TIDMDPL TIDMMOG
RNS Number : 0520J
Dominion Petroleum Limited
24 June 2011
24 June 2011
Dominion Petroleum Limited ("Dominion" or the "Company")
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR
INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN,
SOUTH AFRICA OR ANY JURISDICTION IN WHICH IT WOULD BE UNLAWFUL TO
DO SO
Proposed 20:1 consolidation of share capital
Proposed Placing of new Consolidated Shares to raise
approximately US$55 million
Proposed Placing of 8,622,781 existing Consolidated Shares
Proposed partial repurchase of senior secured convertible
notes
Acquisition of 75% interest in offshore Malta production sharing
contract
Dominion announces today its intention to raise approximately
US$55 million (approximately GBP34.4 million) by way of the issue
and sale of new and existing Consolidated Shares (respectively, the
Subscription Shares and the Sale Shares) (the "Placing Shares") in
the Company (the "Placing"), with both new and existing
institutional investors.
Immediately prior to the issue and sale of the Placing Shares,
it is proposed that the issued and unissued US$0.00004 common
shares of the Company be consolidated on a 20 for 1 basis into
common shares of a nominal value of US$0.0008. The shares to be
issued and sold pursuant to the Placing will therefore be
Consolidated Shares.
The Placing is being conducted, subject to the satisfaction of
certain conditions, through an accelerated book-building process to
be carried out by RBC Capital Markets ("RBC") and Merrill Lynch
International ("BofA Merrill Lynch"), who are acting as joint
bookrunners (the "Joint Bookrunners"). The book will open with
immediate effect.
The timing of the closing of the book, pricing and allocations
are at the discretion of Dominion, RBC and BofA Merrill Lynch. The
number of Subscription Shares is subject to agreement between
Dominion, RBC and BofA Merrill Lynch at the close of the
book-building process.
In association with the Placing of the Subscription Shares, RBC
and BofA Merrill Lynch are also brokering the sale (conditional
upon completion of the Share Consolidation and the Placing of the
Subscription Shares) of 8,622,781 Sale Shares held by the
Sellers.
The price at which the Subscription Shares and the Sale Shares
are to be placed (the "Placing Price") is subject to agreement
between each of the Company, the Sellers, RBC and BofA Merrill
Lynch at the close of the Bookbuild. Details of the number of
Subscription Shares and the Placing Price will be announced as soon
as practicable after the close of the book-building process.
The Subscription Shares will, when issued, be credited as fully
paid and will rank pari passu in all respects with the then
existing Consolidated Shares of US$0.0008 each in the capital of
the Company, including the right to receive all dividends and other
distributions declared, made or paid on or in respect of such
shares after the date of issue of the Placing Shares. The Placing
will be made on a non pre-emptive basis.
The Company will apply for admission of the Subscription Shares
to trading on the AIM market operated by the London Stock Exchange
("Admission"). It is expected that Admission will take place and
that trading will commence on 26 July 2011. As part of the Placing,
the Company has agreed that it will not issue or sell any
Consolidated Shares for a period of 180 days after Admission
without the prior consent of the Joint Bookrunners.
Approximately US$18.0 million of the proceeds of the Placing of
the Subscription Shares will be used to repurchase and then cancel
all the senior secured convertible notes held by the Selling
Noteholders and to repay any additional amounts owed to them under
the note purchase agreement that constitutes the Notes. The
aggregate principal and interest that would be due on the Notes to
be repurchased (assuming they were held to maturity) is
approximately US$28.3 million; the price to be paid by the Company
represents a 36.4% discount to this amount, and a 27.0% discount to
the amount outstanding at the date of the SGM of approximately
US$24.6 million.
BlueGold Global Fund L.P., one of the Selling Noteholders, has
agreed to use the US$8.4 million proceeds of the sale of its Notes
to subscribe for Consolidated Shares pursuant to the Placing.
The Placing is conditional upon, amongst other things, agreement
of the Placing Price, the placing of all of the Sale Shares, the
Company agreeing to repurchase all the Notes held by the Selling
Noteholders, Shareholder approval (which will be sought at the SGM
of the Company proposed to be held at Richmond House, 12
Par-la-ville Road, Hamilton HM 08, Bermuda on 25 July 2011 at 9.00
a.m. (Bermuda time)) and Admission becoming effective. The Placing
is also conditional on the Placing Agreement between the Company,
RBC, BofA Merrill Lynch and the executive Directors becoming wholly
unconditional and not being terminated in accordance with its
terms, and on the Sale Agreement between the Sellers, RBC and BofA
Merrill Lynch becoming wholly unconditional and not being
terminated in accordance with its terms. It is anticipated that the
settlement date will be 26 July 2011.
The Board notes that it has received a number of indicative and
conditional approaches to acquire or merge with the Company for
shares, the most recent approach being a nil premium, all share
offer. These proposals were rejected as the Board concluded that
they were opportunistic and materially undervalued the Company and
its assets; no such discussions are ongoing. The Board has
concluded that an equity raising is the best alternative to
maximise shareholder value by supporting the growth of the Company.
Over recent months, the Company has received industry interest
regarding potential farm-ins into its Block 7 and Block 9 assets
offshore Tanzania and Kenya, underpinning the future availability
of capital to develop these assets.
The Directors have considered the most appropriate method to
conduct the fundraising, including carrying out a placing and open
offer or a rights issue. The Directors concluded that the time and
costs associated with a pre-emptive offering were not in the best
interests of the Company. After careful consideration, they
concluded that the benefit of minimising the costs of the
fundraising by way of a non pre-emptive cash placing would be in
the best interests of Shareholders.
In addition, the Remuneration Committee of the Board has
resolved to adopt a formal share scheme in order to reward,
incentivise and retain key Directors and senior employees, and to
attract new talent to the Company, and has also decided to make
share-based awards to Andrew Cochran, the Chief Executive of the
Company, and Vahid Farzad, Commercial Director.
Finally, the Board wishes to put certain resolutions to
Shareholders to resolve certain procedural issues that have arisen
as a result of the Company's previous election to be non-UK tax
resident, which affect the composition of the Board, amongst other
matters.
The Appendix to this announcement (which forms part of this
announcement) sets out the terms and conditions of the Placing.
Investors will be deemed to have read and understood this
Announcement in its entirety (including the Appendix) and to be
making an offer on the Terms and Conditions set out herein and
providing the representations and warranties, acknowledgments and
undertakings contained in the Appendix.
Background to and reasons for the Placing of the Subscription
Shares
In addition to the repurchase and cancellation of the Notes
referred to above, the Company requires further funds to fund its
near-term work programmes, as described below.
Acquisition of 75% interest in offshore Malta PSC
On 23 June 2011 Dominion entered into an Execution Agreement to
acquire a 75% operated working interest in the production sharing
contract for Blocks 4, 5, 6 and 7 of Area 4 Offshore Malta from
Phoenicia Energy Company Limited ("PEL"), a wholly owned subsidiary
of Mediterranean Oil & Gas plc ("MOG"), pursuant to a draft
farm-in agreement (the "Maltese Acquisition"). Closing of the
Maltese Acquisition is conditional upon (i) Maltese government
approvals and (ii) completion of the Placing of the Subscription
Shares. Under the Execution Agreement, Dominion will pay a deposit
of US$225,000, which is non-refundable in the event that the
Resolutions (other than the Remuneration Resolution) are not passed
at the SGM, or Dominion is otherwise unable to enter into the
farm-in agreement. The deposit is refundable in the event that
Maltese government approvals are not received.
The Maltese PSC covers an area of 5,715 km(2) in Maltese waters
to the North of Libya and provides Dominion with a material working
interest in the proven Eocene carbonate play of North Africa, as
well as the Cretaceous rift potential of the Melita-Median Graben.
RPS Energy completed a competent person's report on Area 4 in March
2006 identifying a number of prospects in the area including the
Tarxien prospect, a lower Eocene carbonate build-up which RPS,
using Libyan oil field analogues, estimated to have a gross
recoverable un-risked P50 prospective oil resource of 115mmbbl with
an 18% chance of success.
MOG, through PEL, currently holds an operated working interest
of 90% under the Maltese PSC, with the remaining 10% working
interest held by Leni Gas & Oil Investments Limited. Following
successful completion of the Maltese Acquisition and entry into the
farm-in agreement, Dominion will have a 75% operated working
interest in the Maltese PSC. Under the terms of the farm-in
agreement Dominion will carry MOG for certain costs relating to its
remaining 15% working interest up to a cap of US$1,260,000.
Dominion will also reimburse MOG for certain historic costs,
through the US$225,000 deposit referred to above plus a closing sum
under the farm-in agreement of US$675,000, for a total of
US$900,000.
The work obligations under the current period of the Maltese PSC
comprise the acquisition of 1,000 km(2) long-offset 3D seismic data
and the drilling of one exploration well. Prior to any drilling
decision, Dominion will process and evaluate the results of the
seismic survey, so as to allow the Company to better define the
Tarxien prospect and to mature other leads and prospects already
identified in Area 4. Furthermore, the long-offset 3D will better
image the pre-tertiary rift-fill below the Eocene carbonates and
potentially support seismic attribute analyses for new Cretaceous
targets.
The first exploration period runs until January 2013 and there
is a minimum spend requirement of US$5 million. The Company
anticipates that the 3D seismic survey will cost between
approximately US$8 million and US$10 million gross to undertake,
which will satisfy the minimum spend requirement.
Andrew Cochran, the Company's Chief Executive Officer, was
appointed Chairman of MOG on 9 May 2011 and so the acquisition of
the interest in the Maltese PSC constitutes a related party
transaction for the purposes of Rule 13 of the AIM Rules. For the
purposes of Schedule 4 of the AIM Rules, it is confirmed that no
profits are attributable to the Maltese PSC at this time.
The Directors, excluding Andrew Cochran and having consulted
with RBC, the Company's nominated adviser, consider that the terms
of the Maltese Acquisition are fair and reasonable so far as
Shareholders are concerned.
Kenya
On 17 May 2011, Dominion entered into a PSC with the Kenyan
Ministry of Energy for a 100% working interest and operatorship of
the Block L9 PSC in the Lamu Basin, offshore Kenya, although it
will retain a net operated working interest of 60% following
transfers of interests to Flow Energy Limited and Avana Petroleum
Limited with whom Dominion applied for the award of the PSC. The
process by which Dominion was awarded Block L9 was highly
competitive. The Board also notes that other companies that have
been awarded acreage offshore Kenya include significantly larger
operators such as BG Group PLC, Anadarko Petroleum Corp and Premier
Oil PLC.
Block L9 was one of the last remaining opportunities for
unlicensed acreage along the whole of the deepwater East African
margin and the Directors believe it represents an ideal opportunity
for organic expansion in this increasingly attractive area. In 1978
Total drilled a single well in Block L9 in the Lamu Basin and
encountered gas shows in the tertiary and upper Cretaceous. The
well may therefore have penetrated a working hydrocarbon system,
which would make the Block highly attractive. Synthetic aperture
radar has also identified possible oil seeps in offshore Kenya
Blocks L6 and L8, which are adjacent to Dominion's Block L9. Due to
the geological similarities between Block L9 and offshore Tanzania,
where Dominion also operates, the Company intends to use its
knowledge of the regional geology to maximise the Block's potential
and to coordinate exploration activities within its expanded
offshore East Africa portfolio.
The initial exploration period of the PSC lasts for two years
and will require the reprocessing of 2,500 line km of 2D seismic,
block wide geological and geophysical studies and the acquisition
of 500 km(2) of 3D seismic data. Minimum expenditure will total
US$6.15 million gross. Dominion will then either relinquish the PSC
or enter into the next two year PSC period carrying a commitment to
drill one exploration well.
