TIDMSCE
RNS Number : 2267M
Surface Transforms PLC
19 January 2021
19 January 2021
THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS
RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN
WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM THE
UNITED STATES, AUSTRALIA, NEW ZEALAND, CANADA, JAPAN OR THE
REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH SUCH
RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.
THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT
CONSTITUTE OR CONTAIN ANY INVITATION, SOLICITATION, RECOMMATION,
OFFER OR ADVICE TO ANY PERSON TO SUBSCRIBE FOR, OTHERWISE ACQUIRE
OR DISPOSE OF ANY SECURITIES IN SURFACE TRANSFORMS PLC OR ANY OTHER
ENTITY IN ANY JURISDICTION. NEITHER THIS ANNOUNCEMENT NOR THE FACT
OF ITS DISTRIBUTION SHALL FORM THE BASIS OF, OR BE RELIED ON IN
CONNECTION WITH, ANY INVESTMENT DECISION IN RESPECT OF SURFACE
TRANSFORMS PLC.
THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED BY
THE COMPANY TO CONSTITUTE INSIDE INFORMATION STIPULATED UNDER THE
MARKET ABUSE REGULATION (EU) NO. 596/2014 ("MAR"). UPON THE
PUBLICATION OF THIS ANNOUNCEMENT VIA THE REGULATORY INFORMATION
SERVICE, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE
PUBLIC DOMAIN.
SURFACE TRANSFORMS PLC
("Surface Transforms" or the "Company")
Proposed conditional Placing to raise GBP17.9 million via an
accelerated bookbuild,
Subscription to raise GBP0.1 million and
Open Offer to raise up to a further GBP2.0 million
Surface Transforms (AIM:SCE), manufacturers of carbon fibre
reinforced ceramic automotive brake discs, is pleased to announce a
proposed conditional Placing to raise GBP17.9 million (before
expenses) at the Issue Price of 50 pence per Ordinary Share.
The net proceeds of the Placing will be used to fund the
construction cost of OEM Production Cell Two, machinery
improvements within OEM Production Cell One and for general working
capital purposes, particularly needed should either or both of two
potentially significant opportunities with the "carry over" of
parts onto new models with OEM 8 and a possible new customer, OEM
9, award supply contracts to the Company. OEM 9 is a new entrant to
the EV market.
The Placing will be conducted by way of an accelerated Bookbuild
which will be launched immediately following this Announcement, in
accordance with the terms and conditions set out in the Appendix to
this Announcement.
KEY HIGHLIGHTS
-- Proposed Placing of up to GBP17.9 million (before expenses)
with institutional investors, proposed Subscription of GBP0.1
million by certain of the Directors (before expenses) and proposed
Open Offer of up to GBP2.0 million (before expenses) with existing
Shareholders, in each case at the Issue Price.
-- The Company intends to use the net proceeds of the proposed
Placing and Subscription to build a second OEM Production Cell at
Knowsley, together with some other capital expenditure improvements
to the existing OEM Production Cell One and for general working
capital purposes, particularly needed should either or both of two
potentially significant opportunities with the "carry over" of
parts onto new models with OEM 8 and a possible new customer, OEM
9, award supply contracts to the Company. OEM 9 is a new entrant to
the EV market.
-- Any monies received under the Open Offer will be used to
further support the Company's strategy and general working capital
purposes.
-- The Issue Price represents a discount of approximately 11.0%
per cent. to the volume weighted average price of 56.3263 pence per
Ordinary Share for the period from 5 to 19 January 2021 being the
period following the Company's last Trading Update to the date of
this Announcement.
-- Zeus Capital is acting as Nominated Adviser and Joint
Bookrunner and finnCap is acting as Joint Bookrunner in connection
with the Placing.
-- Completion of the Fundraising is subject to, inter alia,
Shareholder approval which will be sought at a General Meeting of
the Company, expected to be held at 10:00 a.m. on 8 February
2021.
The timing for the close of the Bookbuild and allocation of the
Placing Shares shall be at the absolute discretion of the Joint
Bookrunners, in consultation with the Company. The final number of
Placing Shares to be issued pursuant to the Placing will be agreed
by the Joint Brokers and the Company at the close of the Bookbuild.
The result of the Placing will be announced as soon as practicable
thereafter. The Placing is not underwritten.
In addition, certain of the Directors have indicated an
intention to participate in the Fundraising (by way of a direct
Subscription for new Ordinary Shares) as follows:
Director Intended Subscription Number of Subscription
Shares
David Bundred GBP25,000 50,000
Richard Gledhill GBP100,000 200,000
In addition to the Placing and Subscription, the Company intends
to provide all Qualifying Shareholders with the opportunity to
subscribe for an aggregate of up to 4,000,000 Open Offer Shares at
the Issue Price of 50 pence per Open Offer Share to raise up to
approximately GBP2.0 million (before expenses). Shareholders
subscribing for their full entitlement under the Open Offer may
also request additional Open Offer Shares through an excess
application facility. The Open Offer is not underwritten.
The issue of the Placing Shares, the Subscription Shares and the
Open Offer Shares are conditional, inter alia, on the passing by
Shareholders of the Resolutions at the General Meeting of the
Company, expected to be held at 10:00 a.m. on 8 February 2021.
A circular containing further details of the Placing, the
Subscription and the Open Offer, notice of General Meeting, proxy
form and Open Offer Application Form will be despatched to
Shareholders following announcement of the result of the Placing
and Subscription and will thereafter be available on the Company's
website at www.surfacetransforms.com .
Pursuant to the Stay at Home Order introduced by the UK
Government on 6 January 2021 to manage the Covid-19 virus
(coronavirus), public gatherings of more than two people and
non-essential travel are currently prohibited. The Company will
therefore convene the General Meeting with the minimum quorum of
two shareholders necessary to conduct the meeting, being the
Company's Chief Executive, Kevin Johnson (acting as Chairman) and
the Company's Finance Director, Michael Cunningham. All other
Shareholders must not seek to attend the General Meeting in
person.
Applications will be made to the London Stock Exchange for the
admission of the Placing Shares, Subscription Shares and Open Offer
Shares to be admitted to trading on AIM. First Admission of the
EIS/VCT Qualifying Placing Shares is expected to commence at 8:00
a.m. on 9 February 2021 and Second Admission of the Placing Shares
(excluding the EIS/VCT Placing Shares), the Subscription Shares and
the Open Offer Shares is expected to commence at 8:00 a.m. on 10
February 2021.
The New Ordinary Shares, when issued, will be fully paid and
will rank pari passu in all respects with the Existing Ordinary
Shares.
The Appendix to this Announcement (which forms part of this
Announcement) contains the detailed terms and conditions of the
Placing.
David Bundred, Non-Executive Chairman of Surface Transforms,
commented:
"This funding will enable the Company to move to the next stage
of its development - the building of OEM Production Cell Two will
provide revenue capacity of GBP35 million at Knowsley from 2022,
and enabling us to fulfil contracts we are confident of being
awarded in the near future."
Kevin Johnson, Chief Executive Officer of Surface Transforms,
added:
"This decision to invest ahead of contract award reflects both
our confidence in the strength of our pipeline - and our
realisation that the new disruptive OEMs operate to different
timescales than our other customers. The automotive industry is
changing with electric vehicles central to this, and we are
delighted to be a part of it."
For further information, please contact:
Surface Transforms plc +44 151 356 2141
David Bundred, Chairman
Kevin Johnson, CEO
Michael Cunningham, CFO
Zeus Capital Limited (Nominated Adviser and
Joint Broker) +44 203 829 5000
David Foreman / Dan Bate / Jordan Warburton (Corporate
Finance)
Dominic King (Corporate Broking)
finnCap Ltd (Joint Broker) +44 20 7220 0500
Ed Frisby / Giles Rolls (Corporate Finance)
Richard Chambers (ECM)
T he person responsible for arranging the release of this
Announcement on behalf of the Company is Michael Cunningham,
Finance Director.
Introduction to the Fundraise
Surface Transforms announces that it proposes to raise GBP17.9
million by means of a conditional Placing of 35,750,000 Placing
Shares at the Issue Price of 50 pence per Ordinary Share. In
addition, the Company proposes to raise GBP0.1 million by way of a
Subscription by certain of the Directors and up to GBP2.0 million
by way of an Open Offer.
The Fundraising is conditional on, inter alia, the passing of
the Resolutions and admission of the Placing Shares, Subscription
Shares and Open Offer Shares to trading on AIM.
Automotive market drivers
There are compelling drivers for the increasing adoption of
carbon ceramic brakes, with the likes of AMG, Aston Martin, Audi,
Bentley, BMW, General Motors, Corvette, Ferrari, Jaguar, Land
Rover, Lamborghini, Koenigsegg, McLaren, Nissan, Porsche and VW now
offering carbon ceramic brakes on selected vehicles.
The drivers for adoption of carbon ceramic brakes are
multi-faceted and include:
-- Technological: carbon ceramic discs provide superior braking
performance than iron discs being both stronger and more durable as
well as being able to dissipate more heat - increased heat
evacuation reduces the brake temperature which improves
performance. In addition, carbon ceramic discs can be up to 70 per
cent. lighter - in certain instances each carbon ceramic brake disc
being 25 kg lighter resulting in a total chassis weight reduction
of 100 kg;
-- Environmental: reduced chassis weight results in lower CO2
emissions. In addition, carbon ceramic discs produce significantly
less brake pad dust pollution than iron discs;
-- Competition: SGL Brembo are currently the leading carbon
ceramic brake disc manufacturer by volume with a near monopolistic
position. Automotive OEMs desire de-risked supply arrangements
wherever possible. The Board consider Surface Transforms to be the
only credible alternative supplier of carbon ceramic brakes to SGL
Brembo;
-- Lifetime and total cost of ownership: Carbon ceramic discs
last approximately four times longer than iron discs. This
increased service life therefore has a commensurate reduction in
the total cost of ownership;
-- Quality: Carbon ceramic discs provide enhanced handling,
comfort and performance compared with heavier iron discs; and
-- Aesthetics: Carbon ceramic discs are desirable, especially
when combined with colourful calipers, and because they do not
corrode like iron discs, they generate significantly less brake
dust resulting in cleaner wheels.
The EV market is becoming more prominent in the wider automotive
space, led by stringent rules in the EU, California and Japan to
reduce carbon emissions. In addition to the above, weight saving on
EVs can mean smaller, cheaper batteries - the main expense for EVs
- can be used, or that their range is increased.
Knowsley revenue capacity and capacity planning
Surface Transforms' manufacturing facility at Knowsley totals
approximately 55,000 sq ft. The site has purposefully been
configured to provide significant capacity expansion when required
and comprises a SVP cell (of 5,000 sq ft) and five distinct OEM
production cells (covering 37,000 sq ft in total).
Revenue capacity of OEM Production Cell One plus the existing
SVP cell is approximately GBP20m. This capacity will be available
in Q2 2021.
As reported in the Company's Trading Update on 5 January 2021,
Surface Transforms has existing customer contracts stretching into
2024 and 2025 which provide the Board with reasonable confidence on
expected average selling prices going forward. Consequently, the
Board currently consider the total annual revenue capacity of the
SVP cell and all five OEM production cells at Knowsley to be circa
GBP75m.
Historically, capacity planning has been relatively straight
forward. Discussions with OEM 1 to OEM 7 worked on the principle of
a circa two-year period between contract award and start of
production. Customer capacity requirements were agreed as part of
the contract award. The resultant building and demonstration of
production capacity by Surface Transforms was expected to take
circa 18 months leaving some contingency before vehicle start of
production. As further described below, certain other OEMs are now
requiring a more compressed timeline between contract award and
start of production.
