by the Placee for registration as holder, of Placing Shares will
not give rise to a liability under any of sections 67, 70, 93 or 96 of the
Finance Act 1986 (depositary receipts and clearance services) and that the
Placing Shares are not being acquired in connection with arrangements to
issue depositary receipts or to issue or transfer Placing Shares into a
clearance system;
10. represents and warrants that it understands that the Placing Shares have not
been and will not be registered under the Securities Act or under the
securities laws of any state or other jurisdiction of the United States (as
defined below) and that the Company has not been registered as an
"investment company" under the United States Investment Company Act of 1940,
as amended;
11. represents and warrants that unless it is a "US Person" (within the meaning
of Regulation S) that is a QIB in the United States to which the Placing
Shares will be offered on a private placement basis, it is, or at the time
the Placing Shares are acquired, it will be, (a) the beneficial owner of
such Placing Shares and is neither a person located in the United States of
America, its territories or possessions, any state of the United States or
the District of Columbia (the "United States") nor on behalf of a person in
the United States, (b) acquiring the Placing Shares in an offshore
transaction (as defined in Regulation S under the Securities Act) and (c)
will not offer or sell, directly or indirectly, any of the Placing Shares in
the United States except in accordance with Regulation S or pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act;
12. represents and warrants that it has not offered or sold and will not offer
or sell any Placing Shares to persons in the United Kingdom prior to
Admission except to qualified investors as defined in section 86(7) of FSMA,
being persons falling within Article 2.1(e)(i), (ii) or (iii) of the
Prospectus Directive;
13. represents and warrants that it has only communicated or caused to be
communicated and will only communicate or cause to be communicated any
invitation or inducement to engage in investment activity (within the
meaning of section 21 of FSMA) relating to the Placing Shares in
circumstances in which section 21(1) of FSMA does not require approval of
the communication by an authorised person;
14. represents and warrants that it has complied and will comply with all
applicable provisions of FSMA with respect to anything done by it in
relation to the Placing Shares in, from or otherwise involving the United
Kingdom;
15. represents and warrants that it has complied with its obligations in
connection with money laundering and terrorist financing under the Criminal
Justice Act 1993, the Proceeds of Crime Act 2002, the Terrorism Act 2000,
the Anti-terrorism Crime and Security Act 2001 and the Money Laundering
Regulations (2003) (the "Regulations") and, if it is making payment on
behalf of a third party, that satisfactory evidence has been obtained and
recorded by it to verify the identity of the third party as required by the
Regulations;
16. unless otherwise agreed with DKIB, represents and warrants that it is (a) a
person falling within Article 19(5) of the FPO or (b) a person falling
within Article 49(2)(a) to (d) of the FPO and undertakes that it will
acquire, hold, manage or dispose of any Placing Shares that are allocated to
it for the purposes of its business;
17. unless otherwise agreed with DKIB, represents and warrants that it is a
qualified investor as defined in section 86(7) of FSMA, being a person
falling within Article 2.1(e)(i), (ii) or (iii) of the Prospectus Directive;
18. represents and warrants that it has all necessary capacity and has obtained
all necessary consents and authorities to enable it to commit to participate
in the Placing and to perform its obligations in relation thereto
(including, without limitation, in the case of any person on whose behalf it
is acting, all necessary consents and authorities to agree to the terms set
out or referred to in this document) and will honour such obligations;
19. undertakes that it (and any person acting on its behalf) will pay for the
Placing Shares acquired by it in accordance with this announcement on the
due time and date set out herein against delivery of such Placing Shares to
it, failing which the relevant Placing Shares may be placed with other
Placees or sold as DKIB may, in its absolute discretion, determine and it
will remain liable for any shortfall below the net proceeds of such sale and
the placing proceeds of such Placing Shares and may be required to bear any
stamp duty or stamp duty reserve tax (together with any interest or
penalties due pursuant to the terms set out or referred to in this
announcement) which may arise upon the sale of such Placee's Placing Shares
on its behalf;
20. acknowledges that neither DKIB, DBAG, the Company, any of their respective
Affiliates nor any person acting on their behalf is making any
recommendations to it or advising it regarding the suitability or merits of
