TIDMVLS
RNS Number : 1768F
Velocys PLC
15 May 2017
News release
Velocys plc
("Velocys" or "the Company")
15 May 2017
Fund raise of over GBP10 million
Velocys plc (VLS.L), the company at the forefront of smaller
scale gas-to-liquids (GTL), is pleased to announce that it has
conditionally raised over GBP10 million (before expenses).
Highlights
-- Fund raising of over GBP10 million (before expenses) through the:
- Proposed issue of 18 million convertible loan notes ("CLNs")
at a price of GBP0.50 per loan note to the Company's two largest
Shareholders, Ervington and Lansdowne, amounting to approximately
GBP9 million.
- Final maturity date of 18 months following the issue of the relevant CLNs.
- Interest rate of 8% per annum.
- Conditional placing ("Placing") of 2,577,777 new Ordinary
Shares at a placing price of GBP0.45 per share to certain
institutional and other investors to raise gross proceeds of
approximately GBP1.16 million.
- Placing price represents a discount of approximately 10% to
the closing mid-market price of the Ordinary Shares as at 12 May
2017.
- Placing Shares will represent approximately 1.8% of the Ordinary Share capital.
-- Proceeds raised by the issue of the CLNs and the Placing will
be used to provide working capital and to progress specific
activities to drive the strategy programme including:
- Initial engineering for US biomass-to-liquids (BTL) plants.
- Integrated technology demonstration for BTL.
- Building the consortium for the renewable fuels focus area and
in particular securing commitments for the majority of the funding
required for the FEL-3 engineering study of the US renewable fuels
plant.
- Project development activities (for example, site selection and permitting).
- The engagement of consultants to support financing and other related activities.
-- $3.4 million of the proceeds of the fund raise will also be
used to extend the loan arrangement Velocys made available to ENVIA
in January 2016 from $9.3m to $12.7m. All other terms of the loan,
which has a 10% coupon, remain unchanged. As such Velocys will help
to support the ENVIA plant achieving steady state operations over
the coming months.
-- Velocys has agreed that its three largest shareholders, which
include Ervington and Lansdowne, have the right to jointly nominate
an individual to be appointed to the Board as a Non-Executive
Director. These shareholders have nominated Andrew Morris, who is
currently CEO of Envirofusion. He has extensive experience as
Chairman, CEO, CFO and Group Finance Director for AIM companies,
SMEs and private equity backed organisations in the renewable
energy, energy from waste and biofuels sectors.
-- The issue of the CLNs and the Placing is conditional (amongst
other things) upon the passing of certain resolutions. A General
Meeting is therefore being convened for the purpose of considering
the Resolutions at 11 a.m. on 1 June 2017 at the offices of Mayer
Brown International LLP, 201 Bishopsgate, London, EC2M 3AF.
David Pummell, CEO of Velocys, said:
"Since announcing our new strategy for sustainable growth, the
first Fischer-Tropsch product has successfully been produced at the
commercial reference plant for Velocys' technology in Oklahoma
City; the first smaller scale commercial GTL plant in the world and
a landmark event for Velocys and the industry. We have also made
strong progress delivering the high quality technology partnerships
needed to develop an integrated offer for the renewable fuels
market in the US, our primary market of focus.
"Today's funding allows us to accelerate the implementation of
the first stage of our strategy, putting in place a consortium of
partners with the aim of delivering a wider commercial renewable
fuels offer and securing the first final investment decision for a
renewable fuels plant.
"We would like to thank our existing shareholders for their
support in today's financing."
- Ends -
For further information, please contact:
Velocys
David Pummell, CEO +44 1235 841
Susan Robertson, CFO 700
Numis Securities (Nomad and joint
broker)
Alex Ham
Stuart Skinner
Jamie Lillywhite +44 20 7260
Tom Ballard 1000
Canaccord Genuity (Joint broker)
Henry Fitzgerald-O'Connor +44 20 7523
Ben Griffiths 8000
Camarco (Financial communications
& PR)
Billy Clegg +44 20 3757
Georgia Edmonds 4983
Certain information contained in this announcement would have
constituted inside information (as defined by Article 7 of
Regulation (EU) No 596/2014) prior to its release as part of this
announcement.
Notes to editors
About Velocys
Velocys is the company at the forefront of smaller scale
gas-to-liquids (GTL), providing the bridge connecting stranded and
low value feedstocks such as natural gas, landfill gas or biomass
with markets for premium products such as renewable diesel, jet
fuel and waxes.
With its partners, Velocys aims to deliver the most economically
compelling conversion solution; a fully integrated offer that can
be deployed at scale into the growing, attractive markets on which
it focuses. Velocys technology, protected by several hundred
patents in over 30 countries, is specifically designed for smaller
scales, combining super-active catalysts with intensified reactor
systems. Standardised modular plants can be deployed readily in a
wide range of locations, and Velocys' capabilities and extensive
experience deliver a proven route to operation.
Velocys plc is admitted to trading on the AIM market of the
London Stock Exchange (LSE: VLS). The Company has a strong,
multi-disciplinary staff operating from its commercial centre in
Houston, Texas, USA and technical facilities near Oxford, UK and
Columbus, Ohio, USA. First product has been produced at its
commercial reference plant, which is located adjacent to Waste
Management's East Oak landfill site in Oklahoma City.
www.velocys.com
IMPORTANT NOTICES
This document does not constitute an offer to buy, acquire or
subscribe for, or the solicitation of an offer to buy, acquire or
subscribe for, Placing Shares or an invitation to buy, acquire or
subscribe for the Placing Shares in any jurisdiction. This document
has not been filed with, examined or approved by the Financial
Conduct Authority or the London Stock Exchange or any other
regulatory authority.
Numis Securities Limited ("Numis"), which is authorised and
regulated in the United Kingdom by the Financial Conduct Authority
and is a member of the London Stock Exchange, is acting as
nominated adviser and joint broker to the Company for the purposes
of the AIM Rules. Canaccord Genuity Limited ("Canaccord"), which is
authorised and regulated in the United Kingdom by the Financial
Conduct Authority and is a member of the London Stock Exchange, is
acting as joint broker to the Company for the purposes of the AIM
Rules. Numis and Canaccord are each acting exclusively for the
Company in connection with the Placing, and will not be responsible
to anyone other than the Company for providing the protections
afforded to their respective clients or for providing advice in
relation to the proposals in this document or any other matter
referred to in this document. Neither Numis nor Canaccord have
authorised the contents of this document for any purpose and,
without limiting the statutory rights of any person to whom this
document is issued, no representation or warranty, express or
implied, is made by either Numis or Canaccord as to any of the
contents or completeness of this document.
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 "anticipate",
"believe", "intend", "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. 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 neither Numis
nor Canaccord nor, except as required by applicable law, the
Company assumes 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.
The distribution of this announcement outside the United Kingdom
may be restricted by law and therefore any persons outside the
United Kingdom into whose possession this announcement comes should
inform themselves about and observe any such restrictions as to the
Placing, the Placing Shares and the distribution of this
announcement. Any failure to comply with such restrictions may
constitute a violation of the securities laws of any jurisdiction
outside of the United Kingdom. This announcement does not
constitute an offer to sell or an invitation to subscribe for, or
the solicitation of an offer to buy or to subscribe for, shares in
any jurisdiction in which such an offer or solicitation is
unlawful. In particular, this announcement is not for release,
publication or distribution, directly, or indirectly, in whole or
in part, in, into or from the United States, Australia, New
Zealand, Canada, the Republic of South Africa, Japan or to any US
Person, or any national, resident or citizen of Australia, New
Zealand, Canada, the Republic of South Africa or Japan. No offering
of Placing Shares, or any other securities of the Company, is being
made in the United
States and this announcement, and the information contained
herein, does not constitute an offer to sell or a solicitation of
an offer to buy any Placing Shares or any other securities of the
Company in the United States.
No person has been authorised to give any information or to make
any representation other than those contained in this announcement
(or the circular to be sent to Shareholders today) in connection
with the Placing and Admission and, if given or made, such
information or representation must not be relied upon as having
been authorised by or on behalf of the Company, Numis or Canaccord
or any of their respective directors, employees or officers.
1. Introduction
The Board announced on 15 May 2017 that it has proposed to
raise, subject to certain conditions, (i) approximately GBP9
million (before expenses) by the issue of Convertible Loan Notes at
a price of GBP0.50 per loan note to the Company's two largest
Shareholders, Ervington and Lansdowne; and (ii) approximately
GBP1.16 million (before expenses) by way of a conditional placing
of 2,577,777 new Ordinary Shares at a placing price of GBP0.45 per
share to certain institutional and other investors.
The Company intends to use the proceeds raised by the issue of
the Convertible Loan Notes and the Placing to fund its working
capital requirements in support of the implementation of its
strategy, including funding an initial engineering study for its
proposed biomass to liquids plant, project development and the
continuing development of its strategic partnerships.
The issue of the Convertible Loan Notes and the Placing is
conditional (amongst other things) upon the passing of certain
resolutions in order to ensure that the Directors have the
necessary authorities and powers to allot the Placing Shares and
issue the Convertible Loan Notes. A General Meeting is therefore
being convened for the purpose of considering the Resolutions at 11
a.m. on 1 June 2017 at the offices of Mayer Brown International
LLP, 201 Bishopsgate, London EC2M 3AF. The Placing is also
conditional on the Placing Agreement between the Company, Canaccord
and Numis becoming unconditional and not being terminated in
accordance with its terms.
