TIDMFDI
RNS Number : 1029Y
Firestone Diamonds PLC
01 December 2017
This announcement contains inside information for the purposes
of article 7 of Regulation 596/2014.
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, CANADA, JAPAN, THE REPUBLIC OF SOUTH
AFRICA, THE REPUBLIC OF IRELAND, NEW ZEALAND OR ANY OTHER
JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION
WOULD BE UNLAWFUL.
1 December 2017
Firestone Diamonds plc
("Firestone" or the "Company") (AIM: FDI)
Proposed Firm Placing, Placing and Open Offer to raise up to
GBP18.5 million (US$25 million)
Revised mining plan
Restructuring of debt facility
Firestone Diamonds plc, the AIM-quoted diamond mining company,
today announces a potential fundraising of GBP18.5 million (US$25
million) before expenses comprising a Firm Placing and a Placing,
subject to clawback under an Open Offer, in each case through the
issue of New Ordinary Shares at an issue price of 10 pence per New
Ordinary Share (the "Issue Price") in order, inter alia, to fund
on-going operations at the Liqhobong Diamond Mine (the
"Fundraising").
In addition, the Company also announces that it has:
-- formulated a revised mine plan to better cater for the
current lower-than-expected diamond sale results in order to ensure
the Company can mine sustainably should the lower average diamond
values being achieved persist; and
-- reached agreement in principle with its lender, ABSA Bank
Limited ("ABSA"), conditionally upon completion of the Fundraising
and approval of both commercial and political risk insurance by the
Export Credit Insurance Corporation of South Africa ("ECIC"), to,
inter alia, defer capital repayments under the ABSA Debt Facility
for a period of 18 months from 1 January 2018 to 30 June 2019 and
extend the final maturity date by 30 months to December 2023.
It is expected that details of the Fundraising and the expected
timetable of principal events will be announced later today (the
"Fundraising Results Announcement").
A circular setting out details of the proposed Fundraising and
giving notice of a General Meeting to approve these proposals (the
"Circular") will be sent to Shareholders shortly following release
of the Fundraising Results Announcement and will also be available
in due course on the Company's website:
www.firestonediamonds.com.
Highlights of the PROPOSED Fundraising
-- Proposed Fundraising of GBP18.5 million (US$25 million)
through a Firm Placing, Placing and Open Offer at the Issue Price.
The Open Offer will provide Qualifying Shareholders with an
opportunity to participate in the proposed issue of New Ordinary
Shares at the Issue Price.
-- The Issue Price represents a discount of 49.4 per cent. to
the Closing Price on 30 November 2017.
-- Application will be made to the London Stock Exchange for the
New Ordinary Shares to be admitted to trading on AIM. It is
expected that Admission will occur on or around 21 December
2017.
-- The Fundraising is conditional, inter alia, on the passing of
the Resolutions at the General Meeting.
Stuart Brown, Chief Executive Officer of Firestone, said:
"The 2017 financial year was successful. We achieved a number of
milestones, including: the successful completion of the
construction of the new mine at Liqhobong in Lesotho, the ramp up
of our production and the continued exceptional safety performance
of zero lost time injuries throughout the project over the past 3
years. However, the weaker than expected diamond market together
with our lower than anticipated recovery of higher value diamonds
has put pressure on our cash reserves and meant that we have had to
raise additional equity and restructure our debt in order to be
able to adopt a revised mining plan which seeks to maximise cash
flow in the shorter term while we address the issues affecting
value recovered. We believe the Liqhobong Mine remains a quality
asset with the potential to deliver attractive returns as the
diamond market recovers and the production footprint becomes more
representative over the medium term and potential efficiencies are
further improved.
I'd like to thank our major shareholders and ABSA for their
ongoing support and commitment."
Background to and reasons for the Fundraising and use of
proceeds
Firestone is a diamond mining company with operations focused in
Lesotho. Firestone commenced production at the Liqhobong Diamond
Mine in Lesotho in October 2016. Liqhobong is owned 75 per cent. by
Firestone and 25 per cent. by the Government of Lesotho. Lesotho is
emerging as one of Africa's significant new diamond producers,
hosting Gem Diamonds' Letseng Mine, Firestone's Liqhobong Diamond
Mine and Namakwa Diamond's Kao Mine.
As announced on 29 September 2017, the Company has achieved
lower than expected diamond prices in its sales for the last two
quarters. Notwithstanding an improvement in the average diamond
value received at the most recent sale on 9 October 2017 of US$83
per carat, the Liqhobong Diamond Mine is still being affected by
the combination of lower than expected occurrence of larger, better
quality diamonds and on-going subdued market conditions for the
lower quality diamonds.
The Liqhobong Diamond Mine is in the early stages of production.
A degree of variability is to be expected during this period,
particularly as mining operations are yet to access all of the
areas of the ore body in a proportionate way. Since commencing
operations in October 2016, around 0.6 million carats have been
sold at an average value of US$82 per carat. This compares to the
Company's updated definitive feasibility study in 2013 which was
based on an estimated average base case value of US$107 per
carat.
It was also announced on 29 September 2017 that the Company
would require additional financing as well as a restructuring of
its near-term debt obligations should it continue to achieve the
current levels of diamond pricing. The Company has had productive
discussions with its lender ABSA and its major Shareholders, the
conclusion of which has been that the Fundraising, in conjunction
with the amendments to the ABSA Debt Facility, is the best way to
protect the interests of all stakeholders whilst enabling the
Company, in the short term, to transition to a nine-year mine plan
with higher near-term cash generation.
The revised mine plan will be focused in the near term on mining
and treating ore over the whole ore body to obtain a more
representative footprint than has been possible to date, as well as
increasing the opportunity for the recovery of large gem stones
which, by nature, are typically scarce and unpredictable. In the
medium term, the Company will also be able to retain the
flexibility to revert to the original 14-year plan should diamond
prices recover materially.
The Fundraising, in conjunction with the amendments to the ABSA
Debt Facility, is being undertaken in order to provide additional
working capital to insulate the Company against any on-going
weakness in the diamond market and any sustained under-recovery of
larger, higher quality diamonds whilst, at the same time, allowing
it to develop to a point where Liqhobong's long term potential is
better understood. Using a low-case diamond price assumption of
US$75 per carat, the Directors anticipate that including the net
proceeds of the Fundraising and the 18 month standstill on the ABSA
Debt Facility capital repayments, Liqhobong will be cash flow break
even after servicing all interest on the ABSA Debt Facility,
working costs and stay in business capital as well as the necessary
small corporate overhead.
The net proceeds of the Fundraising will be used:
-- to fund mining activities and to provide sufficient headroom
while diamond market prices remain subdued, thereby enabling the
Company to achieve its objective of better understanding the true
potential of the ore body;
-- to service the December 2017 capital repayment of US$5.2
million under the ABSA Debt Facility;
-- to fund the debt service reserve account of the Group with
US$4.6 million in respect of the interest due under the ABSA Debt
Facility during the standstill period; and
-- for other general on-going working capital expenditure.
The Company will continue to review, on an on-going basis, the
quality of stones recovered and realised diamond values. The
Directors believe that by adopting the shorter nine-year mine plan,
with the benefit of the flexibility of reverting to the longer
14-year plan, the Company will be best positioned to operate on a
sustainable basis should the lower average diamond values persist
with the optionality of taking advantage of the longer life of mine
should the average diamond values received increase or should there
be an improvement in market conditions.
REVISED MINE PLAN
The Company has formulated a revised nine-year mine plan in
conjunction with its technical advisers which it believes will
deliver the best returns in the medium term at low risk whilst at
the same time offering optionality of taking advantage of the
longer life of mine should the average diamond values increase or
should there be an improvement in market conditions. Should this
occur, the Company will be able to revert to the original 14-year
mine plan. The revised plan is over a shorter nine-year period and
involves the stripping of 76.0 million fewer waste tonnes. The
Directors believe, following completion of the Fundraise and the
amendment to the ABSA Debt Facility, Liqhobong will be cash
generative at an operational level using the revised plan.
Furthermore, over the following 18 months the mining in the pit
will cover a far more representative area of the ore, which the
Directors expect to improve the likelihood of recovering higher
quality stones and, in turn, provide a truer representation of
diamond quality and
pricing than has been possible from the production at Liqhobong
to date.
Item Existing Revised
mining plan mining plan
Unit (2015) (2017) Difference
Ore mined/treated mt 50.9 32.9 (18.0)
Waste mined mt 105.0 29.0 (76.0)
Total mined mt 155.9 61.9 (94.0)
Average
strip ratio Waste/ore 2.1 0.9 (1.2)
Plant capacity mtpa 3.6 3.6 -
In-situ
grade cpht 27.3 23.5 (3.8)
Average
annual production mcts pa 1.0 0.9 (0.1)
Opex cost ZAR/t treated 192.9 175.5 (17.4)
Opex cost US$/t treated 14.5 13.0 (1.5)
Steady state
operating
exp. US$/carat 53.2 55.2 2.0
Royalty % 7% 5% (2%)
Diamond
price escalation
(real) % 3% 3% -
Total carats Million 13.9 7.7 (6.2)
Life of
open pit
mine Years 14 9 (5)
illustrative examples
Year-end cash position following completion of the
Fundraising
The following table sets out illustrative examples of the
Company's year-end cash position following completion of the
Fundraising and amendment to the ABSA Debt Facility based on a
US$75, US$80 and US$90 per carat diamond price and a number of
other assumptions, the key ones of which are summarised below.
US$ Cash position at year end (US$m)
per
carat
diamond
price
FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27
US$75 11 12 13 12 12 10 17 38 67 80
US$80 13 18 24 29 33 35 45 70 104 118
US$90 18 31 47 61 75 84 102 135 178 196
The key assumptions to the illustrative examples above are:
-- US$ per carat diamond prices adjusted for real price
inflation of 3 per cent. per annum;
-- Liqhobong operating assumptions consistent with the revised mine plan;
-- ZAR:US$ exchange rate of ZAR13.50:US$1;
-- maintenance capex of US$2 million in FY2018, c.US$1 million for FY2019 to FY 2026;
-- US$25 million capital raise and 18 month debt standstill
(capital repayment) from 1 January 2018 to 30 June 2019;
-- opening cash balance of US$4.3 million on 1 October 2017;
-- additional net aggregate working capital inflows (dependent
on timing of sales etc.) for FY18 to FY27 of c.US$2 million;
and
-- only repayment of the ABSA Debt Facility modelled (i.e.
excludes repayment of the Series A Bonds and the Series B
Bonds).
Revised mine plan NPV
The following table sets out the indicative NPV of Liqhobong
following completion of the Fundraising and amendment to the ABSA
Debt Facility based on a US$75, US$80, US$90, US$100, US$110 and
US$120 per carat diamond price and a number of other assumptions,
the key ones of which are summarised below.
US$ per US$75 US$80 US$90 US$100 US$110 US$120
carat
diamond
price
NPV (US$m) 114 141 195 240 284 328
The key assumptions to the indicative NPV of Liqhobong above
are:
-- US$ per carat diamond prices adjusted for real price
inflation of 3 per cent. per annum;
-- Liqhobong operating assumptions consistent with the revised mine plan; and
-- NPV before the repayment of the ABSA Debt Facility, the
Series A Bonds and the Series B Bonds.
The information used to prepare the illustrative examples above
has been compiled from a number of sources. The illustrative
examples have not been audited and are based on a number of
assumptions (including the key assumptions set out above). The
illustrative examples do not constitute profit forecasts and the
Company's actual cash position at year-end and/or NPV will be based
on a number of factors, including future diamond price and exchange
rates, which, if different from the assumptions above would result
in the Company's actual cash position at year-end and/or NPV being
materially different from the tables set out above.
Trading update
The Liqhobong Diamond Mine
Liqhobong construction was largely completed on-time and
on-budget in October 2016 without a single lost time injury. Plant
commissioning and ramp up activities were completed in June 2017
and steady state commercial production was reached at the end of
June 2017. 365,891 carats were recovered during FY 2017, whilst
diamond sales for the financial year saw 310,376 carats sold,
generating total sale proceeds of US$27.8 million, achieving an
average value of US$90 per carat. The Company has now reached over
five million man-hours worked whilst maintaining its record of zero
lost time injuries.
Of the 2,878,952 tonnes treated for the twelve months to 30
September 2017, 80 per cent. came from the lower grade K2 material
in the pit with some dilution, seven per cent. came from the K4
material also with some dilution, 13 per cent. came from K5 and
coming from historic mixed stockpiles used during the initial
commissioning stages.
Summary of sales and diamond market update*
Q3 FY Q4 FY Q1 FY Q2 FY
2017 2017 2018 2018
127,590 182,786 195,330 69,193
Carats sold cts cts cts cts
Total sales US$13.7m US$14.1m US$13.5m US$5.7m
Average value US$107/ct US$77/ct US$69/ct US$83/ct
*Two sales per quarter except Q2 FY 2018 (one sale).
As reported in the 29 September 2017 operational update, the
Company believes that the widely reported November 2016 Indian
de-monetisation programme continues to impact diamond pricing, in
particular in the market for smaller stones that comprise the bulk
of the run-of-mine goods sold in the Company's sales to date. The
initial impact of the de-monetisation was a drop in prices as a
result of demand reduction, which has been exacerbated by an
oversupply of goods that has since kept pricing at depressed
levels.
