TIDMRBW
RNS Number : 2136X
Rainbow Rare Earths Limited
08 August 2018
THIS ANNOUNCEMENT (INCLUDING THE APPIX) 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 OR ANY OTHER JURISDICTION IN WHICH SUCH
RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (596/2014/EU). IN
ADDITION, MARKET SOUNDINGS (AS DEFINED IN MAR) WERE TAKEN IN
RESPECT OF CERTAIN OF THE MATTERS CONTAINED IN THIS ANNOUNCEMENT,
WITH THE RESULT THAT CERTAIN PERSONS BECAME AWARE OF SUCH INSIDE
INFORMATION, AS PERMITTED BY MAR. UPON THE PUBLICATION OF THIS
ANNOUNCEMENT THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE
PUBLIC DOMAIN AND SUCH PERSONS SHALL THEREFORE CEASE TO BE IN
POSSESSION OF INSIDE INFORMATION.
FOR IMMEDIATE RELEASE
8 August 2018
Rainbow Rare Earths Ltd ("Rainbow" or the "Company") (LSE:
RBW)
Cooperation Agreement to Fund Downstream Rare Earth Separation
DFS
and combined Capital Raising of approximately GBP1.6m
(US$2.0m)
Rainbow, the rare earth element mining company, is pleased to
announce it has entered into a Cooperation Agreement ("the
Cooperation Agreement") with TechMet Limited ("TechMet") to fund a
Definitive Feasibility Study ("DFS") for downstream rare earth
separation. Additionally, TechMet has agreed to subscribe US$0.50
million ("the TechMet Subscription") for new Ordinary Shares
alongside a proposed placing by way of an accelerated bookbuild to
raise approximately GBP1.6 million (US$2.0 million) at a price of
not less than 12p per Ordinary Share ("the Placing") (the Placing
and the TechMet Subscription being together, the "Capital
Raising").
Transaction highlights
-- Cooperation Agreement entered into with TechMet by which the
parties intend to form a joint venture that will undertake a DFS
focused on a downstream rare earth separation business capable of
processing Rainbow's high grade rare earth concentrate;
-- Under the terms of the Cooperation Agreement, after
completion of an initial scoping exercise, TechMet will fund the
full costs of the DFS on a reimbursable carry basis up to US$3.0
million;
-- In addition TechMet has agreed to subscribe US$0.5m for new Ordinary Shares;
-- The TechMet Subscription Shares will be subject to a 12 month lock-in;
-- Alongside the TechMet Subscription, the Company intends to
raise further proceeds of approximately US$1.5m (before expenses)
through a Placing of new Ordinary Shares arranged by Arden Partners
plc with new and existing investors at a price of not less than 12p
per Ordinary Share;
-- It is the intention of certain of the Directors of Rainbow to
subscribe for approximately $0.6 million in the Placing;
-- Net proceeds of the Combined Capital Raising will be applied
in the following principal areas:
o Mining development at Murambi, the Company's second mining
area due to commence production in Q4 2018;
o Exploration and development of Gomvyi, potentially the
Company's third mining area; and
o Additional working capital.
Martin Eales, Chief Executive Officer of Rainbow said: "We are
extremely pleased to have entered into this Cooperation Agreement,
recognising the potential positive financial impact it may have on
the Company given the much higher selling prices for processed rare
earths compared to the mixed concentrate that Rainbow currently
sells. A fully funded DFS is very much in line with our strategy to
extend our operations "downstream".
"The proceeds from the Combined Capital Raising will be directed
towards the near term development of our second mining area,
Murambi, that is due to start production later this year, but also
be used for exploration and development at Gomvyi, a very promising
potential third mining area and for strengthening Rainbow's working
capital."
Brian Menell, Chairman and Chief Executive Officer of TechMet
said: "Rainbow is one of the most exciting emergent players in the
rare earth space, and the opportunity for our company to invest in
its development, and specifically to jointly explore processing
opportunities, is of considerable strategic value to TechMet as we
expand our portfolio. I believe that the expertise of our team, and
our sources of financing are very complimentary to those of
Rainbow, and that our partnership will add considerable value to
our respective strategies".
Cooperation Agreement with TechMet
TechMet is a private company investing in projects producing,
processing and recycling strategic "technology metals". Its focus
is on the supply pipeline of the metals benefitting from the
exponential growth in demand due to disruptive technologies such as
batteries, electric vehicles and renewable energy, where the
sources of supply are concentrated in a few hands and are not
efficiently scalable. TechMet has interests in producing or
development assets covering lithium, tin, nickel, cobalt and
tungsten, with projects across a number of African countries and in
North and South America.
The TechMet management team has extensive experience of project
development and funding from mineral exploration through to
production, and value-added processing.
Rainbow and TechMet have entered into the Cooperation Agreement
which envisages the following:
-- Subject to completion of an initial scoping exercise, Rainbow
and TechMet will form a joint venture to commission and produce a
DFS in respect of a downstream rare earth processing and separation
business capable of treating concentrate from Rainbow's Gakara
Project in Burundi;
-- TechMet will fund all of the costs of the DFS on a reimbursable carry basis up to US$3.0m;
-- The TechMet Subscription whereby TechMet has agreed to
subscribe US$0.5m for new Ordinary Shares at the Placing Price. The
TechMet Subscription Shares will be subject to a 12 month lock-in;
and
-- Subject to and following the initial DFS scoping exercise,
TechMet and Rainbow expect to commence formation of the joint
venture and the work programme for the DFS within 6 months.
It has long been part of Rainbow's strategy to extend its
operations 'downstream' and thereby benefit from the higher sales
values that can be achieved by selling a product that has been
subject to more processing than the existing mixed rare earth
concentrate. Given the near term focus on the continued ramp up of
its mining activities in Burundi, the Cooperation Agreement will
accelerate Rainbow's ability to accurately assess and subsequently
participate in and benefit from the processing of its own rare
earth concentrate.
The funding structure contained in the Cooperation Agreement
ensures that TechMet 'carries' Rainbow's contribution to the joint
venture until after the completion of the DFS.
Further details of the Placing
Arden is acting as broker and bookrunner in connection with the
Placing.
The Placing, which will be undertaken by way of an accelerated
bookbuild, will be launched immediately following the release of
this Announcement and will be made available to eligible existing
institutional shareholders and new institutional investors. The
timing of the closing of the Bookbuilding Process will be at the
sole discretion of Arden Partners. The completion of the
Bookbuilding Process containing details of the Placing Price, the
number of Placing Shares and the number of TechMet Subscription
Shares will be announced as soon as practicable.
The Placing is subject to the terms and satisfaction of certain
conditions set out in the Placing Agreement. Investors'
participation in the Placing is subject to the terms and
satisfaction of certain conditions set out in the appendix (the
"Appendix") to this Announcement. The Placing is not
underwritten.
Under the terms of the Placing, the Company intends to place the
Placing Shares with eligible existing institutional shareholders
and new institutional investors. Members of the public are not
entitled to participate in the Placing.
By choosing to participate in the Placing and by making an oral
legally binding offer to acquire Placing Shares, investors will be
deemed to have read and understood this Announcement in its
entirety, including the Appendix, and to be making such offer on
the terms and subject to the conditions contained herein and to be
making the representations, warranties, undertakings and
acknowledgements contained in the Appendix.
The Placing Shares, when issued, will be fully paid and will
rank pari passu in all respects with the Existing Ordinary Shares,
including the right to receive all dividends and other
distributions declared, made or paid after the date of issue.