The Company has agreed that its three largest Shareholders,
which include Ervington and Lansdowne, have the right, for so long
as one of the Shareholders (together with any affiliate or person
acting in concert with it) holds a minimum of 14 per cent. of the
issued share capital of the Company, to jointly nominate an
individual (who will not be an employee or consultant of those
Shareholders) to be appointed to the Board as a non-executive
director, subject to approval of the identity of that individual by
the Company and the Company's nominated advisor. The nominated
individual shall be entitled to fees or remuneration from the
Company in the same manner as other non-executive directors of the
Company. This appointment right is conditional on the issue of the
Convertible Loan Notes.
These Shareholders have indicated that they intend to nominate
Andrew Morris in this role. Mr Morris has extensive experience as
Chairman, CEO, CFO and Group Finance Director and significant
involvement in financing and business development for AIM
companies, SMEs and private equity backed organisations. He has
considerable experience in the power and renewable energy, energy
from waste and biofuels sectors. A further announcement will be
made once an appointment has been made.
2. Velocys recent Corporate Developments
(a) ENVIA - the Company's first commercial reference plant
In September 2016, construction of ENVIA's first GTL plant in
Oklahoma City was completed. This was a landmark event for the
Company since it will, once at steady state operations, act as the
Company's first commercial reference plant. ENVIA subsequently
delivered a start up of the commercial scale Fischer-Tropsch
modules and upstream units at the ENVIA Plant, culminating in the
first Fischer-Tropsch product being successfully produced in
February 2017. The performance data that is available from the
ENVIA Plant to date aligns closely to the Velocys pilot plant and
system modelling data.
At the date of this document, the operations team has completed
debugging activities on several non-Fischer-Tropsch units of the
plant (which are routine at this stage of starting up a plant of
the complexity of the ENVIA Plant), and is continuing to implement
the pre-planned procedure of ramping up production to target
operational capacity over the coming months. As a result of the
time taken by these debugging activities, ENVIA requires additional
working capital to support operations through to being cash flow
positive. At the date of this document ENVIA has drawn down $8.2
million of the $9.3 million loan provided by Velocys in January
2016 as part of the stakeholder capital contribution, which is
secured on the undertakings, assets and property of ENVIA. $3.4
million of the proceeds of the fundraise will be used to extend the
loan arrangement Velocys made available to ENVIA in January 2016
from $9.3m to $12.7m. All other terms of the loan, which has a 10%
coupon, remain unchanged. As such Velocys will help to support the
ENVIA plant achieving steady state operations over the coming
months.
(b) Morimatsu
In January 2017, the Company signed an MoU with Morimatsu
(Jiangsu) Heavy Industry Co., Ltd., a subsidiary of Morimatsu
Industry Co., Ltd. Under the MoU, Morimatsu will be the Company's
preferred and strategic supplier of module engineering and
fabrication services for the plants. The MoU was followed up with
the signing of a definitive agreement between the Company and
Morimatsu in March 2017.
Morimatsu is a Japanese fabrication and engineering firm with
nearly 70 years' experience and expertise in the design,
engineering and fabrication of modular processing facilities for
oil and gas, petrochemical, fine chemical, pharmaceutical, power
and metallurgical industries. Its clients include world-leading
players in these industries. Its fabrication facilities include
three plants in China with over 800,000 m(2) of floor space and
3,500 staff. Its revenues totalled $700 million in 2016.
(c) TRI
In January 2017, the Company signed an MoU with ThermoChem
Recovery International, Inc. TRI will be the Company's preferred
and strategic supplier of gasification systems for its BTL
plants.
TRI is a leading provider of steam reforming gasification
systems. TRI's multi-feedstock demonstration plant in Durham, North
Carolina has run for over 10,000 hours, and has successfully shown
that the syngas it produces is well-suited to the Fischer-Tropsch
process. Moreover, its systems have been selected for and deployed
on various commercial North American projects including to
Norampac, a division of Cascades Paper, at its Trenton facility in
Ontario. The Directors anticipate that the terms of the MoU will be
reflected in legally binding documentation within the coming
months.
(d) Strategy review
In December 2016, the Company announced the results of its
strategy review, which it has continued to focus and refine.
Further details of the strategy can be found at paragraph 3
below.
3. Current Trading and Strategy
Current Trading
The Company's financial position and performance reflects its
stage of development as activities become focused on commercial
rollout and the implementation of its strategy. Revenues for the
year ended 31 December 2016 reflected the Company's transition to
commercial operations.
The Company has today also published its preliminary financial
results for the year ended 31 December 2016. Total revenues for the
year were GBP1.4 million (2015: GBP2.0 million). Loss for the year
was GBP12.4 million before exceptional items (GBP12.7 million after
exceptionals) (2015: GBP20.6 million/GBP20.1 million). Cash* at
2016 year end stood at GBP18.7 million (2015: GBP37.7 million).
Cash outflow in 2016 (excluding share issues) was GBP19.0 million
(2015: GBP22.0 million). Cash outflow was GBP13.6 million and
GBP5.4 million in H1 and H2 respectively.
The Directors anticipate that the cost reductions carried out in
2016 will continue into 2017 and the Company is further reviewing
its cost base and resources in order to adjust to its future needs
as a commercial company where research and development activities
are expected to take a less significant role. The Directors
consider that these cost reductions seek to create a leaner
business while preserving the value of the Company's strategic IP,
knowledge, capability and ability to leverage these resources to
scale up rapidly as commercial activities expand. Partially
offsetting the reduced underlying cost base, the Company expects to
increase spend on specific project development costs as set out in
the use of proceeds section of this announcement. Additionally, it
is expected that the existing $9.3 million loan to ENVIA will be
fully drawn down in the first half of 2017 as the plant progresses
towards steady state operations and agreement has been reached in
relation to further ENVIA funding as described above.
* Defined as cash, cash equivalents and short term
investments.
Strategy
Following its strategy review at the end of 2016, the Company
has continued to focus and refine its strategy aimed at increasing
its control in the delivery of plants.
The new strategy is to build on progress at the ENVIA Plant and
build on the Company's position of strength in the following
areas:
-- differentiated technology - recognised as a market leader;
-- recurring revenues which would result from the successful
implementation of its licensing model; and
-- world class technology, engineering capability and operations team.
In addition, the Company is adopting a business model that aims
to increase control over project delivery through a partnership
approach.
(i) Core themes
There are four core themes underpinning the Company's new
strategy:
-- Strategic alliances. Implement alliances with partners that
have the required resources, scale and capabilities to access
large, high value markets and drive growth.
-- Business model. With partners, the Company aims to become the
clear market leader in small-scale GTL and BTL by taking increased
control of multiple projects, reducing delivery risk and
accelerating growth, whilst seeking to continue to reduce its
overheads, construct consortia and secure funding at a project
level to ensure that the Company remains capital light, with
attractive revenues from technology licensing and sales of reactors
and catalyst.
-- The offer. Jointly with partners, deliver a "one-stop-shop"
offer to customers - the fully integrated and financed, cost
effective and operations-ready plant solution.
-- Leverage differentiated capabilities. Leverage the Company's
differentiated technology, engineering and operational
capabilities, working seamlessly with partners to modularise and
drive down costs of the complete offer.
(ii) Attractive plant economics
The Company's indicative modelling suggests that attractive
plant economics exist for BTL plants incorporating the Company's
technology producing renewable fuels. These indicative models show
that the economics for a plant producing 1,400 barrels per day of
renewable fuels from woody biomass are particularly favourable in
the US. Based on current pricing and costs and the indicative
modelling, the Directors believe that operational revenues
approximating $265 per barrel could be achieved at such a plant,
which is made up of around $75/barrel of fuel sales and around
$190/barrel of US federal Renewable Fuel Standard credits (traded
via Renewable Identification Numbers). The Directors believe that
plants addressing the Californian market are expected to be
eligible for around $33/barrel of Californian Low Carbon Fuel
Standard credits, raising potential operational revenues on plants
selling product into California to nearly $300 per barrel.
Corresponding operational costs of just under $130/barrel are
predicted by the Company, which includes: feedstock cost, capital
expenditure, operating expenditure, plant shutdown and maintenance.
The Company has commenced a FEL-2 engineering study to support and
develop its economic assumptions as a key step to securing
commercial partners for a first biomass to liquids plant.
The economics for gas-to-wax plants located on certain gas
fields in North America are competitive with other gas monetisation
options such as methanol or power production. To take an
illustrative example of a 5,000 barrel per day wax plant in Western
Canada, indicative values suggest that operational revenues from
sale of high value waxes, diesel and naphtha would be around
$120/barrel versus operation costs of just over $60/barrel.
(iii) Medium term goals
The Company's medium term goals are:
-- to have the largest market share of any solution provider for
premium renewable fuels in the US;
-- to have the largest market share of any provider of premium
Fischer-Tropsch waxes in North America; and
-- to exploit lucrative opportunities in selected Asian markets.
(iv) Focus areas
The Directors intend the Company's key areas of focus will
be:
-- delivering the joint Company and TRI integrated pilot plant
demonstration (see paragraph 3(v) below);
-- qualifying for the USDA loan guarantee program;
-- completing with partners, the FEL-2 engineering study for the
US renewable fuels plant described in paragraph 3(ii) above;
-- building strategic and commercial partnership consortia
capable of delivering the FID on plants which utilise the Company's
technology. The initial focus will be on building the consortium
for the renewable fuels focus area and in particular securing
commitments for the majority of the funding required for the FEL-3
engineering study of the US renewable fuels plant described in
paragraph 3(ii) above; and
-- conducting site selection and associated project development
activities for renewable fuels plants.
