THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS
RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN
WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM THE
UNITED STATES, AUSTRALIA, NEW
ZEALAND, CANADA, JAPAN OR THE REPUBLIC OF SOUTH
AFRICA OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE,
PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.
THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND DOES
NOT CONSTITUTE OR CONTAIN ANY INVITATION, SOLICITATION,
RECOMMENDATION, OFFER OR ADVICE TO ANY PERSON TO SUBSCRIBE FOR,
OTHERWISE ACQUIRE OR DISPOSE OF ANY SECURITIES IN SURFACE
TRANSFORMS PLC OR ANY OTHER ENTITY IN ANY JURISDICTION. NEITHER
THIS ANNOUNCEMENT NOR THE FACT OF ITS DISTRIBUTION SHALL FORM THE
BASIS OF, OR BE RELIED ON IN CONNECTION WITH, ANY INVESTMENT
DECISION IN RESPECT OF SURFACE TRANSFORMS PLC
OR ANY OTHER
ENTITY.
THE
INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED BY THE
COMPANY TO CONSTITUTE INSIDE INFORMATION STIPULATED UNDER THE
MARKET ABUSE REGULATION (EU) NO. 596/2014 AS IT FORMS PART OF THE
DOMESTIC LAW OF THE UNITED KINGDOM BY VIRTUE OF
THE EUROPEAN UNION (WITHDRAWAL) ACT 2018 (AS AMENDED)
("MAR"). UPON THE PUBLICATION OF THIS ANNOUNCEMENT VIA THE
REGULATORY INFORMATION SERVICE, THIS INSIDE INFORMATION IS NOW
CONSIDERED TO BE IN THE PUBLIC DOMAIN.
SURFACE TRANSFORMS
PLC
("Surface Transforms" or the
"Company")
Proposed Placing and
Subscription to raise approximately
£6.5 million (before
expenses) via an accelerated bookbuild,
and
Open Offer to raise up to a
further £2.0
million (before
expenses)
Surface Transforms (AIM:SCE),
manufacturers of carbon fibre reinforced ceramic automotive brake
discs, is pleased to announce that it proposes to raise
approximately £0.8 million (before expenses) by
means of a Firm Placing and Subscription, and a further
£5.7 million (before expenses) by means of a Conditional
Placing (together, the "Placing and
Subscription"), with a total 650,000,000 New Ordinary Shares
at 1 pence per
New Ordinary Share. In addition to the Placing and Subscription,
the Company proposes to raise up to a
further £2.0 million (before expenses), subject to the Board's discretion
to increase the size of the Open Offer, by way of an Open Offer
(together with the Placing and Subscription, the
"Fundraise").
The net proceeds from the Placing
and Subscription will be used for immediate working capital
requirements, both in terms of existing operations, but also the
Phase 2 and manufacturing scale-up. Any excess raised pursuant to
the Open Offer will provide additional working capital
headroom.
The Placing will be conducted by way
of an accelerated bookbuild ("Bookbuild") which will be launched
immediately following this Announcement, in accordance with the
terms and conditions set out in the Appendix to this
Announcement.
The Firm Placing will be effected by
way of a cashbox placing of new Ordinary Shares for non-cash
consideration, further details of which are set out below. The
cashbox placing structure is being used due to the Issue Price
being at a substantial discount, which would otherwise limit the
net proceeds receivable by the Company given the existing allotment
authorities available to the Board for issuing Ordinary Shares on a
non-pre-emptive basis.
KEY
HIGHLIGHTS
· Proposed Placing of approximately £6.3 million (before expenses) with institutional investors,
proposed Subscription of £0.2 million by the Directors (before expenses) and certain
PDMRs and proposed Open Offer of up to £2.0 million (before expenses), subject to the Board's
discretion to increase the size of the Open Offer, to existing
Qualifying Shareholders, in each case at the Issue
Price.
· The
Company intends to use the net proceeds of the proposed Fundraise
for working capital requirements and to support existing operations
and the manufacturing scale-up
· The
Issue Price represents a discount of approximately
66 per cent. to the
closing mid-market price of 2.9
pence per Ordinary Share
on 30 April
2024, being the last Business Day prior to the date of this
Announcement.
· Zeus
is acting as Nominated Adviser and Joint Broker to the Company and
Cavendish is acting as Joint Broker to the Company in connection
with the Fundraise.
· Completion of the Conditional Placing is subject
to, inter alia, the
Resolutions being passed at a General Meeting of the Company,
expected to be held at 11.00
a.m. on 23
May 2024.
The timing for the close of the
Bookbuild and allocation of the Placing Shares shall be at the
absolute discretion of the Joint Brokers, in consultation with the
Company. The allocation of the Placing
Shares between First Admission and Second Admission shall be at the
absolute discretion of the Joint Brokers, in consultation with the
Company. The final number of Placing Shares to be issued pursuant
to the Placing will be agreed by the Joint Brokers and the Company
at the close of the Bookbuild. The result of the Placing will be
announced as soon as practicable thereafter. The Placing is not
underwritten.
In addition, the Directors and
certain PDMRs have indicated an intention to participate in the
Fundraising (by way of a direct Subscription for Subscription
Shares) as follows:
Director
|
Intended
Subscription
|
Number of Subscription
Shares
|
Matthew Taylor
|
£100,000
|
10,000,000
|
David Bundred
|
£25,000
|
2,500,000
|
Kevin Johnson
|
£25,000
|
2,500,000
|
Ian Cleminson
|
£25,000
|
2,500,000
|
Julia Woodhouse
|
£25,000
|
2,500,000
|
Isabelle Maddock
|
£3,500
|
350,000
|
Stephen
Easton1
|
£15,000
|
1,500,000
|
1Stephen Easton is the non-Board Chief Operating Officer and a
PDMR of the Company
In addition to the Placing and
Subscription, the Company intends to provide all Qualifying
Shareholders with the opportunity to subscribe for an aggregate
of 200,000,000 Open Offer Shares at the Issue Price
of 1 pence per Open Offer Share to raise up to
approximately £2.0 million (before expenses),
subject to the Board's discretion to increase the size of the Open
Offer. Qualifying Shareholders subscribing for their full
entitlement under the Open Offer may also request additional
Open Offer Shares through an excess application facility.
The Open Offer is not underwritten.
The issue of the Firm Placing Shares
and the Subscription Shares are conditional, inter alia¸ on the Firm Placing
Admission. The issue of the Conditional Placing Shares and the
Open Offer Shares are conditional, inter alia, the passing by
Shareholders of the Resolutions at the General Meeting of the
Company, expected to be held at 11.00 a.m. on 23 May
2024.
Shareholders should note that the
Conditional Placing and Open Offer are conditional, inter alia, on
the passing of the Resolutions. Failure to approve the Resolutions
would therefore prevent the Company from raising funds pursuant to
the Conditional Placing and Open Offer, and only part of the net
proceeds would be received by the Company. This would require the
Company to seek urgent alternate financing that may or may not be
available and, if available, may or may not be on worse terms than
the Fundraising. The Directors believe that the Resolutions to be
proposed at the General Meeting are in the best interests of the
Company and Shareholders as a whole and unanimously recommend that
Shareholders vote in favour of the Resolutions.
A circular containing further
details of the Placing, the Subscription and the Open Offer, Notice
of General Meeting, proxy form and Application Form will be
despatched to Shareholders following announcement of the result of
the Placing and Subscription and will thereafter be available on
the Company's website at www.surfacetransforms.com.
Applications will be made to
the London Stock Exchange for the admission of the Firm
and Conditional Placing Shares, Subscription Shares and
Open Offer Shares to be admitted to trading on AIM.
Admission of the Firm Placing Shares and the Subscription Shares is
expected to commence at 8.00
a.m. on 7
May 2024 and admission of the Conditional
Placing at 8.00 am
on 24 May 2024 and
the Open Offer Shares at 8.00
am on 28 May
2024.
The New Ordinary Shares, when
issued, will be fully paid and will rank pari passu in all respects
with the Existing Ordinary Shares.
The
Appendix to this Announcement (which forms part of this
Announcement) contains the detailed terms and conditions of the
Placing.
For
further information, please contact:
|
|
|
|
Surface Transforms plc
|
+44 151
356 2141
|
David Bundred, Chairman
|
|
Kevin Johnson, CEO
|
|
Isabelle Maddock, CFO
|
|
|
|
Zeus (Nominated Adviser and Joint Broker)
|
+44 203
829 5000
|
David Foreman / James
Edis / Ed Beddows (Investment Banking)
|
|
Dominic King (Corporate
Broking)
|
|
|
|
Cavendish Capital Markets Ltd (Joint Broker)
|
+44 20
7220 0500
|
Ed Frisby / Abigail
Kelly (Corporate Finance)
|
|
Andrew Burdis / Harriet
Ward (ECM)
|
|
Introduction
Surface Transforms announces
that it proposes to raise approximately £0.8 million (before expenses) by means of a Firm Placing and
Subscription, and a further £5.7 million
(before expenses) by means of a Conditional
Placing, with a total 650,000,000 New Ordinary Shares
at 1 pence per
New Ordinary Share. In addition, the Company proposes to raise up
to a further £2.0 million (before expenses), subject to the Board's discretion
to increase the size of the Open Offer, by way of an Open
Offer.
The Conditional Placing is
conditional the passing of the Resolutions and the Conditional
Placing Admission.
Background to and reasons for the
Fundraising
Surface Transforms has announced a
Placing and Subscription raising gross proceeds of £6.5 million,
together with an Open Offer to raise up to £2.0 million (before
expenses). The net proceeds of the Fundraising will be used for
immediate working capital requirements and to support existing
operations and the manufacturing scale-up.
It is important to note that Surface
Transforms already has a secured and prospective customer pipeline
for approximately £700 million1 of sales, of which
approximately £390 million2 is contracted. Over the next
three years (and potentially beyond), Surface Transforms expect to
be able to sell as many discs as it can manufacture. Related to
which, the Board continues to target increasing factory capacity to
£75 million3 sales per annum over the next few years
with a medium-term target of £150 million3 per annum.
However, and as recent trading statements released by the Company
have shown, improving manufacturing resilience is at least as
important as the capacity scale-up, and operational management, led
by the Company's Chief Executive, Kevin Johnson and new Chief
Operating Officer, Stephen Easton, are addressing this.
The Company raised £11.0 million
(gross) in Q4-2023 with the expectation that the net proceeds of
that fundraising (together with the £13.2 million Loan Facility
entered into in December 2023) and estimated future operating cash
inflows, would be sufficient to deliver an expanded plant capable
of delivering the medium-term target of £150 million3
sales per annum. Due to a combination of factors, which are
described further below, this is not currently the case, and the
Company requires the net proceeds from the Fundraising for
short-term working capital purposes, which once resolved, will mean
the medium-term opportunity can once again be fully focused upon
and delivered.
The Board is acutely aware of
shareholder frustrations with the need for this Fundraising, not
least given the proximity to the previous equity fundraise
completed by the Company in Q4-2023, but the Directors do therefore
want to remind Shareholders of:
-
the automotive market drivers and recent progress with the
Company's OEM customers;
-
the Company's manufacturing strategy including progress on
installing new capacity; and
-
how such drivers and progress translate into recent and forecast
revenues.
which are considered in turn in more
detail below.
Finally, each member of the Board
and one non-Board PDMR have indicated an intention to subscribe for
a total of 21,850,000 New Ordinary Shares pursuant to the
subscription. The Directors have also irrevocably undertaken to
vote in favour of all the Resolutions to be proposed at the General
Meeting in respect of their own beneficial holdings amounting to in
aggregate 5,402,757 Ordinary Shares, representing approximately
1.53 per cent. of the Existing Ordinary Shares.
Automotive market drivers
Surface Transforms produce
lightweight carbon ceramic brake discs for the automotive industry.
Historically, iron discs have been utilised. However, there are
compelling drivers for the increasing adoption of carbon ceramic
brakes, with the likes of AMG, Aston Martin, Audi, Bentley, BMW,
General Motors, Ferrari, Jaguar Land Rover, Lamborghini, Lucid,
Koenigsegg, McLaren, Nissan, Porsche, Tesla and VW who are now
offering carbon ceramic brakes on selected vehicles.
The drivers for the adoption of
carbon ceramic brakes are multi-faceted and include:
· Technological:
carbon ceramic discs provide superior braking
performance than iron discs being both stronger and more durable as
well as being able to dissipate more heat - increased heat
evacuation reduces the brake temperature which improves
performance. In addition, carbon ceramic discs can be up to 70 per
cent. lighter - in certain instances each carbon ceramic brake disc
is 25 kg lighter resulting in a total chassis weight reduction of
100 kg;
· Environmental:
reduced chassis weight results in lower CO2
emissions. In addition, carbon ceramic discs produce significantly
less brake pad dust pollution than iron discs, an increasingly
important issue for regulators;
· Competition:
Brembo SGL are currently the leading carbon
ceramic brake disc manufacturer by volume and have historically
enjoyed a near monopolistic position. Automotive OEMs desire
de-risked supply arrangements wherever possible. The Board consider
Surface Transforms to be the only credible alternative supplier of
carbon ceramic brakes to Brembo SGL, and anticipate this to be the
situation for some time;
· Lifetime and total cost of
ownership: Carbon ceramic discs last
approximately four times longer than iron discs. This increased
service life therefore has a commensurate reduction in the total
cost of ownership;
· Quality:
Carbon ceramic discs provide enhanced handling,
comfort and performance compared with heavier iron discs.