Progress with OEM customers
During the last 18 months, the Company has been nominated on
five new vehicles by four different OEMs, providing an expected
revenue pipeline of GBP43m(1) in total with these new vehicles
starting production from H2 2021. The Company continues to work
both with a number of potential new OEM customers and, increasingly
importantly, the use of existing product approvals with current OEM
customers on their future models (known in the automotive industry
as "carry over"). Test programmes are proceeding to plan and the
Board is confident that Surface Transforms will be awarded
contracts on further OEM vehicles in the near future.
Considering only existing contracts and expected volumes and
average selling prices, the Board estimate forecast revenue will be
approximately GBP7m in FY21, GBP13m in FY22 and GBP17m in FY23.
In terms of immediacy and quantum, two significant further
opportunities are carry over of parts onto new models with OEM 8
and a potential new customer, OEM 9. OEM 9 is a new entrant to the
EV market. There can be no guarantee that Surface Transforms will
be awarded supply contracts to either of these OEMs or, even if
awarded, what the actual vehicle volumes will transpire to be.
It should be noted that OEM 8 and OEM 9 operate quite
differently to Surface Transforms' other existing OEM customers
including requiring a more compressed 12-15 month (not 24 month)
period between contract award and start of production. The existing
OEM 8 contract award followed this compressed timeline, but Surface
Transforms will have available capacity in OEM Production Cell One
to satisfy anticipated volumes. However, should OEM 8 proceed to
carry over parts to new models, or OEM 9 contract with Surface
Transforms, the Company will not have available production
capacity.
If OEM 9 contracts with Surface Transforms, capacity planning
thresholds at Knowsley will be breached from mid FY22 onwards.
Alternatively, if OEM 9 did not contract, but OEM 8 proceeded to
carry over Surface Transforms discs to new models, Surface
Transforms would similarly have insufficient capacity during FY23.
Should contracts be awarded from both OEM 8 and OEM 9, a new OEM
Production Cell Two would become fully utilised in H2-23.
(1) This is based on the Directors' expectations and their
understanding of the relevant OEMs production plan and estimated
demand for discs.
Reasons for the Fundraising
As set out above, the Company is very pleased with recent
discussions and progress made with other new OEMs to build upon its
current contract expected revenue pipeline of GBP43 million(2) .
Since the start of the financial year, no new nominations have been
made but should one or more be awarded to Surface Transforms, the
Board considers that they would likely be material.
OEM Production Cell Two is capable of providing annual revenue
capacity of GBP15 million, increasing Company revenue capacity to
approximately GBP35m per annum. It is expected to be production
ready by Q3-22. At full capacity, the return on investment is
estimated by the Board to be circa 15 months.
Given the compressed start of production timelines required by
OEM 8 and OEM 9, the Board consider it sensible to build capacity
ahead of any such contract awards.
It is possible that neither OEM 8 nor OEM 9 will award any new
contract to the Company. However, based on their dealings with the
OEMs and their understanding of the OEMs' production plans, the
Directors are of the opinion that there has been continued progress
with OEM 1, OEM 3 (also covering OEM 4), OEM 6 and three new
potential OEM customers are progressing well with numerous new
vehicle launches being targeted for 2024. Indeed, the prospective
contract pipeline has the potential to exceed the entire production
capacity of Knowsley by 2025. Accordingly, the Board are confident
that production capacity of a new OEM Production Cell Two will be
required in due course, regardless of new contracts being awarded
by either or both OEM 8 or OEM 9 to the Company.
(2) This is based on the Directors' expectations and their
understanding of the relevant OEMs production plan and estimated
demand for discs
Use of proceeds
Net proceeds of the Placing and Subscription are expected to be
c.GBP17.0 million. The construction cost of OEM Production Cell Two
is approximately GBP9.2 million. A further GBP0.7 million is to be
allocated for machinery improvements to OEM Production Cell
One.
Forecast increased production will require additional investment
in working capital. The balance of the net proceeds will therefore
be allocated for future general working capital requirements and
together with the Open Offer, to the extent it is taken up, provide
further working capital headroom, as well as the flexibility to
respond quickly to other opportunities or requirements that present
themselves, such as incremental capital expenditure improvements
and ad hoc projects.
Trading update
Revenue for the year ended 31 December 2020 was GBP2.0 million
(2019: GBP1.9 million). Cash as at 31 December was GBP1.1 million
(2019: GBP0.8 million). To this cash sum can be added an estimated
GBP0.6 million tax credit, expected to be received in June 2021.
Other interest-bearing loans and asset finance totalled GBP0.5
million (2019: GBP0.6 million).
The Company has maintained operations throughout the Covid-19
pandemic and whilst all OEM customers have been impacted, the
Company has continued to win new contracts in each of its OEM, near
OEM and retrofit customer segments.
Despite a number of senior management, engineers and developers
being furloughed in response to Covid-19 in 2020, the remaining
workforce continued progressing all existing engineering on the
Company's other new OEMs as part of its prospective contract
pipeline. The Board maintain the action taken was appropriate and
that they achieved an appropriate balance given the tangible
progress on OEM testing that has since been achieved. The Company
is now in recruitment phase and investing in staff at all levels to
ensure the Company has the necessary expertise, experience and
resource to deliver its expected growth of production.
The Placing
The Directors have given careful consideration as to the
structure of the proposed Fundraising and have concluded that the
Placing, the Subscription and the proposed Open Offer are the most
suitable fundraising options available to the Company and
Shareholders at this time.
The Company is seeking to conditionally raise up to GBP17.9
million cash by means of the Placing of up to 35,750,000 Placing
Shares, at the Issue Price for the benefit of the Company.
The Directors believe that up to 4,000,000 new Ordinary Shares
to be issued pursuant to the Placing (hereinafter, the "EIS/VCT
Placing Shares") will rank as "eligible shares" for the purposes of
EIS and will be capable of being a "qualifying holding" for the
purposes of investment by VCTs. Further details as regards VCT and
EIS reliefs and their availability are set out below. The remaining
31,750,000 Placing Shares will not rank as "eligible shares" for
the purposes of EIS.
The Issue Price represents a discount of approximately 11.0 per
cent. to the volume weighted average price of 56.3263 pence per
Ordinary Share for the period from 5 to 19 January 2021 being the
period following the Company's last Trading Update to the date of
this Announcement. The Issue Price also represents a discount of
approximately 17.0 per cent. to the closing mid-market price per
Ordinary Share of 60.5 pence on 19 January 2021, being the date of
this Announcement.
The Placing is being conducted via an accelerated bookbuild
process which will commence immediately following the release of
this Announcement. The Placing is not being underwritten. The
Placing Shares are not subject to clawback and are not part of the
Open Offer.
The timing for the close of the Bookbuild and the allocation of
the Placing Shares shall be at the absolute discretion of the Joint
Bookrunners, in consultation with the Company. The final number of
Placing Shares to be issued pursuant to the Placing will be agreed
by the Joint Bookrunners and the Company at the close of the
bookbuild and the results of the Placing will be announced as soon
as practicable thereafter.
The Placing Agreement
Pursuant to the terms of the Placing Agreement, the Joint
Bookrunners, as agents to the Company, have conditionally agreed to
use their reasonable endeavours to procure Placees for the Placing
Shares to be issued under the Placing. The Placing is conditional,
inter alia, upon the following:
-- the Joint Bookrunners having received legally binding commitments
from Placees to subscribe for the Placing Shares;
-- the passing, without amendment, of the Resolutions at the
General Meeting;
-- First Admission, which is expected to take place on the
First Admission Date with dealings in the First Tranche
Shares on AIM commencing at First Admission Date (or such
later time and/or date as may be agreed between the Company
and the Joint Bookrunners, being no later than 8.00 a.m.
on the Long Stop Date);
-- Second Admission, which is expected to take place on the
Second Admission Date with dealings in the Second Tranche
Shares on AIM commencing at Second Admission Date (or such
later time and/or date as may be agreed between the Company
and the Joint Bookrunners, being no later than 8.00 a.m.
on the Long Stop Date); and
-- the Placing Agreement becoming unconditional in all respects
(save for the condition relating to Admission) and not having
been terminated in accordance with its terms.
If: (i) any of the conditions contained in the Placing
Agreement, including those described above, are not fulfilled or
(where applicable) waived by the Joint Bookrunners by the
respective time or date where specified; (ii) any of such
conditions becomes incapable of being fulfilled; or (iii) the
Placing Agreement is terminated, the Placing will not proceed and
the Placees' rights and obligations hereunder in relation to the
Placing Shares shall cease and terminate at such time and each
Placee agrees that no claim can be made by the Placee in respect
thereof. The Placing is not conditional on the Open Offer
proceeding or on any minimum take-up under the Open Offer.
Subscription
In addition to the Placing, certain of the Directors have
indicated an intention to participate in the Fundraising (by way of
a direct Subscription for new Ordinary Shares at the Issue Price)
as follows:
Director Intended Subscription Number of Subscription
Shares
David Bundred GBP25,000 50,000
Richard Gledhill GBP100,000 200,000
The Subscription Shares, when issued and fully paid, will rank
equally in all respects with the Existing Ordinary Shares. The
Subscription is conditional upon, inter alia, the approval of
Shareholders of the Resolutions at the General Meeting and upon the
Placing Agreement becoming unconditional in all respects.
The Subscription Shares will not rank as "eligible shares" for
the purposes of EIS.
Application will be made to the London Stock Exchange for
admission of the Subscription Shares to trading on AIM. Admission
of the Subscription Shares is expected to take place, and dealings
on AIM are expected to commence, at 8.00 a.m. on 10 February
2021.
Open Offer
In order to provide all Qualifying Shareholders with an
opportunity to participate, the Company is intending to conduct an
Open Offer to provide those shareholders the opportunity to
subscribe at the Issue Price for an aggregate of 4,000,000 Open
Offer Shares. This will allow Qualifying Shareholders to
participate on a pre-emptive basis whilst providing the Company
with the flexibility to raise additional equity capital to further
improve its financial position.
Qualifying Shareholders will also be offered the opportunity to
apply for additional Open Offer Shares in excess of their pro rata
entitlements to the extent that other Qualifying Shareholders do
not take up their entitlements in full. In the event applications
exceed the maximum number of Open Offer Shares available, the
Company will decide on the basis for allocation. The Open Offer
Shares will not be placed subject to clawback nor will they be
underwritten. Consequently, there may be fewer than 4,000,000 Open
Offer Shares issued pursuant to the Open Offer.
The Open Offer is conditional upon, inter alia, the approval of
Shareholders of the Resolutions at the General Meeting and upon the
Placing Agreement becoming unconditional in all respects.
The Directors believe that upon First Admission, the gross
assets of the Company will exceed the maximum limit set out within
the qualifying rules for EIS and VCT. Accordingly, the Open Offer
Shares will not rank as "eligible shares" for the purposes of EIS,
nor will they be capable of being a "qualifying holding" for the
purposes of investments by VCTs.
Application will be made to the London Stock Exchange for
admission of the Open Offer Shares to trading on AIM. Admission of
the Open Offer Shares is expected to take place, and dealings on
AIM are expected to commence, at 8.00 a.m. on 10 February 2021.
EIS and VCT
The following information is based upon the laws and practice
currently in force in the UK and may not apply to persons who do
not hold their Ordinary Shares as investments.