Offshore Tanzania
Dominion was granted a one year extension to the initial
exploration period for Block 7 (100% Dominion) by the United
Republic of Tanzania's Ministry of Energy and Minerals, by a notice
dated 28 March 2011. The extension to the current period removes
any obligation for the Company to relinquish any portion of Block 7
until May 2012, providing Dominion with more time to more fully
evaluate the acreage before the mandatory 50% relinquishment.
In November 2010, Dominion acquired a 3D seismic survey on Block
7, offshore Tanzania and is presently processing these data in full
while interpreting the fast track volume; the survey was initially
focused on the Alpha prospect. A competent person's report prepared
by Energy Resource Consultants Ltd using the original 2D dataset
confirmed, as at 30 June 2010, a mean prospective resource of 7 Tcf
of natural gas, or 1.1 billion barrels of oil, for the Alpha
prospect alone.
The final results of the 3D seismic survey and subsequent
analyses will help the Company re-assess volumes and potentially
improve chances of success, not only for the Alpha prospect but for
all prospects mapped within, and immediately adjacent to, the
survey area.
The fast track 3D has highlighted the presence of new
opportunities not apparent on the original 2D dataset. Examples of
the new Tertiary prospects and leads include:
1. a Paleocene fan prospect (Bravo);
2. an Eocene fan prospect (E1); and
3. a Miocene/Pliocene channel prospect (M1).
Management estimate that these three currently mapped prospects
alone add cumulatively between 1.3 Tcf and 6.5 Tcf (P90 to P10
range) of prospective resources to Block 7. Further work on other
potential prospects and leads is continuing.
Work on the Alpha prospect also continues with the final 3D
volume required to analyse the deeper Cretaceous targets. The
Directors anticipate that the geological chance of success will
improve on the Alpha prospect as a consequence of the improved 3D
data quality. Successful drilling offshore Tanzania and Mozambique
by other operators in the region may also de-risk the prospect
further.
Additionally, interpretation of the fast track 3D has led to a
better understanding of the whole of Block 7. This understanding
has provided the Directors with increased confidence that the
deepwater Lambda and Mu leads may offer substantial additional
prospectivity. To this end, additional 2D is intended to be
acquired as "in fill" to the deeper water portion of Block 7, to
improve the Company's understanding of both the Lambda and Mu
prospects, as well as the larger Cretaceous structural features
beneath.
The final 3D volume will be completed in June 2011 and the
Company will initiate a full CPR in summer 2011. This CPR will
focus on all the prospects so far identified from the Pliocene to
the Lower Cretaceous targets. Dominion's intention is to seek
farm-in partners for Block 7, prior to commencing drilling
operations in the first half of 2012.
Onshore Tanzania
Following further evaluation of the results of the Kianika-1
well, on 23 March 2011, Maurel et Prom (Dominion's joint venture
partner) advised the relevant authorities in Tanzania that the
partners would be surrendering the Mandawa contract area.
Additionally, on 17 December 2010, Heritage Oil Plc, Dominion's
partner in the Kisangire-Lukuliro contract area, affirmed the
proposal that the licence for that area be allowed to lapse. As a
result, an impairment charge of $33.5m has been recognised in
respect of the onshore Tanzanian licences, Mandawa ($24.6m) and
Kisangire ($8.9m) in the Company's accounts for the year ended 31
December 2010.
Uganda / Democratic Republic of Congo
In Uganda, Dominion operates Exploration Area 4B ("EA4B"), with
a 95% working interest. In the DRC, Dominion has a 46.75% stake in
Block V (which is currently awaiting resolution of certain
environmental matters). The other partners in Block V are SOCO
International (38.25%, Operator) and Congolaise des Hydrocarbures,
the Congolese State Oil Company (15%).
EA4B and Block V are contiguous across the Lake Edward basin,
which straddles the borders of both countries. Both blocks are part
of the Albertine Rift system of sedimentary basins where numerous
commercial oil discoveries have been made since 2006. Although the
Ngaji-1 well on EA4B, drilled in June/July 2010, did not identify
any significant hydrocarbons, the well results did confirm the
presence of good quality reservoir sands, seals and possible
Pliocene source.
Dominion's current exploration efforts in this area are focused
on two prospects: Prospect "B", with 49.4 mmboe net prospective P50
resources; and the "Izzy" Prospect, with 83.7 mmboe net prospective
P50 resources (management estimates). In 2011, Dominion intends to
acquire 300-500 km of new 2D seismic in the Lake Edward Basin as
well as carry out a surface geochemistry survey.
Use of proceeds
The acquisition of a 75% operated working interest in the
Maltese Assets and award of the Block L9 PSC in Kenya represent
significant additions to Dominion's portfolio of exploration
assets. With active exploration programmes also continuing in
offshore Tanzania and the Lake Edward basin on the Uganda / DRC
border, the Company has commitments in a number of areas, as
follows:
Commitment Approximate cost
Repurchase and cancellation of the US$18 million
Notes held by Selling Noteholders
Malta - Exploration budget to include US$12 million
acquisition
and processing of 3D seismic data and
to carry
MOG in respect of its costs as described
above
Kenya - Licence costs, reprocessing US$11 million
and
reinterpretation of 2D data, acquisition
of 3D data
Tanzania Block 7 - Licence costs, acquisition US$6 million
of
additional 2D seismic
Uganda / DRC Lake Edward - Licence US$5 million
costs,
acquisition of additional 2D seismic
Working capital and fees US$3 million
The Notes Repurchase
As at the date of this Announcement, the current share price of
the Company is approximately 40% of the conversion price of 12.5p
contained in the Notes, and hence they must be regarded as senior
secured debt, amounting to approximately US$36.0 million
outstanding at the date of the SGM. If the Notes were held to
maturity, the total amount payable would be approximately US$41.4
million. The Board believes that, as an exploration company with no
operating income, the Company's capital structure should be
improved and the senior secured convertible notes should be
minimised or eliminated.
For this reason, the Company has agreed, using approximately
US$18.0 million of the proceeds of the Placing, to repurchase and
then cancel the Notes held by the Selling Noteholders: Plainfield
Offshore Holdings V Inc, and BlueGold Global Fund L.P. Assuming
they were held to maturity the price to be paid by the Company
represents a 36.4% discount to the aggregate principal and interest
which would be payable, and a 27.0% discount to the amount
outstanding at the date of the SGM. Following the Notes Repurchase,
there will be an aggregate approximately US$11.5 million (as at the
date of the SGM) outstanding under the remaining Notes.
One of the Selling Noteholders, BlueGold Global Fund L.P., has
elected to use the proceeds of the sale of its Notes (amounting to
approximately US$8.4 million) to subscribe for Subscription Shares.
The transaction is a related party transaction for the purposes of
Rule 13 of the AIM Rules, as BlueGold Global Fund L.P. currently
holds 11.26% of the issued Common Share capital of the Company and
the Placing is being carried out on a non pre-emptive basis. The
Directors (excluding Dennis Crema), having consulted with RBC, the
Company's nominated adviser, consider that the terms of the
subscription for Subscription Shares by BlueGold Global Fund L.P.
are fair and reasonable so far as Shareholders are concerned.
Share Consolidation
Bye-law 15.1 in the Bye-laws permits the Company, if authorised
by special resolution of its Shareholders, to consolidate its share
capital into shares of a larger nominal value than its existing
shares. Bye-law 15.2 permits the Board, if fractions of shares or
some other difficulty arise on consolidation, to deal with or
resolve the same in such manner as it thinks fit. It is proposed by
the Board that the Share Consolidation will provide that:
1. every 20 Common Shares of US$0.00004 in existence immediately
prior to the issue of the Subscription Shares will be consolidated
into one Consolidated Share of US$0.0008; and
2. fractional entitlements arising out of the Share
Consolidation will be aggregated into Consolidated Shares and the
whole number of Consolidated Shares so arising shall be sold by the
Company, for the benefit of the Company.
The Consolidated Shares will have the same rights as to voting,
dividends and return on capital as the existing Common Shares and
those Consolidated Shares to be issued and sold pursuant to the
Placing.
If approved, the Share Consolidation will be effected at 5.00
p.m. on 25 July 2011 and the Consolidated Shares will be issued on
the same day. Shareholders who hold their Common Shares in
uncertificated form (as Depositary Interests) are expected to have
their CREST accounts credited with Consolidated Shares on 26 July
2011. The ISIN number of the Consolidated Shares is
BMG2897M1148.
Certificates for the Consolidated Shares represented in
certificated form will be despatched upon receipt by the Company
Secretary at the Company's registered office of surrendered
certificates of existing Common Shares. Temporary certificates of
title will not be issued. Certificates of existing Common Shares
will no longer be valid from the time the Share Consolidation
becomes effective which is expected to be at 5.00 p.m. on 25 July
2011.
Procedural Matters
The Company is incorporated in Bermuda, and there are various
entrenched provisions in its Bye-laws which are designed to
maintain the tax status of the Company outside of the United
Kingdom. It is the Company's medium to long-term objective that the
Company be re-domiciled as an English company, which the Directors
believe would significantly reduce costs and increase the appeal of
the Company to investors who can only invest in English
companies.
One such provision of the Bye-laws requires the majority of the
Board to be resident outside of the United Kingdom for tax
purposes. In the event that this is not the case, as a matter of
Bermuda law the Board is improperly constituted for the purposes of
its Bye-laws and accordingly would be restricted in the purposes
for which it may take action. Owing to various departures from the
Board ending in March 2009 with the departure of Michael Garland,
which followed the departure of Daniel Yona in November 2008, the
Board at that time ceased to be constituted in accordance with the
Bye-laws and could not thereafter form the quorum required under
the Bye-laws to transact business at a board meeting. This remains
the current situation. As a result of this, the appointments of
Andrew Cochran, Dennis Crema and Atul Gupta were not properly
authorised by the Board, and they require re-appointing anew, prior
to completion of the Placing.
At the SGM, which has been convened by Roger Cagle, in his
capacity as Chairman, the first step will be to appoint James Keyes
and Gregory Tolaram, who are each resident outside of the UK for
tax purposes, on a temporary basis, until the conclusion of the
SGM. James Keyes is a Managing Director of Renaissance Capital in
Bermuda, having previously been a qualified solicitor and partner
at Appleby, an offshore law firm, until 2008. Gregory Tolaram has
been involved in the financial services industry for 20 years and
in the private equity industry since 1986, having been originally
hired as an analyst and becoming portfolio strategist for Goulson
Group. Following work as head of private equity investments for
Parkyn Trust he co-founded and was Managing Director of Hamilton
Capital Limited. Mr Tolaram is currently Managing Director of
Mercury Group Limited; a Bermuda based Management Company which,
along with its affiliates, provides corporate and specialised
support to its clientele in the finance industry including funds
and family offices. Further information on each of James Keyes and
Gregory Tolaram is set out below. Following such appointment, the
Board will be able to constitute a quorum, and, during a brief
adjournment of the SGM, will ratify the acts of the
(improperly-constituted) board as at the date such actions were
taken, including in relation to the Placing, Share Consolidation
and Notes Repurchase. The Board will also at this stage adopt new
Bye-laws which, amongst other things, remove the requirements in
relation to the residency of the Board. Following such steps, the
new Bye-laws must be approved by Shareholders. Shareholders must
also ratify the actions of the Board and any resolutions of
Shareholders that took place at meetings called by the
improperly-constituted board. This will require the affirmative
vote of 66% of all Shareholders, not just those present (in person
or by proxy) at the SGM.
The other changes to the Bye-laws comprise, broadly, the
following:
1. reinstating provisions that are required to be present under
the terms and conditions set out in the NPA, which are conditions
of the Notes;
2. removing good and bad leaver provisions; and
3. maintaining the rights of the Remaining Noteholders to
appoint directors following the Notes Repurchase.
At the conclusion of the SGM, James Keyes and Gregory Tolaram
will resign from the Board and Andrew Cochran, Dennis Crema and
Atul Gupta will be appointed.
