TIDMOGT
RNS Number : 4550O
International Oil and Gas Tech Ltd
19 September 2013
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN
PART, DIRECTLY OR INDIRECTLY, TO US PERSONS OR IN OR INTO THE
UNITED STATES, CANADA, AUSTRALIA, THE REPUBLIC OF SOUTH AFRICA, THE
REPUBLIC OF IRELAND, JAPAN OR ANY JURISDICTION IN WHICH THE SAME
WOULD BE UNLAWFUL.
19 September 2013
INTERNATIONAL OIL AND GAS TECHNOLOGY LIMITED
("IOGT" or the "Company")
PROPOSED EQUITY ISSUE AND EGM
1. Introduction
Further to the announcement of 12 September 2013, the Company
announces a proposed equity issue to raise gross proceeds of US$
2,121,684 through a Placing of 707,228 Placing Shares at US$3 per
Share.
The Placing has now closed, the Company having received the
following irrevocable commitments to subscribe in aggregate for all
of the Placing Shares at the Placing Price:
-- 683,398 Placing Shares have been subscribed for by certain of the Shareholders;
-- 21,497 Placing Shares have been subscribed for by the Directors; and
-- 2,333 Placing Shares have been subscribed for by the Investment Manager.
The Placing is conditional, inter alia, on Shareholder approval
and Admission. A circular will be sent to Shareholders as soon as
practicable and will include a notice convening the Extraordinary
General Meeting to be held on 16 October 2013.
2. Overview
The Company's investment portfolio comprises three investments
in early-stage, growth companies. The Board has said a number of
times over the last few years that the primary goal of the Company
was to invest, develop and exit from investee companies and the
Board has now concluded that it is time to complete orderly exits
from all three remaining portfolio investments within the next 24
months and return proceeds to Shareholders. In order to avoid a
rushed sales process, and bearing in mind the Company's
deteriorating cash position, which has been exacerbated by the cost
of litigation, the Company has canvassed Shareholders representing
more than 50 per cent. of the issued share capital of the Company.
Without additional funds, the Company would need to address its
liquidity position by undertaking the immediate sale of some or all
of its investments, as more fully described in section 4 below.
The Board is proposing the Placing to raise new equity capital
with the objectives of improving its deteriorating cash position
and thereby:
-- meeting the anticipated capital requirements of the Company
and, to a lesser extent, its investee companies while it pursues
the orderly realisation of its assets; and
-- mitigating the erosion of Shareholder value that would
otherwise result from rushed sales processes or capital starvation
of the investee companies.
The Company has no debt or other form of leverage, and does not
consider that it is practical to obtain a debt facility since very
few of the assets of the Company currently generates any
income.
3. Portfolio update
The unaudited NAV of the Company as at 30 June 2013 was US$
58,195,400, equivalent to US$7.98 per Share. This NAV calculation
is based on the valuation model in use for several years. The
Company's portfolio investments are private companies that are
still on the steep portion of their individual learning and
business development curves and the Board would emphasise that its
valuations of the investee companies are based in part on estimates
of future performance. They also assume an orderly sale process and
consistent underlying financial performance. The valuations given
are Tier III valuations which require a high degree of judgment in
the valuation of illiquid assets and which therefore may not
reflect the price ultimately agreed between a willing buyer and a
willing seller. The NAV is also calculated on the assumption that
the Company continues as a going concern and that the underlying
assets are realised at market rather than distressed value.
The Company's portfolio of investments currently consists of
three companies: Strata (unaudited fair value of US$36.9 million as
at 30 June 2013), SR2020 (US$14.0 million), and Crest Energy
(US$4.0 million).
Set out below, in summary, is an update of the performance of
each of these investments:
Strata
The Company owns approximately 43 per cent. of the issued share
capital of Strata and a US$2 million unsecured loan note in its
favour which is repayable on demand, but repayment of which is
currently prohibited by Strata's other lenders for the reasons
disclosed below.
Strata has for many years been one of the leading providers of
UBD services in its domestic Canadian market, where it has a strong
market share. Strata has established an enviable reputation amongst
the major Canadian oil and gas companies with its patented RFD
equipment and the quality and efficiency of its service
provision.
During 2012, Strata established UBD services in Kurdistan.
Operations in this region have continued to expand, with two new
long-term contracts due to commence in H2/2013.
An important development has been the increasing and
industry-wide acceptance of MPD services; these enable operators to
increase drilling efficiency and safety by drilling close to
balance with the formation pressure, with constant positive control
of drilling fluids. Strata has developed a service package centred
on its proprietary RFDs and automated drilling chokes. Strata's MPD
services have started to gain market share in the US where, in
concert with the appointment of a local country manager, the
company is expanding operations with several major US operators.
MPD is particularly attractive to operators in the booming shale
drilling sector in the US, where safety and efficiency are coming
under intense scrutiny.
This greater geographical diversification should allow Strata to
mitigate the impact of downturns in the potentially more volatile
Canadian home market.
Performance for H1/2013 has still been affected by the aftermath
of the dramatic slump in drilling activity in Canada during
H2/2012. Revenues for the six months to 31 May 2013 were C$10.3
million with EBITDA of C$0.3 million. The slow first six months
means that the full-year revenue outturn is likely to be flat
compared to FY/2012. As a result of the lower revenues and EBITDA
in 2012 and H1/2013, Strata does not currently meet its
twelve-month trailing EBITDA covenant under its debt facility.
Resolution of this may require a combination of short-term cost
reduction within the research and development department together
with an injection of up to C$ 5 million of subordinated debt and/or
equity. Investors should note that, if the foregoing cannot be
achieved over the coming three months, there is a material risk
that the Company's sale of its interest in Strata will need to be
accelerated, with potential negative effects on exit price.
However, Strata forecasts that H2/2013 will show a significant
improvement, with high current levels of equipment utilisation in
all three operating regions. The outlook for the next 12 months is
stronger, with monthly revenues, many already contracted, forecast
to exceed significantly those of the previous twelve-month
period.
The company has until recently continued with its development
programme for offshore MPD technology. This will provide Strata
with added technical differentiation and the potential to penetrate
the lucrative offshore market.
With high equipment utilisation anticipated for the next 12
months, successful expansion into the US and Middle East, and
proprietary offshore technology, the future of the investment in
Strata looks most promising if its short-term cash flow issues can
be resolved at a reasonable price or with an acceptable level of
dilution. We are working on this issue assiduously with both Strata
and its lenders.
Crest Energy
The Company owns 100 per cent. of the issued share capital of
Crest Energy, subject to an agreement to provide for shares to be
issued to management representing up to 25 per cent. of the issued
share capital of Crest Energy.
Crest Energy currently focuses on providing nitrogen-purging
services to national oil companies and other operators in the
Middle East. Crest Energy is headquartered in Dubai, United Arab
Emirates and has an operations base in al-Khobar, Saudi Arabia,
from which it serves Saudi Aramco.
Crest Energy continued to increase revenues at a rapid rate
during H1/2013, with revenues for the six months of US$1.3 million
compared to total revenues in 2012 of just over US$1.0 million.
Based on current activity levels, full-year revenues are expected
to exceed US$2.2 million. Margins remained high and Crest Energy
was EBITDA-positive during the first half of 2013. As in 2012, this
revenue was earned exclusively from operations in Saudi Arabia by
providing nitrogen-purging services using Crest Energy's membrane
nitrogen-generation units.
