TIDMZIN
RNS Number : 1055A
Zinc Media Group PLC
17 January 2020
THIS ANNOUNCEMENT, INCLUDING THE APPIX, AND THE INFORMATION
CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION
OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN,
INTO OR FROM THE UNITED STATES, THE REPUBLIC OF IRELAND, AUSTRALIA,
CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER
JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE
RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION. PLEASE SEE THE
IMPORTANT NOTICES AT THE OF THIS ANNOUNCEMENT AND AT THE START OF
THE APPIX.
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 ZINC MEDIA GROUP 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 ZINC MEDIA
GROUP PLC.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF ARTICLE 7 OF EU REGULATION 596/2014 ("MAR").
Zinc Media Group plc
("Zinc Media" or the "Company")
LAUNCH OF PLACING VIA ACCELERATED BOOKBUILD
Proposed Placing, Preference Share Conversion, Debt Conversion,
Debt Variation, Share Consolidation, Article Amendments and Capital
Reduction
Zinc Media Group plc, (AIM: ZIN), a leading TV and multimedia
content producer, is pleased to announce a proposed placing of
GBP3.5 million (gross) via an accelerated bookbuild placing to
institutional investors and other investors, alongside a preference
share conversion, debt conversion, debt variation, share
consolidation, article amendments and a proposed share
consolidation; such that every 500 Existing Ordinary Shares are
consolidated into one New Ordinary Share. The Placing is being
conducted at a price equivalent to 0.18 pence per share, or 90
pence per share as adjusted for the impact of the Share
Consolidation (the "Placing Price").
The proceeds of the Placing will be used primarily to fund the
Company's four-point transformational plan, adopted in September
2019 by the Group's new management team, to address issues of the
past and enable it to capitalise on its significant market
opportunity. The transformation plan prioritises the delivery of
improved margins and a diversified revenue base, whilst driving
cultural and creative renewal and building operational excellence.
The balance of the Placing proceeds will be used for servicing of
existing debt and for general working capital purposes.
Herald, the Company's largest shareholder, has indicated its
intention to support the Placing. In addition, it is proposed that
Herald receive New Ordinary Shares pursuant to the Preference Share
Conversion and that John Booth, another member of the Concert
Party, receive New Ordinary Shares pursuant to the Debt Conversion.
The aggregate proposed issue of New Ordinary Shares to the Concert
Party would be such that the increase in its percentage holding of
voting rights in the share capital of the Company, would require a
waiver pursuant to Rule 9 of the City Code on Takeovers and
Mergers. The Placing, the Preference Share Conversion and the Debt
Conversion are therefore conditional, inter alia, on the Panel
granting the Waiver and approval by Independent Shareholders of the
Whitewash Resolution.
The Placing is being conducted by N+1 Singer, the Company's
nominated adviser and joint broker and Peterhouse, the Company's
joint broker.
Mark Browning, CEO, commented:
"I am delighted that our existing shareholders, supported by
significant new investors, have backed the Group's transformation
plan. This placing will allow Zinc to invest in the plan and enable
the Group to deliver future profits following a period of
transition."
For further information, please contact:
Zinc Media Group plc +44 (0) 20 7878 2311
Mark Browning, CEO / Will Sawyer CFO
www.zincmedia.com
N+1 Singer (NOMAD and Joint Broker to Zinc
Media) +44 (0) 20 7496 3000
Mark Taylor / Lauren Kettle / Mia Gardner
/ Harry Mills
Peterhouse Capital Limited (Joint Broker
to Zinc Media) +44 (0) 20 7469 0932
Martin Lampshire / Duncan Vasey / Eran Zucker
Information on the Placing
The Placing, amongst other things, will be conditional on the
passing of certain resolutions at the General Meeting and agreement
by the Panel for the Waiver. There can be no guarantee that that
the Panel will grant the Waiver or that Independent Shareholders
will pass the Whitewash Resolution. A circular, providing further
details of the Placing and the wider Proposals, including a notice
convening the General Meeting to consider the Resolutions, will be
dispatched to Shareholders and be available on the Company's
website no later than on 24 January 2020 (the "Circular"). An
update on publication and posting of the Circular will be provided
in due course.
The book will open with immediate effect following this
Announcement. The timing of the closing of the book, pricing and
allocations are at the absolute discretion of the Joint Brokers and
the Company. The number of Placing Shares will be announced as soon
as practicable after the close of the Bookbuilding Process.
Certain of the Directors of the Company have indicated their
intention to subscribe for Placing Shares in the Placing. Further
details of the Placing and any participation by the Directors will
be set out in the announcement to be made on the closing of the
Bookbuilding Process.
The Placing Shares, when issued, will be fully paid and will
rank pari passu in all respects with the existing ordinary shares
of 0.125 pence each (following the Share Consolidation) in the
capital of the Company, including the right to receive all
dividends and other distributions declared, made or paid after the
date of issue. If the maximum number of Placing Shares are placed,
and Conversion Shares issued, it would represent an increase of
approximately 165 per cent. of the existing issued ordinary share
capital of the Company. Settlement for the Placing Shares and
Admission is expected to take place on or before 8.00 a.m. on 13
February 2020. The Placing is conditional upon, among other things,
the Resolutions required to implement the Placing being duly passed
by the shareholders of the Company at the General Meeting, upon
Admission becoming effective and the placing agreement between the
Company and the Joint Brokers (the "Placing Agreement") not being
terminated in accordance with its terms.
This Announcement should be read in its entirety. In particular,
your attention is drawn to the detailed terms and conditions of the
Placing and further information relating to the Placing and any
participation in the Placing that is described in the Appendix to
this Announcement (which forms part of this Announcement).
By choosing to participate in the Placing and by making an oral
and legally binding offer to acquire Placing Shares, investors will
be deemed to have read and understood this Announcement in its
entirety (including the Appendix), and to be making such offer on
the terms and subject to the conditions of the Placing contained
herein, and to be providing the representations, warranties and
acknowledgements contained in the Appendix.
Unless otherwise indicated, capitalised terms in this
Announcement have the meaning given to them in the definitions
section included in the Appendix.
The person responsible for releasing this announcement on behalf
of Zinc Media is Will Sawyer, a director of the Company.
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
2020
Publication of the Circular by no later than 24
January
Latest time and date for receipt of Proxy
Votes 10 a.m. on 10 February
Record Date in respect of the Share Consolidation 12 February
General Meeting 10 a.m. on 12 February
Admission and dealings in the New Ordinary
Shares expected to commence on AIM 8 a.m. on 13 February
Where applicable, expected date for CREST
accounts to be credited in respect of the
New Ordinary Shares in uncertificated form 13 February
Where applicable, expected date for despatch
of definitive share certificates for New by no later than 20
Ordinary Shares in certificated form February
Notes:
1. Each of the times and dates above are indicative only and are
subject to change. If any of the above times and/or dates change,
the revised times and/or dates will be notified by the Company to
Shareholders by announcement through a regulatory information
service.
2. All of the above times refer to London time unless otherwise stated.
About Zinc
Zinc Media Group plc is a leading British based TV and content
creation company and operates 6 TV labels and a non-TV content
division called Zinc Communicate.
The six award winning and critically acclaimed television
production labels include: Blakeway, Brook Lapping, Films of
Record, Blakeway North, Reef Television and Tern Television, whose
brands produce television and radio programmes for both UK and
international broadcasters.
Zinc Communicate specialises in creating B2B communications
strategies and behaviour change programmes, campaigns and resources
for partners, businesses and government departments.
For further information on Zinc Media please visit:
http://www.zincmedia.com/
BACKGROUND TO AND REASONS FOR THE PROPOSALS
Zinc's businesses in television and content creation produce
some of the UK's most respected and most watched content. The Group
is well-established as one of the country's premium content
companies led by trusted producers, operating under familiar and
respected labels. The Board believes that the Group's new
management team, appointed in FY19, has the ability to drive
significant long-term growth and Zinc is an attractive vehicle from
which to build a scalable content creation company.
Zinc generates healthy revenues, particularly in television,
although it is currently loss making and, due to the current lack
of scale, Group revenues are susceptible to peaks and troughs. The
Group's new management team, which has a strong track record of
turning media businesses around, has drawn up a detailed
transformation plan to capitalise on Zinc's significant market
opportunity. This plan requires investment to execute within the
targeted time frame.
In addition to the transformation plan, in order to simplify the
Group's capital structure, the Proposals include and the Board has
agreed the following actions to restructure the balance sheet and
shareholder base:
- Conversion of all remaining Preference Shares and outstanding
accrued dividends as at 15 January 2020 (being the latest
practicable Business Day prior to release of this announcement)
into New Ordinary Shares such that, subject to the requisite
approvals at the General Meeting, no Preference Shares remain on
the Company's balance sheet;
- The Debt Variation, agreed in principle pursuant to which the
term of the long-term debt held by two of the Group's major
shareholders, the Debt Holders, will be extended by two years from
December 2020 to December 2022 and the term of the unsecured loan
notes held by Herald will be extended on the same terms;
- The Capital Reduction, with the aim of bolstering the
Company's ability to make dividend payments to Shareholders in the
future; and
- Reorganising the Existing Share Capital of the Company by way
of the Share Consolidation, to improve the marketability of the
Ordinary Shares by way of a higher share price and to reduce
volatility in the Company's share price by narrowing the spread of
its bid and offer price.
Shareholders should note that, in connection with the Share
Consolidation and in accordance with the Articles: (i) no
Shareholder will be entitled to a fraction of a New Ordinary Share.
Instead, their entitlement will be rounded down to the nearest
whole number of New Ordinary Shares. Remaining fractional
entitlements to New Ordinary Shares will be aggregated and sold on
behalf, and for the benefit, of the Company (and Shareholders will
not receive any value for the sale of those fractional
entitlements); and (ii) if a Shareholder holds fewer than 500
Ordinary Shares as at the Record Date, then as a result of the
Share Consolidation they will cease to hold any New Ordinary Shares
(of any description) in the capital of the Company, and will
therefore cease to be a Shareholder.
Management change and turnaround strategy
The Company is embarking on a far-reaching transformation plan
to capitalise on its market opportunity and drive growth of the
business. This transition is being led by a new management team
with a proven and very recent track record of transforming
underperforming TV businesses into highly profitable companies,
supported by a refreshed board with deep media sector expertise
aligned to the needs of the Group.
The new management team, Mark Browning, CEO, and Will Sawyer,
CFO, joined the Group in April 2019 and October 2018 respectively.
This reunites the management team that led the turnaround of ITN
Productions over the last 10 years, growing its revenues
significantly, taking it from loss making to sustainably
profitable, and transforming it into one of the top independent
production companies in the UK.
Christopher Satterthwaite joined the Board as Chairman in June
2019, bringing a wealth of experience in the media and
communications sectors, and with the appointment of Andrew Garard
as non-executive director from ITV plc, the Group has someone who
has been at the forefront of M&A activity in its markets on a
global scale.
The Board believes it now has a proven team in place capable of
leading the transformation of Zinc into a significant content
creation company.
Transformation plan
The Company's new management team believe that the key to
unlocking the Group's full potential is to address the issues that
prevent the Group delivering the level of margin and profitability
that should be expected in a business of this scale.
Phase 1 of the plan is organic transformation. This phase will
focus on diversifying revenues and moving toward a sustainably
profitable business through organic growth and improved margins.