Application will be made for the Placing Shares and the TechMet
Subscription Shares to be admitted to the standard listing segment
of the Official List and to trading on the main market for listed
securities of the London Stock Exchange plc
Admission is expected to take place on or around 8.00 a.m. on 16
August 2018 and settlement is expected to occur on or around 16
August 2018. The Placing is conditional on, inter alia, the Placing
Agreement becoming unconditional in all respects and Admission
becoming effective on or before 8.00 a.m. on 16 August 2018 (or
such later time and/or date as the Company and Arden may agree).
The Placing is conditional on the TechMet Subscription.
The Appendix sets out further information relating to the
Placing and the terms and conditions of the Placing.
This Announcement should be read in its entirety. In particular,
you should read and understand the information provided in the
"Important Notices" section of this Announcement and the detailed
terms, conditions and additional information relating to the
Placing described in the Appendix.
Background to and reasons for the Capital Raising
Rainbow's focus is the Gakara Project, one of the highest-grade
(47%-67% total rare earth oxide) rare earths projects globally. The
Company listed on the standard segment of the official list and to
trading on the main market of the London Stock Exchange in January
2017 with the intention to fast-track the fully permitted Gakara
Project to first production and export of rare earth concentrate by
the end of 2017, which was achieved as planned.
Net funds of US$3.5m raised in December 2017 were applied as
intended to the purchase of new mining equipment, an expanded
exploration and drilling campaign and production development. The
Exploration campaign in particular has delivered positive results
for shareholders, particularly the drilling undertaken at Kiyenzi
which is now in 'Phase 2' and will serve as the foundation for the
Company's targeted maiden JORC Resource statement in the fourth
quarter of 2018.
In the period from first production of concentrate in December
2017 to 30 June 2018 the Company exported 575 tonnes of rare earth
concentrate and sold 475 tonnes and remains on track to target a
production run rate at the end of 2018 of approximately 400tpm.
During the production ramp-up period to date in 2018, production
and selling costs per tonne have exceeded revenues per tonne of
concentrate, although these costs are expected to fall
significantly on a per tonne basis as production scales. Given the
current rate of cash consumption the Board believes that the
balance sheet would benefit from additional cash in the form of
equity in order to cater for the sometimes irregular sales cycle
for its concentrate and ensure sufficient working capital
reflecting the Company's complexity and nature of its
operations.
In addition, following the Company's decision to advance mining
development at Murambi rather than Gashirwe due to its more
attractive characteristics for rapid delivery of ore, there has
been an increase in mining fleet costs due to the greater size of
the area to be exploited. Alongside this, looking further ahead in
the Company's development schedule, it is proposed to investigate
the Gomvyi area to establish whether the deposit is suitable as the
Company's next new mining area after Murambi.
As described above, under the Cooperation Agreement TechMet has
undertaken to subscribe for US$0.5m in new Ordinary Shares which
will be subject to a 12 month lock-in. The Directors believe that
the opportunity to invest further in Rainbow on equivalent terms
should be extended to existing and new investors.
The Capital Raising will be limited to an issuance of
approximately 14.9 million new Ordinary Shares.
The TechMet Subscription Shares, when issued, will be fully paid
and will rank pari passu in all respects with the Existing Ordinary
Shares, including the right to receive all dividends and other
distributions declared, made or paid after the date of issue.
The TechMet Subscription Shares Admission is expected to take
place on or around 8.00 a.m. on 16 August 2018 and settlement is
expected to occur on or around 16 August 2018. The TechMet
Subscription is not conditional on the Placing.
Current trading and prospects
The Company's Operations Update to 30 June 2018 was released on
24 July 2018. Since this date the Company has traded in line with
expectations. .
As at 6 August 2018 the 'basket price' for Rainbow's concentrate
was estimated to be US$11.93.kg, which has decreased by 1.6% since
24 July 2018.
Use of proceeds
The gross proceeds of the Capital Raising, assuming the issuance
of approximately 13 million new Ordinary Shares, are expected to be
approximately GBP1.6 million (US$2.0 million) and it is proposed
that such proceeds shall be used as follows:
-- Approximately US$0.50 million to be deployed towards the near term development at Murambi
o Murambi was confirmed in July 2018 as the Company's second
mining area after an internal evaluation process ranked it more
attractive for development than Gashirwe, which had originally been
planned as the first additional mining area after Gasagwe
o Murambi's mineralogy and structure is similar to Gasagwe but
covers a more extensive area than Gashirwe so mining volumes and
therefore fleet costs are higher
-- Approximately US$0.50 million to be deployed towards Gomvyi
o The Company's ongoing exploration work this year has suggested
that Gomvyi may provide an extremely attractive additional mining
area after the start up at Murambi
o Funds will be applied to further investigation and preparatory
work in this area in order to ascertain within the coming months
whether it is also ripe for accelerated development
-- Up to approximately US$1.0 million to provide working capital
to strengthen the balance sheet.
The Placing
The Placing Agreement
Pursuant to the Placing Agreement, Arden has agreed to use its
reasonable endeavours as the placing agent of the Company to
procure subscribers for the Placing Shares at the Placing
Price.
The Placing is not underwritten by Arden Partners. The Company
will bear all other expenses of, and incidental to, the Placing
including the fees of the London Stock Exchange, registrars' fees,
all legal and accounting fees incurred by the Company and Arden and
all relevant stamp duty and other taxes and duties payable.
The Placing is subject to the terms and conditions set out in
the Appendix.
Expected Timetable of Events
Announcement of the Placing and Bookbuild 8 August 2018
commences
8 August 2018
Announcement of the closing of the Placing
and Bookbuild
Admission and commencement of dealings 8.00 a.m. on 16 August
in the Placing Shares on the Official List 2018
Admission of the TechMet Subscription Shares
and commencement of dealings in the TechMet 8.00 a.m. on 16 August
Subscription Shares on the Official List 2018
Placing Shares credited to CREST members' 16 August 2018
accounts
Despatch of definitive share certificates within 10 business days
for the Placing Shares in certificated of Admission
form
Each of the times and dates above refer to London time and are
subject to change by the Company. Any such change will be notified
to shareholders by an announcement through a Regulatory Information
Service.
Capitalised terms used but not defined in this Announcement
shall have the meanings given to such terms in the section headed
"Definitions" below save that any capitalised term defined in the
Appendix shall have such meaning in the Appendix to the exclusion,
in the Appendix only, of any definition of such term elsewhere in
this Announcement.
For further information, please contact:
Rainbow Rare Earths Ltd Martin Eales Tel: +44 (0) 20 3910
4550
Arden Partners plc Paul Shackleton Tel: +44 (0) 20 7614
Benjamin Cryer 5900
---------------- ---------------------
St Brides Partners Ltd Lottie Wadham Tel: +44 (0) 20 7236
Susie Geliher 1177
---------------- ---------------------
IMPORTANT NOTICES
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UNITED STATES OR IN ANY JURISDICTION IN WHICH SUCH OFFER OR
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AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933,
AS AMED (THE "US SECURITIES ACT"), OR WITH ANY SECURITIES
REGULATORY AUTHORITY IN ANY STATE OF THE UNITED STATES, AND MAY NOT
BE OFFERED OR SOLD IN THE UNITED STATES EXCEPT TO CERTAIN INVESTORS
IN RELIANCE ON AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT
TO, THE REGISTRATION REQUIREMENTS OF THE US SECURITIES ACT. THERE
WILL BE NO PUBLIC OFFER OF THE PLACING SHARES IN THE UNITED
STATES.
