TIDMFRAN
RNS Number : 2494K
Franchise Brands PLC
20 April 2020
THIS ANNOUNCEMENT (INCLUDING THE APPIX) AND THE INFORMATION
CONTAINED HEREIN, IS RESTRICTED AND IS NOT FOR PUBLICATION,
RELEASE, TRANSMISSION, DISTRIBUTION, OR FORWARDING DIRECTLY OR
INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES,
AUSTRALIA, CANADA, THE REPUBLIC OF SOUTH AFRICA, JAPAN OR ANY OTHER
JURISDICTION IN WHICH SUCH PUBLICATION, RELEASE OR DISTRIBUTION
WOULD BE UNLAWFUL.
THIS ANNOUNCEMENT, INCLUDING THE APPIX, IS FOR INFORMATION
PURPOSES ONLY AND DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR
SUBSCRIPTION OF ANY SECURITIES IN THE COMPANY. THIS ANNOUNCEMENT
AND THE APPIX DO NOT CONSTITUTE OR CONTAIN ANY INVITATION,
SOLICITATION, RECOMMATION, OFFER OR ADVICE TO ANY PERSON TO
SUBSCRIBE FOR, OTHERWISE ACQUIRE OR DISPOSE OF ANY SECURITIES OF
FRANCHISE BRANDS PLC OR INTO ANY OTHER JURISDICTION WHERE TO DO SO
WOULD BREACH ANY APPLICABLE LAW OR REGULATION.
PLEASE SEE THE IMPORTANT NOTICES AT THE OF THIS
ANNOUNCEMENT.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION for the purposes
of article 7 of the market abuse regulation (EU) no. 596/2014. Upon
the publication of this announcement, this inside information is
now considered to be in the public domain.
20 April 2020
Franchise Brands plc
("Franchise Brands", the "Company", or the "Group")
Proposed Placing of Ordinary Shares and
update on current trading and outlook
Franchise Brands plc (AIM: FRAN), a multi-brand franchise
business, today announces its intention to conduct a Placing of new
ordinary shares of 0.5 pence each in the capital of the Company by
the issue of up to 19.9% of the current issued share capital (the
"Placing"). Certain Directors and senior management of the Company
intend to participate in the Placing.
The Placing will be conducted through an accelerated bookbuild
process (the "Bookbuild"), on a non-pre-emptive basis, which will
be launched immediately following this announcement. Dowgate
Capital Limited and Allenby Capital Limited are acting as Joint
Bookrunners in connection with the Placing.
The Placing is subject to the terms and conditions set out in
the Appendix to this announcement (which forms part of this
announcement, such announcement and its Appendix together being
this "Announcement").
Capitalised terms used in this Announcement and not separately
defined shall have the meaning given to them in the Definitions
section at the end of the Announcement.
Summary of the Placing
-- The Company intends to issue up to 19.9% of the current issued share capital in the Placing .
-- Certain of the Directors of the Company and senior management
team intend to participate in the Placing for a minimum of
GBP2m.
-- The Placing will strengthen the Group's balance sheet,
provide additional working capital and importantly position the
Group to capitalise on earnings-enhancing growth opportunities as
they arise.
-- Completion of the Placing beyond 11.66m shares is conditional
upon, inter alia, Shareholder approval of the Resolutions to enable
the issue of additional Placing Shares beyond current authorities,
which is due to be sought at the Annual General Meeting of the
Company to be held at 11:00 a.m. on 28 April 2020.
Stephen Hemsley, Executive Chairman, commented:
"The Group had strong momentum ahead of the COVID-19 crisis,
with Q1 trading showing significant growth on the prior year and a
continuation of the accelerating rate of sales growth in its B2B
division in particular. We have taken all the necessary actions to
enable us to trade through this current uncertain period
profitably, albeit at a significantly lower level.
"We see considerable opportunity across our businesses and this
Placing will ensure that we are very well positioned to capitalise
on external growth opportunities as we emerge from the COVID-19
crisis."
Details of the Placing
Dowgate Capital and Allenby Capital are acting as Joint
Bookrunners in connection with the Placing.
The Placing is subject to the terms and conditions set out in
the Appendix to this Announcement.
The Joint Bookrunners will commence the Bookbuild immediately
following the release of this Announcement in respect of the
Placing. The exact number of Placing Shares to be issued and the
price at which the Placing Shares are to be issued will be
determined at the close of the Bookbuild. The timing of the closing
of the Bookbuild, pricing and allocations are at the absolute
discretion of the Joint Bookrunners and the Company. Details of the
Placing Price, the number of Placing Shares and the resulting
Directors' shareholdings will be announced as soon as practicable
after the close of the Bookbuild. The Placing is not being
underwritten. Members of the public are not entitled to participate
in the Placing.