The Directors believe that the EIS/VCT Placing Shares to be
issued pursuant to the Fundraising will rank as "eligible shares"
for the purposes of EIS and will be capable of being a "qualifying
holding" for the purposes of investment by VCTs. Further details as
regards VCT and EIS reliefs are set out below. The Directors
believe that upon First Admission, the Company will meet the
maximum limit of the gross assets test set out within the
qualifying rules for EIS and VCT. Accordingly, neither the
Subscription Shares nor the Open Offer Shares will rank as
"eligible shares" for the purposes of EIS, nor will they be capable
of being a "qualifying holding" for the purposes of investment by
VCTs.
On issue, the New Ordinary Shares will not be treated as either
"listed" or "quoted" securities for relevant tax purposes. Provided
the Company remains one which does not have any of its shares
quoted on a recognised stock exchange (which for these purposes
does not include AIM), the New Ordinary Shares should continue to
be treated as unquoted securities.
Potential shareholders or Shareholders of the Company who are in
any doubt as to their tax position or who are subject to tax in
jurisdictions other than the UK are strongly advised to consult
their own independent financial adviser immediately.
The Company has applied for and obtained assurance from HMRC
that the EIS/VCT Placing Shares will be "eligible shares" for the
purposes of EIS and the Directors believe that the EIS/VCT Placing
Shares will be "eligible shares" for the purposes of investment by
VCTs. The status of the EIS/VCT Placing Shares as a qualifying
holding for VCTs will be conditional, inter alia, upon the Company
continuing to satisfy the relevant requirements. Although the
Company currently expects to satisfy the relevant conditions for
VCT investment, neither the Directors nor the Company gives any
warranty or undertaking that relief will be available in respect of
any investment in the Placing Shares pursuant to this document, nor
do they warrant or undertake that the Company will conduct its
activities in a way that qualifies for or preserves its status.
As the rules governing EIS and VCT reliefs are complex and
interrelated with other legislation, if Shareholders and potential
shareholders are in any doubt as to their tax position, require
more detailed information that the general outline above, or are
subject to tax in a jurisdiction other than the United Kingdom,
they should consult their professional adviser.
Investor presentation
The Company will provide a live presentation to investors and
any other interested parties via Hardman & Co's platform at
4:00 p.m. on 25 January 2021. Interested parties can register for
the presentation at
https://zoom.us/webinar/register/WN_7OKl7yGVTFaK-e_y89aTbg
Surface Transforms is committed to ensuring that there are
appropriate communication structures for all its Shareholders.
Questions can be submitted in advance as well as during the event
via the "Ask a Question" function. Although management may not be
in a position to answer every question received, they will address
the most prominent ones within the confines of information already
disclosed to the market. Responses to questions from the live
presentation will be published at the earliest opportunity on the
Company's website.
Expected timetable of principal events
Announcement of the Fundra i se 19 January 2021
Record Date for the Open Offer Close of Business on 19 January
2021
Announcement of t he result of the 20 January 2021
Placing and Subscription
Despatch of t he Circular 20 January 2021
General Meeting 10.00 a.m. on 8 February
2021
Admission of the EIS/VCT Placing 8.00 a.m. on 9 February 2021
Shares to trading on AIM
Admission of the remaining Placing 8.00 a.m. on 10 February
Shares, the Subscription Shares) 2021
and Open Offer Shares to trading
on AIM
Irrevocable commitments
The Directors (or persons connected with the Directors within
the meaning of sections 252 - 255 of the Act), who in aggregate
hold 18,494,994 Existing Ordinary Shares, representing
approximately 11.9 per cent. of the Existing Ordinary Share Capital
of the Company, have irrevocably undertaken to vote in favour of
the Resolutions at the General Meeting and not to subscribe for any
of the Open Offer Shares.
Important information
This Announcement is for information purposes only and does not
itself constitute an offer or invitation to underwrite, subscribe
for or otherwise acquire or dispose of any securities in the
Company and does not constitute investment advice.
Neither this Announcement nor any copy of it may be taken or
transmitted, published or distributed, directly or indirectly, in
or into the United States, Australia, New Zealand, Canada, Japan or
the Republic of South Africa or to any persons in any of those
jurisdictions or any other jurisdiction where to do so would
constitute a violation of the relevant securities laws of such
jurisdiction. Any failure to comply with this restriction may
constitute a violation of the securities laws of any state or
territory of the United States, Australia, New Zealand, Canada,
Japan or the Republic of South Africa. The distribution of this
Announcement in other jurisdictions may be restricted by law and
persons into whose possession this Announcement comes should inform
themselves about, and observe any such restrictions.
Any failure to comply with these restrictions may constitute a
violation of the securities laws of any such jurisdiction. Neither
this Announcement nor any part of it nor the fact of its
distribution shall form the basis of or be relied on in connection
with or act as an inducement to enter into any contract or
commitment whatsoever.
In particular, the Placing Shares have not been and will not be
registered under the US Securities Act, or under the securities
laws or with any securities regulatory authority of any state or
other jurisdiction of the United States, and accordingly the
Placing Shares may not be offered, sold, pledged or transferred,
directly or indirectly, in, into or within the United States except
pursuant to an exemption from the registration requirements of the
US Securities Act and the securities laws of any relevant state or
other jurisdiction of the United States. There is no intention to
register any portion of the Placing in the United States or to
conduct a public offering of securities in the United States or
elsewhere.
Zeus Capital is authorised and regulated in the United Kingdom
by the FCA and is acting as nominated adviser and joint bookrunner
to the Company in respect of the Placing. finnCap is authorised and
regulated in the United Kingdom by the FCA and is acting as joint
bookrunner to the Company in respect of the Placing. Each of Zeus
Capital and finnCap is acting for the Company and for no-one else
in connection with the Placing, and will not be treating any other
person as its client in relation thereto, and will not be
responsible for providing the regulatory protections afforded to
its customers nor for providing advice in connection with the
Placing or any other matters referred to herein and apart from the
responsibilities and liabilities (if any) imposed on Zeus Capital
or finnCap, as the case may be, by FSMA, any liability therefor is
expressly disclaimed. Any other person in receipt of this
Announcement should seek their own independent legal, investment
and tax advice as they see fit.
Forward-looking statements
This Announcement contains statements about Surface Transforms
that are, or may be deemed to be, "forward-looking statements".
All statements, other than statements of historical facts,
included in this Announcement may be forward-looking statements.
Without limitation, any statements preceded or followed by, or that
include, the words "targets", "plans", "believes", "expects",
"aims", "intends", "will", "may", "should", "anticipates",
"estimates", "projects", "would", "could", "continue" or words or
terms of similar substance or the negative thereof, are
forward-looking statements. Forward-looking statements include,
without limitation, statements relating to the following: (i)
future capital expenditures, expenses, revenues, earnings,
synergies, economic performance, indebtedness, financial condition,
dividend policy, losses and future prospects and (ii) business and
management strategies and the expansion and growth of the
operations of Surface Transforms.
These forward-looking statements are not guarantees of future
performance. These forward-looking statements involve known and
unknown risks, uncertainties and other factors which may cause the
actual results, performance or achievements of any such person, or
industry results, to be materially different from any results,
performance or achievements expressed or implied by such
forward-looking statements. These forward-looking statements are
based on numerous assumptions regarding the present and future
business strategies of such persons and the environment in which
each will operate in the future. Investors should not place undue
reliance on such forward-looking statements and, save as is
required by law or regulation (including to meet the requirements
of the AIM Rules for Companies, the Prospectus Rules, the FSMA
and/or MAR), does not undertake any obligation to update publicly
or revise any forward-looking statements (including to reflect any
change in expectations with regard thereto or any change in events,
conditions or circumstances on which any such statement is based).
All subsequent oral or written forward-looking statements
attributed to Surface Transforms or any persons acting on their
behalf are expressly qualified in their entirety by the cautionary
statement above. All forward-looking statements contained in this
Announcement are based on information available to the Directors at
the date of this Announcement, unless some other time is specified
in relation to them, and the posting or receipt of this
Announcement shall not give rise to any implication that there has
been no change in the facts set forth herein since such date.
Appendix
TERMS AND CONDITIONS OF THE PLACING
IMPORTANT INFORMATION FOR INVITED PLACEES ONLY
MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE
PLACING. THE ANNOUNCEMENT REGARDING THE PLACING (THE
"ANNOUNCEMENT") AND THE TERMS AND CONDITIONS SET OUT HEREIN ("TERMS
AND CONDITIONS") ARE DIRECTED ONLY AT PERSONS WHOSE ORDINARY
ACTIVITIES INVOLVE THEM IN ACQUIRING, HOLDING, MANAGING AND
DISPOSING OF INVESTMENTS (AS PRINCIPAL OR AGENT) FOR THE PURPOSES
OF THEIR BUSINESS AND WHO HAVE PROFESSIONAL EXPERIENCE IN MATTERS
RELATING TO INVESTMENTS AND ARE: (A) IF IN THE UNITED KINGDOM,
QUALIFIED INVESTORS WHO FALL WITHIN ARTICLE 19(5) OF THE FINANCIAL
SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005, AS
AMED (THE "ORDER") (INVESTMENT PROFESSIONALS) OR FALL WITHIN
ARTICLE 49(2)(a) TO (d) (HIGH NET WORTH COMPANIES, UNINCORPORATED
ASSOCIATIONS, ETC.) OF THE ORDER; OR (B) PERSONS TO WHOM THEY MAY
OTHERWISE LAWFULLY BE COMMUNICATED (ALL SUCH PERSONS TOGETHER BEING
REFERRED TO AS "RELEVANT PERSONS").
THE ANNOUNCEMENT AND THE TERMS AND CONDITIONS AND THE
INFORMATION HEREIN MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO
ARE NOT RELEVANT PERSONS. PERSONS DISTRIBUTING THE ANNOUNCEMENT OR
THE TERMS AND CONDITIONS MUST SATISFY THEMSELVES THAT IT IS LAWFUL
TO DO SO. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THE TERMS
AND CONDITIONS RELATE IS AVAILABLE ONLY TO RELEVANT PERSONS AND
WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. THE ANNOUNCEMENT AND
THE TERMS AND CONDITIONS DO NOT THEMSELVES CONSTITUTE AN OFFER FOR
SALE OR SUBSCRIPTION OF ANY SECURITIES IN SURFACE TRANSFORMS
PLC.
THE PLACING SHARES HAVE NOT BEEN AND WILL NOT BE REGISTERED
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMED (THE
"SECURITIES ACT") OR UNDER THE APPLICABLE SECURITIES LAWS OR WITH
ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR JURISDICTION OF
THE UNITED STATES, AND MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES
EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND
IN COMPLIANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OR
OTHER JURISDICTION OF THE UNITED STATES. THE PLACING SHARES ARE
BEING OFFERED AND SOLD ONLY OUTSIDE THE UNITED STATES IN "OFFSHORE
TRANSACTIONS" WITHIN THE MEANING OF, AND IN ACCORDANCE WITH,
REGULATION S UNDER THE SECURITIES ACT AND OTHERWISE IN ACCORDANCE
WITH APPLICABLE LAWS. NO PUBLIC OFFERING OF THE PLACING SHARES IS
BEING MADE IN THE UNITED STATES OR ELSEWHERE.
THE ANNOUNCEMENT AND THE TERMS AND CONDITIONS ARE RESTRICTED AND
ARE NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN
PART, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM THE UNITED STATES,
AUSTRALIA, CANADA, THE REPUBLIC OF SOUTH AFRICA, OR JAPAN OR ANY
OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR
DISTRIBUTION WOULD BE UNLAWFUL.