THIS ANNOUNCEMENT IS NOT A PROSPECTUS FOR THE PURPOSES OF
DIRECTIVE 2003/71/EC AS AMED (INCLUDING AMMENTS BY DIRECTIVE
2010/73/EU, TO THE EXTENT IMPLEMENTED IN THE RELEVANT MEMBER STATE)
(THE "PROSPECTUS DIRECTIVE"). NO PROSPECTUS HAS BEEN OR WILL BE
PREPARED OR MADE AVAILABLE IN CONNECTION WITH THE MATTERS CONTAINED
IN THIS ANNOUNCEMENT AND NO SUCH PROSPECTUS IS REQUIRED UNDER THE
PROSPECTUS DIRECTIVE TO BE PUBLISHED IN CONNECTION WITH THE
PLACING. INVESTORS SHOULD NOT SUBSCRIBE FOR OR PURCHASE ANY
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INFORMATION ABOUT THE COMPANY THAT IS PUBLICLY AVAILABLE. THIS
ANNOUNCEMENT DOES NOT CONSTITUTE A RECOMMATION CONCERNING THE
PLACING.
THIS ANNOUNCEMENT IS NOT AN INVITATION NOR IS IT INTED TO BE AN
INDUCEMENT TO ENGAGE IN INVESTMENT ACTIVITY FOR THE PURPOSE OF
SECTION 21 OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (AS AMED)
OF THE UNITED KINGDOM ("FSMA"). THIS ANNOUNCEMENT IS DIRECTED AT
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THIS ANNOUNCEMENT HAS BEEN ISSUED BY AND IS THE SOLE
RESPONSIBILITY OF THE COMPANY. APART FROM THE RESPONSIBILITIES AND
LIABILITIES, IF ANY, WHICH MAY BE IMPOSED ON ARDEN BY FSMA, NO
REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, IS OR WILL BE MADE
AS TO, OR IN RELATION TO, AND NO RESPONSIBILITY OR LIABILITY IS OR
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STATEMENT.
ARDEN IS AUTHORISED AND REGULATED IN THE UNITED KINGDOM BY THE
FCA AND IS ACTING FOR THE COMPANY IN CONNECTION WITH THE PLACING
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CERTAIN STATEMENTS AND MATTERS DISCUSSED IN THIS ANNOUNCEMENT
MAY CONSTITUTE FORWARD-LOOKING STATEMENTS. FORWARD-LOOKING
STATEMENTS ARE STATEMENTS THAT ARE NOT HISTORICAL FACTS AND MAY BE
IDENTIFIED BY WORDS SUCH AS "AIM", "ANTICIPATE", "BELIEVE",
"CONTINUE", "ESTIMATE", "EXPECT", "INT", "MAY", "SHOULD",
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MANY OF WHICH ARE BASED, IN TURN, UPON FURTHER ASSUMPTIONS.
ALTHOUGH THE COMPANY BELIEVES THAT THESE ASSUMPTIONS WERE
REASONABLE WHEN MADE, THESE ASSUMPTIONS ARE INHERENTLY SUBJECT TO
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(A) EU DIRECTIVE 2014/65/EU ON MARKETS IN FINANCIAL INSTRUMENTS,
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INVESTORS WHO MEET THE CRITERIA OF PROFESSIONAL CLIENTS AND
ELIGIBLE COUNTERPARTIES.
FOR THE AVOIDANCE OF DOUBT, THE TARGET MARKET ASSESSMENT DOES
NOT CONSTITUTE: (A) AN ASSESSMENT OF SUITABILITY OR APPROPRIATENESS
FOR THE PURPOSES OF MIFID II; OR (B) A RECOMMATION TO ANY INVESTOR
OR GROUP OF INVESTORS TO INVEST IN, OR PURCHASE, OR TAKE ANY OTHER
ACTION WHATSOEVER IN RESPECT TO THE PLACING SHARES.
EACH DISTRIBUTOR IS RESPONSIBLE FOR UNDERTAKING ITS OWN TARGET
MARKET ASSESSMENT IN RESPECT OF THE PLACING SHARES AND DETERMINING
APPROPRIATE DISTRIBUTION CHANNELS.
APPIX
TERMS AND CONDITIONS OF THE PLACING
IMPORTANT INFORMATION ON THE PLACING FOR INVITED PLACEES
ONLY
MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE
PLACING.
THIS ANNOUNCEMENT IS NOT AN INVITATION NOR IS IT INTED TO BE AN
INDUCEMENT TO ENGAGE IN INVESTMENT ACTIVITY FOR THE PURPOSE OF
SECTION 21 OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (AS AMED)
OF THE UNITED KINGDOM ("FSMA"). THIS ANNOUNCEMENT AND THE TERMS AND
CONDITIONS SET OUT IN THIS APPIX ARE DIRECTED AT AND IS ONLY BEING
DISTRIBUTED TO: (A) PERSONS IN MEMBER STATES OF THE EUROPEAN
ECONOMIC AREA (THE "EEA") WHO ARE QUALIFIED INVESTORS WITHIN THE
MEANING OF ARTICLE 2(1)(E) OF THE PROSPECTUS DIRECTIVE ("QUALIFIED
INVESTORS"), (B) IF IN THE UNITED KINGDOM, PERSONS WHO (I) HAVE
PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS 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 HIGH NET WORTH
COMPANIES, UNINCORPORATED ASSOCIATIONS OR PARTNERSHIPS OR TRUSTEES
OF HIGH VALUE TRUSTS AS DESCRIBED IN ARTICLE 49(2) OF THE ORDER AND
(II) ARE "QUALIFIED INVESTORS" AS DEFINED IN SECTION 86 OF FSMA AND
(C) OTHERWISE, TO PERSONS TO WHOM IT MAY OTHERWISE BE LAWFUL TO
COMMUNICATE IT TO (EACH A "RELEVANT PERSON"). NO OTHER PERSON
SHOULD ACT OR RELY ON THIS ANNOUNCEMENT AND PERSONS DISTRIBUTING
THIS ANNOUNCEMENT MUST SATISFY THEMSELVES THAT IT IS LAWFUL TO DO
SO. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS APPIX AND
THE TERMS AND CONDITIONS SET OUT HEREIN RELATE IS AVAILABLE ONLY TO
RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS.
BY ACCEPTING THE TERMS OF THIS ANNOUNCEMENT YOU REPRESENT AND AGREE
THAT YOU ARE A RELEVANT PERSON. THIS APPIX DOES NOT ITSELF
CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES OF
THE COMPANY.
THE PLACING SHARES HAVE NOT BEEN AND WILL NOT BE REGISTERED
UNDER THE APPLICABLE SECURITIES LAWS OF AUSTRALIA, CANADA, JAPAN OR
SOUTH AFRICA AND SUBJECT TO CERTAIN EXCEPTIONS, MAY NOT BE OFFERED
OR SOLD, DIRECTLY OR INDIRECTLY, IN AUSTRALIA, CANADA, JAPAN OR
SOUTH AFRICA. THERE WILL BE NO PUBLIC OFFERING OF THE PLACING
SHARES IN AUSTRALIA, CANADA, JAPAN OR SOUTH AFRICA OR
ELSEWHERE.
THE PLACING SHARES HAVE NOT BEEN AND WILL NOT BE REGISTERED
UNDER THE US SECURITIES ACT OR WITH ANY SECURITIES REGULATORY
AUTHORITY IN ANY STATE OF THE UNITED STATES, AND ARE BEING OFFERED
AND SOLD OUTSIDE THE UNITED STATES IN COMPLIANCE WITH REGULATION S
UNDER THE US SECURITIES ACT. THERE WILL BE NO PUBLIC OFFER OF THE
PLACING SHARES IN THE UNITED STATES.
THE PLACING SHARES HAVE NOT BEEN RECOMMED, APPROVED OR
DISAPPROVED BY ANY UNITED STATES FEDERAL OR STATE SECURITIES
COMMISSION OR REGULATORY AUTHORITY IN THE UNITED STATES. FURTHER,
THE FOREGOING AUTHORITIES HAVE NOT PASSED UPON ORORSED THE MERITS
OF THE PLACING OR THE ACCURACY OR ADEQUACY OF THIS ANNOUNCEMENT.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENCE IN THE
UNITED STATES.