The Directors believe that working with strategic partners will
drive faster adoption and bring broader investment options to the
Company.
(v) Strategy: Roll-out
As described in paragraph 2 above, the Company has signed MoUs
with Morimatsu and TRI.
The Directors believe that the potential benefits of further
modularisation of smaller scale GTL plants are significant in terms
of reduced plant build schedule, reduced risk of delays, and lower
capital expenditure and operating expenditure. With Morimatsu, the
Company is scoping out a programme of work to maximise these
benefits across all areas of both GTL and BTL plants. This ongoing
collaboration builds on Morimatsu's successful delivery of targeted
cost and footprint reductions in their design of the
Fischer-Tropsch section of future plants.
The Company and TRI have begun the development of a joint
engineering design for a BTL plant to produce renewable diesel and
jet fuels from woody biomass. TRI will support the Company and its
partners to further reduce plant capital expenditure and operating
expenditure and to de-risk the financing of the first BTL plant,
for example, through:
-- an integrated technology demonstration at the TRI facility in
Durham, North Carolina to which the Company intends to relocate its
skid-mounted Fischer-Tropsch section of its pilot plant currently
located at the Company's facility in Ohio. The joint demonstration
was selected for support as part of a competitive award granted by
the US Department of Energy; and
-- accessing the USDA's loan guarantee scheme (for which the
joint demonstration is integral).
Furthermore, the Company has commenced discussions with various
other potential partners, including traders, refiners, airlines,
feedstock suppliers and banks with which it seeks to assemble its
integrated turnkey offer for customers, which includes the
technical solution, financing route, feedstock and offtake.
4. Use of Proceeds
The Directors intend that the net proceeds of the issue of the
Convertible Loan Notes and the Placing will be used by the Company
to progress the key focus areas in paragraph 3(iv) above,
particularly:
(a) working capital including certain upfront costs resulting
from its ongoing reduction of overheads not required to progress
the Company's key focus areas;
(b) specific activities to drive the strategy programme including:
(i) initial engineering for US BTL plants;
(ii) integrated technology demonstration for BTL;
(iii)building the consortium for the renewable fuels focus area
and in particular securing
commitments for the majority of the funding required for the
FEL-3 engineering study of the
US renewable fuels plant described in paragraph 3(ii) above;
and
(iv) project development activities (for example site selection
and permitting); and
(c) engaging consultants to support financing and other related activities.
$3.4 million of the proceeds of the fundraise will also be used
to extend the loan arrangement Velocys made available to ENVIA in
January 2016 from $9.3m to $12.7m. All other terms of the loan,
which has a 10% coupon, remain unchanged. As such Velocys will help
to support the ENVIA Plant achieving steady state operations over
the coming months.
The Company is reliant on the net proceeds of the issue of the
Convertible Loan Notes and the Placing to provide working capital
to progress the initial stages of its strategy. It follows that if
the Resolutions are not passed by Shareholders, the Placing and the
issue of the Convertible Loan Notes will not proceed. In these
circumstances the Directors would need to reconsider its
strategy.
The Directors expect that the Company will require further
funding by the second quarter of 2018 to progress the next stages
of its strategy.
The Company's preliminary financial results for the year ended
31 December 2016 (which will shortly be available to Shareholders
on the Company's website (www.velocys.com)) have been prepared on a
going concern basis which assumes that the Company will have
sufficient funds available to enable it to continue to trade for
the foreseeable future. The financial forecasts include certain
assumptions in relation to which there are uncertainties, including
the costs and timing of the ENVIA Plant achieving steady state
operations, the costs of ongoing development projects, the ability
to reduce certain overheads and funds generated from partnership
funding, and the ability to raise additional funding. Adverse
variations in these assumptions would mean that the Company may be
unable to realise its assets and discharge its liabilities in the
normal course of business. These conditions indicate the existence
of a material uncertainty which may cast significant doubt about
the Company's ability to continue as a going concern.
5. Principal terms of the Convertible Loan Notes
The Company proposes raising approximately GBP9 million, before
expenses, by way of the conditional, non-pre-emptive issue of up to
18 million Convertible Loan Notes at the issue price of GBP0.50 per
loan note. The issue of the Convertible Loan Notes is governed by
the terms of the Convertible Loan Note Instrument which was
constituted by the Company on 15 May 2017 (as further described
below).
The issue of the Convertible Loan Notes is conditional upon the
passing of the Resolutions at the General Meeting or by 16 June
2017 (or such later date as may be agreed by the Company and the
subscribers).
If this condition is not satisfied, the Convertible Loan Notes
will not be issued and all monies received from subscribers will be
returned (at the subscriber's risk and without interest) as soon as
possible thereafter.
The Convertible Loan Note Instrument creates a total of 30
million GBP0.50 unsecured convertible loan notes which will be
issued to subscribers at a price of GBP0.50 per loan note.
Accordingly, the Company may issue a total of 30 million
convertible loan notes pursuant to the Convertible Loan Note
Instrument, amounting to approximately GBP15 million. The Company
currently proposes to issue 18 million GBP0.50 Convertible Loan
Notes to subscribers, amounting to approximately GBP9 million. The
Company does not currently intend to issue any further Convertible
Loan Notes pursuant to the Convertible Loan Note Instrument in the
near term; however the Company retains its discretion to do so
should the Board consider it appropriate. The Resolutions
summarised in paragraph 8 permit the issue of the maximum number of
Ordinary Shares under the Convertible Loan Notes, including
interest payments, up to the Final Maturity Date.
The key terms of the Convertible Loan Note Instrument are:
-- unless already converted to Ordinary Shares, the Convertible
Loan Notes shall be redeemed on the date that falls 18 months
following their issue (the "Final Maturity Date") or, if any
Convertible Loan Notes remain outstanding (in the circumstances
described below), at any time from the Final Maturity Date;
-- the subscriber may at any time provide notice to the Company
to convert all or part of its Convertible Loan Notes to Ordinary
Shares provided that such subscriber may elect to not convert all
of its Convertible Loan Notes if, as a result of such conversion,
it would hold more than 29.99% of the voting rights of the Company
and such Convertible Loan Notes shall remain outstanding until
converted by such subscriber or by the Company in accordance with
the below;
-- the Company may at any time from the month before the Final
Maturity Date provide notice to a subscriber to convert all or part
of their Convertible Loan Notes to Ordinary Shares provided that
the Company may not convert any Convertible Loan Notes that would
cause a subscriber to hold more than 29.99% of the voting rights of
the Company;
-- for so long as any Convertible Loan Notes remain outstanding,
interest shall accrue on the principal amount of the Convertible
Loan Notes at a rate of 8 per cent. per annum and, on the date of
conversion or redemption (as applicable), the Company or a
subscriber can elect to repay or receive (as the case may be) the
interest through the issue of additional Ordinary Shares at a price
of GBP0.50 per share
-- for so long as any Convertible Loan Notes remain outstanding, the Company shall not:
-- create any security interest to secure any indebtedness save
in respect of certain ordinary course indebtedness ("Relevant
Indebtedness") unless the Company shall ensure that all amounts
payable under any outstanding Convertible Loan Notes are secured by
a security interest which is not less beneficial than the security
interest created pursuant to the Relevant Indebtedness;
-- incur indebtedness in excess of GBP50,000 save in respect of
certain ordinary course indebtedness; and
-- create any security over its intellectual property rights.
-- on conversion of the Convertible Loan Notes to Ordinary
Shares, such number of Ordinary Shares shall be issued to the
subscriber that equals the outstanding principal amount of the
notes plus any applicable interest at a price of GBP0.50 per
Ordinary Share;
-- the Convertible Loan Notes shall be automatically converted
to Ordinary Shares in certain circumstances, for example in the
event of a takeover offer or a fundamental change of business in
respect of the Company;
-- the Convertible Loan Notes shall be redeemed in the event
that the Company suffers an insolvency event;
-- save in respect of affiliates of a subscriber, the
Convertible Loan Notes are not transferable; and
-- no covenants are given as to the status or affairs of the Company.
The maximum number of Ordinary Shares that may be issued on
conversion of the Convertible Loan Notes is therefore 20,156,000
Ordinary Shares (assuming the Convertible Loan Notes are converted
on the Final Maturity Date together with all accrued interest). The
Ordinary Shares issued on a conversion of the Convertible Loan
Notes will, when issued, rank pari passu in all respects with the
other Ordinary Shares then in issue, including all rights to all
dividends and other distributions declared, made or paid
thereafter.
The Convertible Loan Notes will not be admitted to trading on
AIM or any other investment exchange.
6. Principal terms of the Placing
The Company proposes raising approximately GBP1.16 million,
before expenses, by way of a conditional, non-pre-emptive placing
of up to 2,577,777 new Ordinary Shares at the Placing Price. The
Placing Shares will be placed by Numis and Canaccord as agents for
the Company and pursuant to the Placing Agreement with
institutional and other investors.
The Placing Price represents a discount of approximately 10% to
the closing mid-market price of the Ordinary Shares as at 12 May
2017 of GBP0.5125 per Ordinary Share. The Placing Shares will
represent approximately 1.8 per cent. of the Ordinary Share capital
as enlarged by the Placing provided that no options have been
exercised and provided that the Convertible Loan Notes have not
been converted into Ordinary Shares) and will, when issued, rank
pari passu in all respects with the other Ordinary Shares then in
issue, including all rights to all dividends and other
distributions declared, made or paid following Admission.