Completion of Phase 1 of the plan will ready the business for Phase
2 of the transformation plan: acquisitions that can be successfully
integrated and create scale, diversifying the Group's core offering
and enhancing its value.
Phase 1 of the transformation plan will prioritise four
areas:
1. Improvement in the gross margins of television production
The Group's television production revenues are strong, but gross
margins are below industry norms and are too low for a company of
the Group's scale. There are three ways in which the Company will
improve the television gross margins:
a) Reduce external costs through investment in in-house post
production facilities and production management staff;
b) Improve the culture, expectation and accountability for margin management discipline; and
c) Incentivise and reward staff responsible for margin management.
In the time since they joined the Company, Zinc's new management
have already identified production margin improvements, and actions
taken to date are already starting to drive increases in gross
margin levels. The Board anticipate that an investment of GBP0.6
million in post-production in the Group's London and Manchester
businesses, coupled with a drive to bring more post-production
in-house, has the potential to deliver cost savings of GBP1.8
million over three years.
2. Revenue growth and diversification
a) TV
The Group's television businesses need to diversify into new
genres and amongst a wider client base. This will take investment
and time but will create a better revenue and margin mix.
Diversification will also smooth the Group's revenue profile and
reduce its exposure to the inevitable peaks and troughs that come
when a business is dependent on a low number of high value
commissions from a small number of business generators.
The TV market opportunity is worth GBP3bn per annum, with public
sector broadcasters ("PSBs") representing 66 per cent., of market
spend and increasing their proportion of spend on Factual
commissions; now nearly GBP600m. Rapid growth is also coming from
multi-channel and SVOD spending, now worth approximately GBP1bn,
and further growth being driven by USA commissioning in Premium
Factual.
b) Non-TV:
The Group will be re-positioning both of its non-TV businesses,
Zinc Communicate Limited and Ten Alps Communications Limited, into
larger, integrated and more profitable markets by redefining the
product proposition and investing in new business generating
personnel. Based on the new management team's experience of
building non-TV content businesses, the Board is confident that
these businesses can make a positive contribution to the Group and,
indeed, that in the medium term they have the potential to deliver
higher margin revenues than traditional TV production.
3. Cultural and creative renewal
The objective is for Zinc to be a highly effective organisation
balancing commercial, creative and cultural competencies.
Previously there has been less focus on the commercial and cultural
aspects of the Group. A number of initiatives will help to achieve
this, such as creating a transparent, collaborative culture from
the top, increased focus on margins and improving management
information to improve decision making and promote ownership and
accountability.
A key aspect underpinning cultural renewal has been to establish
an incentivisation structure to reward the right behaviours and
align the interests of employees and management with all
stakeholders, which previously very few employees had access to. As
such, many revenue generating roles and cost management roles are
now part of a Group-wide bonus scheme which is geared towards
rewarding margin and profitability improvements. Furthermore, the
remuneration packages of the CEO and CFO are aligned to phase one
of the transformation plan and measured against KPIs set out in the
plan. The outline of a long-term share option incentive plan has
been agreed in principle by the Board and is anticipated to be
approved and formally adopted by the remuneration committee in
early 2020, to reward longer term creation of Shareholder
value.
4. Investment in operational excellence
The Board's objective is to be a cohesive group of creative
content companies built on common DNA, benefiting from a central
'core' and delivering commercial value at scale, which itself
becomes a compelling factor in attracting the best talent. This
will involve investment in:
a) Group functions to provide a spine which adds value to
divisional businesses by delivering operational excellence;
b) Relocating Zinc's headquarters in London to a fit for purpose creative space; and
c) Improving workflows and decision making, readying the
business for acquisitions that can be successfully integrated to
add scale in Phase 2 of the Group's transformation plan.
Market opportunity
The Board believes that the Group's market opportunity is
considerable and, with the benefit of the actions management have
identified, Zinc should be well placed to take advantage. Revenues
from UK TV production companies grew to record levels in the last
12 months, the SVOD and multi-channel commissioning market is
buoyant, made outside London (where the Group has a strong
platform) factual commissioning continues to grow, and the non-TV
revenues of UK indies are also delivering strong growth across the
sector.
International expansion, particularly within the growing SVOD
market, remains a largely untapped growth area for Zinc's
television business. In addition, there is further opportunity to
grow revenues from international multi-channel networks and build
on the recent well received productions for the likes of National
Geographic.
As a leading producer in the UK nations and regions, with a
growing reputation with the international multi-channels and
untapped potential in non-TV content creation, the Group can become
a vehicle for significant profit growth in the years ahead.
CURRENT TRADING AND PROSPECTS
The Company announced its audited results for the 12 months
ended 30 June 2019 on 11 November 2019, in which it reported Group
adjusted EBITDA of GBP0.13m on revenues of GBP24.63m.
The Group's revenue continued to perform well in FY19, a year on
year increase of 14 per cent., driven by growth in television where
revenues were up GBP3.6m (21 per cent.). Highlights of this strong
revenue performance in television include:
- MoL revenues up 32 per cent. year on year, driven by Tern Television;
- International commissions at 20 per cent. of TV revenues with
commissions from HBO, National Geographic and Smithsonian;
- Commissions from all UK PSB (Public Service Broadcaster)
channels, including the prestigious 9pm slot on ITV and a BAFTA
award winning programme for BBC1; and
- First SVOD commission with Love Nature through the Group's
specialist factual division Blakeway.
FY20 will be a transitional year for the Group as it addresses
the profitability challenge it faces. The Board is confident it has
good visibility of the issues within the Group and know where
improvements need to be made. We will focus on diversifying and
growing our revenue within TV and non-TV, improving margins and
building cultural and operational excellence. The medium-term
prospects for sustained profitability look very positive.
THE PLACING
The Company proposes to raise GBP3.5 million (before expenses)
through the issue of the Placing Shares at the Placing Price, which
represented a discount of 23.4 per cent. to the closing mid-market
price of an Ordinary Share of 0.235 pence (or 117.5 pence, as
adjusted for the Share Consolidation) on 16 January 2020, being the
Business Day prior to release of this announcement.
Herald and the John Booth Parties have indicated an intention to
subscribe for Placing Shares at the Placing Price. Subject to
completion of the Placing, the Preference Share Conversion and the
Debt Conversion, the Concert Party, who currently hold, in
aggregate, 38.04 per cent of the voting rights of the Company, are
expected to increase their aggregate holding of voting rights to
such a level that, without a waiver of the obligations under Rule 9
of the Code, would require the Concert Party to make a general
offer for the Company. The Placing will therefore be conditional
on, inter alia, agreement by the Panel to the Waiver and the
passing of the Whitewash Resolution (on a poll) by Independent
Shareholders, such that any Shareholder presumed to be acting in
concert with the Concert Party will be disenfranchised from
voting.
The Placing Shares and Conversion Shares will rank pari passu in
all respects with Ordinary Shares in issue prior to completion of
the Placing, the Preference Share Conversion and the Debt
Conversion, including the right to receive all dividends and other
distributions declared following Admission.
The Code applies to the Company and as such the Shareholders are
entitled to the protections afforded by the Code, as described in
the section entitled 'City Code on Takeovers and Mergers' below.
Should the Panel not agree to grant the Waiver or the approval of
Independent Shareholders not be obtained at the General Meeting,
the Placing, the Preference Share Conversion and the Debt
Conversion will not proceed.
The Placing Agreement
Pursuant to the terms of the Placing Agreement, the Joint
Brokers have conditionally agreed to use their respective
reasonable endeavours, as agents for the Company, to place the
Placing Shares with certain institutional and other investors. The
Placing has not been underwritten. The Placing Agreement is
conditional upon the conditions therein including, inter alia, the
Resolutions being duly passed without amendment at the General
Meeting and Admission becoming effective on or before 8.00 a.m. on
13 February 2020 (or such later time and/or date as the Company,
N+1 Singer and Peterhouse may agree, but in any event by no later
than 8.00 a.m. on 2 March 2020).
The Placing Agreement contains warranties from the Company in
favour of the Joint Brokers and the Company has agreed to indemnify
the Joint Brokers in relation to certain liabilities it may incur
in respect of the Placing. The Joint Brokers have the right to
terminate the Placing Agreement in certain circumstances prior to
Admission, in particular, in the event that any of the warranties
given to the Joint Brokers in the Placing Agreement are untrue or
inaccurate in any material respect or the failure of the Company to
comply in any material respect with its obligations under the
Placing Agreement.
INDICATIVE USE OF PROCEEDS
The net proceeds of the Placing receivable by the Company,
anticipated to amount to approximately GBP3.2m, are expected to be
used to support:
Objective 1: Improvements to London and Manchester
TV gross margin: Investment in post-production editing
kit to capitalise on the Group's economies of scale
and enhance television gross margins GBP0.8m
Objective 2: Revenue diversification: Investment in
business development staff in TV and non-TV GBP0.9m
Objective 3: Culture & creative: Driven by investments
in operational excellence and new management initiatives GBPnil
Objective 4: Investment in operational excellence:
Relocation of the Group's headquarters in London and
investment in technology, human resources and finance
personnel GBP0.8m
General working capital and servicing of debt GBP0.7m
The expected use of the net proceeds represents the Directors'
current intentions based on the Group's present plans and business
condition. The Directors will retain broad discretion in the
allocation and use of the net proceeds.
PREFERENCE SHARE CONVERSION
The Company currently has GBP767,354 of Preference Shares in
issue, which carry an annual coupon of 4.5 per cent. per annum. As
at 15 January 2020 (being the latest practicable Business Day prior
to this announcement) there are unpaid dividends accrued on the
Preference Shares totalling GBP92,554. The Preference Shares are
held entirely by Herald and, pursuant to the provisions of the
Articles, can currently be converted (together with all accrued and
unpaid dividends thereon) at 2.5 pence per Ordinary Share at the
holder's option.
In connection with the Proposals, the Company and Herald have
agreed, in principle, to convert the remaining balance of principal
of the Preference Shares and all accrued and unpaid dividends at
the Placing Price.
In order to achieve the Preference Share Conversion, it is
proposed that the Company undertake the Consolidation and
Redesignation, the Ordinary Share Bonus Issue and the Preference
Dividend Share Issue. Specifically it is proposed that:
(i) the Preference Shares be consolidated and redesignated into
New Ordinary Shares (creating the Redesignated Shares);
(ii) the amount standing to the credit of the Company's share
premium account be capitalised and thereafter applied in paying up,
at par and in full, the Bonus Shares and allocating them to Herald;
and
(iii) the Company issue the Preference Dividend Shares, at the
Placing Price, to Herald, in consideration of Herald releasing the
Company's liability to pay the accumulated unpaid dividend on the
Preference Shares totalling GBP92,554.
The combination of the above steps would result in the
conversion of the entire outstanding balance of Preference Shares,
and all accrued and unpaid dividends on the Preference Shares, into
Ordinary Shares, at an effective conversion price equal to the
Placing Price. It would also cause an increase to the Company's
share premium account which will be included, subsequently, in the
Capital Reduction (see below for details).
The Directors believe the Preference Share Conversion to be in
the best interests of the Independent Shareholders, as it serves to
simplify the Group's capital structure and balance sheet, thus
making it more attractive to potential investors.