During the last six months, Crest Energy continued to own two
units: a single, high-capacity (2000 scf/m) membrane nitrogen unit
that was deployed to major pipeline-purging projects and on
powerstation infrastructure-purging operations and a smaller
(580scf/m) unit, which is on a long-term contract and assigned
exclusively to nitrogen-purging operations on power-station
infrastructure in Saudi Arabia. Although Crest Energy has
periodically deployed rental equipment on operations, it does not
seek actively to pursue a business model based on significant usage
of rental equipment, which carries lower margins with more
cash-flow risk.
Crest Energy has had to decline offered work due to lack of
available equipment. An increase in Crest Energy's asset base would
enable it to meet at least part of this excess demand. However, to
take full advantage of that demand will require further capital
investment. Furthermore, current high utilisation levels of
equipment restrict Crest Energy's ability to tender for new work in
H2/2013 because it cannot be certain when existing contracts will
finish. Without investment in new equipment, Crest Energy is likely
to achieve lower revenues and working capital in the H2/2013.
SR2020
The Company owns 100 per cent. of the issued share capital and
debt of SR2020, which is subject to dilution of up to 30 per cent.
through an Employee Share Ownership Programme established to
incentivise and retain key employees of SR2020.
SR2020 provides borehole seismic acquisition and processing
services in the US. Its headquarters are in Brea, California, where
the company's geophysicists undertake seismic-data processing for
both its client borehole seismic data acquired by its own equipment
and for data sets acquired by third parties. SR2020 processes both
conventional and borehole seismic data from third parties,
particularly specialising in difficult situations such as sub-salt
surveys.
SR2020 has an operations base in Houston, Texas from where its
proprietary tubing-conveyed borehole seismic-array equipment is
deployed.
SR2020 enjoyed a three-fold increase in income during 2012.
However, revenues of US$0.9 million in H1/2013 were disappointing.
Reduced acquisition revenue, which was caused by a shortage of
equipment, resulted in lower associated processing income. The key
new acquisition equipment ordered in 2012 has been further delayed,
with delivery not now expected until later in H2/2013. As a result,
SR2020 expects full-year revenues to remain flat compared to 2012.
Additional capital is required to purchase the new equipment and
further working capital to achieve sales growth, although SR2020
has continued to strengthen its sales team to provide better
customer awareness of its capabilities.
The Investment Manager is working with SR2020 to increase its
revenues and exploring all avenues to address the need to improve
SR2020's acquisition capabilities. However, it should be noted that
the current ability of the Company to provide further support to
SR2020 is limited.
4. Reasons for the Placing
As disclosed in the unaudited interim financial statements of
the Company to 30 June 2013 announced on 30 August 2013, the cash
balance of the Company continued to reduce over the previous twelve
months. As at 30 June 2012, it was US$7,901,935, by 31 December
2012 it had reduced to US$5,055, 889 and as at 30 June 2013 it was
US$2,967,139. During the two six-month periods to 30 June 2013, the
net follow-on investment in investee companies totalled
US$1,995,000 and US$600,000 respectively. The balance of the
reduction in cash was due almost entirely to the ongoing running
costs of the Company and the need to fund the Company's defence in
the litigation. The Company's cash balance as at the date of this
document had further reduced to US$1,689,194 and the Company
anticipates that to maintain solvency without the provision of
further capital pursuant to the Placing, it would have to be
certain of receiving the proceeds from the sale of an investment by
November 2013 and would therefore immediately have to commence a
distressed short-form sales process.
The Directors and the Investment Manager consider that a
short-form sales process would not be in the best interests of
Shareholders as a whole for the following reasons:
-- A distressed seller of assets can find it difficult to
achieve an appropriate price on a sale of those assets where
potential purchasers are aware of the distress. In a short-form
sales process, the price likely to be achieved on a sale could be
dramatically less than the relevant component NAV or the price that
could be achieved on an orderly disposal;
-- Strata, which (as set out above) comprises the majority of
the NAV of the Company, experienced poor trading in 2012 which
continued through the first half of 2013. It is currently operating
under a forbearance letter from its principal lender. Any immediate
sale is therefore likely to be at a distressed price. However, the
Board and the Investment Manager believe its technology and
services are of very high quality, and its principal service, MPD,
is increasingly becoming the industry standard form of drilling. In
addition, development of its offshore equipment nears completion
and its awarded and contracted work for the coming twelve months
should show increased revenues.
Therefore, the Board considers that the further equity required
for the Placing should be more than compensated by achieving a more
appropriate exit price for the interest in Strata and avoiding the
disposal of an investment with which the Board perceives has
significant intrinsic value for a distressed short-form sale
price.
5. Litigation
Quorum issued proceedings in the High Court, Queen's Bench
(Commercial Court) on 17 January 2012 claiming damages of US$15.7
million for wrongful termination of the original investment
management agreement. The Company has in response advanced in the
proceedings a counterclaim, as yet unquantified, alleging
mismanagement of the Company's investments whilst Quorum was
co-investment manager.
The exchange of documentary evidence has taken place and the
exchange of witness statements is scheduled to occur in September
2013. The Board continues to take advice on the merits and defence
of the case from Norton Rose Fulbright LLP and Queen's Counsel. A
date for trial has been fixed for March 2014.
The Board and its advisers in this matter continue to view the
claim by Quorum as entirely without merit and the damages claimed
as inflated, speculative and far-fetched.
As reported in the year-end accounts, of Quorum's total claim
for US$15.7 million the first head of damage claims loss of
management and transaction fees during the three-year notice period
and (based on the Company's NAV at the date of termination) amounts
to approximately US$4 million. The recovery by Quorum of this head
of damage can only occur if the Court rules at trial that (contrary
to advice taken by the Board in 2010) dismissal of the co-managers
was wrongful and represented a breach of contract. The second head
of damages, which seeks compensation for lost future transaction
fees, performance fees and options, and other consequential losses,
amounts to approximately US$11.7 million. This part of the claim
makes a number of assumptions, including that the Company would not
only have permitted Quorum to make further and new investments but
that the Company would have also raised more capital and both
existing and new investments would have performed well. The Board
has been advised that, as a matter of English law, Quorum will fail
to recover the second head of damages. Attempts to settle the
proceedings have been made in meetings and through written offers
(the terms of which cannot be divulged for legal reasons) but the
terms and amounts have been unacceptable.
Notwithstanding the rules of the High Court of England and Wales
on the recoverability of costs of litigation, parties generally
incur around 25 per cent. costs that are not recoverable even on a
successful outcome. The Company has budgeted to incur a further
US$1.4 million in defending the claim. Legal costs incurred to date
of nearly US $1.5 million have been expensed. No provision or asset
has been recognised for any future costs or recoveries. The Company
has been awarded security for a proportion of its costs by the
Court.
6. Use of proceeds
The proceeds from the Placing are expected to be used to meet
the on-going expenses, including meeting costs and expenses
connected with the litigation, of the Company and to make follow-on
capital investments in the investee companies.
Subject to Shareholder approval of the Resolutions, the Placing
is expected to provide aggregate net proceeds to the Company of
approximately US$ 2 million, excluding certain deferred costs of
approximately US$ 160,000. On this basis, the Company believes that
it should have sufficient working capital until at least 31
December 2014, based on assumptions which the Board considers to be
reasonable on the basis of information currently available to
them.