It was encouraging that the Company's October 2017 sale saw an
improvement in pricing for both finer sized stones and larger
stones and included the sale of a 133 carat gem-quality light
yellow diamond (the largest diamond recovered at Liqhobong to
date).
Near-term headwinds aside, the Directors believe that the
long-term fundamentals of the diamond sector remain strong.
SUMMARY OF THE GROUP'S FINANCING ARRANGEMENTS
The ABSA Debt Facility
As announced on 11 April 2014, ABSA granted the Group a project
debt finance facility of up to US$82.4 million for the construction
and commissioning of Liqhobong. The terms of the ABSA Debt Facility
included a total term of 6.5 years, with an 18 month draw down
period for construction and with the repayment of capital occurring
in the final 4.5 years of the loan term.
ABSA has agreed, in principle, to: (i) an 18 month debt
standstill on capital repayments for the period from 1 January 2018
to 30 June 2019; and (ii) an extension of the final maturity date
by 30 months to December 2023. The financial covenants and
definition of financial completion in the ABSA Debt Facility would
also be revised to reflect the revised mine plan and remaining life
of the facility and the cash sweep would be increased from 40 per
cent. to 50 per cent. after provision for sufficient working
capital. A credit review will be held in twelve months' time to
assess actual performance against expectations and consider
additional restructuring actions if necessary. ABSA will also have
the ability to call a credit review before December 2018 or to
declare default in the event of average diamond values for three
consecutive sales being below US$70 per carat, which is below the
base case value of US$75 per carat adopted by ABSA for measurement
during the standstill period. The Company also expects an increase
of between 0.25 per cent. and 0.5 per cent. in the margin rates
payable, together with a potential increase in the ECIC premium
(depending on the outcome of the ECIC review). These amendments are
conditional, inter alia, on:
-- approval of both commercial and political risk insurance by the ECIC;
-- the Company raising at least US$20 million pursuant to the Fundraising;
-- the Company's debt service reserve account to be expanded to
cover 18 months' interest during the standstill period; and
-- other customary conditions standard for facilities of this
nature including documentation and the signing of material
contracts.
An illustrative comparison of the scheduled capital repayment
profiles of the existing and proposed ABSA Debt Facility are set
out in the table below.
FY18 FY19 FY20 FY21 FY22 FY23 FY24
Existing
ABSA Debt
Facility
(US$m) 19.5 22.1 20.3 15.9 - - -
Proposed
ABSA Debt
Facility
(US$m) 9.9 1.9 10.2 14.0 21.2 11.5 9.0
The Company believes that good progress is being made in
relation to satisfying the conditions precedent for such
amendments.
The Series A Bonds
As previously announced on 26 May 2014, the Company entered into
the Mezzanine Facility whereby US$15.0 million was agreed to be
provided by each of Pacific Road and RCF (US$30.0 million in
aggregate). The Mezzanine Facility has an interest rate of 8.0 per
cent. per annum payable quarterly in arrears. All interest payments
are payable in cash save that the Group may, at its discretion,
provided that no event of default is subsisting and no requirement
under Rule 9 of the Takeover Code to make a mandatory offer would
be triggered, elect to satisfy such payment by way of the issue of
new Ordinary Shares at an issue price equal to the 20 day VWAP of
an Ordinary Share. The Mezzanine Facility is repayable on 20 August
2022.
On 24 April 2015 it was announced that the Mezzanine Facility
was being restructured by way of an issue of quoted Eurobonds and,
accordingly, the Company issued US$30.0 million principal amount of
Series A Bonds. The Series A Bonds have the same commercial terms
(described in the Company's circular to Shareholders dated 24 April
2015) as the Mezzanine Facility.
As at the date of this announcement, the Company has issued
5,936,792 new Ordinary Shares and 5,341,480 new Ordinary Shares to
RCF and Pacific Road respectively to satisfy the payment of
interest under the Series A Bonds and it is currently the Directors
intention to continue to issue Ordinary Shares to satisfy such
interest payments.
As part of the funding package provided by RCF and Pacific Road,
each received 2014 Warrants entitling each of them to subscribe for
24,393,218 new Ordinary Shares.
The Series B Bonds
As previously announced, under the terms of the ABSA Debt
Facility, the Company was required to secure a separate standby
debt facility to fund any potential cost over-runs or delays in
respect of the Liqhobong Diamond Mine, to remain in place until the
mine achieved technical and financial completion. RCF agreed to
provide this facility by agreeing to subscribe for Series B
Bonds.
Following the amendment and restatement of the Series B Bonds
announced on 22 June 2017, the Company was granted put options by
RCF to require RCF to purchase any or all of the Series B Bonds at
a price of US$1,000 per Series B Bond in minimum drawdowns of
US$2.0 million (and thereafter in US$1.0 million increments), up to
a maximum of US$15.0 million.
As at the date of this announcement the Company has issued
US$7.0 million Series B Bonds to RCF with a further US$8.0 million
of Series B Bonds available.
In order to facilitate the ability of the holder of the Series B
Bonds to elect to receive new Ordinary Shares, as opposed to cash,
on the redemption of the Series B Bonds by the Company, the Company
agreed that, upon the issue of a Series B Bond, the Company will
also issue RCF with Series B Warrants. The Series B Warrants are
attached to the Series B Bonds and, on redemption of the Series B
Bonds by the Company, RCF (or any third party to whom the Series B
Bonds have been transferred) may exercise the Series B Warrants
such that they will receive such number of new Ordinary Shares as
is equal to the applicable redemption amount divided by the
applicable exercise price, as opposed to the applicable redemption
amount in cash.
Further details of the Series B Bonds and the Series B Warrants
are contained in the Company's circular to Shareholders dated 24
April 2015 and its announcement dated 22 June 2017.
Details of the FUNDRAISING
The Company proposes to raise GBP18.5 million (US$25 million)
before expenses by the issue of up to 147,888,528 New Ordinary
Shares by way of the Firm Placing and a further 36,954,356 New
Ordinary Shares by way of the Placing, subject to clawback under
the Open Offer, each at an Issue Price of 10 pence per New Ordinary
Share. The New Ordinary Shares are expected to represent 36.6 per
cent. of the Enlarged Issued Share Capital. Macquarie, as agent of
the Company, has agreed to use its reasonable endeavours to
conditionally place the Firm Placing Shares and the Placing Shares
at the Issue Price pursuant to the Placing and Open Offer
Agreement. The Fundraising is not underwritten.
Qualifying Shareholders will be offered the right to subscribe
for Open Offer Shares in accordance with the terms of the Open
Offer. Qualifying Shareholders will not be offered the right to
subscribe for the Firm Placing Shares.
The Board considers the Firm Placing and the Placing and Open
Offer to be an appropriate fundraising structure, providing
certainty of funds to complete the plans outlined above whilst
providing existing Shareholders with the opportunity to participate
in the Fundraising through the Open Offer.
All elements of the Fundraising will have the same Issue Price.
The Issue Price of 10 pence per New Ordinary Share represents a
49.4 per cent. discount to the Closing Price of 19.75 pence per
Existing Ordinary Share on 30 November 2017 (being the latest
practicable date prior to the publication of this Announcement).
The Issue Price has been set by the Directors following their
assessment of market conditions and following discussions with
major Shareholders. The Directors are in agreement that the level
of discount and method of issue are appropriate to secure the
investment necessary.
Firm Placing
Macquarie, as agent for the Company and pursuant to the Placing
and Open Offer Agreement, has agreed to use its reasonable
endeavours to conditionally place the Firm Placing Shares at the
Issue Price. The Firm Placing Shares will be placed with
institutional and other investors. The Firm Placing Shares will not
be subject to clawback.
Placing and Open Offer
The Directors recognise the importance of pre-emption rights to
Shareholders and consequently Open Offer Shares will be offered to
existing Shareholders by way of the Open Offer. The Open Offer will
provide Qualifying Shareholders with an opportunity to participate
in the Fundraising by subscribing for their respective Basic
Entitlements and Excess Entitlements.
As part of the Placing and Open Offer, Macquarie as agent for
the Company and pursuant to the Placing and Open Offer Agreement
has agreed to use its reasonable endeavours to conditionally place
the Placing Shares at the Issue Price.
Subject to the fulfilment of the conditions set out below and in
the Circular to be published in due course, Qualifying Shareholders
will be given the opportunity to subscribe for Open Offer Shares
under the Open Offer at the Issue Price, payable in full on
application and free of all expenses, pro rata to their existing
shareholdings. The Excess Application Facility will enable
Qualifying Shareholders, provided that they take up their Basic
Entitlements in full, to apply for Excess Entitlements.
If you have sold or otherwise transferred all of your Existing
Ordinary Shares after the ex-entitlement Date, you will not be
entitled to participate in the Open Offer.
The Open Offer is not a rights issue. Qualifying CREST
Shareholders should note that, although the Open Offer Entitlements
will be admitted to CREST and be enabled for settlement,
applications in respect of entitlements under the Open Offer may
only be made by the Qualifying Shareholder originally entitled or
by a person entitled by virtue of a bona fide market claim raised
by Euroclear's Claims Processing Unit. Qualifying Non-CREST
Shareholders should note that the Application Form is not a
negotiable document and cannot be traded. Qualifying Shareholders
should be aware that under the Open Offer, unlike in a rights
issue, any New Ordinary Shares not applied for will not be sold in
the market or placed for the benefit of Qualifying Shareholders who
do not apply under the Open Offer, but will be placed with Placees
pursuant to the Placing and Open Offer Agreement, and the net
proceeds will be retained, for the benefit of the Company.
Further details of the Open Offer and the terms and conditions
on which the Open Offer will be made, including the procedure for
application and payment, will be contained in the Fundraising
Results Announcement and the Circular and for Qualifying Non-CREST
Shareholders on the accompanying Application Form.
To enable the Company to benefit from applicable exemptions to
the requirement under the Prospectus Rules to prepare a prospectus
in connection with the Open Offer, a maximum of 36,954,356 Open
Offer Shares, representing a total consideration of approximately
GBP3.7 million will be made available to Qualifying Shareholders
under the Open Offer. The Open Offer is restricted to Qualifying
Shareholders in order to enable the Company to benefit from
exemptions from securities law requirements in certain
jurisdictions outside the United Kingdom.
Basis of allocation under the Fundraising
The Placing may be scaled back at the Company's absolute
discretion in order to satisfy valid applications by Qualifying
Shareholders under the Open Offer. The Open Offer is being made on
a pre-emptive basis to Qualifying Shareholders. Any New Ordinary
Shares that are available under the Open Offer and are not taken up
by Qualifying Shareholders pursuant to their Open Offer
Entitlements will be reallocated to the Placing.
The number of Placing Shares to be clawed back from Placees to
satisfy valid applications by Qualifying Shareholders under the
Open Offer will be calculated pro rata to each Placee's commitment
to subscribe for Placing Shares.
Other information relating to the Fundraising
Each of the placing of the Firm Placing Shares, the Placing
Shares and the issue of the Open Offer Shares is conditional, inter
alia, upon Admission becoming effective by no later than 8.00 a.m.
on 21 December 2017 (or such later time and/or date as Macquarie
and the Company may agree being no later than 8.00 a.m. on 29
December 2017). The Placing is conditional on completion of the
Open Offer.
The Open Offer is subject to the satisfaction, amongst other
matters, of the following conditions on or before 21 December 2017
(or such time and date being no later than 8.00 a.m. on 29 December
2017, as the Company may decide):
-- Admission becoming effective by 8.00 a.m. on 21 December 2017
(or such later time or date not being later than 8.00 a.m. on 29
December 2017 as the Company may decide);
-- the Placing and Open Offer Agreement becoming unconditional
in all respects and not having been terminated in accordance with
its terms; and
-- the Resolutions having been duly passed without amendment at
the General Meeting and the Resolutions becoming unconditional.
In the event that the Open Offer does not become unconditional
by 8.00 a.m. on 21 December 2017 (or such later time and date as
the Company may decide being no later than 8.00 a.m. on 29 December
2017), the Open Offer will lapse and application monies will be
returned by post to the Applicant(s) at the Applicant's risk and
without interest, to the address set out in the Application Form,
within 14 days thereafter.
The New Ordinary Shares will, when issued and fully paid, rank
pari passu in all respects with the Existing Ordinary Shares,
including the right to receive all dividends and other
distributions declared, made or paid after the date of
Admission.
Settlement and dealings
Application will be made to the London Stock Exchange for the
New Ordinary Shares to be admitted to trading on AIM. It is
expected that Admission will become effective and that dealings
will commence at 8.00 a.m. on 21 December 2017.
Overseas Shareholders
Certain Overseas Shareholders may not be permitted to subscribe
for Open Offer Shares pursuant to the Open Offer and should refer
to the Circular when published in due course.
General Meeting
The Company will convene a General Meeting in due course for the
purpose of considering and, if thought fit, passing the Resolutions
in order to approve the Fundraising.