Furthermore, carbon ceramic discs materially reduce the prospect of
galvanic corrosion, a safety concern for grey iron discs on
EVs;
· Aesthetics:
Carbon ceramic discs are desirable, especially
when combined with colourful calipers, and because they do not
corrode like iron discs, they generate significantly less brake
dust resulting in cleaner wheels, and unlike iron discs do not
rust;
· Shift to EV:
The EV market is becoming more prominent in the
wider automotive space, led by stringent rules in the EU,
California and Japan to reduce carbon emissions. In addition to the
above, weight saving on EVs can lead to smaller and potentially
cheaper batteries.
While there are substantial market
drivers outlined above, the considerable testing requirements of
the OEMs continue to limit the competition. Surface Transforms is
currently taking market share from both Brembo SGL and iron disc
manufacturers, and expects to continue to win new contracts during
the coming years.
Progress with OEM customers
Surface Transforms' growth continues
to be driven by contracting directly with OEMs to supply carbon
ceramic brake discs for upcoming models. The Company has 12
nominated OEM contracts, with an expected total lifetime value of
£390 million4, equating to £79 million5 per
annum. This includes the most recent nomination with OEM 10,
expected to result in £100 million6 of lifetime
value.
Of the 12 nominated OEM contracts,
five are in a multi-year revenue generation phase with the
remaining contracts expected to enter SOP at regular intervals
between now and 2027.
In addition, expected revenue
continues to grow through "follow on" contracts, in which OEM
customers use existing product approvals on their future
models.
The Company's strategy is to achieve
annual revenue of £100 million7 within the next five
years, with a PCP of £300 million, which includes other potential
customers alongside awarded and nominated contracts.
Whilst there can be no guarantee
that Surface Transforms will be awarded any further supply
contracts to any of the OEMs or, even if awarded, what the actual
vehicle volumes will transpire to be, the Board note their
continuing success winning new contracts, particularly follow on
contracts.
Whilst Surface Transforms can fulfil
its existing supply contracts through existing, and planned
increases in manufacturing capacity through 2024 and 2025 at the
Company's Knowsley facility, there remains insufficient resilience
and future capacity expansion will be required to deliver the PCP,
should these be converted into actual contract awards.
Manufacturing strategy
During Q1 2024, the Company
continued to progress its three-phased manufacturing capacity
scale-up, building on Phase 1 which provides a revenue capacity of
£20 million per annum.
The Company has commenced Phase 2,
which is expected to increase production capacity to £75
million8 per annum by 2025, with a capital cost of £14
million. Phase 2 comprises two parts, with Part 1 anticipated to be
available for production in 2024 and Part 2 remaining on course to
be completed and available for production in 2025. Part 1 will
increase production capacity to £50 million8 per annum,
helping support 2024 customer demand and provide the necessary
resilience to mitigate the risk of and/or overcome single points of
failure. The Company has to date invested £6 million into Phase 2,
with the balance to be financed by the Loan Facility which was
secured in December 2023.
Phase 3 of the manufacturing
strategy is to increase revenue to £150 million8 per
annum through the expansion of the factory on an adjacent 2 acre
site. Phase 3 is expected to be completed by 2027, with an expected
capital cost of £30 million, being financed by the Loan Facility
and retained cash flows generated from operations.
Progress on installing Phase
2 new capacity
Part 1 of Phase 2 is proceeding to
plan with all but one of the furnaces to be on site by mid-2024.
The last furnace is slightly delayed, not due to an issue with the
furnace itself, but due to protracted negotiations regarding the
site expansion including the positioning of this last furnace,
which have now concluded.
Capacity increases can also be
achieved by internal work on already installed furnaces which can,
over time, be substantial. The Company has a number of internal
work projects underway; they are progressing well and form part of
2024 capacity contingency plans.
Manufacturing
yield
Date
|
2023
|
Q1-2024
|
Q2-2024
|
Q3-2024
|
Q4-2024
|
H1-25
|
H2-25
|
Strategic
Goal
|
Yield
|
47%
|
75%
|
83%
|
85%
|
86%
|
88%
|
90%
|
99%
|
As described in the section below,
production has been constrained with manufacturing yields too low,
due to high scrappage rates, primarily in Q1-2024. A dedicated
team, overseen by Stephen Easton, Chief Operating Officer, have
completed a large number of process refinements during FY 2023 and
Q1 2024, as shown in the below chart. Moreover, there remains a
detailed programme of further quarterly initiatives to be performed
throughout 2024 and 2025.
Production stability
Process refinements have been
introduced and managed to address the objectives of building
capacity, improving yield and reducing costs. The vast majority of
these refinements for FY 2024 and beyond have already been
explicitly identified, which combined with recent successful
implementations, gives management confidence that these further
process improvements will generate improved manufacturing yields
during FY 2024 and FY 2025, enhance capacity and reduce
costs.
Date
|
Avg
2023/Q
|
Q1-2024
|
Q2-2024
|
Q3-2024
|
Q4-2024
|
H1-25
|
H2-25
|
Strategic
Goal
|
# Process
Refinements
|
72
|
42
|
16
|
15
|
25
|
5
|
8
|
5
|
Cost
reductions
The above initiatives as well as
other specific projects will enable the Company to reduce
manufacturing costs per disc, as set out in the table
below:
Date
|
2023
|
Q1-2024
|
Q2-2024
|
Q3-2024
|
Q4-2024
|
Q1-2025
|
Q2-2025
|
Q3-2025
|
Strategic
Goal
|
Cost reduction saving/disc
(£)
|
(56)
|
(32)
|
48
|
60
|
60
|
100
|
125
|
150
|
210
|
Utilisation of proceeds for the 6 months to the end of Q1
2024
The Company raised net proceeds of
£10.1 million in Q4-2023 which have primarily been utilised against
management budgets at the time, as follows:
Foregone contribution from missed
sales during FY 2024 to date
|
£1.5 million
|
Combined cost of scrappage, both
foregone contribution of lost sales and sunk cost of production
through to point of scrappage
|
£2.4 million
|
Increased development and other
overhead costs supporting scale-up, including tooling and repairs
and maintenance to resolve certain single points of failure but
particularly in understanding and conducting programmes to reduce
scrappage rates
|
£1.2 million
|
Loan Financing - timing differences
to originally assumed cash phasing
|
£3.5 million
|
Positive working capital variance -
linked to Q1-2024 activity being lower than originally
forecast
|
(£1.9 million)
|
The combination of the above
factors, namely foregone sales contribution, increased costs and
certain adverse timing differences, have resulted in the Company
being working capital constrained.
Reasons for the Fundraising
For the reasons set out above, the
Company has been and expects to continue to be working capital
constrained in the absence of a cash injection. Accordingly, the
proposed Placing and Subscription raising net proceeds of
approximately £6.0 million will support the immediate working
capital requirements of the Company, both in terms of existing
operations, but also the Phase 2 and manufacturing scale-up. Any
excess raised pursuant to the Open Offer will provide additional
working capital headroom. The Company does not currently anticipate
requiring any further external funding for future expansion up to
and including Phase 3 of the manufacturing scale-up but will likely
explore non-equity options in the first instance should any further
external funding be required.
The Board has considered various
options to address this short term working capital constraint and
concluded that an equity fundraising is the optimal solution,
acknowledging that at the Issue Price, the proposed Placing and
Subscription will be significantly dilutive to Existing
Shareholders. Accordingly, the Board intends to propose the Open
Offer to allow its supporting Existing Shareholders (who are also
Qualifying Shareholders) the opportunity to participate in the
Fundraising through the Open Offer and minimise
dilution.
Trading update and outlook
As recently reported in the
Company's RNS announcement on 17 April 2024 entitled "2024 Sales
Outlook", sales are anticipated to grow between 111 - 165 per cent.
in FY 2024 (compared to FY 2023 sales of £8.3 million) resulting in
a projected FY 2024 range of £17.5 million to £22 million
sales.
Sales were constrained in Q1-2024
due primarily to continuing high levels of scrap from processes
that are not yet fully capable. Significant progress has been made
in reducing scrap and this is expected to continue through 2024,
unlocking further capacity. Similarly, progress on expanding the
Company's capacity during 2024 is advancing. These three activities
are all boosting sales which the Board maintain will drive the
Company's rapid growth during the year.
Management have detailed plans in
place to continue to drive all three areas with the pace of
progress determining a current spread in expected revenues for FY
2024 of between £17.5 million and £22 million. With continuing
improvements in scrappage rates and generally better visibility on
customer deliveries, the Board expect this sales range to narrow,
and the Company will provide updates on progress throughout the
year.
The Company's ambition remains
generating revenues of £100 million9 per annum within
the next five years. The below table sets out actual FY 2023 and Q1
2024 revenues together with management expectations through Q2
2025, set against the targeted £25 million quarterly
revenue:
Date
|
Q1-2023
|
Q2-2023
|
Q3-2023
|
Q4-2023
|
Q1-2024
|
Q2-2024
|
Q3-2024
|
Q4-2024
|
Q1-2025
|
Q2-2025
|
Strategic
Goal
|
Quarterly Revenues
(£m)
|
1.4
|
1.9
|
2.0
|
3.0
|
3.0
|
4.0
|
4.8
|
5.8
|
7.0
|
7.0
|
25.0
|
These quarterly revenues (above)
need to be viewed against the effective revenue capacity of the
Company during the same period (as set out in the below
table):
Date
|
Avg
2023
|
Q1-2024
|
Q2-2024
|
Q3-2024
|
Q4-2024
|
Q1-2025
|
Q2-2025
|
Strategic
Goal
|
Effective Capacity Revenue
(£m)
|
2.0
|
3.0
|
7.0
|
7.0
|
9.0
|
10.0
|
11.0
|
38.0
|
Sales in Q1 2024 were £3.0 million.
Accepting that £3.0 million maintained the Company's quarterly
revenue rate rather than increasing it, sales in Mar-24 were £1.5
million. Furthermore, significant improvements in the underlying
operational performance, led by Stephen Easton, Chief Operating
Officer, have also been achieved. The single point of failure
capacity constraints have now, almost all, been resolved, the
revised maintenance procedures and continuing operator training
have significantly improved plant availability, and
performance.
The Company has also agreed revised
2024 delivery schedules with all customers that progressively pull
back arrears. The Company is broadly keeping to these schedules and
the Board are of the view that the customer situation is
stable.
In April 2024, the Company agreed
revised financial covenants for the Loan Facility, with updated
banking documentation currently being prepared. Management's
low-case estimates (with FY24 sales of £17.5 million) include
approximately £10.45 million total use of the Loan Facility by the
end of the two-year drawdown period ending 31 December 2025. Under
such scenario, management anticipate they would request an
extension of the Loan Facility to utilise any undrawn amounts
during FY26. If the financial performance of the Company exceeds
this low-case forecast, management expect the full £13.2 million
will be drawn down.
Board change
David Bundred, Chairman, has
confirmed that after 12 years on the Board, he intends to retire
from this role in 2024. A search process has now started, led by
Julia Woodhouse, independent non-executive director. Further
updates will be provided in due course.
The
Placing and Subscription
The Company intends to raise £0.8
million (before expenses), and conditionally raise a further £5.7
million (before expenses), by means of the Placing and Subscription
of 650,000,000 new
Ordinary Shares, which are not subject to clawback, at the Issue
Price for the benefit of the Company.
The Placing Shares and the
Subscription Shares, when issued and fully paid, will rank equally
in all respects with the Existing Ordinary Shares.
The Firm Placing will be effected by
way of a cashbox placing of New Ordinary Shares for non-cash
consideration. The cashbox structure is expected to have the effect
of providing the Company with the ability to realise distributable
reserves approximately equal to the net proceeds of the Firm
Placing less the nominal value of the Firm Placing Shares issued by
the Company.
Zeus will, pursuant to the
Subscription and Transfer Agreements, subscribe for redeemable
preference shares in Bumblebee Finance (Jersey) Limited a new
Jersey-incorporated subsidiary of the Company ("JerseyCo") in an
amount equal to the gross proceeds of the Firm Placing. Monies
received from Placees taking up Firm Placing Shares will be applied
by Zeus to subscribe for redeemable preference shares in
JerseyCo.
The Company will allot and issue the
Firm Placing Shares on a non-pre-emptive basis to Placees who have
participated in the Firm Placing in consideration for the transfer,
pursuant to the terms of the Subscription and Transfer Agreements,
of the redeemable preference shares in JerseyCo that will be issued
to Zeus. Accordingly, at the conclusion of this cashbox placing
process, JerseyCo will be a wholly owned subsidiary of the Company
and its principal assets will be cash reserves approximately equal
to the gross proceeds of the Firm Placing. Shareholder approval is
not required to effect the Firm Placing by way of a cashbox
placing.
Instead of receiving cash as
consideration for the issue of the Firm Placing Shares, following
completion of the Firm Placing, the Company will own the entire
issued share capital of JerseyCo, whose only asset will be its cash
reserves as noted above. The Company will then be able to access
those funds by redeeming the redeemable preference shares it holds
in JerseyCo.