The distribution of the Terms and Conditions and/or the Placing
and/or issue of the Placing Shares in certain jurisdictions may be
restricted by law. No action has been taken by the Company, the
Joint Bookrunners or any of their respective affiliates, agents,
directors, officers or employees that would permit an offer of the
Placing Shares or possession or distribution of the Terms and
Conditions or any other offering or publicity material relating to
such Placing Shares in any jurisdiction where action for that
purpose is required. Persons into whose possession these Terms and
Conditions come are required by the Company and the Joint
Bookrunners to inform themselves about and to observe any such
restrictions.
The Announcement and these Terms and Conditions or any part of
them are for information purposes only and do not constitute or
form part of any offer to issue or sell, or the solicitation of an
offer to acquire, purchase or subscribe for, any securities in the
United States, Australia, Canada, the Republic of South Africa or
Japan or any other jurisdiction in which the same would be
unlawful. No public offering of the Placing Shares is being made in
any such jurisdiction.
In the United Kingdom, the Announcement and these Terms and
Conditions are being directed solely at persons in circumstances in
which section 21(1) of the Financial Services and Markets Act 2000
(as amended) (the "FSMA") does not apply.
The Placing Shares have not been approved or disapproved by the
US Securities and Exchange Commission, any state securities
commission or other regulatory authority in the United States, nor
have any of the foregoing authorities passed upon or endorsed the
merits of the Placing or the accuracy or adequacy of the
Announcement and these Terms and Conditions or the Circular. Any
representation to the contrary is a criminal offence in the United
States. The relevant clearances have not been, nor will they be,
obtained from the securities commission of any province or
territory of Canada, no prospectus has been lodged with, or
registered by, the Australian Securities and Investments Commission
or the Japanese Ministry of Finance; the relevant clearances have
not been, and will not be, obtained for the South Africa Reserve
Bank or any other applicable body in the Republic of South Africa
in relation to the Placing Shares and the Placing Shares have not
been, nor will they be, registered under or offering in compliance
with the securities laws of any state, province or territory of
Australia, Canada, the Republic of South Africa or Japan.
Accordingly, the Placing Shares may not (unless an exemption under
the relevant securities laws is applicable) be offered, sold,
resold or delivered, directly or indirectly, in or into Australia,
Canada, the Republic of South Africa or Japan or any other
jurisdiction in which such offer, sale, re-sale or delivery would
be unlawful.
Persons (including, without limitation, nominees and trustees)
who have a contractual right or other legal obligations to forward
a copy of the Announcement (or any part of it) and/or these Terms
and Conditions should seek appropriate advice before taking any
action.
The Terms and Conditions should be read in their entirety.
Key Terms and Dates
In addition to the definitions set out at the end of these Terms
and Conditions, the following defined terms and dates are relevant
to these Terms and Conditions:
"Admission" means First Admission and/or Second Admission
as the context admits;
"First Admission" means admission of the First Tranche Shares
to trading on AIM becoming effective as
provided in Rule 6 of the AIM Rules for
Companies;
--------------------------------------------------
"First Admission means 8.00 a.m. on 9 February 2021 or such
Date" later time as the Joint Bookrunners may
agree with the Company but in any event
no later than 8.00 a.m. on the Long Stop
Date;
--------------------------------------------------
"First Admission means the date the settlement of transactions
Settlement Date" in the First Tranche Shares following the
First Admission will take place within the
CREST system (subject to certain exceptions)
which is expected to occur on 9 February
2021;
--------------------------------------------------
"First Tranche Shares" means up to 4,000,000 new Ordinary Shares
to be issued pursuant to the Placing to
Placees seeking EIS or VCT relief on their
investment and which are proposed to be
admitted to trading on AIM on the First
Admission Date;
--------------------------------------------------
"Placing Price" means 50 pence per Ordinary Share;
--------------------------------------------------
"Placing Shares" means the new Ordinary Shares to be issued
in connection with the Placing (being the
First Tranche Shares and/or the Second Tranche
Shares as the context admits);
--------------------------------------------------
"Second Admission" means admission of the Second Tranche Shares
to trading on AIM becoming effective as
provided in Rule 6 of the AIM Rules;
--------------------------------------------------
"Second Admission means 8.00 a.m. on 10 February 2021 or such
Date" later time as the Joint Bookrunners may
agree with the Company but in any event
no later than 8.00 a.m. on the Long Stop
Date;
--------------------------------------------------
"Second Admission means the date the settlement of transactions
Settlement Date" in the Second Tranche Shares following the
Second Admission will take place within
the CREST system (subject to certain exceptions)
which is expected to occur on 10 February
2021; and
--------------------------------------------------
"Second Tranche Shares" means the Placing Shares other than the
First Tranche Shares, the final number of
which shall be determined by the Company
and the Joint Bookrunners and which are
proposed to be admitted to trading on AIM
on the Second Admission Date.
--------------------------------------------------
Details of the Placing Agreement and the Placing Shares
The Joint Bookrunners have entered into the Placing Agreement
with the Company under which, on the terms and subject to the
conditions set out in the Placing Agreement, each of the Joint
Bookrunners, as agent for and on behalf of the Company, has agreed
to use its reasonable endeavours to procure Placees for the Placing
Shares at the Placing Price. The Placing is not being underwritten
by either of the Joint Bookrunners or any other person.
The exact number of Placing Shares to be allocated and issued to
Placees shall be determined by the Joint Bookrunners and the
Company following completion of the Bookbuild (as defined
below).
The Placing Shares will, when issued, be subject to the
memorandum and articles of association of the Company and credited
as fully paid and will rank pari passu in all respects with the
Existing Ordinary Shares, including the right to receive all
dividends and other distributions declared, made or paid in respect
of such Ordinary Shares after the date of issue of the Placing
Shares.
Accelerated bookbuilding process
Commencing today, the Joint Bookrunners will be conducting an
accelerated bookbuilding process to determine demand for
participation in the Placing by Placees (the "Bookbuild"). The
Announcement gives details of the terms and conditions of, and the
mechanics of participation in, the Placing. However, the Joint
Bookrunners will be entitled to effect the Placing by such
alternative method to the Bookbuild as they may, after consultation
with the Company, determine. No commissions will be paid by or to
Placees in respect of any participation in the Placing or
subscription for Placing Shares.
A bid in the Bookbuild will be made on these Terms and
Conditions which are attached to the Announcement and will be
legally binding on the Placee on behalf of which it is made and,
except with the Joint Bookrunners' consent, will not be capable of
variation or revocation after the close of the Bookbuild.
The book will open with immediate effect. The final number of
Placing Shares to be issued pursuant to the Placing will be agreed
by the Joint Bookrunners and the Company at the close of the
Bookbuild, and the result of the Placing will be announced as soon
as practicable thereafter. The timing for the close of the
Bookbuild and the allocation of the Placing Shares shall be at the
absolute discretion of the Joint Bookrunners, in consultation with
the Company.
To the fullest extent permissible by law, neither:
(a) the Joint Bookrunners (or either of them);
(b) any of their respective affiliates, agents, advisers,
directors, officers, consultants or employees; nor
(c) to the extent not contained within (a) or (b), any person
connected with either of the Joint Bookrunners as defined in the
FSMA ((b) and (c) being together "affiliates" and individually an
"affiliate" of the relevant Joint Bookrunner),
shall have any liability (including to the extent permissible by
law, any fiduciary duties) to Placees or to any other person
whether acting on behalf of a Placee or otherwise. In particular,
neither of the Joint Bookrunners nor any of their respective
affiliates shall have any liability (including, to the extent
legally permissible, any fiduciary duties), in respect of their
conduct of the Bookbuild or of such alternative method of effecting
the Placing as the Joint Bookrunners may determine.
By participating in the Placing (such participation up to an
agreed maximum level to be confirmed in and evidenced by either (i)
a recorded telephone call or (ii) email correspondence, in either
case between representatives of the Joint Bookrunner to whom the
Placee's commitment is given ("Relevant Joint Bookrunner") and the
relevant Placee (a "Recorded Commitment")), each Placee will be
deemed to have read and understood the Announcement and these Terms
and Conditions in their entirety, to be participating and acquiring
Placing Shares on these Terms and Conditions and to be providing
the representations, warranties, indemnities, acknowledgements and
undertakings contained in these Terms and Conditions.
In particular, each such Placee irrevocably represents,
warrants, undertakes, agrees and acknowledges (amongst other
things) severally to the Company and each of the Joint Bookrunners
that:
1. it is a Relevant Person and that it will acquire, hold,
manage or dispose of any Placing Shares that are allocated to it
for the purposes of its business;
2. it is acquiring the Placing Shares for its own account or is
acquiring the Placing Shares for an account with respect to which
it exercises sole investment discretion and has the authority to
make and does make the representations, warranties, indemnities,
acknowledgements, undertakings and agreements contained in these
Terms and Conditions; and
3. it understands (or if acting for the account of another
person, such person has confirmed that such person understands) and
agreed to comply with the resale and transfer restrictions set out
in these Terms and Conditions; and
4. except as otherwise permitted by the Company and subject to
any available exemptions from applicable securities laws, it (and
any account referred to in paragraph 3 above) is outside the United
States acquiring the Placing Shares in offshore transactions as
defined in and in accordance with Regulation S under the Securities
Act.
No prospectus
The Placing Shares are being offered to a limited number of
specifically invited persons only and will not be offered in such a
way as to require any prospectus or other offering document to be
published. No prospectus or other offering document has been or
will be submitted to be approved by the Financial Conduct Authority
("FCA") in relation to the Placing or the Placing Shares and
Placees' commitments will be made solely on the basis of the
information contained in the Announcement and any information
publicly announced through a Regulatory Information Service (as
defined in the AIM Rules for Companies (the "AIM Rules")) by or on
behalf of the Company on or prior to the date of these Terms and
Conditions (the "Publicly Available Information") and subject to
any further terms set forth in writing in any contract note sent to
an individual Placee.
Each Placee, by participating in the Placing, agrees that the
content of the Announcement is exclusively the responsibility of
the Company and confirms that it has neither received nor relied on
any information (other than the Publicly Available Information),
representation, warranty or statement made by or on behalf of the
Joint Bookrunners or the Company or any other person and none of
the Joint Bookrunners, the Company nor any other person acting on
such person's behalf nor any of their respective affiliates has or
shall have any liability for any Placee's decision to participate
in the Placing based on any other information, representation,
warranty or statement. Each Placee acknowledges and agrees that it
has relied on its own investigation of the business, financial or
other position of the Company in accepting a participation in the
Placing. No Placee should consider any information in the
Announcement or these Terms and Conditions to be legal, tax,
business or other advice. Nothing in this paragraph shall exclude
the liability of any person for fraudulent misrepresentation.
Application for admission to trading
Application(s) will be made to the London Stock Exchange for
admission of the Placing Shares to trading on AIM.
It is expected that First Admission will take place on the First
Admission Date that dealings in the First Tranche Shares on AIM
will commence at the same time.
It is expected that Second Admission will take place on the
Second Admission Date that dealings in the Second Tranche Shares on
AIM will commence at the same time.
Principal terms of the Placing
1. Zeus is acting as nominated adviser and joint broker to the
Placing, as agent for and on behalf of the Company.
2. finnCap is acting as joint broker to the Placing, as agent
for and on behalf of the Company.
3. Participation in the Placing is by invitation only and will
only be available to persons who may lawfully be, and are, invited
by either of the Joint Bookrunners to participate. The Joint
Bookrunners and any of their respective affiliates are entitled to
participate in the Placing as principal.
4. Each Placee will confirm the maximum number of Placing Shares
it is willing to acquire in a Recorded Commitment. Once they have
made a Recorded Commitment, each Placee will have an immediate,
separate, irrevocable and binding obligation, owed to the Relevant
Joint Bookrunner (as agent for the Company), to subscribe and pay
for, at the Placing Price, the number of Placing Shares allocated
to it, up to the agreed maximum.