Shareholders should be aware that receipt of the Placing
proceeds does not necessarily preclude the possibility of the
Company having to effect a short-form sale process for some or all
of its assets, which would be likely to have a negative impact on
the value received by the Company. The Company's key assumptions in
assessing its working capital requirements are set out in the Risk
Factors section of the Circular.
7. Dividend policy and returns to shareholders
The Company's investments are not income generating and
therefore the Company no longer has a policy of paying
dividends.
On realisations of the Company's investments, and subject to the
retention of appropriate capital pending the resolution of the
litigation, and to meet the Company's and the investee companies'
working capital requirements, it is the intention of the Board to
return capital to the Shareholders.
8. Further information in relation to the equity issue
The Placing is conditional on, among other things, satisfaction
of the following conditions:
-- the passing at the EGM of the Resolutions;
-- the Placing Agreement not having been terminated in
accordance with its terms prior to Admission; and
-- Admission becoming effective.
In connection with the Placing, the Company, the Investment
Manager and Numis Securities Limited have entered into the Placing
Agreement pursuant to which and conditional upon, inter alia,
admission of the Placing Shares to the Official List of the UKLA
taking place on or before 31 October 2013, Numis Securities Limited
has agreed to use its reasonable endeavours to procure subscribers
for the Placing Shares at the Placing Price. The Placing is not
underwritten.
The Placing Agreement contains customary warranties and
indemnities from the Company and the Investment Manager in favour
of Numis Securities Limited, certain undertakings from the Company
to Numis Securities Limited relating to the conduct of the
Company's business and provisions which enable Numis Securities
Limited to terminate the Placing Agreement in certain circumstances
prior to admission, including where any warranties are found to be
untrue, inaccurate or misleading in a material respect and also in
the event of a material adverse change in the financial position or
prospects of the Company or in national or international financial,
market, economic or political conditions.
Under the Placing Agreement, the Company has agreed to pay Numis
Securities Limited a fixed fee. The Company has also agreed to pay
all other costs, charges and expenses incidental to the Placing and
admission.
Applications will be made for the Placing Shares to be admitted
to listing on the Official List (by way of a standard listing under
Chapter 14 of the Listing Rules) and to trading on the London Stock
Exchange's Main Market. It is expected that Admission will become
effective and dealings in the Placing Shares will commence at 8.00
a.m. on 21 October 2013. The Placing Shares will, when issued and
fully paid, rank pari passu in all respects with the Shares.
It is expected that CREST accounts will be credited with
entitlements to Placing Shares as soon as practicable after 8.00
a.m. on the day of Admission (as the case may be) and that share
certificates (where applicable) will be dispatched by 25 October
2013.
9. Investment Management Agreement
The Board will keep the Company's agreement with the Investment
Manager under review and may seek in due course to propose a
revised arrangement that provides the Investment Manager with
appropriate certainty of tenure while encouraging it to complete
asset realisations on a timely basis. Amendments to the agreement
require the consent of both parties and accordingly there can be no
assurance that any amendments will be made.
10. Regulatory
The number of Shares which may be issued under the Placing will
be limited to 707,228. As this number represents less than 10 per
cent. of the existing Shares currently admitted to trading on the
London Stock Exchange, the Company is exempt from publishing a
prospectus under the Prospectus Rules.
The Company has previously given undertakings regarding certain
Listing Rules which are not applicable to it as an issuer admitted
to listing on the Official List by way of a standard listing under
Chapter 14 of the Listing Rules.
Specifically:
-- in proposing Resolution 1 (Approval of Placing) the Company
is voluntarily complying with Listing Rule 15.4.11 which if
applicable to the Company would preclude issues of further Shares
at prices below the NAV of those Shares without the approval of
Shareholders; and
-- the Company notifies Shareholders that the subscribers to the
Placing include certain major Shareholders, the Directors and the
Investment Manager, each of whom would be deemed related parties to
the Company under Chapter 11 of the Listing Rules if this chapter
was applicable to the Company.
11. Placing to the Directors and Investment Manager
The Directors have subscribed in aggregate for 21,497 Placing
Shares and the Investment Manager has subscribed for 2,333 Placing
Shares.
12. Risk Factors
Shareholders' attention is drawn to the Risk Factors section of
the Circular and specifically to the risks disclosed in relation to
the Company's:
-- lack of additional funds;
-- ongoing litigation; and
-- working capital.
13. EGM
Notice of an EGM of the Company to be held at the offices of the
Company Secretary (Regency Court, Regency Court, Glategny
Esplanade, St Peter Port, Guernsey GY1 3RH) at 10 a.m. (UK time) on
16 October 2013 is set out at the end of the Circular. Shareholders
are requested to complete and return the Form of Proxy whether or
not they intend to be present at the EGM. To be valid, the Form of
Proxy should be completed and signed in accordance with the
instructions printed on it and returned by post or by hand so as to
reach the Company's registrar, as soon as possible and no later
than 10 a.m. on 14 October 2013. The completion and return of a
Form of Proxy will not preclude a Shareholder from attending and
voting at the EGM.
A summary and explanation of the Resolutions are set out below.
Please note that this is not the full text of the Resolutions and
this section should be read in conjunction with the Resolutions
contained in the Notice of EGM at the end of the Circular.
Resolution 1 - Approval of Placing
To approve the terms of the Placing at the Issue Price of US$3
for each Placing Share being issued pursuant to the Placing (which
represents a discount of 62.4 per cent. to the unaudited NAV per
existing Share as at 30 June 2013, which is the latest published
NAV prior to the announcement of the Placing).
Resolution 2 - Authority to allot shares
To authorise the Directors for the purposes of Articles 4(A) of
the Articles to exercise all the powers of the Company to allot the
Placing Shares to the placees up to an aggregate nominal amount of
US$ 707,228 (representing an amount equal to 9.70 per cent. of the
issued Shares on today's date) during the period commencing on the
date of the passing of the Resolutions and expiring at the
conclusion of the next Annual General Meeting of the Company. The
Company will allot the Placing Shares on a non pre-emptive basis.
The Articles and Guernsey companies law do not require the Company
to disapply pre-emption rights to issues shares on a non
pre-emptive basis.
The Resolutions will be proposed as ordinary resolutions
(requiring a simple majority of the votes cast).
14. Action to be taken
Shareholders are asked to complete and return the Form of Proxy
to the Company's registrar, so as to be received as soon as
possible, and to arrive no later than 48 hours before the time of
the EGM.
Completion and return of a Form of Proxy will not affect a
Shareholder's right to attend and vote at the EGM should he or she
wish to do so.
15. Importance of the Placing
As more fully described above, the Company's cash position is
deteriorating, exacerbated by the cost of litigation. If the
Resolutions are not approved, the Company will not be in a position
to complete the Placing and the Board anticipates that in this
circumstance it will immediately have to commence a distressed
short form sales process for the Company's assets. The Board
anticipates that such a process would be likely to result in a
significant erosion of Shareholder value.
16. Recommendation
The Board considers that the Placing and each of the Resolutions
are in the best interests of the Company and the Shareholders of
the Company as a whole. Accordingly, the Board unanimously
recommends Shareholders to vote in favour of each of the
Resolutions, as the Directors intend to do with their own
beneficial shareholdings held at the time of the EGM, amounting to
65,474 Shares in aggregate at the date of this document,
representing approximately 0.9 per cent. of the Company's current
issued Shares.