Accordingly, by subscribing for the
Firm Placing Shares under the Firm Placing and submitting a valid
payment in respect thereof, each Placee instructs Zeus to hold such
payment on their respective behalves and: (i) to the extent of a
successful application under the Firm Placing, to apply such
payment solely to permit Zeus to subscribe (as principal) for
redeemable preference shares in JerseyCo; and (ii) to the extent of
an unsuccessful application under the Firm Placing, to return the
relevant payment without interest to the Placee.
The Subscription is a private
subscription at the Issue Price with Subscription Letters between
the Company and each of the Directors and one non-Board PDMR of the
Company. The Subscription Shares will be issued at Firm Placing
Admission under the Company's existing allotment authorities
obtained at the Company's general meeting held on 18 December
2023.
The
Placing Agreement
Pursuant to the terms of the Placing
Agreement, Zeus and Cavendish, as agents to the Company, have
conditionally agreed to use their reasonable endeavours to procure
Placees for the Placing Shares to be issued under the Placing. The
Firm Placing is conditional, inter alia, upon neither of the Joint
Brokers having exercised their right to terminate the Placing
Agreement and the Firm Placing Admission occurring not later than
8.00 a.m. on 7 May 2024. The Firm Placing is not conditional on the
Resolutions being passed at the GM. Once the Firm Placing Admission
has occurred, neither of the Joint Brokers will have the right to
terminate any of its obligations under the Placing Agreement with
regard to the Firm Placing, but may at any time up to the
Conditional Placing Admission terminate its obligations under the
Placing Agreement as regards the Conditional Placing.
The Conditional Placing is
conditional, inter alia, upon the Firm Placing Admission having
occurred not later than 8.00 am on 7 May 2024, the Resolutions
being passed at the GM without amendment, the Company having full
performed its obligations under the Placing Agreement to the extent
that they fall to be performed prior to the Conditional Placing
Admission, the Placing Agreement becoming unconditional and not
being terminated in accordance with its terms and, the Conditional
Placing Admission occurring by no later than 8.00 a.m. on 24 May
2024 (or such later date as the Company and the Joint Brokers may
agree, being no later than 8.00 a.m. on 11 June 2024). Once the
Conditional Placing Admission has occurred, no party to the Placing
Agreement can terminate any part of the Placing Agreement which
relates to the Conditional Placing Admission and/or the Placing,
allotment and/or issue of the shares subject to the Conditional
Placing Admission.
The
Subscription and Transfer Agreements
In connection with the Firm Placing,
(a) the Company, Zeus and JerseyCo have entered into a subscription
and transfer agreement and (b) the Company and Zeus have entered
into a put and call option agreement (together the "Subscription
and Transfer Agreements"), each agreement being dated on or around
the date of the Placing Agreement, in relation to the subscription
and transfer of the redeemable preference shares in JerseyCo to the
Company.
Under the terms of the Subscription
and Transfer Agreements:
(a)
the Company and Zeus will acquire ordinary shares in
JerseyCo;
(b) the
Company and Zeus have entered into certain put and call options in
respect of the ordinary shares in JerseyCo subscribed for by Zeus
that are exercisable if the Firm Placing does not
complete;
(c)
Zeus will apply monies received from Placees under the Firm
Placing, to subscribe for redeemable preference shares in JerseyCo
to an aggregate value equal to such monies; and
(d) the
Company will allot and issue the Firm Placing Shares to those
persons entitled to them in consideration of Zeus transferring its
holding of redeemable preference shares and ordinary shares in
JerseyCo to the Company.
Placees and Qualifying Shareholders
are not party to these arrangements and so will not acquire any
direct right against Zeus pursuant to these arrangements. The
Company will be responsible for enforcing the obligations of Zeus
under these arrangements.
Director and non-Board PDMR Participation in the
Fundraising
The Directors and PDMRs have
indicated an intention to participate in the Subscription by way of
a direct Subscription, as follows:
Director
|
Intended
Subscription
|
Number of Subscription
Shares
|
Matthew Taylor
|
£100,000
|
10,000,000
|
David Bundred
|
£25,000
|
2,500,000
|
Kevin Johnson
|
£25,000
|
2,500,000
|
Ian Cleminson
|
£25,000
|
2,500,000
|
Julia Woodhouse
|
£25,000
|
2,500,000
|
Isabelle Maddock
|
£3,500
|
350,000
|
Stephen
Easton1
|
£15,000
|
1,500,000
|
1Stephen Easton is the non-Board Chief Operating Officer and a
PDMR of the Company
The Subscription Shares, when issued
and fully paid, will rank equally in all respects with the Existing
Ordinary Shares. The Subscription is conditional upon, inter alia, the Firm Placing
Admission.
Application will be made to the
London Stock Exchange for admission of the Subscription Shares to
trading on AIM. Admission of the Subscription Shares is expected to
take place, and dealings on AIM are expected to commence, at 8.00
a.m. on 7 May 2024.
Open Offer
In order to provide all Qualifying
Shareholders with an opportunity to participate, the Company is
conducting an Open Offer providing those shareholders the
opportunity to subscribe at the Issue Price for an aggregate of
200,000,000 Open Offer Shares. The Board has discretion to increase
the size of the Open Offer up to an aggregate of 300,000,000 Open
Offer Shares. This allows Qualifying Shareholders to participate on
a pre-emptive basis whilst providing the Company with the
flexibility to raise additional equity capital to further improve
its financial position.
Qualifying Shareholders are being
offered the opportunity to apply through the Excess Application
Facility for additional Open Offer Shares in excess of their pro
rata entitlements to the extent that other Qualifying Shareholders
do not take up their entitlements in full. Qualifying Shareholders
with nil basic entitlement will still be eligible to apply for Open
Offer Shares under the Excess Application Facility. In the event of
applications in excess of the maximum number of Open Offer Shares
available, the Company will decide on the basis for allocation,
however, if this scenario occurs, preference is likely to be given
to Qualifying Shareholders with smaller shareholdings (who
historically may have had less opportunity to participate in
placings conducted by the Company). The Open Offer Shares will not
have been placed subject to clawback nor have they been
underwritten. Consequently, there may be fewer than 200,000,000
Open Offer Shares issued pursuant to the Open Offer.
The Open Offer provides Qualifying
Shareholders the opportunity to participate in the Fundraising, up
to £2.0 million worth of Open Offer Shares to be issued at the
Issue Price. The Open Offer is being made on the basis of 1 Open
Offer Share for every 1.760363190 Existing Ordinary Shares held by
Qualifying Shareholders on the Record Date. However, should the
Open Offer be significantly oversubscribed, the Directors may, at
their absolute discretion, increase the Open Offer up to a maximum
aggregate amount of £3.0 million worth of Open Offer Shares to be
issued at the Issue Price.
The Conditional Placing and the Open
Offer are conditional upon, inter alia, the Firm Placing Admission
having occurred not later than 8.00 am on 7 May 2024, the approval
of Shareholders of the Resolutions at the General Meeting and upon
the Placing Agreement becoming unconditional in all respects (other
than as to the Conditional Placing Admission and the Open Offer
Admission (as the case may be)) and not having been terminated in
accordance with its terms.
Investor presentation
The Company will provide a live
presentation to investors and any other interested parties via
Hardman & Co's platform at 12.00 noon on 9 May 2024. Interested
parties can register for the presentation at
https://us06web.zoom.us/webinar/register/WN_mUnp-l2KTomKBRFgUhFEow
Surface Transforms is committed to
ensuring that there are appropriate communication structures for
all its Shareholders. Questions can be submitted in advance as well
as during the event via the "Ask a Question" function. Although
management may not be in a position to answer every question
received, they will address the most prominent ones within the
confines of information already disclosed to the market.
Expected timetable of principal events
|
|
|
|
Record Date
|
1 May 2024
|
Announcement of the
Fundraising
|
1
May 2024
|
Announcement of the result of the
Placing and the Subscription
|
2 May
2024
|
Despatch of the Circular
|
3
May 2024
|
Admission of the Firm Placing Shares
and Subscription Shares
|
8.00 a.m.
on 7 May 2024
|
Announcement of the results of the
General Meeting
|
23 May
2024
|
Announcement of the result of the
Open Offer
|
by 24 May
2024
|
Announcement of the result of the
Open Offer
|
by 24 May
2024
|
Admission of the Conditional Placing
Shares
|
8.00 a.m.
on 24 May
2024
|
Admission of the Open Offer
Shares
|
8.00 a.m.
on 28 May
2024
|
Irrevocable commitments
The Directors (or persons connected
with the Directors within the meaning of sections 252 - 255 of the
Act), who in aggregate hold 5,402,757 Existing Ordinary Shares,
representing approximately 1.53 per cent. of the Existing Ordinary
Shares, have irrevocably undertaken to vote in favour of the
Resolutions at the General Meeting and not to subscribe for any of
the Open Offer Shares.
Important information
This Announcement is for information
purposes only and does not itself constitute an offer or invitation
to underwrite, subscribe for or otherwise acquire or dispose of any
securities in the Company and does not constitute investment
advice.
Neither this Announcement nor any
copy of it may be taken or transmitted, published or distributed,
directly or indirectly, in or into the United
States, Australia, New Zealand, Canada, Japan
or the Republic of South Africa or to any persons in any of
those jurisdictions or any other jurisdiction where to do so would
constitute a violation of the relevant securities laws of such
jurisdiction. Any failure to comply with this restriction may
constitute a violation of the securities laws of any state or
territory of the United States, Australia, New
Zealand, Canada, Japan or the Republic of South
Africa. The distribution of this Announcement in other
jurisdictions may be restricted by law and 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
any such jurisdiction. Neither this Announcement nor any part of it
nor the fact of its distribution shall form the basis of or be
relied on in connection with or act as an inducement to enter into
any contract or commitment whatsoever.
In particular, the Placing
Shares, the Subscription
Shares and the Open Offer Shares have not been and will not be
registered under the US Securities Act, or under the securities
laws or with any securities regulatory authority of any state or
other jurisdiction of the United States, and accordingly the
Placing Shares, the Subscription Shares and the Open Offer Shares
may not be offered, sold, pledged or transferred, directly or
indirectly, in, into or within the United States except
pursuant to an exemption from the registration requirements of the
US Securities Act and the securities laws of any relevant state or
other jurisdiction of the United States. There is no intention
to register any portion of the Fundraising in the United
States or to conduct a public offering of securities
in the United States or elsewhere.
Zeus is authorised and regulated in
the United Kingdom by the FCA and is acting as
nominated adviser and Joint Broker to the Company in respect of the
Fundraising. Cavendish is authorised and regulated in
the United Kingdom by the FCA and is acting as
Joint Broker to the Company in respect of the Fundraising. Each of
Zeus and Cavendish is acting for the Company and for no-one else in
connection with the Fundraising, and will not be treating any other
person as its client in relation thereto, and will not be
responsible for providing the regulatory protections afforded to
its customers nor for providing advice in connection with the
Fundraising or any other matters referred to herein and apart from
the responsibilities and liabilities (if any) imposed on Zeus or
Cavendish, as the case may be, by FSMA, any liability therefor is
expressly disclaimed. Any other person in receipt of this
Announcement should seek their own independent legal, investment
and tax advice as they see fit.
Forward-looking statements
This Announcement contains
statements about Surface Transforms that are, or may be
deemed to be, "forward-looking statements".
All statements, other than
statements of historical facts, included in this Announcement may
be forward-looking statements. Without limitation, any statements
preceded or followed by, or that include, the words "targets",
"plans", "believes", "expects", "aims", "intends", "will", "may",
"should", "anticipates", "estimates", "projects", "would", "could",
"continue" or words or terms of similar substance or the negative
thereof, are forward-looking statements. Forward-looking statements
include, without limitation, statements relating to the following:
(i) future capital expenditures, expenses, revenues, earnings,
synergies, economic performance, indebtedness, financial condition,
dividend policy, losses and future prospects and (ii) business and
management strategies and the expansion and growth of the
operations of Surface Transforms.
These forward-looking statements are
not guarantees of future performance. These forward-looking
statements involve known and unknown risks, uncertainties and other
factors which may cause the actual results, performance or
achievements of any such person, or industry results, to be
materially different from any results, performance or achievements
expressed or implied by such forward-looking statements. These
forward-looking statements are based on numerous assumptions
regarding the present and future business strategies of such
persons and the environment in which each will operate in the
future. Investors should not place undue reliance on such
forward-looking statements and, save as is required by law or
regulation (including to meet the requirements of the AIM Rules for
Companies, the Prospectus Rules, the FSMA and/or MAR), does not
undertake any obligation to update publicly or revise any
forward-looking statements (including to reflect any change in
expectations with regard thereto or any change in events,
conditions or circumstances on which any such statement is based).
All subsequent oral or written forward-looking statements
attributed to Surface Transforms or any persons acting on
their behalf are expressly qualified in their entirety by the
cautionary statement above. All forward-looking statements
contained in this Announcement are based on information available
to the Directors at the date of this Announcement, unless some
other time is specified in relation to them, and the posting or
receipt of this Announcement shall not give rise to any implication
that there has been no change in the facts set forth herein since
such date.