The Board has determined to limit the amount that can be raised
in the Placing to 19.9% of the current issued share capital of the
Company. At the Company's last Annual General Meeting, shareholders
provided the Directors with authority to issue up to 15% of the
issued share capital on a non-pre-emptive basis, which equates to
11,659,800 Ordinary Shares. A similar percentage share authority is
being sought at the Company's AGM on 28 April 2020. Accordingly, as
the Company currently has limited authority to issue new ordinary
shares on a non-pre-emptive basis until the AGM, the issue of more
than 11,659,800 Placing Shares will be subject to the passing of
the Resolutions. The Placing Shares will, therefore, be issued in
two tranches as detailed below.
By choosing to participate in the Placing and by making an oral
and/or written legally binding offer to acquire Placing Shares,
investors will be deemed to have read and understood this
Announcement in its entirety, including the Appendix, and to be
making such offer on the terms and subject to the conditions
contained herein and to be making the representations, warranties,
undertakings and acknowledgements contained in the Appendix to this
Announcement.
The Placing Shares when issued, will be fully paid and will rank
pari passu in all respects with each other and with the existing
ordinary shares of the Company, including, without limitation, the
right to receive all dividends and other distributions declared,
made or paid after the date of issue.
Applications will be made to the London Stock Exchange for
admission of the Placing Shares to trading on AIM. The issue and
Admission of the first tranche of Placing Shares is expected to
take place on or around 8.00 a.m. on 27 April 2020 ("First
Admission"). The issue and Admission of the second tranche of
Placing Shares is expected to take place on or around 8.00 a.m. on
30 April 2020 ("Second Admission"). Second Admission is conditional
upon, among other things, First Admission and the Resolutions being
duly passed at the Annual General Meeting.
The Placing is conditional upon, among other things, Admission
becoming effective. The Placing is also conditional upon the
Placing Agreement between the Company and the Joint Bookrunners not
being terminated in accordance with its terms. The Appendix to this
Announcement sets out further information relating to the terms and
conditions of the Placing and the Placing Agreement.
The reasons for the Placing and use of proceeds are set out
further below.
Update on current trading and outlook
As reported on 30 March 2020, the Group started the year with
strong underlying trading from both divisions. Despite the last 2-3
weeks of March being impacted by the COVID-19 crisis, the business
experienced significant year-on-year growth in Q1 2020, with
Adjusted EBITDA up 27% on Q1 2019.
B2B Division
The B2B division, which comprises Metro Rod, Metro Plumb and
Willow Pumps, provides a "Water in. Waste out" range of national
drainage, plumbing and pump services to the commercial market. On a
pro-forma basis (including Willow Pumps for a full year) this
division would have contributed 67% of the Group's 2019 Adjusted
EBITDA (excluding group overheads).
In Q1 2020, EBITDA in the B2B division was 42% higher than Q1
2019 as a result of a strong performance at Metro Rod and the
inclusion of Willow Pumps (which was acquired in October 2019).
Growth in Metro Rod system sales accelerated to 19% for the quarter
(FY2019: 14%), a continuation of the increasing rate of growth
experienced since the launch of the Vision 2023 strategy.
The majority of services provided by this division have been
designated by the Government as essential to ensure the smooth
running of the health service, public utilities and other essential
businesses during the current crisis. As the majority of the work
is reactive in nature there is a continuing demand and the
business, therefore, continues to operate and serve customers,
subject to the ability of engineers to operate safely.
Metro Rod and Metro Plumb are franchise businesses, with the
engineers employed by our franchisees. The costs that can be
directly controlled therefore relate to the operation of the
Support Centre. As they provide services to mainly commercial,
leisure and hospitality customers and many of their premises are
not currently occupied, order intake has declined during the
crisis. However, the B2B division has been able to win new work
directly with the NHS and food retailers since the start of the
crisis. As a result, order intake is currently running a little
over 60% of 2019 levels. Overheads have been reduced in line with
revenue reductions by furloughing staff through the Job Retention
Scheme, agreeing pay cuts, and reducing other overheads (such as IT
and marketing spend). Payroll, which represents 60% of Support
Centre overheads at Metro Rod and Metro Plumb, has been reduced by
39% from Q1 2020 levels.
Willow Pumps, which was acquired in October 2019, is a direct
labour organisation and, therefore, has full control of all its
costs. The value of reactive work is currently at around 2019
levels. The supply and installation of pump stations has been
impacted by limited site access at construction sites. However,
Willow Pumps is still invoicing some work on existing contracts and
the enquiry level for future work is strong. The volume of
above-ground pump work has declined but the value of work invoiced
remains at 2019 levels. Overheads have been reduced in line with
revenue reductions by furloughing staff through the Job Retention
Scheme, agreeing pay cuts, and reducing other overheads. Payroll,
which represents 55% of overheads, has been reduced by 40% from Q1
2020 levels.
The B2B division's engineers are in the front line of servicing
our customers. Therefore, in this particularly challenging time
they remain on full salary. The Group's priority is to continue to
support them in every way it can, especially in relation to their
health and safety.
The Directors expect these cost saving measures to result in the
B2B division continuing to trade profitably during the crisis
period, albeit at a significantly lower level than originally
anticipated.