Without the Procedural Matters having been resolved, the Placing
will not be able to be completed, and the Board will thereafter
continue to be unable to act, other than to call another general
meeting at which the same Resolutions (other than the Remuneration
Resolution) would be considered. Furthermore, the Company could be
unable to enforce certain provisions of contracts that it has
entered into, and would be in continuing breach of the terms of the
Notes, such that acceleration or other remedies could be available
to Noteholders.
The Directors, together with certain Shareholders, holding
together 568,456,800 Common Shares, representing 35.8% of the total
number of Common Shares at the date of this Announcement, have
irrevocably undertaken to vote in favour of the Resolutions.
Additional information on James Keyes and Gregory Tolaram
James Michael Keyes, aged 48, is currently a Director of 28 fund
groups. He is a Director of Sagecrest Holdings Ltd., which was
placed in Chapter 11 proceedings in 2009 after the financial crisis
of 2008. The directors and the provisional liquidators of Sagecrest
Holdings are currently working to realise illiquid assets for
investors. He was also a Director of Millennium Global Emerging
Credit Fund Ltd which was placed into liquidation in 2009.
Gregory Tolaram, aged 47, is currently a Director of 18 other
companies/fund groups.
Directors' and senior employees' remuneration and share
scheme
There is currently no share-based incentive scheme available to
Directors and senior employees, past awards having been made on an
ad-hoc basis. As the Company grows in size, the Board believes that
it is necessary to put in place structures to retain and
incentivise key Directors and senior employees, and to attract new
talent to the Company.
As a result, the Remuneration Committee has decided to implement
a share-based incentive scheme, for existing executive Directors
and senior employees and also as part of the Company's ongoing
strategy to recruit and retain talented individuals. Such scheme
will comply fully with the recommendations set out in the ABI
Guidelines on Executive Remuneration and the QCA Guidance for
Companies on Employee Share Schemes, and will be subject to the
limits as regards dilution set out in those documents.
The Remuneration Committee also recognises that Andrew Cochran
and Vahid Farzad (who have not received any ad-hoc awards since
joining the Company in 2009 and early 2010 respectively) have
brought substantial success to the Company, in the form of the
Kenya and Maltese acquisitions and in relation to the Placing. In
order to reward them for past services, incentivise them for the
future and ensure that their services are retained, the
Remuneration Committee has elected to make the following awards,
which are conditional on the successful completion of the Placing
and Shareholder consent:
Award of
Consolidated Options over Options over
Shares at the Consolidated Consolidated
Placing Shares Shares
Price to the value at the Placing at 2x the Placing
of Price Price
Andrew Cochran GBP750,000 2,000,000 2,000,000
Vahid Farzad GBP250,000 500,000 250,000
The awards of Consolidated Shares will vest, and the options
over Consolidated Shares will become exercisable, on 31 December
2012. In the event that the individual concerned leaves prior to
such date (save in certain limited circumstances), the Consolidated
Shares awarded to him will not vest and the options over
Consolidated Shares will lapse automatically. The options over
Consolidated Shares will remain exercisable, following 31 December
2012, during the three year period following Admission. A facility
for cashless exercise of the options is proposed to be incorporated
into the option agreements. All of the awards of Consolidated
Shares will vest, and the options over Consolidated Shares will
become immediately exercisable, upon a change of control of the
Company.
It is anticipated that the awards in respect of Consolidated
Shares will be made within two months of Admission, prior to which
time it is envisaged that the Company will have established a
formal structure for the share incentive scheme, details of which
will be announced in due course.
Special General Meeting
At the annual general meeting of the Company held on 12 November
2010, Shareholders granted authority to the Directors to make non
pre-emptive offers of Common Shares for cash of up to 158,978,115
Common Shares (representing up to approximately 10% of the issued
share capital of the Company) at any time up to 11 March 2012. This
is insufficient to permit the issue of all of the Subscription
Shares and so new authorities from Shareholders are therefore
required.
At the SGM, Resolutions will be proposed to:
1. appoint James Keyes to the Board (as part of the resolution
of the Procedural Matters);
2. appoint Gregory Tolaram to the Board (as part of the
resolution of the Procedural Matters);
Between Resolutions 2 and 3 there will be a meeting of the Board
at which the Board will ratify its actions since 28 November 2008
and adopt new Bye-laws, subject to Shareholder approval, which is
sought in Resolution 3.
3. adopt new Bye-laws which remove the requirements in relation
to tax residency for Directors, which bring the Bye-laws more into
line with what might be expected for a company whose securities are
admitted to AIM, which ratify the actions of the Board and
resolutions of members since 28 November 2008 (again, part of the
resolution of the Procedural Matters) and which maintain the powers
of the Remaining Noteholders to appoint directors;
4. approve the Placing of the Subscription Shares, which will
combine resolutions to:
a. consolidate the existing issued and unissued Common Shares of
US$0.00004 each into Consolidated Shares of US$0.0008 each; and
b. renew and increase the authorities pursuant to Bye-law 2.4
and Bye-law 2.6 to allow the directors to allot and issue
securities without pre-emption rights applying (which authorities
will be required in order to allot the Subscription Shares and
which, unless otherwise renewed or revoked by the Shareholders in a
general meeting will expire on the date of the next annual general
meeting of the Company);
5. approve the share-based awards to Andrew Cochran and Vahid
Farzad;
6. appoint Andrew Cochran to the Board;
7. appoint Dennis Crema to the Board; and
8. appoint Atul Gupta to the Board.
Financial position
The Company's financial results for the year to 31 December 2010
were announced on 24 June 2011 and showed that the Company had a
cash balance of US$15.8 million as at the year end. As at 30 April
2011 (the latest date prior to the publication of this document for
which management accounts are available) the Company's cash
resources were approximately US$12.5 million.
The Company having been through a process of reviewing how it
might best meet its funding requirements has concluded that it is
in the best interests of the Company and its Shareholders to raise
approximately US$55 million through the Placing of the Subscription
Shares.
Andrew Cochran, Chief Executive, said:
"This is a huge accomplishment in the corporate restructuring we
embarked upon over the past year. The Company will have a greatly
improved capital structure going forward and sufficient working
capital to meet the needs of the expanding portfolio.
Offshore Tanzania and Kenya are coming along nicely. Our
internal work on Block 7 3D and existing 2D in L9 will support a
new CPR over the summer. The new prospects mean that we can now
establish our partnering strategy for deepwater East Africa.
The expansion into offshore Malta represents a material operated
position in another emerging deepwater basin under reasonable terms
and commitments. The Mediterranean basin represents a potentially
new 'core' area for Dominion; we'll kick-off 3D in Malta as soon as
we can."
ENQUIRIES
For further information please contact:
Dominion Petroleum Limited
Andrew Cochran, Chief Executive Officer +44 (0) 20 7349 5900
Rob Shepherd, Finance Director
RBC Capital Markets, NOMAD and Joint Book Runner +44 (0)20 7653
4000
Jeremy Low
Martin Eales
Paul Stricker
Bank of America Merrill Lynch International, Joint Book Runner
+44 (0)20 7996 1000
Andrew Osborne
Paul Frankfurt
Pelham Bell Pottinger Limited +44 (0)20 7861 3112
Archie Berens
IMPORTANT NOTICES
This Announcement contains (or may contain) certain
forward-looking statements with respect to certain of the Company's
plans and its current goals and expectations, financial condition
and performance and which involve a number of risks and
uncertainties. The Company cautions readers that no forward-looking
statement is a guarantee of future performance and that actual
results could differ materially from those contained in the
forward-looking statements. These forward-looking statements can be
identified by the fact that they do not relate only to historical
or current facts. Forward-looking statements sometimes use words
such as "aim", "anticipate", "target", "expect", "estimate",
"intend", "plan", "goal", "believe", or other words of similar
meaning. Examples of forward-looking statements include, amongst
others, statements regarding the Company's probable, inferred or
contingent oil and gas resources or reserves, future financial
position, income growth, impairment charges, business strategy,
projected levels of growth, projected costs, estimates of capital
expenditure, and plans, dividend growth and objectives for future
operations of the Company and other statements that are not
historical fact. By their nature, forward-looking statements
involve risk and uncertainty because they relate to future events
and circumstances, including, but not limited to, UK domestic and
global economic and business conditions, the effects of continued
volatility in credit markets, market-related risks such as changes
in interest rates and foreign exchange rates, the policies and
actions of governmental and regulatory authorities, changes in
legislation, the further development of standards and
interpretations under International Financial Reporting Standards
("IFRS") applicable to past, current and future periods, evolving
practices with regard to the interpretation and application of
standards under IFRS, the outcome of pending and future litigation
or regulatory investigations, the success of future explorations,
acquisitions and other strategic transactions and the impact of
competition. A number of these factors are beyond the Company's
control. As a result, the Company's actual future results may
differ materially from the plans, goals, and expectations set forth
in the Company's forward-looking statements. Given these risks and
uncertainties, prospective investors are cautioned not to place
undue reliance on forward-looking statements which are not
guarantees of future performance. Any forward-looking statements
made in this Announcement by or on behalf of the Company speak only
as of the date they are made. Except as required by the FSA, the
London Stock Exchange, the AIM Rules or applicable law, the Company
expressly disclaims any obligation or undertaking to release
publicly any updates or revisions to any forward-looking statements
contained in this Announcement to reflect any changes in the
Company's expectations with regard thereto or any changes in
events, conditions or circumstances on which any such statement is
based.
This Announcement is for information purposes only and shall not
constitute an offer to buy, sell, issue, or subscribe for, or the
solicitation of an offer to buy, sell, issue, or subscribe for any
securities, nor shall there be any sale of securities in any
jurisdiction, including, without limitation, the United States,
Australia, Canada or Japan, in which such offer, solicitation or
sale is or may be unlawful prior to registration or qualification
under the securities laws of any such jurisdiction (a "Prohibited
Jurisdiction"). This Announcement and the information contained
herein are not for publication or distribution, directly or
indirectly, to persons in a Prohibited Jurisdiction unless
permitted pursuant to an exemption under the relevant local law or
regulation in any such jurisdiction. This Announcement has been
issued by and is the sole responsibility of the Company.
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 RBC, BofA Merrill Lynch (together the
"Joint Bookrunners") or by any of their Affiliates or agents as to,
or in relation to, the accuracy or completeness of this
Announcement, including the Appendix, or any other written or oral
information made available to or publicly available to any
interested party or its advisers, and any responsibility or
liability therefor is expressly disclaimed.
Royal Bank of Canada Europe Limited, trading as RBC Capital
Markets, which is authorised and regulated in the United Kingdom by
the FSA, is acting for the Company and the Sellers and for no-one
else in connection with the Placing, and will not be responsible to
anyone other than the Company or the Sellers for providing the
protections afforded to customers of RBC or for providing advice to
any other person in relation to the Placing or any other matter
referred to herein.
BofA Merrill Lynch, which is authorised and regulated in the
United Kingdom by the FSA, is acting for the Company and the
Sellers and for no-one else in connection with the Placing, and
will not be responsible to anyone other than the Company or the
Sellers for providing the protections afforded to customers of BofA
Merrill Lynch or for providing advice to any other person in
relation to the Placing or any other matter referred to herein.
The distribution of this Announcement and the offering of the
Placing Shares in certain jurisdictions may be restricted by law
and/or regulation. No action has been taken by the Company or the
Joint Bookrunners or any of their respective Affiliates that would
permit an offering of such shares or possession or distribution of
this Announcement or any other offering or publicity material
relating to such 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
Bookrunners to inform themselves about and to observe such
restrictions.
The price of shares and the income from them (if any) may go
down as well as up and investors may not get back the full amount
invested on disposal of the shares. No statement in this
Announcement is intended to be a profit forecast or profit
estimate.
MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE
PLACING. THIS ANNOUNCEMENT (INCLUDING THE APPENDIX) AND THE TERMS
AND CONDITIONS SET OUT HEREIN ARE FOR INFORMATION PURPOSES ONLY AND
ARE DIRECTED ONLY AT PERSONS WHO ARE: (A) (I) INVESTMENT
PROFESSIONALS FALLING WITHIN ARTICLE 19(1) OR ARTICLE 19(5) OF THE
FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER
2005 (THE "ORDER"), OR (II) PERSONS FALLING WITHIN ARTICLE 49(2)(A)
TO (D) ("HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS,
ETC") OF THE ORDER, OR (III) PERSONS TO WHOM IT MAY OTHERWISE BE
LAWFULLY COMMUNICATED; AND (B) (I) PERSONS IN MEMBER STATES OF THE
EUROPEAN ECONOMIC AREA WHO ARE QUALIFIED INVESTORS (AS DEFINED IN
ARTICLE 2(1)(E) OF EU DIRECTIVE 2003/71/EC (THE "PROSPECTUS
DIRECTIVE")), AND/OR (II) PERSONS IN THE UNITED KINGDOM WHO ARE
QUALIFIED INVESTORS (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS
"RELEVANT PERSONS"). THIS ANNOUNCEMENT (INCLUDING THE APPENDIX) AND
THE TERMS AND CONDITIONS SET OUT IN THIS ANNOUNCEMENT MUST NOT BE
ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. ANY
INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS ANNOUNCEMENT
(INCLUDING THE APPENDIX) AND THE TERMS AND CONDITIONS SET OUT IN
THIS ANNOUNCEMENT RELATE IS AVAILABLE ONLY TO RELEVANT PERSONS AND
WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. THIS ANNOUNCEMENT
(INCLUDING THE APPENDIX) DOES NOT ITSELF CONSTITUTE AN OFFER FOR
SALE OR SUBSCRIPTION OF ANY SECURITIES IN THE COMPANY.
Persons (including individuals, funds or otherwise) by whom or
on whose behalf a commitment to subscribe for Placing Shares has
been given ("Placees") will be deemed to have read and understood
this Announcement, including the Appendix, in its entirety and to
be making such commitment on the Terms and Conditions, and to be
providing the representations, warranties, acknowledgements and
undertakings contained in the Appendix. In particular, each such
Placee represents, warrants and acknowledges that it is: (i) a
Relevant Person (as defined above) and undertakes that it will
acquire, purchase, subscribe for, hold, manage or dispose of any
Placing Shares that are allocated to it for the purposes of its
business; and (ii) outside the United States and is subscribing
and/or purchasing Placing Shares for its own account or is
acquiring the Placing Shares for an account with respect to which
it exercises sole investment discretion in an "offshore
transaction" (within the meaning of Regulation S under the United
States Securities Act of 1933 (the "Securities Act")).
This Announcement, including the Appendix, is not for
distribution, directly or indirectly, in or into the United States
(such term to be understood throughout this Announcement and the
Appendix as including the United States' territories and
possessions, any state of the United States and the District of
Columbia), Canada, Australia or Japan or any jurisdiction into
which the same would be unlawful. This Announcement does not
constitute or form part of an offer or solicitation to acquire
shares in the capital of the Company in the United States, Canada,
Australia or Japan or any jurisdiction in which such an offer or
solicitation is unlawful. In particular, the Placing Shares
referred to in this Announcement have not been, and will not be,
registered under the Securities Act or under the securities
legislation of any state of the United States, and may not be
offered, sold, resold or delivered, directly or indirectly, in or
into the United States absent registration except pursuant to an
exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act. The Placing Shares
referred to in this Announcement are being offered and sold only
outside the United States in "offshore transactions" (as defined in
Regulation S under the Securities Act) meeting the requirements of
Regulation S under the Securities Act. No public offering of
securities of the Company will be made in connection with the
Placing in the United Kingdom, the United States, Australia,
Canada, Japan, South Africa or elsewhere.
The relevant clearances have not been, and nor will they be,
obtained from the securities commission of any province or
territory of Canada; no prospectus has been lodged with, or
registered by, the Australian Securities and Investments Commission
or the Japanese Ministry of Finance; and the Placing Shares have
not been, and nor will they be, registered under the securities
laws of any state, province or territory of Australia, Canada 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 the United
States, Australia, Canada, Japan or any other jurisdiction outside
the United Kingdom.
The Placing Shares have not been approved or disapproved by the
US Securities and Exchange Commission, any state securities
commission or any 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 unlawful.
Persons (including, without limitation, nominees and trustees)
who have a contractual or other legal obligation to forward a copy
of the Appendix or this Announcement should seek appropriate advice
before taking any action.
Residents of South Africa are subject to exchange control
regulations as issued from time to time by the Exchange Control
Division of the SARB and are advised to seek independent advice
regarding any permissions that may be required of the Exchange
Control Division of the SARB with regard to the acquisition of
Placing Shares by any resident of South Africa. To the extent that
Placing Shares are offered for subscription, acquisition or sale in
South Africa, such offer is being effected in terms of section 144
of the South African Companies Act and does not constitute an offer
to the public or any sector of the public within the meaning of the
South African Companies Act.
This Announcement relates to an Exempt Offer in accordance with
the Offered Securities Rules of the DFSA. This Announcement is
intended for distribution only to persons of a type specified in
the Offered Securities Rules of the DFSA. It must not be delivered
to, or relied on by, any other person. The DFSA has no
responsibility for reviewing or verifying any documents in
connection with Exempt Offers. The DFSA has not approved this
Announcement nor taken steps to verify the information set forth
herein and has no responsibility for this Announcement. The Placing
Shares to which this Announcement relates may be illiquid and / or
subject to restrictions on their resale. Prospective subscribers of
the Placing Shares offered should conduct their own due diligence
on the Placing Shares. If you do not understand the contents of
this Announcement you should consult an authorised financial
adviser.
The Placing Shares to be issued pursuant to the Placing will not
be admitted to trading on any stock exchange other than AIM.
Neither the content of the Company's website nor any website
accessible by hyperlinks on the Company's website is incorporated
in, or forms part of, this Announcement.
APPENDIX
TERMS AND CONDITIONS OF THE PLACING
IMPORTANT INFORMATION FOR PLACEES ONLY REGARDING THE PLACING
Defined terms used in this Appendix are set out at the end of
this Appendix
Details of the Placing
The Joint Bookrunners have today entered into (i) an agreement
with inter alia the Company under which, subject to the conditions
set out in that agreement, the Joint Bookrunners, as agents for and
on behalf of the Company, have agreed to use reasonable endeavours
to procure placees for the Subscription Shares; and (ii) an
agreement with the Sellers under which, subject to the conditions
set out in that agreement, the Joint Bookrunners, as agents for and
on behalf of the Sellers, have agreed to use reasonable endeavours
to procure placees for the Sale Shares in each case at a price
determined following completion of the bookbuilding process
described in this Announcement. The Placing has not been
underwritten and is subject inter alia to the Joint Bookrunners
agreeing the Placing Price and the number of Subscription Shares
with the Company. The Placing of the Sale Shares has not been
underwritten and is subject inter alia to the Joint Bookrunners
agreeing the Placing Price and the number of Sale Shares with the
Sellers. In association with the Placing, the Company is
undertaking the Share Consolidation. Accordingly Placees will
receive Consolidated Shares pursuant to the Placing.
The Subscription Shares will, when issued, be credited as fully
paid and will rank pari passu in all respects with the Common
Shares (following the Consolidation) including the right to receive
all dividends and other distributions declared, made or paid in
respect of such shares after the date of issue of the Subscription
Shares.
The Sale Shares were issued, fully paid and rank pari passu in
all respects with the Common Shares (following the Consolidation)
including the right to receive all dividends and other
distributions declared, made or paid in respect of such shares.
The Subscription Shares will be issued and the Sale Shares are
free of any pre-emption rights, encumbrance, lien or other security
interest.
The Subscription Shares allocated to Placees in the Placing will
be allotted as Consolidated Shares and issued to the Depositary as
nominee for such Placees, and the Company will procure that the
Depositary issues to Placees dematerialised Depositary Interests
representing such Consolidated Shares allocated to them. The Sale
Shares are held by the Depositary as nominee for the Sellers and
the Sellers shall procure the delivery of Depositary Interests
representing the Sale Shares as Consolidated Shares to such Placees
as are allocated to them. References in this Appendix and these
Terms and Conditions to Placing Shares, Sale Shares, Subscription
Shares and Consolidated Shares and their subscription and/or
acquisition by or transfer to Placees and their allotment and issue
by the Company shall be interpreted accordingly.
As part of the Placing, the Company has agreed that it will not
issue or sell any shares for a period of 180 days after Admission,
without the prior consent of the Joint Bookrunners. This agreement
is subject to customary exceptions and does not prevent the Company
from granting or satisfying exercises of options, warrants or
convertible notes as disclosed in publicly available
information.
Application for admission to trading
Application will be made to the London Stock Exchange for
admission of the Subscription Shares (as Consolidated Shares and as
represented by Depositary Interests) to trading on AIM. Admission
is conditional inter alia upon the passing of the Resolutions
(other than the Remuneration Resolution) at the Special General
Meeting proposed to be convened on or around 25 July 2011 by the
shareholders of the Company. It is expected that Admission will
become effective on or around 26 July 2011 and that dealings in the
Placing Shares (as Consolidated Shares and as represented by
Depositary Interests) will commence at that time.
Bookbuild
The Joint Bookrunners will today commence the Bookbuild to
determine demand for participation in the Placing by Placees. This
Appendix gives details of the terms and conditions of, and the
mechanics of participation in, the Placing. No fees or commissions
will be paid to Placees or by Placees in respect of any Placing
Shares.
The Joint Bookrunners shall be entitled to effect the Placing by
such alternative method to the Bookbuild as it may, in its sole
discretion, determine.
Participation in, and principal terms of, the Placing
1 RBC and BofA Merrill Lynch are acting as joint bookrunners and
as agents of the Company (in respect of the Subscription Shares)
and as agents of the Sellers (in respect of the Sale Shares).
2 Participation in the Placing will only be available to persons
who may lawfully be, and are, invited to participate by the Joint
Bookrunners. The Joint Bookrunners and their Affiliates are each
entitled to enter bids in the Bookbuild as principal.
3 The Bookbuild will establish a single price payable to the
Joint Bookrunners by all Placees whose bids are successful. The
Placing Price and the number of Placing Shares to be issued will be
agreed between the Joint Bookrunners and the Company (as regards
Subscription Shares) and the Sellers (as regards the Sale Shares)
following completion of the Bookbuild. The Placing Price and the
number of Placing Shares will be announced on a Regulatory
Information Service following the completion of the Bookbuild.
4 To bid in the Bookbuild, Placees should communicate their bid
by telephone to their usual sales or equity capital markets contact
at either of the Joint Bookrunners. Each bid should state the
number of Placing Shares which the prospective Placee wishes
acquire for at either the Placing Price, which is ultimately
established in the Bookbuild or at prices up to a price limit
specified in its bid. Bids may be scaled down by the Joint
Bookrunners on the basis referred to in paragraph 9 below. The
Joint Bookrunners reserve the right not to accept bids or to accept
bids in part rather than in whole. The acceptance of the bids shall
be at the relevant Joint Bookrunner's absolute discretion.
5 The Bookbuild is expected to close no later than 4.00 p.m.
(London time) on 24 June 2011 but may be closed earlier or later at
the discretion of the Joint Bookrunners. The Joint Bookrunners may,
in their discretion, accept bids that are received after the
Bookbuild has closed. The Company reserves the right (upon the
agreement of the Joint Bookrunners) to reduce or seek to increase
the amount to be raised pursuant to the Placing, in its absolute
discretion.