DEBT CONVERSION
The Company currently has outstanding debt owing to JB (not
including, for the avoidance of doubt, debt owing to JBCF)
totalling GBP77,482 (inclusive of all principle and interest as at
15 January 2020 (being the latest practicable Business Day prior to
the release of this announcement)). In connection with the
Proposals, the Company and JB have agreed, in principle, to convert
that debt amount at the Placing Price, into Conversion Shares.
The Directors believe the Debt Conversion to be in the best
interests of the Independent Shareholders, as it serves to simplify
the Group's capital structure and balance sheet, thus making it
more attractive to potential investors.
DEBT VARIATION
The Company currently has approximately GBP2.74 million of
long-term loans outstanding held by the Debt Holders who are also
Shareholders. The interest rate on these loans is 4 per cent. plus
monthly LIBOR, with a repayment date of 31 December 2020.
Furthermore, Herald hold unsecured loan notes with a value of
approximately GBP1.03m (including principal and accrued interest).
Interest charged on the loan notes at a fixed rate of 8 per cent.
and the loan notes have a repayment date of 31 December 2020.
The Company has negotiated and agreed, in principle, the Debt
Variation with the Debt Holders pursuant to which the repayment
date of the long term loans and the unsecured loan notes will be
extended by two years from December 2020 to December 2022. It is
proposed that all other terms shall remain the same, including the
interest rates applied to the long-term debt and the unsecured loan
notes.
THE SHARE CONSOLIDATION
As at the date of this announcement, the Company has
1,489,573,609 Ordinary Shares in issue, with a closing mid-market
price of 0.235 pence per Ordinary Share (as at 16 January 2020,
being the latest practicable Business Day prior to this
announcement). The Board believes that the Share Consolidation will
improve the marketability of the Ordinary Shares by way of a higher
share price and hopes to reduce volatility in the Company's share
price by narrowing the spread of its bid and offer price.
It is therefore proposed, pursuant to the Share Consolidation,
that the Existing Ordinary Shares are consolidated on a 500 for 1
basis, such that every 500 Ordinary Shares are consolidated into
one New Ordinary Share of 0.125 pence in nominal value. Assuming a
share capital of 1,489,573,609 Ordinary Shares immediately prior to
the Record Date; immediately following completion of the Share
Consolidation but prior to the issue of the Placing Shares and the
Conversion Shares, the Company will have 2,979,147 New Ordinary
Shares in issue.
No Shareholder will be entitled to a fraction of a New Ordinary
Share. Instead, their entitlement will be rounded down to the
nearest whole number of New Ordinary Shares. Remaining fractional
entitlements to New Ordinary Shares will be aggregated and sold on
behalf, and for the benefit, of the Company (and Shareholders will
not receive any value for the sale of those fractional
entitlements). If a Shareholder holds fewer than 500 Ordinary
Shares as at the Record Date, such that the rounding down process
results in a Shareholder being entitled to zero New Ordinary
Shares, then as a result of the Share Consolidation they will cease
to hold any Ordinary Shares (of any description) in the capital of
the Company, and will therefore cease to be a Shareholder.
The New Ordinary Shares will have the same rights as the
Ordinary Shares, including voting, dividend and other rights. The
entitlement of any holders of securities or instruments convertible
into Shares (such as options and warrants) shall be adjusted in
accordance with the terms of such securities or instruments
following implementation of the Share Consolidation.
CAPITAL REDUCTION
Background and reasons for the Capital Reduction
As at the date of this announcement, the Company has negative
distributable reserves and is, therefore, prohibited under the
Companies Act 2006 from making distributions to its Shareholders,
including the payment of dividends.
As at 30 November 2019, the Company had accumulated losses
amounting to GBP36.3m. As at the same date (but assuming completion
of the Preference Share Conversion), the Company had GBP30.6m
standing to the credit of its share premium account, and GBP0.9m
standing to the credit of its merger reserve. It also has in issue
the Deferred Shares and the D Deferred Shares which, as a result of
the rights attaching to those shares, effectively have no economic
value. The Board does not consider there to be any commercial
purpose in the Deferred Shares and the D Deferred Shares.
The Company is seeking the approval of Shareholders to the
Capital Reduction, which will cancel the entire balance standing to
the credit of the Company's share premium account, and through the
issue of the Capital Reduction Shares and their subsequent
cancellation, an amount equal to the Company's merger reserve. The
Company's share capital will also be further reduced by the
cancellation of the Deferred Shares and the D Deferred Shares for
no consideration. Pursuant to article 5.1.6 of the Articles, the
cancellation of the Deferred Shares and the D Deferred Shares
pursuant to a Capital Reduction for no consideration will not
constitute a variation of the rights attaching to the Deferred
Shares or the D Deferred Shares. Consequently, the Capital
Reduction can be approved without the approval of the holders of
the Deferred Shares or D Deferred Shares.
The Capital Reduction will create realised profits of GBP37.4m
that should be sufficient to eliminate the current deficit on the
Company's retained loss account. As a result, any positive
distributable reserves generated by the Company after the date on
which the Capital Reduction takes effect should be available for
the Board to use in offsetting future losses or for the purposes of
paying dividends in the future, subject to the continuing
satisfactory financial performance of the Group. However, in
seeking approval of the Capital Reduction, the Board are not
indicating any commitment to make any distributions at this time.
Furthermore, the Capital Reduction itself will not involve any
distribution or repayment of capital or share premium by the
Company to its Shareholders, and it will not reduce the underlying
net assets of the Company. Following the implementation of the
Capital Reduction, there will be no change to the number of New
Ordinary Shares in issue.
The Directors believe the Capital Reduction to be in the best
interests of the Shareholders, as it serves to put the Company in a
better position to pay dividends in the future. As with the Share
Consolidation, it also serves to simplify the Group's capital
structure and balance sheet, thus making it more attractive to
potential investors.
If approved by Shareholders, the Capital Reduction will require
subsequent approval by the Court.
The Capital Reduction and the Court process
In order to eliminate the accumulated losses of GBP36.3m on the
Company's profit and loss account, it is proposed that:
(i) the amount standing to the credit of the Company's merger
reserve in the sum of GBP0.9m is capitalised by way of a bonus
issue of newly created Capital Reduction Shares;
(ii) the newly created Capital Reduction Shares are cancelled;
(iii) the entire amount standing to the credit of the Company's
share premium account (such amount being GBP30.5m, as at 30
November 2019, (being the latest accounts prior to release of this
announcement) (and assuming completion of the Preference Share
Conversion ) is cancelled; and
(iv) the Deferred Shares and the D Deferred Shares are cancelled for no consideration.
The cancellations, if approved by Court, will create realised
pro ts suf cient to eliminate the accumulated losses of the Company
and establish positive distributable reserves. If the requisite
Shareholder approval is obtained for the Capital Reduction, the
Company will seek con rmation and approval of the Capital Reduction
by the Court. In order to provide the con rmation, the Court must
be satis ed that the significant creditors of the Company whose
debts are outstanding on the effective date of the Capital
Reduction are not prejudiced by the Capital Reduction and that
there is no real likelihood that the Capital Reduction would result
in the Company being unable to discharge its debts or claims as and
when they fall due.
The Company will therefore be required to give such undertakings
or other form of creditor protection as the Court may require for
the bene t of these creditors. These may include seeking the
consent of the Company's significant creditors to the Capital
Reduction. The Company currently has outstanding long-term debt
owing to the Debt Holders, as well as other customary trade
payables.
It is anticipated that the first orders hearing in relation to
the Capital Reduction will take place on or around 19 February
2020, with the nal Court Hearing taking place on or around 4 March
2020. In order for the Capital Reduction to become effective, the
order of the Court con rming it, under section 648 of the Companies
Act 2006, must be registered with the Registrar of Companies, which
is expected to be completed within two days of the Court Hearing.
The Capital Reduction is therefore expected to become effective on
or around 6 March 2020.
The Board reserves the right to abandon or to discontinue (in
whole or in part) the application to the Court for the Capital
Reduction in the event that the Board considers that the terms on
which the proposed Capital Reduction would be (or would be likely
to be) confirmed by the Court would not be in the best interests of
the Company and/or the Shareholders as a whole. The Board have
undertaken a thorough and extensive review of the Company's
liabilities (including contingent liabilities) and considers that
the Company will be able to satisfy the Court that, as at the date
on which the Court Order relating to the proposed Capital Reduction
and the statement of capital in respect of the proposed Capital
Reduction have both been registered by the Registrar of Companies
at Companies House and the proposed Capital Reduction therefore
becomes effective, the Company's significant creditors will either
have consented to the proposed Capital Reduction or be sufficiently
protected.
The Capital Reduction Bonus Issue and the rights of the Capital
Reduction Shares
It is proposed to capitalise the sum of GBP0.9m standing to the
credit of the Company's merger reserve by applying that sum in
paying up in full new Capital Reduction Shares prior to the Court
Hearing (such capitalisation to take effect at the Capital
Reduction Record Time), and allotting and issuing such Capital
Reduction Shares by way of a bonus issue to the persons at that
point holding New Ordinary Shares on the basis of one Capital
Reduction Share for every one New Ordinary Share held at the
Capital Reduction Record Time. The Capital Reduction Shares will
not be admitted to trading on AIM or any other market. No share
certi cates will be issued in respect of the Capital Reduction
Shares. The Capital Reduction Shares will carry no rights to vote,
no rights to participate in the pro ts of the Company and no rights
to participate in the Company's assets, save on a winding-up. The
Capital Reduction Shares will be transferable, but no market will
exist in them and it is anticipated that the Court will con rm
their cancellation at the Court Hearing on the day immediately
after the date on which they have been issued. The capitalisation
of the merger reserve is needed as an additional step since the
Court only has the power to reduce share capital and other
statutory reserves, including the share premium. Hence, in order to
utilise the merger reserve in the Capital Reduction, it is
necessary to convert the reserves into share capital (the Capital
Reduction Shares) and thereafter to cancel the Capital Reduction
Shares.
ARTICLE AMMENTS
The Board is proposing that its Articles be amended and replaced
to reflect the following necessary changes arising as a result of
Share Consolidation and Preference Share Conversion.
(a) amending the nominal value of the Ordinary Shares from
0.00025 pence to 0.125 pence, to take into account the Share
Consolidation; and
(b) the removal of all references to Preference Shares (which
will no longer exist following the Preference Share Conversion)
A copy of the proposed new articles (and a comparison showing
all changes) will be made available at the General Meeting.
Shareholder approval is being sought at the General Meeting to
approve these changes.
CITY CODE ON TAKEOVERS AND MERGERS
The proposed terms of the Placing, Preference Share Conversion
and Debt Conversion gives rise to certain considerations under the
Code. Brief details of the Code and the protection this affords
Shareholders are described below.
The Code is issued and administered by the Panel. The Code and
the Panel operate to ensure fair and equal treatment of
shareholders in relation to takeovers, and also provide an orderly
framework within which takeovers are conducted. The Code applies to
all takeovers and merger transactions, where the company is, among
others, a listed or unlisted public company with its registered
office in the United Kingdom, the Channel Islands or the Isle of
Man or falls within certain categories of private limited
companies. Zinc is such a company and accordingly its Shareholders
are entitled to protection afforded by the Code.