The Placing is conditional upon (amongst other things):
(a) the passing of the Resolutions at the General Meeting;
(b) the Placing Agreement becoming unconditional and the Placing
Agreement not having been terminated in accordance with its
terms;
(c) the issue of the Convertible Loan Notes; and
(d) Admission occurring on or before 2 June 2017 (or such later
date as Numis, Canaccord and the Company may agree, not being later
than 14 days following that date).
If any of the conditions are not satisfied, the Placing Shares
will not be issued and all monies received from placees will be
returned (at the placees risk and without interest) as soon as
possible thereafter.
The Placing is not being underwritten.
The Placing Agreement contains warranties from the Company in
favour of Numis and Canaccord in relation to, (amongst other
things), the Company and its business. In addition, the Company has
agreed to indemnify Numis and Canaccord in relation to certain
liabilities it may incur in undertaking the Placing and issuing the
Convertible Loan Notes. Numis and Canaccord have the right to
terminate the Placing Agreement in certain circumstances prior to
Admission, in particular, it may terminate in the event that there
has been a material breach of any of the warranties or for force
majeure.
Application will be made for the Placing Shares to be admitted
to trading on AIM, subject to the Placing Agreement not having been
terminated, and it is expected that trading in the Placing Shares
will commence at 8 a.m. on 2 June 2017.
7. Related party transaction
The issue of the Convertible Loan Notes constitutes a related
party transaction under the AIM Rules as two "substantial
shareholders" (within the meaning of the AIM Rules), Ervington and
Lansdowne, (in each case via an affiliate), are subscribing for
Convertible Loan Notes. The Directors consider, having consulted
with Numis, the Company's nominated adviser, that the terms of the
transaction are fair and reasonable insofar as its Shareholders are
concerned.
8. Resolutions
The Company currently does not have sufficient authority to
issue the Convertible Loan Notes or effect the Placing.
Accordingly, the Resolutions, summarised below, are being proposed
at the General Meeting to ensure that the Directors have sufficient
authority to issue the Convertible Loan Notes and to allot and
issue the Placing Shares on a non-pre-emptive basis.
(a) Resolution 1 is an ordinary resolution to grant authority to
the Directors under s551 of the Act to allot relevant securities,
up to a maximum aggregate nominal amount of GBP227,337.77 pursuant
to the Placing and the issue of the Convertible Loan Notes, such
authority expiring at the earlier of the Company's next annual
general meeting and 31 August 2018.
If Resolution 1 is passed, the Directors will have the
authority, under the Act, to allot Ordinary Shares or grant rights
to subscribe for or to convert any security into Ordinary Shares up
to the maximum aggregate nominal amount of GBP227,337.77 (being the
maximum required for the purpose of issuing the Placing Shares and
the Convertible Loan Notes (including any Ordinary Shares required
to be issued under the Convertible Loan Notes plus any accrued
interest up to the Final Maturity Date); and
(b) Resolution 2 is a special resolution, conditional upon the
passing of Resolution 1, to empower the Directors, pursuant to s570
of the Act, to allot Ordinary Shares and Convertible Loan Notes
which are convertible into Ordinary Shares up to a maximum
aggregate nominal amount of GBP227,337.77 on a non-pre-emptive
basis pursuant to the Placing and the issue of the Convertible Loan
Notes, such authority expiring at the earlier of the Company's next
annual general meeting and 31 August 2018.
If Resolution 2 is passed, the Directors will have the power,
under the Act, to allot the Placing Shares and issue the
Convertible Loan Notes, (including any Ordinary Shares required to
be issued under the Convertible Loan Notes plus any accrued
interest up to the Final Maturity Date), in each case without
offering those shares to existing Shareholders.
These authorities are required to enable the Directors to effect
the Placing and the issue of the Convertible Loan Notes and are in
addition to the general authorities that were granted by
Shareholders at the Company's annual general meeting on 14 June
2016, which gave the Directors authority to allot relevant
securities up to a maximum aggregate nominal amount of
GBP477,508.79 under s551 of the Act and to allot Ordinary Shares up
to a maximum aggregate nominal amount of GBP143,252.64 on a
non-pre-emptive basis under s570 of the Act (such authorities
expire at the next annual general meeting of the Company or 31 July
2017, whichever is earlier).
Resolution 1 is an ordinary resolution and requires a majority
of more than 50 per cent. of the Shareholders voting to be passed.
Resolution 2 is a special resolution and requires the approval of
75 per cent. of the Shareholders voting to be passed.
9. Recommendation
The Directors consider that the issue of Convertible Loan Notes,
the Placing and the Resolutions are in the best interests of the
Company and its Shareholders as a whole. The Company is reliant on
the net proceeds of the issue of the Convertible Loan Notes and the
Placing to provide working capital to progress the initial stages
of its strategy. It follows that if the Resolutions are not passed
by Shareholders, the Placing and the issue of the Convertible Loan
Notes will not proceed. In these circumstances the Directors will
need to reconsider its strategy. Accordingly the Directors
unanimously recommend that Shareholders vote in favour of the
Resolutions, as they intend to do in respect of their own legal
and/or beneficial shareholdings, amounting, in aggregate, to
620,663 Ordinary Shares (representing approximately 0.43 per cent.
of the Ordinary Shares in the issue as at the date of this
announcement).
Definitions
The following definitions apply throughout this announcement,
unless the context requires otherwise.
"Act" the United Kingdom Companies Act 2006, as amended
"Admission" admission of the Placing Shares to trading on AIM
becoming effective in accordance with Rule 6 of the AIM Rules
"AIM" the market of that name operated by London Stock Exchange
plc
"AIM Rules" the AIM Rules for Companies, which sets out the
rules and responsibilities for companies listed on AIM, as amended
from time to time
"Articles" the articles of association of the Company (as
amended from time to time)
"Board" or "Directors" the board of directors of the Company
"BTL" biomass-to-liquids
"Canaccord" Canaccord Genuity Limited, a company incorporated in
England and Wales, with registered number 01774003, whose
registered office is at 88 Wood Street, London EC2V 7QR
"Capita Asset Services" a trading name of Capita Registrars Limited
"Company" or "Velocys" Velocys plc, a public limited company
incorporated in England & Wales under registered number 5712187
and having its registered office at 115e Olympic Avenue, Milton
Park, Abingdon, Oxfordshire OX14 4SA
"Convertible Loan Notes" the 18 million convertible loan notes
to be issued at a price of GBP0.50 per loan note to Ervington and
Lansdowne pursuant to the Convertible Loan Note Instrument
"Convertible Loan Note Instrument" the convertible loan note
instrument constituted by the Company on 15 May 2017 which created
up to GBP15,000,000 of convertible loan notes at GBP0.50 per loan
note, further details of which can be found above
"CREST" the relevant system (as defined in the Regulations)
which enables title to units of relevant securities (as defined in
the Regulations) to be evidenced and transferred without a written
instrument and in respect of which Euroclear United Kingdom &
Ireland Limited is the Operator (as defined in the Regulations)
"Enlarged Share Capital" the issued Ordinary Share capital of
the Company immediately following Admission comprising the Existing
Ordinary Shares and the Placing Shares (and assuming the Placing is
fully subscribed)
"ENVIA" ENVIA Energy, LLC, a joint venture between Waste
Management, Inc, NRG Energy, Inc, Ventech Engineers and the
Company
"ENVIA Plant" ENVIA's first GTL plant located in Oklahoma
City
"Ervington" Ervington Investments Limited
"Existing Ordinary Shares" the 143,994,558 Ordinary Shares in
issue as at the date of this announcement being the entire issued
share capital of the Company prior to the Placing
"FCA" Financial Conduct Authority
"FEL" Front-end loading
"FID" Final Investment Decision
"Final Maturity Date" the final maturity date of the Convertible
Loan Notes, being 18 months following the issue of the relevant
Convertible Loan Notes
"FSMA" the Financial Services and Markets Act 2000 (as
amended)
"Fully Diluted Share Capital" the fully diluted share capital of
the Company from Admission, being the Enlarged Share Capital plus
any Ordinary Shares that may be issued by the Company assuming that
all options currently in issue are exercised in full and all
Convertible Loan Notes are converted to Ordinary Shares with
accrued interest at the Final Maturity Date
"General Meeting" the general meeting of the Company to be held
at 11 a.m. on 1 June 2017 notice of which is set out at the end of
the circular
"GTL" gas-to-liquids
"Joint Brokers" Numis and Canaccord
"Lansdowne" Lansdowne Partners
"London Stock Exchange" London Stock Exchange plc
"Morimatsu" Morimatsu Industry Co., Ltd
"MoU" memorandum of understanding
"Numis" Numis Securities Limited, a private limited company
incorporated in England & Wales under registered number 2285918
and having its registered office at 10 Paternoster Square, London
EC4M 7LT
"Ordinary Shares" ordinary shares of GBP0.01 each in the capital
of the Company
"Placing" the proposed conditional, non-pre-emptive placing by
Numis and Canaccord of the Placing Shares pursuant to the Placing
Agreement
"Placing Agreement" the conditional agreement dated 15 May 2017
relating to the Placing, between the Company, Canaccord and
Numis
"Placing Price" GBP0.45 pence per Placing Share
"Placing Shares" up to 2,577,777 new Ordinary Shares to be
issued pursuant to the Placing
"Registrar" Capita Asset Services
"Regulations" the United Kingdom Uncertificated Securities
Regulations 2001 (SI 2001 No. 3755), as amended
"Resolutions" the resolutions to be proposed at the General
Meeting as set out in the Notice of General Meeting
"Shareholders" the holders of Ordinary Shares from time to time,
each individually being a "Shareholder"
"TRI" ThermoChem Recovery International, Inc.