FOR FURTHER INFORMATION
Numis Securities Limited
Nathan Brown / Hugh Jonathan, Corporate Broking &
Finance
Tel: +44 20 7260 1426 / 1263
NOTES TO EDITORS
International Oil and Gas Technology Limited is an authorised
closed-ended investment company incorporated in Guernsey. IOGT
invests expansion capital into companies that provide services and
technology to the upstream oil and gas industry. These companies
have proprietary and proven technologies, services and/or processes
that can be deployed more rapidly or on a larger scale through the
introduction of growth capital. Such companies are likely to have
recurring annual revenues of between US$5 million and US$25
million, positive EBITDA and/or significant working capital, and
strong management teams. IOGT was admitted to the Official List of
the UK Listing Authority and to trading on the London Stock
Exchange on 7 January 2008. Its stock market EPIC is OGT.L. Further
information can be found at www.international-ogt.com.
EXPECTED TIMETABLE
Deadline for receipt of forms 10 a.m. on 14 October 2013
of proxy
Extraordinary General Meeting 10 a.m. on 16 October 2013
Placing Shares issued, Admission 8 a.m. on 21 October 2013
effective and dealings in the
Placing Shares to commence
CREST accounts credited with 8 a.m. on 21 October 2013
the Placing Shares
Share certificates for the Placing By 25 October 2013
Shares despatched
The times and dates set out in this expected timetable and
mentioned elsewhere in this document may be adjusted by the
Company, in which event details of the new times and dates will be
notified, as required, to the UK Listing Authority and the London
Stock Exchange and, where appropriate, Shareholders.
DEFINITIONS
In this document the following expressions shall have the
meanings set out below, save where the context may otherwise
require:
"1994 Law" the Companies (Guernsey) Law, 1994 (as amended);
"Admission" admission of the Placing Shares to the Official List
and to trading on the London Stock Exchange becoming effective;
"AIFM" alternative investment fund manager;
"Articles" the articles of association of the Company;
"Board" the board of directors of the Company, or as the context
may require, the directors of the Company from time to time;
"Business Day" a day on which banks and stock exchanges in
Guernsey and London are normally open for business;
"C$" the lawful currency of Canada;
"Company" or
"IOGT" International Oil and Gas Technology Limited;
"CREST" the paperless settlement procedure operated by CRESTCo
under the CREST Regulations enabling securities to be evidenced
otherwise than by certificates and transferred otherwise than by
written instrument;
"CRESTCo" Euroclear UK and Ireland Limited;
"Crest Energy" Crest Energy Services;
"CREST
Regulations" UK Uncertificated Securities Regulations, 2001 (SI2001/3775), as amended;
"Directors" the directors of the Company from time to time;
"Disclosure and
Transparency
Rules" the FCA's Disclosure Rules and Transparency Rules;
"EBITDA" earnings before interest, taxes, depreciation and amortisation;
"EGM" the extraordinary general meeting to be held at 10 a.m. on
16 October 2013;
"AIFM Directive" the EU Alternative Investment Fund Managers Directive (No. 2011/61/EU);
"FCA" the UK Financial Conduct Authority;
"FSMA" the UK Financial Services and Markets Act 2000 (as may be
amended from time to time);
"Investment
Management
Agreement" the investment management and advisory agreement
entered into between the Company and the Investment Manager which
is currently in force;
"Investment
Manager" Linton Capital LLP, a limited liability partnership
incorporated under the laws of England and Wales;
"Listing Rules" the listing rules of the UK Listing Authority;
"London Stock
Exchange" the London Stock Exchange plc;
"MPD" managed-pressure drilling;
"NAV" the total assets of the Company less its total liabilities
(including accrued but unpaid fees) valued in accordance with the
Company's accounting policies adopted from time to time by the
Company and expressed in US$;
"Official List" the official list maintained by the UK Listing Authority;
"OPEC" the Organisation of Petroleum Exporting Countries;
"Options" the options which have been granted to the Optionholders;
"Optionholders" persons connected with the former co-manager,
Quorum, and with the now-defunct investment advisory committee
established by that co-manager;
"Placing" the conditional placing of 707,228 Shares, as described in this document;
"Placing
Agreement" means the placing agreement entered into between the
Company, the Investment Manager and Numis Securities Limited dated
18 September 2013;
"Placing Price" US$3 per Share;
"Placing Shares" participating redeemable preference shares of
US$1 each in the share capital of the Company to be issued by the
Company at the Placing Price pursuant to the Placing;
"Prospectus
Directive" EU Prospectus Directive (2003/71/EC);
"Prospectus
Rules" the Prospectus Rules published by the FCA from time to time;
"Quorum" QOGT Inc.;
"Resolutions" the resolutions to be proposed at the EGM in
connection with the Placing, notice of which is set out in this
document;
"RFD" rotating flow diverter;
"Securities Act" the US Securities Act of 1933, as amended;
"Shareholder" a holder of Shares;
"Shares" the participating redeemable preference shares of US$1
each in the share capital of the Company and includes the Placing
Shares;
"SR2020" SR2020 Inc.;
"GBP" or "Sterling" the lawful currency of the United Kingdom;
"Strata" STRATA Energy Services Inc.;
"UBD" underbalanced drilling;
"UK Listing
Authority" the FCA, in its capacity as the competent authority
for the purpose of Part IX of FSMA;
"US" or
"United States" the United States of America, its territories
and possessions, any state of the United States of America and the
District of Columbia;
"US Person" a citizen or resident of the United States, a
corporation, partnership or other entity created or organised in or
under the laws of the United States or any person: (i) falling
within the definition of the term "United States Person" in
Regulation S promulgated under the US Securities Act; or (ii) who
is not a "Non-United States person" as that term is defined in Rule
4.7 promulgated under the Commodity Exchange Act;
"US$" or "US
Dollars" the lawful currency of the United States;
"EUR" the Euro, being the lawful currency of the European Monetary Union.
IMPORTANT NOTICE
This Announcement has been issued by, and is the sole
responsibility of, the Company.
The Appendix to this announcement (which forms part of this
announcement) sets out the terms and conditions of the Placing.
By participating in the Placing, each person who is invited to
and who chooses to participate in the Placing (a Placee) by making
an oral and legally binding offer to acquire Placing Shares will be
deemed to have read and understood this Announcement in its
entirety (including the Appendix) and to be making such offer on
the terms and subject to the conditions herein, and to be providing
the representations, warranties and acknowledgements contained in
the Appendix.
Members of the public are not eligible to take part in the
Placing. This Announcement and the terms and conditions set out in
the Appendix to this Announcement are for information purposes only
and are directed only at persons in the United Kingdom who are: (a)
investment professionals falling within article 19(5) of the
Financial Services and Markets Act 2000 (Financial Promotion) order
2005 (the Order); or (b) persons falling within Article 49(2)(a) to
(d) ("high net worth companies, unincorporated associations, etc")
of the Order; or (c) persons to whom it may otherwise be lawfully
communicated, (all such persons together being referred to as
relevant persons). This Announcement and the terms and conditions
set out in the Appendix to this Announcement must not be acted on
or relied on by persons who are not relevant persons. Any
investment or investment activity to which this Announcement and
the terms and conditions set out in the Appendix to this
Announcement relate is available only to relevant persons and will
be engaged in only with relevant persons.