For more information contact:
Firestone Diamonds plc +44 (0)20 8741
Stuart Brown 7810
Macquarie Capital (Europe)
Limited (Nomad and Broker)
Nick Stamp +44 (0)20 3037
Nicholas Harland 2000
Tavistock (Public and Investor
Relations) +44 (0)20 7920
Simon Hudson 3150
Jos Simson +44 (0)7966 477
Barney Hayward 256
IMPORTANT INFORMATION
Neither this announcement nor any copy of it may be taken or
transmitted, published or distributed, directly or indirectly, into
the United States, Australia, Canada, Japan or 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 United States,
Australian, Canadian, Japanese or South African securities laws.
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.
This announcement does not constitute, or form part of, any
offer or invitation to sell or issue, or any solicitation of any
offer to purchase or subscribe for any Ordinary Shares or other
securities in the United States (including its territories and
possessions, any state of the United States and the District of
Colombia (the United States or US)), Australia, Canada, Japan or
South Africa or in any jurisdiction to whom or in which such offer
or solicitation is unlawful.
The Fundraising and the distribution of this announcement and
other information in connection with the Fundraising in certain
jurisdictions may be restricted by law and persons into whose
possession this announcement, any document or other information
referred to herein, comes should inform themselves about and
observe any such restriction. Any failure to comply with these
restrictions may constitute a violation of the securities laws of
any such jurisdiction.
In particular, the securities of the Company (including the New
Ordinary Shares) have not been and will not be registered under the
US Securities Act of 1933, as amended (the "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 New Ordinary 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, or in a
transaction not subject to, the registration requirements of the
Securities Act and the securities laws of any relevant state or
jurisdiction of the United States. There is no intention to
register any portion of the offering in the United States or to
conduct a public offering of securities in the United States.
The New Ordinary 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 Fundraising or the accuracy or adequacy of this
announcement. Any representation to the contrary is a criminal
offence in the United States.
Macquarie Capital (Europe) Limited ("Macquarie") is authorised
and regulated in the United Kingdom by the FCA, is acting as
nominated adviser, sole bookrunner and broker to the Company in
respect of the Fundraising. Macquarie 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
Macquarie by Financial Services and Markets Act 2000 (as amended)
("FSMA"), any liability therefor is expressly disclaimed. Any other
person should seek their own independent legal, investment and tax
advice as they see fit.
FORWARD LOOKING STATEMENTS
This announcement contains (or may contain) certain
forward-looking statements with respect to certain of the Company's
plans and its current goals and expectations relating to its future
financial condition and performance and which involve a number of
risks and uncertainties. The Company cautions readers that no
forward-looking statement is a guarantee of future performance and
that actual results could differ materially from those contained in
the forward-looking statements. These forward-looking statements
can be identified by the fact that they do not relate only to
historical or current facts. Forward-looking statements sometimes
use words such as "aim", "anticipate", "target", "expect",
"estimate", "intend", "plan", "goal", "believe", "predict" or other
words of similar meaning. Examples of forward-looking statements
include, amongst others, statements regarding or which make
assumptions in respect of the planned use of the proceeds for the
Fundraising, the Group's liquidity position, the future performance
of the Group, future interest rates and currency controls, the
Group's future financial position, plans and objectives for future
operations and any other statements that are not historical fact.
By their nature, forward-looking statements involve risk and
uncertainty because they relate to future events and circumstances,
including, but not limited to, economic and business conditions,
the effects of continued volatility in credit markets,
market-related risks such as changes in interest rates and foreign
exchanges rates, the policies and actions of governmental and
regulatory authorities, changes in legislation, the further
development of standards and interpretations under IFRS applicable
to past, current and future periods, evolving practices with regard
to the interpretation and application of standards under IFRS, the
outcome of pending and future litigation or regulatory
investigations, the success of future acquisitions and other
strategic transactions and the impact of competition. A number of
these factors are beyond the Company's control. As a result, the
Company's actual future results may differ materially from the
plans, goals, and expectations set forth in the Company's
forward-looking statements. Any forward-looking statements made in
this announcement by or on behalf of the Company speak only as of
the date they are made. These forward looking statements reflect
the Company's judgement at the date of this announcement and are
not intended to give any assurance as to future results. Except as
required by the FCA, the London Stock Exchange, the AIM Rules or
applicable law, the Company expressly disclaims any obligation or
undertaking to release publicly any updates or revisions to any
forward-looking statements contained in this announcement to
reflect any changes in the Company's expectations with regard
thereto or any changes in events, conditions or circumstances on
which any such statement is based.
References
All times referred to in this announcement are, unless otherwise
stated, references to UK time.
All references in this announcement to "GBP", "pence" or "p" are
to the lawful currency of the UK, references to "US$" are to the
lawful currency of the United States and references to "ZAR" are to
the lawful currency of the Republic of South Africa.
APPIX I
RISK FACTORS
An investment in the New Ordinary Shares is subject to a number
of risks. Before making an investment decision with respect to the
New Ordinary Shares, prospective investors should carefully
consider the risks associated with an investment in the Company,
the Company's business and the industry in which the Company
operates, in addition to all of the other information set out in
this announcement and, once published, the Circular and, in
particular, those risks described below.
If any of the circumstances identified in the risk factors were
to materialise, the Company's business, financial condition,
results of operations and future prospects could be adversely
affected and investors may lose all or part of their investment.
Certain risks of which the Directors are aware at the date of this
announcement and which they consider material to prospective
investors are set out in the risk factors below. Additional risk
factors which the Directors consider may be relevant to the
Company's business can be found in the Company's re-admission
document dated 13 August 2010. However, further risks and
uncertainties relating to the Company which are not currently known
to the Directors, or that the Directors do not currently deem
material, may also have an adverse effect on the Company's
business, financial condition, results of operations and future
prospects. If this occurs, the price of the Ordinary Shares may
decline and investors may lose all or part of their investment.
An investment in the Company may not be suitable for all
potential investors. Potential investors are therefore strongly
recommended to consult an independent financial adviser authorised
under FSMA and who specialises in advising upon the acquisition of
shares and other securities before making a decision to invest
Operational and Industry Risks
Exploration, Development and Mining Risks
The successful exploration, development and mining of diamonds
is subject to a number of risks and hazards which even a
combination of careful evaluation, experience and knowledge may not
eliminate. These risks include environmental hazards, industrial
accidents, fires, the encountering of unusual or unexpected
geological formations, pit side wall failures, flooding,
earthquakes, damage to diamonds during the mining and/or processing
phase of operations and periodic interruptions of utilities due to
inclement or hazardous weather conditions (for example, heavy
snowfall). These occurrences could result in damage to, or
destruction of, mineral properties or production facilities,
personal injury or death, environmental damage, reduced production
and delays in mining, asset write-downs, monetary losses and
possible legal liability.
Estimates of Reserves and Resources
The estimation of the Group's resources and reserves and their
anticipated production profiles comply with standard evaluation
methods generally used in the international mining industry. In
respect of these estimates, no assurance can be given that the
anticipated revenues, tonnages and grades will be achieved, that
the indicated level of recovery will be realised or that the
kimberlitic resources can be mined or processed profitably. Actual
resources may not conform to expectations and the volume and grade
of ore recovered may be below the estimated levels. There can be no
assurance that recoveries in small-scale laboratory tests will be
duplicated in larger-scale tests under on-site conditions or during
production. Reserve data are not indicative of future results of
operations. If the Group's actual reserves and resources are less
than current estimates, the Group's results or operations or
financial position may be materially and adversely affected.
Diamond Market Risks
The business of the Group is focused on the exploration and
mining of diamonds. The marketability of diamonds is affected by
and dependent on numerous factors beyond the control of the Group,
the precise effects of which cannot be accurately predicted. These
factors include market fluctuations, general economic activity,
action taken by other diamond companies or nations where diamonds
are mined, the supply of rough diamonds to the market, consumer
demand for polished diamonds and the availability and pricing of
other substitute material (including synthetic diamonds),
government regulation relating to taxation, royalties, production
levels, imports and exports, land tenure and land use, mining
licences, health and safety and the environment.
Depending on demand and pricing within the diamond market, the
Group may determine that it is not economically feasible to
continue production which could have an adverse impact on the
Group's business, results of operations and financial condition. In
such circumstances the Group may curtail or suspend some or all of
its production activities.
Title and Licenses
The Group requires a number of licenses, leases, approvals,
permits and regulatory consents, in respect of its operations as
well as work and environment permits (collectively,
"Authorisations"). The Group has obtained all Authorisations, which
are material to the mining of the Liqhobong Diamond Mine. The
political, legal and regulatory regime within Lesotho is still
developing and there can be no assurance that the Group has or will
have every necessary or desirable Authorisation required at any one
time to conduct the Group's operations. Any delays in being awarded
the relevant Authorisations may affect the Group's financial
position. Furthermore, there is a risk that such Authorisations
could be terminated, revoked, withdrawn, suspended, unavailable for
renewal following expiry or become commercially unviable. Whilst
the Group has investigated its title to and rights over interests
in and relating to its mining assets and rights, this should not be
construed as a guarantee of the Group's title to such assets. The
Group's assets may be subject to prior unregistered agreements or
transfers that have not been recorded or detected through title
research and title may be affected by undetected defects. There can
be no assurance that title to some of the Group's assets will not
be challenged or impugned.
Single Principal Asset
The Liqhobong Diamond Mine is the Group's main asset and is the
Group's main source of revenue. In the event that the Liqhobong
Diamond Mine is unable to maintain a steady-state of production,
whether due to operational failings or force majeure events, then a
reduction in targets or the suspension of operations at the
Liqhobong Diamond Mine could have a material adverse effect on the
financial position of the Group. In particular, it could result in
the Group defaulting on the repayment of the Eurobonds and/or the
ABSA Debt Facility.
Availability of and access to infrastructure
The Group's mining, processing, development and exploration
activities depend on adequate infrastructure, including reliable
roads, power sources and water supplies. Any failure or
unavailability of the infrastructure on which the Group's
operations rely could adversely affect the production output from
its mines or impact its exploration activities or the development
of a mine or a project. If the infrastructure used by the Group is
affected, it could have a material adverse effect on the Group's
business, results or operations or financial condition.
Risk of theft
The Group has established security systems, procedures and
arrangements in place across the extraction, processing and diamond
recovery chain. Despite the best efforts of management, there can
be no guarantee that there will be no occurrences of theft of
diamonds from the Group's operations. Whilst the Group maintains
insurance against such theft in an amount it considers to be
adequate, in certain circumstances its insurance may not cover or
be adequate to cover any such theft, in which case the Group could
incur significant costs that could materially and adversely affect
its results of operations.
Management Risks
The Group's business is highly dependent on the chief executive
and the senior management team. There can be no certainty that the
services of such key personnel will continue to be available to the
Group as competition for such personnel is intense in the mining
industry. Factors critical to retaining the Group's present staff
and attracting and recruiting additional qualified personnel
include, inter alia, the Group's ability to provide these
individuals with competitive compensation arrangements. If the
Group is not successful in retaining or attracting qualified
individuals in key management and operational positions, its
business may be adversely affected.
Competition
The diamond mining business is highly competitive in all its
phases. The Group competes with numerous other companies, several
of which have greater financial, technical and other resources than
the Group, for the acquisition of assets as well as the recruitment
and retention of qualified employees and other personnel.
Insurance Risks
Although the Board believes the Group carries adequate insurance
with respect to its activities in accordance with industry
practice, in certain circumstances its insurance may not cover or
be adequate to cover the consequences of such events. Furthermore,
insurance fully covering many environmental risks including
potential liability for pollution or other hazards as a result of
the containment of waste water (or "slimes") is not generally
available to the Group or to other companies in the mining
industry. The occurrence of an event that is not covered or fully
covered by insurance could have a material adverse effect on the
business, financial condition, results or operations of the
Group.
Litigation Risks
While the Group is not party to any material litigation, there
can be no guarantee that current or future actions of the Group
will not result in such litigation. Due to the inherent uncertainty
of the litigation process, there can be no assurance that the
resolution of any such particular legal proceedings will not have a
material effect on the Group's financial position or results of
operations.
On 13 November 2017 the Company received a letter from The
Department of Corruption and Economic Offences in Maseru, Lesotho
requesting information relating to the award of a long term mining
contract by LMDC. The Board, having reviewed the tendering process
in detail and taken legal advice on the matter, is confident that
the process was conducted in an open and transparent fashion and in
compliance with all relevant laws and the relevant Liqhobong mining
contract. The Company is in the process of responding to all
requests for information in full.
Work Force Risks
Much of the work undertaken in relation to the Liqhobong Diamond
Mine is dependent on locally sourced employees. The Directors
believe that the Group has good relationships with its employees
but work slow-downs, stoppages or other labour related developments
or disputes involving employees could potentially result in a delay
or decrease in production going forward which in turn could impact
the Group's financial performance and condition.
The success of the Group's operations also depends on its
ability to hire sufficient skilled and qualified people locally.
The Group may struggle to recruit and retain engineers, consultants
and other important members of the workforce due to shortages of
labour, or of skilled workers, or the unavailability or over
commitment of consultants, which may cause delays to
production.
Environmental Risks
The Group's operations are subject to environmental regulation.
Such regulation covers a wide variety of matters, including,
without limitation, prevention of waste, pollution and protection
of the environment, labour regulations and worker safety.