"United Kingdom" the United Kingdom of Great Britain and
Northern Ireland
"US" or "United States" the United States of America, its
territories and possessions, any state of the United States and the
District of Colombia
"USDA" US Department of Agriculture
"GBP" the lawful currency of the United Kingdom
"$" the lawful currency of the US
APPIX
TERMS AND CONDITIONS OF THE PLACING
IMPORTANT INFORMATION ON THE PLACING FOR INVITED PLACEES
ONLY
THIS ANNOUNCEMENT INCLUDES STATEMENTS, ESTIMATES, OPINIONS AND
PROJECTIONS WITH RESPECT TO ANTICIPATED FUTURE PERFORMANCE OF THE
GROUP ("FORWARD-LOOKING STATEMENTS") WHICH REFLECT VARIOUS
ASSUMPTIONS CONCERNING ANTICIPATED RESULTS TAKEN FROM THE GROUP'S
CURRENT BUSINESS PLAN OR FROM PUBLIC SOURCES WHICH MAY OR MAY NOT
PROVE TO BE CORRECT. THESE FORWARD LOOKING STATEMENTS CAN BE
IDENTIFIED BY THE USE OF FORWARD LOOKING TERMINOLOGY, INCLUDING THE
TERMS "ANTICIPATES", "TARGET", "BELIEVES", "ESTIMATES", "EXPECTS",
"INTS", "MAY", "PLANS", "PROJECTS", "SHOULD" OR "WILL", OR, IN EACH
CASE, THEIR NEGATIVE OR OTHER VARIATIONS OR COMPARABLE TERMINOLOGY
OR BY DISCUSSIONS OF STRATEGY, PLANS, OBJECTIVES, GOALS, FUTURE
EVENTS OR INTENTIONS. SUCH FORWARD-LOOKING STATEMENTS REFLECT
CURRENT EXPECTATIONS BASED ON THE CURRENT BUSINESS PLAN AND VARIOUS
OTHER ASSUMPTIONS AND INVOLVE SIGNIFICANT RISKS AND UNCERTAINTIES
AND SHOULD NOT BE READ AS GUARANTEES OF FUTURE PERFORMANCE OR
RESULTS AND WILL NOT NECESSARILY BE ACCURATE INDICATIONS OF WHETHER
OR NOT SUCH RESULTS WILL BE ACHIEVED. AS A RESULT, PROSPECTIVE
INVESTORS SHOULD NOT RELY ON SUCH FORWARD-LOOKING STATEMENTS DUE TO
THE INHERENT UNCERTAINTY THEREIN. NO REPRESENTATION OR WARRANTY IS
GIVEN AS TO THE COMPLETENESS OR ACCURACY OF THE FORWARD-LOOKING
STATEMENTS CONTAINED IN THIS ANNOUNCEMENT. FORWARD-LOOKING
STATEMENTS SPEAK ONLY AS OF THE DATE OF SUCH STATEMENTS AND, EXCEPT
AS REQUIRED BY THE FCA, THE LONDON STOCK EXCHANGE, THE AIM RULES OR
APPLICABLE LAW, THE COMPANY UNDERTAKES NO OBLIGATION TO UPDATE OR
REVISE PUBLICLY ANY FORWARD-LOOKING STATEMENTS, WHETHER AS A RESULT
OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE. NO STATEMENT IN
THIS ANNOUNCEMENT IS INTED TO BE A PROFIT FORECAST AND NO STATEMENT
IN THIS ANNOUNCEMENT SHOULD BE INTERPRETED TO MEAN THAT EARNINGS
PER SHARE OF THE COMPANY FOR THE CURRENT OR FUTURE FINANCIAL YEARS
WOULD NECESSARILY MATCH OR EXCEED THE HISTORICAL PUBLISHED EARNINGS
PER SHARE OF THE COMPANY.
THIS ANNOUNCEMENT, INCLUDING THE APPIX (TOGETHER THE
"ANNOUNCEMENT") AND THE INFORMATION IN IT IS RESTRICTED AND IS NOT
FOR PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY,
IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES, AUSTRALIA, NEW
ZEALAND, CANADA, JAPAN OR SOUTH AFRICA OR ANY OTHER JURISDICTION IN
WHICH SUCH PUBLICATION, RELEASE OR DISTRIBUTION WOULD BE
UNLAWFUL.
MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE
PLACING. THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN ARE
FOR INFORMATION PURPOSES ONLY AND ARE DIRECTED ONLY AT: (A) PERSONS
IN MEMBER STATES OF THE EUROPEAN ECONOMIC AREA WHO ARE QUALIFIED
INVESTORS AS DEFINED IN SECTION 2(7) OF THE FINANCIAL SERVICES AND
MARKETS ACT 2000, AS AMED, ("QUALIFIED INVESTORS") BEING PERSONS
FALLING WITHIN THE MEANING OF ARTICLE 2(1)(E) OF THE EU PROSPECTUS
DIRECTIVE (WHICH MEANS DIRECTIVE 2003/71/EC AND INCLUDES ANY
RELEVANT IMPLEMENTING DIRECTIVE MEASURE IN ANY MEMBER STATE) (THE
"PROSPECTUS DIRECTIVE"); AND (B) IN THE UNITED KINGDOM, TO
QUALIFIED INVESTORS WHO ARE PERSONS WHO (I) HAVE PROFESSIONAL
EXPERIENCE IN MATTERS RELATING TO INVESTMENTS FALLING WITHIN
ARTICLE 19(1) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000
(FINANCIAL PROMOTION) ORDER 2005 (THE "ORDER"); (II) ARE PERSONS
FALLING WITHIN ARTICLE 49(2)(A) TO (D) ("HIGH NET WORTH COMPANIES,
UNINCORPORATED ASSOCIATIONS, ETC") OF THE ORDER; OR (III) ARE
PERSONS TO WHOM IT MAY OTHERWISE BE LAWFULLY COMMUNICATED (ALL SUCH
PERSONS IN (A) OR (B) TOGETHER BEING REFERRED TO AS "RELEVANT
PERSONS").
THIS ANNOUNCEMENT DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE
OR SUBSCRIPTION OF ANY SECURITIES IN THE COMPANY. THIS ANNOUNCEMENT
MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVENT
PERSONS. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS
ANNOUNCEMENT RELATES IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL
BE ENGAGED IN ONLY WITH RELEVANT PERSONS. EACH PLACEE SHOULD
CONSULT WITH ITS OWN ADVISERS AS TO LEGAL, TAX, BUSINESS AND
RELATED ASPECTS OF AN INVESTMENT IN PLACING SHARES.
In this Appendix, unless the context requires, "Placee" means a
Relevant Person (including individuals, funds or others) who has
been invited to, and who chooses to, participate in the Placing and
by whom or on whose behalf a commitment to subscribe for Placing
Shares has been given.
No representation or warranty, express or implied, is made or
given by or on behalf of the Company or Canaccord Genuity Limited
("Canaccord") or Numis Securities Ltd ("Numis"), the Company's
nominated adviser, or any of their respective affiliates (within
the meaning of Rule 405 under the US Securities Act of 1933, as
amended (the "Securities Act") or any of such persons' directors,
officers or employees or any other person as to the accuracy,
completeness or fairness of the information or opinions contained
in this Announcement and no liability whatsoever is accepted by the
Company, Numis, Canaccord or any of such persons' Affiliates,
directors, officers or employees or any other person for any loss
howsoever arising, directly or indirectly, from any use of such
information or opinions or otherwise arising in connection
therewith.
This Announcement does not constitute an offer to sell or issue
or the solicitation of an offer to buy or subscribe for Placing
Shares in any jurisdiction in which such offer or solicitation is
or may be unlawful. In particular the Placing Shares referred to in
this Announcement have not been and will not be registered under
the Securities Act or with any securities regulatory authority of
any state or other jurisdiction of the United States and will be
offered or sold only outside of the United States in accordance
with Regulation S under the Securities Act.
The relevant clearances have not been, nor will they be,
obtained from the securities commission of any province or
territory of Canada; no prospectus has been lodged with or
registered by, the Australian Securities and Investments Commission
or the Japanese Ministry of Finance; and the Placing Shares have
not been, nor will they be, registered under or offered in
compliance with the securities laws of any state, province or
territory of United States, Australia, New Zealand, Canada, Japan
or South Africa. Accordingly, the Placing Shares may not (unless an
exemption under the relevant securities laws is applicable) be
offered, sold, resold or delivered, directly or indirectly, in or
into the United States, Australia, New Zealand, Canada, Japan or
South Africa or any other jurisdiction outside the United
Kingdom.
Persons distributing any part of 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 Announcement should seek
appropriate advice before taking any action. Persons into whose
possession this Announcement comes are required by the Company,
Canaccord and Numis to inform themselves about, and observe, any
such restrictions.
1. Details of the Placing
1.1 Numis and Canaccord today entered into an agreement with the
Company (the "Placing Agreement") under which, subject to certain
conditions, Numis and Canaccord, as agents for and on behalf of the
Company, have agreed to use their respective reasonable endeavours
to procure placees ("Placees") for the Placing Shares at the
Placing Price. The Placing is not being underwritten by Numis or
Canaccord.