References
1. Based on the
Directors' expectations of existing customer contracts and their
understanding of the relevant OEM's production plan and estimated
demand for discs.
2.
Based on the
Directors' expectations and their understanding of the relevant
OEM's production plan and estimated demand for discs and it takes
into account the expected lifetime revenue from the Company's
contract with OEM which is anticipated to be entered into following
the Company's recent nomination as OEM 10's tier one supplier of a
carbon ceramic brake discs.
3.
Based on the
Directors' estimates of sales proceeds from expected production
volumes.
4.
Based on the
Directors' expectations and their understanding of the relevant
OEM's production plan and estimated demand for discs and it takes
into account the expected lifetime revenue from the Company's
contract with OEM which is anticipated to be entered into following
the Company's recent nomination as OEM 10's tier one supplier of a
carbon ceramic brake discs.
5.
Based on the
directors' expectations, their understanding of the relevant OEMs
production plans and an assumed disc demand
6.
The Directors
believe that based on existing customer contracts and PCPs, the
current capacity will not provide the required production capacity
to meet demands from OEMs
7.
Based on the
Directors' expectations of sales proceeds from expected production
volumes for existing customer contracts and PCPs.
8. Based on the
Directors' estimates of sales proceeds from expected production
volumes.
9.
Based on the
Directors' expectations of sales proceeds from expected production
volumes for existing customer contracts and PCP.
APPENDIX
TERMS AND CONDITIONS OF THE
PLACING
IMPORTANT INFORMATION FOR INVITED
PLACEES ONLY REGARDING THE PLACING.
MEMBERS OF THE PUBLIC ARE NOT
ELIGIBLE TO TAKE PART IN THE PLACING. THE ANNOUNCEMENT REGARDING
THE PLACING (THE "ANNOUNCEMENT") AND THE TERMS AND
CONDITIONS SET OUT HEREIN ("TERMS AND CONDITIONS") ARE DIRECTED
ONLY AT PERSONS WHOSE ORDINARY ACTIVITIES INVOLVE THEM IN
ACQUIRING, HOLDING, MANAGING AND DISPOSING OF INVESTMENTS (AS
PRINCIPAL OR AGENT) FOR THE PURPOSES OF THEIR BUSINESS AND WHO HAVE
PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS AND ARE:
(A) IF IN A MEMBER STATE OF THE EUROPEAN ECONOMIC AREA
("EEA"), QUALIFIED
INVESTORS AS DEFINED IN ARTICLE 2(e) OF REGULATION (EU) 2017/1129
(THE "EU PROSPECTUS
REGULATION"); (B) IF IN THE UNITED KINGDOM, QUALIFIED
INVESTORS AS DEFINED IN ARTICLE 2(e) OF REGULATION (EU) 2017/1129
WHICH FORMS PART OF DOMESTIC LAW PURSUANT TO THE EUROPEAN UNION
(WITHDRAWAL) ACT 2018 (THE "UK PROSPECTUS REGULATION") WHO ALSO (I)
FALL WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT
2000 (FINANCIAL PROMOTION) ORDER 2005, AS AMENDED
(THE "ORDER")
(INVESTMENT PROFESSIONALS); (II) FALL WITHIN ARTICLE 49(2)(a) TO
(d) (HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC.)
OF THE ORDER; OR (C) PERSONS TO WHOM THEY MAY OTHERWISE LAWFULLY BE
COMMUNICATED (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS
"RELEVANT
PERSONS").
THE ANNOUNCEMENT AND THE TERMS AND
CONDITIONS AND THE INFORMATION THEREIN MUST NOT BE ACTED ON OR
RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. PERSONS
DISTRIBUTING THE ANNOUNCEMENT AND/OR THE TERMS AND CONDITIONS MUST
SATISFY THEMSELVES THAT IT IS LAWFUL TO DO SO. ANY INVESTMENT
OR INVESTMENT ACTIVITY TO WHICH THE TERMS AND CONDITIONS RELATE IS
AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH
RELEVANT PERSONS. THE ANNOUNCEMENT AND THE TERMS AND CONDITIONS DO
NOT THEMSELVES CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY
SECURITIES IN SURFACE TRANSFORMS PLC.
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
APPLICABLE SECURITIES LAWS OR WITH ANY SECURITIES REGULATORY
AUTHORITY OF ANY STATE OR JURISDICTION OF THE UNITED STATES, AND
MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED,
DIRECTLY OR INDIRECTLY, IN THE UNITED STATES EXCEPT PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN COMPLIANCE
WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OR OTHER
JURISDICTION OF THE UNITED STATES. THE PLACING SHARES ARE
BEING OFFERED AND SOLD ONLY OUTSIDE THE UNITED STATES IN
"OFFSHORE TRANSACTIONS"
WITHIN THE MEANING OF, AND IN ACCORDANCE WITH, REGULATION S UNDER
THE SECURITIES ACT AND OTHERWISE IN ACCORDANCE WITH APPLICABLE
LAWS. NO PUBLIC OFFERING OF THE PLACING SHARES IS BEING MADE
IN THE UNITED STATES OR ELSEWHERE.
THE ANNOUNCEMENT AND THE TERMS AND
CONDITIONS ARE RESTRICTED AND ARE NOT FOR RELEASE, PUBLICATION OR
DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR
INTO OR FROM THE UNITED STATES, AUSTRALIA, NEW ZEALAND, CANADA, THE
REPUBLIC OF SOUTH AFRICA, OR JAPAN OR ANY OTHER JURISDICTION IN
WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE
UNLAWFUL.
The distribution of the Announcement
and/or the Terms and Conditions and/or the Placing and/or issue of
the Placing Shares in certain jurisdictions may be restricted by
law. No action has been taken by the Company, the Joint Bookrunners
or any of their respective affiliates, agents, directors, officers
or employees that would permit an offer of the Placing Shares or
possession or distribution of the Announcement and/or the Terms and
Conditions or any other offering or publicity material relating to
such Placing Shares in any jurisdiction where action for that
purpose is required. Persons into whose possession the Announcement
and/or these Terms and Conditions come are required by the Company
and the Joint Bookrunners to inform themselves about and to observe
any such restrictions.
The Announcement and these Terms and
Conditions or any part of them are for information purposes only
and do not constitute or form part of any offer to issue or sell,
or the solicitation of an offer to acquire, purchase or subscribe
for, any securities in the United States, Australia, New Zealand,
Canada, the Republic of South Africa or Japan or any other
jurisdiction in which the same would be unlawful. No public
offering of the Placing Shares is being made in any such
jurisdiction.
In the United Kingdom, the
Announcement and these Terms and Conditions are being directed
solely at persons in circumstances in which section 21(1) of the
Financial Services and Markets Act 2000 (as amended) (the
"FSMA") does not
apply.
The Placing Shares have not been
approved or disapproved by the US Securities and Exchange
Commission, any state securities commission or other regulatory
authority in the United States, nor have any of the foregoing
authorities passed upon or endorsed the merits of the Placing or
the accuracy or adequacy of the Announcement and these Terms and
Conditions or the Circular. Any representation to the
contrary is a criminal offence in the United States. The relevant
clearances have not been, nor will they be, obtained from the
securities commission of any province or territory of Canada, no
prospectus has been lodged with, or registered by, the Australian
Securities and Investments Commission or the Japanese Ministry of
Finance; the relevant clearances have not been, and will not be,
obtained for the South Africa Reserve Bank or any other applicable
body in the Republic of South Africa in relation to the Placing
Shares and the Placing Shares have not been, nor will they be,
registered under or offering in compliance with the securities laws
of any state, province or territory of Australia, New Zealand,
Canada, the Republic of Ireland, the Republic of South Africa or
Japan. Accordingly, the Placing Shares may not (unless an
exemption under the relevant securities laws is applicable) be
offered, sold, resold or delivered, directly or indirectly, in or
into Australia, New Zealand, the Republic of Ireland, the United
States, Canada, the Republic of South Africa or Japan or any other
jurisdiction in which such offer, sale, re-sale or delivery would
be unlawful.
Persons (including, without
limitation, nominees and trustees) who have a contractual right or
other legal obligations to forward a copy of the Announcement (or
any part of it) and/or these Terms and Conditions should seek
appropriate advice before taking any action.
Solely for the purposes of the
product governance requirements contained within: (a) EU Directive
2014/65/EU on markets in financial instruments, as amended
("MiFID II"); (b) Articles
9 and 10 of Commission Delegated Directive (EU) 2017/593
supplementing MiFID II ("MiFID II
Delegated Directive"); and (c) local implementing measures,
(including insofar as MiFID II and the MiFID II Delegated Directive
constitute retained EU law (as defined in section 6(7) of the
European Union (Withdrawal) Act 2018) in the United Kingdom)
("Retained MiFID
Provisions") (together, the "MiFID II Product Governance
Requirements"), and disclaiming all and any liability,
whether arising in tort, contract or otherwise, which any
"manufacturer" (for the purposes of the MiFID II Product Governance
Requirements) may otherwise have with respect thereto, the Placing
Shares have been subject to a product approval process, which has
determined that the Placing Shares are: (i) compatible with an end
target market of (a) retail investors, (b) investors who meet the
criteria of professional clients and (c) eligible counterparties,
each as defined in MiFID II and the Retained MiFID Provisions; and
(ii) eligible for distribution through all distribution channels as
are permitted by MiFID II or the Retained MiFID Provisions (the
"Target Market
Assessment"). Notwithstanding the Target Market Assessment,
distributors should note that: the price of the Placing Shares may
decline and investors could lose all or part of their investment;
the Placing Shares offer no guaranteed income and no capital
protection; and an investment in the Placing Shares is compatible
only with investors who do not need a guaranteed income or capital
protection, who (either alone or in conjunction with an appropriate
financial or other adviser) are capable of evaluating the merits
and risks of such an investment and who have sufficient resources
to be able to bear any losses that may result therefrom. The Target
Market Assessment is without prejudice to the requirements of any
contractual, legal or regulatory selling restrictions in relation
to the Placing. Furthermore, it is noted that,
notwithstanding the Target Market Assessment, the Joint Bookrunners
will only procure investors who meet the criteria of professional
clients and eligible counterparties.
For the avoidance of doubt, the
Target Market Assessment does not constitute: (a) an assessment of
suitability or appropriateness for the purposes of MiFID II or the
Retained MiFID Provisions; or (b) a recommendation to any investor
or group of investors to invest in, or purchase, or take any other
action whatsoever with respect to the Placing Shares.
Each distributor is responsible for
undertaking its own target market assessment in respect of the
Placing Shares and determining appropriate distribution
channels.
The Terms and Conditions should be
read in their entirety.
Key
Terms and Dates
In addition to the definitions set
out at the end of these Terms and Conditions, the following defined
terms and dates are relevant to these Terms and
Conditions:
"Admission"
|
means First Admission and/or Second
Admission, as the context requires becoming effective as provided
in Rule 6 of the AIM Rules for Companies;
|
"First Admission"
|
means admission of the Firm Placing
Shares to trading on AIM becoming effective in accordance with the
AIM Rules;
|
"First Admission Date"
|
means 8.00 a.m. on 7 May 2024 or
such later time as the Joint Bookrunners may agree with the Company
but in any event no later than 8.00 a.m. on 11 June
2024;
|
"First Settlement Date"
|
means the date the settlement of
transactions in the Firm Placing Shares following First Admission
will take place within the CREST system (subject to certain
exceptions) which is expected to occur on 7 May 2024;
|
"Issue Price"
|
means 1 pence per Ordinary
Share;
|
"Second Admission"
|
means admission of the Conditional
Placing Shares to trading on AIM becoming effective in accordance
with the AIM Rules;
|
"Second Admission Date"
|
means 8.00 a.m. on 24 May 2024 or
such later time as the Joint Bookrunners may agree with the Company
but in any event no later than 8.00 a.m. on 11 June
2024;
|
"Second Settlement Date"
|
means the date the settlement of
transactions in the Conditional Placing Shares following Admission
will take place within the CREST system (subject to certain
exceptions) which is expected to occur on 24 May 2024; and
|
"Settlement Date"
|
means First Settlement Date and/or
Second Settlement Date, as the context requires.
|
Details of the Placing Agreement and the Placing
Shares
The Joint Bookrunners have entered
into the Placing Agreement with the Company under which, on the
terms and subject to the conditions set out in the Placing
Agreement, each of the Joint Bookrunners, as agent for and on
behalf of the Company, has agreed to use its reasonable endeavours
to procure Placees for the Placing Shares at the Issue Price. The
Placing is not being underwritten by either of the Joint
Bookrunners or any other person.
The exact number of Placing Shares
to be allocated and issued to Placees shall be determined by the
Joint Bookrunners and the Company following completion of the
Bookbuild (as defined below).
The issue of the Firm Placing Shares
is to be effected by way of a cashbox placing. The Company will
allot and issue the Firm Placing Shares on a non-pre-emptive basis
to the Placees in consideration for Zeus transferring its holdings
of redeemable preference shares and ordinary subscriber shares in
Bumblebee Finance (Jersey) Limited ("JerseyCo") to the Company. Accordingly,
instead of receiving cash as consideration for the issue of the
Firm Placing Shares, at the conclusion of the Firm Placing the
Company will own all of the issued ordinary shares and redeemable
preference shares of JerseyCo whose only asset will be its cash
reserves, which will represent an amount approximately equal to the
net proceeds of the Firm Placing.