5. Each Placee's allocation and whether such Placee participates
in the Placing has or will be determined by the Joint Bookrunners
in their discretion following consultation with the Company will be
confirmed by the Relevant Joint Bookrunner either orally or in
writing via a contract note.
6. Each Placee's commitment will be confirmed in and evidenced
by a Recorded Commitment. These Terms and Conditions will be deemed
incorporated into each contract which is entered into by way of a
Recorded Commitment and will be legally binding on the relevant
Placee(s) on behalf of whom the commitment is made with effect from
the end of the Recorded Commitment and, except with the Relevant
Joint Bookrunner's prior written consent, will not be capable of
variation or revocation after such time. A contract note confirming
each Placee's allocation of Placing Shares will be sent to them
following the Recorded Commitment and the allocation process. These
Terms and Conditions shall be deemed incorporated into any such
contract note.
7. Each Placee will have an immediate, separate, irrevocable and
binding obligation, owed to the Relevant Joint Bookrunner (as agent
for the Company), to pay to it (or as it may direct) in cleared
funds an amount equal to the product of the Placing Price and the
number of Placing Shares allocated to such Placee (subject always
to such Placee's agreed maximum).
8. The Joint Bookrunners reserve the right to scale back the
number of Placing Shares to be subscribed by any Placee in the
event that the Placing is oversubscribed. The Joint Bookrunners
also reserve the right not to accept offers to subscribe for
Placing Shares or to accept such offers in part rather than in
whole. The acceptance and, if applicable, scaling back of offers
shall be at the absolute discretion of the Joint Bookrunners.
9. Except as required by law or regulation, no press release or
other announcement will be made by the Joint Bookrunners (or either
of them) or the Company using the name of any Placee (or its
agent), in its capacity as Placee (or agent), other than with such
Placee's prior written consent.
10. Irrespective of the time at which a Placee's allocation(s)
pursuant to the Placing is/are confirmed, settlement for all First
Tranche Shares to be acquired pursuant to the Placing will be
required to be made at the same time and settlement for all Second
Tranche Shares to be acquired pursuant to the Placing will be
required to be made at the same time, in each case on the basis
explained below under "Registration and settlement".
11. 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".
12. By participating in the Placing, each Placee agrees that its
rights and obligations in respect of the Placing will terminate
only in the circumstances described below and will not be capable
of rescission or termination by the Placee.
Registration and settlement
By participating in the Placing, each Placee will be deemed to
agree that it will do all things necessary to ensure that delivery
and payment is completed as directed by the Relevant Joint
Bookrunner in accordance with either the standing CREST or
certificated settlement instructions which they have in place with
the Relevant Joint Bookrunner.
Settlement of transactions in the First Tranche Shares following
First Admission will take place within the CREST system, subject to
certain exceptions. Settlement through CREST will be on a delivery
versus payment basis ("DVP") unless otherwise notified by the
Relevant Joint Bookrunner and is expected to occur on the First
Admission Settlement Date.
Settlement of transactions in the Second Tranche Shares
following Second Admission will take place within the CREST system,
subject to certain exceptions. Settlement through CREST will be on
a DVP basis unless otherwise notified by the Relevant Joint
Bookrunner and is expected to occur on the Second Admission
Settlement Date.
In the event of any difficulties or delays in the admission of
any Placing Shares to CREST or the use of CREST in relation to the
Placing, the Company and the Joint Bookrunners may agree that the
Placing Shares (or any of them) should be issued in certificated
form. Each of the Joint Bookrunners reserves the right to require
settlement for any of the Placing Shares, and to deliver any of the
Placing Shares to any Placees, by such other means as it deems
necessary if delivery or settlement to any Placee is not
practicable within the CREST system or would not be consistent with
regulatory requirements in the jurisdiction in which a Placee is
located.
Interest is chargeable daily on payments not received from
Placees on or before the due date in accordance with the
arrangements set out above, in respect of either CREST or
certificated deliveries, at the rate of 3 percentage points above
prevailing base rate of Barclays Bank plc as determined by the
Relevant Joint Bookrunner.
Each Placee is deemed to agree that if it does not comply with
these obligations, the Relevant Joint Bookrunner may sell any or
all of their Placing Shares on their behalf and retain from the
proceeds, for the Relevant Joint Bookrunner's own account and
benefit, an amount equal to the aggregate amount owed by the Placee
plus any interest due. The relevant Placee will, however, remain
liable for any shortfall below the Placing Price and for any stamp
duty or stamp duty reserve tax (together with any interest or
penalties) which may arise upon the sale of its Placing Shares on
its behalf.
If Placing Shares are to be delivered to a custodian or
settlement agent, Placees must ensure that, upon receipt, any
relevant contract note is copied and delivered immediately to the
relevant person within that organisation. Insofar as Placing Shares
are registered in a Placee's name or that of its nominee or in the
name of any person for whom a Placee is contracting as agent or
that of a nominee for such person, such Placing Shares should,
subject as provided below, be so registered free from any liability
to United Kingdom stamp duty or stamp duty reserve tax. Placees
will not be entitled to receive any fee or commission in connection
with the Placing.
Conditions of the Placing
The Placing is conditional upon the Placing Agreement becoming
unconditional and not having been terminated in accordance with its
terms.
Subject to the proviso that once First Admission has occurred no
party to the Placing Agreement shall be entitled to terminate any
part of the Placing Agreement which relates to First Admission
and/or the placing, allotment or issue of the First Tranche Shares,
the obligations of the Joint Bookrunners under the Placing
Agreement are, and the Placing is, conditional upon, inter
alia:
(a) the Resolutions being passed at the General Meeting;
(b) the warranties and undertakings contained in the Placing
Agreement ("Warranties") being true, accurate and not misleading
when made on the date of the Placing Agreement and at all times up
to Second Admission by reference to the facts and circumstances
subsisting at that time;
(c) the Company having fully performed its obligations under the
Placing Agreement to the extent that they fall to be performed
prior to Second Admission;
(d) neither of the Joint Bookrunners not having exercised their
right to terminate the Placing Agreement;
(e) First Admission having become effective at or around the
First Admission Date; and
(f) Second Admission having become effective at or around the
Second Admission Date;
(all conditions to the obligations of the Joint Bookrunners
included in the Placing Agreement being together, the
"conditions").
If any of the conditions is not fulfilled or, where permitted,
waived in accordance with the Placing Agreement within the stated
time periods (or such later time and/or date as the Company and the
Joint Bookrunners may agree), or the Placing Agreement is
terminated in accordance with its terms, the Placing (or such part
of it as may then remain to be completed) will lapse and the
Placee's rights and obligations shall cease and terminate at such
time and each Placee agrees that no claim can be made by or on
behalf of the Placee (or any person on whose behalf the Placee is
acting) in respect thereof.
By participating in the Placing, each Placee agrees that its
rights and obligations cease and terminate only in the
circumstances described above and under "Termination of the
Placing" below and will not be capable of rescission or termination
by it.
The Joint Bookrunners may, in their absolute discretion (but
acting together) and upon such terms as they think fit, waive
fulfilment of all or any of the conditions in the Placing Agreement
in whole or in part, or extend the time provided for fulfilment of
one or more conditions, save that certain conditions (including as
regards the First Tranche Shares the condition relating to First
Admission referred to in paragraph (e) above, and as regards the
Second Tranche Shares the condition relating to Second Admission
referred to in paragraph (f) above) may not be waived. Any such
extension or waiver will not affect Placees' commitments as set out
in these Terms and Conditions.
Either of the Joint Bookrunners may terminate the Placing
Agreement in certain circumstances, details of which are set out
below.
Neither the Joint Bookrunners nor any of their respective
affiliates, agents, advisers, directors, officers or employees nor
the Company shall have any liability to any Placee (or to any other
person whether acting on behalf of a Placee or otherwise) in
respect of any decision any of them may make as to whether or not
to waive or to extend the time and/or date for the satisfaction of
any condition to the Placing (or any part thereof) nor for any
decision any of them may make as to the satisfaction of any
condition or in respect of the Placing generally (or any part
thereof) and by participating in the Placing each Placee agrees
that any such decision is within the absolute discretion of the
Joint Bookrunners.
Termination of the Placing
Save as set out below, either of the Joint Bookrunners may, in
its absolute discretion, by notice to the Company, terminate the
Placing Agreement at any time up to Second Admission if, inter
alia, it is of the opinion, in its absolute discretion, that any of
the following has occurred and it is, as a result of such matter,
inappropriate to proceed with the Placing:
(a) any statement contained in the Circular or any other
document or announcement issued or published by or on behalf of the
Company in connection with the Placing ("Placing Documents") has
become untrue, inaccurate or misleading or any matter has arisen
which would, if the Placing Documents were issued at that time,
constitute a material omission from the Placing Documents or any of
them;
(b) any of the Warranties was untrue, inaccurate or misleading
when made and/or that any of the Warranties has ceased to be true
or accurate or has become misleading at any time prior to Second
Admission, in each case by reference to the facts and circumstances
subsisting at that time;
(c) the Company has not complied or cannot comply with any of
its obligations under the Placing Agreement or otherwise relating
to the Placing and Admission (to the extent that such obligations
fall to be complied with prior to Admission);
(d) there has occurred any material adverse change in the
financial position or prospects of the Company (or its group on a
consolidated basis); or
(e) there has occurred any change in national or international
financial, monetary, market (including fluctuations in exchange
rates), industrial, economic, legal or political conditions or
there has occurred or been a material worsening of any
international or national crisis, civil unrest, act of terrorism or
outbreak of hostilities which is material in the context of the
Placing.
If the Placing Agreement is terminated in accordance with its
terms, the rights and obligations of each Placee in respect of the
Placing as described in these Terms and Conditions shall cease and
terminate at such time and no claim can be made by any Placee in
respect thereof.
Notwithstanding any other provision of the Placing Agreement,
once First Admission has occurred no party to the Placing Agreement
shall be entitled to terminate any part of the Placing Agreement
which relates to First Admission and/or the placing, allotment or
issue of the First Tranche Shares.
By participating in the Placing, each Placee agrees with the
Company and the Joint Bookrunners that the exercise by the Company
or the Joint Bookrunners of any right of termination or any other
right or other discretion under the Placing Agreement shall be
within the absolute discretion of the Company or the Joint
Bookrunners (or either of them) or for agreement between the
Company and the Joint Bookrunners (as the case may be) and that
neither the Company nor the Joint Bookrunners need make any
reference to such Placee and that none of the Company, the Joint
Bookrunners nor any of their respective affiliates, agents,
advisers, directors, officers or employees shall have any liability
to such Placee (or to any other person whether acting on behalf of
a Placee or otherwise) whatsoever in connection with any such
exercise.
By agreeing with a Joint Bookrunner (as agent of the Company) to
subscribe for Placing Shares under the Placing, a Placee (and any
person acting on a Placee's behalf) will irrevocably acknowledge
and confirm and warrant and undertake to, and agree with, each of
the Company and the Joint Bookrunners, in each case as a
fundamental term of such Placee's application for Placing Shares
and of the Company's obligation to allot and/or issue any Placing
Shares to it or at its direction, that its rights and obligations
in respect of the Placing (or any part of it) will terminate only
in the circumstances described above and under the "Conditions of
the Placing" section above and will not be capable of rescission or
termination by it in any other circumstances.