Under Rule 9 of the Code, when a person acquires an interest in
shares which, taken together with shares in which he and persons
acting in concert with him are interested in, carry 30 per cent. or
more of the voting rights of a company subject to the Code, or any
person who, together with persons acting in concert with him, is
interested in shares which in aggregate carry not less than 30 per
cent. of the voting rights of a company but does not hold shares
carrying more than 50 per cent. of the voting rights of the company
subject to the Code, and such person, or any persons acting in
concert with him, acquires an interest in any other shares which
increases the percentage of the shares carrying voting rights in
which he is interested, then in either case, that person together
with the persons acting in concert with him, is normally required
to make a general offer in cash, at the highest price paid by him,
or any persons acting in concert with him, for shares in that
company or an interest in shares in that company within the
preceding 12 months, for all the remaining equity share capital of
that company.
Under the Code, a 'concert party' arises, inter alia, when
persons who, pursuant to an agreement or understanding (whether
formal or informal), co-operate, to obtain or consolidate control
of that company.
Under the Code, control means an interest, or interests, in
shares carrying in aggregate 30 per cent. or more of the voting
rights of a company, irrespective of whether such interest or
interests give de facto control. In this context, voting rights
means all the voting rights attributable to the capital of the
company which are currently exercisable at a general meeting.
The Panel has determined that Herald and John Booth Parties are
acting 'in concert'. The proposed participation by the Concert
Party in the Placing, the Preference Share Conversion and the Debt
Conversion is such that it would ordinarily trigger a requirement
for a Rule 9 Offer.
Under Note 1 on the Notes on the Dispensations from Rule 9, the
Panel will normally waive the requirement for a Rule 9 Offer if,
inter alia, those shareholders of the Company who are independent
of the person who would otherwise be required to make an offer pass
an ordinary resolution on a poll at a general meeting approving
such a waiver.
The proposed participation by Herald and the other members of
the Concert Party in the Placing, the Preference Share Conversion
and the Debt Conversion remains subject to the agreement with the
Panel, and subject to approval by Independent Shareholders' (being
Shareholders other than members of the Concert Party) on a poll of
the Whitewash Resolution, to waive the requirement for Herald and
the other members of the Concert Party to make a Rule 9 Offer to
all Shareholders where such an obligation would otherwise arise as
a result of the Placing, the Preference Share Conversion and the
Debt Conversion. The Whitewash Resolution will be passed if
approved by a simple majority of votes cast by the Independent
Shareholders on a poll.
You should note that if the Placing, the Preference Share
Conversion and the Debt Conversion complete, it is proposed that
the Concert Party will increase its aggregate holding of voting
rights and will hold New Ordinary Shares that carry more than 30
per cent. of such voting rights but less than 50 per cent. of such
voting rights.
Therefore, the Concert Party will not be entitled to increase
its interest in the voting rights of the Company without incurring
a further obligation under Rule 9 of the Code to make a general
offer (unless a dispensation from this requirement has been
obtained from the Panel in advance). In the event that the
Whitewash Resolution is approved at the General Meeting, the
Concert Party, or individual members thereof, will not be
restricted from making an offer for the Company.
Independent Shareholders should also note that if the Placing,
the Preference Share Conversion and the Debt Conversion proceed,
the Concert Party's interest in the voting rights of the Company
combined will result in an increase in the percentage of the New
Ordinary Shares that are not in public hands (as defined in the AIM
Rules). This may in turn have the effect of reducing the liquidity
of trading in the New Ordinary Shares on AIM. The Concert Party's
proposed stake in the voting rights of the Company will also mean
that the Concert Party will be able, if it so wishes, to exert
significant influence over resolutions proposed at future general
meetings of the Company.
GENERAL MEETING
The Board will seek approval of Independent Shareholders in
relation to the Whitewash Resolution and Shareholder approval more
generally of the Resolutions. The Circular, together with a notice
convening the General Meeting at which the Resolutions, including
the Whitewash Resolution, will be proposed, will be posted to
Shareholders in due course.
SETTLEMENT AND DEALINGS
Application will be made to the London Stock Exchange for the
Placing Shares and the Conversion Shares to be admitted to trading
on AIM. It is expected that Admission will become effective at 8.00
a.m. on 13 February 2020. Following completion of the Share
Consolidation, the Company's New Ordinary Shares will continue to
be eligible for CREST settlement but will trade under a new ISIN,
GB00BJVLR251.
The Placing Shares and Conversion Shares, when issued, will rank
pari passu in all respects with the Existing Ordinary Shares,
including the right to receive dividends and other distributions
following Admission.
Important Notices
MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE
PLACING. THIS ANNOUNCEMENT (INCLUDING THE APPIX) AND THE TERMS AND
CONDITIONS SET OUT HEREIN (TOGETHER, THIS "ANNOUNCEMENT") 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:
(1) IF IN A MEMBER STATE OF THE EUROPEAN ECONOMIC AREA ("EEA"),
QUALIFIED INVESTORS AS DEFINED IN ARTICLE 2(e) OF REGULATION (EU)
2017/1129 (THE "PROSPECTUS REGULATION"); (2) IF IN THE UNITED
KINGDOM, QUALIFIED INVESTORS WHO (A) FALL WITHIN ARTICLE 19(5) OF
THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION)
ORDER 2005, AS AMED (THE "ORDER") (INVESTMENT PROFESSIONALS) OR (B)
FALL WITHIN ARTICLE 49(2)(a) TO (d) (HIGH NET WORTH COMPANIES,
UNINCORPORATED ASSOCIATIONS, ETC.) OF THE ORDER (ALL SUCH PERSONS
TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS").
THIS ANNOUNCEMENT AND THE INFORMATION IN IT MUST NOT BE ACTED ON
OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. PERSONS
DISTRIBUTING THIS ANNOUNCEMENT MUST SATISFY THEMSELVES THAT IT IS
LAWFUL TO DO SO. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH
THIS ANNOUNCEMENT RELATES IS AVAILABLE ONLY TO RELEVANT PERSONS AND
WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. THIS ANNOUNCEMENT
DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY
SECURITIES IN ZINC MEDIA GROUP 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 WITH ANY SECURITIES REGULATORY AUTHORITY OF
ANY STATE OR JURISDICTION OF THE UNITED STATES, AND MAY NOT BE
OFFERED, SOLD OR 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 OF THE UNITED STATES IN
"OFFSHORE TRANSACTIONS" WITHIN THE MEANING OF, AND IN ACCORDANCE
WITH, REGULATION S UNDER THE SECURITIES ACT. NO PUBLIC OFFERING OF
THE PLACING SHARES IS BEING MADE IN THE UNITED STATES OR
ELSEWHERE.
THIS ANNOUNCEMENT (INCLUDING THE APPIX) AND THE INFORMATION
CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION
OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR
INTO OR FROM THE UNITED STATES, THE REPUBLIC OF IRELAND, AUSTRALIA,
CANADA, THE REPUBLIC OF SOUTH AFRICA OR JAPAN OR ANY OTHER
JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION
WOULD BE UNLAWFUL.
THIS ANNOUNCEMENT IS NOT FOR PUBLICATION OR DISTRIBUTION,
DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES OF AMERICA.
THIS ANNOUNCEMENT IS NOT AN OFFER OF SECURITIES FOR SALE INTO THE
UNITED STATES. THE SECURITIES REFERRED TO HEREIN HAVE NOT BEEN AND
WILL NOT BE REGISTERED UNDER THE SECURITIES ACT AND MAY NOT BE
OFFERED OR SOLD IN THE UNITED STATES, EXCEPT PURSUANT TO AN
APPLICABLE EXEMPTION FROM REGISTRATION. NO PUBLIC OFFERING IS BEING
MADE IN THE UNITED STATES.
The distribution of this Announcement 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 Brokers 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 this Announcement
or any other offering or publicity material relating to such
Placing Shares in any jurisdiction where action for that purpose is
required. Persons into whose possession this Announcement comes are
required by the Company and The Joint Brokers to inform themselves
about and to observe any such restrictions.
This Announcement or any part of it is for information purposes
only and does 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 (including its
territories and possessions, any state of the United States and the
District of Columbia (the "United States" or the "US")), the
Republic of Ireland. 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.
All offers of the Placing Shares in the EEA will be made
pursuant to an exemption under the Prospectus Regulation from the
requirement to produce a prospectus. In the United Kingdom, this
Announcement is being directed solely at persons in circumstances
in which section 21(1) of the Financial Services and Markets Act
2000 (as amended) 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 this
Announcement. 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 from 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 offered
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 outside the United Kingdom.
Persons (including, without limitation, nominees and trustees)
who have a contractual right or other legal obligations to forward
a copy of this Announcement should seek appropriate advice before
taking any action.
By participating in the Placing, each person who is invited to
and who chooses to participate in the Placing (a "Placee") by
making an oral and legally binding offer to acquire Placing Shares
will be deemed to have read and understood this Announcement in its
entirety, to be participating, making an offer and acquiring
Placing Shares on the terms and conditions contained herein and to
be providing the representations, warranties, indemnities,
acknowledgements and undertakings contained in the Appendix.
N+1 Singer is acting as joint broker and as agent for and on
behalf of the Company for the Placing. N+1 Singer is authorised and
regulated by the Financial Conduct Authority (the "FCA") in the
United Kingdom. N+1 Singer is acting exclusively for the Company
and no one else in connection with the matters referred to in this
Announcement and N+1 Singer will not be responsible to anyone other
than the Company for providing the protections afforded to its
clients or for providing advice in relation to the matters
described in this Announcement.
Peterhouse is acting as financial adviser and joint broker to
the Placing, as agent for and on behalf of the Company. Peterhouse
is authorised and regulated in the United Kingdom by the FCA and is
acting exclusively for the Company and no one else in connection
with the matters referred to in this Announcement and will not be
responsible to anyone other than the Company for providing the
protections afforded to the customers of Peterhouse or for
providing advice in relation to the matters described in this
Announcement.
No representation or warranty, express or implied, is or will be
made as to, or in relation to, and no responsibility or liability
is or will be accepted by either Joint Broker or by any of its
affiliates or agents as to, or in relation to, the accuracy or
completeness of this Announcement or any other written or oral
information made available to or publicly available to any
interested party or its advisers, and any liability therefor is
expressly disclaimed.
No statement in this Announcement is intended to be a profit
forecast or estimate, and no statement in this Announcement should
be interpreted to mean that earnings per share of the Company for
the current or future financial years would necessarily match or
exceed the historical published earnings per share of the
Company.
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. No statement in this Announcement is
intended to be a profit forecast and no statement in this
Announcement should be interpreted to mean that earnings per share
of the Company for the current or future financial years would
necessarily match or exceed the historical published earnings per
share of the Company.
The Placing Shares to be issued pursuant to the Placing will not
be admitted to trading on any stock exchange other than on the AIM
market of the London Stock Exchange.
Neither the content of the Company's website nor any website
accessible by hyperlinks on the Company's website is incorporated
in, or forms part of, this Announcement.
This Announcement includes statements, estimates, opinions and
projections with respect to anticipated future performance of the
Company ("forward-looking statements") which reflect various
assumptions concerning anticipated results taken from the Company's
current business plan or from public sources which may or may not
prove to be correct. These forward looking statements can be
identified by the use of forward looking terminology, including the
terms "anticipates", "target", "believes", "estimates", "expects",
"intends", "may", "plans", "projects", "should" or "will", or, in
each case, their negative or other variations or comparable
terminology or by discussions of strategy, plans, objectives,
goals, future events or intentions. Such forward-looking statements
reflect current expectations based on the current business plan and
various other assumptions and involve significant risks and
uncertainties and should not be read as guarantees of future
performance or results and will not necessarily be accurate
indications of whether or not such results will be achieved. As a
result, prospective investors should not rely on such
forward-looking statements due to the inherent uncertainty therein.