6 Each prospective Placee's allocation will be agreed between
the Joint Bookrunners and the Company and will be confirmed orally
by one of the Joint Bookrunners as agent of the Company (in respect
of the Subscription Shares) and as agent of the Sellers (in respect
of the Sale Shares), following the close of the Bookbuild. That
oral confirmation will constitute an irrevocable legally binding
commitment upon that person (who will at that point become a
Placee) in favour of the Company and/or the Sellers and the Joint
Bookrunners to subscribe and/or purchase the number of Placing
Shares allocated to it at the Placing Price on these Terms and
Conditions and in accordance with the Company's Bye laws.
7 Each prospective Placee's allocation and commitment will be
evidenced by a contract note issued to such Placee by one of the
Joint Bookrunners. These Terms and Conditions will be deemed
incorporated in that contract note.
8 Each Placee will also have an immediate, separate, irrevocable
and binding obligation, owed to the relevant Joint Bookrunner (as
agent of the Company in respect of the Subscription Shares and as
agent of the Sellers in respect of the Sale Shares), to pay to such
Joint Bookrunner (or as it may direct) in cleared funds at the time
set out in paragraph 12, an amount equal to the product of the
Placing Price and the number of Placing Shares such Placee has
agreed to subscribe and/or purchase and the Sellers have agreed to
procure the transfer by the Depositary of, and the Company has
agreed to allot and issue to the Depositary on the basis that the
Depositary will issue, Depositary Interests representing those
Placing Shares to the Placee. Each Placee's obligation will be owed
to the Company and/or the Sellers and to the relevant Joint
Bookrunner. The Company shall allot and the Sellers shall sell such
Placing Shares to each Placee following each Placee's payment to
the relevant Joint Bookrunner.
9 Subject to paragraphs 4 and 5 above, the Joint Bookrunners may
choose to accept bids, either in whole or in part, on the basis of
allocations determined in accordance with the Bookbuild and may
scale down any bids for this purpose on such basis as it may
determine. The Joint Bookrunners may also, notwithstanding
paragraphs 4 and 5 above, (i) allocate Placing Shares after the
time of any initial allocation to any person submitting a bid after
that time and (ii) allocate Placing Shares after the Bookbuild has
closed to any person submitting a bid after that time. The
acceptance of offers shall be at the absolute discretion of the
Joint Bookrunners.
10 A bid in the Bookbuild will be made on the terms and subject
to the conditions in this Announcement and will be legally binding
on the Placee on behalf of which it is made and, except with the
consent of the Joint Bookrunners, will not be capable of variation
or revocation after the time at which it is submitted.
11 Except as required by law or regulation, no press release or
other announcement will be made by the Joint Bookrunners or the
Company using the name of any Placee (or its agent), in its
capacity as Placee (or agent), other than with such Placee's prior
written consent.
12 Irrespective of the time at which a Placee's allocation
pursuant to the Placing is confirmed, settlement for all Placing
Shares to be subscribed and/or purchased pursuant to the Placing
will be required to be made at the same time, on the basis
explained below under "Registration and Settlement".
13 All obligations under the Bookbuild and 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".
14 By participating in the Bookbuild, 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.
15 To the fullest extent permissible by law, neither Joint
Bookrunner nor any of their Affiliates nor any person acting on
their behalf shall have any responsibility or liability to any
Placee (or to any other person whether acting on behalf of a Placee
or otherwise). In particular, neither Joint Bookrunner nor any of
their Affiliates nor any person acting on their behalf shall have
any responsibility or liability (including to the fullest extent
permissible by law, any fiduciary duties) in respect of the Joint
Bookrunners' conduct of the Bookbuild or of such alternative method
of effecting the Placing as the Joint Bookrunners may
determine.
Conditions of the Placing
The Placing is conditional upon the Placing Agreement and the
Sale Agreement each becoming unconditional and not having been
terminated in accordance with their respective terms.
The obligations of the Joint Bookrunners under the Placing
Agreement are conditional on, amongst other things:
(a) the Company having complied with all its obligations and
having satisfied all conditions to be performed or satisfied by it
under the Placing Agreement which fall to be performed or satisfied
on or prior to Admission;
(b) none of the following having occurred at any time before
Admission:
(i) none of the representations and warranties contained in the
Placing Agreement being, or ceasing to be, true and accurate or
being or becoming misleading (in each case) by reference to the
facts and circumstances subsisting at that time; or
(ii) in the opinion of either of the Joint Bookrunners, there
not having been any material adverse change (whether or not
foreseeable at the date of the Placing Agreement) in, or any
development likely to involve a prospective material adverse change
in the condition (financial, operational, legal or otherwise) or
the earnings, business affairs, trading position or business
prospects of the Group, taken as a whole, whether or not arising in
the ordinary course of business;
(c) agreement being reached between the Company, the Sellers and
the Joint Bookrunners, on the Placing Price and the number of
Placing Shares, and the publication by the Company of a pricing
announcement;
(d) the Sale Agreement becoming unconditional (other than in
respect of the Admission of the Subscription Shares) and not having
been terminated;
(e) the passing of the Resolutions (other than the Remuneration
Resolution), without amendment, at the Special General Meeting;
and
(f) Admission becoming effective by not later than 8.00 a.m. on
26 July 2011 (or such later time and/or date as the Joint
Bookrunners and the Company may agree).
The Placing of the Sale Shares is conditional upon the Sale
Agreement becoming unconditional and not having been terminated in
accordance with its terms. The obligations of the Joint Bookrunners
under the Sale Agreement are conditional upon amongst other things
Admission of the Subscription Shares becoming effective in
accordance with the terms of the Placing Agreement.
If any of the conditions contained in the Placing Agreement are
not fulfilled or, where permitted, waived by the Joint Bookrunners,
by the respective time or date where specified (or such later time
and/or date as the Company and the Joint Bookrunners may agree), or
(ii) the Placing Agreement is terminated in the circumstances
specified below, the Placing will not proceed and each Placee's
rights and obligations hereunder in relation to the Placing Shares
shall cease and terminate at such time and each Placee agrees that
no claim can be made by the Placee in respect thereof.
If the conditions contained in the Sale Agreement are not
fulfilled or waived by the Joint Bookrunners, by the time or date
where specified (or such later time and/or date as the Company and
the Joint Bookrunners may agree), or (ii) the Sale Agreement is
terminated in the circumstances specified below, or (iii) the
Placing Agreement fails to become unconditional in accordance with
its terms or is terminated in the circumstances specified below,
the Placing will not proceed and each Placee's rights and
obligations hereunder in relation to the Sale Shares shall cease
and terminate at such time and each Placee agrees that no claim can
be made by the Placee in respect thereof.
The Joint Bookrunners may, at their discretion and upon such
terms as they think fit, extend the time for the satisfaction of
any condition or waive compliance by the Company with the whole or
any part of any of the Company's obligations in relation to the
conditions in the Placing Agreement, save that the condition in the
Placing Agreement relating to Admission taking place may not be
waived. Any such extension or waiver will not affect Placees'
commitments as set out in this Announcement.
The Joint Bookrunners may, at their discretion and upon such
terms as they think fit, extend the time for the satisfaction of
any condition or waive compliance by the Sellers with the
conditions in the Sale Agreement. Any waiver will not affect
Placees' commitments as set out in this Announcement.
None of the Joint Bookrunners, the Company or any other person
shall have any responsibility or liability to any Placee (or to any
other person whether acting on behalf of a Placee or otherwise) in
respect of any decision made as to whether or not to waive or to
extend the time and / or the date for the satisfaction of any
condition to the Placing nor for any decision made 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 Bookrunners.
By participating in the Bookbuild, each Placee agrees that its
rights and obligations hereunder terminate only in the
circumstances described above and under "Termination of the
Placing" below, and will not be capable of rescission or
termination by the Placee.
Termination of the Placing
Either of the Joint Bookrunners are entitled, at any time before
Admission, to terminate the Placing Agreement in relation to its
obligations in respect of the Subscription Shares by giving notice
to the Company if, amongst other things:
(a) the Company fails to comply with any of its obligations
under the Placing Agreement or under the terms of the Placing;
or
(b) any of the representations, warranties or undertakings of
the Company contained in the Placing Agreement are not, or have
ceased to be, true and accurate by reference to the facts and
circumstances subsisting at that time; or
(c) it shall come to the notice of either of the Joint
Bookrunners that any statement contained in (inter alia) this
Announcement is or has become untrue, incorrect or misleading, or
any matter has arisen, which would, if the Placing were made at
that time, constitute an omission from this Announcement; or
(d) in the opinion of either of the Joint Bookrunners, there
shall have been any material adverse change (whether or not
foreseeable at the date of this agreement) in, or any development
likely to involve a prospective material adverse change in the
condition (financial, operational, legal or otherwise) or the
earnings, business affairs, trading position or business prospects
of the Group, taken as a whole, whether or not arising in the
ordinary course of business; or
(e) if there shall occur any material adverse change in the
financial markets in the US, the UK, any member of the European
Union or the international financial markets, any outbreak of
hostilities or escalation of hostilities or other calamity or
crisis or any change or development involving a prospective change
in national or international political, financial or economic
conditions, or currency exchange rates, in each case the effect of
which is such as to make it, in the good faith opinion of the Joint
Bookrunners (arrived at after such consultation with the Company as
shall be reasonably practicable in the circumstances) impracticable
or inadvisable to market the Placing Shares or to proceed with the
Placing in the manner contemplated in the Placing Documents or
which may adversely affect the success of the Placing or dealings
in the Placing Shares following Admission; or
(f) trading in any securities of the Company has been suspended
or limited by the London Stock Exchange, or if trading generally on
the New York Stock Exchange, the NASDAQ National Market or the
London Stock Exchange has been suspended or limited, or minimum or
maximum prices for trading have been fixed, or maximum ranges for
prices have been required, by any of such exchanges or by such
system or by order of any governmental authority, or a material
disruption has occurred in commercial banking or securities
settlement or clearance services in the US, the UK, Europe or in
Bermuda; or
(g) a banking moratorium has been declared by US, UK or Bermudan
authorities,
Either of the Joint Bookrunners are entitled, at any time before
Admission, to terminate the Sale Agreement in relation to its
obligations in respect of the Sale Shares by giving notice to the
Sellers if, amongst other things:
(a) there shall have come to the notice of either of the Joint
Bookrunners or there occurs any breach of, or any event that in the
judgement of either of the Joint Bookrunners renders untrue or
incorrect in any respect, any of the representations and warranties
contained in the Sale Agreement or any failure in the performance
of any of the Sellers' undertakings or agreements or any failure in
the performance or satisfaction of any of the conditions in the
Sale Agreement; or
(b) any material adverse change in the condition, results of
operations or prospects of the Company occurs or is made public on
or after the date of the Sale Agreement, or (ii) if there has
occurred (a) any material adverse change in the financial markets
in the United States, the United Kingdom, or the European Economic
Area or Bermuda or in the international financial markets, (b) any
outbreak or escalation of hostilities, act of terrorism or other
calamity or crisis or (c) any change or development involving a
prospective change in national or international political,
financial or economic conditions, or currency exchange rates, in
each case the effect of which is such as to make it, in the
judgement of either of the Joint Bookrunners, impracticable or
inadvisable to market the Sale Shares or to enforce contracts for
the sale of the Sale Shares, or (iii) if trading in any securities
of the Company has been suspended or materially limited by the
London Stock Exchange, or if trading generally on the New York
Stock Exchange or in the Nasdaq National Market or the London Stock
Exchange has been suspended or materially limited, or minimum or
maximum prices for trading have been fixed, or maximum ranges for
prices have been required, by any of the said exchanges or any
other governmental authority, or a material disruption has occurred
in commercial banking or securities settlement or clearance
services in the United States, Bermuda or in Europe, or (iv) if a
banking moratorium has been declared by either the United States,
the United Kingdom or Bermuda; or
(c) the Placing Agreement terminates at any time prior to the
Admission of the Subscription Shares.