The Subscription and the Open Offer
are independent from the Placing and for the avoidance of doubt
completion of the Placing is not conditional on completion of the
Subscription and/or the Open Offer. The Open Offer will be launched
on conclusion of the Firm Placing and the Placing Shares will not
be part of the Open Offer. The Open Offer Shares are expected
to be admitted to trading on AIM separately after Second
Admission.
The Placing Shares will, when
issued, be subject to the memorandum and articles of association of
the Company and credited as fully paid and will rank pari passu in all respects with the
existing issued Ordinary Shares, 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.
Accelerated bookbuilding process
Commencing today, the Joint
Bookrunners will be conducting an accelerated bookbuilding process
to determine demand for participation in the Placing by Placees
(the "Bookbuild"). The
Announcement gives details of the terms and conditions of, and the
mechanics of participation in, the Placing. However, the Joint
Bookrunners will be entitled to effect the Placing by such
alternative method to the Bookbuild as they may, after consultation
with the Company, determine. No commissions will be paid by Placees
in respect of any participation in the Placing or subscription for
Placing Shares.
A bid in the Bookbuild will be made
on these Terms and Conditions which are attached to the
Announcement and will be legally binding on the Placee on behalf of
which it is made.
The book will open with immediate
effect. The final number of Placing Shares to be issued pursuant to
the Placing will be agreed by the Joint Bookrunners and the Company
at the close of the Bookbuild, and the result of the Placing will
be announced as soon as practicable thereafter. The timing
for the close of the Bookbuild and the allocation of the Placing
Shares (including without limitation whether and to what extent
Placees are allocated Firm Placing Shares and/or Conditional
Placing Shares) shall be at the absolute discretion of the Joint
Bookrunners, in consultation with the Company.
To the fullest extent permissible by
law, neither:
(a) the Joint
Bookrunners (or either of them);
(b) any of their
respective affiliates, agents, advisers, directors, officers,
consultants or employees; nor
(c) to the
extent not contained within (a) or (b), any person connected with
either of the Joint Bookrunners as defined in the FSMA ((b) and (c)
being together "affiliates"
and individually an "affiliate" of the relevant Joint
Bookrunner),
shall have any liability (including
to the extent permissible by law, any fiduciary duties) to Placees
or to any other person whether acting on behalf of a Placee or
otherwise. In particular, neither of the Joint Bookrunners nor any
of their respective affiliates shall have any liability (including,
to the extent legally permissible, any fiduciary duties), in
respect of their conduct of the Bookbuild or of such alternative
method of effecting the Placing as the Joint Bookrunners may
determine.
By participating in the Placing
(such participation up to an agreed maximum level to be confirmed
in and evidenced by either (i) a recorded telephone call or (ii)
email correspondence, in either case between representatives of the
Joint Bookrunner to whom the Placee's commitment is given
("Relevant Joint
Bookrunner") and the relevant Placee (a "Recorded Commitment"), each Placee will
be deemed to have read and understood the Announcement and these
Terms and Conditions in their entirety, to be participating and
acquiring Placing Shares on these Terms and Conditions and to be
providing the representations, warranties, indemnities,
acknowledgements and undertakings contained in these Terms and
Conditions.
In particular, each such Placee
irrevocably represents, warrants, undertakes, agrees and
acknowledges (amongst other things) severally to the Company and
each of the Joint Bookrunners that:
1.
it is a Relevant Person and that it will acquire, hold, manage or
dispose of any Placing Shares that are allocated to it for the
purposes of its business;
2.
in the case of a Relevant
Person in the United Kingdom who acquires any Placing Shares
pursuant to the Placing:
(d) it is a Qualified Investor
within the meaning of Article 2(e) of the UK Prospectus Regulation;
and
(e) in the case of any
Placing Shares acquired by it as a financial intermediary, as that
term is used in Article 5(1) of the UK Prospectus
Regulation:
(i) the
Placing Shares acquired by it in the Placing have not been acquired
on behalf of, nor have they been acquired with a view to their
offer or resale to, persons in the United Kingdom other than
Qualified Investors or in circumstances in which the prior consent
of the Joint Bookrunners has been given to the offer or resale;
or
(ii) where
Placing Shares have been acquired by it on behalf of persons in the
United Kingdom other than Qualified Investors, the offer of those
Placing Shares to it is not treated under the UK Prospectus
Regulation as having been made to such persons; and
3.
in the case of a Relevant Person in a member state of the EEA
(each, a "Relevant State")
who acquires any Placing Shares pursuant to the
Placing:
(a) it is a Qualified
Investor within the meaning of Article 2(e) of the EU
Prospectus Regulation;
(b) in the case of any Placing
Shares acquired by it as a financial intermediary, as that term is
used in Article 5(1) of the
EU Prospectus Regulation:
(i) the
Placing Shares acquired by it in the Placing have not been acquired
on behalf of, nor have they been acquired with a view to their
offer or resale to, persons in a Relevant State other than
Qualified Investors or in circumstances in which the prior consent
of the Joint Bookrunners has been given to the offer or resale;
or
(ii) where
Placing Shares have been acquired by it on behalf of persons in a
Relevant State other than Qualified Investors, the offer of those
Placing Shares to it is not treated under the EU Prospectus
Regulation as having been made to such persons;
4.
it is acquiring the Placing Shares for its own account or is
acquiring the Placing Shares for an account with respect to which
it exercises sole investment discretion and has the authority to
make and does make the representations, warranties, indemnities,
acknowledgements, undertakings and agreements contained in these
Terms and Conditions;
5.
it understands (or if acting for the account of another person,
such person has confirmed that such person understands) and agrees
to comply with the resale and transfer restrictions set out in
these Terms and Conditions; and
6.
except as otherwise permitted by the Company and subject to any
available exemptions from applicable securities laws, it (and any
account referred to in paragraph 4
above) is outside the United States acquiring the
Placing Shares in offshore transactions as defined in and in
accordance with Regulation S under the Securities Act.
No
prospectus
The Placing Shares are being offered
to a limited number of specifically invited persons only and will
not be offered in such a way as to require any prospectus or other
offering document to be published. No prospectus or other
offering document has been or will be submitted to be approved by
the FCA in relation to the Placing or the Placing Shares and
Placees' commitments will be made solely on the basis of the
information contained in the Announcement and any information
publicly announced through a Regulatory Information Service (as
defined in the AIM Rules for Companies (the "AIM Rules")) by or on behalf of the
Company on or prior to the date of these Terms and Conditions (the
"Publicly Available
Information") and subject to any further terms set forth in
writing in any contract note or trade confirmation sent to an
individual Placee.
Each Placee, by participating in the
Placing, agrees that the content of the Announcement is exclusively
the responsibility of the Company and confirms that it has neither
received nor relied on any information (other than the Publicly
Available Information), representation, warranty or statement made
by or on behalf of the Joint Bookrunners or the Company or any
other person and none of the Joint Bookrunners, the Company nor any
other person acting on such person's behalf nor any of their
respective affiliates has or shall have any liability for any
Placee's decision to participate in the Placing based on any other
information, representation, warranty or statement. Each Placee
acknowledges and agrees that it has relied on its own investigation
of the business, financial or other position of the Company in
accepting a participation in the Placing. No Placee should consider
any information in the Announcement or these Terms and Conditions
to be legal, tax, business or other advice. Nothing in this
paragraph shall exclude the liability of any person for fraudulent
misrepresentation.
Application for admission to trading
Application(s) will be made to the
London Stock Exchange for admission of the Placing Shares to
trading on AIM.
It is expected that First Admission
will take place on the First Admission Date and that dealings in
the Firm Placing Shares on AIM will commence at the same
time.
It is expected that Second Admission
will take place on the Second Admission Date and that dealings in
the Conditional Placing Shares on AIM will commence at the same
time.
Principal terms of the Placing
Zeus is acting as nominated adviser
and joint broker to the Placing, as agent for and on behalf of the
Company. Zeus is also acting as subscriber of shares in
JerseyCo for the purposes of the Firm Placing which is structured
as a cashbox placing.
Cavendish is acting as joint broker
to the Placing, as agent for and on behalf of the
Company.
Participation in the Placing is by
invitation only and will only be available to persons who may
lawfully be, and are, invited by either of the Joint Bookrunners to
participate. The Joint Bookrunners and any of their respective
affiliates are entitled to participate in the Placing as
principal.
Each Placee will confirm the
maximum number of Placing Shares it is willing to acquire in a
Recorded Commitment. Once they have made a Recorded Commitment,
each Placee will have an immediate, separate, irrevocable and
binding obligation, owed to the Relevant Joint Bookrunner (as agent
for the Company), to subscribe and pay for, at the Issue Price, the
number of Placing Shares allocated to it, up to the agreed
maximum.
Each Placee's allocation (and
whether such Placee participates in the Placing) will be determined
by the Joint Bookrunners in their discretion following consultation
with the Company and will be confirmed by the Relevant Joint
Bookrunner either orally or in writing via a contract note or trade
confirmation after the Recorded Commitment has taken
place.
Each Placee's commitment will be
confirmed in and evidenced by a Recorded Commitment. These Terms
and Conditions will be deemed incorporated into each contract which
is entered into by way of a Recorded Commitment and will be legally
binding on the relevant Placee(s) on behalf of whom the commitment
is made with effect from the end of the Recorded Commitment and,
except with the Relevant Joint Bookrunner's prior written consent,
will not be capable of variation or revocation after such
time. A contract note or trade confirmation confirming each
Placee's allocation of Placing Shares will be sent to them
following the Recorded Commitment and the allocation process.
These Terms and Conditions shall be deemed incorporated into any
such contract note or trade confirmation.
Each Placee will have an immediate,
separate, irrevocable and binding obligation, owed to the Relevant
Joint Bookrunner (as agent for the Company), to pay to it (or as it
may direct) in cleared funds an amount equal to the product of the
Issue Price and the number of Placing Shares allocated to such
Placee (subject always to such Placee's agreed
maximum).
The Joint Bookrunners reserve the
right to scale back the number of Placing Shares to be subscribed
by any Placee in the event that the Placing is oversubscribed and
the allocation of the Placing Shares between First Admission and
Second Admission shall be at their absolute discretion, in
consultation with the Company. The Joint Bookrunners also reserve
the right not to accept offers to subscribe for Placing Shares or
to accept such offers in part rather than in whole. The acceptance
and, if applicable, scaling back of offers shall be at the absolute
discretion of the Joint Bookrunners.
Except as required by law or
regulation, no press release or other announcement will be made by
the Joint Bookrunners (or either of them) or the Company using the
name of any Placee (or its agent), in its capacity as Placee (or
agent), other than with such Placee's prior written
consent.
Irrespective of the time at which a
Placee's allocation(s) pursuant to the Placing is/are confirmed,
settlement for all Placing Shares to be acquired pursuant to the
Placing will be required to be made at the same time on the basis
explained below under "Registration and
settlement".
All obligations under the Placing
will be subject to fulfilment of the conditions referred to below
under "Conditions of the
Placing" and to the Placing not being terminated on the
basis referred to below under "Termination of the
Placing".
By participating in the Placing,
each Placee agrees that its rights and obligations in respect of
the Placing will terminate only in the circumstances described
below and will not be capable of rescission or termination by the
Placee.
Registration and settlement
By participating in the Placing,
each Placee will be deemed to agree that it will do all things
necessary to ensure that delivery and payment is completed as
directed by the Relevant Joint Bookrunner in accordance with either
the standing CREST or certificated settlement instructions which
they have in place with the Relevant Joint Bookrunner.
Settlement of transactions in the
Firm Placing Shares following First Admission will take place
within the CREST system, subject to certain exceptions.
Settlement through CREST will be on a delivery versus payment basis
("DVP") unless otherwise
notified by the Relevant Joint Bookrunner and is expected to occur
on the First Settlement Date.
Settlement of transactions in the
Conditional Placing Shares following Second Admission will take
place within the CREST system, subject to certain exceptions.
Settlement through CREST will be on a DVP basis unless otherwise
notified by the Relevant Joint Bookrunner and is expected to occur
on the Second Settlement Date.
In the event of any difficulties or
delays in the admission of any Placing Shares to CREST or the use
of CREST in relation to the Placing, the Company and the Joint
Bookrunners may agree that the Placing Shares (or any of them)
should be issued in certificated form. Each of the Joint
Bookrunners reserves the right to require settlement for any of the
Placing Shares, and to deliver any of the Placing Shares to any
Placees, by such other means as it deems necessary if delivery or
settlement to any Placee is not practicable within the CREST system
or would not be consistent with regulatory requirements in the
jurisdiction in which a Placee is located.
Interest is chargeable daily on
payments not received from Placees on or before the due date in
accordance with the arrangements set out above, in respect of
either CREST or certificated deliveries, at the rate of 3
percentage points above the prevailing base rate of Barclays Bank
plc as determined by the Relevant Joint Bookrunner.