Given the exceptional nature of the current situation, and
despite the assistance being provided through the various
Government schemes, the Directors believe it is prudent to
anticipate a number of customers to become insolvent as the crisis
continues (although the current actual credit loss is low, as it
has been historically). A detailed internal analysis of debtors has
been completed on a risk-weighted basis according to the business
sectors they are operating in and their financial position.
Overall, the Directors believe the Group's potential exposure in
this regard is up to GBP1.6m (net of VAT) and, taking into account
the existing provision of GBP0.3m, an additional COVID-19 related
exceptional charge of GBP1.3m will be taken in H1 2020 to provide
for these potential credit losses.
B2C Division
In Q1 2020, EBITDA of the B2C division (ChipsAway, Ovenclean and
Barking Mad) was 5% ahead of Q1 the previous year. ChipsAway
experienced very strong franchise recruitment. However, weakening
consumer demand from early March, as people began staying at home
and self-isolating, impacted fee income across the division.
Barking Mad was particularly impacted as customers cancelled
holidays, monies were refunded and Management Service Fee ("MSF")
previously charged was rebated to franchisees.
In response to virtually no activity for the B2C franchisees
since the introduction of the Government restrictions, franchise
fees have been significantly reduced or eliminated by the Group to
help ensure franchisees' survival. Support Centre payroll costs
have been reduced by 78% from Q1 2020 levels by furloughing the
majority of the staff and agreeing pay-cuts for the few that
remain, with the aim of matching overhead costs to the reduced
revenue. The objective for this division is to operate at a cash
break-even level during the crisis.
Current financial position
A number of actions have been taken to preserve cash and
strengthen liquidity. The Group has furloughed approximately 120
staff, which accounts for just over 40% of staff across the Group,
and agreed staff pay cuts of up to 20% in the B2B and B2C
divisions. In addition, the Board and senior management have taken
salary cuts of up to 100%, which will contribute two-thirds of the
overall Group cost savings being achieved by pay cuts. The
Directors and a number of members of senior management have also
elected to receive the proposed 2019 final dividend as a scrip
dividend instead of cash as part of the scrip dividend alternative,
details of which were announced on 30 March 2020.
To further preserve cash resources, a number of payments have
been deferred, including those to HMRC, landlords and a hire
purchase supplier. Finally, an extension of the bank overdraft from
GBP2m to GBP6m has been agreed in principle with HSBC. The Group
met its existing banking covenants in Q1 and anticipates doing so
in Q2.
Adjusted net debt as at 31 March 2020 was GBP10.4m, an increase
of GBP1.2m since 31 December 2019. This reflected Metro Rod needing
to invest a further GBP1.4m in working capital as a result of the
19% increase in system sales in Q1, combined with an increase in
debtor days from 71 to 80 days as customers slowed down payments at
the end of March. The largest creditors of the Group are the B2B
franchisees and it has not therefore been possible (or desirable)
to compensate for the increasing debtor days by delaying creditor
payments.
Reasons for the Placing and use of proceeds
To ensure that the Group has a strong balance sheet and is well
placed for the recovery once the COVID-19 crisis subsides, the
Board has concluded that it is prudent to raise additional equity
now. This will provide additional working capital funding, improve
liquidity, and eliminate the Group's overall net debt. The Board
will seek to reduce gross debt at an appropriate opportunity,
depending on the opportunities presented by the strategy outlined
below, once the COVID-19 crisis subsides and recovery is
assured.
The additional working capital funding will enable the Group to
take full advantage of the strong recovery in demand we expect for
the services of our B2B businesses following the COVID-19 related
shutdowns of premises.
Importantly, the Placing will also position the Group to take
advantage of earnings-enhancing external growth opportunities as
they arise. Of considerable interest are acquisitions that expand
the range of services that Metro Rod, Metro Plumb and Willow Pumps
can offer, in pursuit of the ambition to offer a full "Water in.
Waste out" drainage, pumps and plumbing service.
In the B2C division, acquisitions which allow the Group to
leverage its existing divisional structure and shared support
services such as franchise recruitment, marketing, finance and
technology are also in scope. It is anticipated that many smaller
B2C franchise businesses will require funding in order to
recommence trading after the Government restrictions are lifted,
and this may give rise to the opportunity for attractively priced
acquisitions.
Finally, the Group anticipates now being more competitive in its
ability to acquire larger franchise systems as private equity
buyers may no longer be able to gear purchases to pre-crisis
levels.
Outlook
The impact on the foul and fresh water systems of commercial
premises from being mothballed for a prolonged period during the
COVID-19 crisis can be significant, with a range of potential
issues needing to be remedied before the premises can safely
re-open. As the Government restrictions are lifted, and subject to
having sufficient engineer capacity, a strong recovery at both
Metro Rod and Willow Pumps is expected as business premises are
re-occupied.
The recovery in the B2C division, as the franchise recruitment
pipeline is reactivated and franchisees get back to work, is
expected to be slower and the Group anticipates that it will take a
full quarter for activity levels, and therefore income, to be fully
restored.