any transaction it may enter into in connection with the Placing, and
acknowledges that neither the Company, DKIB, DBAG, any of their respective
Affiliates nor any person acting on their behalf has any duties or
responsibilities to it for providing advice in relation to the Placing or in
respect of any representations, warranties, undertakings or indemnities
contained in the Placing Agreement or for the exercise or performance of any
of DKIB's or DBAG's rights and obligations thereunder, including any right
to waive or vary any condition or exercise any termination right contained
therein;
21. undertakes that (i) the person whom it specifies for registration as holder
of the Placing Shares will be (a) the Placee or (b) the Placee's nominee, as
the case may be, (ii) neither DKIB, DBAG nor the Company will be responsible
for any liability to stamp duty or stamp duty reserve tax resulting from a
failure to observe this requirement and (iii) the Placee and any person
acting on its behalf agrees to acquire the Placing Shares on the basis that
the Placing Shares will be allotted to the CREST stock account of DKIB which
will hold them as settlement agent to facilitate the transaction and as
nominee for the Placees until settlement in accordance with its standing
settlement instructions with payment for the Placing Shares being made
simultaneously upon receipt of the Placing Shares in the Placee's stock
account on a delivery versus payment basis;
22. acknowledges that 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 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;
23. acknowledges that it irrevocably appoints any director of DKIB as its agent
for the purposes of executing and delivering to the Company and/or its
registrars any documents on its behalf necessary to enable it to be
registered as the holder of any of the Placing Shares agreed to be taken up
by it under the Placing;
24. represents and warrants that it is not a resident of any Prohibited
Jurisdiction and acknowledges that the Placing Shares have not been and will
not be registered nor will a prospectus be cleared in respect of the Placing
Shares under the securities legislation of any Prohibited Jurisdictions and,
subject to certain exceptions, may not be offered, sold, taken up, renounced
or delivered or transferred, directly or indirectly, within any Prohibited
Jurisdiction;
25. acknowledges that the agreement to settle each Placee's acquisition of
Placing Shares (and/or the acquisition of a person for whom it is
contracting as agent) free of stamp duty and stamp duty reserve tax depends
on the settlement relating only to an acquisition by it and/or such person
direct from the Company of the Placing Shares in question. Such agreement
assumes that the Placing Shares are not being acquired in connection with
arrangements to issue depositary receipts or to issue or transfer the
Placing Shares into a clearance service. If there were any such
arrangements, or the settlement related to other dealing in the Placing
Shares, stamp duty or stamp duty reserve tax may be payable, for which
neither the Company, DKIB nor DBAG will be responsible. If this is the case,
the Placee should take its own advice and notify DKIB accordingly;
26. acknowledges that the Placing Shares will be issued and/or transferred
subject to the terms and conditions set out in this announcement;
27. acknowledges that when a Placee or any person acting on behalf of the Placee
is dealing with DKIB, any money held in an account with DKIB on behalf of
the Placee and/or any person acting on behalf of the Placee will not be
treated as client money within the meaning of the relevant rules and
regulations of the FSA. The Placee acknowledges that the money will not be
subject to the protections conferred by the client money rules; as a
consequence, this money will not be segregated from DKIB's money in
accordance with the client money rules and will be used by DKIB in the
course of its business; and the Placee will rank only as a general creditor
of DKIB.
28. acknowledges that DKIB may (in its absolute discretion) satisfy its
obligations to procure Placees by itself agreeing to become a Placee in
respect of some or all of the Placing Shares or by nominating any connected
or associated person to do so;
29. acknowledges and understands that the Company, DKIB, DBAG and others will
rely upon the truth and accuracy of the foregoing representations,
warranties, agreements, undertakings and acknowledgements; and
30. acknowledges that until 40 days after the later of the commencement of the
Placing and the closing date, an offer or sale of Placing Shares within the
United States by any dealer (whether or not participating in the Placing)
may violate the registration requirements of the Securities Act if such
offer or sale is made otherwise than in accordance with Rule 144A or
pursuant to another exemption from registration under the Securities Act to
a person that is a QP (as defined below).