By participating in the Placing, Placees agree that the exercise
by the Joint Bookrunners of any right of termination or other
discretion under the Placing Agreement or the Sale Agreement shall
be within the absolute discretion of the Joint Bookrunners and that
it need not make any reference to Placees in this regard and that,
to the fullest extent permitted by law, the Joint Bookrunners shall
have no responsibility or liability to Placees whatsoever in
connection with any such exercise or failure so to exercise.
No prospectus
No offering document, prospectus or admission document has been
or will be prepared in relation to the Placing, and Placees'
commitments will be made solely on the basis of publicly available
information taken together with the information contained in this
Announcement (including this Appendix) released by the Company
today, and any Exchange Information (as defined below) previously
published by the Company and subject to the further terms set forth
in the contract note to be provided to individual prospective
Placees.
Each Placee, by accepting a participation in the Placing, agrees
that the content of this Announcement (including this Appendix) and
the publicly available information released by or on behalf of the
Company is exclusively the responsibility of the Company and
confirms that it has neither received nor relied on any other
information, representation, warranty, or statement made by or on
behalf of the Company (other than publicly available information)
or the Joint Bookrunners or their Affiliates (other than the amount
of the relevant Placing participation in the oral confirmation
given to Placees and the contract note referred to below) or any
other person and none of the Joint Bookrunners, their Affiliates,
any persons acting on their behalf or the Company nor any other
person will be liable for any Placee's decision to participate in
the Placing based on any other information, representation,
warranty or statement which the Placees may have obtained or
received (regardless of whether or not such information,
representation, warranty or statement was given or made by or on
behalf of any such persons). 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.
Registration and settlement
Settlement of transactions in the Placing Shares (ISIN
BMG2897M1148) following Admission will take place within the system
administered by Euroclear UK & Ireland Limited ("CREST"), using
the DVP mechanism, subject to certain exceptions. The Company
reserves the right to require settlement for and delivery of the
Placing Shares (or a portion thereof) to Placees in certificated
form if, in the Joint Bookrunners' opinion, delivery or settlement
is not possible or practicable within the CREST system within the
timetable set out in this Announcement or would not be consistent
with the regulatory requirements in the Placee's jurisdiction.
Following the close of the Bookbuild for the Placing, each
Placee allocated Placing Shares in the Placing will be sent a
contract note stating the number of Placing Shares to be allocated
to it at the Placing Price, the aggregate amount owed by such
Placee to the relevant Joint Bookrunner and settlement
instructions. Placees procured by BofA Merrill Lynch should settle
against CREST ID: 686. Placees procured by RBC should settle
against CREST ID: 388. It is expected that such contract note will
be despatched on 24 June 2011 and that this will also be the trade
date.
Each Placee agrees that it will do all things necessary to
ensure that delivery and payment is completed in accordance with
either the standing CREST or certificated settlement instructions
that it has in place with the Joint Bookrunners.
The Sellers and/or the Company will deliver the Placing Shares
to CREST accounts operated by RBC and BofA Merrill Lynch as agents
for the Sellers and/or the Company as appropriate and RBC and BofA
Merrill Lynch will enter their respective delivery (DEL)
instructions into the CREST system. RBC and BofA Merrill Lynch will
hold any Placing Shares delivered to this account as nominees for
the Placees. The input to CREST by a Placee of a matching or
acceptance instruction will then allow delivery of the relevant
Placing Shares to that Placee against payment.
It is expected that settlement will be on 26 July 2011.
Interest is chargeable daily on payments not received from
Placees on the due date in accordance with the arrangements set out
above at the rate of two percentage points above LIBOR as
determined by the Joint Bookrunners.
Each Placee agrees that, if it does not comply with these
obligations, the Joint Bookrunners may sell any or all of the
Placing Shares allocated to that Placee on such Placee's behalf and
retain from the proceeds, for the Company's account and benefit, an
amount equal to the aggregate amount owed by the Placee plus any
interest due. The relevant Placee will, however, remain liable for
any shortfall below the aggregate amount owed by it and shall be
required to bear any stamp duty, stamp duty reserve tax or other
stamp, securities, transfer, registration, execution, documentary
or other similar impost, duty or tax (together with any interest or
penalties) which may arise upon the sale of such Placing Shares on
such Placee's behalf.
If Placing Shares are to be delivered to a custodian or
settlement agent, Placees should ensure that the contract note is
copied and delivered immediately to the relevant person within that
organisation. Insofar as Placing Shares are registered in a
Placee's name or that of its nominee or in the name of any person
for whom a Placee is contracting as agent or that of a nominee for
such person, such Placing Shares should, subject as provided below,
be so registered free from any liability to UK stamp duty or stamp
duty reserve tax. If there are any circumstances in which any other
stamp duty or stamp duty reserve tax (together with interest and
penalties) is payable in respect of the issue of the Subscription
Shares, neither of the Joint Bookrunners nor the Company shall be
responsible for the payment thereof.
Representations and warranties
By participating in the Placing each Placee (and any person
acting on such Placee's behalf) irrevocably acknowledges, confirms,
undertakes, represents, warrants and agrees (as the case may be)
with the Joint Bookrunners (in their capacity as joint bookrunners
and placing agents of the Company in respect of the Placing of the
Subscription Shares and as joint bookrunners and placing agents of
the Sellers in respect of the Sale Shares) and the Company, in each
case as a fundamental term of their application for Placing Shares
the following. It:
1 represents and warrants that it has read and understood this
Announcement, including the Appendix, in its entirety and that its
subscription and/or purchase of Placing Shares is subject to and
based upon all the terms, conditions, warranties, acknowledgements,
agreements and undertakings and other information contained
herein;
2 acknowledges and agrees that no offering document or
prospectus or admission document has been or will be prepared in
connection with the Placing and represents and warrants that it has
not received a prospectus, admission document or other offering
document in connection with the Bookbuild, the Placing or the
Placing Shares;
3 acknowledges that the Common Shares are traded on AIM, and
that the Company is therefore required to publish certain business
and financial information in accordance with the rules and
practices of the FSA and AIM (collectively, the "Exchange
Information"), 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 similar statements for preceding
financial years and that it has reviewed such Exchange Information
and is able to obtain or access such Exchange 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 acknowledges that none of the Joint Bookrunners or the Company
nor any of their Affiliates nor any person acting on behalf of any
of them has provided, and will not provide, it with any material or
information regarding the Placing Shares, the Placing or the
Company or any other person other than this Announcement; nor has
it requested any of the Joint Bookrunners, the Company, any of
their Affiliates or any person acting on behalf of any of them to
provide it with any such material or information;
5 acknowledges that the Placing Shares have not been and will
not be registered under the securities legislation of the United
States, Australia, Canada, Japan or South Africa or any other
Prohibited Jurisdiction and, subject to certain exceptions, may not
be offered, sold, taken up, renounced or delivered or transferred,
directly or indirectly, in or into such Prohibited
Jurisdictions;
6 confirms that (i) it is not within the United States,
Australia, Canada, Japan or any other Prohibited Jurisdiction in
which it is unlawful to make or accept an offer to acquire the
Placing Shares; and (ii) it is not acquiring the Placing Shares
with a view to the offer, sale, resale, transfer, delivery or
distribution, directly or indirectly, of any such Placing Shares
into the United States or any other Prohibited Jurisdiction;
7 represents and warrants that, if a resident of South Africa,
it has sought independent advice regarding any permissions that may
be required of the Exchange Control Division of the SARB with
regard to the subscription for Placing Shares by it and
acknowledges that, to the extent that Placing Shares are offered
for subscription, acquisition or sale in South Africa, such offer
is being effected in terms of section 144 of the South African
Companies Act and does not constitute an offer to the public or any
sector of the public within the meaning of the South African
Companies Act;
8 represents and warrants that, if resident in Australia it is a
professional investor, as defined in section 9 below and for the
purposes of section 708(11) of the Corporations Act 2001 (Cth) of
Australia, or the minimum amount to be paid by it for the Placing
Shares to be subscribed for by it will be not less than
AUD500,000;
9 represents and warrants that, if resident in Australia it is
not acquiring the Placing Shares for the purpose of resale,
transfer or the granting, issuing or transferring interests in, or
options over them and will not offer any Placing Shares for resale
in Australia within 12 months of any such Placing Shares being
issued to it unless the resale offer is exempt from the requirement
to issue a disclosure document under section 708 of the
Corporations Act 2001 (Cth) of Australia;
10 acknowledges that the Placing Shares have not been and will
not be qualified by a prospectus under Canadian Securities Laws and
are not being offered or sold to any person in any Canadian
jurisdiction;
11 acknowledges that the content of this Announcement is
exclusively the responsibility of the Company and that neither of
the Joint Bookrunners, their Affiliates nor any person acting on
their behalf has or shall have any responsibility or liability for
any information, representation or statement contained in this
Announcement or any information previously published by or on
behalf of the Company and will not be liable for any Placee's
decision to participate in the Placing based on any information,
representation or statement contained in this Announcement, any
information previously published by or on behalf of the Company or
otherwise. Each Placee further represents, warrants and agrees that
the only information on which it is entitled to rely and on which
such Placee has relied in committing itself to subscribe and/or
purchase the Placing Shares is contained in this Announcement and
any Exchange Information, such information being all that it deems
necessary to make an investment decision in respect of the Placing
Shares and that it has neither received nor relied on any other
information given or investigations, representations, warranties or
statements made by the Joint Bookrunners or the Company and neither
the Joint Bookrunners nor the Company will be liable for any
Placee's decision to accept an invitation to participate in the
Placing based on any other information, representation, warranty or
statement. Each Placee further acknowledges and agrees that it has
relied on its own investigation of the business, financial or other
position of the Company in deciding to participate in the
Placing;
12 acknowledges that it has not relied on any information
relating to the Company contained in any research reports prepared
by the Joint Bookrunners, any of their Affiliates or any person
acting on behalf of either of the Joint Bookrunners or any of their
Affiliates' behalf and understands that (i) none of the Joint
Bookrunners, any of their Affiliates nor any person acting on their
behalf has or shall have any liability for public information or
any representation; (ii) none of the Joint Bookrunners, any of
their Affiliates nor any person acting on their behalf has or shall
have any liability for any additional information that has
otherwise been made available to such Placee, whether at the date
of publication, the date of this Announcement or otherwise; and
that (iii) none of the Joint Bookrunners, any of their Affiliates
nor any person acting on their behalf makes any representation or
warranty, express or implied, as to the truth, accuracy or
completeness of such information, whether at the date of
publication, the date of this Announcement or otherwise;
13 acknowledges that none of the Joint Bookrunners nor any
person acting on behalf of it nor any of its Affiliates has or
shall have any responsibility or liability for any Exchange
Information, any publicly available or filed 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;
14 represents and warrants that neither it, nor the person
specified by it for registration as a holder of Placing Shares is,
or is acting as nominee or agent for a person whose business either
is or includes issuing depositary receipts or the provision of
clearance services and therefore that the issue to the Placee, or
the person specified by the Placee for registration as holder, of
the Placing Shares will not give rise to a liability under any of
sections 67, 70, 93 and 96 of the Finance Act 1986 (depositary and
clearance services) and that the Placing Shares are not being
acquired in connection with arrangements to issue depositary
receipts or to issue or transfer Placing Shares into a clearance
system;
15 acknowledges that no action has been or will be taken by the
Company, the Joint Bookrunners or any person acting on behalf of
the Company or the Joint Bookrunners that would, or is intended to,
permit a public offer of the Placing Shares in any country or
jurisdiction where any such action for that purpose is
required;
16 represents and warrants that it has complied with its
obligations in connection with money laundering and terrorist
financing under the Criminal Justice Act 1993, the Proceeds of
Crime Act 2002, the Terrorism Act 2000, the Terrorism Act 2006 and
the Money Laundering Regulations 2007 (the "Regulations") and, if
making payment on behalf of a third party, that satisfactory
evidence has been obtained and recorded by it to verify the
identity of the third party as required by the Regulations;
17 represents and warrants that it is acting as principal only
in respect of the Placing or, if it is acting for any other person
(i) it is duly authorised to do so, (ii) it is and will remain
liable to the Company and/or the Joint Bookrunners 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), (iii) it is both an "authorised person" for the purposes
of FSMA and a "qualified investor" ("Qualified Investor") as
defined in the Prospectus Directive acting as agent for such
person, and (iv) such person is either (1) a "qualified investor"
as referred to at section 86(7) of FSMA or (2) a "client" (as
defined in section 86(2) of FSMA) of its that has engaged it to act
as such client's agent on terms which enable it to make decisions
concerning the Placing or any other offers of transferable
securities on such client's behalf without reference to such