This Announcement provides information about the Placing, but
does not invite participation in the Placing. This Announcement
(including the Appendix) does not constitute, and the Company is
not making, an offer to the public of transferable securities
within the meaning of sections 85 and 102B of the Financial
Services and Markets Act 2000, as amended (FSMA). This Announcement
(including the Appendix) is therefore not an approved prospectus
for the purposes of section 85 of FSMA, and has not been prepared
in accordance with the prospectus rules of the FCA and as such
neither its contents nor its issue has been approved by the FCA or
by any authority which would be a competent authority for the
purposes of any legislation that implements the Prospectus
Directive.
This Announcement (including the Appendix) and the information
contained herein is not for release, publication or distribution,
in whole or in part, directly or indirectly, in, into or from the
United States (including its territories and possessions, any state
of the United States and the District of Columbia), Australia,
Canada, Japan, the Republic of Ireland, the Republic of South
Africa or any other state or jurisdiction into which the same would
be unlawful. This Announcement (including the Appendix) is for
information purposes only and shall not constitute or form part of
any offer to buy, sell, subscribe for, issue, or acquire, or the
solicitation of any offer to buy, sell, subscribe for, issue, or
acquire any securities, nor shall there be any sale of securities
in any jurisdiction in which such offer, solicitation or sale would
be unlawful. Any failure to comply with these restrictions may
constitute a violation of the securities laws of such
jurisdictions. In particular, the Placing Shares have not been and
will not be registered under the United States Securities Act of
1933, as amended (the Securities Act) and may not be offered, sold
or transferred, directly or indirectly, within the United States or
to, or for the account of, US Persons except pursuant to an
exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act and the securities
laws of any state or other jurisdiction of the United States. No
public offering of the Placing Shares is being made in the United
States, Australia, Canada, Japan, the Republic of Ireland or the
Republic of South Africa.
Each Placee should consult with its own advisers as to legal,
tax, business and related aspects of a subscription for the Placing
Shares.
Numis Securities Limited, which is authorised and regulated in
the United Kingdom by the Financial Conduct Authority, is acting
exclusively for the Company and for no one else in connection with
the Placing and will not be responsible to anyone other than the
Company for providing the protections afforded to clients of Numis
Securities Limited or for providing advice in relation to the
Placing or any matter referred to in this Announcement (including
the Appendix).
The price of shares and the income from them may go down as well
as up and investors may not get back the full amount invested on
disposal of the shares. Past performance is no guide to future
performance and persons needing advice should consult an
independent financial adviser.
No representation or warranty, express or implied, is or will be
made by or on behalf of Numis Securities Limited, and no
responsibility or liability is or will be accepted by Numis
Securities Limited or any of their respective affiliates, as to the
accuracy, completeness or verification of the information set out
in this Announcement (including the Appendix), and nothing
contained in this Announcement (including the Appendix) is, or
shall be relied upon as, a promise or representation in this
respect, whether as to the past or the future. Numis Securities
Limited and each of its affiliates accordingly disclaim, to the
fullest extent permitted by law, all and any liability whether
arising in tort, contract or otherwise which it might otherwise
have in respect of this Announcement (including the Appendix) or
any such statement.
Neither the content of the Company's website nor any website
accessible by hyperlinks on the Company's website is incorporated
in, or forms part of, this Announcement.
This Announcement contains (or may contain) certain
forward-looking statements with respect to certain of the Company's
current expectations and projections about future events. These
statements, which sometimes use words such as "aim", "anticipate",
"believe", "intend", "plan", "estimate", "expect" and words of
similar meaning, reflect the directors' beliefs and expectations
and involve a number of risks, uncertainties and assumptions that
could cause actual results and performance to differ materially
from any expected future results or performance expressed or
implied by the forward-looking statement. By their nature,
forward-looking statements involve risk and uncertainty because
they relate to future events and circumstances. Statements
contained in this Announcement regarding past trends or activities
should not be taken as a representation that such trends or
activities will continue in the future. The information contained
in this Announcement is subject to change without notice and,
except as required by applicable law, the Company does not assume
any responsibility or obligation to update publicly or review any
of the forward-looking statements contained herein. You should not
place undue reliance on forward-looking statements, which speak
only as of the date of this Announcement. No statement in this
Announcement is or is intended to be a profit forecast or to imply
that the earnings of the Company for the current or future
financial years will necessarily match or exceed the historical or
published earnings of the Company.
APPENDIX - TERMS AND CONDITIONS OF APPLICATION UNDER THE
PLACING
IMPORTANT INFORMATION FOR INVITED PLACEES ONLY REGARDING THE
PLACING
1. Introduction
The Company and Linton Capital LLP (the "Manager") have entered
into an agreement with Numis Securities Limited ("Numis"), pursuant
to which Numis has been appointed as placing agent in connection
with the Placing (the "Placing Agreement"). Subject to the terms
and conditions set out in the Placing Agreement, Numis has agreed
to use its reasonable endeavours, as agent for the Company, to
procure Placees to subscribe for Placing Shares at the Placing
Price. The Placing is not underwritten.
The Placing Shares will rank pari passu in all respects with the
Shares currently in issue, including the right to receive all
dividends and other distributions declared on or after the date on
which they are issued.
2. Application for Admission
Applications will be made to the London Stock Exchange and the
UKLA for the Placing Shares to be admitted to trading on the London
Stock Exchange and for their admission to the Official List
(together, "Admission"). It is expected that Admission will take
place, and dealings in the Placing Shares will commence, on or
about 21 October 2013.
3. Conditions of the Placing
The Placing is conditional on (inter alia) Admission and the
passing of the resolutions proposed in the notice of extraordinary
general meeting that will accompany the Circular.
4. Participation in the Placing
Each Placee which confirms its agreement to Numis to subscribe
for Placing Shares under the Placing will be bound by these terms
and conditions and will be deemed to have accepted them.
The Company and/or Numis may require any Placee to agree to such
further terms and/or conditions and/or give such additional
warranties and/or representations as it (in its absolute
discretion) sees fit and/or may require any such Placee to execute
a separate contract note (a "Contract Note").
Numis will determine in its absolute discretion the extent of
each Placee's participation in the Placing, which may not
necessarily be the same for each Placee.
Each Placee's allocation will be confirmed to Placees orally by
Numis and a trade confirmation or Contract Note will be dispatched
as soon as possible thereafter. The oral confirmation to such
Placement will constitute an irrevocable legally binding commitment
upon such person who will at that point become a Placee in favour
of Numis and the Company under which it agrees to acquire the
number of Placing Shares allocated to it at the Placing Price on
the terms and conditions set out in this Appendix and in accordance
with the Company's Articles of Incorporation (the "Articles").
Irrespective of the time at which a Placee's allocation pursuant
to the Placing is confirmed, settlement for all Placing Shares to
be acquired pursuant to the Placing will be required to be made at
the same time on the basis explained below under "Registration and
Settlement".
5. No prospectus
Placees' commitments will be made solely on the basis of the
information contained in this Announcement (including this
Appendix) and the RNS announcements of Company's Interim Results
announcement on 30 August 2013 and of a potential issue of equity
on 12 September 2013 (the "Exchange Information") and which has not
been approved by, or submitted to the Financial Conduct Authority
or the London Stock Exchange and subject to the further terms set
forth in the Contract Note to be provided to individual prospective
Placees.