1.2 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 dividends and other
distributions declared or made after the date of issue of the
Placing Shares.
2. Applications for admission to trading
2.1 Application will be made to the London Stock Exchange for
admission to trading of the Placing Shares on its AIM market
("Application").
2.2 It is expected that Admission will become effective at
8.00am on 2 June 2017 ("Admission") and that dealings in the
Placing Shares will commence at that time.
3. Participation in, and principal terms of, the Placing
3.1 Numis and Canaccord are acting as joint bookrunners and as
agents for the Company in connection with the Placing, Application
and Admission. Numis and Canaccord are each authorised and
regulated in the United Kingdom by the FCA, and are each acting
exclusively for the Company and no one else in connection with the
matters referred to in this Announcement and will not be
responsible to anyone other than the Company for providing the
protections afforded to the customers of Numis and Canaccord or for
providing advice in relation to the matters described in this
Announcement. Participation in the Placing is only available to
persons who may lawfully be, and are invited to participate in it
by Numis and Canaccord. Numis, Canaccord and their respective
Affiliates are each entitled to participate in the Placing as
principals.
3.2 The placing price will be a fixed price of 45 pence per
Placing Share (the "Placing Price"). No commissions will be paid to
Placees or by the Placees in respect of any Placing Shares.
3.3 Each prospective Placee's allocation of Placing Shares will
be confirmed to prospective Placees orally by Numis, Canaccord or
one of their respective Affiliates, and a contract note will be
dispatched as soon as practicable thereafter as evidence of such
Placee's allocation and commitment. The terms and conditions of
this Appendix will be deemed incorporated into the contract note.
That oral confirmation will constitute an irrevocable legally
binding commitment upon that person (who at that point will become
a Placee) in favour of the Company and Numis or Canaccord (as
applicable) to subscribe for 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
association. An offer to acquire Placing Shares, which has been
communicated by a prospective Placee to Numis or Canaccord (as
applicable) which has not been withdrawn or revoked prior to
publication of this Announcement shall not be capable of withdrawal
or revocation immediately following the publication of this
Announcement without the consent of Numis or Canaccord (as
applicable).
3.4 Each Placee will also have an immediate, separate,
irrevocable and binding obligation, owed to Numis or Canaccord, as
applicable (as agents of the Company), to pay the relevant entity
(or as it may direct) in cleared funds an amount equal to the
product of the Placing Price and the number of Placing Shares such
Placee has agreed to subscribe for and the Company has agreed to
allot and issue to that Placee. Each Placee's obligation will be
owed to the Company and to Numis or Canaccord, as applicable.
3.5 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 "Registration and Settlement".
3.6 All obligations under the Placing will be subject to
fulfilment of the conditions referred to below under "Conditions of
the Placing" and to the Placing not being terminated on the basis
referred to below under "Termination of the Placing Agreement".
3.7 By participating in the Placing, each Placee will agree 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.
3.8 To the fullest extent permitted by law and applicable FCA
rules, neither (i) Numis, (ii) any of its directors, officers,
employees or consultants, or (iii) to the extent not contained with
(i) or (ii), any person connected with Numis as defined in FSMA
((i), (ii) and (iii) being together "affiliates" and individually
an "affiliate"), shall have any liability (including to the extent
permissible by law, any fiduciary duties) to Placees or to any
person other than the Company in respect of the Placing.
3.9 To the fullest extent permitted by law and applicable FCA
rules, neither (i) Canaccord, (ii) any of its directors, officers,
employees or consultants, or (iii) to the extent not contained with
(i) or (ii), any person connected with Canaccord as defined in FSMA
((i), (ii) and (iii) being together "Affiliates" and individually
an "Affiliate"), shall have any liability (including to the extent
permissible by law, any fiduciary duties) to Placees or to any
person other than the Company in respect of the Placing.
4. Conditions of the Placing
4.1 Numis' and Canaccord's obligations under the Placing
Agreement in respect of the Placing Shares are conditional on,
amongst other things:
(a) none of the warranties in the Placing Agreement (i) being
untrue and inaccurate or misleading to an extent which, in any such
case, would be material, or (ii) on and as of the date of the
Placing Agreement and again at Admission becoming untrue,
inaccurate or misleading to an extent which, in any such case,
would be material by reference to the facts and circumstances then
subsisting;
(b) the Company allotting, subject only to Admission, the
Placing Shares in accordance with the Placing Agreement;
(c) certain publication of announcement obligations (including
with respect to this Announcement);
(d) the compliance by the Company with all its obligationswhich
are required to be performed or satisfied on or prior to
Admission;
(e) the respective obligations of Numis and Canaccord under the
Placing Agreement not having been terminated prior to Admission;
and
(f) Admission occurring by 8:00am on 2 June 2017 (or such later
time and date as Numis and Canaccord (acting together) may agree in
unity with the Company not being later than 8:00am on 16 June
2017).
4.2 If (i) any condition contained in the Placing Agreement in
relation to the Placing Shares is not fulfilled or waived by Numis
and Canaccord (acting together), by the respective time or date
where specified (or such later time or date as Numis and Canaccord
may agree in writing with the Company), (ii) any such condition
becomes incapable of being fulfilled or (iii) the Placing Agreement
is terminated in accordance with its terms, 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.
4.3 Numis and Canaccord may, acting together and in their sole
discretion and upon such terms as they think fit, waive compliance
by the Company with the whole or any part of any of the Company's
obligations in relation to the conditions in the Placing Agreement,
save that conditions (b) and (f) above relating to Admission may
not be waived. Any such extension or waiver will not affect the
Placees' commitments as set out in this Announcement.
4.4 Neither Numis nor Canaccord nor the Company shall have any
liability to any Placee (or to any other person whether acting on
behalf of a Placee or otherwise) in respect of any decision 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, and by
participating in the Placing each Placee agrees that any such
decision is within the absolute discretion of Numis and Canaccord
(acting together).
5. Termination of the Placing Agreement
5.1 Numis and Canaccord (acting together) are entitled, at any
time prior to Admission, to terminate the Placing Agreement in
respect of the Placing Shares in accordance with the terms of the
Placing Agreement by giving written notice to the Company in
certain circumstances, including but not limited to any of the
warranties given to Numis and Canaccord in the Placing Agreement,
which Numis and Canaccord (acting together) being untrue,
inaccurate or misleading in any material respect, the failure of
the Company to comply with its material obligations under the
Placing Agreement or the occurrence of a force majeure event which
prevents any party not seeking to terminate from performing its
obligations under the Placing Agreement.
5.2 By participating in the Placing, Placees agree that the
exercise by Numis and Canaccord of any right of termination or
other discretion under the Placing Agreement shall be within the
absolute discretion of Numis and Canaccord (acting together) that
it need not make any reference to Placees and that it nor the
Company (or its directors, officers or employees) shall have no
liability to Placees whatsoever in connection with any such
exercise.
6. No admission document or prospectus
6.1 No offering document, admission document or prospectus has
been or will be submitted to be approved by the FCA or submitted to
the London Stock Exchange in relation to the Placing or the Placing
Shares and Placees' commitments will be made solely on the basis of
the information contained in this Announcement (including this
Appendix) and the Exchange Information (as defined below).
6.2 Each Placee, by accepting a participation in the Placing,
agrees that the content of this Announcement is exclusively the
responsibility of the Company and confirms 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 Canaccord or any other
person and neither Numis nor Canaccord nor 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.
7. Registration and settlement
7.1 Settlement of transactions in the Placing Shares (ISIN:
GB00B11SZ269) following Admission will take place within the system
administered by Euroclear UK & Ireland Limited ("CREST"),
subject to certain exceptions. Numis or Canaccord reserve the right
to require settlement for, and delivery of, the Placing Shares (or
a portion thereof) to Placees in certificated form if, in their
opinion, delivery or settlement is not possible or practicable
within the CREST system within the timetable set out in this
Announcement or would not be consistent with the regulatory
requirements in any Placee's jurisdiction.
7.2 Each Placee allocated Placing Shares in the Placing will be
sent a contract note in accordance with the standing arrangements
in place with Numis or Canaccord (as applicable), stating the
number of Placing Shares allocated to it at the Placing Price, the
aggregate amount owed by such Placee to Numis or Canaccord (as
applicable) 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 standing CREST or
certificated settlement instructions that it has in place with
Numis or Canaccord (as applicable).
7.3 The Company will (via its registrar) deliver the Placing
Shares to a CREST account operated by Numis or Canaccord (as
applicable) as agent for the Company and Numis or Canaccord (as
applicable) will enter its delivery (DEL) instruction into the
CREST system. Numis or Canaccord (as applicable) will hold any
Placing Shares delivered to this account as nominee for the
Placees. The input to CREST by a Placee of a matching or acceptance
instruction will then allow delivery of the relevant Placing Shares
to that Placee against payment.
7.4 It is expected that settlement will take place on 2 June
2017 in accordance with the instructions set out in the contract
note.
7.5 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 the base rate of
Barclays Bank plc from time to time.
7.6 Each Placee agrees that, if it does not comply with these
obligations, Numis or Canaccord (as applicable) 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' or Canaccord's
account and benefit (as applicable), 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 stamp duty or stamp duty reserve tax (together with any
interest or penalties) which may arise upon the sale of such
Placing Shares on such Placee's behalf.