Each Placee is deemed to agree that
if it does not comply with these obligations, the Relevant Joint
Bookrunner may sell any or all of their Placing Shares on their
behalf and retain from the proceeds, for the Relevant Joint
Bookrunner's own account and benefit, an amount equal to the
aggregate amount owed by the Placee plus any interest due. The
relevant Placee will, however, remain liable for any shortfall
below the Issue Price and for any stamp duty or stamp duty reserve
tax (together with any interest or penalties) which may arise upon
the sale of its Placing Shares on its behalf.
If Placing Shares are to be
delivered to a custodian or settlement agent, Placees must ensure
that, upon receipt, any relevant contract note or trade
confirmation is copied and delivered immediately to the relevant
person within that organisation. Insofar as Placing Shares are
registered in a Placee's name or that of its nominee or in the name
of any person for whom a Placee is contracting as agent or that of
a nominee for such person, such Placing Shares should, subject as
provided below, be so registered free from any liability to United
Kingdom stamp duty or stamp duty reserve tax.
Conditions of the Placing
The Placing is conditional upon the
Placing Agreement becoming unconditional and not having been
terminated in accordance with its terms. Furthermore, the
Conditional Placing is conditional upon the Resolutions being
passed at the General Meeting without amendment.
The obligations of the Joint
Bookrunners under the Placing Agreement in respect of the Firm
Placing Shares and the Subscription Shares are, and the Firm
Placing is, conditional upon, inter alia:
(a)
the warranties and undertakings contained in the Placing Agreement
("Warranties") being true,
accurate and not misleading when made on the date of the Placing
Agreement and at all times up to First Admission by reference to
the facts and circumstances subsisting at that time;
(b) the
Company having fully performed its obligations under the Placing
Agreement, the Option Agreement and the Transfer Agreement to the
extent that they fall to be performed prior to First
Admission;
(c)
neither of the Joint Bookrunners having exercised their right to
terminate the Placing Agreement; and
(d)
First Admission having occurred on or before 8:00 a.m. on the First
Admission Date.
The obligations of the Joint
Bookrunners under the Placing Agreement in respect of the
Conditional Placing Shares are, and the Conditional Placing is,
conditional upon, inter
alia:
(a)
First Admission having occurred not later than 8.00 a.m. on the
First Admission Date;
(b) the
Circular and a form of proxy having been sent to Shareholders by no
later than 3 May 2024 in accordance with the Company's articles of
association;
(c)
the Resolutions being passed at the General Meeting without
amendment;
(d) the
Warranties being true, accurate and not misleading when made on the
date of the Placing Agreement and at all times up to Second
Admission by reference to the facts and circumstances subsisting at
that time;
(e)
the Company having fully performed its obligations under the
Placing Agreement to the extent that they fall to be performed
prior to Second Admission;
(f)
neither of the Joint Bookrunners having exercised their right to
terminate the Placing Agreement with regard to the Conditional
Placing; and
(g)
Second Admission having occurred on or before 8:00 a.m. on the
Second Admission Date;
(all conditions to the obligations
of the Joint Bookrunners included in the Placing Agreement in
respect of the Firm Placing Shares, the Subscription Shares and/or
the Conditional Placing Shares being together, the "conditions").
If any of the conditions is not
fulfilled or, where permitted, waived in accordance with the
Placing Agreement within the stated time periods (or such later
time and/or date as the Company and the Joint Bookrunners may
agree), or the Placing Agreement is terminated in accordance with
its terms, the Placing (or such part of it as may then remain to be
completed) will lapse and the Placee's rights and obligations shall
cease and terminate at such time and each Placee agrees that no
claim can be made by or on behalf of the Placee (or any person on
whose behalf the Placee is acting) in respect thereof.
By participating in the Placing,
each Placee agrees that its rights and obligations cease and
terminate only in the circumstances described above and under
"Termination of the
Placing" below and will not be capable of rescission or
termination by it.
The Joint Bookrunners may, in their
absolute discretion (but acting together) and upon such terms as
they think fit, waive fulfilment of all or any of the conditions in
the Placing Agreement in whole or in part, or extend the time
provided for fulfilment of one or more conditions, save that
certain conditions (including the condition relating to Admission
referred to in paragraph (e) above) may not be waived. Any
such extension or waiver will not affect Placees' commitments as
set out in these Terms and Conditions.
Either of the Joint Bookrunners may
terminate the Placing Agreement in certain circumstances, details
of which are set out below.
Neither the Joint Bookrunners nor
any of their respective affiliates, agents, advisers, directors,
officers or employees nor the Company shall have any liability to
any Placee (or to any other person whether acting on behalf of a
Placee or otherwise) in respect of any decision any of them may
make as to whether or not to waive or to extend the time and/or
date for the satisfaction of any condition to the Placing (or any
part thereof) nor for any decision any of them may make as to the
satisfaction of any condition or in respect of the Placing
generally (or any part thereof) and by participating in the Placing
each Placee agrees that any such decision is within the absolute
discretion of the Joint Bookrunners.
Termination of the Placing
Save as set out below, either of the
Joint Bookrunners may, in its absolute discretion, by notice to the
Company, terminate the Placing Agreement at any time up to Second
Admission if, inter alia,
it is of the opinion, in its absolute discretion, that any of the
following has occurred and it is, as a result of such matter,
inappropriate to proceed with the Placing (or any part of
it):
(a)
any statement contained in the Circular or any other document or
announcement issued or published by or on behalf of the Company in
connection with the Placing ("Placing Documents") has become untrue,
inaccurate or misleading or any matter has arisen which would, if
the Placing Documents were issued at that time, constitute a
material omission from the Placing Documents or any of
them;
(b) any
of the Warranties was untrue, inaccurate or misleading when made
and/or that any of the Warranties has ceased to be true or accurate
or has become misleading at any time prior to Admission, in each
case by reference to the facts and circumstances subsisting at that
time;
(c)
the Company has not complied or cannot comply with any of its
obligations under the Placing Agreement, the Option Agreement or
the Transfer Agreement or otherwise relating to the Placing and
Admission (to the extent that such obligations fall to be complied
with prior to Admission);
(d)
there has occurred any material adverse change in the financial
position or prospects of the Company (or its group on a
consolidated basis); or
(e)
there has occurred any change in national or international
financial, monetary, market (including fluctuations in exchange
rates), industrial, economic, legal or political conditions or
there has occurred or been a material worsening of any
international or national crisis, civil unrest, act of terrorism or
outbreak of hostilities which is material in the context of the
Placing.
Once First Admission has occurred,
neither of the Joint Bookrunners will have the right to terminate
any of its obligations under the Placing Agreement with regard to
the Firm Placing, but may at any time up to Second Admission
terminate its obligations under the Placing Agreement as regards
the Conditional Placing.
If the Placing Agreement is
terminated in accordance with its terms, the rights and obligations
of each Placee in respect of the Firm Placing as described in these
Terms and Conditions shall cease and terminate at such time and no
claim can be made by any Placee in respect thereof.
If the Placing Agreement is
terminated in accordance with its terms at any time after First
Admission but prior to Second Admission, the rights and obligations
of each Placee in respect of the Conditional Placing as described
in these Terms and Conditions shall cease and terminate at such
time and no claim can be made by any Placee in respect thereof, but
for the avoidance of doubt the rights and obligations of any Placee
in respect of the Firm Placing shall not be capable of termination
at any time after First Admission.
By participating in the Placing,
each Placee agrees with the Company and the Joint Bookrunners that
the exercise by the Company or the Joint Bookrunners of any right
of termination or any other right or other discretion under the
Placing Agreement shall be within the absolute discretion of the
Company or the Joint Bookrunners (or either of them) or for
agreement between the Company and the Joint Bookrunners (as the
case may be) and that neither the Company nor the Joint Bookrunners
need make any reference to such Placee and that none of the
Company, the Joint Bookrunners nor any of their respective
affiliates, agents, advisers, directors, officers or employees
shall have any liability to such Placee (or to any other person
whether acting on behalf of a Placee or otherwise) whatsoever in
connection with any such exercise.
By agreeing with a Joint Bookrunner
(as agent of the Company) to subscribe for Placing Shares under the
Placing, a Placee (and any person acting on a Placee's behalf) will
irrevocably acknowledge and confirm and warrant and undertake to,
and agree with, each of the Company and the Joint Bookrunners, in
each case as a fundamental term of such Placee's application for
Placing Shares and of the Company's obligation to allot and/or
issue any Placing Shares to it or at its direction, that its rights
and obligations in respect of the Placing (or any part of it) will
terminate only in the circumstances described above and under the
"Conditions of the
Placing" section above and will not be capable of rescission
or termination by it in any other circumstances.
Representations, warranties and further
terms
By participating in the Placing,
each Placee (and any person acting on such Placee's behalf)
represents, warrants, acknowledges, undertakes, confirms and agrees
(for itself and for any such prospective Placee) that (save where
the Relevant Joint Bookrunner expressly agrees in writing to the
contrary):
1.
it has read and understood the Announcement and these Terms and
Conditions in their entirety and its acquisition of Placing Shares
is subject to and based upon all the terms, conditions,
representations, warranties, indemnities, acknowledgements,
agreements and undertakings and other information contained herein
and it has not relied on, and will not rely on, any information
given or any representations, warranties or statements made at any
time by any person in connection with Admission, the Placing, the
Company, the Placing Shares or otherwise, other than the
information contained in the Announcement and the Publicly
Available Information;
2.
it has not received a prospectus or other offering document in
connection with the Placing and acknowledges that no prospectus or
other offering document:
(a)
is required under any applicable law; or
(b) has
been or will be prepared in connection with the Placing
and, in particular, that the
Subscription and Open Offer referred to in the Announcement and the
Circular relating thereto are separate from the Placing and do not
form part of any offer or agreement concerning the Placing and/or
any Placing Shares;
3.
the Ordinary Shares are admitted to trading on AIM, and that the
Company is therefore required to publish certain business and
financial information in accordance with the AIM Rules and the
Market Abuse Regulation (EU Regulation No. 596/2014 which forms
part of domestic law pursuant to the European Union (Withdrawal)
Act 2018) ("UK MAR")),
which includes a description of the nature of the Company's
business and the Company's most recent published balance sheet and
statement of total comprehensive income and that it is able to
obtain or access such information without undue difficulty, and is
able to obtain access to such information or comparable information
concerning any other publicly traded company, without undue
difficulty;
4.
it has made its own assessment of the Placing Shares and has relied
on its own investigation of the business, financial position and
other aspects of the Company in accepting a participation in the
Placing and neither the Joint Bookrunners nor the Company nor any
of their respective affiliates, agents, advisers, directors,
officers or employees nor any person acting on behalf of any of
them has provided, and will not provide, it with any material
regarding the Placing Shares or the Company or any other person
other than the information in the Announcement and these Terms and
Conditions or the Publicly Available Information; nor has it
requested either of the Joint Bookrunners, the Company, any of
their respective affiliates, agents, advisers, directors, employees
or officers or any person acting on behalf of any of them to
provide it with any such information;
5.
neither of the Joint Bookrunners nor any person acting on behalf of
them nor any of their respective affiliates, agents, directors,
officers or employees has or shall have any liability for any
Publicly Available Information, or any representation relating to
the Company, provided that nothing in these Terms and Conditions
excludes the liability of any person for any fraudulent
misrepresentation made by that person;
6.
the only information on which it is entitled to rely on and on
which it has relied on in committing to acquire the Placing Shares
is contained in the Announcement and the Publicly Available
Information, such information being all that it deems necessary to
make an investment decision in respect of the Placing Shares and it
has made its own assessment of the Company, the Placing Shares and
the terms of the Placing based on the Announcement and the Publicly
Available Information;
7.
neither the Joint Bookrunners nor any of their respective
affiliates, agents, directors, officers or employees have made any
representation or warranty to it, express or implied, with respect
to the Company, the Placing or the Placing Shares or the accuracy,
completeness or adequacy of the Announcement, the Circular or the
Publicly Available Information;
8.
it has conducted its own investigation of the Company, the Placing
and the Placing Shares, satisfied itself that the information is
still current and relied on that investigation for the purposes of
its decision to participate in the Placing;
9.