No representation or warranty is given as to the completeness or
accuracy of the forward-looking statements
contained in this Announcement. Forward-looking statements speak
only as of the date of such statements and, except as required by
the FCA, the London Stock Exchange or applicable law, the Company
undertakes no obligation to update or revise publicly any
forward-looking statements, whether as a result of new information,
future events or otherwise. No statement in this Announcement is
intended to be a profit forecast and no statement in this
Announcement should be interpreted to mean that earnings per share
of the Company for the current or future financial years would
necessarily match or exceed the historical published earnings per
share of the Company.
Notice to distributors
Solely for the purposes of the product governance requirements
contained within: (a) EU Directive 2014/65/EU on markets in
financial instruments, as amended ("MiFID II"); (b) Articles 9 and
10 of Commission Delegated Directive (EU) 2017/593 supplementing
MiFID II; and (c) local implementing measures (together, the "MiFID
II Product Governance Requirements"), and disclaiming all and any
liability, whether arising in tort, contract or otherwise, which
"manufacturer" (for the purposes of the MiFID II Product Governance
Requirements) may otherwise have with respect thereto, the Placing
Shares have been subject to a product approval process, which has
determined that such securities are: (i) compatible with an end
target market of retail investors and investors who meet the
criteria of professional clients and eligible counterparties, each
as defined in MiFID II; and (ii) eligible for distribution through
all distribution channels as are permitted by MiFID II (the "Target
Market Assessment").
Notwithstanding the Target Market Assessment, distributors
should note that: the price of the Placing Shares may decline and
investors could lose all or part of their investment; Placing
Shares offer no guaranteed income and no capital protection; and an
investment in the Placing Shares is compatible only with investors
who do not need a guaranteed income or capital protection, who
(either alone or in conjunction with an appropriate financial or
other adviser) are capable of evaluating the merits and risks of
such an investment and who have sufficient resources to be able to
bear any losses that may result therefrom.
For the avoidance of doubt, the Target Market Assessment does
not constitute: (a) an assessment of suitability or appropriateness
for the purposes of MiFID II; or (b) a recommendation to any
investor or group of investors to invest in, or purchase, or take
any other action whatsoever with respect to Placing Shares. Each
distributor is responsible for undertaking its own target market
assessment in respect of the Placing Shares and determining
appropriate distribution channels.
Basis on which information is presented
In this document, references to "GBP", "pence" and "p" are to
the lawful currency of the United Kingdom. All times referred to in
this document are, unless otherwise stated, references to London
time.
APPIX - TERMS AND CONDITIONS OF THE PLACING
IMPORTANT INFORMATION FOR INVITED PLACEES ONLY REGARDING THE
PLACING.
THIS ANNOUNCEMENT, INCLUDING THIS APPIX AND THE INFORMATION
CONTAINED HEREIN (TOGETHER THE "ANNOUNCEMENT") IS RESTRICTED AND IS
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART,
DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM THE UNITED STATES, THE
REPUBLIC OF IRELAND, AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF
SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE,
PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL. THIS ANNOUNCEMENT
HAS NOT BEEN APPROVED BY THE LONDON STOCK EXCHANGE, NOR IS IT INTED
THAT IT WILL BE SO APPROVED.
MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE
PLACING. THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND IS
DIRECTED ONLY AT: (A) PERSONS IN MEMBER STATES OF THE EUROPEAN
ECONOMIC AREA ("EEA") WHO ARE QUALIFIED INVESTORS AS DEFINED IN
SECTION 86(7) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000, AS
AMED ("QUALIFIED INVESTORS"), BEING PERSONS FALLING WITHIN THE
MEANING OF ARTICLE 2 (e) OF REGULATION (EU) 2017/1129 (THE
"PROSPECTUS REGULATION"); AND (B) IN THE UNITED KINGDOM, QUALIFIED
INVESTORS WHO ARE PERSONS WHO (I) HAVE PROFESSIONAL EXPERIENCE IN
MATTERS RELATING TO INVESTMENTS FALLING WITHIN ARTICLE 19(5)
(INVESTMENT PROFESSIONALS) OF THE FINANCIAL SERVICES AND MARKETS
ACT 2000 (FINANCIAL PROMOTION) ORDER 2005, AS AMED (THE "ORDER");
(II) ARE PERSONS FALLING WITHIN ARTICLE 49(2)(A) TO (D) (HIGH NET
WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC.) OF THE ORDER;
OR (III) ARE PERSONS TO WHOM IT MAY OTHERWISE BE LAWFULLY
COMMUNICATED (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS
"RELEVANT PERSONS").
THIS ANNOUNCEMENT AND THE INFORMATION IN IT MUST NOT BE ACTED ON
OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. PERSONS
DISTRIBUTING THIS ANNOUNCEMENT MUST SATISFY THEMSELVES THAT IT IS
LAWFUL TO DO SO. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH
THIS ANNOUNCEMENT RELATES IS AVAILABLE ONLY TO RELEVANT PERSONS AND
WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. THIS ANNOUNCEMENT
DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY
SECURITIES IN ZINC MEDIA GROUP PLC.
THIS ANNOUNCEMENT IS NOT AN OFFER OF SECURITIES FOR SALE INTO
THE UNITED STATES. THE PLACING SHARES HAVE NOT BEEN AND WILL NOT BE
REGISTERED UNDER THE UNITED STATES SECURITIES ACT 1933, AS AMED
(THE "SECURITIES ACT") OR WITH ANY SECURITIES REGULATORY AUTHORITY
OF ANY STATE OR JURISDICTION OF THE UNITED STATES, AND MAY NOT BE
OFFERED, SOLD OR 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. SUBJECT TO CERTAIN
EXCEPTIONS AND AT THE SOLE DISCRETION OF THE COMPANY, 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, THE UNITED KINGDOM OR
ELSEWHERE. NO MONEY, SECURITIES OR OTHER CONSIDERATION FROM ANY
PERSON INSIDE THE UNITED STATES IS BEING SOLICITED AND, IF SENT IN
RESPONSE TO THE INFORMATION CONTAINED IN THIS ANNOUNCEMENT, WILL
NOT BE ACCEPTED.
EACH PLACEE SHOULD CONSULT WITH ITS ADVISERS AS TO LEGAL, TAX,
BUSINESS AND RELATED ASPECTS OF AN INVESTMENT IN PLACING SHARES.
THE DISTRIBUTION OF THIS ANNOUNCEMENT, ANY PART OF IT OR ANY
INFORMATION CONTAINED IN IT MAY BE RESTRICTED BY LAW IN CERTAIN
JURISDICTIONS, AND ANY PERSON INTO WHOSE POSSESSION THIS
ANNOUNCEMENT, ANY PART OF IT OR ANY INFORMATION CONTAINED IN IT
COMES SHOULD INFORM THEMSELVES ABOUT, AND OBSERVE, SUCH
RESTRICTIONS.
No action has been taken by the Company, Nplus1 Singer Advisory
LLP ("N+1 Singer"), Peterhouse Capital Limited ("Peterhouse" and,
together with N+1 Singer, the "Joint Brokers") 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 this Announcement or any other offering or
publicity material relating to such Placing Shares in any
jurisdiction where action for that purpose is required.
This Announcement or any part of it does 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 (including its territories and possessions, any state of the
United States and the District of Columbia), Canada, the Republic
of Ireland, Australia, the Republic of South Africa, 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.
All offers of the Placing Shares will be made pursuant to an
exemption under the Prospectus Regulation from the requirement to
produce a prospectus. In the United Kingdom, this Announcement is
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 this
Announcement. 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, Japan or the Republic
of South Africa. Accordingly, the Placing Shares may not (unless an
exemption under the relevant securities laws is applicable) be
offered, sold, resold or delivered, directly or indirectly, in or
into Australia, Canada, Japan or the Republic of South Africa or
any other jurisdiction outside the United Kingdom.
Persons (including, without limitation, nominees and trustees)
who have a contractual right or other legal obligations to forward
a copy of this Announcement should seek appropriate advice before
taking any action.
This Announcement should be read in its entirety. In particular,
you should read and understand the information provided in this
"Important Information" section of this Announcement.
By participating in the Placing, each person who is invited to
and who chooses to participate in the Placing (a "Placee") will be
deemed to have read and understood this Announcement in its
entirety, to be participating, making an offer and acquiring
Placing Shares on the terms and conditions contained herein and to
be providing the representations, warranties, indemnities,
acknowledgements and undertakings contained in this Appendix.
In particular, each such Placee represents, warrants,
undertakes, agrees and acknowledges (amongst other things)
that:
1 it is a Relevant Person and undertakes that it will acquire,
hold, manage or dispose of any Placing Shares that are allocated to
it for the purposes of its business;
2 in the case of a Relevant Person in the EEA who acquires any
Placing Shares pursuant to the Placing:
2.1 it is a Qualified Investor within the meaning of Article
2(e) of the Prospectus Regulation; and
2.2 in the case of any Placing Shares acquired by it as a
financial intermediary, as that term is used in Article 5(1) of the
Prospectus Regulation:
2.2.1 the Placing Shares acquired by it in the Placing have not
been acquired on behalf of, nor have they been acquired with a view
to their offer or resale to, persons in the EEA other than
Qualified Investors or in circumstances in which the prior consent
of the Joint Brokers has been given to the offer or resale; or
2.2.2 where Placing Shares have been acquired by it on behalf of
persons in the EEA other than Qualified Investors, the offer of
those Placing Shares to it is not treated under the Prospectus
Regulation as having been made to such persons;
3 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 this
Announcement;
4 it understands (or if acting for the account of another
person, such person has confirmed that such person understands) the
resale and transfer restrictions set out in this Appendix; and
5 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 4 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
No prospectus or other offering document has been or will be
submitted to be approved by the 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 this 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
this Announcement (the "Publicly Available Information") and
subject to any further terms set forth in the form of confirmation
to be sent to individual Placees.
Each Placee, by participating in the Placing, agrees that the
content of this Announcement is exclusively the responsibility of
the Company and confirms that it has neither received nor relied on
any information (other than the Publicly Available Information),
representation, warranty or statement made by or on behalf of N+1
Singer, Peterhouse, the Company or any other person and none of N+1
Singer, Peterhouse, the Company or 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. Nothing in this paragraph shall exclude the liability of
any person for fraudulent misrepresentation.
Details of the Placing Agreement and the Placing Shares
The Joint Brokers have today entered into a placing agreement
(the "Placing Agreement") with the Company under which, on the
terms and subject to the conditions set out in the Placing
Agreement, the Joint Brokers, as agents for and on behalf of the
Company, have agreed to use their reasonable endeavours to procure
Placees for the Placing Shares at the Placing Price.
The Placing Shares will, when issued, be subject to the articles
of association of the Company and credited as fully paid and will
rank pari passu in all respects with the existing ordinary share
capital of the Company (the "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.