THE DISTRIBUTION OF THIS ANNOUNCEMENT AND THE PLACING AND/OR
ISSUE OF THE PLACING SHARES IN CERTAIN JURISDICTIONS MAY BE
RESTRICTED BY LAW. PERSONS DISTRIBUTING THIS ANNOUNCEMENT MUST
SATISFY THEMSELVES THAT IT IS LAWFUL TO DO SO. PERSONS (INCLUDING,
WITHOUT LIMITATION, NOMINEES AND TRUSTEES) WHO HAVE A CONTRACTUAL
OR OTHER LEGAL OBLIGATION TO FORWARD A COPY OF THIS APPIX OR THE
ANNOUNCEMENT OF WHICH IT FORMS PART SHOULD SEEK APPROPRIATE ADVICE
BEFORE TAKING ANY ACTION.
NO ACTION HAS BEEN TAKEN BY THE COMPANY, ARDEN OR ANY OF THEIR
RESPECTIVE AFFILIATES THAT WOULD PERMIT AN OFFER OF THE PLACING
SHARES OR POSSESSION OR DISTRIBUTION OF THIS ANNOUNCEMENT OR ANY
OTHER OFFERING OR PUBLICITY MATERIAL RELATING TO SUCH PLACING
SHARES IN ANY JURISDICTION WHERE ACTION FOR THAT PURPOSE IS
REQUIRED. PERSONS INTO WHOSE POSSESSION THIS ANNOUNCEMENT COMES ARE
REQUIRED BY THE COMPANY AND ARDEN TO INFORM THEMSELVES ABOUT AND TO
OBSERVE ANY SUCH RESTRICTIONS.
THIS ANNOUNCEMENT SHOULD BE READ IN ITS ENTIRETY. IN PARTICULAR,
YOU SHOULD READ AND UNDERSTAND THE INFORMATION PROVIDED IN THE
"IMPORTANT NOTICES" SECTION OF THIS ANNOUNCEMENT. BY PARTICIPATING
IN THE BOOKBUILD AND THE PLACING, PLACEES WILL BE DEEMED TO HAVE
READ AND UNDERSTOOD THIS ANNOUNCEMENT IN ITS ENTIRETY, TO BE
PARTICIPATING, MAKING AN OFFER AND SUBSCRIBING FOR PLACING SHARES
ON THE TERMS AND CONDITIONS CONTAINED HEREIN AND TO BE PROVIDING
THE REPRESENTATIONS, WARRANTIES, INDEMNITIES, ACKNOWLEDGEMENTS AND
UNDERTAKINGS CONTAINED HEREIN.
EACH PLACEE SHOULD CONSULT WITH ITS OWN ADVISERS AS TO LEGAL,
TAX, BUSINESS AND RELATED ASPECTS OF THE SUBSCRIPTION FOR PLACING
SHARES.
Persons who are invited to and who choose to participate in the
Placing, by making an oral or written offer to subscribe for
Placing Shares, including any individuals, funds or others on whose
behalf a commitment to subscribe for Placing Shares is given (and
who shall be included within the definition of "Placees") will (i)
be deemed to have read and understood this Announcement, including
this Appendix, in its entirety; and (ii) be making such offer on
the terms and conditions contained in this Appendix, including
being deemed to be providing (and shall only be permitted to
participate in the Placing on the basis that they have provided)
the representations, warranties, acknowledgements and undertakings
set out herein.
In particular, each such Placee represents, warrants and
acknowledges to the Company and Arden that:
1. it is a Relevant Person (as defined above) and undertakes
that it will subscribe for, acquire, hold, manage or dispose of any
Placing Shares that are allocated to it for the purposes of its
business;
2. it is and the prospective beneficial owner of the Placing
Shares is, and at the time the Placing Shares are acquired will be
outside the United States acquiring the Placing Shares in an
"offshore transaction" as defined in, and in compliance with,
Regulation S; and
3. if it is a financial intermediary, as that term is used in
Article 3(2) of the Prospectus Directive, that any Placing Shares
acquired by it in the Placing will not be acquired on a
non-discretionary basis on behalf of, nor will they be acquired
with a view to their offer or resale to, 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 Arden has been given to
each such proposed offer or resale.
The Company and Arden will rely upon the truth and accuracy of
the foregoing representations, warranties, acknowledgements and
agreements.
No prospectus
The Placing Shares are being offered to a limited number of
specifically invited persons only. No prospectus or other offering
document has been or will be submitted to be approved by the FCA or
the London Stock Exchange in relation to the Placing and no such
prospectus is required to be published.
Placees' commitments will be made solely on the basis of the
information contained in this Announcement and any Exchange
Information (as defined below) previously published by the Company.
Each Placee, by participating in the Placing, agrees that the
content of this Announcement and all such Exchange Information is
exclusively the responsibility of the Company and confirms that it
has neither received nor relied on any other information,
representation, warranty, or statement made by or on behalf of the
Company or Arden or any other person and neither Arden or the
Company nor any other person will be liable for any Placee's
decision to participate in the Placing based on any other
information, representation, warranty or statement which the
Placees may have obtained or received. 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.
Details of the Placing Agreement and the Placing Shares
Arden has today entered into the Placing Agreement with the
Company under which it has agreed as agent for the Company to use
its reasonable endeavours to procure Placees to take up the Placing
Shares, on the terms and subject to the conditions set out therein,
at a price and at a number to be determined following the
Bookbuild.
The Placing Shares will, when issued, be credited as fully paid
and will rank pari passu in all respects with the Existing Ordinary
Shares, including the right to receive all dividends and other
distributions declared, made or paid on or in respect of the
Ordinary Shares after the date of issue of the Placing Shares, and
will on issue be free of all pre-emption rights, claims, liens,
charges, encumbrances and equities.
Applications for admission to listing and trading of the Placing
Shares
Applications will be made to the FCA for admission of the
Placing Shares to the standard listing segment of the Official List
of the FCA and to the London Stock Exchange for admission to
trading of the Placing Shares on its main market for listed
securities. It is expected that Admission will become effective at
or around 8:00 a.m. on 16 August 2018 and that dealings in the
Placing Shares will commence at that time.
Bookbuild
Arden will today commence the Bookbuild to determine demand for
participation in the Placing by Placees. This Appendix gives
details of the terms and conditions of, and the mechanics of
participation in, the Placing. No commissions will be paid to
Placees or by Placees in respect of any Placing Shares.
Arden and the Company shall be entitled to effect the Placing by
such alternative method to the Bookbuild as they may, in their sole
discretion, determine.
Principal terms of the Placing
1. Arden is arranging the Placing as agent of the Company.
Participation will only be available to persons who may lawfully
be, and are, invited to participate by Arden. Arden and its
affiliates are entitled to enter bids as principal in the
Bookbuild.
2. Following the Bookbuild, Arden, in agreement with the
Company, will establish the Placing Price payable by all Placees
whose bids are successful. The Placing Price and the aggregate
proceeds to be raised through the Placing will be agreed between
Arden and the Company following completion of the Bookbuild and
will be recorded in the term sheet (the "Term Sheet"). The Placing
Price and the number of Placing Shares to be issued will be
announced on a Regulatory Information Service following completion
of the Bookbuild.
3. To bid in the Bookbuild, Placees should communicate their bid
by telephone to their usual sales contact at Arden. Each bid should
state the number of Placing Shares which the prospective Placee
wishes to acquire at the Placing Price which is ultimately
established by the Company and Arden or at prices up to a price
limit specified in its bid. Bids may be scaled down by Arden on the
basis referred to in paragraph 6 below.