Following a strong start to the year, with Q1 Adjusted EBITDA up
27% on the previous year, the Group has taken swift action taken to
reduce costs to match anticipated income during the COVID-19
crisis. This should allow the Group to generate a positive,
although much reduced Adjusted EBITDA, through this period.
Thereafter, a strong recovery is anticipated in the B2B division,
which represents approximately two-thirds of the Group's
activities.
MAR
This Announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014 ("MAR"). In addition, market
soundings (as defined in MAR) were taken in connection with the
Placing as a result of which certain persons became aware of inside
information (as defined in MAR), as permitted by MAR. This inside
information is set out in this Announcement. Therefore, those
persons that received such inside information in a market sounding
are no longer in possession of such inside information relating to
the Company and its securities.
Enquiries:
Franchise Brands plc + 44 (0) 1625 813231
Stephen Hemsley, Executive Chairman
Chris Dent, Chief Financial Officer
Julia Choudhury, Corporate Development Director
Allenby Capital Limited (Nominated Adviser
and Joint Broker)
Amrit Nahal (Broking) +44 (0) 203 394 2973
Jeremy Porter / Liz Kirchner / Nicholas Chambers
(Corporate Finance) +44 (0) 203 328 5656
Dowgate Capital Limited (Joint Broker) +44 (0) 203 903 7715
James Serjeant / Colin Climie
MHP Communications (Financial PR) +44 (0) 203 128 8100
Katie Hunt +44 (0) 7884 494112
franchisebrands@mhpc.com
About Franchise Brands plc
Franchise Brands is focused on building market-leading
businesses in selected customer segments using primarily a
franchise model. The Group currently has a combined network of over
450 franchisees across five franchise brands. Our focus is on
established brands which can benefit from our shared support
services, specialist sector expertise, management experience and
group resources.
Franchise Brands' portfolio of market-leading service businesses
grew in 2019 with the acquisition of Willow Pumps. The addition of
Willow Pumps, a direct labour organisation, represented an
important step in expanding Metro Rod and Metro Plumb's range of
services to the commercial market.
The Group is organised into a B2B division comprised of Metro
Rod, Metro Plumb and Willow Pumps, and a B2C division incorporates
ChipsAway, Ovenclean and Barking Mad. This divisional organisation
of our brands is designed to provide a greater focus and structure
to support the strategic development of our B2B and B2C brands.
Each of our brands are leaders in their respective markets and
each brand has a long trading history. The combined trading history
of all the Group's brands is over 125 years.
Franchise Brands employs some 250 FTE people across three
principal locations in Macclesfield, Kidderminster and
Aylesford.
For further information, visit www.franchisebrands.co.uk.
IMPORTANT NOTICES
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
Dowgate Capital or Allenby Capital or by any of their affiliates or
agents as to or in relation to, the accuracy or completeness of
this Announcement or any other written or oral information made
available to or publicly available to any interested party or its
advisers, and any liability therefore is expressly disclaimed.
This Announcement does not constitute, or form part of, a
prospectus relating to the Company, nor does it constitute or
contain any invitation or offer to any person, or any public offer,
to subscribe for, purchase or otherwise acquire any shares in the
Company or advise persons to do so in any jurisdiction, nor shall
it, or any part of it form the basis of or be relied on in
connection with any contract or as an inducement to enter into any
contract or commitment with the Company. In particular, the Placing
Shares have not been, and will not be, registered under the United
States Securities Act of 1933 as amended or qualified for sale
under the laws of any state of the United States or under the
applicable laws of any of Canada, Australia, the Republic of South
Africa, Japan or New Zealand and, subject to certain exceptions,
may not be offered or sold in the United States or to, or for the
account or benefit of, US persons (as such term is defined in
Regulation S under the Securities Act) or to any national, resident
or citizen of Canada, Australia, the Republic of South Africa,
Japan or New Zealand.
The distribution or transmission of this Announcement and the
offering of the Placing Shares in certain jurisdictions other than
the UK may be restricted or prohibited by law or regulation.
Persons distributing this Announcement must satisfy themselves that
it is lawful to do so. Any failure to comply with these
restrictions may constitute a violation of the securities laws of
any such jurisdiction. No action has been taken by the Company 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 to
inform themselves about, and to observe, such restrictions. In
particular, this announcement may not be distributed, directly or
indirectly, in or into the United States, Canada, the Republic of
South Africa, Australia, Japan or New Zealand. Overseas
Shareholders and any person (including, without limitation,
nominees and trustees), who have a contractual or other legal
obligation to forward this document to a jurisdiction outside the
UK should seek appropriate advice before taking any action.
This Announcement includes "forward-looking statements" which
includes all statements other than statements of historical fact,
including, without limitation, those regarding the Company's
financial position, business strategy, plans and objectives of
management for future operations, or any statements preceded by,
followed by or that include the words "targets", "believes",
"expects", "aims", "intends", "will", "may", "anticipates",
"would", "could" or similar expressions or negatives thereof. Such
forward-looking statements involve known and unknown risks,
uncertainties and other important factors beyond the Company's
control that could cause the actual results, performance or
achievements of the Group to be materially different from future
results, performance or achievements expressed or implied by such
forward-looking statements. Such forward-looking statements are
based on numerous assumptions regarding the Company's present and
future business strategies and the environment in which the Company
will operate in the future. These forward-looking statements speak
only as at the date of this Announcement. The Company expressly
disclaims any obligation or undertaking to disseminate any updates
or revisions to any forward-looking statements contained herein to
reflect any change in the Company's expectations with regard
thereto or any change in events, conditions or circumstances on
which any such statements are based unless required to do so by
applicable law or the AIM Rules for Companies.