Each Placee, by accepting a participation in the Placing, agrees
that the content of this Announcement (including the Appendix) is
exclusively the responsibility of the Company and confirms that it
has neither received nor relied on any other information (other
than the Exchange Information), representation, warranty, or
statement made by or on behalf of the Company or Numis or any other
person and none of the Company or Numis nor any other person will
be liable for any Placee's decision to participate in the Placing
based on any other information, representation, warranty or
statement which the Placees may have obtained or received. Each
Placee acknowledges and agrees that it has relied on its own
investigation of the business, financial or other position of the
Company in accepting a participation in the Placing. Nothing in
this paragraph shall exclude the liability of any person for
fraudulent misrepresentation or fraud.
6. Agreement to subscribe for Placing Shares
Conditional on:
6.1.1 Admission occurring and becoming effective by 8.00 a.m.
(London time) on or prior to 21 October 2013 (or such later time
and/or date, not being later than 31 October 2013, as the Company
and Numis may agree);
6.1.2 the Placing Agreement becoming otherwise unconditional in
all respects and not having been terminated in accordance with its
terms prior to Admission;
6.1.3 the passing of the resolutions approving the Placing at
the EGM (or any adjournment thereof); and
6.1.4 Numis confirming to the Placees their allocation of Placing Shares,
a Placee agrees to become a member of the Company and agrees to
subscribe for those Placing Shares allocated to it by Numis at the
Placing Price.
If any of the conditions contained in the Placing Agreement are
not fulfilled or waived by Numis, by the respective time or date
where specified, or the Placing Agreement is terminated, the
Placing will not proceed and the Placee's rights and obligations
hereunder in relation to the Placing Shares shall cease and
terminate at such time and each Placee agrees that no claim can be
made by the Placee in respect thereof. Numis may, at their
discretion and upon such terms as they think fit, waive compliance
by the Company or the Manager with respect to the whole or any part
of any of their respective obligations in relation to the
conditions in the Placing Agreement or extend that time or date by
which such conditions must be satisfied. Any such waiver or
extension will not affect Placees' commitments as set out in this
Announcement (and the Appendix). None of the Company, Numis or any
other person shall have any liability to any Placee (or to any
other person whether acting on behalf of a Placee or otherwise) in
respect of any decision they may make as to whether or not to waive
or to extend the time and/or the date for the satisfaction of any
condition to the Placing nor for any decision they may make as to
the satisfaction of any condition or in respect of the Placing
generally or to terminate of the Placing Agreement, and by
participating in the Placing, each Placee agrees that any such
decision is in the absolute discretion of Numis.
To the fullest extent permitted by law, each Placee acknowledges
and agrees that it will not be entitled to exercise any remedy of
rescission at any time. This does not affect any other rights the
Placee may have.
7. Payment for Placing Shares
Each Placee must pay the Placing Price for the Placing Shares
issued to the Placee in the manner and by the time directed by
Numis. If any Placee fails to pay as so directed and/or by the time
required, the relevant Placee's application for Placing Shares
shall be rejected.
8. Registration and Settlement
Settlement of transactions in the Placing Shares (ISIN:
GG00B29Q2M88) following Admission will take place within CREST
provided that, subject to certain exceptions, Numis reserves the
right to require settlement for, and delivery of, the Placing
Shares (or a portion thereof) to Placees by such other means that
it deems necessary if delivery or settlement is not possible or
practicable within CREST within the timetable set out in this
Announcement or would not be consistent with the regulatory
requirements in any Placee's jurisdiction.
Each Placee allocated Placing Shares in the Placing will be sent
a trade confirmation or Contract Note stating the number of Placing
Shares allocated to it at the Placing Price, the aggregate amount
owed by such Placee to Numis (as agent for the Company) and
settlement instructions. Each Placee agrees that it will do all
things necessary to ensure that delivery and payment is completed
in accordance with either the CREST or certificated settlement
instructions that it has in place with Numis.
It is expected that settlement in respect of the Placing Shares
will be on 21 October 2013 in accordance with the instructions set
out in the trade confirmation.
Interest is chargeable daily on payments not received from
Placees on the due date in accordance with the arrangements set out
above at the rate of two percentage points above LIBOR as
determined by Numis.
Each Placee is deemed to agree that, if it does not comply with
these obligations, Numis may sell any or all of the Placing Shares
allocated to that Placee on such Placee's behalf and retain from
the proceeds, for Numis' account and benefit (as agent for the
Company), an amount equal to the aggregate amount owed by the
Placee plus any interest due. The relevant Placee will, however,
remain liable and shall indemnify Numis on demand for any shortfall
below the aggregate amount owed by it and may be required to bear
any stamp duty or stamp duty reserve tax or securities transfer tax
(together with any interest or penalties) which may arise upon the
sale of such Placing Shares on such Placee's behalf. By
communicating a bid for Placing Shares, each Placee confers on
Numis all such authorities and powers necessary to carry out any
such sale and agrees to ratify and confirm all actions which Numis
lawfully takes in pursuance of such sale.
If Placing Shares are to be delivered to a custodian or
settlement agent, Placees should ensure that the trade confirmation
or Contract Note is copied and delivered immediately to the
relevant person within that organisation.
Insofar as Placing Shares are registered in a Placee's name or
that of its nominee or in the name of any person for whom a Placee
is contracting as agent or that of a nominee for such person, such
Placing Shares should, subject as provided below, be so registered
free from any liability to UK stamp duty or stamp duty reserve tax
or securities transfer tax. Placees will not be entitled to receive
any fee or commission in connection with the Placing.