Environmental legislation and permitting are likely to evolve in a
manner which will require stricter standards and enforcement,
increased fines and penalties for non-compliance, more stringent
environmental assessments of proposed projects and a heightened
degree of responsibility for companies and their directors and
employees.
Economic, Financial and Political Risks
Currency Risks, Exchange Rate Fluctuations and Exchange Control
Regulations
The Company is exposed to a number of different currency risks
between the South African Rand, Lesotho Maloti, US$, Sterling and
Botswana Pula. The Group values and sells its diamonds in US$ and
then converts the proceeds to Sterling, Maloti and Pula as
required. As the Group reports in US$, reported revenue is affected
by changes in exchange rates between the above currencies. The
Group's expenses in Botswana, South Africa, the UK and Lesotho are
incurred in Pula, Rand, Sterling and Maloti respectively. The value
of the Maloti is set on a 1:1 basis to the Rand. A significant
fluctuation in the operating currencies or the US$ could have a
material adverse effect on the business, financial position and
result of operations in the Group.
Whilst at present the Group is not adversely affected by strict
controls on access to foreign currency and the repatriation of
funds, any change in foreign exchange regulations in the
jurisdictions in which the Group operates could have a material
adverse effect on its business and operations, and there can be no
assurance that exchange control restrictions will not be
reintroduced in certain countries in which the Group operates.
Economic Risk
In common with other early stage emerging market economies, many
African countries (where all of the Group's assets are located) are
dependent on sale proceeds from primary commodity production which
are subject to fluctuations in world commodity prices. In general,
these economies have also experienced devaluations, high inflation
and high interest rates. All these economic risks may from time to
time adversely affect the Group's operations. Historically,
commodity prices (including diamonds) have displayed wide ranges
and are affected by the numerous factors over which the Company
does not have any control. These include world production levels,
international economic trends, expectations for inflation,
speculative activity, consumption patterns and global or regional
political events.
Geopolitical Risk
Lesotho is a small nation bordered on all sides by the Republic
of South Africa and is reliant on its larger neighbour for the
supply of food, fuel, and goods and services. Consequently,
economic and political events in the Republic of South Africa may
have an adverse effect on Lesotho's economy, political system,
infrastructure and population which may subsequently have an
adverse effect on the Company's operations and financial
position.
Political Risk
Democratic political processes have been restored in Lesotho
since 1998 and the country has undergone several parliamentary
elections under the restored political system. However, there
remains a level of volatility to the parliamentary process which
could undermine the democratic system of government in Lesotho.
Lesotho is still developing the legal framework required to support
a market economy. The following risk factors relating to the legal
systems of Lesotho creates uncertainties with respect to the Group,
many of which uncertainties do not exist in countries with more
developed market economies: (i) inconsistencies between and among
governmental, ministerial and local orders, decisions, resolutions
and other acts; (ii) conflicting local, regional and federal rules
and regulations; (iii) the lack of judicial and administrative
guidance on interpreting legislation; (iv) laws and government and
administrative decisions and certain transactions consummated
pursuant to them have in the past been challenged in the Courts and
such challenges may occur in the future; (v) substantial gaps in
the regulatory structure due to delay or absence of implementing
legislation; (vi) a high degree of discretion on the part of
governmental authorities, which could result in arbitrary actions
such as suspension or termination of licences; and (vii) poorly
developed bankruptcy procedures that are subject to abuse.
Furthermore, several fundamental laws have only recently become
effective. The recent nature of much legislation, the lack of
consensus about the scope, content and pace of economic and
political reform and the rapid evolution of the legal systems in
ways that may not always coincide with market developments place
the enforceability and underlying constitutionality of laws in
doubt and results in ambiguities, inconsistencies, anomalies and
uncertainties. In addition, legislation often contemplates
implementing regulations which have not yet been promulgated,
leaving substantial gaps in the regulatory infrastructure. Due to
the inconsistency of legislation, the same provisions of the law
may be applied differently by different local authorities and state
bodies. Although the decisions and actions of these authorities and
state bodies can be challenged in the Courts, the uncertainty as to
how the law will be applied by different local authorities and
state bodies may have adverse consequences for the Group. All of
these weaknesses could have a material adverse effect on the
Group's financial position, prospects and the value of the Shares
and may prevent the Group from effectively and efficiently carrying
out its business strategy and could affect the Group's ability to
enforce its legal rights in Lesotho, including rights under its
contracts, or to defend against claims by others in Lesotho
Courts.
Acts of God and contagious diseases
Acts of God such as natural disasters and outbreaks of highly
contagious diseases are beyond the control of the Group and may
adversely affect the economy, infrastructure and livelihood of
people in the countries in which the Group is operating or
proposing to operate and other parts of the world. The Group's
business and profitability may be adversely affected should such
acts of God and/or outbreaks occur and/or continue.
Crime and corruption
The political and economic changes in Lesotho in recent years
have resulted in significant dislocations of authority. The local
press and international press have reported levels of corruption
including the bribing of, or by, officials for the purpose of
initiating investigations by government agencies. Press reports
have also described instances in which government officials have
engaged in selective investigations and prosecutions to further the
interests of the government and individual officials or business
groups. Demands of corrupt officials (including the initiation of
investigations into certain aspects of the Group's business
(including procurement) or claims that the Group or its management
or its beneficial owners have been involved in corruption or
illegal activities or biased articles and negative publicity could
adversely affect the Group's ability to conduct its business. Parts
of the Lesotho economic system continue to suffer from corruption.
The Group may have to cease or alter certain activities or business
activities as a result of criminal threats or activities or face
delays as a result of selective investigations/prosecutions. Legal
rights may be difficult to enforce in the face of organised crime
or corruption. Prospective counterparties to the Group may seek to
structure transactions in an irregular fashion, to evade fiscal or
legal requirements. They may also deliberately conceal information
from the Group and its advisers or provide inaccurate or misleading
information which may have a material adverse effect on the
Group.
Additional compliance costs and sanctions
Regulatory authorities exercise considerable discretion in
matters of enforcement and interpretation of applicable laws,
regulations and standards, the issuance and renewal of any
applicable licences, permits, approvals and authorisations and in
monitoring licencees' compliance with the terms thereof. Failure to
comply with existing laws and regulations or the findings of
government inspections may result in the imposition of fines or
penalties or more severe sanctions including the suspension,
amendment or termination of any applicable licences, permits,
approvals and authorisations or in requirements to cease certain
business activities, or in criminal and administrative penalties.
Moreover, an agreement made or transaction executed in violation of
a law may be invalidated and unwound by a Court decision. Any such
decisions, requirements or sanctions, or any increase in
governmental regulation could increase the Group's costs of
operation and materially adversely affect the financial position or
prospects of the Group.
Risk relating to the Fundraising
Existing debt obligations
As at the date of this document, the Group's debt obligations
consist of the US$82.4 million ABSA Debt Facility, US$30 million of
Series A Bonds and US$7 million of Series B Bonds. As more
particularly described at paragraph 6.1 of Part 1 of this document,
ABSA has agreed, in principle, to make certain amendments to the
ABSA Debt Facility. The extent and terms of the Group's leverage
has important consequences for Shareholders. For example: (i) the
Group is required to dedicate a substantial portion of its cash
flow from operations over the life of mine to required payments on
indebtedness, thereby reducing the availability of cash flow for
working capital, capital expenditures, other general corporate
activities and distributions to equity holders; (ii) the existing
indebtedness makes the Group vulnerable to the impact of economic
downturns and adverse developments in its business; and (iii) it
will be an event of default under the revised ABSA Debt Facility if
any three of the Group's consecutive diamond sales achieve less
than an average value of US$70 per carat (which is below the
Company's current low-case diamond price assumption of US$75 per
carat). The Group's ability to make scheduled payments on, or to
refinance, its obligations or to meet the existing and/or revised
financial covenant tests with respect to its indebtedness will
depend on its financial and operating performance, which in turn
will be affected by general economic conditions and by financial,
competitive, regulatory and other factors (such as prevailing US$
per carat diamond price and the ZAR:US$ exchange rate) which are
beyond the Group's control. Furthermore, ABSA intends to undertake
a credit review of the Liqhobong mine (including an updated
technical review) in 12 months time to assess the actual
performance against expectations and consider if additional
restructuring actions are necessary. If the Group is unable to
generate sufficient cash flow to satisfy its debt obligations
and/or ABSA's review reveals that Liqhobong's anticipated ability
to service debt repayments is lower than currently anticipated, the
Group may have to undertake alternative financing plans, such as
refinancing or restructuring its debt, reducing or delaying capital
investments or seeking to raise additional capital. There is no
guarantee that any refinancing would be possible or that additional
financing could be obtained on acceptable terms, if at all. The
Group's inability to satisfy its debt obligations, or to refinance
its indebtedness on commercially reasonable terms, could, in the
long term, materially and adversely affect its financial condition
and results of operations.
If the Fundraising does not proceed
Implementation of the Fundraising is conditional, among other
things, on Shareholders passing the Resolutions. If Shareholders do
not pass these Resolutions and the Fundraising does not proceed,
the Company may not be able to meet its obligations under the ABSA
Debt Facility or Eurobonds. The Fundraising is not guaranteed nor
underwritten.
If the proposed amendments to the ABSA Debt Facility are not
implemented
As announced on 11 April 2014, ABSA granted the Group a project
debt finance facility of up to US$82.4 million for the construction
and commissioning of Liqhobong. The terms of the ABSA Debt Facility
included a total term of 6.5 years, with an 18 month draw down
period for construction and with the repayment of capital occurring
in the final 4.5 years of the loan term. ABSA has agreed, in
principle, to an 18 month debt standstill on capital repayments for
the period from 1 January 2018 to 30 June 2019 and an extension of
the final maturity date by 30 months to December 2023 conditional,
inter alia, on: (i) approval of both commercial and political risk
insurance by ECIC; (ii) the Company raising at least US$20 million
pursuant to the Fundraising; (iii) the Company's debt service
reserve account to be expanded to cover 18 months' interest during
the standstill period and (iv) other customary conditions standard
for facilities of this nature including documentation and the
signing of material contracts. The Company believes that good
progress is being made in relation to satisfying the conditions
precedent for such amendment. However, there can be no guarantee
that such conditions will be satisfied and/or that definitive
agreements to amend the ABSA Debt Facility as described above will
be entered into, following which, the Company may not be able to
meet its obligations under the terms of the existing ABSA Debt
Facility.
Risks relating to the Ordinary Shares and the Open Offer
Dilution of ownership of Ordinary Shares
For those Qualifying Shareholders who do not participate in the
Open Offer, their proportionate ownership and voting interest in
the Company will be reduced as a consequence. In particular, to the
extent that Shareholders do not take up the offer of Open Offer
Shares under the Open Offer, their proportionate ownership and
voting interest in the Company will be further reduced and the
percentage that their shareholdings represent of the Ordinary
Shares capital of the Company will, following Admission, be reduced
accordingly.
Suitability
An investment in Ordinary Shares is only appropriate for
investors capable of evaluating the risks (including the risk of
capital loss) and merits of such investment and who have sufficient
resources to sustain a total loss of their investment. An
investment in Ordinary Shares should be seen as long-term in nature
and complementary to investments in a range of other financial
assets and should only constitute part of a diversified investment
portfolio. Potential investors should consider carefully whether
investment in the New Ordinary Shares is suitable for them in the
light of the information in this announcement and their personal
circumstances. Before making any final decision, potential
investors in any doubt should consult with an investment adviser
authorised under FSMA who specialises in advising on investments of
this nature.
Volatility in price of New Ordinary Shares
The Issue Price may not be indicative of the market price for
the New Ordinary Shares following Admission. The market price of
the New Ordinary Shares could be volatile and subject to
significant fluctuations due to a variety of factors, including
changes in sentiment in the market regarding the Company, the
sector or equities generally, any regulatory changes affecting the
Group's operations, variations in the Group's operating results
and/or business developments of the Group and/or its competitors,
the operating and share price performance of other companies in the
industries and markets in which the Group operates, news reports
relating to trends in the Group's markets or the wider economy and
the publication of research analysts' reports regarding the Company
or the sector generally.
Liquidity of the Ordinary Shares and AIM generally
An investment in the Ordinary Shares is highly speculative and
subject to a high degree of risk. Application will be made for the
New Ordinary Shares to be traded on AIM. AIM is a market designed
primarily for emerging or smaller companies. The rules of this
market are less demanding than those of the Official List.
Investments in shares traded on AIM carry a higher degree of risk
than investments in shares quoted on the Official List. An
investment in the Ordinary Shares may be difficult to realise and
the price at which the Ordinary Shares will be traded and the price
at which investors may realise their investment will be influenced
by a large number of factors, some specific to the Group and its
operations and some, which may affect quoted companies generally.
Admission to AIM should not be taken as implying that there will be
a liquid market for the Ordinary Shares. The market for shares in
smaller public companies, such as the Company, is less liquid than
for larger public companies. Consequently, the share price may be
subject to greater fluctuation on small volumes of shares, and thus
the Ordinary Shares may be difficult to sell at a particular price.
The value of the Ordinary Shares may go down as well as up.