it has not relied on any investigation that either of the Joint
Bookrunners or any person acting on their behalf may have conducted
with respect to the Company, the Placing or the Placing
Shares;
10. the
contents of the Announcement, the Circular and the other Publicly
Available Information as well as any information made available (in
written or oral form) in presentations or as part of roadshow
discussions with investors relating to the Company (the
"Information") has been
prepared by and is exclusively the responsibility of the Company
and neither the Joint Bookrunners nor any persons acting on their
behalf is responsible for or has or shall have any liability for
any such Information, or for any representation, warranty or
statement relating to the Company contained therein nor will they
be liable for any Placee's decision to participate in the Placing
based on any Information or any representation, warranty or
statement contained therein or otherwise;
11. it
has the funds available to pay for the Placing Shares which it has
agreed to acquire and acknowledges and agrees that it will pay the
total subscription amount in accordance with the Announcement
and these Terms and Conditions by the due time and date set
out herein, failing which the relevant Placing Shares may be placed
with other Placees or sold at such price as the Relevant Joint
Bookrunner determines;
12. it
and/or each person on whose behalf it is participating:
(a)
is entitled to acquire Placing Shares pursuant to the Placing under
the laws and regulations of all relevant jurisdictions;
(b) has
fully observed such laws and regulations;
(c)
has capacity and authority and is entitled to enter into and
perform its obligations as an acquirer of Placing Shares and will
honour such obligations; and
(d) has
obtained all necessary consents and authorities (including, without
limitation, in the case of a person acting on behalf of a Placee,
all necessary consents and authorities to agree to the terms set
out or referred to in these Terms and Conditions) under those laws
or otherwise and complied with all necessary formalities to enable
it to enter into the transactions contemplated hereby and to
perform its obligations in relation thereto and, in particular, if
it is a pension fund or investment company it is aware of and
acknowledges it is required to comply with all applicable laws and
regulations with respect to its acquisition of Placing
Shares;
13. it
is not, and any person who it is acting on behalf of is not, and at
the time the Placing Shares are acquired will not be, a resident
of, or with an address in, or subject to the laws of, Australia,
New Zealand, the Republic of Ireland, Canada, the Republic of South
Africa or Japan, and it acknowledges and agrees that the Placing
Shares have not been and will not be registered or otherwise
qualified under the securities legislation of Australia, New
Zealand, the Republic of Ireland, Canada, the Republic of South
Africa or Japan and may not be offered, sold, or acquired, directly
or indirectly, within those jurisdictions;
14. it
and the beneficial owner of the Placing Shares is, and at the time
the Placing Shares are acquired will be, outside the United States
and acquiring the Placing Shares in an "offshore transaction" as
defined in, and in accordance with, Regulation S under the
Securities Act;
15. it
understands that the Placing Shares have not been, and will not be,
registered under the Securities Act and may not be offered, sold or
resold in or into or from the United States except pursuant to an
effective registration under the Securities Act, or pursuant to an
exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act and in accordance
with applicable state securities laws; and no representation is
being made as to the availability of any exemption under the
Securities Act for the reoffer, resale, pledge or transfer of the
Placing Shares;
16. it
(and any account for which it is purchasing) is not acquiring the
Placing Shares with a view to any offer, sale or distribution
thereof within the meaning of the Securities Act;
17. it
will not distribute, forward, transfer or otherwise transmit the
Announcement or these Terms and Conditions and/or the Circular or
any part of them, or any other presentational or other materials
concerning the Placing in or into or from the United States
(including electronic copies thereof) to any person, and it has not
distributed, forwarded, transferred or otherwise transmitted any
such materials to any person;
18. none
of the Joint Bookrunners, their respective affiliates and/or any
person acting on behalf of any of them is making any
recommendations to it or advising it regarding the suitability of
any transactions it may enter into in connection with the Placing
and that participation in the Placing is on the basis that it is
not and will not be a client of either of the Joint Bookrunners and
that the Joint Bookrunners have no duties or responsibilities to it
for providing the protections afforded to its clients or for
providing advice in relation to the Placing nor in respect of any
representations, warranties, undertakings or indemnities contained
in the Placing Agreement nor for the exercise or performance of any
of its rights and obligations thereunder including any rights to
waive or vary any conditions or exercise any termination
right;
19. it
will make payment to the Relevant Joint Bookrunner for the Placing
Shares allocated to it in accordance with these Terms and
Conditions on or by the Settlement Date, failing which the relevant
Placing Shares may be placed with others on such terms as the
Relevant Joint Bookrunner determines in its absolute discretion
without liability to the Placee 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 these
Terms and Conditions) which may arise upon the sale of such
Placee's Placing Shares on its behalf;
20. its
Recorded Commitment to acquire Placing Shares will represent a
maximum number of Placing Shares which it may be required to
subscribe for, and that following the allocation process the
Relevant Joint Bookrunner may call upon it to subscribe for a lower
number of Placing Shares (if any), but in no event in aggregate
more than the aforementioned maximum;
21. no
action has been or will be taken by any of the Company, the Joint
Bookrunners or any person acting on behalf of the Company or either
of the Joint Bookrunners that would, or is intended to, permit a
public offer of the Placing Shares in the United States or in any
country or jurisdiction where any such action for that purpose is
required;
22. the
person who it specifies for registration as holder of the Placing
Shares will be:
(a)
the Placee; or
(b) a
nominee of the Placee, as the case may be;
23.
neither the Joint Bookrunners nor the Company will be responsible
for any liability to stamp duty or stamp duty reserve tax resulting
from a failure to observe the above requirement. Each Placee
and any person acting on behalf of such Placee agrees to acquire
Placing Shares pursuant to the Placing and agrees to indemnify the
Company and the Joint Bookrunners in respect of the same on the
basis that the Placing Shares will be allotted to a CREST stock
account of (or nominated by) the Relevant Joint Bookrunner or
transferred to a CREST stock account of the Relevant Joint
Bookrunner who will hold them as nominee on behalf of the Placee
until settlement in accordance with its standing settlement
instructions with it;
24. the
allocation, allotment, issue and delivery to it, or the person
specified by it for registration as holder, of Placing Shares will
not give rise to a stamp duty or stamp duty reserve tax liability
under (or at a rate determined under) any of sections 67, 70, 93 or
96 of the Finance Act 1986 (depository receipts and clearance
services) and it is not participating in the Placing as nominee or
agent for any person or persons to whom the allocation, allotment,
issue or delivery of Placing Shares would give rise to such a
liability;
25. if
it is within the United Kingdom, it and any person acting on its
behalf (if within the United Kingdom) falls within Article 19(5)
and/or 49(2) of the Order and undertakes that it will acquire,
hold, manage and (if applicable) dispose of any Placing Shares that
are allocated to it for the purposes of its business
only;
26. it
has not offered or sold and will not offer or sell any Placing
Shares to persons in the United Kingdom except to persons whose
ordinary activities involve them in acquiring, holding, managing or
disposing of investments (as principal or agent) for the purposes
of their business or otherwise in circumstances which have not
resulted and which will not result in an offer to the public in the
United Kingdom within the meaning of section 85(1) of the FSMA or
an offer to the public in any other member state of the EEA within
the meaning of the UK Prospectus Regulation, or an offer to the
public in any Relevant State within the meaning of the EU
Prospectus Regulation;
27. it
has only communicated or caused to be communicated and it will only
communicate or cause to be communicated any invitation or
inducement to engage in investment activity (within the meaning of
section 21 of the FSMA) relating to Placing Shares in circumstances
in which section 21(1) of the FSMA does not require approval of the
communication by an authorised person and it acknowledges and
agrees that neither the Announcement, these Terms and Conditions
nor the Circular has been or will be approved by the Joint
Bookrunners in their capacity as an authorised person under section
21 of the FSMA and it may not therefore be subject to the controls
which would apply if it was made or approved as a financial
promotion by an authorised person;
28. it
has complied and it will comply with all applicable laws in any
jurisdiction with respect to anything done by it or on its behalf
in relation to the Placing Shares (including all relevant
provisions of the FSMA and UK MAR in respect of anything done in,
from or otherwise involving the United Kingdom);
29. the
Placing Shares acquired by it in the Placing will not be acquired
on a non-discretionary basis on behalf of, nor will they be
acquired with a view to their offer or resale to any person save in
circumstances in which the express prior written consent of the
Relevant Joint Bookrunner has been given to the offer or
resale;
30. if
it has received any inside information (for the purposes of UK MAR
and/or section 56 of the Criminal Justice Act 1993 or other
applicable law) about the Company in advance of the Placing, it has
not:
(a)
dealt (or attempted to deal) in the securities of the
Company;
(b)
encouraged, recommended or induced another person to deal in the
securities of the Company; or
(c)
unlawfully disclosed such information to any person, prior to the
information being made publicly available;
31.
neither the Joint Bookrunners, the Company nor any of their
respective affiliates, agents, advisers, directors, officers or
employees nor any person acting on behalf of the Joint Bookrunners
or their respective affiliates, agents, advisers, directors,
officers or employees nor any person acting on behalf of any of
them is making any recommendations to it, advising it regarding the
suitability of any transactions it may enter into in connection
with the Placing nor providing advice in relation to the Placing
nor in respect of any representations, warranties,
acknowledgements, agreements, undertakings, or indemnities
contained in the Placing Agreement nor the exercise or performance
of any of the Joint Bookrunners' rights and obligations thereunder
including any rights to waive or vary any conditions or exercise
any termination right;
32.
either of the Joint Bookrunners and their respective affiliates,
acting as an investor for its or their own account(s), may bid or
subscribe for and/or purchase Placing Shares and, in that capacity,
may retain, purchase, offer to sell or otherwise deal for its or
their own account(s) in the Placing Shares, any other securities of
the Company or other related investments in connection with the
Placing or otherwise. Accordingly, references in these Terms
and Conditions and/or the Announcement to the Placing Shares being
offered, subscribed, acquired or otherwise dealt with should be
read as including any offer to, or subscription, acquisition or
dealing by, the Joint Bookrunners and/or any of their respective
affiliates acting as an investor for its or their own
account(s). Neither the Joint Bookrunners nor the Company
intend to disclose the extent of any such investment or transaction
otherwise than in accordance with any legal or regulatory
obligation to do so;
33.
it:
(a)
has complied, and will comply, with its obligations in connection
with money laundering and terrorist financing under the Proceeds of
Crime Act 2002, the Terrorism Act 2000, the Terrorism Act 2006 and
the Money Laundering, Terrorist Financing and Transfer of Funds
(Information on the Payer) Regulations 2017 (in each case as
amended);
(b) is
not a person:
(i)
with whom transactions are prohibited under the US Foreign Corrupt
Practices Act of 1977 or any economic sanction programmes
administered by, or regulations promulgated by, the Office of
Foreign Assets Control of the U.S. Department of the
Treasury;
(ii)
named on the Consolidated List of Financial Sanctions Targets
maintained by HM Treasury of the United Kingdom; or
(iii) subject
to financial sanctions imposed pursuant to a regulation of the
European Union or a regulation adopted by the United Nations or
other applicable law,
(all such statutes, rules and
regulations referred to in this paragraph 33 together, the "Regulations") and if making payment on
behalf of a third party, that satisfactory evidence has been
obtained and recorded by it to verify the identity of the third
party as required by the Regulations and has obtained all
governmental and other consents (if any) which may be required for
the purpose of, or as a consequence of, such purchase, and it will
provide promptly to the Relevant Joint Bookrunner such evidence, if
any, as to the identity or location or legal status of any person
which it may request from it in connection with the Placing (for
the purpose of complying with the Regulations or ascertaining the
nationality of any person or the jurisdiction(s) to which any
person is subject or otherwise) in the form and manner requested by
the Relevant Joint Bookrunner on the basis that any failure by it
to do so may result in the number of Placing Shares that are to be
acquired by it or at its direction pursuant to the Placing being
reduced to such number, or to nil, as the Relevant Joint Bookrunner
may decide at its sole discretion;
34. in
order to ensure compliance with the Regulations, the Relevant Joint
Bookrunner (for itself and as agent on behalf of the Company) or
the Company's registrars may, in their absolute discretion, require
verification of its identity. Pending the provision to the
Relevant Joint Bookrunner or the Company's registrars, as
applicable, of evidence of identity, definitive certificates in
respect of the Placing Shares may be retained at the Relevant Joint
Bookrunner's absolute discretion or, where appropriate, delivery of
the Placing Shares to it in uncertificated form may be delayed at
the Relevant Joint Bookrunner's or the Company's registrars', as
the case may be, absolute discretion. If within a reasonable time
after a request for verification of identity the Relevant Joint
Bookrunner (for itself and as agent on behalf of the Company) or
the Company's registrars have not received evidence satisfactory to
them, either the Relevant Joint Bookrunner and/or the Company may,
at its absolute discretion, terminate its commitment in respect of
the Placing, in which event the monies payable on acceptance of
allotment will, if already paid, be returned without interest to
the account of the drawee's bank from which they were originally
debited;
35. its
commitment to acquire Placing Shares on the Terms and Conditions
will continue notwithstanding any amendment that may in future be
made to the terms and conditions of the Placing and that Placees
will have no right to be consulted or require that their consent be
obtained with respect to the Company's or any Joint Bookrunner's
conduct of the Placing;
36.
neither of the Joint Bookrunners nor any of their respective
affiliates, agents, advisers, directors, officers or employees
makes any representation in respect of or shall have any
responsibility for the tax treatment that any Placee may receive or
expect in relation to their investment in Placing
Shares;
37. it
has knowledge and experience in financial, business and
international investment matters as is required to evaluate the
merits and risks of acquiring the Placing Shares. It further
acknowledges that it is experienced in investing in securities of
this nature and is aware that it may be required to bear, and is
able to bear, the economic risk of, and is able to sustain, a
complete loss in connection with the Placing. It has relied upon
its own examination and due diligence of the Company and its
affiliates taken as a whole, and the terms of the Placing,
including the merits and risks involved;
38. it
irrevocably appoints any duly authorised officer of the Relevant
Joint Bookrunner as its agent for the purpose 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 which it agrees to acquire upon these
Terms and Conditions;
39. the
Company, the Joint Bookrunners and others (including each of their
respective affiliates, agents, advisers, directors, officers and
employees) will rely upon the truth and accuracy of the foregoing
representations, warranties, acknowledgements and agreements, which
are given to each of the Joint Bookrunners on their own behalf and
on behalf of the Company and are irrevocable;
40. it
is acting as principal only in respect of the Placing or, if it is
acquiring the Placing Shares as a fiduciary or agent for one or
more investor accounts, it is duly authorised to do so and it has
full power and authority to make, and does make, the foregoing
representations, warranties, acknowledgements, agreements and
undertakings on behalf of each such accounts;
41. time
is of the essence as regards its obligations under these Terms and
Conditions;
42. any
document that is to be sent to it in connection with the Placing
will be sent at its risk and may be sent to it at any address
provided by it to the Relevant Joint Bookrunner;
43. the
Placing Shares will be issued subject to these Terms and
Conditions; and
44.
these Terms and Conditions and all documents into which these Terms
and Conditions are incorporated by reference or otherwise validly
forms a part and/or any agreements entered into pursuant to these
Terms and Conditions and all agreements to acquire Placing Shares
pursuant to the Placing will be governed by and construed in
accordance with English law and it submits to the exclusive
jurisdiction of the English courts in relation to any claim,
dispute (contractual or otherwise) or matter arising out of or in
connection with such contract except that enforcement proceedings
in respect of the obligation to make payment for the Placing Shares
(together with interest chargeable thereon) may be taken by the
Company or the Relevant Joint Bookrunner in any jurisdiction in
which the relevant Placee is incorporated or in which any of its
securities have a quotation on a recognised stock
exchange.