9. Representations, Warranties and Further Terms
By agreeing to subscribe for Placing Shares, each Placee which
enters into a commitment to subscribe for Placing Shares will (for
itself and any person(s) procured by it to subscribe for Placing
Shares and any nominee(s) for any such person(s)) be deemed to
represent and warrant to each of the Company, Sanlam Securities and
Numis that:
9.1.1 in agreeing to subscribe for Placing Shares under the
Placing, it is relying solely on this Announcement (and its
Appendix) issued by the Company and not on any other information
given, or representation or statement made at any time, by any
person concerning the Company or the Placing. It agrees that none
of the Company, Numis, nor any of their respective officers, agents
employees, will have any liability for any other information or
representation and irrevocably and unconditionally waives any
rights it may have in respect of any other information or
representation;
9.1.2 it acknowledges and agrees that no offering document or
prospectus has been, or will be, prepared in connection with the
Placing and represents and warrants that it has not received, and
will not receive, an offering document or prospectus;
9.1.3 it (or the beneficial owner as applicable) has all
necessary capacity to commit to participation in the Placing and to
perform its obligations in relation thereto and will honour such
obligations;
9.1.4 if the laws of any territory or jurisdiction outside the
United Kingdom are applicable to its agreement to subscribe for
Placing Shares under the Placing, it warrants that it has complied
with all such laws, obtained all governmental and other consents
which may be required, is duly authorised and complied with all
requisite formalities and paid any issue, transfer or other taxes
due in connection with its application in any territory and that it
has not taken any action or omitted to take any action which will
result in the Company, Numis or any of their respective officers,
agents or employees acting in breach of the regulatory or legal
requirements, directly or indirectly, of any territory or
jurisdiction outside the United Kingdom in connection with the
Placing;
9.1.5 it has carefully read and understands this Announcement
(and its Appendix) in its entirety, it has all the information it
believes necessary or appropriate in connection with its decision
to subscribe for Placing Shares and acknowledges that it is
acquiring Placing Shares on the terms and subject to the conditions
set out in this Announcement (and its Appendix) and the Articles as
in force at Admission;
9.1.6 it has not relied on Numis or any person affiliated with
either of them in connection with any investigation of the accuracy
of any information contained in this Announcement (and its
Appendix);
9.1.7 the content of this Announcement (and its Appendix) and
any Exchange Information is exclusively the responsibility of the
Company and its Directors and Numis, nor any person acting on their
respective behalf nor any of their affiliates are responsible for
or shall have any liability for any information, representation or
statement contained in this Announcement (and its Appendix) or any
information published by or on behalf of the Company (including
Exchange Information) and will not be liable for any decision by a
Placee to participate in the Placing based on any information,
representation or statement contained in this Announcement (and its
Appendix) or otherwise;
9.1.8 it acknowledges that no person is authorised in connection
with the Placing to give any information or make any representation
other than as contained in this Announcement (and its Appendix)
and, if given or made, any information or representation must not
be relied upon as having been authorised by Numis, the Company or
any of their respective officers, agents or employees;
9.1.9 it represents and warrants that neither it, nor the person
specified by it for registration as a holder of Placing Shares is,
or is acting as nominee or agent for, and that the Placing Shares
will not be allotted to, a person who is or may be liable to stamp
duty or stamp duty reserve tax under any of sections 67, 70, 93 and
96 of the Finance Act 1986 (depository receipts and clearance
services);
9.1.10 it accepts that none of the Placing Shares have been or
will be registered under the laws of the United States, Canada, the
Republic of South Africa, Australia or Japan. Accordingly, the
Placing Shares may not be offered, sold, issued or delivered,
directly or indirectly or to, or for the account of, US Persons,
within any of United States, Canada, the Republic of South Africa,
Australia or Japan, unless an exemption from any registration
requirement is available;
9.1.11 if it is within the United Kingdom, it is a person who
falls within Articles 49(2)(a) to (d) or 19(5) of the Financial
Services and Markets Act 2000 (Financial Promotions) Order 2005 or
is a person to whom the Placing Shares may otherwise lawfully be
offered under such Order, or, if it is receiving the offer in
circumstances under which the laws or regulations of a jurisdiction
other than the United Kingdom would apply, that it is a person to
whom the Placing Shares may be lawfully offered under that other
jurisdiction's laws and regulations;
9.1.12 in the case of any Ordinary Shares acquired by an
investor as a financial intermediary as that term is used in
Article 3(2) of the EU Directive 2003/71/EC (the "Prospectus
Directive"): (i) the Ordinary Shares acquired by it in the Placing
have not been acquired on behalf of, nor have they been acquired
with a view to their offer or resale to, persons in any relevant
Member State other than qualified investors, as that term is
defined in the Prospectus Directive, or in circumstances in which
the prior consent of Numis has been given to the offer or resale;
or (ii) where Ordinary Shares have been acquired by it on behalf of
persons in any relevant Member State other than qualified
investors, the offer of those Ordinary Shares to it is not treated
under the Prospectus Directive as having been made to such
persons;
9.1.13 if it is outside the United Kingdom, neither this
Announcement (and its Appendix) nor any other offering, marketing
or other material in connection with the Placing constitutes an
invitation, offer or promotion to, or arrangement with, it or any
person whom it is procuring to subscribe for Placing Shares
pursuant to the Placing unless, in the relevant territory, such
offer, invitation or other course of conduct could lawfully be made
to it or such person and such documents or materials could lawfully
be provided to it or such person and Placing Shares could lawfully
be distributed to and subscribed and held by it or such person
without compliance with any unfulfilled approval, registration or
other regulatory or legal requirements;
9.1.14 it does not have a registered address in, and is not a
citizen, resident or national of, any jurisdiction in which it is
unlawful to make or accept an offer of the Placing Shares and it is
not acting on a non-discretionary basis for any such person;
9.1.15 if the investor is a natural person, such investor is not
under the age of majority (18 years of age in the United Kingdom)
on the date of such investor's agreement to subscribe for Placing
Shares under the Placing and will not be any such person on the
date any such Placing is accepted;
9.1.16 it has not, directly or indirectly, distributed,
forwarded, transferred or otherwise transmitted this prospectus or
any other offering materials concerning the Placing or the Placing
Shares to any persons within the United States or to any US
Persons, nor will it do any of the foregoing;
9.1.17 it represents, warrants, acknowledges and agrees that it
is not a national or resident of the United States or a
corporation, partnership or other entity organised under the laws
of the United States or otherwise a US Person and that it will not
offer, sell, renounce, transfer or deliver, directly or indirectly,
any of the Placing Shares to, or for the account of, US Persons, or
into the United States or any other jurisdiction where to do so
would be in breach of any applicable law and/or regulation and, in
addition, it acknowledges that the Placing Shares have not been and
will not be registered under the United States Securities Act of
1933, as amended, or with any securities regulatory authority of
any state or other jurisdiction of the United States;
9.1.18 it has all the relevant permissions, authorizations and
due capacity to subscribe for the Placing Shares and to perform its
obligations under these terms and conditions and it acknowledges
that Numis nor any of its affiliates nor any person acting on its
behalf is making any recommendations to it, advising it regarding
the suitability of any transactions it may enter into in connection
with the Placing or providing any advice in relation to the Placing
and participation in the Placing is on the basis that it is not and
will not be a client of Numis and that Numis does not have any
duties or responsibilities to it for providing protection afforded
to their respective clients or for providing advice in relation to
the Placing nor in respect of any representations, warranties,
undertaking or indemnities contained in any placing letter;
9.1.19 it acknowledges that where it is subscribing for Placing
Shares for one or more managed, discretionary or advisory accounts,
it is authorised in writing for each such account: (i) to subscribe
for the Placing Shares for each such account; (ii) to make on each
such account's behalf the representations, warranties and
agreements set out in this Appendix; and (iii) to receive on behalf
of each such account any documentation relating to the Placing in
the form provided by the Company and/or Numis. It agrees that the
provision of this paragraph shall survive any resale of the Placing
Shares by or on behalf of any such account;
9.1.20 it irrevocably appoints any director of the Company and
any director of Numis to be its agent and on its behalf (without
any obligation or duty to do so), to sign, execute and deliver any
documents and do all acts, matters and things as may be necessary
for, or incidental to, its subscription for all or any of the
Placing Shares for which it has given a commitment under the
Placing, in the event of its own failure to do so;
9.1.21 it accepts that if the Placing does not proceed or the
conditions to the Placing Agreement are not satisfied or the
Placing Shares for which valid applications are received and
accepted are not admitted to listing and trading on London Stock
Exchange for any reason whatsoever then none of Numis, Sanlam
Securities, the Company, nor persons controlling, controlled by or
under common control with any of them nor any of their respective
employees, agents, officers, members, stockholders, partners or
representatives, shall have any liability whatsoever to it or any
other person;
9.1.22 in connection with its participation in the Placing it
has observed all relevant legislation and regulations, in
particular (but without limitation) those relating to money
laundering ("Money Laundering Legislation") and that its
application is only made on the basis that it accepts full
responsibility for any requirement to verify the identity of its
clients and other persons in respect of whom it has applied. In
addition, it warrants that it is a person: (i) subject to the Money
Laundering Regulations 2007 in force in the United Kingdom; or (ii)
subject to the Money Laundering Directive (2005/60/EC of the
European Parliament and of the EC Council of 26 October 2005 on the
prevention of the use of the financial system for the purpose of
money laundering and terrorist financing); or (iii) subject to the
Guernsey AML Requirements; or (iv) acting in the course of a
business in relation to which an overseas regulatory authority
exercises regulatory functions and is based or incorporated in, or
formed under the law of, a country in which there are in force
provisions at least equivalent to those required by the Money
Laundering Directive;
9.1.23 it acknowledges that due to anti-money laundering
requirements, Numis and the Company may require proof of identity
and verification of the source of the payment before the
application can be processed and that, in the event of delay or
failure by the applicant to produce any information required for
verification purposes, Numis and the Company may refuse to accept
the application and the subscription moneys relating thereto. It
holds harmless and will indemnify Numis and the Company against any
liability, loss or cost ensuing due to the failure to process such
application, if such information as has been required has not been
provided by it;
9.1.24 it acknowledges that any person in Guernsey involved in
the business of the Company who has a suspicion or belief that any
other person (including the Company or any person subscribing for
Placing Shares) is involved in money laundering activities, is
under an obligation to report such suspicion to the Financial
Intelligence Service pursuant to the Terrorism and Crime (Bailiwick
of Guernsey) Law, 2002 (as amended);
9.1.25 it acknowledges and agrees that information provided by
it to the Company, Registrar or Administrator will be stored on the
Registrar's and the Administrator's computer systems and manually.