No statement in this Announcement is intended to be a profit
forecast and no statement in this Announcement should be
interpreted to mean that earnings per share of the Company for the
current or future financial years would necessarily match or exceed
the historical published earnings per share of the Company.
Neither the content of the Company's website (or any other
website) nor the content of any website accessible from hyperlinks
on the Company's website (or any other website) is incorporated
into, or forms part of, this Announcement.
Allenby Capital, which is authorised and regulated by the FCA in
the United Kingdom, is acting as Joint Bookrunner, Joint Broker and
nominated adviser to the Company for the purposes of the AIM Rules
for Companies in connection with the Placing and Admission and, as
nominated adviser, its responsibilities are owed solely to the
London Stock Exchange and are not owed to the Company and the
Directors or to any other person or entity. Allenby Capital will
not be responsible to any person other than the Company for
providing the protections afforded to clients of Allenby Capital or
for providing advice to any other person in connection with the
Placing or any acquisition of shares in the Company.
Dowgate Capital, which is authorised and regulated by the FCA in
the United Kingdom, is acting as Joint Bookrunner and Joint Broker
to the Company in connection with the Placing. Dowgate Capital will
not be responsible to any person other than the Company for
providing the protections afforded to clients of Dowgate Capital or
for providing advice to any other person in connection with the
Placing or any acquisition of shares in the Company.
Information to Distributors
Solely for the purposes of the product governance requirements
contained within: (a) EU Directive 2014/65/EU on markets in
financial instruments, as amended ("MiFID II"); (b) Articles 9 and
10 of Commission Delegated Directive (EU) 2017/593 supplementing
MiFID II; and (c) local implementing measures (together, the
"Product Governance Requirements"), and disclaiming all and any
liability, whether arising in tort, contract or otherwise, which
any "manufacturer" (for the purposes of the Product Governance
Requirements) may otherwise have with respect thereto, the Placing
Shares have been subject to a product approval process, which has
determined that the Placing Shares are: (i) compatible with an end
target market of retail investors and investors who meet the
criteria of professional clients and eligible counterparties, each
as defined in MiFID II; and (ii) eligible for distribution through
all distribution channels as are permitted by MiFID II (the "Target
Market Assessment"). Notwithstanding the Target Market Assessment,
investors should note that: the price of the Placing Shares may
decline and investors could lose all or part of their investment;
Placing Shares offer no guaranteed income and no capital
protection; and an investment in the Placing Shares is compatible
only with investors who do not need a guaranteed income or capital
protection, who (either alone or in conjunction with an appropriate
financial or other adviser) are capable of evaluating the merits
and risks of such an investment and who have sufficient resources
to be able to bear any losses that may result therefrom. The Target
Market Assessment is without prejudice to the requirements of any
contractual, legal or regulatory selling restrictions in relation
to the Placing and Subscription. Furthermore, it is noted that,
notwithstanding the Target Market Assessment, only investors who
have met the criteria of professional clients and eligible
counterparties have been procured. For the avoidance of doubt, the
Target Market Assessment does not constitute: (a) an assessment of
suitability or appropriateness for the purposes of MiFID II; or (b)
a recommendation to any investor or group of investors to invest
in, or purchase, or take any other action whatsoever with respect
to the Placing Shares.
DEFINITIONS
The following terms apply throughout this Announcement unless
the context requires otherwise:
"Adjusted EBITDA" Unaudited earnings before interest,
tax, depreciation, amortisation
and share based payments
"Admission" admission of the Placing Shares
to trading on AIM
"Affiliate" a person controlling, controlled
by or under common control with
that person
"AGM" the annual general meeting of the
Company to be held at 11:00 a.m.