By participating in the Placing,
each Placee (and any person acting on such Placee's behalf) agrees
to indemnify and hold the Company, the Joint Bookrunners and each
of their respective affiliates, agents, directors, officers and
employees harmless from any and all costs, claims, liabilities and
expenses (including legal fees and expenses) arising out of or in
connection with any breach of the representations, warranties,
acknowledgements, agreements and undertakings given by the Placee
(and any person acting on such Placee's behalf) in these Terms and
Conditions or incurred by either of the Joint Bookrunners, the
Company or any of their respective affiliates, agents, directors,
officers or employees arising from the non-performance of the
Placee's obligations as set out in these Terms and Conditions, and
further agrees that the provisions of these Terms and Conditions
shall survive after completion of the Placing.
The agreement to allot and issue
Placing Shares to Placees (or the persons for whom Placees are
contracting as agent) free of stamp duty and stamp duty reserve tax
in the United Kingdom relates only to their allotment and issue to
Placees, or such persons as they nominate as their agents, direct
by the Company. Such agreement assumes that the Placing
Shares are not being acquired in connection with arrangements to
issue depositary receipts or to transfer the Placing Shares into a
clearance service. If there are any such arrangements, or the
settlement related to any other dealings in the Placing Shares,
stamp duty or stamp duty reserve tax may be payable. In that
event, the Placee agrees that it shall be responsible for such
stamp duty or stamp duty reserve tax and neither the Company nor
the Joint Bookrunners shall be responsible for such stamp duty or
stamp duty reserve tax. If this is the case, each Placee
should seek its own advice and they should notify the Relevant
Joint Bookrunner accordingly. 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 United Kingdom
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 and each Placee, or the Placee's nominee, in respect of whom
(or in respect of the person for whom it is participating in the
Placing as an agent or nominee) the allocation, allotment, issue or
delivery of Placing Shares has given rise to such non-United
Kingdom stamp, registration, documentary, transfer or similar taxes
or duties undertakes to pay such taxes and duties, including any
interest and penalties (if applicable), forthwith and to indemnify
on an after-tax basis and to hold harmless the Company and the
Joint Bookrunners in the event that any of the Company and/or the
Joint Bookrunners have incurred any such liability to such taxes or
duties.
The representations, warranties,
acknowledgements and undertakings contained in these Terms and
Conditions are given to each of the Joint Bookrunners for itself
and on behalf of the Company and are irrevocable.
The Joint Bookrunners are authorised
and regulated by the FCA in the United Kingdom and are acting
exclusively for the Company and no one else in connection with the
Placing, and will not be responsible to anyone (including any
Placees) other than the Company for providing the protections
afforded to their clients or for providing advice in relation to
the Placing or any other matters referred to in these Terms and
Conditions.
Each Placee and any person acting on
behalf of the Placee acknowledges that the Joint Bookrunners do not
owe any fiduciary or other duties to any Placee in respect of any
representations, warranties, undertakings, acknowledgements,
agreements or indemnities in the Placing Agreement.
The provisions of these Terms and
Conditions may be varied, waived or modified as regards specific
Placees or on a general basis by either of the Joint Bookrunners
provided always that such variation, waiver or modification is not
materially prejudicial to the interests of the Company or the other
Joint Bookrunner.
In the case of a joint agreement to
acquire Placing Shares, references to a "Placee" in these Terms and Conditions
are to each of such Placees and such joint Placees' liability is
joint and several.
Each Placee and any person acting on
behalf of the Placee acknowledges and agrees that either of the
Joint Bookrunners may (at 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.
When a Placee or any person acting
on behalf of the Placee is dealing with a Joint Bookrunner, any
money held in an account with the Relevant Joint Bookrunners 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 FCA made under the FSMA.
Each Placee acknowledges that the money will not be subject to the
protections conferred by the client money rules: as a consequence
this money will not be segregated from the Relevant Joint
Bookrunner's money in accordance with the client money rules and
will be held by it under a banking relationship and not as
trustee.
In these Terms and Conditions any
words following the terms "including",
"include", "in
particular", "for example" or any
similar expression shall be construed as illustrative and shall not
limit the sense of the words, description, definition, phrase or
term preceding those terms.
References to time in the Terms and
Conditions are to London time, unless otherwise stated.
All times and dates in these Terms
and Conditions may be subject to amendment. Placees will be
notified of any changes.
No statement in the Announcement,
these Terms and Conditions or the Circular is intended to be a
profit forecast or estimate, and no statement in the Announcement,
these Terms and Conditions or the Circular should be interpreted to
mean that earnings per share of the Company for the current or
future financial years will necessarily match or exceed the
historical published earnings per share of the Company.
The price of the Ordinary Shares and
any income expected from them may go down as well as up and
investors may not get back the full amount invested upon disposal
of the Ordinary Shares. Past performance is no guide to future
performance, and persons needing advice should consult an
independent financial adviser.
The Placing Shares to be issued
pursuant to the Placing will not be admitted to trading on any
stock exchange other than AIM.
Neither the content of the Company's
website nor any website accessible by hyperlinks on the Company's
website is incorporated in, or forms part of, these Terms and
Conditions and/or the Announcement.
DEFINITIONS
In this Announcement the following
terms have the associated meanings:
"Act"
|
the Companies Act 2006 (as
amended)
|
"AIM"
|
the AIM market operated by the
London Stock Exchange
|
"AIM Rules for Companies"
|
means the rules of AIM as set out in
the publication entitled "AIM Rules for Companies" published by the
London Stock Exchange from time to time
|
"Announcement"
|
this announcement
|
"Application Form"
|
the personalised application form
that will be posted with the Circular for use by Qualifying
Shareholders in connection with the Open Offer
|
"Bookbuild"
|
an accelerated process conducted by
the Joint Bookrunners to determine demand for participation in the
Placing by Placees
|
"Cavendish"
|
means, Cavendish Capital Markets
Limited a company incorporated in England and Wales with company
number 06198898, authorised and regulated by the FCA, and for the
purpose of trade settlement in the Placing means, Cavendish
Securities plc a company incorporated in England and Wales with
company number 05210733, authorised and regulated by the
FCA
|
"Circular"
|
means the explanatory circular to be
issued by the Company to Shareholders explaining, inter alia, the Fundraising and
incorporating the notice of the General Meeting
|
"Company"
|
Surface Transforms Plc, registered
in England and Wales under number 03769702 whose registered office
is at Image Business Park, Acornfield Road, Knowsley Industrial
Park, Liverpool, England, L33 7UF
|
"Conditional Placing"
|
means the proposed placing of the
Conditional Placing Shares by the Joint Bookrunners on behalf of
the Company at the Issue Price
|
"Conditional Placing Shares"
|
means Placing Shares (in such number
as is agreed between the Company and the Joint Brokers in
accordance with the Placing Agreement) to be issued by the Company
to the Placees pursuant to the Placing and admitted to trading on
AIM on the Second Admission Date
|
"CREST"
|
the computerised settlement system
to facilitate transfer of the title to an interest in securities in
uncertificated form operated by Euroclear
|
"Directors" or
"Board"
|
the directors of the Company at the
date of this Announcement
|
"Euroclear"
|
Euroclear UK & International
Limited
|
"EV"
|
means electric vehicles
|
"Existing Ordinary Shares"
|
the 352,072,638 Ordinary Shares in
issue at the date of this Announcement;
|
"FCA"
|
Financial Conduct Authority of the
UK;
|
"Firm Placing"
|
means the proposed placing of the
Firm Placing Shares by the Joint Bookrunners on behalf of the
Company at the Issue Price
|
"Firm Placing Shares"
|
means 58,727,744 Placing Shares, to
be issued by the Company to the Placees pursuant to the Placing and
admitted to trading on AIM on the First Admission Date
|
"Fundraising"
|
means the Placing, the Subscription
and the Open Offer
|
"General Meeting"
|
means the general meeting of the
Company to be held at the offices of Gateley Plc, Ship Canal House,
98 King Street, Manchester, M2 4WU on 23 May 2024 at 11.00 a.m.,
convened pursuant to the Notice of General Meeting
|
"Issue Price"
|
1 pence per New Ordinary
Share
|
"JerseyCo"
|
Bumblebee Finance (Jersey) Limited,
a new Jersey-incorporated subsidiary of the Company which has its
registered office at 47 Esplanade, St Helier, Jesey JE1 0BD and
registered company number is 154104
|
"Joint Bookrunners"
|
Zeus and Cavendish (each a
"Joint
Bookrunner")
|
"London Stock Exchange"
|
London Stock Exchange plc
|
"New Ordinary Shares"
|
together the Placing Shares,
Subscription Shares and the Open Offer Shares
|
"Notice of General Meeting"
|
the notice of the General Meeting
contained within the Circular
|
"OEM"
|
original equipment
manufacturer
|
"Open Offer"
|
means the conditional invitation
proposed to be made by the Company to Qualifying Shareholders to
subscribe for the Open Offer Shares
|
"Open Offer Shares"
|
means up to 200,000,000 new Ordinary
Shares which are to be the subject of the Open Offer
|
"Option Agreement"
|
the initial subscription and put and
call option agreement entered into on or around the date of this
announcement by the Company, JerseyCo and Zeus providing for the
subscription by Zeus for shares in JerseyCo and granting Zeus the
option to sell and granting the Company the option to buy such
JerseyCo shares held by Zeus
|
"Ordinary Shares"
|
ordinary shares of £0.01 each in the
capital of the Company
|
"Placees"
|
means the persons with whom Placing
Shares are placed pursuant to the Placing
|
"Placing"
|
means the proposed placing of the
Placing Shares by the Joint Bookrunners on behalf of the Company at
the Issue Price, in accordance with the Placing
Agreement
|
"Placing Agreement"
|
the conditional placing agreement
relating to the Placing of the Placing Shares between the Company
and the Joint Bookrunners
|
"Placing Shares"
|
means the new Ordinary Shares
proposed to be issued by the Company and offered for subscription
to Placees at the Issue Price as part of the Placing (including the
Firm Placing Shares and the Conditional Placing Shares, but
excluding the Subscription Shares and the Open Offer
Shares)
|
"Qualifying Shareholders"
|
Shareholders whose Ordinary Shares
are on the register of members of the Company at the close of
business on the Record Date with the exclusion (subject to
exemptions) of persons with a registered address or located or
resident outside the United Kingdom
|
"Record Date"
|
close of business on 1 May
2024
|
"Regulation S"
|
Regulation S under the Securities
Act 1933, as amended
|
"Resolutions"
|
the resolutions contained in the
Notice of General Meeting
|
"Shareholders"
|
holders of Ordinary
Shares
|
"SOP"
|
start of production
|
"Subscription"
|
the private subscription at the
Issue Price by (i) David Bundred, (ii) Ian Cleminson, (iii) Kevin
Johnson, (iv) Isabelle Maddock, (v) Matthew Taylor, (vi) Julia
Woodhouse and (vii) Stephen Easton (or their respective associates)
directly with the Company for the Subscription Shares pursuant to
the Subscription Letters
|
"Subscription Letters"
|
the letters to be entered into
between the Company and each of (i) David Bundred, (ii) Ian
Cleminson, (iii) Kevin Johnson, (iv) Isabelle Maddock, (v) Matthew
Taylor, (vi) Julia Woodhouse and (vii) Stephen Easton (or their
respective associates)
|
"Subscription Shares"
|
the 21,850,000 new Ordinary Shares
which are to be issued by the Company pursuant to the
Subscription
|
"Transfer Agreement"
|
the subscription and transfer
agreement entered into on or around the date of this announcement
by the Company, JerseyCo and the Joint Brokers providing, inter
alia, for the subscription by the Joint Brokers for certain shares
in JerseyCo and the acquisition by the Company from the Joint
Brokers of such shares
|
"United States or US"
|
the United States of America, its
territories and possessions, any state of the United States and the
District of Columbia
|
"Zeus" or "Nominated
Adviser"
|
means Zeus
Capital Limited, a company incorporated in England and Wales with
company number 04417845, authorised and regulated by the
FCA
|