It acknowledges and agrees that for the purposes of the Data
Protection (Bailiwick of Guernsey) Law 2001 (the "Data Protection
Law") and other relevant data protection legislation which may be
applicable, the Registrar and the Administrator are required to
specify the purposes for which they will hold personal data. The
Registrar and the Administrator will only use such information for
the purposes set out below (collectively, the "Purposes"), being
to:
9.1.25.1 process its personal data (including sensitive personal
data) as required by or in connection with its holding of Placing
Shares, including processing personal data in connection with
credit and money laundering checks on it;
9.1.25.2 communicate with it as necessary in connection with its
affairs and generally in connection with its holding of Placing
Shares;
9.1.25.3 provide personal data to such third parties as the
Administrator or Registrar may consider necessary in connection
with its affairs and generally in connection with its holding of
Placing Shares or as the Data Protection Law may require, including
to third parties outside the Bailiwick of Guernsey or the European
Economic Area;
9.1.25.4 without limitation, provide such personal data to the
Company or the Manager and their respective associates for
processing, notwithstanding that any such party may be outside the
Bailiwick of Guernsey or the European Economic Area; and
9.1.25.5 process its personal data for the Administrator's
internal administration.
9.1.26 in providing the Registrar and the Administrator with
information, it hereby represents and warrants to the Registrar and
the Administrator that it has obtained the consent of any data
subject to the Registrar and the Administrator and their respective
associates holding and using their personal data for the Purposes
(including the explicit consent of the data subjects for the
processing of any sensitive personal data for the Purpose set out
in paragraph (a)). For the purposes of this prospectus, "data
subject", "personal data" and "sensitive personal data" shall have
the meanings attributed to them in the Data Protection Law;
9.1.27 Numis and the Company are entitled to exercise any of
their rights under the Placing Agreement or any other right in
their absolute discretion without any liability whatsoever to
them;
9.1.28 the representations, undertakings and warranties
contained in this Appendix are irrevocable. It acknowledges that
Numis and the Company and their respective affiliates will rely
upon the truth and accuracy of the foregoing representations and
warranties and it agrees that if any of the representations or
warranties made or deemed to have been made by its subscription of
the Placing Shares are no longer accurate, it shall promptly notify
Numis and the Company. The Placee agrees to indemnify on an
after-tax basis and hold harmless on demand each of the Company and
Numis and each of their respective affiliates and any person acting
on its or their behalf from any and all costs, claims, liabilities
and expenses (including legal fees and expenses) arising out of or
in connection with any breach of the representations, warranties,
acknowledgements, agreements and undertakings in this document;
9.1.29 where it or any person acting on behalf of it is dealing
with Numis, any money held in an account with Numis on behalf of it
and/or any person acting on behalf of it will not be treated as
client money within the meaning of the relevant rules and
regulations of the Financial Conduct Authority which therefore will
not require Numis to segregate such money, as that money will be
held by Numis under a banking relationship and not as trustee;
9.1.30 any of its clients, whether or not identified to Numis,
will remain its sole responsibility and will not become clients of
Numis for the purposes of the rules of the Financial Conduct
Authority or for the purposes of any other statutory or regulatory
provision;
9.1.31 it accepts that the allocation of Placing Shares shall be
determined by the Company in its absolute discretion but in
consultation with Numis and that the Company may scale down any
Placing commitments for this purpose on such basis as it may
determine; and
9.1.32 time shall be of the essence as regards its obligations
to settle payment for the Placing Shares and to comply with its
other obligations under the Placing.
The representations, warranties, acknowledgements and
undertakings contained in these terms and conditions are given to
Numis and the Company and are irrevocable and shall not be capable
of termination in any circumstances.
10. Supply and Disclosure of Information
If Numis, the Registrar or the Company or any of their agents
request any information about a Placee's agreement to subscribe for
Placing Shares under the Placing, such Placee must promptly
disclose it to them.
11. Miscellaneous
The rights and remedies of Numis, the Administrator, the
Registrar and the Company under these terms and conditions are in
addition to any rights and remedies which would otherwise be
available to each of them and the exercise or partial exercise of
one will not prevent the exercise of others.
On application, if a Placee is a discretionary fund manager,
that Placee may be asked to disclose in writing or orally the
jurisdiction in which its funds are managed or owned. All documents
provided in connection with the Placing will be sent at the
Placee's risk. They may be returned by post to such Placee at the
address notified by such Placee.
Each Placee agrees to be bound by the Articles once the Placing
Shares, which the Placee has agreed to subscribe for pursuant to
the Placing and all disputes and claims arising out of or in
connection with its subject matter or formation (including
non-contractual disputes or claims), have been acquired by the
Placee. The contract to subscribe for Placing Shares under the
Placing and the appointments and authorities mentioned in this
prospectus will be governed by, and construed in accordance with,
the laws of England and Wales. For the exclusive benefit of Numis,
the Administrator, the Company and the Registrar, each Placee
irrevocably submits to the jurisdiction of the courts of England
and Wales and waives any objection to proceedings in any such court
on the ground of venue or on the ground that proceedings have been
brought in an inconvenient forum. This does not prevent an action
being taken against the Placee in any other jurisdiction.
In the case of a joint agreement to subscribe for Placing Shares
under the Placing, references to a "Placee" in these terms and
conditions are to each of the Placees who are a party to that joint
agreement and their liability is joint and several.
All times and dates in this document may be subject to
amendment.
Numis and the Company expressly reserve the right to modify the
Placing (including, without limitation, the timetable and
settlement) at any time before allocations are determined.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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