Investors may therefore realise less than their original
investment, or sustain a total loss of their investment. The
Company is unable to predict when and if substantial numbers of
Ordinary Shares will be sold in the open market following
Admission. Any such sales, or the perception that such sales might
occur, could result in a material adverse effect on the market
price of the Ordinary Shares.
Taxation Risk
Any change in the Group's tax status or the tax applicable to
holding Ordinary Shares or in taxation legislation or its
interpretation, could affect the value of the investments held by
the Group, affect the Group's ability to provide returns to
Shareholders and/or alter the post-tax returns to Shareholders.
APPIX II
DEFINITIONS
The following definitions apply throughout this announcement,
unless the context requires otherwise:
2014 Warrants warrants to subscribe for, in
aggregate, 48,786,436 new Ordinary
Shares, as more particularly described
in the Company's circular dated
11 April 2014
ABSA ABSA Bank Limited, acting through
its Corporate Investment Banking
division
ABSA Debt Facility the US$82.4 million project debt
finance facility provided by ABSA
to LMDC
Admission admission of the New Ordinary
Shares to trading on AIM and such
admission becoming effective in
accordance with the AIM Rules
AIM the AIM market operated by the
London Stock Exchange
AIM Rules the AIM Rules for Companies and/or
the AIM Rules for Nominated Advisers
(as the context may require)
AIM Rules for Companies 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
AIM Rules for Nominated the rules of AIM as set out in
Advisers the publication entitled 'AIM
Rules for Nominated Advisers'
published by the London Stock
Exchange from time to time
Application Form the application form which will
accompany the Circular to be used
by Qualifying Non-CREST Shareholders
in connection with the Open Offer
Basic Entitlement(s) the entitlement to subscribe for
Open Offer Shares, allocated to
a Qualifying Shareholder pursuant
to the Open Offer
Board or Directors the board of directors of the
Company for the time being
certificated or the description of a share or
in certificated other security which is not in
form uncertificated form (that is not
in CREST)
Circular the shareholder circular of the
Company to be issued on or around
1 December 2017 in connection
with the Fundraising
Closing Price the closing middle market quotation
of an Ordinary Share as derived
from the Daily Official List of
the London Stock Exchange
Company or Firestone Firestone Diamonds plc, a company
incorporated in England and Wales
with registered number 03589905
and having its registered office
at The Triangle, 5 - 17 Hammersmith
Grove, London W6 0LG
CREST the relevant system (as defined
in the CREST Regulations) in respect
of which Euroclear is the Operator
(as defined in the CREST Regulations)
CREST Regulations the Uncertificated Securities
Regulations 2001 (as amended)
ECIC Export Credit Insurance Corporation
of South Africa SOC LTD
Enlarged Issued the issued share capital of the
Share Capital Company immediately following
Admission
EU the European Union
Eurobonds the Series A Bonds and/or Series
B Bonds, as appropriate
Euroclear Euroclear UK & Ireland Limited
Excess Application the facility pursuant to which
Facility Qualifying Shareholders may apply
to subscribe for such number of
Open Offer Shares in excess of
their Basic Entitlements
Excess Entitlement(s) in respect of a Qualifying Shareholder,
the entitlement (provided that
the Qualifying Shareholder has
agreed to take up its Basic Entitlement
in full) to apply for Open Offer
Shares in excess of the Basic
Entitlement
Existing Ordinary the 320,271,086 Ordinary Shares
Shares in issue at the Record Date
FCA the UK Financial Conduct Authority
Firm Placing Shares the new Ordinary Shares to be
issued by the Company under the
Firm Placing at the Issue Price
Firm Placing the placing of the Firm Placing
Shares pursuant to the Placing
and Open Offer Agreement
FSMA the UK Financial Services and
Markets Act 2000 (as amended)
Fundraising the Firm Placing and the Placing
and Open Offer
Fundraising Results the announcement expected to be
Announcement released by the Company on or
around 1 December 2017, setting
out final details of the Fundraising
(including the expected timetable
of principal events)
General Meeting the general meeting of the Company
to be held in connection with
the Fundraising, notice of which
will be set out in the Circular
Group the Company and/or its subsidiary
undertakings at the date of this
announcement (as defined in sections
1159 and 1160 of the Companies
Act 2006)
Issue Price 10 pence per New Ordinary Share
Lesotho the Kingdom of Lesotho
Lesotho Government the Government of the Kingdom
of Lesotho
Liqhobong or Liqhobong the Liqhobong Diamond Mine which
Diamond Mine is located in the Lesotho Highlands
LMDC Liqhobong Mining Development Company
(Pty) Limited, which is 75 per
cent. owned by the Company and
25 per cent. owned by the Lesotho
Government, which operates the
Liqhobong Diamond Mine
London Stock Exchange London Stock Exchange plc
Macquarie Macquarie Capital (Europe) Limited,
a private limited company incorporated
in England and Wales under registered
number 03704031 and having its
registered office at Ropemaker
Place, 28 Ropemaker Street, London
EC2Y 9HD, the Company's nominated
adviser and sole broker for the
purposes of the Fundraising and
Admission
Mezzanine Facility the mezzanine facility for US$30
million in total received from
Pacific Road and RCF
New Ordinary Shares together, the Firm Placing Shares,
the Placing Shares and the Open
Offer Shares
Open Offer the conditional invitation by
the Company to Qualifying Shareholders
to apply to subscribe for Open
Offer Shares at the Issue Price
on the terms and subject to the
conditions to be set out in the
Circular and in the case of the
Qualifying Non-CREST Shareholders
only, the Application Form
Open Offer Entitlements an entitlement to subscribe for
Open Offer Shares, allocated to
a Qualifying Shareholder under
the Open Offer (and, for the avoidance
of doubt, references to Open Offer
Entitlements include Basic Entitlements
and Excess CREST Open Offer Entitlements)
Open Offer Shares the new Ordinary Shares to be
offered to Qualifying Shareholders
under the Open Offer
Ordinary Shares the ordinary shares of one penny
each in the capital of the Company
Overseas Shareholders Shareholders with registered addresses
outside the UK or who are citizens
of, incorporated in, registered
in or otherwise resident in, countries
outside the UK
Pacific Road (i) Pacific Road Resources Fund
II L.P. represented by Pacific
Road Capital Management GP II
Limited; and (ii) Pacific Road
Resources Fund II represented
by Pacific Road Capital II PTY
Limited
Placees any persons who have agreed to
subscribe for Placing Shares pursuant
to the Placing
Placing the placing of the Placing Shares
pursuant to the Placing and Open
Offer Agreement
Placing Shares the new Ordinary Shares (excluding
the Firm Placing Shares) to be
issued by the Company under the
Placing at the Issue Price in
accordance with the terms of the
Placing and Open Offer Agreement
and which number shall reduce
commensurate with the number of
Open Offer Shares to be issued
Placing and Open the conditional placing and open
Offer Agreement offer agreement dated 1 December
2017 between the Company and Macquarie
relating to the Fundraising
Prospectus Rules the rules made by the FCA under
Part VI of FSMA in relation to
offers of transferable securities
to the public and admission of
transferable securities to trading
on a regulated market
Qualifying CREST Qualifying Shareholders whose
Shareholders Existing Ordinary Shares on the
register of members of the Company
on the Record Date are in uncertificated
form
Qualifying Non-CREST Qualifying Shareholders whose
Shareholders Existing Ordinary Shares on the
register of members of the Company
on the Record Date are held in
certificated form
Qualifying Shareholders holders of Existing Ordinary Shares
on the register of members of
the Company at the Record Date
with the exception (subject to
certain exceptions) of Shareholders
resident in or citizens of any
Restricted Jurisdiction
RCF Resource Capital Fund VI L.P.
Record Date 5.30 p.m. on 30 November 2017
being the latest time by which
transfers of Existing Ordinary
Shares must be received for registration
by the Company in order to allow
transferees to be recognised as
Qualifying Shareholders
Regulatory Information has the meaning given in the AIM
Service Rules for Companies
Resolutions the resolutions to be proposed
at the General Meeting in connection
with the Fundraising
Restricted Jurisdictions each of Australia, Canada, Japan,
the Republic of South Africa,
New Zealand and the United States
Securities Act the US Securities Act of 1933,
as amended from time to time and
the rules and regulations promulgated
thereunder
Series A Bonds has the meaning given to such
term at the paragraph titled 'The
Series A Bonds' of this announcement
Series B Bonds has the meaning given to such
term at the paragraph titled 'The
Series B Bonds' of this announcement
Series B Warrants has the meaning given to such
term at the paragraph titled 'The
Series B Bonds' of this announcement
Shareholders holders of Existing Ordinary Shares
uncertificated or recorded on a register of securities
uncertificated form maintained by Euroclear in accordance
with the CREST Regulations as
being in uncertificated form in
CREST and title to which, by virtue
of the CREST Regulations, may
be transferred by means of CREST
Takeover Code the City Code on Takeovers and
Mergers
UK or United Kingdom the United Kingdom of England,
Scotland, Wales and Northern Ireland
US or United States the United States of America,
its territories and possessions,
any state of the United States
of America and the District of
Columbia
GBP or sterling pounds sterling, the legal currency
of the United Kingdom
APPIX III
TERMS & CONDITIONS OF THE FIRM PLACING AND THE PLACING
IMPORTANT INFORMATION FOR PLACEES ONLY CONCERNING THE FIRM
PLACING AND THE PLACING
MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE FIRM
PLACING OR THE PLACING. THE TERMS AND CONDITIONS SET OUT HEREIN ARE
FOR INFORMATION PURPOSES ONLY AND ARE ONLY DIRECTED AT, AND BEING
DISTRIBUTED TO, 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"),
PERSONS WHO ARE QUALIFIED INVESTORS WITHIN THE MEANING OF ARTICLE
2(1)(E) OF THE EU PROSPECTUS DIRECTIVE (WHICH MEANS DIRECTIVE
2003/71/EC, AS AMED FROM TIME TO TIME, AND INCLUDES ANY RELEVANT
IMPLEMENTING DIRECTIVE MEASURE IN ANY MEMBER STATE OF THE EEA TO
THE EXTENT IMPLEMENTED IN THE RELEVANT MEMBER STATE OF THE EEA)
(THE "PROSPECTUS DIRECTIVE") ("QUALIFIED INVESTORS"); (B) IF IN THE
UNITED KINGDOM, PERSONS WHO FALL WITHIN THE DEFINITION OF
"INVESTMENT PROFESSIONALS" IN ARTICLE 19(5) OF THE FINANCIAL
SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005, AS
AMED ("THE ORDER") OR ARE PERSONS FALLING WITHIN ARTICLE 49(2) OF
THE ORDER AND ARE "QUALIFIED INVESTORS" AS DEFINED IN SECTION 86(7)
OF THE FSMA; (C) IF IN THE UNITED STATES, PERSONS REASONABLY
BELIEVED TO BE QIBS AS DEFINED UNDER THE U.S. SECURITIES ACT OF
1933, AS AMED (THE "SECURITIES ACT"); (D) ANY OTHER PERSON TO WHOM
IT MAY OTHERWISE LAWFULLY BE COMMUNICATED; AND, IN EACH CASE, WHO
HAVE BEEN INVITED TO PARTICIPATE IN THE FIRM PLACING AND THE
PLACING BY MACQUARIE (ALL SUCH PERSONS TOGETHER BEING REFERRED TO
AS "RELEVANT PERSONS").
THE TERMS AND CONDITIONS SET OUT HEREIN MUST NOT BE ACTED ON OR
RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. ANY PERSON WHO
HAS RECEIVED OR IS DISTRIBUTING THESE TERMS AND CONDITIONS MUST
SATISFY THEMSELVES THAT IT IS LAWFUL TO DO SO. ANY INVESTMENT OR
INVESTMENT ACTIVITY TO WHICH THESE TERMS AND CONDITIONS RELATE IS
AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH
RELEVANT PERSONS. THESE TERMS AND CONDITIONS DO NOT THEMSELVES
CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN
THE COMPANY. THE SECURITIES HAVE NOT BEEN AND WILL NOT BE
REGISTERED UNDER THE SECURITIES ACT OR THE SECURITIES LAWS OF ANY
STATE OR OTHER JURISDICTION OF THE UNITED STATES AND THE SECURITIES
MAY NOT BE OFFERED, SOLD, TRANSFERRED OR DELIVERED, DIRECTLY OR
INDIRECTLY IN, INTO OR WITHIN THE UNITED STATES, EXCEPT PURSUANT TO
AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE
STATE SECURITIES LAWS. THERE WILL BE NO PUBLIC OFFERING OF THE
SECURITIES IN THE UNITED STATES.
EACH PLACEE SHOULD CONSULT WITH ITS OWN ADVISERS AS TO LEGAL,
TAX, BUSINESS AND RELATED ASPECTS OF AN ACQUISITION OF PLACING
SHARES (AS SUCH TERM IS DEFINED BELOW)
Unless otherwise defined in these terms and conditions,
capitalised terms used in these terms and conditions shall have the
meaning given to them in this announcement.