4. The Bookbuild is expected to close no later than 9.00 p.m.
(London time) on 8 August 2018 but may be closed earlier or later
at the discretion of Arden. Arden may, in agreement with the
Company, accept bids that are received after the Bookbuild has
closed. The Company reserves the right to reduce or seek to
increase the amount to be raised pursuant to the Placing in its
discretion.
5. Each prospective Placee's allocation and commitment will be
confirmed to Placees orally by Arden as soon as practicable
following the close of the Bookbuild, and a contract note or
electronic trade confirmation will be dispatched as soon as
possible thereafter. The terms of this Appendix will be deemed
incorporated therein. Arden's oral confirmation to such Placee will
constitute an irrevocable legally binding commitment upon the
Placee concerned in favour of Arden and the Company under which
such Placee agrees to subscribe for the number of Placing Shares
allocated to it and to pay the relevant Placing Price on the terms
and subject to the conditions set out in this Appendix and in
accordance with the Company's corporate documents. Each Placee's
obligations will be owed to the Company.
6. Subject to paragraphs 3 to 5 above, Arden will, in effecting
the Placing, consult with the Company as to the identity of the
Placees and the basis of allocation of the Placing Shares provided,
however, that the final decision as to the identity of the Placees
and the basis of allocation of the Placing Shares shall be for
Arden in its absolute discretion. Arden may also, notwithstanding
paragraphs 3 to 5 above, subject to the prior consent of the
Company (i) allocate Placing Shares after the time of any initial
allocation to any person submitting a bid after that time and (ii)
allocate Placing Shares after the Bookbuild has closed to any
person submitting a bid after that time.
7. A bid in the Bookbuild will be made on the terms and subject
to the conditions in this Appendix and will be legally binding on
the Placee on behalf of which it is made and except with Arden's
consent will not be capable of variation or revocation after the
time at which it is submitted. Each Placee will also have an
immediate, irrevocable and binding obligation, owed to Arden, to
pay it (or as it may direct) in cleared funds an amount equal to
the product of the Placing Price and the number of Placing Shares
that such Placee has agreed to subscribe for and the Company has
agreed to allot and issue to that Placee.
8. Except as required by law or regulation, no press release or
other announcement will be made by Arden or the Company using the
name of any Placee (or its agent), in its capacity as Placee (or
agent), other than with such Placee's prior written consent.
9. Irrespective of the time at which a Placee's allocation
pursuant to the Placing is confirmed, settlement for all Placing
Shares to be subscribed for pursuant to the Placing will be
required to be made at the same time on the basis explained below
under the paragraph entitled "Registration and Settlement".
10. All obligations under the Bookbuild and Placing will be
subject to fulfilment or (where applicable) waiver of the
conditions referred to below under "Conditions of the Placing" and
to the Placing not being terminated on the basis referred to below
under "Termination of the Placing".
11. By participating in the Bookbuild, each Placee agrees that
its rights and obligations in respect of the Placing will terminate
only in the circumstances described below and will not be capable
of rescission or termination by the Placee.
12. To the fullest extent permissible by law, neither Arden, the
Company nor any of their respective affiliates, agents, directors,
officers or employees shall have any responsibility or liability to
Placees (or to any other person whether acting on behalf of a
Placee or otherwise). In particular, neither Arden, the Company nor
any of their respective affiliates shall have any responsibility or
liability (including to the extent permissible by law, any
fiduciary duties) in respect of Arden's conduct of the Bookbuild or
of such alternative method of effecting the Placing as Arden, its
affiliates and the Company may agree.
Conditions of the Placing
The Placing is conditional upon the Placing Agreement becoming
unconditional and not having been terminated in accordance with its
terms.
Arden's obligations under the Placing Agreement are conditional
on, inter alia:
(a) Admission occurring not later than 8:00 a.m. London time on
20 August 2018 (or such later time and/or date as Arden and the
Company may agree in writing);
(b) the representations, warranties, undertakings and covenants
of the Company contained in the Placing Agreement being true,
accurate and complete on and as of the date of the Placing
Agreement, as at the time of execution of the Term Sheet and
immediately before Admission;
(c) the Company having complied with all of its obligations to
be performed or satisfied under the Placing Agreement on or before
Admission;
(d) the Term Sheet having been executed and delivered by the Company and Arden;
(e) the publication of the results of the Placing on a
Regulatory Information Service as soon as practicable after the
execution of the Term Sheet and in any event by not later than 8:00
a.m. London time on 9 August 2018 (or such later time and/or date
as Arden and the Company may agree in writing); and
(f) the Company allotting, subject only to Admission, the
Placing Shares in accordance with the Placing Agreement.
If (i) any of the conditions contained in the Placing Agreement,
including those described above, are not fulfilled or (where
applicable) waived by Arden by the respective time or date where
specified (or such later time or date as the Company and Arden may
agree) or (ii) the Placing Agreement is terminated in the
circumstances specified below under the paragraph entitled
"Termination of the Placing", the Placing will lapse and the
Placees' 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 it or on its behalf (or
any person on whose behalf the Placee is acting) in respect
thereof.
Arden may, at their discretion and upon such terms as it thinks
fit, waive fulfilment of all or any conditions in the Placing
Agreement or extend the time provided for fulfilment of any such
conditions in respect of all or any part of the performance
thereof, save that the above conditions relating, inter alia, to
Admission taking place may not be waived. Any such extension or
waiver will not affect Placees' commitments as set out in this
Announcement.
Arden shall not have any liability to any Placee (or to any
other person whether acting on behalf of a Placee or otherwise) in
respect of any decision it may make as to whether or not to waive
or to extend the time and/or date for the satisfaction of any
condition to the Placing nor for any decision they may make as to
the satisfaction of any condition or in respect of the Placing
generally and by participating in the Placing each Placee agrees
that any such decision is within the absolute discretion of
Arden.
Termination of the Placing
Arden is entitled, at any time before Admission, to terminate
the Placing Agreement in accordance with the terms of the Placing
Agreement in certain circumstances, including, inter alia if any of
the following occurs:
(a) any breach of the representations and warranties given in
the Placing Agreement or any failure to perform any of the
Company's undertakings in the Placing Agreement at the times
specified therein;
(b) any material adverse effect or change in or affecting, or
any development reasonably likely to give rise to or involve a
material adverse change, in or affecting, the condition (financial,
operational, legal or otherwise) or in the earnings, results of
operations, business affairs, management, properties, assets,
rights, operations, solvency, credit rating, prospects or funding
position of the Company and the Company and its subsidiaries and
subsidiary undertakings (the "Group") whether or not arising in the
ordinary course of business; or
(c) the occurrence or, in the opinion of Arden, it being
reasonably likely that there will occur:
(i) any material adverse change in the financial markets in the
United States, the United Kingdom, Guernsey, any member or
associate member of the European Union or the international
financial markets;
(ii) a suspension or material limitation in the trading in
securities by the London Stock Exchange or the New York Stock
Exchange or the fixing of minimum or maximum prices for trading or
maximum ranges for prices of securities being required by any said
exchanges or by such system or by order of any governmental
authority or the occurrence of a material disruption in commercial
banking or securities settlement or clearance services in the
United States or the European Union;
(iii) any actual or officially announced change in the United
Kingdom or Guernsey or any other taxation that would have a
materially adverse effect on any member of the Group, the
allotment, issue or delivery of the Placing Shares or any
imposition of exchange controls by the United States, United
Kingdom, Guernsey or any member or associate member of the European
Union;
(iv) a banking moratorium declared by the authorities in the
United States, the United Kingdom, Guernsey, New York or a member
or associate member of the European Union; or
(v) any event which in the opinion of Arden, would make it
impracticable or inadvisable to market the Placing Shares or to
enforce contracts for sale of the Ordinary Shares or which may
prejudice the success of the Placing or dealings in the Placing
Shares in the secondary market.