As part of the Placing, the Company has agreed that it will not
for a period of 90 days after (but including) Admission, directly
or indirectly, issue, offer, sell, lend, pledge, contract to sell
or issue, grant any option, right or warrant to purchase or
otherwise dispose of any Ordinary Shares (or any interest therein
or in respect thereof) or other securities of the Company
exchangeable for, convertible into or representing the right to
receive Ordinary Shares or any substantially similar securities or
otherwise enter into any transaction (including derivative
transaction) directly or indirectly, permanently or temporarily, to
dispose of any Ordinary Shares or undertake any other transaction
with the same economic effect as any of the foregoing or announce
an offering of Ordinary Shares or any interest therein or to
announce publicly any intention to enter into any transaction
described above. This agreement is subject to certain customary
exceptions and does not prevent the grant or exercise of options
under any of the Company's existing share incentives and share
option schemes, or following Admission the issue by the Company of
any Ordinary Shares upon the exercise of any right or option or the
conversion of a security already in existence.
Application for admission to trading
Application will be made to the London Stock Exchange for
admission of the New Ordinary Shares to trading on AIM.
It is expected that Admission will take place no later than 8.00
a.m. on 13 February 2020 and that dealings in the New Ordinary
Shares on AIM will commence at the same time.
Principal terms of the Placing
1 N+1 Singer is acting as nominated adviser and joint broker to
the Placing, as agent for and on behalf of the Company. N+1 Singer
is authorised and regulated in the United Kingdom by the Financial
Conduct Authority ("FCA") and is acting exclusively for the Company
and no one else in connection with the matters referred to in this
Announcement and will not be responsible to anyone other than the
Company for providing the protections afforded to the customers of
N+1 Singer or for providing advice in relation to the matters
described in this Announcement.
2 Peterhouse is acting as financial adviser and joint broker to
the Placing, as agent for and on behalf of the Company. Peterhouse
is authorised and regulated in the United Kingdom by the Financial
Conduct Authority ("FCA") and is acting exclusively for the Company
and no one else in connection with the matters referred to in this
Announcement and will not be responsible to anyone other than the
Company for providing the protections afforded to the customers of
Peterhouse or for providing advice in relation to the matters
described in this Announcement.
3 Participation in the Placing will only be available to persons
who may lawfully be, and are, invited by the Joint Brokers to
participate. N+1 Singer, Peterhouse and any of their respective
affiliates are entitled to participate in the Placing as
principal.
4 The price per Placing Share (the "Placing Price") is fixed at
90 pence (as adjusted for the Share Consolidation) and is payable
to the Joint Brokers by all Placees.
5 Each Placee's allocation is determined by the Joint Brokers in
their discretion following consultation with the Company and has
been or will be confirmed orally by the Joint Brokers and a form of
confirmation will be dispatched as soon as possible thereafter.
That oral confirmation will give rise to an irrevocable, legally
binding commitment by that person (who at that point becomes a
Placee), in favour of the relevant Joint Broker and the Company,
under which it agrees to acquire the number of Placing Shares
allocated to the Placee at the Placing Price and otherwise on the
terms and subject to the conditions set out in this Appendix and in
accordance with the Company's articles of association. Except with
the relevant Joint Broker's written consent, such commitment will
not be capable of variation or revocation at the time at which it
is submitted.
6 Each Placee's allocation and commitment will be evidenced by a
form of confirmation issued to such Placee by the relevant Joint
Broker. The terms of this Appendix will be deemed incorporated in
that form of confirmation.
7 Each Placee will have an immediate, separate, irrevocable and
binding obligation, owed to the relevant Joint Broker (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 such Placee has agreed to acquire and the Company
has agreed to allot and issue to that Placee.
8 Irrespective of the time at which a Placee's allocation(s)
pursuant to the Placing is/are confirmed, settlement for all
Placing Shares to be acquired pursuant to the Placing will be
required to be made at the same time, on the basis explained below
under "Registration and Settlement".
9 All obligations of the Joint Brokers 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".
10 By participating in the Placing, each Placee will agree that
its rights and obligations in respect of the Placing will terminate
only in the circumstances described below and will not be capable
of rescission or termination by the Placee.
11 By participating in the placing, each Placee will agree that
N+1 Singer may choose to invoke the CASS Delivery Versus Payment
(CASS 7.11.14 R) exemption with regard to settlement of funds,
should they see fit.
12 To the fullest extent permissible by law and applicable FCA
rules, none of (a) the Joint Brokers, (b) any of the Joint Brokers'
respective affiliates, agents, directors, officers, consultants,
(c) to the extent not contained within (a) or (b), any person
connected with the Joint Brokers as defined in the Financial
Services and Markets Act 2000 ("FSMA") ((b) and (c) being together
"affiliates" and individually an "affiliate" of N+1 Singer), (d)
any person acting on behalf of the respective Joint Broker, 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 N+1
Singer nor any of its respective affiliates shall have any
liability (including, to the extent permissible by law, any
fiduciary duties) in respect of their conduct of the Placing or of
such alternative method of effecting the Placing as the Joint
Brokers and the Company may agree.
Registration and Settlement
If Placees are allocated any Placing Shares in the Placing they
will be sent a form of confirmation or electronic confirmation by
the relevant Joint Broker, as soon as it is able which will confirm
the number of Placing Shares allocated to them, the Placing Price
and the aggregate amount owed by them to the Joint Broker.
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 Broker in accordance with either the
standing CREST or certificated settlement instructions which they
have in place with the Joint Broker.
Settlement of transactions in the Placing Shares (ISIN:
GB00BJVLR251) following Admission will take place within the CREST
system, subject to certain exceptions. Settlement through CREST is
expected to take place on 13 February 2020 unless otherwise
notified by the Joint Broker and Admission is expected to occur no
later than 8.00 a.m. on 13 February 2020 unless otherwise notified
by the Joint Broker. Admission and Settlement may occur at an
earlier date, which if achievable, will be set out in the Circular.
Settlement will be on a delivery versus payment basis. However, in
the event of any difficulties or delays in the admission of the
Placing Shares to CREST or the use of CREST in relation to the
Placing, the Company and the Joint Brokers may agree that the
Placing Shares should be issued in certificated form. N+1 Singer
reserves the right to require settlement for the Placing Shares,
and to deliver the Placing Shares to Placees, by such other means
as they deem necessary if delivery or settlement to Placees is not
practicable within the CREST system or would not be consistent with
regulatory requirements in a Placee's jurisdiction.
Interest is chargeable daily on payments not received from
Placees on the due date in accordance with the arrangements set out
above, in respect of either CREST or certificated deliveries, at
the rate of 2 percentage points above prevailing LIBOR as
determined by N+1 Singer.
Each Placee agrees that, if it does not comply with these
obligations, the Joint Brokers may sell, charge by way of security
(to any funder of the respective Joint Brokers) or otherwise deal
with any or all of their Placing Shares on their behalf and retain
from the proceeds, for the respective Joint Broker's own account
and benefit, an amount equal to the aggregate amount owed by the
Placee plus any interest due and any costs and expenses properly
incurred by the Joint Broker a result of the Placee's failure to
comply with its obligations. The relevant Placee will, however,
remain liable for any shortfall below the amount owed by it and for
any stamp duty or stamp duty reserve tax (together with any
interest or penalties) which may arise upon the sale of their
Placing Shares on their behalf. Legal and/or beneficial title in
and to any Placing Shares shall not pass to the relevant Placee
until such time as it has fully complied with its obligations
hereunder.
If Placing Shares are to be delivered to a custodian or
settlement agent, Placees must ensure that, upon receipt, the
conditional form of confirmation 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.
The obligations of the Joint Brokers under the Placing Agreement
are, and the Placing is, conditional upon, inter alia:
(a) the passing of the Resolutions at the General Meeting (or at
any adjournment thereof);
(b) none of the representations, warranties and undertakings on
the part of the Company contained in the Placing Agreement being
untrue or inaccurate on the date on which the Placing Agreement is
signed or Admission, by reference to the facts and circumstances
then subsisting and no fact or circumstance having arisen
constitute a Specified Event under the Placing Agreement;
(c) the performance by the Company of its obligations under the
Placing Agreement to the extent that they fall to be performed
prior to Admission;
(d) no matter having arisen before Admission which might
reasonably be expected to give rise to an indemnity claim under the
Placing Agreement;
(e) Admission occurring by not later than 8.00 a.m. on 13
February 2020 (or such later date as the Company and the Joint
Brokers may agree in writing, in any event being not later than
8:00 a.m. on the Long Stop Date),
(all conditions to the obligations of the Joint Brokers included
in the Placing Agreement being together, the "conditions").
If any of the conditions set out in the Placing Agreement are
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 Brokers may agree,
provided that the time for satisfaction of the condition set out in
(e) above shall not be extended beyond 8.00 a.m. on 2 March 2020),
or the Placing Agreement is terminated in accordance with its
terms, the Placing 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.
Certain conditions may be waived in whole or in part by the
Joint Brokers, in their absolute discretion by notice in writing to
the Company and the Joint Brokers may also agree in writing with
the Company to extend the time for satisfaction of any condition.
Any such extension or waiver will not affect Placees' commitments
as set out in this Announcement.
The Joint Brokers may terminate the Placing Agreement in certain
circumstances, details of which are set out below.
Neither of the respective Joint Brokers, the Company nor any of
their respective affiliates, agents, directors, officers, employees
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 nor for any decision any of them may make
as to the satisfaction of any condition or in respect of the
Placing generally and by participating in the Placing each Placee
agrees that any such decision is within the absolute discretion of
the Joint Brokers.
Termination of the Placing
N+1 Singer may (having consulted with Peterhouse) terminate the
Placing Agreement, in accordance with its terms, at any time prior
to Admission if, in the good faith opinion of N+1 Singer, inter
alia:
1 it comes to the attention of the Joint Brokers that any of the
warranties were not true or accurate, or were misleading when given
or deemed given; or
2 it comes to the attention of the Joint Brokers that the
Company has failed to comply with its obligations under the Placing
Agreement, FSMA, the AIM Rules or other applicable Law; or
3 it comes to the attention of the Joint Brokers that any
statement contained in the Placing Documents (as defined in the
Placing Agreement) has become or been discovered to be untrue,
inaccurate or misleading; or
4 there has occurred a force majeure event, or any material
adverse change has occurred in the financial position or prospects
or business of the Company and its subsidiary undertakings (taken
as whole) which, in the opinion of the Joint Brokers, will or is
likely to be prejudicial to the Placing or Admission or to the
subscription for Placing Shares by Placees.
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 this Announcement shall cease and terminate
at such time and no claim can be made by any Placee in respect
thereof.
By participating in the Placing, each Placee agrees with the
Company and the Joint Brokers that the exercise by the Company or
the Joint Brokers 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 relevant Joint Broker and
that neither of the Company nor the Joint Brokers need make any
reference to such Placee and that neither the Joint Brokers, the
Company, nor any of their respective affiliates, agents, 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 participating in the Placing, each Placee agrees that its
rights and obligations 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
after the issue by the relevant Joint Broker of a form of
confirmation confirming each Placee's allocation and commitment in
the Placing.