Representations, warranties and further terms
By participating in the Placing, each Placee (and any person
acting on such Placee's behalf) represents, warrants, acknowledges,
undertakes, confirms and agrees (for itself and for any such
prospective Placee) that (save where the Relevant Joint Bookrunner
expressly agrees in writing to the contrary):
1. it has read and understood the Announcement and these Terms
and Conditions in their entirety and its acquisition of Placing
Shares is subject to and based upon all the terms, conditions,
representations, warranties, indemnities, acknowledgements,
agreements and undertakings and other information contained herein
and it has not relied on, and will not rely on, any information
given or any representations, warranties or statements made at any
time by any person in connection with Admission, the Placing, the
Company, the Placing Shares or otherwise, other than the
information contained in the Announcement and the Publicly
Available Information;
2. it has not received a prospectus or other offering document
in connection with the Placing and acknowledges that no prospectus
or other offering document:
(a) is required under any applicable law; and
(b) has been or will be prepared in connection with the Placing
and, in particular, that the Subscription and Open Offer
referred to in the Announcement and the Circular relating thereto
are separate from the Placing and do not form part of any offer or
agreement concerning the Placing and/or any Placing Shares;
3. the Ordinary Shares are admitted to trading on AIM, and that
the Company is therefore required to publish certain business and
financial information in accordance with the AIM Rules and the
Market Abuse Regulation (EU Regulation No. 596/2014 (the "MAR")),
which includes a description of the nature of the Company's
business and the Company's most recent balance sheet and profit and
loss account and that it is able to obtain or access such
information without undue difficulty, and is able to obtain access
to such information or comparable information concerning any other
publicly traded company, without undue difficulty;
4. it has made its own assessment of the Placing Shares and has
relied on its own investigation of the business, financial position
and other aspects of the Company in accepting a participation in
the Placing and neither the Joint Bookrunners nor the Company nor
any of their respective affiliates, agents, advisers, directors,
officers or employees nor any person acting on behalf of any of
them has provided, and will not provide, it with any material
regarding the Placing Shares or the Company or any other person
other than the information in the Announcement and these Terms and
Conditions or the Publicly Available Information; nor has it
requested either of the Joint Bookrunners, the Company, any of
their respective affiliates, agents, advisers, directors, employees
or officers or any person acting on behalf of any of them to
provide it with any such information;
5. neither of the Joint Bookrunners nor any person acting on
behalf of them nor any of their respective affiliates, agents,
directors, officers or employees has or shall have any liability
for any Publicly Available Information, or any representation
relating to the Company, provided that nothing in these Terms and
Conditions excludes the liability of any person for any fraudulent
misrepresentation made by that person;
6.
(a) the only information on which it is entitled to rely on and
on which it has relied in committing to acquire the Placing Shares
is contained in the Announcement and the Publicly Available
Information, such information being all that it deems necessary to
make an investment decision in respect of the Placing Shares and it
has made its own assessment of the Company, the Placing Shares and
the terms of the Placing based on the Announcement and the Publicly
Available Information;
(b) neither the Joint Bookrunners nor any of their respective
affiliates, agents, directors, officers or employees have made any
representation or warranty to it, express or implied, with respect
to the Company, the Placing or the Placing Shares or the accuracy,
completeness or adequacy of the Announcement, the Circular or the
Publicly Available Information;
(c) it has conducted its own investigation of the Company, the
Placing and the Placing Shares, satisfied itself that the
information is still current and relied on that investigation for
the purposes of its decision to participate in the Placing; and
(d) it has not relied on any investigation that either of the
Joint Bookrunners or any person acting on their behalf may have
conducted with respect to the Company, the Placing or the Placing
Shares;
7. the contents of the Announcement, the Circular and the other
Publicly Available Information as well as any information made
available (in written or oral form) in presentations or as part of
roadshow discussions with investors relating to the Company (the
"Information") has been prepared by and is exclusively the
responsibility of the Company and neither the Joint Bookrunners nor
any persons acting on their behalf is responsible for or has or
shall have any liability for any such Information, or for any
representation, warranty or statement relating to the Company
contained therein nor will they be liable for any Placee's decision
to participate in the Placing based on any Information or any
representation, warranty or statement contained therein or
otherwise;
8. it has the funds available to pay for the Placing Shares
which it has agreed to acquire and acknowledges and agrees that it
will pay the total subscription amount in accordance with the
Announcement and these Terms and Conditions by the due time and
date set out herein, failing which the relevant Placing Shares may
be placed with other Placees or sold at such price as the Relevant
Joint Bookrunner determines;
9. it and/or each person on whose behalf it is participating:
(a) is entitled to acquire Placing Shares pursuant to the
Placing under the laws and regulations of all relevant
jurisdictions;
(b) has fully observed such laws and regulations;
(c) has capacity and authority and is entitled to enter into and
perform its obligations as an acquirer of Placing Shares and will
honour such obligations; and
(d) has obtained all necessary consents and authorities
(including, without limitation, in the case of a person acting on
behalf of a Placee, all necessary consents and authorities to agree
to the terms set out or referred to in these Terms and Conditions)
under those laws or otherwise and complied with all necessary
formalities to enable it to enter into the transactions
contemplated hereby and to perform its obligations in relation
thereto and, in particular, if it is a pension fund or investment
company it is aware of and acknowledges it is required to comply
with all applicable laws and regulations with respect to its
acquisition of Placing Shares;
10. it is not, and any person who it is acting on behalf of is
not, and at the time the Placing Shares are acquired will not be, a
resident of, or with an address in, or subject to the laws of,
Australia, Canada, the Republic of South Africa or Japan, and it
acknowledges and agrees that the Placing Shares have not been and
will not be registered or otherwise qualified under the securities
legislation of Australia, Canada, the Republic of South Africa or
Japan and may not be offered, sold, or acquired, directly or
indirectly, within those jurisdictions;
11. it and the beneficial owner of the Placing Shares is, and at
the time the Placing Shares are acquired will be, outside the
United States and acquiring the Placing Shares in an "offshore
transaction" as defined in, and in accordance with, Regulation S
under the Securities Act;
12. it understands that the Placing Shares have not been, and
will not be, registered under the Securities Act and may not be
offered, sold or resold in or into or from the United States except
pursuant to an effective registration under the Securities Act, or
pursuant to an exemption from, or in a transaction not subject to,
the registration requirements of the Securities Act and in
accordance with applicable state securities laws; and no
representation is being made as to the availability of any
exemption under the Securities Act for the reoffer, resale, pledge
or transfer of the Placing Shares;
13. it (and any account for which it is purchasing) is not
acquiring the Placing Shares with a view to any offer, sale or
distribution thereof within the meaning of the Securities Act;
14. it understands that:
(a) the Placing Shares are "restricted securities" within the
meaning of Rule 144(a)(3) under the Securities Act and will be
subject to restrictions on resale and transfer subject to certain
exceptions under US law; and
(b) it will not deposit the Placing Shares in an unrestricted
depositary receipt programme in the United States or for US persons
(as defined in the Securities Act);
15. it will not offer, sell, transfer, pledge or otherwise
dispose of any Placing Shares except:
(a) in an offshore transaction in accordance with Rules 903 or
904 of Regulation S under the Securities Act; or
(b) pursuant to another exemption from registration under the
Securities Act, if available,
and in each case in accordance with all applicable securities
laws of the states of the United States and all other applicable
jurisdictions;
16. no representation has been made as to the availability of
the exemption provided by Rule 144, Rule 144A or any other
exemption under the Securities Act for the reoffer, resale, pledge
or transfer of the Placing Shares;
17. t understands that the Placing Shares are expected to be
issued to it through CREST but may be issued to it in certificated,
definitive form and acknowledges and agrees that the Placing Shares
will, to the extent they are delivered in certificated form, bear a
legend to the following effect unless agreed otherwise with the
Company and the Relevant Joint Bookrunner:
"THESE SECURITIES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER
THE UNITED STATES SECURITIES ACT OF 1933, AS AMED (THE "SECURITIES
ACT"), OR UNDER THE APPLICABLE SECURITIES LAWS OR WITH ANY
SECURITIES REGULATORY AUTHORITY OF ANY STATE OR OTHER JURISDICTION
OF THE UNITED STATES, AND MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED EXCEPT (A) PURSUANT TO A REGISTRATION
STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT, (B) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 903 OR
RULE 904 OF REGULATION S UNDER THE SECURITIES ACT OR (C) PURSUANT
TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION OF
THE UNITED STATES. NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THE
FOREGOING, THE SECURITIES MAY NOT BE DEPOSITED INTO ANY
UNRESTRICTED DEPOSITARY RECEIPT FACILITY IN RESPECT OF THE
COMPANY'S SECURITIES ESTABLISHED OR MAINTAINED BY A DEPOSITARY
BANK. EACH HOLDER, BY ITS ACCEPTANCE OF THESE SHARES, REPRESENTS
THAT IT UNDERSTANDS AND AGREES TO THE FOREGOING RESTRICTIONS.";
18. it is not taking up the Placing Shares as a result of any
"general solicitation" or "general advertising" efforts (as those
terms are defined in Regulation D under the Securities Act) or any
"directed selling efforts" (as such term is defined in Regulation S
under the Securities Act);
19. if located in the United States, it understands that there
may be certain consequences under United States and other tax laws
resulting from an investment in the Placing and it has made such
investigation and has consulted its own independent advisers or
otherwise has satisfied itself concerning, without limitation, the
effects of United States federal, state and local income tax laws
and foreign tax laws generally;
20. it will not distribute, forward, transfer or otherwise
transmit the Announcement or these Terms and Conditions and/or the
Circular or any part of them, or any other presentational or other
materials concerning the Placing in or into or from the United
States (including electronic copies thereof) to any person, and it
has not distributed, forwarded, transferred or otherwise
transmitted any such materials to any person;
21. none of the Joint Bookrunners, their respective affiliates
and/or any person acting on behalf of any of them is making any
recommendations to it or advising it regarding the suitability of
any transactions it may enter into in connection with the Placing
and that participation in the Placing is on the basis that it is
not and will not be a client of either of the Joint Bookrunners and
that the Joint Bookrunners have no duties or responsibilities to it
for providing the protections afforded to its clients or for
providing advice in relation to the Placing nor in respect of any
representations, warranties, undertakings or indemnities contained
in the Placing Agreement nor for the exercise or performance of any
of its rights and obligations thereunder including any rights to
waive or vary any conditions or exercise any termination right;
22. it will make payment to the Relevant Joint Bookrunner for
the Placing Shares allocated to it in accordance with these Terms
and Conditions on or by the specified time (being the First
Admission Settlement Date in respect of any First Tranche Shares
and the Second Admission Settlement Date as regards any Second
Tranche Shares), failing which the relevant Placing Shares may be
placed with others on such terms as the Relevant Joint Bookrunner
determines in its absolute discretion without liability to the
Placee and it will remain liable for any shortfall below the net
proceeds of such sale and the placing proceeds of such Placing
Shares and may be required to bear any stamp duty or stamp duty
reserve tax (together with any interest or penalties due pursuant
to the terms set out or referred to in these Terms and Conditions)
which may arise upon the sale of such Placee's Placing Shares on
its behalf;
23. its Recorded Commitment to acquire Placing Shares will
represent a maximum number of Placing Shares which it may be
required to subscribe for, and that following the allocation
process the Relevant Joint Bookrunner may call upon it to subscribe
for a lower number of Placing Shares (if any), but in no event in
aggregate more than the aforementioned maximum;
24. no action has been or will be taken by any of the Company,
the Joint Bookrunners or any person acting on behalf of the Company
or either of the Joint Bookrunners that would, or is intended to,
permit a public offer of the Placing Shares in the United States or
in any country or jurisdiction where any such action for that
purpose is required;
25. the person who it specifies for registration as holder of the Placing Shares will be:
(a) the Placee; or
(b) a nominee of the Placee, as the case may be.