client;
18 represents and warrants that it will subscribe and/or
purchase Placing Shares for its account or for one or more accounts
as to each of which it exercises sole investment discretion and it
has full power to make the acknowledgements, representations and
agreements herein on behalf of each such account;
19 if a financial intermediary, as that term is used in Article
3(2) of the Prospectus Directive (including any relevant
implementing measure in any member state), represents and warrants
that the Placing Shares subscribed and/or purchased by it in the
Placing will not be subscribed or purchased on a non-discretionary
basis on behalf of, nor will they be subscribed for with a view to
their offer or resale to, persons in a member state of the European
Economic Area which has implemented the Prospectus Directive other
than to Qualified Investors, or in circumstances in which the prior
consent of the Joint Bookrunners has been given to the proposed
offer or resale;
20 represents and warrants that it has not offered or sold and,
prior to the expiry of a period of six months from Admission, will
not offer or sell any Placing Shares to persons in the United
Kingdom, except to Qualified Investors 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 FSMA;
21 acknowledges that any offer of Placing Shares may only be
directed at persons in member states of the European Economic Area
who are Qualified Investors and represents and warrants that it has
not offered or sold and will not offer or sell any Placing Shares
to persons in the European Economic Area prior to Admission except
to Qualified Investors or otherwise in circumstances which have not
resulted in and which will not result in an offer to the public in
any member state of the European Economic Area within the meaning
of the Prospectus Directive (including any relevant implementing
measure in any member state);
22 represents and warrants that it has only communicated or
caused to be communicated and will only communicate or cause to be
communicated any invitation or inducement to engage in investment
activity (within the meaning of section 21 of FSMA) relating to the
Placing Shares in circumstances in which section 21(1) of FSMA does
not require approval of the communication by an authorised
person;
23 represents and warrants that it has complied and will comply
with all applicable provisions of FSMA with respect to anything
done by it in relation to the Placing Shares in, from or otherwise
involving, the United Kingdom;
24 represents and warrants that it is a person falling within
Article 19(1), Article 19(5) and/or Article 49(2)(a) to (d) of the
Financial Services and Markets Act 2000 (Financial Promotion) Order
2005 or is a person to whom this Announcement may otherwise be
lawfully communicated;
25 represents and warrants that (i) it and any person acting on
its behalf has capacity and authority and is otherwise entitled to
subscribe for and purchase the Placing Shares under the laws of all
relevant jurisdictions which apply to it; (ii) it has paid any
issue, transfer or other taxes due in connection with its
participation in any territory; (iii) it has not taken any action
which will or may result in the Company, the Joint Bookrunners, any
of their Affiliates or any person acting on their behalf being in
breach of the legal and/or regulatory requirements of any territory
in connection with the Placing and (iv) that the subscription for
and purchase of the Placing Shares by it or any person acting on
its behalf will be in compliance with applicable laws and
regulations in the jurisdiction of its residence, the residence of
the Company, or otherwise;
26 undertakes that it and any person acting on its behalf will
make payment for the Placing Shares allocated to it in accordance
with this Announcement on the due time and date set out herein
against delivery of such Placing Shares to it, failing which the
relevant Placing Shares may be placed with other Placees or sold as
the Joint Bookrunners may in its absolute discretion determine 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;
27 acknowledges that its allocation (if any) of Placing Shares
will represent a maximum number of Placing Shares which it will be
entitled, and required, to subscribe and/or purchase, and that the
Company or the Joint Bookrunners may call upon it to subscribe
and/or purchase a lower number of Placing Shares (if any), but in
no event in aggregate more than the aforementioned maximum;
28 acknowledges that none of the Joint Bookrunners or any of
their Affiliates, nor any person acting on their behalf, is making
any recommendations to it or advising it regarding the suitability
or merits of any transactions it may enter into in connection with
the Placing and that participation in the Placing is on the basis
that it is not and will not be a client of either Joint Bookrunner
and that neither of the Joint Bookrunners have any duties or
responsibilities to any Placee for providing the protections
afforded to its clients or for providing advice in relation to the
Placing nor in respect of any representations, warranties,
undertakings or indemnities contained in the Placing Agreement or
the Sale Agreement nor for the exercise or performance of any of
the Joint Bookrunners' rights and obligations thereunder including
any rights to waive or vary any conditions or exercise any
termination right;
29 undertakes that (i) the person whom it specifies for
registration as holder of the Placing Shares will be (a) itself or
(b) its nominee, as the case may be; (ii) neither the Joint
Bookrunners nor the Company will be responsible for any liability
to stamp duty or stamp duty reserve tax (together with interest and
penalties) resulting from a failure to observe this requirement and
(iii) each Placee and any person acting on behalf of such Placee
agrees to participate in the Placing on the basis that the Placing
Shares will be allotted to the CREST stock account of the relevant
Joint Bookrunner who will hold them as nominee on behalf of such
Placee until settlement in accordance with its standing settlement
instructions with payment for the Placing Shares being made
simultaneously upon receipt of the Placing Shares in the Placee's
stock account on a delivery versus payment basis;
30 acknowledges that these Terms and Conditions and any
agreements entered into by it pursuant to these Terms and
Conditions and any non-contractual obligations arising out of or in
connection with such agreements shall be governed by and construed
in accordance with the laws of England and Wales and it submits (on
behalf of itself and on behalf of any person on whose behalf it is
acting) to the exclusive jurisdiction of the English courts as
regards any claim, dispute or matter arising out of any such
contract, except that enforcement proceedings in respect of the
obligation to make payment for the Placing Shares (together with
any interest chargeable thereon) may be taken by the Company or
either of the Joint Bookrunners 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;
31 acknowledges that the Joint Bookrunners and the Company and
their respective Affiliates will rely upon the truth and accuracy
of the representations, warranties, agreements, undertakings and
acknowledgements set forth herein and which are irrevocable and it
irrevocably authorises the Joint Bookrunners to produce this
Announcement, pursuant to, in connection with, or as may be
required by any applicable law or regulation, administrative or
legal proceeding or official inquiry with respect to the matters
set forth herein;
32 agrees to indemnify on an after-tax basis and hold the
Company, the Joint Bookrunners, any of their respective Affiliates
and any person acting on their behalf 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 in this Appendix and further agrees that the
provisions of this Appendix shall survive after completion of the
Placing;
33 acknowledges that it irrevocably appoints any director of
either of the Joint Bookrunners as its agent for the purposes 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 agreed to be taken up by it
under the Placing;
34 acknowledges that its commitment to subscribe for Placing
Shares on the terms set out herein and in the contract note will
continue notwithstanding any amendment that may in future be made
to the terms of the Placing and that Placees will have no right to
be consulted or require that their consent be obtained with respect
to the Company's conduct of the Placing;
35 in making any decision to subscribe for the Placing Shares,
confirms that (i) it has knowledge, sophistication and experience
in financial, business and international investment matters as is
required to evaluate the merits and risks of acquiring the Placing
Shares; (ii) it is experienced in investing in securities of this
nature and is aware that it may be required to bear, and is able to
bear, the economic risk of, and is able to sustain a complete loss
in connection with, the Placing; (iii) it has relied on 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; (iv) it has had sufficient time to
consider and conduct its own investigation with respect to the
offer and purchase of the Placing Shares, including the tax, legal,
currency and other economic considerations relevant to such
investment and (v) will not look to the Company, the Joint
Bookrunners, any of their respective Affiliates or any person
acting on their behalf for all or part of any such loss or losses
it or they may suffer;
36 acknowledges and agrees that the Joint Bookrunners do not owe
any fiduciary or other duties to it or any Placee in respect of any
representations, warranties, undertakings or indemnities in the
Placing Agreement or the Sale Agreement;
37 understands and agrees that it may not rely on any
investigation that the Joint Bookrunners or any person acting on
their behalf may or may not have conducted with respect to the
Company and its Affiliates or the Placing and the Joint Bookrunners
have not made any representation to it, express or implied, with
respect to the merits of the Placing, the subscription and/or
purchase of Placing Shares, or as to the condition, financial or
otherwise, of the Company and its Affiliates, or as to any other
matter relating thereto, and nothing herein shall be construed as a
recommendation to it to subscribe and/or purchase Placing Shares.
It acknowledges and agrees that no information has been prepared
by, or is the responsibility of, the Joint Bookrunners for the
purposes of this Placing;
38 acknowledges and agrees that it will not hold the Joint
Bookrunners or any of their Affiliates or any person acting on
their behalf responsible or liable for any misstatements in or
omission from any publicly available information relating to the
Company's group or information made available (whether in written
or oral form) relating to the Company's group (the "Information")
and that none of the Joint Bookrunners or any person acting on
behalf of the Joint Bookrunners, makes any representation or
warranty, express or implied, as to the truth, accuracy or
completeness of such Information or accepts any responsibility for
any of such Information;
39 acknowledges that in connection with the Placing, the Joint
Bookrunners and any of its Affiliates acting as an investor for its
own account may take up shares in the Company and in that capacity
may retain, purchase or sell for its own account such shares in the
Company and any securities of the Company or related investments
and may offer or sell such securities or other investments
otherwise than in connection with the Placing. Accordingly,
references in this Announcement to shares being issued, offered,
transferred, acquired or placed should be read as including any
issue, offering, transfer, acquisition or placement of such shares
in the Company to or by any of the Joint Bookrunners and any
Affiliate acting in such capacity. Neither the Joint Bookrunners
nor any of their Affiliates intends to disclose the extent of any
such investment or transactions otherwise than in accordance with
any legal or regulatory obligations to do so. In addition the Joint
Bookrunners or their Affiliates may enter into financing
arrangements (including swaps or contracts for differences) with
investors in connection with which the Joint Bookrunners (or their
Affiliates) may from time to time acquire, hold or dispose of
Placing Shares;
40 acknowledges and agrees that (1) any Subscription Shares that
it is allocated in the Placing will be allotted and issued as
Consolidated Shares to the Depositary as nominee for it, and that
the Company shall procure that the Depositary shall issue to it
Depositary Interests representing such Subscription Shares (as
Consolidated Shares) allocated to it; (2) any Sale Shares that it
is allocated in the Placing are held by the Depositary as nominee
for it, and that the Sellers shall procure that the Depositary
shall transfer to it Depositary Interests representing such Sale
Shares (as Consolidated Shares) allocated to it; and (3) that the
Joint Bookrunners shall have no liability in respect of acts of, or
failure to act by, the Depositary;
41 if in South Africa, it will directly subscribe for the
Placing Shares and the placing price payable by it will be more
than ZAR100,000 (approximately GBP8,700);
42 if in South Africa, it warrants and represents that it is (a)
a bank registered or provisionally registered in terms of the Banks
Act, 1990 (Act No 94 of 1990); or (b) a mutual bank registered or
provisionally registered in terms of the Mutual Banks Act, 1993
(Act No 124 of 1993);or (c) a long-term insurer as defined in the
Long-term Insurance Act, 1998 (Act No 52 of 1998); or (d) a
short-term insurer as defined in the Short-term Insurance Act, 1998
(Act No 53 of 1998) and in each case is acting as principal and the
wholly-owned subsidiaries of such entities will also fall within
the exemption when they act as agent in the capacity of authorised
portfolio manager for a pension fund registered in terms of the
Pension Funds Act, 1956 (Act No 24 of 1956), or as manager for a
collective investment scheme registered in terms of the Collective
Investment Schemes Control Act, 2002 (Act No 45 of 2002);
43 acknowledges that (i) the Placing Shares are being offered
and sold pursuant to Regulation S under the Securities Act in a
transaction not involving a public offering of securities in the
United States and the Placing Shares have not been and will not be
registered under the Securities Act or under the securities laws of
any state or other jurisdiction of the United States, nor approved
or disapproved by the US Securities and Exchange Commission, any
state securities commission in the United States or any other
United States regulatory authority; and (ii) the Company has not
been registered as an "investment company" under the United States
Investment Company Act of 1940, as amended;
44 represents and warrants that it is, or at the time the
Placing Shares are acquired, it will be, (a) outside the United
States and is not acquiring the Placing Shares for the account or
benefit of any person located in the United States, unless the
instruction to acquire was received from a person outside the
United States and the person giving such instruction has confirmed
that it has the authority to give such instruction, and that either
(i) it has investment discretion over such account or (ii) it is an
investment manager of investment company, (b) acquiring the Placing
Shares in an "offshore transaction" (as defined in Regulation S
under the Securities Act) and (c) will not offer or sell, directly
or indirectly, any of the Placing Shares except in an "offshore
transaction" in accordance with Regulation S or in the United
States pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act;
and
45 represents and warrants that it is not taking and will not
take up any Placing Shares as a result of any "directed selling
efforts" as that term is defined in Regulation S under the
Securities Act.