on 28 April 2020 at 24 Chesham Mews,
London, SW1X 8HS
"Allenby Capital" Allenby Capital Limited, the Company's
nominated adviser and joint broker
and joint bookrunner for the Placing
"Allenby Capital Person" any person being Allenby Capital,
its Affiliates or its and their
respective directors, officers,
agents or employees (in each case
whether present or future)
"Announcement" this announcement
"Board" or "Directors" the directors of the Company
"Company" or "Group" Franchise Brands plc
"Dowgate Capital" Dowgate Capital Limited, the Company's
joint broker and joint bookrunner
for the Placing
"Dowgate Capital Person" any person being Dowgate Capital,
its Affiliates or its and their
respective directors, officers,
agents or employees (in each case
whether present or future)
"EBITDA" unaudited earnings before interest,
tax, depreciation and amortisation
"Enlarged Share Capital" the issued share capital of the
Company as enlarged by the issue
of the Placing Shares
"First Admission" the admission of the First Placing
Shares to trading on AIM
"First Placing Shares" up to 11,659,800 new Ordinary Shares
"Joint Bookrunners" Allenby Capital and Dowgate Capital,
the joint brokers to the Company
"Ordinary Shares" ordinary shares of 0.5p in the capital
of the Company
"Placees" subscribers for Placing Shares pursuant
to the Placing
"Placing" the conditional placing of the Placing
Shares at the Placing Price by the
Joint Brokers, pursuant to the Placing
Agreement
"Placing Agreement" the conditional agreement dated
20 April 2020 between the Company
and the Joint Brokers in relation
to the Placing
"Placing Price" the price at which the Placing Shares
are to be issued as determined at
the close of the Bookbuild
"Placing Shares" the First Placing Shares and the
Second Placing Shares to be issued
pursuant to the Placing
"Resolutions" the resolutions numbered 15 and
16 set out in the notice dated 26
March 2020 convening the AGM
"Second Admission" the admission of the Second Placing
Shares to trading on AIM becoming
effective in accordance with the
AIM Rules
"Second Placing Shares" the number of Placing Shares to
be issued on Second Admission as
determined by the Bookbuild
APPIX
TERMS AND CONDITIONS OF THE PLACING
IMPORTANT INFORMATION FOR INVITED PLACEES ONLY REGARDING THE
PLACING
1. Introduction
THIS ANNOUNCEMENT, INCLUDING THE APPIX AND THE TERMS AND
CONDITIONS CONTAINED HEREIN, (TOGETHER, THIS "ANNOUNCEMENT") IS
RESTRICTED AND IS NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION,
DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM THE UNITED STATES,
CANADA, AUSTRALIA, THE REPUBLIC OF SOUTH AFRICA, JAPAN, NEW ZEALAND
OR ANY JURISDICTION IN WHICH THE SAME WOULD BE UNLAWFUL. PERSONS
INTO WHOSE POSSESSION THIS ANNOUNCEMENT (INCLUDING THE APPIX) COMES
ARE REQUIRED BY THE COMPANY, ALLENBY CAPITAL AND DOWGATE CAPITAL TO
INFORM THEMSELVES ABOUT AND TO OBSERVE ANY SUCH RESTRICTIONS.
MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE
PLACING. THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND IS
DIRECTED ONLY AT: (A) PERSONS IN THE UNITED KINGDOM AND MEMBER
STATES OF THE EUROPEAN ECONOMIC AREA WHO ARE QUALIFIED INVESTORS
WITHIN THE MEANING OF ARTICLE 2(E) OF THE REGULATION (EU) 2017/1129
("QUALIFIED INVESTORS"); AND (B) PERSONS WHO (I) HAVE PROFESSIONAL
EXPERIENCE IN MATTERS RELATING TO INVESTMENTS AND FALL WITHIN
ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000
(FINANCIAL PROMOTION) ORDER 2005 (THE "ORDER"); OR (II) ARE PERSONS
FALLING WITHIN ARTICLE 49(2)(A) TO (D) ("HIGH NET WORTH COMPANIES,
UNINCORPORATED ASSOCIATIONS, ETC") OF THE ORDER; OR (C) ARE PERSONS
WHO ARE OTHERWISE LAWFULLY PERMITTED TO RECEIVE IT WITHOUT
REQUIRING THE COMPANY TO ISSUE A PROSPECTUS APPROVED BY COMPETENT
REGULATORS (ALL SUCH PERSONS REFERRED TO IN (A), (B) AND (C),
TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS"). THIS
ANNOUNCEMENT AND THE INFORMATION IN IT MUST NOT BE ACTED ON OR
RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. PERSONS
DISTRIBUTING THIS ANNOUNCEMENT MUST SATISFY THEMSELVES THAT IT IS
LAWFUL TO DO SO. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH
THIS APPIX AND THE TERMS AND CONDITIONS SET OUT HEREIN RELATE IS
AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH
RELEVANT PERSONS. THIS APPIX DOES NOT ITSELF CONSTITUTE AN OFFER
FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN THE COMPANY.
THE CONTENT OF THIS ANNOUNCEMENT HAS NOT BEEN APPROVED BY AN
AUTHORISED PERSON WITHIN THE MEANING OF THE FINANCIAL SERVICES AND
MARKETS ACT 2000 (AS AMED). RELIANCE ON THIS ANNOUNCEMENT FOR THE
PURPOSE OF ENGAGING IN ANY INVESTMENT ACTIVITY MAY EXPOSE AN
INDIVIDUAL TO A SIGNIFICANT RISK OF LOSING ALL OF THE PROPERTY OR
OTHER ASSETS INVESTED.
EACH PLACEE SHOULD CONSULT WITH ITS OWN ADVISERS AS TO LEGAL,
TAX, BUSINESS AND RELATED ASPECTS OF A SUBSCRIPTION FOR OR PURCHASE
OF THE PLACING SHARES.