26. neither the Joint Bookrunners nor the Company will be
responsible for any liability to stamp duty or stamp duty reserve
tax resulting from a failure to observe the above requirement. Each
Placee and any person acting on behalf of such Placee agrees to
acquire Placing Shares pursuant to the Placing and agrees to
indemnify the Company and the Joint Bookrunners in respect of the
same on the basis that the Placing Shares will be allotted to a
CREST stock account of the Relevant Joint Bookrunner or transferred
to a CREST stock account of the Relevant Joint Bookrunner who will
hold them as nominee on behalf of the Placee until settlement in
accordance with its standing settlement instructions with it;
27. the allocation, allotment, issue and delivery to it, or the
person specified by it for registration as holder, of Placing
Shares will not give rise to a stamp duty or stamp duty reserve tax
liability under (or at a rate determined under) any of sections 67,
70, 93 or 96 of the Finance Act 1986 (depository receipts and
clearance services) and it is not participating in the Placing as
nominee or agent for any person or persons to whom the allocation,
allotment, issue or delivery of Placing Shares would give rise to
such a liability;
28. if it is within the United Kingdom, it and any person acting
on its behalf (if within the United Kingdom) falls within Article
19(5) and/or 49(2) of the Order and undertakes that it will
acquire, hold, manage and (if applicable) dispose of any Placing
Shares that are allocated to it for the purposes of its business
only;
29. it has not offered or sold and will not offer or sell any
Placing Shares to persons in the United Kingdom except to persons
whose ordinary activities involve them in acquiring, holding,
managing or disposing of investments (as principal or agent) for
the purposes of their business or otherwise in circumstances which
have not resulted and which will not result in an offer to the
public in the United Kingdom within the meaning of section 85(1) of
the FSMA;
30. it has only communicated or caused to be communicated and it
will only communicate or cause to be communicated any invitation or
inducement to engage in investment activity (within the meaning of
section 21 of the FSMA) relating to Placing Shares in circumstances
in which section 21(1) of the FSMA does not require approval of the
communication by an authorised person and it acknowledges and
agrees that neither the Announcement, these Terms and Conditions
nor the Circular has been or will be approved by the Joint
Bookrunners in their capacity as an authorised person under section
21 of the FSMA and it may not therefore be subject to the controls
which would apply if it was made or approved as financial promotion
by an authorised person;
31. it has complied and it will comply with all applicable laws
in any jurisdiction with respect to anything done by it or on its
behalf in relation to the Placing Shares (including all relevant
provisions of the FSMA in respect of anything done in, from or
otherwise involving the United Kingdom);
32. the Placing Shares acquired by it in the Placing will not be
acquired on a non-discretionary basis on behalf of, nor will they
be acquired with a view to their offer or resale to any person save
in circumstances in which the express prior written consent of the
Relevant Joint Bookrunner has been given to the offer or
resale;
33. if it has received any inside information (for the purposes
of the MAR and/or section 56 of the Criminal Justice Act 1993 or
other applicable law) about the Company in advance of the Placing,
it has not:
(a) dealt (or attempted to deal) in the securities of the Company;
(b) encouraged, recommended or induced another person to deal in
the securities of the Company; or
(c) unlawfully disclosed such information to any person, prior
to the information being made publicly available;
34. neither the Joint Bookrunners, the Company nor any of their
respective affiliates, agents, advisers, directors, officers or
employees nor any person acting on behalf of the Joint Bookrunners
or their respective affiliates, agents, advisers, directors,
officers or employees nor any person acting on behalf of any of
them is making any recommendations to it, advising it regarding the
suitability of any transactions it may enter into in connection
with the Placing nor providing advice in relation to the Placing
nor in respect of any representations, warranties,
acknowledgements, agreements, undertakings, or indemnities
contained in the Placing Agreement nor the exercise or performance
of any of the Joint Bookrunners' rights and obligations thereunder
including any rights to waive or vary any conditions or exercise
any termination right;
35. either of the Joint Bookrunners and their respective
affiliates, acting as an investor for its or their own account(s),
may bid or subscribe for and/or purchase Placing Shares and, in
that capacity, may retain, purchase, offer to sell or otherwise
deal for its or their own account(s) in the Placing Shares, any
other securities of the Company or other related investments in
connection with the Placing or otherwise. Accordingly, references
in these Terms and Conditions and/or the Announcement to the
Placing Shares being offered, subscribed, acquired or otherwise
dealt with should be read as including any offer to, or
subscription, acquisition or dealing by, the Joint Bookrunners
and/or any of their respective affiliates acting as an investor for
its or their own account(s). Neither the Joint Bookrunners nor the
Company intend to disclose the extent of any such investment or
transaction otherwise than in accordance with any legal or
regulatory obligation to do so;
36. it:
(a) has complied, and will comply, with its obligations in
connection with money laundering and terrorist financing under the
Proceeds of Crime Act 2002, the Terrorism Act 2000 (as amended),
the Terrorism Act 2006 and the Money Laundering, Terrorist
Financing and Transfer of Funds (Information on the Payer)
Regulations 2017;
(b) is not a person:
(i) with whom transactions are prohibited under the US Foreign
Corrupt Practices Act of 1977 or any economic sanction programmes
administered by, or regulations promulgated by, the Office of
Foreign Assets Control of the U.S. Department of the Treasury;
(ii) named on the Consolidated List of Financial Sanctions
Targets maintained by HM Treasury of the United Kingdom; or
(iii) subject to financial sanctions imposed pursuant to a
regulation of the European Union or a regulation adopted by the
United Nations or other applicable law,
(all such statutes, rules and regulations referred to in the
paragraph 37 together, the "Regulations") and if making payment on
behalf of a third party, that satisfactory evidence has been
obtained and recorded by it to verify the identity of the third
party as required by the Regulations and has obtained all
governmental and other consents (if any) which may be required for
the purpose of, or as a consequence of, such purchase, and it will
provide promptly to the Relevant Joint Bookrunner such evidence, if
any, as to the identity or location or legal status of any person
which it may request from it in connection with the Placing (for
the purpose of complying with the Regulations or ascertaining the
nationality of any person or the jurisdiction(s) to which any
person is subject or otherwise) in the form and manner requested by
the Relevant Joint Bookrunner on the basis that any failure by it
to do so may result in the number of Placing Shares that are to be
acquired by it or at its direction pursuant to the Placing being
reduced to such number, or to nil, as the Relevant Joint Bookrunner
may decide at its sole discretion;
37. in order to ensure compliance with the Regulations, the
Relevant Joint Bookrunner (for itself and as agent on behalf of the
Company) or the Company's registrars may, in their absolute
discretion, require verification of its identity. Pending the
provision to the Relevant Joint Bookrunner or the Company's
registrars, as applicable, of evidence of identity, definitive
certificates in respect of the Placing Shares may be retained at
the Relevant Joint Bookrunner's absolute discretion or, where
appropriate, delivery of the Placing Shares to it in uncertificated
form may be delayed at the Relevant Joint Bookrunner's or the
Company's registrars', as the case may be, absolute discretion. If
within a reasonable time after a request for verification of
identity the Relevant Joint Bookrunner (for itself and as agent on
behalf of the Company) or the Company's registrars have not
received evidence satisfactory to them, either the Relevant Joint
Bookrunner and/or the Company may, at its absolute discretion,
terminate its commitment in respect of the Placing, in which event
the monies payable on acceptance of allotment will, if already
paid, be returned without interest to the account of the drawee's
bank from which they were originally debited;
38. its commitment to acquire Placing Shares on the Terms and
Conditions will continue notwithstanding any amendment that may in
future be made to the terms and conditions of the Placing and that
Placees will have no right to be consulted or require that their
consent be obtained with respect to the Company's or any Joint
Bookrunner's conduct of the Placing;
39. neither of the Joint Bookrunners nor any of their respective
affiliates, agents, advisers, directors, officers or employees
makes any representation in respect of or shall have any
responsibility for the tax treatment that any Placee may receive or
expect in relation to their investment in Placing Shares and in
particular whether or not any Placee will be entitled to EIS or VCT
relief in respect of any such investment;
40. it has knowledge and experience in financial, business and
international investment matters as is required to evaluate the
merits and risks of acquiring the Placing Shares. It further
acknowledges that it is experienced in investing in securities of
this nature and is aware that it may be required to bear, and is
able to bear, the economic risk of, and is able to sustain, a
complete loss in connection with the Placing. It has relied upon
its own examination and due diligence of the Company and its
affiliates taken as a whole, and the terms of the Placing,
including the merits and risks involved;
41. it irrevocably appoints any duly authorised officer of the
Relevant Joint Bookrunner as its agent for the purpose of executing
and delivering to the Company and/or its registrars any documents
on its behalf necessary to enable it to be registered as the holder
of any of the Placing Shares which it agrees to acquire upon these
Terms and Conditions;
42. the Company, the Joint Bookrunners and others (including
each of their respective affiliates, agents, advisers, directors,
officers and employees) will rely upon the truth and accuracy of
the foregoing representations, warranties, acknowledgements and
agreements, which are given to each of the Joint Bookrunners on
their own behalf and on behalf of the Company and are
irrevocable;
43. it is acting as principal only in respect of the Placing or,
if it is acquiring the Placing Shares as a fiduciary or agent for
one or more investor accounts, it is duly authorised to do so and
it has full power and authority to make, and does make, the
foregoing representations, warranties, acknowledgements, agreements
and undertakings on behalf of each such accounts;
44. time is of the essence as regards its obligations under these Terms and Conditions;
45. any document that is to be sent to it in connection with the
Placing will be sent at its risk and may be sent to it at any
address provided by it to the Relevant Joint Bookrunner;
46. the Placing Shares will be issued subject to these Terms and Conditions; and
47. these Terms and Conditions and all documents into which
these Terms and Conditions are incorporated by reference or
otherwise validly forms a part and/or any agreements entered into
pursuant to these terms and conditions and all agreements to
acquire Placing Shares pursuant to the Placing will be governed by
and construed in accordance with English law and it submits to the
exclusive jurisdiction of the English courts in relation to any
claim, dispute (contractual or otherwise) or matter arising out of
or in connection with such contract except that enforcement
proceedings in respect of the obligation to make payment for the
Placing Shares (together with interest chargeable thereon) may be
taken by the Company or the Relevant Joint Bookrunner in any
jurisdiction in which the relevant Placee is incorporated or in
which any of its securities have a quotation on a recognised stock
exchange.
By participating in the Placing, each Placee (and any person
acting on such Placee's behalf) agrees to indemnify and hold the
Company, the Joint Bookrunners and each of their respective
affiliates, agents, directors, officers and employees harmless from
any and all costs, claims, liabilities and expenses (including
legal fees and expenses) arising out of or in connection with any
breach of the representations, warranties, acknowledgements,
agreements and undertakings given by the Placee (and any person
acting on such Placee's behalf) in these Terms and Conditions or
incurred by either of the Joint Bookrunners, the Company or any of
their respective affiliates, agents, directors, officers or
employees arising from the non-performance of the Placee's
obligations as set out in these Terms and Conditions, and further
agrees that the provisions of these Terms and Conditions shall
survive after the completion of the Placing.