Representations, warranties and further terms
By participating in the Placing, each Placee (and any person
acting on such Placee's behalf) represents, warrants, acknowledges
and agrees (for itself and for any such prospective Placee) that
(save where the Joint Brokers expressly agree in writing to the
contrary):
1 it has read and understood this Announcement in its entirety
and that its acquisition of the 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 that 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 this
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 the Prospectus
Regulation; and (b) has been or will be prepared in connection with
the Placing;
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 or other
position of the Company in accepting a participation in the Placing
and neither the Joint Brokers, the Company nor any of their
respective affiliates, agents, directors, officers or employees or
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 this
Announcement, or the Publicly Available Information; nor has it
requested neither of the Joint Brokers, the Company, any of their
respective affiliates, agents, directors, officers or employees or
any person acting on behalf of any of them to provide it with any
such information;
5 neither the Joint Brokers, any person acting on behalf of them
or 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 this paragraph excludes the
liability of any person for fraudulent misrepresentation made by
that person;
6 the only information on which it is entitled to rely on and on
which it has relied in committing to subscribe for the Placing
Shares is contained in 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 Publicly Available Information; neither the Joint
Brokers, the Company nor any of their respective affiliates,
agents, directors, officers or employees has 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 Publicly Available Information; 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 it has not relied on
any investigation that the Joint Brokers or any person acting on
their behalf may have conducted with respect to the Company, the
Placing or the Placing Shares;
7 the content of this Announcement and the Publicly Available
Information has been prepared by and is exclusively the
responsibility of the Company and that neither the Joint Brokers
nor any persons acting on behalf of it is responsible for or has or
shall have any liability for any information, representation,
warranty or statement relating to the Company contained in this
Announcement or the Publicly Available Information nor will they be
liable for any Placee's decision to participate in the Placing
based on any information, representation, warranty or statement
contained in this Announcement, the Publicly Available Information
or otherwise. Nothing in this Appendix shall exclude any liability
of any person for fraudulent misrepresentation;
8 the Placing Shares have not been registered or otherwise
qualified, and will not be registered or otherwise qualified, for
offer and sale nor will a prospectus be cleared or approved in
respect of any of the Placing Shares under the securities laws of
the United States, or any state or other jurisdiction of the United
States, the Republic of Ireland, Australia, Canada, Republic of
South Africa or Japan and, subject to certain exceptions, may not
be offered, sold, taken up, renounced or delivered or transferred,
directly or indirectly, within the United States, the Republic of
Ireland, Australia, Canada, South Africa or Japan or in any country
or jurisdiction where any such action for that purpose is
required;
9 it and/or each person on whose behalf it is participating:
9.1 is entitled to acquire Placing Shares pursuant to the
Placing under the laws and regulations of all relevant
jurisdictions;
9.2 has fully observed such laws and regulations;
9.3 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
9.4 has obtained all necessary consents and authorities
(including, without limitation, in the case of a person acting on
behalf of a Placee, all necessary consents and authorities to agree
to the terms set out or referred to in this Appendix) 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 subscription for 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 subscribed will not be,
a resident of, or with an address in, or subject to the laws of,
Australia, Canada, Japan, the Republic of Ireland or the Republic
of South Africa, and it acknowledges and agrees that the Placing
Shares have not been and will not be registered or otherwise
qualified under the securities legislation of Australia, Canada,
Japan, the Republic of Ireland or the Republic of South Africa and
may not be offered, sold, or acquired, directly or indirectly,
within those jurisdictions;
11 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;
12 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;
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 will not distribute, forward, transfer or otherwise
transmit this Announcement or any part of it, or any other
presentational or other materials concerning the Placing 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;
15 it understands that:
15.1 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;
15.2 no representation is made as to the availability of the
exemption provided by Rule 144 for resales or transfers of Placing
Shares; and
15.3 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);
16 it will not offer, sell, transfer, pledge or otherwise
dispose of any Placing Shares except:
16.1 in an offshore transaction in accordance with Rules 903 or
904 of Regulation S under the Securities Act; or
16.2 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 other
jurisdictions;
17 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;
18 it 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:
"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.";
19 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);
20 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;
21 neither the respective Joint Brokers, their respective
affiliates, agents, 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 and that
participation in the Placing is on the basis that it is not and
will not be a client of the Joint Brokers and the Joint Brokers
have no duties or responsibilities to it for providing the
protections afforded to their respective 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 has the funds available to pay for the Placing Shares for
which it has agreed to subscribe and acknowledges and agrees that
it will make payment to the relevant Joint Broker for the Placing
Shares allocated to it in accordance with the terms and conditions
of this Announcement on the due times and dates set out in this
Announcement, failing which the relevant Placing Shares may be
placed with others on such terms as the relevant Joint Broker may,
in their absolute discretion determine 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 this Announcement) which may
arise upon the sale of such Placee's Placing Shares on its
behalf;
23 no action has been or will be taken by any of the Company,
the relevant Joint Brokers or any person acting on their behalf
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;
24 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. Neither the Joint Broker nor the
Company will be responsible for any liability to stamp duty or
stamp duty reserve tax resulting from a failure to observe this
requirement. Each Placee and any person acting on behalf of such
Placee agrees to acquire Placing Shares pursuant to the Placing and
agrees to pay the Company and the relevant Joint Broker in respect
of the same (including any interest or penalties) on the basis that
the Placing Shares will be allotted to a CREST stock account of the
Joint Broker or transferred to a CREST stock account of the Joint
Broker who will hold them as nominee on behalf of the Placee until
settlement in accordance with its standing settlement instructions
with it;
25 it is acting as principal only in respect of the Placing or,
if it is acting for any other person, (a) it is duly authorised to
do so and has full power to make the acknowledgments,
representations and agreements herein on behalf of each such person
and (b) it is and will remain liable to the Company and the Joint
Broker for the performance of all its obligations as a Placee in
respect of the Placing (regardless of the fact that it is acting
for another person);
26 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 that 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;
27 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;
28 it will not make an offer to the public of the Placing Shares
and it has not offered or sold and will not offer or sell any
Placing Shares to persons in the United Kingdom or elsewhere in the
EEA prior to the expiry of a period of six months from Admission
except to persons whose ordinary activities involve them in
acquiring, holding, managing or disposing of investments (as
principal or agent) for the purposes of their business or otherwise
in circumstances which have not resulted 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 or an offer to the public in any other
member state of the EEA within the meaning of the Prospectus
Regulation;
29 it is a person of a kind described in: (a) Article 19(5)
(Investment Professionals) and/or 49(2) (High net worth companies
etc.) of the Financial Services and Markets Act 2000 (Financial
Promotion) Order 2005, as amended, and/or an authorised person as
defined in section 31 of FSMA; and (b) section 86(7) of FSMA
("Qualified Investor"), being a person falling within Article 2(e)
the Prospectus Regulation. For such purposes, it undertakes that it
will acquire, hold, manage and (if applicable) dispose of any
Placing Shares that are allocated to it for the purposes of its
business only;
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;
31 it has complied and it will comply with all applicable laws
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 if it is a financial intermediary, as that term is used in
Article 5(1) of the Prospectus Regulation, 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, persons in a member state
of the EEA which has implemented the Prospectus Regulation other
than Qualified Investors, or in circumstances in which the express
prior written consent of the Joint Broker has been given to the
offer or resale;
33 it has neither received nor relied on any confidential price
sensitive information about the Company in accepting this
invitation to participate in the Placing;
34 neither the respective Joint Brokers nor any of their
respective affiliates, agents, directors, officers or employees or
any person acting on behalf of any of them has or shall have any
liability for any information, representation or statement
contained in this Announcement or for any information previously
published by or on behalf of the Company or any other written or
oral information made available to or publicly available or filed
information or any representation, warranty or undertaking relating
to the Company, and will not be liable for its decision to
participate in the Placing based on any information,
representation, warranty or statement contained in this
Announcement or elsewhere, provided that nothing in this paragraph
shall exclude any liability of any person for fraud;
35 neither the Joint Brokers, the Company, nor any of their
respective affiliates, agents, directors, officers or employees or
any person acting on behalf of the Joint Brokers, the Company or
their respective affiliates, agents, directors, officers or
employees 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 the Joint Brokers rights and obligations thereunder including
any rights to waive or vary any conditions or exercise any
termination right;
36 acknowledges and accepts that the respective Joint Brokers
may, in accordance with applicable legal and regulatory provisions,
engage in transactions in relation to the Placing Shares and/or
related instruments for their own account for the purpose of
hedging their underwriting exposure or otherwise and, except as
required by applicable law or regulation, the Joint Brokers will
not make any public disclosure in relation to such
transactions;
37 The Joint Brokers and each of their respective affiliates,
each 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 this Announcement to the Placing Shares being offered,
subscribed, acquired or otherwise dealt with should be read as
including any offer to, or subscription, acquisition or dealing by
the Joint Brokers and/or any of their respective affiliates, acting
as an investor for its or their own account(s). Neither the Joint
Brokers 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;
38 it has not offered or sold and will not offer or sell any
Placing Shares to persons in the EEA prior to the expiry of a
period of six months from Admission except to persons whose
ordinary activities involve them in acquiring, holding, managing or
disposing of investments (as principal or agent) for the purpose of
their business or otherwise in circumstances which have not
resulted and which will not result in an offer to the public in any
member state of the EEA within the meaning of the Prospectus
Regulation;
39 it has complied with its obligations in connection with money
laundering and terrorist financing under the Proceeds of Crime Act
2002, the Terrorism Act 2000, the Terrorism Act 2006 and the Money
Laundering Regulations 2007 (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;
40 it is aware of the obligations regarding insider dealing in
the Criminal Justice Act 1993, FSMA, the EU Market Abuse Regulation
No. 596 of 2014 and the Proceeds of Crime Act 2002 and confirms
that it has and will continue to comply with those obligations;
41 if it has received any inside information (for the purposes
of the MAR and section 56 of the Criminal Justice Act 1993 or other
applicable law) about the Company in advance of the Placing, it has
not:
41.1 dealt (or attempted to deal) in the securities of the Company;
41.2 encouraged, recommended or induced another person to deal
in the securities of the Company; or
41.3 unlawfully disclosed such information to any person, prior
to the information being made publicly available;
42 in order to ensure compliance with the Money Laundering
Regulations 2007, the Joint Brokers (for themselves and as agents
on behalf of the Company) or the Company's registrars may, in their
absolute discretion, require verification of its identity. Pending
the provision to the Joint Brokers or the Company's registrars, as
applicable, of evidence of identity, definitive certificates in
respect of the Placing Shares may be retained at the Joint Brokers
absolute discretion or, where appropriate, delivery of the Placing
Shares to it in uncertificated form may be delayed at the Joint
Brokers 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 Joint Brokers (for themselves and as
agents on behalf of the Company) or the Company's registrars have
not received evidence satisfactory to them, the Joint Brokers
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;
43 acknowledges that its commitment to acquire Placing Shares on
the terms set out in this Announcement and in the form of
confirmation 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 the
Joint Brokers conduct of the Placing;
44 it has knowledge and experience in financial, business and
international investment matters as is required to evaluate the
merits and risks of subscribing for 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;
45 it irrevocably appoints any duly authorised officer of the
respective Joint Brokers 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 for which it agrees to subscribe or
purchase upon the terms of this Announcement;
46 the Company, the Joint Brokers and others (including each of
their respective affiliates, agents, directors, officers or
employees) will rely upon the truth and accuracy of the foregoing
representations, warranties, acknowledgements and agreements, which
are given to the Joint Brokers, on their own behalf and on behalf
of the Company and are irrevocable;
47 if it is acquiring the Placing Shares as a fiduciary or agent
for one or more investor accounts, 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;
48 time is of the essence as regards its obligations under this Appendix;
49 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 Joint Brokers;
50 the Placing Shares will be issued subject to the terms and
conditions of this Appendix; and
51 these terms and conditions in this Appendix and all documents
into which this Appendix is 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 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 or matter arising out of any such contract, except that
enforcement proceedings in respect of the obligation to make
payment for the Placing Shares (together with any interest
chargeable thereon) may be taken by the Company or the Joint
Brokers 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 Brokers 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 this Appendix or incurred by the Joint Brokers,
the Company or each of their respective affiliates, agents,
directors, officers or employees arising from the performance of
the Placee's obligations as set out in this Announcement, and
further agrees that the provisions of this Appendix 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 Brokers 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
Joint Brokers 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
Brokers in the event that either the Company and/or the Joint
Brokers has incurred any such liability to such taxes or
duties.