THE PLACING SHARES HAVE NOT BEEN AND WILL NOT BE REGISTERED
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMED (THE
"SECURITIES ACT") OR WITH ANY SECURITIES REGULATORY AUTHORITY OF
ANY STATE OR JURISDICTION OF THE UNITED STATES, AND MAY NOT BE
OFFERED, SOLD OR TRANSFERRED, DIRECTLY OR INDIRECTLY, IN THE UNITED
STATES EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION
NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
AND IN COMPLIANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE
OR OTHER JURISDICTION OF THE UNITED STATES. THE PLACING SHARES ARE
BEING OFFERED AND SOLD ONLY OUTSIDE THE UNITED STATES IN "OFFSHORE
TRANSACTIONS" WITHIN THE MEANING OF, AND IN ACCORDANCE WITH,
REGULATION S UNDER THE SECURITIES ACT AND OTHERWISE IN ACCORDANCE
WITH APPLICABLE LAWS. NO PUBLIC OFFERING OF THE PLACING SHARES IS
BEING MADE IN THE UNITED STATES OR ELSEWHERE.
This Announcement or any part of it does not constitute or form
part of any offer to issue or sell, or the solicitation of an offer
to acquire, purchase or subscribe for, any securities in the United
States (including its territories and possessions, any state of the
United States and the District of Columbia), Australia, Canada,
Japan or the Republic of South Africa or any other jurisdiction in
which the same would be unlawful. No public offering of the Placing
Shares is being made in any such jurisdiction.
The Placing Shares have not been approved or disapproved by the
US Securities and Exchange Commission, any state securities
commission or other regulatory authority in the United States, nor
have any of the foregoing authorities passed upon or endorsed the
merits of the Placing or the accuracy or adequacy of this
Announcement. Any representation to the contrary is a criminal
offence in the United States. The relevant clearances have not
been, nor will they be, obtained from the securities commission of
any province or territory of Canada, no prospectus has been lodged
with, or registered by, the Australian Securities and Investments
Commission or the Japanese Ministry of Finance; the relevant
clearances have not been, and will not be, obtained for the South
Africa Reserve Bank or any other applicable body in the Republic of
South Africa in relation to the Placing Shares and the Placing
Shares have not been, nor will they be, registered under or
offering in compliance with the securities laws of any state,
province or territory of Australia, Canada, Japan or the Republic
of South Africa. Accordingly, the Placing Shares may not (unless an
exemption under the relevant securities laws is applicable) be
offered, sold, resold or delivered, directly or indirectly, in or
into Australia, Canada, Japan or the Republic of South Africa or
any other jurisdiction outside the United Kingdom.
Persons (including, without limitation, nominees and trustees)
who have a contractual right or other legal obligations to forward
a copy of this Announcement should seek appropriate advice before
taking any action.
By participating in the Bookbuild (as defined below) and the
Placing, each Placee will be deemed to have read and understood
this Announcement in its entirety to be participating, making an
offer and acquiring Placing Shares on the terms and conditions
contained herein and to be providing the representations,
warranties, indemnities, acknowledgements and undertakings
contained in this Appendix.
Members of the public are not eligible to take part in the
Placing.
In this Appendix:
(a) "you" or "Placee" means any person who becomes committed
through the Bookbuild to subscribe for Placing Shares; and
(b) terms defined elsewhere in this Announcement have the same
meanings, unless the context requires otherwise.
Various dates referred to in this Announcement are stated on the
basis of the expected timetable for the Placing. It is possible
that some of these dates may be changed. It is expected that (i)
the First Placing Shares will be allotted, conditional upon, inter
alia, First Admission, on 27 April 2020, or, in any case, by such
later time and/or date as the Company and the Joint Brokers (as
defined below) may agree, being not later than 14 May 2020 (Long
Stop Date) and (ii) the Second Placing Shares will be allotted,
conditional upon, inter alia, Second Admission, on 30 April 2020
or, in any case, by such later time and/or date as the Company and
the Joint Brokers may agree, being not later than the Long Stop
Date.
2. Details of the Placing
Allenby Capital and Dowgate Capital (the "Joint Brokers") have
today entered into the Placing Agreement with the Company pursuant
to which, subject to the conditions set out in such agreement, they
have agreed, as agents for and on behalf of the Company, to use
their respective reasonable endeavours to procure Placees for the
Placing Shares at the Placing Price with certain institutional and
other investors.
No element of the Placing is underwritten.
The Placing of the Placing Shares is conditional upon the
Placing Agreement becoming unconditional in all respects.
The Placing Shares will, when issued, be subject to the articles
of association of the Company, be credited as fully paid and rank
pari passu in all respects with the existing Ordinary Shares,
including the right to receive dividends and other distributions
declared or made following each Admission.