If a person indicates to Macquarie that it wishes to participate
in the Firm Placing or the Placing (together the "Equity Placings")
by making an oral offer to acquire Firm Placing Shares pursuant to
the Firm Placing and Open Offer Shares pursuant to the terms of the
Placing (together the "Placing Shares") (each such person, a
"Placee") it will be deemed to have read and understood these terms
and conditions and the announcement of which it forms part and the
draft circular dated 1 December 2017 prepared by, and relating to,
the Company (the "Placing Proof") in their entirety and to be
making such offer on the terms and conditions, and to be providing
the representations, warranties, indemnities, agreements and
acknowledgements, contained in these terms and conditions. In
particular, each such Placee represents, warrants and acknowledges
that it is a Relevant Person and undertakes that it will acquire,
hold, manage and dispose of any of the Placing Shares that are
allocated to it for the purposes of its business only. Further,
each such Placee represents, warrants and agrees that: (a) if it is
a financial
intermediary, as that term is used in Article 3(2) of the
Prospectus Directive, that the Placing Shares acquired by and/or
subscribed for by it in the Equity Placings will not be acquired on
a non--discretionary basis on behalf of, nor will they be acquired
with a view to their offer or resale to, persons in circumstances
which may give rise to an offer of securities to the public other
than an offer or resale in a member state of the EEA which has
implemented the Prospectus Directive to Qualified Investors, or in
circumstances in which the prior consent of Macquarie has been
given to each such proposed offer or resale; and (b) it is and, at
the time the Placing Shares are acquired, will be either (i)
outside the United States, and acquiring the Placing Shares in an
offshore transaction in accordance with Rule 903 and Rule 904 of
Regulation S for its own account or purchasing the Placing Shares
for an account with respect to which it exercises sole investment
discretion; or (ii) a QIB. These terms and conditions do not
constitute an offer to sell or issue or the invitation or
solicitation of an offer to buy or acquire Placing Shares in the
United States or any other jurisdiction where to do so may be
unlawful, including, without limitation, Australia, Canada, Japan,
the Republic of South Africa or any other Excluded Territory.
These terms and conditions and the information contained herein
are not for release, publication or distribution, directly or
indirectly, in whole or in part, to persons in the United States,
subject to certain exceptions, or Australia, Canada, Japan, the
Republic of South Africa or any other Excluded Territory.
In particular, the Placing Shares referred to in these terms and
conditions have not been and will not be registered under the
Securities Act or the securities laws of any state or other
jurisdiction of the United States and the Placing Shares may not be
offered or sold directly or indirectly in, into or within the
United States, except pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the
Securities Act and applicable state securities laws. There will be
no public offering of the Placing Shares in the United States.
Subject to certain exceptions, no offering of the Placing Shares
will be made in the United States. The Placing Shares have not been
approved or disapproved by the U.S. Securities and Exchange
Commission, any state securities commission in the United States or
any other regulatory authority in the United States, nor have any
of the foregoing authorities passed upon or endorsed the merits of
the Equity Placings or the accuracy or adequacy of these terms and
conditions. Any representation to the contrary is a criminal
offence in the United States.
The distribution of these terms and conditions and the offer
and/or placing of Placing Shares in certain other jurisdictions may
be restricted by law. No action has been taken by Macquarie or the
Company that would permit an offer of the Placing Shares or
possession or distribution of these terms and conditions or any
other offering or publicity material relating to the Placing Shares
in any jurisdiction where action for that purpose is required, save
as mentioned above. Persons into whose possession these terms and
conditions come are required by Macquarie and the Company to inform
themselves about and to observe any such restrictions.
Each Placee's commitments will be made solely on the basis of
the information set out in this announcement and the Placing Proof.
Each Placee, by participating in the Equity Placings, agrees that
it has neither received nor relied on any other information,
representation, warranty or statement made by or on behalf of
Macquarie or the Company and none of Macquarie, the Company, or any
person acting on such person's behalf nor any of their respective
affiliates has or shall have liability for any Placee's decision to
accept this invitation to participate in the Equity Placings 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 Equity Placings.
Nothing in this paragraph shall exclude the liability of any person
for fraudulent misrepresentation.
No undertaking, representation, warranty or any other assurance,
express or implied, is made or given by or on behalf of Macquarie
or its affiliates, directors, officers, employees, agents,
advisers, or any other person, as to the accuracy, completeness,
correctness or fairness of the information or opinions contained in
the Placing Proof or this announcement or for any other statement
made or purported to be made by any of them, or on behalf of them,
in connection with the Company or the Equity Placings and no such
person shall have any responsibility or liability for any such
information or opinions or for any errors or omissions.
Accordingly, save to the extent permitted by law, no liability
whatsoever is accepted by Macquarie or any of its directors,
officers, employees or affiliates or any other person for any loss
howsoever arising, directly or indirectly, from any use of this
announcement or such information or opinions contained herein or
otherwise arising in connection with the Placing Proof.
These terms and conditions do not constitute or form part of,
and should not be construed as, any offer or invitation to sell or
issue, or any solicitation of any offer to purchase or subscribe
for, any Placing Shares or any other securities or an inducement to
enter into investment activity, nor shall these terms and
conditions (or any part of them), nor the fact of their
distribution, form the basis of, or be relied on in connection
with, any investment activity. No statement in these terms and
conditions is intended to be nor may be construed as a profit
forecast and no statement made herein should be interpreted to mean
that the Company's profits or earnings per share for any future
period will necessarily match or exceed historical published
profits or earnings per share of the Company.
Proposed Firm Placing of Firm Placing Shares and Placing of Open
Offer Shares subject to clawback in respect of valid applications
by Qualifying Shareholders pursuant to the Open Offer
Placees are referred to these terms and conditions, this
announcement and the Placing Proof containing details of, inter
alia, the Equity Placings. These terms and conditions, this
announcement and the Placing Proof have been prepared and issued by
the Company, and each of these documents is the sole responsibility
of the Company.
Firm Placing
The Firm Placing Shares are not subject to clawback and do not
form part of the Placing and Open Offer. The Firm Placing is
subject to the same conditions and termination rights which apply
to the Placing and Open Offer.
Macquarie have agreed, pursuant to the Placing and Open Offer
Agreement, to use reasonable endeavours to place, as agent for the
Company, the Firm Placing Shares at a purchase price per New
Ordinary Share of 10 pence (the "Issue Price") with Placees.
Subscribers may, with Macquarie's consent, subscribe directly with
the Company for Firm Placing Shares at the Issue Price. For the
avoidance of doubt, Macquarie will not have any obligation to use
its reasonable endeavours to place, as agent for the Company, such
Firm Placing Shares at the Issue Price with Placees and references
to Firm Placing Shares in this announcement shall be interpreted
mutatis mutandis.
Application will be made to the London Stock Exchange for the
Firm Placing Shares to be issued pursuant to the Firm Placing to be
admitted to trading on AIM. Subject to the conditions below being
satisfied, it is expected that Admission will become effective on
21 December 2017 and that dealings for normal settlement in the
Firm Placing Shares will commence at 8.00 a.m. on the same day. The
Firm Placing Shares, when issued and fully paid, will be identical
to, and rank pari passu with, the Existing Ordinary Shares,
including the right to receive all dividends and other
distributions declared, made or paid on the Existing Ordinary
Shares by reference to a record date on or after Admission.
The Firm Placing is conditional, inter alia, upon:
(i) Admission becoming effective by not later than 8.00 a.m. on
21 December 2017 (or such later time and/or date as the Company and
Macquarie may agree); and
(ii) the Placing and Open Offer Agreement having become
unconditional in all respects and not having been terminated in
accordance with its terms.
Placing and Open Offer
Macquarie have agreed, pursuant to the Placing and Open Offer
Agreement, to use reasonable endeavours to conditionally place, as
agent for the Company, all the Open Offer Shares at Issue Price
with placees. The commitments of placees in the Placing (the
"Conditional Placees") are subject to clawback in respect of valid
Applications for Open Offer Shares by Qualifying Shareholders
pursuant to the Open Offer.
Qualifying Shareholders are being given the opportunity to apply
for the Open Offer Shares at the Issue Price on and subject to the
terms and conditions of the Open Offer, pro rata to their holdings
of Existing Ordinary Shares on the Record Date. Open Offer Shares
will also be made available to Qualifying Shareholders under the
Excess Application Facility. Fractions of Open Offer Shares will be
rounded down to the nearest whole number.
The New Ordinary Shares issued under the Placing and Open Offer,
when issued and fully paid, will be identical to, and rank pari
passu with, the Existing Ordinary Shares, including the right to
receive all dividends and other distributions declared, made or
paid on the Existing Ordinary Shares after Admission.
Application will be made to the London Stock Exchange for the
Open Offer Shares to be issued under the Placing and Open Offer to
be admitted to trading on AIM. Subject to the conditions below
being satisfied, it is expected that Admission will become
effective on 21 December 2017 and that dealings for normal
settlement in the New Ordinary Shares will commence at 8.00 a.m. on
the same day.
The Placing and Open Offer are conditional, inter alia,
upon:
(i) Admission becoming effective by not later than 8.00 a.m. on
21 December 2017 (or such later time and/or date as the Company and
Macquarie may agree); and
(ii) the Placing and Open Offer Agreement having become
unconditional in all respects and not having been terminated in
accordance with its terms.
The full terms and conditions of the Open Offer will be
contained in the Circular to be issued by the Company
Bookbuild of the Equity Placings
Commencing today, Macquarie will be conducting the Bookbuild to
determine demand for participation in the Equity Placings.
Macquarie will seek to procure Placees as agent for the Company as
part of this Bookbuild. These terms and conditions give details of
the terms and conditions of, and the mechanics of participation in,
the Equity Placings.
Principal terms of the Bookbuild
a) By participating in the Equity Placings, Placees will be
deemed to have read and understood this announcement, these terms
and conditions and the Placing Proof in their entirety and to be
participating and making an offer for any Placing Shares on these
terms and conditions, and to be providing the representations,
warranties, indemnities, acknowledgements and undertakings,
contained in these terms and conditions.
b) Macquarie is arranging the Equity Placings as agents of the Company.
c) Participation in the Equity Placings will only be available
to persons who are Relevant Persons and who may lawfully be and are
invited to participate by Macquarie. Macquarie and its affiliates
are entitled to offer to subscribe for Placing Shares as principal
in the Bookbuild.
d) Any offer to subscribe for Placing Shares should state the
aggregate number of Firm Placing Shares and Open Offer Shares which
the Placee wishes to acquire or the total monetary amount which it
wishes to commit to acquire Placing Shares at the Issue Price.
e) The Bookbuild is expected to close on or around 1 December
2017 but may close earlier or later, at the discretion of Macquarie
and the Company. The timing of the closing of the books and
allocations will be agreed between Macquarie and the Company
following completion of the Bookbuild (the "Allocation Policy").
Macquarie may, in agreement with the Company, accept offers to
subscribe for Placing Shares that are received after the Bookbuild
has closed.
f) An offer to subscribe for Placing Shares in the Bookbuild
will be made on the basis of these terms and conditions and the
Placing Proof and will be legally binding on the Placee by which,
or on behalf of which, it is made and will not be capable of
variation or revocation after the close of the Bookbuild.
g) Subject to paragraph (e) above, Macquarie reserves the right
not to accept an offer to subscribe for Placing Shares, either in
whole or in part, on the basis of the Allocation Policy and may
scale down any offer to subscribe for Placing Shares for this
purpose.
h) If successful, each Placee's allocation will be confirmed to
it by Macquarie following the close of the Bookbuild. Oral or
written confirmation (at Macquarie's discretion) from Macquarie to
such Placee confirming its allocation will constitute a legally
binding commitment upon such Placee, in favour of Macquarie and the
Company to acquire the number of Placing Shares allocated to it
(and in the respective numbers of Firm Placing Shares and Open
Offer Shares (subject to clawback) so allocated) on the terms and
conditions set out herein. Each Placee will have an immediate,
separate, irrevocable and binding obligation, owed to Macquarie, to
pay to Macquarie (or as Macquarie may direct) as agent for the
Company in cleared funds an amount equal to the product of the
Issue Price and the sum of the number of Firm Placing Shares and,
once apportioned after clawback (in accordance with the procedure
described in the paragraph entitled 'Placing Procedure' below), the
Open Offer Shares, which such Placee has agreed to acquire.
i) The Company will make a further announcement following the
close of the Bookbuild detailing the number of Placing Shares to be
issued (the "Placing Results Announcement"). It is expected that
such Placing Results Announcement will be made as soon as
practicable after the close of the Bookbuild.
j) Subject to paragraphs (g) and (h) above, Macquarie reserves
the right not to accept bids or to accept bids, either in whole or
in part, on the basis of allocations determined at Macquarie's
discretion and may scale down any bids as Macquarie may determine,
subject to agreement with the Company. The acceptance of bids shall
be at Macquarie's absolute discretion, subject to agreement with
the Company.
k) Irrespective of the time at which a Placee's allocation(s)
pursuant to the Equity Placings is/are confirmed, settlement for
all Placing Shares to be acquired pursuant to the Firm Placing will
be required to be made at the time specified and all Placing Shares
to be acquired pursuant to the Placing will be required to be made
at the later time specified, on the basis explained below under the
paragraph entitled "Registration and Settlement".
l) No commissions are payable to Placees in respect of the Firm Placing or the Placing.
m) By participating in the Bookbuild, each Placee agrees that
its rights and obligations in respect of the Firm Placing and/or
the Placing will terminate only in the circumstances described
below and will not be capable of rescission or termination by the
Placee. All obligations under the Equity Placings will be subject
to the fulfilment of the conditions referred to below under the
paragraph entitled "Conditions of the Equity Placings and
Termination of the Placing and Open Offer Agreement".