Upon such notice being given, the parties to the Placing
Agreement shall be released and discharged (except for any
liability arising before or in relation to such termination) from
their respective obligations under or pursuant to the Placing
Agreement, subject to certain exceptions.
By participating in the Placing, each Placee agrees that (i) the
exercise by Arden of any right of termination or of any other
discretion under the Placing Agreement shall be within the absolute
discretion of Arden and that it need not make any reference to
Placees and that it shall have no liability to Placees whatsoever
in connection with any such exercise or failure to so exercise and
(ii) its rights and obligations terminate only in the circumstances
described above and under the paragraph entitled "Conditions of the
Placing" above, and its participation will not be capable of
rescission or termination by it after oral confirmation by Arden of
its allocation and commitments following the close of the
Bookbuild.
Lock-up arrangements
As part of the Placing, the Company has agreed that it will not
issue or sell any Ordinary Shares for a period of 180 days after
Admission without the prior written consent of Arden. This lock-up
arrangement is subject to (i) the customary exception of the issue
and offer by or on behalf of the Company of the Placing Shares and
the issue by the Company of any Ordinary Shares upon the exercise
of any existing options, including any options or restricted share
grants under the Company's share option scheme and (ii) the issue
by the Company of Ordinary Shares in connection with an acquisition
of shares or assets by the Company.
Registration and settlement
Each Placee allocated Placing Shares in the Placing will be sent
a contract note or electronic trade confirmation in accordance with
the standing arrangements in place with Arden stating the number of
Placing Shares allocated to it at the Placing Price, the aggregate
amount owed by such Placee to Arden and settlement instructions.
Each Placee agrees that it will do all things necessary to ensure
that delivery and payment is completed in accordance with the
standing CREST or certificated settlement instructions in respect
of the Placing Shares that it has in place with Arden.
Settlement of transactions in the Placing Shares (ISIN:
GG00BD59ZW98) following Admission will take place within the CREST
system, subject to certain exceptions. Settlement through CREST is
expected to be on 16 August 2018 on a T+3 basis in accordance with
the instructions set out in the contract note or electronic trade
confirmation sent to Placees unless otherwise notified by Arden.
Settlement will be on a delivery versus payment basis. However, in
the event of any difficulties or delays in the admission of the
Placing Shares to CREST or the use of CREST in relation to the
Placing, the Company and Arden may agree that the Placing Shares
should be issued in certificated form. The Company and Arden
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 practicable within the
CREST system within the timetable set out in this Announcement or
would not be consistent with the regulatory requirements in the
Placee's jurisdiction.
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 prevailing LIBOR
as determined by Arden.
Each Placee is deemed to agree that, if it does not comply with
these obligations, Arden may sell any or all of the Placing Shares
allocated to that Placee on such Placee's behalf and retain from
the proceeds, for Arden's account and benefit, an amount equal to
the aggregate amount owed by the Placee plus any interest due. The
relevant Placee will, however, remain liable for any shortfall
below the aggregate amount owed by it and may be required to bear
any taxes or duties (together with any related interest, fines or
penalties) imposed in any jurisdiction which may arise upon the
sale of such Placing Shares on such Placee's behalf.
When a Placee or person acting on behalf of the Placee is
dealing with any of Arden, any money held in an account with Arden
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 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 Arden's money in accordance with the
client money rules and will be used by Arden in the course of its
own business and the Placees will rank only as a general creditor
of Arden.
If Placing Shares are to be delivered to a custodian or
settlement agent, Placees should ensure that upon receipt the
contract note or electronic trade confirmation is copied and
delivered immediately to the relevant person within that
organisation.
Representations, warranties and acknowledgements
By submitting a bid in the Bookbuild, each prospective Placee
(and any person acting on such Placee's behalf) represents,
warrants and acknowledges to, and agrees with, the Company and
Arden (for itself and for any such prospective Placee) that:
1. it has read and understood this Announcement, including this
Appendix, in its entirety and that its subscription for the Placing
Shares is subject to and based upon all the terms, conditions,
representations, warranties, acknowledgements, agreements and
undertakings and other information contained herein;
2. it has not received a prospectus or other offering document
in connection with the Bookbuild, the Placing or the Placing Shares
and acknowledges that no prospectus or other offering document has
been or will be prepared in connection with the Bookbuild, the
Placing or in the Placing Shares;
3. it will not distribute, forward, transfer or otherwise
transmit this Announcement or any part of it, or any other
presentational or other materials concerning the Placing (including
electronic copies thereof) to any person, and it has not
distributed, forwarded, transferred or otherwise transmitted any
such materials to any person;
4. the Ordinary Shares are admitted to the standard listing
segment of the Official List, and that the Company is therefore
required to publish certain business and financial information in
accordance with the rules and practices of the FCA, and that it is
able to obtain or access such information and comparable
information concerning other publicly traded companies without
undue difficulty;
5. it has knowledge and experience in financial, business and
international investment matters as is required to evaluate the
merits and risks of acquiring the Placing Shares. It further
acknowledges that it is experienced in investing in securities of
this nature, and is aware that it may be required to bear, and is
able to bear, the economic risk of, and is able to sustain, a
complete loss in connection with the Placing;
6. the content of this Announcement is exclusively the
responsibility of the Company and that none of Arden, any of its
affiliates or any persons acting on its behalf is responsible for
or has or shall have any liability for any information or
representation relating to the Company contained in this
Announcement or any information publicly announced through a
regulatory information services (as defined in the listing rules of
the FCA) by or on behalf of the Company on or prior to the date of
this Announcement (the "Exchange Information"), provided that
nothing in this paragraph excludes the liability of any person for
fraudulent misrepresentation made by such person;
7. the only information on which it is entitled to rely and on
which such Placee has relied in committing itself to subscribe for
the Placing Shares is contained in this Announcement and any
Exchange Information, such information being all that it deems
necessary to make an investment decision in respect of the Placing
Shares and that it has neither received nor relied on any other
information given or representations, warrants or statements,
express or implied, made by or any view expressed by Arden, the
Company or any of their affiliates (including in any management
presentation delivered in respect of the Bookbuild) with respect to
the Company, the Placing or the Placing Shares or the accuracy,
completeness or adequacy of any information contained in this
Announcement, the Exchange Information or otherwise, provided that
nothing in this paragraph excludes the liability of any person for
fraudulent misrepresentation made by such person;
8. it may not rely on any investigation that Arden, its
affiliates or any person acting on their behalf may or may not have
conducted with respect to the Company and its affiliates or the
Placing and neither Arden nor any of its affiliates nor any person
acting on their behalf has made any representation or warranty to