Additional Representations and Warranties by US Persons
In addition to the foregoing, each Placee which is a US Person to which the
Placing Shares will be offered in transactions exempt from, or not subject to,
the registration requirements of the Securities Act represents, warrants and
agrees as follows:
31. that (a) it is a qualified institutional buyer within the meaning of Rule
144A of the Securities Act; (b) it is a "qualified purchaser" within the
meaning of Section 2(a)(51) of the United States Investment Company Act of
1940, as amended ("QP"), and is not (i) a broker or dealer which owns or
invests less than US$25 million in securities of unaffiliated issuers; (ii)
a participant-directed employee plan; or (iii) formed for the purposes of
investing in the Placing Shares or the Company; (c) it has duly executed, or
will duly execute, an investor letter in the form provided to it by DKIB in
which it will make certain undertakings, representations and warranties in
addition to those contained herein; and (d) it is subscribing for the
Placing Shares for its own account, or for the account managed on behalf of
another QIB that is also a QP, and not with a view to any distribution
within the meaning of the Securities Act or applicable state law except as
set forth below;
32. it acknowledges and agrees that no offering circular or prospectus will be
provided in connection with the Placing Shares and it has, or to the extent
it is acquiring Placing Shares for the account of another QIB, such other
QIB (a) has, sufficient knowledge, sophistication and experience in
financial and business matters so as to be capable of evaluating the merits
and risks of the purchase of the Placing Shares; (b) is able to bear the
economic and financial risk (including a complete loss) of such a purchase;
(c) has had sufficient time to consider and conduct its own investigation
with respect to the offer and purchase of the Placing Shares, including the
tax, legal, currency and other economic considerations relevant to such
investment; and (d) will not look to the Company, DKIB, DBAG, any of their
respective Affiliates or any person acting on their behalf for all or part
of any such loss or losses it or they may suffer;
33. it understands and agrees that (a) the Placing Shares are "restricted
securities" within the meaning of Rule 144(a)(3) under the Securities Act;
(b) the undersigned will not offer, sell, transfer, pledge, hypothecate or
otherwise dispose of any Placing Shares except in an offshore transaction
outside the United States in accordance with Regulation S under the
Securities Act (and not in a prearranged transaction resulting in the sale
of Placing Shares into the United States or to a US Person) in accordance
with any other applicable laws of the United States governing the offer and
sale of such Placing Shares, and in each case it will notify any purchaser
of the Placing Shares of the resale restrictions relating to the Placing
Shares, if still applicable; (c) understands and agrees that the Placing
Shares (to the extent they are in certificated form), unless otherwise
determined by the Company in accordance with applicable law, will bear a
legend to that effect in addition to such other legends as the Company deems
necessary or as are required under applicable law; and (d) understands that
the Company or registrar and transfer agent for the Placing Shares will not
be required to accept for registration of transfer any Placing Shares except
upon presentation of evidence (including an opinion of legal counsel
satisfactory to the Company) to the Company and the transfer agent that the
foregoing restrictions on transfer have been complied with;
34. it understands and agrees that if any beneficial owner of ordinary shares in
the Company is at any time a US person and not a QP, the Company may (i)
require such beneficial owner to sell its ordinary shares to a person who is
not a US person or who is a QIB and a QP and is qualified to purchase such
shares in a transaction exempt from registration under the Securities Act or
(ii) sell such shares on behalf of such beneficial owner at the best price
reasonably obtainable to a person who is not a US person or who is a QIB and
a QP and is qualified to purchase such shares in a transaction exempt from
registration under the Securities Act;
35. without limiting the generality of clause (c) of paragraph 32 above, it
acknowledges that the Company may be a passive foreign investment company ("
PFIC") for US federal income tax purposes, and it could be a PFIC in future
years. The Company has not undertaken an extensive PFIC analysis, however,
if such analysis reveals no significant differences between tax and book
values for income and losses, then there is a significant likelihood that
the Company is a PFIC currently and may be a PFIC in future years. If the
Company is a PFIC, then US taxable investors may be subject to adverse US
tax consequences in respect of their investment in the Company's shares. US
investors may be able to mitigate these adverse US tax consequences by
making certain elections for US tax purposes;
36. it agrees that no purchaser of the Placing Shares shall deposit the Placing
Shares into any unrestricted American Depositary Receipt facility
established or maintained by a depositary bank, unless and until such time
as such Placing Shares are no longer "restricted securities" within the
meaning of Rule 144(a)(3) under the Securities Act; and
37. it acknowledges and agrees that the Company, DKIB, their respective
Affiliates and any person acting on their behalf will rely upon its
representations, warranties, undertakings, agreements and acknowledgements
set forth herein and in the investor letter, and agrees to notify the
Company and DKIB promptly in writing if any of its representations,
warranties, undertakings, agreements or acknowledgements cease to be
accurate and complete.