Conditions of the Equity Placings and Termination of the Placing
and Open Offer Agreement
Placees will only be called on to acquire Placing Shares if the
obligations of Macquarie under the Placing and Open Offer Agreement
have become unconditional in all respects and Macquarie has not
terminated the Placing and Open Offer Agreement prior to
Admission.
Macquarie' obligations under the Placing and Open Offer
Agreement in respect of the Firm Placing and the Placing and Open
Offer are conditional upon, inter alia:
(a) Admission occurring not later than 8.00 a.m. on 21 December
2017 (or such later time and/or date as the Company and Macquarie
may agree);
(b) the passing of the Resolutions (without amendment) at the
General Meeting on 20 December 2017;
(c) the warranties given by the Company to Macquarie as
contained in the Placing and Open Offer Agreement being true,
accurate and not misleading on and as of the date of the Placing
and Open Offer Agreement and at all times between the date of the
Placing and Open Offer Agreement and Admission, by references to
the facts and circumstances from time to time subsisting; and
(d) there not having occurred, in the opinion of Macquarie
(acting in good faith), a material adverse change affecting the
condition of, or in the earnings, management, business properties,
assets, rights, results of operations, solvency, credit rating or
prospects of, (i) the Company or (ii) the Group taken as a whole,
in each case whether or not arising in the ordinary course of
business at any time prior to Admission,
(all such conditions included in the Placing and Open Offer
Agreement being together the "Conditions").
The Placing and Open Offer Agreement can be terminated at any
time before Admission by Macquarie giving notice to the Company in
certain circumstances, including (but not limited to) where (a) any
of the relevant conditions in the Placing and Open Offer Agreement
are not satisfied in all material respects at the required times
(unless waived); and (b) there has been a breach by the Company of
any of the warranties, undertakings or covenants in the Placing and
Open Offer Agreement or any of the warranties has ceased to be
true, accurate and not misleading, and in each case, the effect, in
the opinion of Macquarie, is singly or in the aggregate material in
the context of the Equity Placings and/or is such as to make it
impracticable or inadvisable to proceed with the Equity Placings,
Admission or to market or enforce contracts for the sale of, any
New Ordinary Shares.
If any Condition has not been satisfied, has not been waived by
Macquarie or has become incapable of being satisfied (and is not
waived by Macquarie as described below) or if the Placing and Open
Offer Agreement is terminated, all obligations under these terms
and conditions will automatically terminate. By participating in
the Equity Placings, each Placee agrees that its rights and
obligations hereunder are conditional upon the Placing and Open
Offer Agreement becoming unconditional in all respects in respect
of the Firm Placing (in respect of Firm Placing Shares subscribed
for) and/or in respect of the Placing (in respect of Open Offer
Shares subscribed for under the Placing) and that its rights and
obligations will terminate only in the circumstances described
above and will not be capable of rescission or termination by it
after oral or written confirmation by Macquarie (at Macquarie's
discretion) following the close of the Bookbuild.
Macquarie may in its absolute discretion in writing waive
fulfilment of certain of the Conditions in the Placing and Open
Offer Agreement or extend the time provided for fulfilment of such
Conditions. Any such extension or waiver will not affect Placees'
commitments as set out in these terms and conditions. Neither
Macquarie 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 made by Macquarie as to
whether or not to waive or to extend the time and/or date for the
fulfilment of any condition in the Placing and Open Offer
Agreement.
By participating in the Equity Placings each Placee agrees that
the exercise by the Company or Macquarie of any right or other
discretion under the Placing and Open Offer Agreement shall be
within the absolute discretion of the Company and Macquarie and
that neither the Company nor Macquarie need make any reference to
such Placee and that neither the Company nor Macquarie 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.
Placing Procedure
Placees shall acquire the Firm Placing Shares and Open Offer
Shares to be issued pursuant to the Equity Placings (after
clawback) and any allocation of the Firm Placing Shares and Open
Offer Shares (subject to clawback) to be issued pursuant to the
Equity Placings will be notified to them on or around 1 December
2017 (or such other time and/or date as the Company and Macquarie
may agree).
Placees will be called upon to subscribe for, and shall
subscribe for, the Open Offer Shares only to the extent that valid
Applications by Qualifying Shareholders under the Open Offer are
not received by 11.00 a.m. on 19 December 2017 (or any such later
time and/or date as the Company may agree with Macquarie) or if
Applications have otherwise not been deemed to be valid in
accordance with the Circular and the Application Form.
Payment in full for any Firm Placing Shares and Open Offer
Shares so allocated in respect of the Equity Placings at the Issue
Price must be made by no later than 21 December 2017 (or such other
date as shall be notified to each Placee by Macquarie) on the
closing date for the Firm Placing and the closing date for the Open
Offer, respectively (or such other time and/or date as the Company
and Macquarie may agree). Macquarie will notify Placees if any of
the dates in these terms and conditions should change, including as
a result of delay in the posting of the Circular, the Application
Forms or the crediting of the Open Offer Entitlements in CREST.
Registration and settlement
Settlement of transactions in the Placing Shares following
Admission will take place within the CREST system, subject to
certain exceptions.
Macquarie and the Company reserve the right to require
settlement for, and delivery of, the Placing Shares to Placees by
such other means that they deem necessary if delivery or settlement
is not possible within the CREST system within the timetable set
out in the Placing Proof and/or Circular or would not be consistent
with the regulatory requirements in the Placee's jurisdiction.
Each Placee will be deemed to agree that it will do all things
necessary to ensure that delivery and payment is completed in
accordance with either the standing CREST or certificated
settlement instructions which they have in place with
Macquarie.
Settlement for the Equity Placings will be on a T+2 and delivery
versus payment basis and settlement is expected to take place on 21
December 2017. Interest is chargeable daily on payments to the
extent that value is received after the due date from Placees at
the rate of 2 percentage points above prevailing LIBOR. Each Placee
is deemed to agree that if it does not comply with these
obligations, Macquarie may sell any or all of the Placing Shares
allocated to it on its behalf and retain from the proceeds, for its
own account and benefit, an amount equal to the aggregate amount
owed by the Placee plus any interest due. By communicating a bid
for Placing Shares, each Placee confers on Macquarie all such
authorities and powers necessary to carry out any such sale and
agrees to ratify and confirm all actions which Macquarie lawfully
take in pursuance of such sale. The relevant Placee will, however,
remain liable for any shortfall below the aggregate amount owed by
it and may be required to bear any stamp duty or stamp duty reserve
tax (together with any interest or penalties) which may arise upon
any transaction in the Firm Placing Shares on such Placee's
behalf.
Acceptance
By participating in the Equity Placings, a Placee (and any
person acting on such Placee's behalf) irrevocably acknowledges,
confirms, undertakes, represents, warrants and agrees (as the case
may be) with Macquarie and the Company, the following:
1. in consideration of its allocation of a placing
participation, to subscribe at the Issue Price for any Placing
Shares comprised in its allocation for which it is required to
subscribe pursuant to these terms and conditions, subject to
clawback of the Open Offer Shares in respect of valid Applications
from Qualifying Shareholders in the Open Offer;
2. it has read and understood this announcement (including these
terms and conditions) and the Placing Proof in their entirety and
that it has neither received nor relied on any information given or
any investigations, representations, warranties or statements made
at any time by any person in connection with Admission, the Equity
Placings, the Company, the New Ordinary Shares, or otherwise, other
than the information contained in this announcement (including
these terms and conditions) and the Placing Proof that in accepting
the offer of its placing participation it will be relying solely on
the information contained in this announcement (including these
terms and conditions) and the Placing Proof, receipt of which is
hereby acknowledged, and undertakes not to redistribute or
duplicate such documents;
3. its oral commitment will be made solely on the basis of the
information set out in this announcement and the Placing Proof and
the information publicly announced to a Regulatory Information
Service by or on behalf of the Company on the date of this
announcement, such information being all that such Placee deems
necessary or appropriate and sufficient to make an investment
decision in respect of the Placing Shares and that it has neither
received nor relied on any other information given, or
representations or warranties or statements made, by Macquarie or
the Company nor any of their respective affiliates and neither
Macquarie or the Company will be liable for any Placee's decision
to participate in the Firm Placing and/or the Placing based on any
other information, representation, warranty or statement;
4. the content of this announcement, these terms and conditions
and the Placing Proof are exclusively the responsibility of the
Company and agrees that neither Macquarie nor its affiliates nor
any person acting on behalf of any of such persons will be
responsible for or shall have liability for any information,
representation or statements contained therein or any information
previously published by or on behalf of the Company, and neither
Macquarie nor the Company, or any of their respective affiliates or
any person acting on behalf of any such person will be responsible
or liable for a Placee's decision to accept its placing
participation;
5. (i) it has not relied on, and will not rely on, any
information relating to the Company contained or which may be
contained in any research report or investor presentation prepared
or which may be prepared by Macquarie or its affiliates; (ii)
neither Macquarie, its affiliates or any person acting on behalf of
any of such persons has or shall have any responsibility or
liability for public information relating to the Company; (iii)
neither Macquarie, its affiliates or any person acting on behalf of
any of such persons has or shall have any responsibility or
liability for any additional information that has otherwise been
made available to it, whether at the date of publication of such
information, the date of these terms and conditions or otherwise;
and that (iv) neither Macquarie, its affiliates or any person
acting on behalf of any of such persons makes any representation or
warranty, express or implied, as to the truth, accuracy or
completeness of any such information referred to in (i) to (iii)
above, whether at the date of publication of such information, the
date of this announcement or otherwise;
6. it has made its own assessment of the Company and has relied
on its own investigation of the business, financial or other
position of the Company in deciding to participate in the Equity
Placings, and has satisfied itself concerning the relevant tax,
legal, currency and other economic considerations relevant to its
decision to participate in the Firm Placing and/or the Placing;
7. it is acting as principal only in respect of the Equity
Placings or, if it is acting for any other person (i) it is duly
authorised to do so and has full power to make the acknowledgments,
representations and agreements herein on behalf of each such
person, (ii) it is and will remain liable to the Company and
Macquarie for the performance of all its obligations as a Placee in
respect of the Equity Placings (regardless of the fact that it is
acting for another person), (iii) if it is in the United Kingdom,
it is a person (a) who has professional experience in matters
relating to investments and who falls within the definition of
"investment professionals" in Article 19(5) of the Order or who
falls within Article 49(2) of the Order, and (b) is a "qualified
investor" as defined in Section 86 of the FSMA, (iv) if it is in a
member state of the EEA, it is a "qualified investor" within the
meaning of Article 2(1)(e) of the Prospectus Directive, and (v) if
it is a financial intermediary, as that term is used in
Article 3(2) of the Prospectus Directive, the Placing Shares
subscribed by it in the Equity Placings are not being acquired on a
non--discretionary basis for, or on behalf of, nor will they be
acquired with a view to their offer or resale to persons in a
member state of the EEA in circumstances which may give rise to an
offer of shares to the public, other than their offer or resale to
qualified investors within the meaning of Article 2(1)(e) of the
Prospectus Directive in a member state of the EEA which has
implemented the Prospectus Directive;
8. if it has received any confidential price sensitive
information about the Company in advance of the Equity Placings, it
has not (i) dealt in the securities of the Company; (ii) encouraged
or required another person to deal in the securities of the
Company; or (iii) disclosed such information to any person, prior
to the information being made generally available;
9. it has complied with its obligations in connection with money
laundering and terrorist financing under the Proceeds of Crime Act
2002, the Terrorism Act 2000, the Terrorism Act 2006 and the Money
Laundering Regulations 2007 and the Criminal Justice (Money
Laundering and Terrorism Financing) Act 2010 and any related or
similar rules, Regulations or guidelines, issued, administered or
enforced by any government agency having jurisdiction in respect
thereof (the "Regulations") and, if it is making payment on behalf
of a third party, it has obtained and recorded satisfactory
evidence to verify the identity of the third party as may be
required by the Regulations;
10. it has only communicated or caused to be communicated and
will only communicate or cause to be communicated any invitation or
inducement to engage in investment activity (within the meaning of
Section 21 of FSMA) relating to the Placing Shares in circumstances
in which Section 21(1) of FSMA does not require approval of the
communication by an authorised person;
11. it is not acting in concert (within the meaning given in the
City Code on Takeovers and Mergers) with any other Placee or any
other person in relation to the Company;
12. it has complied and will comply with all applicable
provisions of the FSMA with respect to anything done by it in
relation to the Placing Shares in, from or otherwise involving the
United Kingdom;
13. it and any person acting on its behalf is entitled to
acquire the Placing Shares under the laws of all relevant
jurisdictions and that it has all necessary capacity and has
obtained all necessary consents and authorities to enable it to
commit to this participation in the Equity Placings and to perform
its obligations in relation thereto (including, without limitation,
in the case of any person on whose behalf it is acting, all
necessary consents and authorities to agree to the terms set out or
referred to in these terms and conditions);
14. unless otherwise agreed by the Company (after agreement with
Macquarie), it is not, and at the time the Placing Shares are
subscribed for and purchased will not be, subscribing for and on
behalf of a resident of Australia, Canada, Japan, the Republic of
South Africa or any other Excluded Territory and further
acknowledges that the Placing Shares have not been and will not be
registered under the securities legislation of any Excluded
Territory and, subject to certain exceptions, may not be offered,
sold, transferred, delivered or distributed, directly or
indirectly, in or into those jurisdictions;
15. it does not expect Macquarie to have any duties or
responsibilities towards it for providing protections afforded to
clients under the rules of the FCA Handbook (the "Rules") or
advising it with regard to the Placing Shares and that it is not,
and will not be, a client of Macquarie as defined by the Rules.