it, express or implied, with respect to the merits of the Placing,
the subscription for or purchase of the Placing Shares, or as to
the condition, financial or otherwise, of the Company and its
affiliates, or as to any other matter relating thereto, and nothing
herein shall be construed as a recommendation to it to subscribe
for the Placing Shares. It acknowledges and agrees that no
information has been prepared by, or is the responsibility of Arden
or any of its affiliates or any person acting on their behalf for
the purposes of this Placing;
9. it has conducted its own due diligence, examination and
assessment of the Company, the Placing Shares and the terms of the
Placing (including the merits and risks involved) and satisfied
itself that the information resulting from such investigation is
still current and relied on that investigation for the purposes of
its decision to participate in the Placing;
10. Arden will not be liable for any Placee's decision to
participate in the Placing based on any information,
representation, warranty or statement contained in this
Announcement or otherwise;
11. it will not hold Arden or any of its affiliates or any
person acting on their behalf responsible or liable for any
misstatements in or omission from any publicly available
information relating to the Group or information made available
(whether in written or oral form) relating to the Group (the
"Information") and that none of Arden, its affiliates or any person
acting on their behalf, makes any representation or warranty,
express or implied, as to the truth, accuracy or completeness of
such Information or accepts any responsibility for any of such
Information;
12. the Placing Shares have not been registered or otherwise
qualified, and will not be registered or otherwise qualified, for
offer and sale with any securities regulatory authority of the
United States, or any state or other jurisdiction of the United
States, Australia, Canada, Japan or South Africa or any
jurisdiction in which registration may be required;
13. subject to certain exceptions, the Placing Shares may not be
offered, sold, taken up, renounced or delivered or transferred,
directly or indirectly, within the United States, Australia,
Canada, Japan or South Africa or any jurisdiction in which it would
be unlawful to do so and no action has been or will be taken by any
of the Company, Arden or any person acting on behalf of the Company
or Arden that would, or is intended to, permit a public offer of
the Placing Shares in the United States, Australia, Canada, Japan
or South Africa or in any country or jurisdiction where any such
action for that purpose is required;
14. unless otherwise specifically agreed with Arden, that it is
not and at the time the Placing Shares are acquired, neither it nor
the beneficial owner of the Placing Shares will be, a resident of
Australia, Canada, Japan, South Africa or the United States;
15. it has not offered or sold and will not offer or sell any
Placing Shares to persons in the EEA prior to Admission except to
Qualified Investors or otherwise in circumstances which have not
resulted and which will not result in an offer to the public in any
member state of the EEA within the meaning of the Prospectus
Directive;
16. it and/or each person on whose behalf it is participating:
(a) is entitled to acquire Placing Shares pursuant to the Placing under the laws of all relevant jurisdictions and has fully observed such laws;
(b) has capacity and authority and is entitled to enter into and
perform its obligations as a subscriber of Placing Shares and will
honour such obligations; and
(c) has obtained all necessary consents and authorities
(including, without limitation, in the case of a person acting on
behalf of a Placee, all necessary consents and authorities to agree
to the terms set out or referred to in this Appendix) to enable it
to enter into the transactions contemplated hereby and to perform
its obligations in relation thereto;
17. if it is a pension fund or investment company, its
acquisition of Placing Shares is in full compliance with applicable
laws and regulations;
18. it is a Relevant Person and undertakes that it will acquire,
hold, manage or dispose of any Placing Shares that are allocated to
it for the purposes of its business and, in particular:
(a) if in a member state of the EEA, unless otherwise
specifically agreed with Arden in writing, it is a Qualified
Investor;
(b) if in the United Kingdom, that it is a person (i) having
professional experience in matters relating to investments who
falls within the definition of "investment professionals" in
Article 19(5) of the Order or (ii) who falls within Article
49(2)(a) to (d) ("High Net Worth Companies, Unincorporated
Associations, etc.") of the Order, or (iii) to whom this
Announcement may otherwise lawfully be communicated;
19. it and the prospective beneficial owner of the Placing
Shares is, and at the time the Placing Shares are acquired will be,
either (i) outside the United States acquiring the Placing Shares
in an "offshore transaction" as defined in, and in compliance with,
Regulation S or (ii) an investor purchasing in reliance on an
exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act;
20. if it is a financial intermediary, as that term is used in
Article 3(2) of the Prospectus Directive:
(a) the Placing Shares purchased by it in the Placing will not
be acquired on a non-discretionary basis on behalf of, nor will
they be acquired with a view to their offer or resale to, persons
in circumstances which may give rise to an offer of securities to
the public other than an offer or resale in any member state of the
EEA which has implemented the Prospectus Directive to Qualified
Investors, or in circumstances in which the prior consent of Arden
has been given to each proposed offer or resale; or
(b) where Placing Shares have been acquired by it on behalf of
persons in any member state of the EEA other than Qualified
Investors, the offer of those Placing Shares to it is not treated
under the Prospectus Directive as having been made to such
persons;
21. it has only communicated or caused to be communicated and it
will only communicate or cause to be communicated any invitation or
inducement to engage in investment activity (within the meaning of
section 21 of 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;
22. it has complied, and will comply, with all applicable
provisions of FSMA with respect to anything done by it in relation
to the Placing Shares in, from or otherwise involving the United
Kingdom;
23. it is acquiring the Placing Shares for its own account or is
acquiring the Placing Shares for an account with respect to which
it exercises sole investment discretion and has the authority to
make and does make the acknowledgements, representations and
agreements contained in this Announcement;
24. it is purchasing the Placing Shares for investment purposes,
and not with a view to distribution or resale, directly or
indirectly, in the United States or otherwise in violation of
United States securities laws;
25. it understands that the Placing Shares have not been, and
will not be, registered under the US Securities Act or with any
state or other jurisdiction of the United States and that the
Placing Shares may not be reoffered, resold, pledged or otherwise
transferred except (a) outside the United States in compliance with
Regulation S under the US Securities Act or (b) in a transaction
pursuant to another exemption from, or a transaction not subject
to, the registration requirements of the US Securities Act, in each
case in compliance with all applicable laws;
26. it has complied with its obligations (i) under the Criminal
Justice Act 1993 and the Market Abuse Regulation (EU 596/2014) and
(ii) in connection with money laundering and terrorist financing
under the Proceeds of Crime Act 2002, the Criminal Justice Act
1993, the Terrorism Act 2000, the Terrorism Act 2006, the Money
Laundering, Terrorist Financing and Transfer of Funds (Information
on the Payer) Regulations 2017) 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 making payment on behalf of a third party,
that satisfactory evidence has been obtained and recorded by it to
verify the identity of the third party as required by the
Regulations;
27. it may be asked to disclose in writing or orally to Arden:
(a) if he or she is an individual, his or her nationality; or
(b) if he or she is a discretionary fund manager, the
jurisdiction in which the funds are managed or owned.