The acknowledgements, agreements, undertakings, representations and warranties
referred to above are given to each of the Company, DKIB, DBAG (for their own
benefit and, where relevant, the benefit of their respective Affiliates and any
person acting on their behalf) and are irrevocable.
No UK stamp duty or stamp duty reserve tax should be payable to the extent that
the Placing Shares are issued or transferred (as the case may be) into CREST to,
or to the nominee of, a Placee who holds those shares beneficially (and not as
agent or nominee for any other person) within the CREST system and registered in
the name of such Placee or such Placee's nominee.
Any arrangements to issue or transfer the Placing Shares into a depositary
receipts system or a clearance service or to hold the Placing Shares as agent or
nominee of a person to whom a depositary receipt may be issued or who will hold
the Placing Shares in a clearance service, or any arrangements subsequently to
transfer the Placing Shares, may give rise to stamp duty and/or stamp duty
reserve tax, for which neither the Company nor DKIB nor DBAG 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 stamp duty
or stamp duty reserve tax undertakes to pay such stamp duty or stamp duty
reserve tax forthwith and to indemnify on an after-tax basis and to hold
harmless the Company, DKIB and DBAG in the event that any of the Company and/or
DKIB and/or DBAG has incurred any such liability to stamp duty or stamp duty
reserve tax.
In addition, Placees should note that they will be liable for any capital duty,
stamp duty and all other stamp, issue, securities, transfer, registration,
documentary or other duties or taxes (including any interest, fines or penalties
relating thereto) payable outside the UK by them or any other person on the
acquisition by them of any Placing Shares or the agreement by them to acquire
any Placing Shares.
All times and dates in this announcement may be subject to amendment. DKIB shall
notify the Placees and any person acting on behalf of the Placees of any such
changes.
This announcement has been issued by the Company and is the sole responsibility
of the Company.
The rights and remedies of DKIB, DBAG and the Company under these terms and
conditions are in addition to any rights and remedies which would otherwise be
available to each of them and the exercise or partial exercise or partial
exercise of one will not prevent the exercise of others.
Each Placee may be asked to disclose in writing or orally to DKIB:
(a) if he is an individual, his nationality; or
(b) if he is a discretionary fund manager, the jurisdiction in which the
funds are managed or owned.
Dresdner Kleinwort Limited and Dresdner Kleinwort Securities Limited, who are
authorised and regulated by the Financial Services Authority, and Dresdner Bank
AG, London Branch, which is authorised by BAFin and by the Financial Services
Authority and which is regulated by the Financial Services Authority for the
conduct of designated investment business in the United Kingdom, are 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 clients of Dresdner Bank AG, London Branch, Dresdner Kleinwort
Securities Limited and Dresdner Kleinwort Limited, or for affording advice in
relation to the Placing, or any other matters referred to herein.
All times and dates in this announcement may be subject to amendment. DKIB shall
notify the Placees and any person acting on behalf of the Placees of any
changes.
This announcement has been prepared solely to provide information about the
Placing and it does not constitute, or form part of, any offer or invitation to
purchase, underwrite or otherwise acquire Placing Shares being offered, or the
solicitation of any such offer. Without limiting the foregoing statement, this
announcement does not constitute an offer of securities for sale in the United
States nor the solicitation of an offer to buy any such securities, nor may
securities be offered or sold in the United States absent registration or an
exemption from registration as provided in the Securities Act and the rules and
regulations thereunder. The Company does not intend to register the Placing
Shares under the Securities Act.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IOEILMFTMMMMMPP
D1 Oils (LSE:DOO)
過去 株価チャート
から 6 2024 まで 7 2024
D1 Oils (LSE:DOO)
過去 株価チャート
から 7 2023 まで 7 2024