The representations, warranties, acknowledgements and
undertakings contained in this Appendix are given to the Joint
Brokers for themselves and on behalf of the Company and are
irrevocable.
Each Placee and any person acting on behalf of the Placee
acknowledges that the respective Joint Brokers does 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.
Each Placee and any person acting on behalf of the Placee
acknowledges and agrees that the Joint Brokers may (at their
absolute discretion) satisfy their 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 the Joint Brokers, any money held in an account with
the respective Joint Brokers 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 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 Joint Brokers money (as applicable) in accordance with the
client money rules and will be held by it under a banking
relationship and not as trustee.
References to time in this Announcement are to London time,
unless otherwise stated.
All times and dates in this Announcement may be subject to
amendment.
No statement in this Announcement is intended to be a profit
forecast, and no statement in this Announcement should be
interpreted to mean that earnings per share of the Company for the
current or future financial years would necessarily match or exceed
the historical published earnings per share of the Company.
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 or sold pursuant to the Placing
will not be admitted to trading on any stock exchange other than
the London Stock Exchange.
Neither the content of the Company's website nor any website
accessible by hyperlinks on the Company's website is incorporated
in, or forms part of, this Announcement.
DEFINITIONS
In this Appendix to the Announcement and, as the context shall
admit, in the Announcement:
Act the Companies Act 2006 (as amended)
Admission the admission of the Placing Shares to trading
on AIM becoming effective in accordance with
the AIM Rules
AIM AIM, a market operated by the London Stock
Exchange
AIM Rules the AIM Rules for Companies published by
the London Stock Exchange from time to time
Article Amendments the amendments to the Articles proposed in
the Resolutions;
Articles the Company's articles of association adopted
as at the date of this announcement
Board or Directors the directors of the Company
Bonus Shares the New Ordinary Shares proposed to be issued
by the Company to Herald pursuant to the
Ordinary Share Bonus Issue (and as part of
the Preference Share Conversion)
Business Day any day on which banks are usually open in
England and Wales for the transaction of
sterling business, other than a Saturday,
Sunday or public holiday
Capital Reduction the proposed share capital reduction of the
Company pursuant to which (i) the amount
standing to the credit of the Company's share
premium account (after completion of the
Ordinary Share Bonus Issue and the Preference
Dividend Share Issue), the Deferred Shares
and D Deferred Shares will be cancelled and
(ii) the entire amount standing to the credit
of the Company's merger reserve, will be
capitalised by issuing Capital Reduction
Shares and thereafter such Capital Reduction
Shares will be cancelled immediately
Capital Reduction Bonus the bonus issue of one Capital Reduction
Issue Share for every one Ordinary Share held by
each Shareholder on the register of members
of the Company at the Capital Reduction Record
Time in order to facilitate the Capital Reduction
as described in this announcement
Capital Reduction Shares the New Ordinary Shares proposed to be created
by the Capital Reduction Bonus Issue, whereby
the nominal value of such shares is equal
to the sum that is obtained by dividing the
number of such shares to be issued by the
amount standing to the credit of the Company's
merger reserve;
certificated or in a share or other security not held in uncertificated
certificated form form (that is, not in CREST)
Circular the shareholder circular in relation to the
Proposals to be posted to Shareholders
Code the City Code on Takeovers and Mergers
Company or Zinc Zinc Media Group plc, a company incorporated
in Scotland with registered number SC075133
Completion the Share Consolidation, the Debt Variation,
the Placing, the Preference Share Conversion
and the Debt Conversion being completed and
Admission having taken place
Concert Party Herald and the John Booth Parties, all of
whom are regarded for the purposes of the
Code as acting in concert (as defined by
the Code)
Consolidation and Redesignation in connection with the Preference Share Conversion,
the consolidation and redesignation of the
Preference Shares into the Redesignated Shares
Conversion Shares each of (i) the New Ordinary Shares (comprising
the Redesignated Shares, the Bonus Shares
and the Preference Dividend Shares) to be
issued to Herald as a result of the Preference
Share Conversion and (ii) the New Ordinary
Shares to be issued to JB as a result of
the Debt Conversion
Court the Scottish Commercial Court within the
Court of Session
Court Hearing the hearing by the Court to confirm the Capital
Reduction
CREST a relevant system (as defined in the CREST
Regulations) in respect of which Euroclear
is the Operator (as defined in the CREST
Regulations)
CREST Regulations the Uncertificated Securities Regulations
2001 (SI 2001/3755) as amended from time
to time
D Deferred Shares the 419,397,339 D deferred shares of 0.09975
pence each in the capital of the Company
as at the date of this announcement
Debt Conversion conversion of the GBP77,482 debt owed by
the Company to JB, at the Placing Price,
into the relevant Conversion Shares
Debt Holders Herald and JBCF
Debt Variation the proposed variation to the terms of the
long-term debt held by the Debt Holders,
and the proposed variation to the terms of
the unsecured loan notes held by Herald
Debt Variation Agreements the conditional agreements between the Company
and the Debt Holders, relating to the Debt
Variation
Deferred Shares the 276,666,012 deferred shares of 1.99 pence
each in the capital of the Company as at
the date of this announcement
Directors the directors of the Company as at the date
of this announcement
Enlarged Share Capital the issued share capital of the Company,
as altered by
(i) the Share Consolidation (ii) the issue
and allotment of the Placing Shares and
(iii) the issue and allotment of the Conversion
Shares
Euroclear Euroclear UK & Ireland Limited, the operator
of CREST
Existing Ordinary Shares the 1,489,573,609 Ordinary Shares in issue
at the date of this announcement, all of
which are admitted to trading on AIM
Existing Share Capital the issued share capital of the Company at
the date of this announcement
FCA the Financial Conduct Authority (and its
predecessor, the Financial Services Authority)
in its capacity as the competent authority
for the purposes of Part VI of FSMA
FSMA the Financial Services and Markets Act 2000
(as amended)
General Meeting the general meeting of the Company to be
held in connection with the Proposals, notice
of which will accompany the Circular
Group the Company and its subsidiaries
Herald Herald Investment Trust plc (company number:
02879728)
HIML Herald Investment Management Limited (company
number: 02877061)
Independent Shareholders Shareholders who are independent of a person
who would otherwise be required to make a
Rule 9 Offer and any person acting in concert
with him or her
JB John David Sebastian Booth, a substantial
shareholder of the Company and a director
of HIML
JBCF John Booth Charitable Foundation
John Booth Parties JBCF and JB
Joint Brokers N+1 Singer and Peterhouse (each a "Joint
Broker")
LIBOR the London interbank offered rate administered
by ICE Benchmark Administration Limited (or
any other person which takes over the administration
of that rate) for sterling for the relevant
period, displayed on page LIBOR01 or LIBOR02
of the Thomson Reuters screen (or any replacement
Thomson Reuters page which displays that
rate) or on the appropriate page of such
other information service which publishes
that rate from time to time in place of Thomson
Reuters
London Stock Exchange London Stock Exchange plc
or LSE
MoL made outside London
N+1 Singer Nplus1 Singer Advisory LLP, the Company's
nominated adviser and Joint Broker
New Ordinary Shares the new ordinary shares of 0.125 pence each
in the capital of the Company
Notice or Notice of the notice of the General Meeting, which
General Meeting will accompany the Circular
Official List the official list of the Financial Conduct
Authority
Ordinary Shares the ordinary shares of 0.00025 pence each
in the capital of the Company
Ordinary Share Bonus in connection with the Preference Share Conversion,
Issue the bonus issue of New Ordinary Shares by
the Company, pursuant to which the amount
standing to the credit of the Company's share
premium account will be capitalised and thereafter
applied in paying up in full the Bonus Shares
and allocating such Bonus Shares to Herald
Panel the Panel on Takeovers and Mergers
Peterhouse Peterhouse Capital Limited, the Company's
Joint Broker and independent financial adviser
for the purposes of the Code
Placing the placing the Placing Shares at the Placing
Price
Placing Agreement the conditional placing agreement dated 17
January 2020 between (1) the Company (2)
N+1 Singer and (3) Peterhouse relating to
the Placing;
Placing Price 90 pence per Placing Share (as adjusted for
the Share Consolidation)
Placing Shares the New Ordinary Shares to be issued by the
Company pursuant to the Placing
Preference Dividend in connection with the Preference Share Conversion,
Share Issue the proposed issue by the Company of the
Preference Dividend Shares, at the Placing
Price, to Herald, in consideration of Herald
releasing the Company's liability to pay
the accumulated unpaid dividend on its Preference
Shares totalling GBP859,909
Preference Dividend the New Ordinary Shares to be issued by the
Shares Company to Herald pursuant to the Preference
Dividend Share Issue (and effected as part
of the Preference Share Conversion)
Preference Share Conversion conversion of the Preference Shares, at the
Placing Price, into the Conversion Shares,
effected via the Consolidation and Redesignation,
the Ordinary Share Bonus Issue and the Preference
Dividend Share Issue;
Preference Shares 767,354 preference shares of 0.01 pence each
in the capital of the Company, held by Herald,
as at the date of this announcement
Proposals the Placing, the Preference Share Conversion,
the Debt Conversion, the Debt Variation,
the Share Consolidation, the Article Amendments
and the Capital Reduction
Redesignated Shares the New Ordinary Shares created by the Company
and registered to Herald pursuant to the
Ordinary Share Bonus Issue (and effected
as part of the Preference Share Conversion)
Registrar Link Asset Services, registrars to the Company
Resolutions the resolutions set out in the Notice of
General Meeting
Rule 9 Offer a general offer under Rule 9 of the Code
Share Consolidation the proposed consolidation of the Company's
ordinary share capital pursuant to which
each 500 Ordinary Shares will be consolidated
into one New Ordinary Share
Shareholders holders of Ordinary Shares
uncertificated or in recorded on the register of members of the
uncertificated form Company as being held in uncertificated form
in CREST and title to which, by virtue of
the CREST Regulations, may be transferred
by means of CREST
United Kingdom or UK the United Kingdom of Great Britain and Northern
Ireland
United States or US the United States of America
Waiver the waiver, to be agreed with the Panel (subject
to the passing of the Whitewash Resolution
as set out in the Notice of General Meeting)
in respect of the obligation on the Concert
Party to make a mandatory offer under Rule
9 of the Code in connection with the issue
of the Placing Shares and the Conversion
Shares
Whitewash Resolution an ordinary resolution passed by the Independent
Shareholders on a poll at the General Meeting
approving the proposals giving rise to the
obligation to make a Rule 9 Offer and the
waiver of it by the Panel
GBP, pounds sterling UK pounds sterling, the lawful currency of
or pence the United Kingdom
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END
IOEFIFVILTIDLII
(END) Dow Jones Newswires
January 17, 2020 02:00 ET (07:00 GMT)
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