28. it will make payment to Arden in accordance with the terms
and conditions of this Announcement on the due times and dates set
out in this Announcement, failing which the relevant Placing Shares
may be placed with others on such terms as Arden determine and
without liability to such Placee, who will remain liable for any
amount by which the net proceeds of such sale falls short of the
product of the relevant Placing Price and the number of Placing
Shares allocated to it and may be required to bear any taxes or
duties (together with any related interest, fines or penalties)
which may arise on the sale of such Placee's Placing Shares;
29. its allocation (if any) of Placing Shares will represent a
maximum number of Placing Shares which it will be entitled, and
required, to subscribe for, and that the Company may call upon it
to subscribe for a lower number of Placing Shares (if any), but in
no event in aggregate more than the aforementioned maximum;
30. the Placing Shares will be issued subject to the terms and
conditions of this Appendix and the Company's articles of
incorporation and that its commitment to acquire Placing Shares on
the terms set out herein will continue notwithstanding any
amendment that may in future be made to the terms and conditions of
the Placing and that Placees will have no right to be consulted or
require that their consent be obtained with respect to the
Company's or Arden's conduct of the Placing;
31. Arden do not owe any fiduciary or other duties to any Placee
in respect of any representations, warranties, undertakings or
indemnities in the Placing Agreement;
32. none of Arden, its respective affiliates and any person
acting on behalf of any of them is making any recommendations to
it, advising it regarding the suitability of any transactions it
may enter into in connection with the Placing and that
participation in the Placing is on the basis that it is not and
will not be a client of Arden and that Arden has no duties or
responsibilities to it for providing the protections afforded to
their clients or customers or for providing advice in relation to
the Placing nor in respect of any representations, warranties,
undertakings or indemnities contained in the Placing Agreement nor
for the exercise or performance of any of its rights and
obligations thereunder including any rights to waive or vary any
conditions or exercise any termination right;
33. it is not in possession of and has neither received nor
relied on any confidential price sensitive information concerning
the Company in accepting the invitation to participate in the
Placing and it is not subscribing for the Placing Shares on the
basis of material non-public information;
34. in connection with the Placing, Arden and any of its
affiliates acting as an investor for its own account may subscribe
for Placing Shares in the Company and in that capacity may retain,
purchase or sell for its own account such Placing Shares in the
Company and any securities of the Company or related investments
and may offer or sell such securities or other investments
otherwise than in connection with the Placing. Accordingly,
references in this Announcement to shares being issued, offered or
placed should be read as including any issue, offering or placement
of such shares in the Company to each of Arden or any of its
affiliates acting in such capacity. In addition Arden and any of
its affiliates may enter into financing arrangements and swaps with
investors in connection with which Arden and any of its affiliates
may from time to time acquire, hold or dispose of such securities
of the Company, including the Placing Shares. Arden does not intend
to disclose the extent of any such investment or transactions
otherwise than in accordance with any legal or regulatory
obligation to do so;
35. the Company, Arden, their respective affiliates and others
will rely upon the truth and accuracy of the foregoing
representations, warranties, acknowledgements and agreements, which
are given for the benefit of each of the Company and Arden (for
their own benefit and, where relevant, the benefit of their
respective affiliates and any person acting on their behalf) and
are irrevocable and it irrevocably authorises Arden to produce this
Announcement, pursuant to, in connection with, or as may be
required by any applicable law or regulation, administrative or
legal proceeding or official inquiry with respect to the matters
set forth herein;
36. the rights and remedies of Arden and the Company under the
terms and conditions in this Appendix 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; and
37. these terms and conditions of the Placing and any agreements
entered into by it pursuant to these terms and conditions of the
Placing, and all non-contractual or other obligations arising out
of or in connection with them, shall be governed by and construed
in accordance with the laws of England and Wales and it submits (on
behalf of itself and on behalf of any person on whose behalf it is
acting) to the exclusive jurisdiction of the English courts as
regards any claim, dispute or matter arising out of any such
contract (including any dispute regarding the existence, validity
or termination of such contract or relating to any non-contractual
or other obligation arising out of or in connection with such
contract), except that enforcement proceedings in respect of the
obligation to make payment for the Placing Shares (together with
any interest chargeable thereon) may be taken by either the Company
or Arden 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.
Indemnity
By participating in the Placing, each Placee (and any person
acting on such Placee's behalf) agrees to indemnify on an after-tax
basis and hold the Company, Arden and each of their respective
affiliates harmless from any and all costs, claims, liabilities and
expenses (including legal fees and expenses) arising out of or in
connection with any breach of the representations, warranties,
acknowledgements, agreements and undertakings given by the Placee
in this Appendix and further agrees that the provisions of this
Appendix shall survive after completion of the Placing.
Taxation
The allotment and issue of Placing Shares to Placees (or the
persons for whom Placees are contracting as agent), together with
any transfer of Placing Shares by Arden on a Placee's behalf,
should be free of any transfer tax imposed in Guernsey.
The allotment and issue of Placing Shares to Placees (or the
persons for whom Placees are contracting as agent) should be free
of any stamp duty or stamp duty reserve tax under the laws of the
United Kingdom, provided that: (a) no register for the Placing
Shares is kept in the United Kingdom by or on behalf of the
Company, and (b) the Placing Shares are not paired with shares
issued by a body corporate incorporated in the United Kingdom. If
there are any circumstances in which any other stamp duty or stamp
duty reserve tax (together with interest and penalties) is payable
in respect of the issue of the Placing Shares, neither Arden nor
the Company nor any of their affiliates shall be responsible for
the payment thereof.
Placees are advised to consult with their own advisers regarding
the tax aspects of the subscription for Placing Shares.
DEFINITIONS
In this Announcement, the following words and expressions shall,
unless the context provides otherwise, have the following
meanings:
"Admission" the admission of the Placing Shares
to the standard segment of the Official
List in accordance with the Listing
Rules and to trading on the Main Market
"Announcement" this announcement and the Appendix,
which forms part of this announcement
dated 8 August 2018 regarding the Cooperation
Agreement and proposed Capital Raising
"Arden Partners" or "Arden" Arden Partners plc
"Board" or "Directors" the directors of the Company as at the
date of the Announcement
"Bookbuilding Process" the accelerated Bookbuild undertaken
or "Bookbuild" by the Company to effect the Placing
"Capital Raising" the Placing and the TechMet Subscription
"Company" or "Rainbow" Rainbow Rare Earths Limited
"CREST" the relevant system (as defined in the
CREST Regulations) in respect of which
Euroclear is the operator (as defined
in the CREST Regulations)
"EU" the European Union
"Euroclear" Euroclear UK & Ireland Limited
"Existing Ordinary Shares" the 174,626,472 Ordinary Shares in issue
on the date of this Announcement and
prior to completion of the Capital Raising
"FCA" the Financial Conduct Authority of the
UK
"FSMA" Financial Services and Markets Act 2000
(as amended)
"JORC Code" the 2012 edition of the Australasian
Joint Ore Reserves Committee Code
"JORC Resource" a mineral resource, being a concentration
of occurrence of solid material of economic
interest in or on the Earth's crust
in such form grade and quantity that
there are reasonable prospects for eventual
economic extraction, declared in accordance
with the JORC Code
"London Stock Exchange" London Stock Exchange plc
"Main Market" the main market of the London Stock
Exchange
"Official List" the official list of the FCA
"Ordinary Shares" ordinary shares of no par value in the
capital of the Company
"Placees" eligible existing institutional shareholders
and new institutional shareholders subscribing
for new Ordinary Shares pursuant to
the Placing
"Placing" the firm placing by the Company of the
Placing Shares with the Placees pursuant
to the Placing Agreement and the Bookbuild
"Placing Price" a price per Placing Share to be determined
at the close of the Bookbuilding Process
"Placing Shares" up to 14.9 million new Ordinary Shares
"Placing Agreement" the agreement entered into between the
Company and Arden Partners dated the
date of this Announcement
"Prospectus Rules" the Prospectus Rules made in accordance
with the EU Prospectus Directive 2003/71/EC
in relation to offers of securities
to the public and the admission of securities
to trading on a regulated market
"REE" rare earth elements
"Regulatory Information has the meaning given in the Disclosure
Service" Guidance and Transparency Rules sourcebook
published by the FCA
"Securities Act" US Securities Act of 1933 (as amended)
"TechMet" TechMet Limited, a company incorporated
in Malta with registered number C81571
"TechMet Subscription" the direct subscription with the Company
of $0.5m by TechMet for TechMet Subscription
Shares pursuant to the TechMet Subscription
Letter at the Placing Price
"TechMet Subscription the subscription letter entered into
Letter" between the Company and TechMet on or
before the date of this Announcement,
pursuant to which TechMet has agreed
to subscribe for the TechMet Subscription
Shares
"TechMet Subscription the new Ordinary Shares to be issued
Shares" pursuant to the TechMet Subscription
"TechMet Subscription the admission of the TechMet Subscription
Shares Admission" Shares to the standard segment of the
Official List in accordance with the
Listing Rules and to trading on the
Main Market
"tpa" tonnes per annum
"United Kingdom" or "UK" the United Kingdom of Great Britain
and Northern Ireland
"United States", "United the United States of America, its territories
States of America" or and possessions, any State of the United
"US" States, and the District of Columbia
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
MSCSSUFSAFASEEA
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August 08, 2018 06:31 ET (10:31 GMT)
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