7.7 If Placing Shares are to be delivered to a custodian or
settlement agent, Placees should ensure that the contract note is
copied and delivered immediately to the relevant person within that
organisation.
7.8 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.
7.9 Placees will not be entitled to receive any fee or
commission in connection with the Placing.
8. Representations and warranties
8.1 By participating in the Placing, each Placee (and any person
acting on such Placee's behalf) acknowledges, undertakes,
represents, warrants and agrees (as the case may be) that:
(a) it has read and understood this Announcement (including the
Appendix) in its entirety and its subscription for the Placing
Shares is subject to and based on the terms and conditions of the
Placing as referred to and included in this Announcement and
undertakes not to redistribute or duplicate this Announcement;
(b) no offering document, admission document or prospectus has
been prepared in connection with the Placing and that it has not
received and will not receive a prospectus, admission document or
other offering document in connection with the Placing;
(c) the Ordinary Shares are admitted to trading on AIM, and the
Company is therefore required to publish certain business and
financial information in accordance with the AIM Rules and the
other applicable rules and practices of the London Stock Exchange
and/or the FCA (collectively "Exchange Information"), which
includes the Company's most recent balance sheet and profit and
loss account and that it is able to obtain or access such
information or comparable information concerning any other publicly
traded company without undue difficulty;
(d) (i) it has made its own assessment of the Company, the
Placing Shares and the terms and conditions of the Placing and has
relied on its own investigation of the business, financial or other
position of the Company in accepting a participation in the Placing
and has satisfied itself that the information is still current;
(ii) none of Numis, Canaccord, the Company, any of their respective
Affiliates or any person acting on behalf of any of them has
provided, or will provide it, with any material regarding the
Placing Shares in addition to this Announcement; and (iii) it has
not requested Numis, Canaccord, the Company or any of their
respective Affiliates or any person acting on behalf of any of them
to provide it with any such information;
(e) the content of this Announcement is exclusively the
responsibility of the Company and that none of Numis, Canaccord,
their Affiliates or any person acting on their behalf has or shall
have any liability for any information, representation or statement
contained in this Announcement or any information previously or
concurrently published by or on behalf of the Company and will not
be liable for any Placee's decision to participate in the Placing
based on any information, representation or statement contained in
this Announcement or elsewhere;
(f) the only information on which it has relied in committing
itself to subscribe for the Placing Shares is contained in this
Announcement and any Exchange Information and that it has not
received or relied on any information given or any representations,
warranties or statements, express or implied, made by Numis,
Canaccord or the Company or any of their Affiliates or any person
acting on behalf of any of them and none of Numis, Canaccord, the
Company, any of their Affiliates or any person acting on behalf of
any of them will be liable for its decision to accept an invitation
to participate in the Placing based on any information,
representation, warranty or statement other than that contained in
this Announcement and any Exchange Information;
(g) it has neither received nor relied on any confidential price
sensitive information concerning the Company in accepting this
invitation to participate in the Placing and is not purchasing
Placing Shares on the basis of material non-public information;
(h) it has the funds available to pay for the Placing Shares it
has agreed to subscribe for and acknowledges, agrees and undertakes
that it will pay the total subscription amount in accordance with
the terms of this Announcement on the due time and date set out
herein, failing which the relevant Placing Shares may be placed
with other Placees or sold at such price as Numis or Canaccord (as
applicable) determines;
(i) it: (i) is entitled to subscribe for the Placing Shares
under the laws of all relevant jurisdictions; (ii) has fully
observed such laws; (iii) has the requisite capacity and authority
and is entitled to enter into and to perform its obligations as a
subscriber for Placing Shares and will honour such obligations; and
(iv) has obtained all necessary consents and authorities
(including, without limitation, in the case of any person on whose
behalf it is acting, all necessary consents and authorities to
agree to the terms set out or referred to in this Announcement) to
enable it to enter into the transactions contemplated hereby and to
perform its obligations in relation thereto and, in particular, if
it is a pension fund or investment company it is aware of and
acknowledges it is required to comply with all applicable laws and
regulations with respect to its subscription for Placing
Shares;
(j) it is not, and any person who it is acting on behalf of is
not, and at the time the Placing Shares are subscribed will not be,
a resident of, or with an address in, the United States, Australia,
New Zealand, Canada, Japan or South Africa, and it acknowledges and
agrees that the Placing Shares have not been and will not be
registered or otherwise qualified under the securities legislation
of the United States, Australia, New Zealand, Canada, Japan or
South Africa and may not be offered, sold, or acquired, directly or
indirectly, within those jurisdictions;
(k) (i) the Placing Shares have not been and will not be
registered under the Securities Act or with any state or other
jurisdiction of the United States, nor approved or disapproved by
the US Securities and Exchange Commission, any state securities
commission in the United States or any other United States
regulatory authority, (ii) it will not offer, sell or deliver,
directly or indirectly, any Placing Shares in or into the United
States other than pursuant to an effective registration under the
Securities Act or in a transaction exempt from, or not subject to,
the registration requirements thereunder and in compliance with any
applicable securities laws of any state or other jurisdiction of
the United States, and (iii) it is outside of the United States,
not acting on a non-discretionary basis for the account or benefit
of a person located within the United States at the time the
undertaking to acquire the Placing Shares is given and is otherwise
acquiring the Placing Shares in an "offshore transaction" meeting
the requirements of Regulation S under the Securities Act;
(l) it is a person of a kind described in (i) Article 19(5)
(Investment Professionals) and/or 49(2) (high net worth companies
etc.) of the Financial Services and Markets Act 2000 (Financial
Promotion) Order 2005, as amended, and/or an authorised person as
defined in section 31 of FSMA; and (ii) section 86(7) of FSMA
("Qualified Investor"), being a person falling within Article
2.1(e) of Directive 2003/71/EC as amended (the "Prospectus
Directive"). For such purposes, it undertakes that it will acquire,
hold, manage and (if applicable) dispose of any Placing Shares that
are allocated to it for the purposes of its business only;
(m) it has only communicated or caused to be communicated and
will only communicate or cause to be communicated any invitation or
inducement to engage in investment activity (within the meaning of
section 21 of FSMA) relating to the Placing Shares in circumstances
in which section 21(1) of FSMA does not require approval of the
communication by an authorised person and it acknowledges and
agrees that this Announcement has not been approved by Numis or
Canaccord in their capacity as an authorised person under section
21 of FSMA and it may not therefore be subject to the controls
which would apply if it was made or approved as financial promotion
by an authorised person;
(n) it is aware of and acknowledges that it has complied with
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;
(o) it will not make any offer to the public of the Placing
Shares and has not offered or sold and will not offer or sell any
Placing Shares to persons in the United Kingdom or elsewhere in the
European Economic Area prior to Admission except to persons whose
ordinary activities involve them in acquiring, holding, managing or
disposing of investments (as principal or agent) for the purposes
of their business or otherwise in circumstances which have not
resulted in and which will not result in an offer to the public in
the United Kingdom within the meaning of section 85(1) of FSMA or
an offer to the public in any other member state of the European
Economic Area within the meaning of the Prospectus Directive (which
includes any relevant implementing measure in any Member State of
the European Economic Area);
(p) it has not been engaged to subscribe for the Placing Shares
on behalf of any other person who is not a Qualified Investor
unless the terms on which it is engaged enable it to make decisions
concerning the acceptance of offers of transferable securities on
the client's behalf without reference to the client as described in
section 86(2) of FSMA;
(q) it is aware of and acknowledges that it is required to
comply with its obligations in connection with money laundering
under the Proceeds of Crime Act 2002, the Terrorism Act 2000, the
Terrorism Act 2006 and the Money Laundering Regulations 2007 (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;
(r) it is aware of the obligations regarding insider dealing in
the Criminal Justice Act 1993, with all applicable provisions of
FSMA, the EU Market Abuse Regulation 596/2014 and the Proceeds of
Crime Act 2002 and confirms that it has and will continue to comply
with those obligations;
(s) the allocation, allotment, issue and delivery to it, or the
person specified by it for registration as a holder of Placing
Shares, will not give rise to a stamp duty or stamp duty reserve
tax liability under any of sections 67, 70, 93 or 96 of the Finance
Act 1986 (depositary receipts and clearance services) and that no
instrument under which it subscribes for Placing Shares (whether as
principal, agent or nominee) would be subject to stamp duty or the
increased rates referred to in those sections and that it, or the
person specified by it for registration as a holder of Placing
Shares, is not participating in the Placing as nominee or agent for
any person or persons to whom the allocation, allotment, issue or
delivery of Placing Shares would give rise to such a liability;
(t) it, or the person specified by it for registration as a
holder of the Placing Shares, will be liable for any stamp duty and
all other stamp, issue, securities, transfer, registration,
documentary or other duties or taxes (including any interest, fines
or penalties relating thereto), if any, payable on acquisition of
any of the Placing Shares or the agreement to subscribe for the
Placing Shares and acknowledges and agrees that none of Numis,
Canaccord the Company, any of their respective Affiliates or any
person acting on behalf of them will be responsible for any
liability to stamp duty or stamp duty reserve tax resulting from a
failure to observe this requirement. Each Placee and any person
acting on behalf of such Placee agrees to participate in the
Placing, and agrees to indemnify the Company, Canaccord and Numis
on an after--tax basis in respect of the same, on the basis that
the Placing Shares will be allotted to the CREST stock account of
Numis or Canaccord (as applicable) who will hold them as nominee on
behalf of such Placee until settlement in accordance with its
standing settlement instructions;
(u) none of Numis, Canaccord any of their Affiliates or any
person acting on behalf of any of them has or shall have any
liability for any information, representation or statement
contained in this Announcement or for any information previously
published by or on behalf of the Company or any other written or
oral information made available to or publicly available or filed
information or any representation, warranty or undertaking relating
to the Company, and will not be liable for its decision to
participate in the Placing based on any information,
representation, warranty or statement contained in this
Announcement or elsewhere, provided that nothing in this paragraph
shall exclude any liability of any person for fraud;
(v) none of Numis, Canaccord any of their Affiliates or 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 its participation in the Placing is on the basis that it is
not and will not be a client of Numis or Canaccord and that Numis
and Canaccord have no duties or responsibilities to it for
providing the protections afforded to its clients or customers
under the rules of the FCA, for providing advice in relation to the
Placing, in respect of any representations, warranties,
undertakings or indemnities contained in the Placing Agreement or
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;
(w) in order to ensure compliance with the Money Laundering
Regulations 2007, Numis and Canaccord (for themselves and as agents
on behalf of the Company) or the Company's registrars may, in their
absolute discretion, require verification of its identity. Pending
the provision to Numis, Canaccord or the Company's registrars, as
applicable, of evidence of identity, definitive certificates in
respect of the Placing Shares may be retained at Numis' and
Canaccord's absolute discretion or, where appropriate, delivery of
the Placing Shares to it in uncertificated form, may be retained at
Numis' or Canaccord's or the Company's registrars', as the case may
be, absolute discretion. If within a reasonable time after a
request for verification of identity Numis or Canaccord (for itself
and as agent on behalf of the Company) or the Company's registrars
have not received evidence satisfactory to them, Numis or Canaccord
and/or the Company may, at its absolute discretion, terminate its
commitment in respect of the Placing, in which event the monies
payable on acceptance of allotment will, if already paid, be
returned without interest to the account of the drawee's bank from
which they were originally debited;
(x) Numis and Canaccord may, and their Affiliates acting as an
investor for its or their own account(s) may, subscribe for and/or
purchase Placing Shares and, in that capacity may retain, purchase,
offer to sell or otherwise deal for its or their own account(s) in
the Placing Shares, any other securities of the Company or other
related investments in connection with the Placing or otherwise.