Likewise, any payment by it will not be treated as client money
governed by the Rules;
16. any exercise by Macquarie of any right to terminate the
Placing and Open Offer Agreement or of other rights or discretions
under the Placing and Open Offer Agreement or the Equity Placings
shall be within Macquarie's absolute discretion and Macquarie shall
not have any liability to it whatsoever in relation to any decision
to exercise or not to exercise any such right or the timing
thereof;
17. neither it, nor the person specified by it for registration
as a holder of Placing Shares is, or is acting as nominee(s) or
agent(s) for, and that the Placing Shares will not be allotted to,
a person/person(s) whose business either is or includes issuing
depository receipts or the provision of clearance services and
therefore that the issue to the Placee, or the person specified by
the Placee for registration as holder, of the Placing Shares will
not give rise to a liability under any of Sections 67, 70, 93 and
96 of the Finance Act 1986 (depositary receipts and clearance
services) and that the Placing Shares are not being acquired in
connection with arrangements to issue depository receipts or to
issue or transfer Placing Shares into a clearance system;
18. the person who it specifies for registration as holder of
the Placing Shares will be (i) itself or (ii) its nominee, as the
case may be, and acknowledges that Macquarie and the Company will
not be responsible for any liability to pay stamp duty or stamp
duty reserve tax (together with interest and penalties) resulting
from a failure to observe this requirement; and each Placee and any
person acting on behalf of such Placee agrees to participate in the
Equity Placings on the basis that the Placing Shares will be
allotted to a CREST stock account of one of Macquarie who will hold
them as nominee on behalf of the Placee until settlement in
accordance with its standing settlement instructions with it;
19. where it is acquiring Placing Shares for one or more managed
accounts, it is authorised in writing by each managed account to
acquire Placing Shares for that managed account;
20. if it is a pension fund or investment company, its
acquisition of any Placing Shares is in full compliance with
applicable laws and Regulations;
21. it has not offered or sold and will not offer or sell any
New Ordinary 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;
22. it has not offered or sold and will not offer or sell any
New Ordinary Shares to persons in any member state of the EEA prior
to Admission except to persons whose ordinary activities involve
them acquiring, holding, managing or disposing of investments (as
principal or agent) for the purpose of their business or otherwise
in circumstances which have not resulted and will not result in an
offer to the public in any member state of the EEA within the
meaning of the Prospectus Directive;
23. participation in the Equity Placings is on the basis that,
for the purposes of the Equity Placings, it is not and will not be
a client of Macquarie and that Macquarie does not have any duties
or responsibilities to it for providing the protections afforded to
their clients nor for providing advice in relation to the Equity
Placings nor in respect of any representations, warranties,
undertakings or indemnities contained in the Placing and Open Offer
Agreement or the contents of these terms and conditions;
24. to provide Macquarie with such relevant documents as they
may reasonably request to comply with requests or requirements that
either they or the Company may receive from relevant regulators in
relation to the Equity Placings, subject to its legal, regulatory
and compliance requirements and restrictions;
25. any agreements entered into by it pursuant to these terms
and conditions shall be governed by and construed in accordance
with the laws of England and Wales and it submits (on its behalf
and on behalf of any Placee on whose behalf it is acting) to the
exclusive jurisdiction of the English courts as regards any claim,
dispute or matter arising out of any such contract, except that
enforcement proceedings in respect of the obligation to make
payment for the Placing Shares (together with any interest
chargeable thereon) may be taken by Macquarie 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;
26. to fully and effectively indemnify and hold harmless the
Company and Macquarie and each of their respective affiliates (as
defined in Rule 501(b) under the Securities Act) and each person,
if any, who controls any Bank within the meaning of Section 15 of
the Securities Act or Section 20 of the US Exchange Act of 1934, as
amended, and any such person's respective affiliates, subsidiaries,
branches, associates and holding companies, and in each case their
respective directors, employees, officers and agents from and
against any and all losses, claims, damages and liabilities (i)
arising from any breach by such Placee of any of the provisions of
these terms and conditions and (ii) incurred by Macquarie and/or
the Company arising from the performance of the Placee's
obligations as set out in these terms and conditions;
27. to indemnify on an after--tax basis and hold the Company and
Macquarie and any of their affiliates and any person acting on
their behalf harmless from any and all losses, claims, damages,
liabilities and expenses (including legal fees and expenses)
arising out of or in connection with any breach of the
representations, warranties, acknowledgments, agreements and
undertakings in these terms and conditions and further agrees that
the provisions of these terms and conditions shall survive after
completion of the Fundraising;
28. in making any decision to subscribe for the Placing Shares,
(i) 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; (ii) 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; (iii) it has relied on its own examination, due
diligence and analysis of the Company and its affiliates taken as a
whole, including the markets in which the Group operates, and the
terms of the Equity Placings, including the merits and risks
involved; (iv) it has had sufficient time to consider and conduct
its own investigation with respect to the offer and purchase of the
Placing Shares, including the legal, regulatory, tax, business,
currency and other economic and financial considerations relevant
to such investment and (v) will not look to Macquarie, any of their
respective affiliates or any person acting on their behalf for all
or part of any such loss or losses it or they may suffer;
29. Macquarie and the Company and their respective affiliates
and others will rely upon the truth and accuracy of the foregoing
representations, warranties, acknowledgments and undertakings which
are irrevocable; and
30. its commitment to acquire Placing Shares will continue
notwithstanding any amendment that may in future be made to the
terms and conditions of the Firm Placing and/or 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
Macquarie' conduct of the Firm Placing and/or the Placing.
Please also note that 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 UK
relates only to their allotment and issue to Placees, or such
persons as they nominate as their agents, direct from the Company
for the Placing Shares in question. Such agreement assumes that
such Placing Shares are not being acquired in connection with
arrangements to issue depositary receipts or to transfer such
Placing Shares into a clearance service. If there were any such
arrangements, or the settlement related to other dealing in such
Placing Shares, stamp duty or stamp duty reserve tax may be
payable, for which neither the Company nor Macquarie would be
responsible and Placees shall indemnify the Company and Macquarie
on an after--tax basis for any stamp duty or stamp duty reserve tax
paid by them in respect of any such arrangements or dealings.
Furthermore, each Placee agrees to indemnify on an after--tax
basis and hold each of Macquarie and/or the Company and their
respective affiliates harmless from any and all interest, fines or
penalties in relation to stamp duty, stamp duty reserve tax and all
other similar duties or taxes to the extent that such interest,
fines or penalties arise from the unreasonable default or delay of
that Placee or its agent. If this is the case, it would be sensible
for Placees to take their own advice and they should notify
Macquarie 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 UK by them or any other
person on the acquisition by them of any Placing Shares or the
agreement by them to acquire any Placing Shares.
Selling Restrictions
By participating in the Equity Placings, a Placee (and any
person acting on such Placee's behalf) irrevocably acknowledges,
confirms, undertakes, represents, warrants and agrees (as the case
may be) with Macquarie and the Company, the following:
1. it is not a person who has a registered address in, or is a
resident, citizen or national of, a country or countries, in which
it is unlawful to make or accept an offer to subscribe for Placing
Shares;
2. it has fully observed and will fully observe the applicable
laws of any relevant territory, including complying with the
selling restrictions set out herein and obtaining any requisite
governmental or other consents and it has fully observed and will
fully observe any other requisite formalities and pay any issue,
transfer or other taxes due in such territories;
3. if it is in the United Kingdom, it is a person (i) who has
professional experience in matters relating to investments and who
falls within the definition of "investment professionals" in
Article 19(5) of the Order or who falls within Article 49(2) of the
Order, and (ii) is a "qualified investor" as defined in Section 86
of the FSMA;
4. if it is in a member state of the EEA, it is a "qualified
investor" within the meaning of Article 2(1)(e) of the Prospectus
Directive;
5. it is a person whose ordinary activities involve it (as
principal or agent) in acquiring, holding, managing or disposing of
investments for the purpose of its business and it undertakes that
it will (as principal or agent) acquire, hold, manage or dispose of
any Placing Shares that are allocated to it for the purposes of its
business;
6. it is and, at the time the Placing Shares are purchased, will
be either (i) outside the United States, purchasing in an offshore
transaction pursuant to Regulation S or (ii) a QIB that makes each
of the representations, warranties, acknowledgments and agreements
set out in paragraph 9 below;
7. none of the Placing Shares have been or will be registered
under the Securities Act or with any securities regulatory
authority of any state or other jurisdiction of the United
States;
8. none of the Placing Shares may be offered, sold, taken up or
delivered directly or indirectly, in whole or in part, into or
within the United States except pursuant to an exemption from, or
in a transaction not subject to, the registration requirements of
the Securities Act and in compliance with any applicable securities
laws of any state or other jurisdiction of the United States;
9. if it is in the United States, (i) it is a QIB and is
acquiring the Placing Shares for its own account or for the account
of one or more QIBs with respect to whom it has the authority to
make, and does make, the representations and warranties set forth
herein, for investment purposes and not with a view to further
distribution of such Placing Shares; (ii) it is aware, and each
beneficial owner of the Placing Shares has been advised, that the
sale of Placing Shares to it is in reliance on Rule 144A or another
exemption from the registration requirements of the Securities Act;
(ii) it will only offer, resell, pledge or otherwise transfer the
Placing Shares (a) to a person that the seller and any person
acting on its behalf reasonably believes is a QIB purchasing for
its own account or for the account of a QIB in a transaction
meeting the requirements of Rule 144A, (b) outside the United
States in accordance with Regulation S under the Securities Act,
(c) pursuant to an exemption from registration under the Securities
Act provided by Rule 144 thereunder (if available), or (d) pursuant
to an effective registration statement under the Securities Act, in
each case in accordance with any applicable securities laws of any
state or other jurisdiction of the United States; and (iii)
notwithstanding anything to the contrary, it understands that
Placing Shares may not be deposited into any unrestricted
depositary receipt facility in respect of Placing Shares
established or maintained by a depositary bank unless and until
such time as such Placing Shares are no longer "restricted
securities" within the meaning of Rule 144(a)(3) under the
Securities Act; and
10. it (on its behalf and on behalf of any Placee on whose
behalf it is acting) has (a) fully observed the laws of all
relevant jurisdictions which apply to it; (b) obtained all
governmental and other consents which may be required; (c) fully
observed any other requisite formalities; (d) paid or will pay any
issue, transfer or other taxes; (e) not taken any action which will
or may result in the Company or Macquarie (or any of them) being in
breach of a legal or regulatory requirement of any territory in
connection with the Equity Placings: (f) obtained all other
necessary consents and authorities required to enable it to give
its commitment to subscribe for the relevant Placing Shares and (g)
the power and capacity to, and will, perform its obligations under
the terms contained in these terms and conditions.
Set--off and Miscellaneous
If a Placee is entitled to participate in the Open Offer by
virtue of being a Qualifying Shareholder it will be able to apply
to subscribe for Open Offer Shares under the terms and conditions
of the Open Offer. Any participation by a Placee as a Qualifying
Shareholder in the Open Offer will not reduce such Placee's
commitment in respect of its placing participation in the Placing
(but not the Firm Placing).
The Company reserves the right to treat as invalid any
Application or purported Application for Placing Shares that
appears to the Company or its agents to have been executed,
effected or dispatched from the United States or an Excluded
Territory or in a manner that may involve a breach of the laws or
Regulations of any jurisdiction or if the Company or its agents
believe that the same may violate applicable legal or regulatory
requirements or if it provides an address for delivery of the share
certificates of Placing Shares in an Excluded Territory or the
United States, or any other jurisdiction outside the United Kingdom
in which it would be unlawful to deliver such share
certificates.
When a Placee or person acting on behalf of the Placee is
dealing with Macquarie, any money held in an account with Macquarie
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 rules and Regulations of the FCA made under the FSMA. The
Placee acknowledges that the money will not be subject to the
protections conferred by the client money rules; as a consequence,
this money will not be segregated from Macquarie' money in
accordance with the client money rules and will be used by each of
Macquarie in the course of its own business; and the Placee will
rank only as a general creditor of Macquarie.
Times
Unless the context otherwise requires, all references to time
are to London time. All times and dates in these terms and
conditions may be subject to amendment. Macquarie will notify
Placees and any persons acting on behalf of the Placees of any
changes.
-ends-
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCEAKAFEAPXFEF
(END) Dow Jones Newswires
December 01, 2017 02:01 ET (07:01 GMT)
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