The foregoing acknowledgements, agreements, undertakings,
representations, warranties and confirmations are given for the
benefit of each of the Company and the Joint Bookrunners (for their
own benefit and, where relevant, the benefit of their respective
Affiliates and any person acting on their behalf) and are
irrevocable. The agreement to settle a Placee's allocation (and/or
the allocation of a person for whom such Placee is contracting as
agent) free of stamp duty and stamp duty reserve tax depends on the
settlement relating only to the subscription by it and/or such
person direct from the Company for the Placing Shares in question.
Such agreement assumes, and is based on a warranty from each
Placee, that neither it, nor the person specified by it for
registration as holder, of Placing Shares is, or is acting as
nominee or agent for, and that the Placing Shares will not be
allotted to, a person whose business either is or includes issuing
depositary receipts or the provision of clearance services. If
there are any such arrangements, or the settlement relates to any
other dealing in the Placing Shares, stamp duty or stamp duty
reserve tax may be payable. In that event the Placee agrees that it
shall be responsible for such stamp duty or stamp duty reserve tax,
and neither the Company nor the Joint Bookrunners shall be
responsible for such stamp duty or stamp duty reserve tax. If this
is the case, each Placee should seek its own advice and notify the
Joint Bookrunners 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 similar
impost, 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/subscription by them of any Placing
Shares or the agreement by them to subscribe for any Placing
Shares.
When a Placee or person acting on behalf of the Placee is
dealing with the Joint Bookrunners, any money held in an account
with any of the Joint Bookrunners on behalf of the Placee and/or
any person acting on behalf of the Placee will not be treated as
client money within the meaning of the rules and regulations of the
FSA made under FSMA. The Placee acknowledges that the money will
not be subject to the protections conferred by the client money
rules; as a consequence, this money will not be segregated from the
relevant Joint Bookrunner's money in accordance with the client
money rules and will be used by the relevant Joint Bookrunner in
the course of its own business; and the Placee will rank only as a
general creditor of the relevant Joint Bookrunner.
All times and dates in this Announcement may be subject to
amendment. BofA Merrill Lynch shall notify the Placees and any
person acting on behalf of the Placees of any changes.
Past performance is no guide to future performance and persons
needing advice should consult an independent financial adviser.
The rights and remedies of the Joint Bookrunners and the Company
under these Terms and Conditions are in addition to any rights and
remedies which would otherwise be available to each of them and the
exercise or partial exercise of one will not prevent the exercise
of others.
Each Placee may be asked to disclose in writing or orally to the
Joint Bookrunners:
(a) if he is an individual, his nationality; or
(b) if he is a discretionary fund manager, the jurisdiction in
which the funds are managed or owned.
DEFINITIONS
In this Announcement:
"Admission" means the admission of the Subscription Shares (as
Consolidated Shares) to trading on AIM being effective in
accordance with rule 6 of the AIM Rules;
"Affiliate" has the meaning given in Rule 501(b) of Regulation D
promulgated under the Securities Act or Rule 405 under the
Securities Act, as applicable;
"AIM" means the AIM market of the London Stock Exchange;
"AIM Rules" means the rules published by London Stock Exchange
entitled "AIM Rules for Companies" and "AIM Rules for Nominated
Advisors";
"Announcement" means this Announcement (including the Appendix
to this Announcement);
"Board" or "Directors" means the directors of the Company;
"BofA Merrill Lynch" means Merrill Lynch International;
"Bookbuild" means the bookbuilding process to be commenced by
the Joint Bookrunners to use reasonable endeavours procure placees
for the Placing Shares, as described in this Announcement and
subject to the terms and conditions set out in this Announcement
and the Placing Agreement;
"Bye-laws" and each a "Bye-law" means the byelaws of the
Company, as adopted on 21 August 2008;
"Common Shares" means common shares of US$0.00004 each in the
capital of the Company prior to the Share Consolidation;
"Company" or "Dominion" means Dominion Petroleum Limited;
"Consolidated Shares" means common shares of US$0.0008 each in
the capital of the Company following the Share Consolidation;
"CPR" means a competent person's report;
"CREST" means the relevant system, as defined in the
Uncertificated Securities Regulations 2001 (SI 2001/3755) (in
respect of which Euroclear UK & Ireland Limited is the
operator);
"Depositary" means Computershare Investor Services PLC and/or
Computershare Company Nominees Limited (when acting as custodian
for holders of Depositary Interests);
"Depositary Interests" means interests in uncertificated form,
representing Common Shares, that can be settled electronically
through CREST;
"DFSA" means the Dubai Financial Services Authority;
"EA4B" means Exploration Area 4B in Uganda;
"Euroclear" means Euroclear UK & Ireland Limited;
"Execution Agreement" means the execution agreement proposed to
be entered into between the Company, MOG and PEL, relating to the
Maltese Acquisition;
"FSA" means the Financial Services Authority;
"FSMA" means the Financial Services and Markets Act 2000;
"Group" means the Company and its subsidiary undertakings;
"Joint Bookrunners" means RBC and BofA Merrill Lynch;
"London Stock Exchange" means the London Stock Exchange plc;
"Maltese Acquisition" means the farm-in by the Company,
following the Execution Agreement having become unconditional, in
to 75% of the operated working interest, currently held by PEL
under the Malta PSC, in the Malta Assets;
"Maltese Assets" means Blocks 4, 5, 6 and 7 of Area 4 Offshore
Malta;
"Maltese PSC" means the production sharing contract dated 4 July
2008 in relation to the Malta Assets between PEL and the Government
of the Republic of Malta;
"mmbbl" means million(s) of barrel of oil;
"mmboe" means million(s) barrels of oil equivalent;
"MOG" means Mediterranean Oil & Gas Plc;
"Notes" means senior secured convertible notes of Dominion
Petroleum Acquisitions Limited, repayment of the principal and
interest upon which is guaranteed by the Company and other members
of the Group;
"Notes Repurchase" means the repurchase and cancellation by the
Company of Notes held by the Selling Noteholders, for an aggregate
price of approximately US$24.5 million, to be funded from the
proceeds of the Placing;
"NPA" means the note purchase agreement dated 2 October 2007
between, inter alia, the Company and the Noteholders, which
constitutes the Notes;
"P10" means 10% probability that the figure will exceed this
value, determined using probabilistic methods;
"P50" means 50% probability that the figure will exceed this
value, determined using probabilistic methods;
"P90" means 90% probability that the figure will exceed this
value, determined using probabilistic methods;
"PEL" means Phoenicia Energy Company Limited, a wholly-owned
subsidiary of MOL;
"Placee" means any person (including individuals, funds or
otherwise) by whom or on whose behalf a commitment to subscribe for
Placing Shares has been given;
"Placing" means the placing of the Placing Shares by the Joint
Bookrunners, on behalf of the Company and the Sellers, with
institutional investors;
"Placing Agreement" means the placing agreement dated 24 June
2011 between the Company, certain directors of the Company and RBC
and BofA Merrill Lynch in respect of the Placing of the
Subscription Shares;
"Placing Price" means the price per Common Share at which the
Placing Shares are placed;
"Placing Shares" means the Sale Shares and the Subscription
Shares, either or both of them as the context shall require;
"Procedural Matters" means, in chronological order, the
appointment of James Keyes and Gregory Tolaram to the Board, the
ratification by the Board of its decisions since 28 November 2008
and adoption by the Board of new Bye-laws, the ratification by
Shareholders of the Board's decisions and shareholder resolutions
since 28 November 2008, approval of the adoption of the new
Bye-laws and the appointment of Andrew Cochran, Dennis Crema and
Atul Gupta;
"prospective resources" means those quantities of petroleum
estimated, as of a given date, to be potentially recoverable from
undiscovered accumulations by application of future development
projects;
"PSC" means production sharing contract;
"Prospectus Directive" means the Directive of the European
Parliament and of the Council of the European Union 2003/71/EC;
"RBC" or "RBC Capital Markets" means Royal Bank of Canada Europe
Limited;
"Remuneration Resolution" means the Resolution in relation to
the remuneration of Andrew Cochran and Vahid Farzad;
"Resolutions" means all the resolutions to be set out in the
notice of Special General Meeting;
"Sale Agreement" means the share sale agreement dated 24 June
2011 between the Sellers and RBC and BofA Merrill Lynch in respect
of the Placing of the Sale Shares;
"Sale Shares" means 172,455,653 Common Shares, equal to
8,622,781 Consolidated Shares, to be sold pursuant to the Placing
pursuant to the Sale Agreement;
"SARB" means the South African Reserve Bank;
"Securities Act" means the US Securities Act of 1933, as
amended;
"Sellers" means Plainfield Capital Limited and Plainfield
Offshore Holdings V Inc.;
"Selling Noteholders" means Plainfield Offshore Holdings V Inc
and Bluegold Global Fund L.P.;
"Share Consolidation" means the 20:1 consolidation of Common
Shares into Consolidated Shares;
"Shareholder" means a holder of Common Shares (or, following the
Share Consolidation, Consolidated Shares) including, where the
context requires, holders of Depositary Interests;
"South Africa" means the Republic of South Africa;
"South African Companies Act\" means the Companies Act No. 61 of
1973, as amended;
"Special General Meeting" or "SGM" means the general meeting of
the Company proposed to be held on or around 25 July 2011;
"Subscription Shares" means the Consolidated Shares to be issued
pursuant to the Placing, the number of which will be determined at
the close of the Bookbuild;
"Tcf" means trillion standard cubic feet of gas (10(12) );
"Terms and Conditions" means the terms and conditions of the
Placing set out in the Appendix to this Announcement;
"United Kingdom" or "UK" means the United Kingdom of Great
Britain and Northern Ireland;
"United States" or "US" means the United States of America, its
territories and possessions, any state of the United States and the
District of Columbia;
"GBP" means the lawful currency of the United Kingdom; and
"$" means the lawful currency of the United States.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IOEKMGZVKDKGMZG
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