The agreement to allot and issue Placing Shares to Placees (or
the persons for whom Placees are contracting as agent) free of
stamp duty and stamp duty reserve tax in the United Kingdom relates
only to their allotment and issue to Placees, or such persons as
they nominate as their agents, direct by the Company. Such
agreement assumes that the Placing Shares are not being acquired in
connection with arrangements to issue depositary receipts or to
transfer the Placing Shares into a clearance service. If there are
any such arrangements, or the settlement related to any other
dealings in the Placing Shares, stamp duty or stamp duty reserve
tax may be payable. In that event, the Placee agrees that it shall
be responsible for such stamp duty or stamp duty reserve tax and
neither the Company nor the Joint Bookrunners shall be responsible
for such stamp duty or stamp duty reserve tax. If this is the case,
each Placee should seek its own advice and they should notify the
Relevant Joint Bookrunner accordingly. In addition, Placees should
note that they will be liable for any capital duty, stamp duty and
all other stamp, issue, securities, transfer, registration,
documentary or other duties or taxes (including any interest, fines
or penalties relating thereto) payable outside the United Kingdom
by them or any other person on the acquisition by them of any
Placing Shares or the agreement by them to acquire any Placing
Shares and each Placee, or the Placee's nominee, in respect of whom
(or in respect of the person for whom it is participating in the
Placing as an agent or nominee) the allocation, allotment, issue or
delivery of Placing Shares has given rise to such non-United
Kingdom stamp, registration, documentary, transfer or similar taxes
or duties undertakes to pay such taxes and duties, including any
interest and penalties (if applicable), forthwith and to indemnify
on an after-tax basis and to hold harmless the Company and the
Joint Bookrunners in the event that any of the Company and/or the
Joint Bookrunners have incurred any such liability to such taxes or
duties.
The representations, warranties, acknowledgements and
undertakings contained in these Terms and Conditions are given to
the Joint Bookrunners for itself and on behalf of the Company and
are irrevocable.
The Joint Bookrunners are authorised and regulated by the FCA in
the United Kingdom and are acting exclusively for the Company and
no one else in connection with the Placing, and will not be
responsible to anyone (including any Placees) other than the
Company for providing the protections afforded to their clients or
for providing advice in relation to the Placing or any other
matters referred to in these Terms and Conditions.
Each Placee and any person acting on behalf of the Placee
acknowledges that the Joint Bookrunners do not owe any fiduciary or
other duties to any Placee in respect of any representations,
warranties, undertakings, acknowledgements, agreements or
indemnities in the Placing Agreement.
The provisions of these Terms and Conditions may be varied,
waived or modified as regards specific Placees or on a general
basis by either of the Joint Bookrunners provided always that such
variation, waiver or modification is not materially prejudicial to
the interests of the Company or the other Joint Bookrunner.
In the case of a joint agreement to acquire Placing Shares,
references to a "Placee" in these Terms and Conditions are to each
of such Placees and such joint Placees' liability is joint and
several.
Each Placee and any person acting on behalf of the Placee
acknowledges and agrees that either of the Joint Bookrunners may
(at its absolute discretion) satisfy its obligations to procure
Placees by itself agreeing to become a Placee in respect of some or
all of the Placing Shares or by nominating any connected or
associated person to do so.
When a Placee or any person acting on behalf of the Placee is
dealing with a Joint Bookrunner, any money held in an account with
the Relevant Joint Bookrunners on behalf of the Placee and/or any
person acting on behalf of the Placee will not be treated as client
money within the meaning of the relevant rules and regulations of
the FCA made under the FSMA. Each Placee acknowledges that the
money will not be subject to the protections conferred by the
client money rules: as a consequence this money will not be
segregated from the Relevant Joint Bookrunner's money in accordance
with the client money rules and will be held by it under a banking
relationship and not as trustee.
In these Terms and Conditions any words following the terms
"including", "include", "in particular", "for example" or any
similar expression shall be construed as illustrative and shall not
limit the sense of the words, description, definition, phrase or
term preceding those terms.
References to time in the Terms and Conditions are to London
time, unless otherwise stated.
All times and dates in these Terms and Conditions may be subject
to amendment. Placees will be notified of any changes.
No statement in the Announcement, these Terms and Conditions or
the Circular is intended to be a profit forecast or estimate, and
no statement in the Announcement, these Terms and Conditions or the
Circular should be interpreted to mean that earnings per share of
the Company for the current or future financial years would
necessarily match or exceed the historical published earnings per
share of the Company.
The price of shares and any income expected from them may go
down as well as up and investors may not get back the full amount
invested upon disposal of the shares. Past performance is no guide
to future performance, and persons needing advice should consult an
independent financial adviser.
The Placing Shares to be issued pursuant to the Placing will not
be admitted to trading on any stock exchange other than AIM.
Neither the content of the Company's website nor any website
accessible by hyperlinks on the Company's website is incorporated
in, or forms part of, these Terms and Conditions and/or the
Announcement.
DEFINITIONS
In this Announcement the following terms have the associated
meanings:
"Act" the Companies Act 2006 (as amended)
"Admission" means First Admission and/or Second
Admission as the context admits
-----------------------------------------------
"AIM" the AIM market operated by the London
Stock Exchange
-----------------------------------------------
"AIM Rules for Companies" means the rules of AIM as set out in
the publication entitled "AIM Rules
for Companies" published by the London
Stock Exchange from time to time
-----------------------------------------------
"Announcement" this announcement
-----------------------------------------------
"Application Form" the personalised application form that
will be posted with the Circular for
use by Qualifying Shareholders in connection
with the Open offer
-----------------------------------------------
"Bookbuild" an accelerated process conducted by
the Joint Bookrunners to determine demand
for participation in the Placing by
Placees
-----------------------------------------------
"Circular" means the explanatory circular, in the
agreed form, to be issued by the Company
to Shareholders explaining, inter alia,
the Fundraisings and incorporating the
notice of the General Meeting
-----------------------------------------------
"Company" Surface Transforms Plc registered in
England and Wales under number 03769702
whose registered office is at Image
Business Park Acornfield Road, Knowsley
Industrial Park, Liverpool, England,
L33 7UF
-----------------------------------------------
"CREST" the computerised settlement system to
facilitate transfer of the title to
an interest in securities in uncertificated
form operated by Euroclear
-----------------------------------------------
"Directors" or "Board" the directors of the Company at the
date of this Announcement
-----------------------------------------------
"Euroclear" Euroclear UK & Ireland Limited
-----------------------------------------------
"EV" means electric vehicles
-----------------------------------------------
"Existing Ordinary Shares" the 154,918,319 Ordinary Shares in issue
at the date of this Announcement
-----------------------------------------------
"finnCap" finnCap Ltd, a company incorporated
in England and Wales with company number
06198898, authorised and regulated by
the Financial Conduct Authority
-----------------------------------------------
"First Admission" means admission of the First Tranche
Shares to trading on AIM becoming effective
as provided in Rule 6 of the AIM Rules
for Companies
-----------------------------------------------
"First Admission Date" means 8.00 a.m. on 9 February 2021 or
such later time as the Joint Bookrunners
may agree with the Company but in any
event no later than 8.00 a.m. on the
Long Stop Date
-----------------------------------------------
"First Admission Settlement means the date the settlement of transactions
Date" in the First Tranche Shares following
the First Admission will take place
within the CREST system (subject to
certain exceptions) which is expected
to occur on 9 February 2021
-----------------------------------------------
"First Tranche Shares" means up to 4,000,000 new Ordinary Shares
to be issued pursuant to the Placing
to Placees seeking EIS or VCT relief
on their investment and which are proposed
to be admitted to trading on AIM on
the First Admission Date
-----------------------------------------------
"Fundraisings" means the Placing, the Subscription
and the Open Offer
-----------------------------------------------
"General Meeting" means the general meeting of the Company
to be held at Image Business Park, Acornfield
Lane, Knowsley Industrial Estate, Liverpool,
L33 7UF on 8 February 2021 at 10:00
a.m., convened pursuant to the notice
of general meeting included in the Circular
-----------------------------------------------
"Joint Bookrunners" means Zeus Capital and finnCap, each
a "Joint Bookrunner"
-----------------------------------------------
"London Stock Exchange" London Stock Exchange plc
-----------------------------------------------
"Long Stop Date" 26 February 2021
-----------------------------------------------
"New Ordinary Shares" together the Placing Shares and the
Open Offer Shares
-----------------------------------------------
"Notice of General Meeting" the notice of the General Meeting contained
within the Circular
-----------------------------------------------
"Open Offer" means the conditional invitation proposed
to be made by the Company to Qualifying
Shareholders to subscribe for the Open
Offer Shares
-----------------------------------------------
"Open Offer Shares" means up to 4,000,000 new Ordinary Shares
which are to be the subject of the Open
Offer
-----------------------------------------------
"Ordinary Shares" ordinary shares of GBP0.01 each in the
capital of the Company
-----------------------------------------------
"Placees" means the persons with whom Placing
Shares are placed pursuant to the Placing
-----------------------------------------------
"Placing" the conditional placing of the Placing
Shares by the Joint Bookrunners on behalf
of the Company at the Placing Price,
in accordance with the Placing Agreement,
including any Subscription Shares subscribed
for pursuant to the Subscription (as
applicable)
-----------------------------------------------
"Placing Agreement" the conditional placing agreement relating
to the Placing of the Placing Shares
(other than those Placing Shares which
will be subscribed for directly as part
of the Subscription) between the Company
and the Joint Bookrunners
-----------------------------------------------
"Placing Price" or "Issue 50 pence per New Ordinary Share
Price"
-----------------------------------------------
"Placing Shares" the 35,750,000 new Ordinary Shares to
be conditionally placed for cash with
investors pursuant to the Placing in
accordance with the terms of the Placing
Agreement, (being the First Tranche
Shares and/or the Second Tranche Shares
as the context admits )
-----------------------------------------------
"Qualifying Shareholders" means Shareholders on the register of
members of the Company as at a date
to be agreed by the Joint Bookrunners
and the Company, excluding certain overseas
Shareholders (as further described in
the Circular)
-----------------------------------------------
"Regulation S" Regulation S under the Securities Act
-----------------------------------------------
"Resolutions" the resolutions contained in the Notice
of General Meeting
-----------------------------------------------
"Second Admission" means admission of the Second Tranche
Shares to trading on AIM becoming effective
as provided in Rule 6 of the AIM Rules
-----------------------------------------------
"Second Admission Date" means 8.00 a.m. on 10 February 2021
or such later time as the Joint Bookrunners
may agree with the Company but in any
event no later than 8.00 a.m. on the
Long Stop Date
-----------------------------------------------
"Second Admission Settlement means the date the settlement of transactions
Date" in the Second Tranche Shares following
the Second Admission will take place
within the CREST system (subject to
certain exceptions) which is expected
to occur on 10 February 2021
-----------------------------------------------
"Second Tranche Shares" means the Placing Shares other than
the First Tranche Shares, the final
number of which shall be determined
by the Company and the Joint Bookrunners,
and the Open Offer Shares, which are
proposed to be admitted to trading on
AIM on the Second Admission Date
-----------------------------------------------
"Shareholders" holders of Ordinary Shares
-----------------------------------------------
"Subscription" any private subscription by the Directors
directly with the Company for Subscription
Shares at the Issue Price
-----------------------------------------------
"Subscription Shares" the 250,000 new Ordinary Shares subscribed
for by Directors pursuant to a Subscription
-----------------------------------------------
"SVP" means small volume production
-----------------------------------------------
"United States or US" the United States of America, its territories
and possessions, any state of the United
States and the District of Columbia
-----------------------------------------------
"Zeus Capital" means Zeus Capital Limited, a company
incorporated in England and Wales with
company number 04417845, authorised
and regulated by the Financial Conduct
Authority
-----------------------------------------------
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END
MSCSFEFWUEFSEDF
(END) Dow Jones Newswires
January 19, 2021 12:35 ET (17:35 GMT)
Grafico Azioni Surface Transforms (LSE:SCE)
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