Accordingly, references in this Announcement to the Placing Shares
being offered, subscribed, acquired or otherwise dealt with should
be read as including any offer to, or subscription, acquisition or
dealing by, Numis, Canaccord and/or any of their respective
Affiliates acting as an investor for its or their own account(s).
Neither Numis nor Canaccord nor the Company intend to disclose the
extent of any such investment or transaction otherwise than in
accordance with any legal or regulatory obligation to do so;
(y) these terms and conditions and any agreements entered into
by it pursuant to these terms and conditions, 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, 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 the Company,
Canaccord or Numis 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;
(z) the Company, Canaccord and Numis and their respective
Affiliates and others will rely upon the truth and accuracy of the
foregoing agreements, acknowledgements, representations, warranties
and undertakings which are given to Numis and Canaccord, on their
own behalf and on behalf of the Company, and are irrevocable;
(aa) it irrevocably appoints any duly authorised officer of
Numis or Canaccord as agent for the purpose of executing and
delivering to the Company and/or its registrars any documents on
its behalf necessary to enable it to be registered as the holder of
any of the Placing Shares for which it agrees to subscribe or
purchase upon the terms of this Announcement;
(bb) it will indemnify on an after tax basis and hold the
Company, Numis, Canaccord and 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, undertakings, agreements
and acknowledgements in this Appendix and further agrees that the
provisions of this Appendix shall survive after completion of the
Placing;
(cc) it has knowledge and experience in financial, business and
international investment matters and is required to evaluate the
merits and risks of subscribing for the Placing Shares; (ii) it is
experienced in investing in securities of this nature and is aware
that it may be required to bear, and is able to bear, the economic
risk of, and is able to sustain a complete loss in connection with
the Placing; and (iii) it has relied upon its own examination and
due diligence of the Company and its associates taken as a whole,
and the terms of the Placing, including the merits and risks
involved and has satisfied itself concerning the relevant tax,
legal, currency and other economic consideration relevant to its
subscription for Placing Shares; and
(dd) its commitment to subscribe for Placing Shares on the terms
set out herein and in the contract note will continue
notwithstanding any amendment that may in future be made to the
terms 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 conduct of the Placing.
8.2 The representations, warranties, acknowledgements and
undertakings contained in this Appendix are given to the Company,
and to Numis and Canaccord for themselves and on behalf of the
Company and are irrevocable.
8.3 The agreement to settle a Placee's subscription (and/or the
subscription of a person for whom such Placee is contracting as
agent) free of stamp duty and stamp duty reserve tax depends on the
settlement relating only to a subscription by it and/or such person
direct from the Company for the Placing Shares in question. Such
agreement assumes that the Placing Shares are not being subscribed
for in connection with arrangements to issue depositary receipts or
to transfer the Placing Shares into a clearance service. If there
are any such arrangements, or the settlement relates to any other
subsequent dealing in the Placing Shares, UK stamp duty or stamp
duty reserve tax may be payable, for which neither the Company nor
Numis nor Canaccord will be responsible, and the Placee to whom (or
on behalf of whom, or in respect of the person for whom it is
participating in the Placing as an agent or nominee) the
allocation, allotment, issue or delivery of Placing Shares has
given rise to such UK stamp duty or stamp duty reserve tax
undertakes to pay such UK stamp duty or stamp duty reserve tax
forthwith and to indemnify on an after-tax basis and to hold
harmless the Company and Numis and Canaccord in the event that any
of the Company and/or Numis and/or Canaccord have incurred any such
liability to UK stamp duty or stamp duty reserve tax. If this is
the case, each Placee should seek its own advice and notify Numis
and Canaccord accordingly.
8.4 In addition, Placees should note that they will be liable
for any stamp duty and all other stamp, issue, securities,
transfer, registration, documentary or other duties or taxes
(including any interest, fines or penalties relating thereto)
payable outside the United Kingdom by them or any other person on
the subscription by them of any Placing Shares or the agreement by
them to subscribe for any Placing Shares.
8.5 Each Placee, and any person acting on behalf of the Placee,
acknowledges and agrees that neither Numis nor Canaccord owe any
fiduciary or other duties to any Placee in respect of any
representations, warranties, undertakings or indemnities in the
Placing Agreement.
8.6 Each Placee and any person acting on behalf of each Placee,
acknowledges and agrees that neither Numis, Canaccord nor any of
their Affiliates may, at their absolute discretion, agree to become
a Placee in respect of some or all of the Placing Shares.
8.7 When a Placee or person acting on behalf of the Placee is
dealing with Numis or Canaccord, any money held in an account with
Numis or Canaccord (as applicable) 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 and agrees 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 Numis' or Canaccord's money (as applicable) in
accordance with the client money rules and will be used by Numis or
Canaccord in the course of its own business; and the Placee will
rank only as a general creditor of Numis or Canaccord (as
applicable).
8.8 Past performance is no guide to future performance and
persons needing advice should consult an independent financial
adviser.
8.9 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.
8.10 All times and dates in this Announcement may be subject to
amendment. Numis and Canaccord shall notify the Placees and any
person acting on behalf of a Placee of any changes.
DEFINITIONS
The following definitions apply throughout this Announcement
unless the context otherwise requires:
"Admission" - admission of the Placing Shares to trading on AIM
becoming effective in accordance with the AIM Rules
"AIM " - the market of that name operated by the London Stock
Exchange
"AIM Rules" - the AIM Rules for Companies published by the
London Stock Exchange as they may be amended and replaced from time
to time
"Announcement" - this announcement (including the Appendix to
this announcement)
"Canaccord" - Canaccord Genuity Limited
"Company" - Velocys plc
"CREST" - the relevant system (as defined in the Uncertificated
Securities Regulations 2001) for the paperless settlement of trades
and the holding of uncertificated securities operated by Euroclear
UK & Ireland Limited
"FCA" - the Financial Conduct Authority
"FSMA" - the Financial Services and Markets Act of 2000 (as
amended)
"Group" - the Company and its subsidiary undertakings prior to
completion of the Acquisition
"London Stock Exchange" - London Stock Exchange plc
"Numis" - Numis Securities Limited
"Ordinary Shares" - ordinary shares of 1 pence each in the
capital of the Company
"Placing" - the conditional placing of the Placing Shares at the
Placing Price by Numis and Canaccord as agents for and on behalf of
the Company pursuant to the terms of the Placing Agreement
"Placing Agreement" - the agreement dated on or around 15 May
2017 between the Company, Canaccord and Numis relating to the
Placing
"Placing Price" - 45 pence per Placing Share
"Placing Shares" - 2,577,777 new Ordinary Shares to be issued in
connection with the Placing
"Prospectus Directive" - the Directive of the European
Parliament and of the Council of the European Union 2003/71/EC, as
amended
"Securities Act" - the United States Securities Act of 1933, as
amended
"UK" or "United Kingdom" - the United Kingdom of Great Britain
and Northern Ireland
"United States" or "US" - United States of America, its
territories and possessions, any state of the United States of
America and the District of Columbia and all other areas subject to
its jurisdiction
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCUVUSRBKAVAAR
(END) Dow Jones Newswires
May 15, 2017 10:35 ET (14:35 GMT)
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