Applications will be made to the London Stock Exchange for
admission of the First Placing Shares and the Second Placing Shares
to trading on AIM. The First Admission and Second Admission are
each conditional upon, amongst other things, the conditions in the
Placing Agreement being satisfied and the Placing Agreement not
having been terminated in accordance with its terms. It is expected
that the First Placing Shares will be allotted, conditional upon,
inter alia, First Admission, on 27 April 2020 and that dealings in
the First Placing Shares will commence at that time. It is expected
that the Second Placing Shares will be allotted, conditional upon,
inter alia, the Second Admission, on 30 April 2020 and that
dealings in the Second Placing Shares will commence at that
time.
3. Bookbuild
Each of the Joint Brokers are proceeding with a share placing
bookbuild process (Bookbuild) for the purpose of assessing demand
from institutional and other investors for subscribing for the
Placing Shares at the Placing Price and the Company then issuing
those shares under the Placing representing no more than 19.9% of
the current issued share capital of the Company. Each of the Joint
Brokers are acting as the Company's agent in respect of the
Bookbuild.
The Bookbuild is expected to close at or before 5.00 p.m.
tomorrow, 21 April 2020. The Company will then release an
announcement through the London Stock Exchange's Regulatory
Information Service confirming the number of Placing Shares to be
issued and the amount to be raised under the Placing. The Joint
Brokers will determine the basis for allocating Placing Shares to
bids submitted to it in the Bookbuild and may at their discretion
(i) accept bids, either in whole or in part, (ii) accept bids that
are received after the Bookbuild has closed, and/or (iii) scale
down all or any bids on such basis as it considers appropriate. The
Joint Brokers may carry out the Placing by any alternative method
to the Bookbuild as they choose. Neither of the Joint Brokers nor
any other Allenby Capital Person or Dowgate Capital Person will
have any liability to Placees (subject to applicable law) or to
anyone else other than the Company in respect of the Placing or in
respect of its conduct of the Bookbuild or of any alternative
method that they may adopt for carrying out the Placing.
The Company and the Joint Brokers may, by agreement with each
other, increase the amount to be raised through the Placing. The
Company also reserves the right to allow officers of the Company
and/or Group employees to subscribe for some of the Placing Shares
at the Placing Price, with the Joint Brokers' agreement, on
substantially the same or similar terms as apply to those Relevant
Persons subscribing for shares under the Placing.
4. Participation and settlement
Participation in the Bookbuild is only available to persons who
are invited to participate in it by the Joint Brokers.
If you are invited to participate in the Bookbuild and wish to
do so, you should communicate your bid by telephone to your usual
broking contact at the Joint Brokers. Each bid should state the
number of Placing Shares which you wish to subscribe for at the
Placing Price. If your bid is successful, in whole or in part, your
allocation will be confirmed orally following the close of the
Bookbuild. Oral confirmation of your allocation by any of the Joint
Brokers will constitute a legally binding commitment on your part
to subscribe for the number of Placing Shares allocated to you at
the Placing Price on the terms and subject to the conditions set
out or referred to in this Appendix and subject to the Company's
articles of association.
A person who submits a bid in the Bookbuild will not be able,
without the agreement of any of the Joint Brokers (as appropriate),
to vary or revoke the bid before the close of the Bookbuild. Such a
person will not be able, after the close of the Bookbuild, to vary
or revoke a submitted bid in any circumstances.
If you are allocated Placing Shares in the Bookbuild, you will
be sent a written confirmation stating (i) the number of Placing
Shares allocated to you, (ii) the aggregate amount you will be
required to pay for those Placing Shares at the Placing Price,
(iii) relevant settlement information, and (iv) settlement
instructions. Settlement instructions will accompany each written
confirmation and, on receipt, should be confirmed back to the Joint
Brokers by the date and time stated in it. Settlement of
transactions in the Placing Shares will take place within the CREST
system, subject to certain exceptions, on a "delivery versus
payment" (or "DVP") basis. The Joint Brokers reserve the right to
require settlement for and/or delivery to any Placee of any Placing
Shares to be made by such other means as it may deem appropriate if
delivery or settlement is not possible or practicable within the
CREST system within the timetable set out in this Announcement. If
your Placing Shares are to be delivered to a custodian or
settlement agent, you should ensure that the written confirmation
is copied and delivered promptly to the appropriate person within
that organisation.
Each Placee's obligations to subscribe and pay for Placing
Shares under the Placing will be owed to each of the Company and
the Joint Brokers. No commissions will be paid to or by Placees in
respect of their agreement to subscribe for any Placing Shares.
Placees' commitments in respect of Placing Shares will be made
solely on the basis of the information contained in this
Announcement and on the terms contained in it. No admission
document for the purposes of the AIM Rules nor any prospectus is
required to be published, or has been or will be published, in
relation to the Placing or the Placing Shares.
5. Placing conditions
Under the terms of the Placing Agreement, the Joint Brokers have
agreed, as agents for and on behalf of the Company, to use their
respective reasonable endeavours to procure Placees for Placing
Shares at the Placing Price.
The Placing is conditional on inter alia (i) the Joint Brokers'
obligations under the Placing Agreement not being terminated in
accordance with their terms, (ii) in the case of the First Placing
Shares, First Admission taking place not later than 8.00 a.m. on 27
April 2020 or such later date (being not later than the Long Stop
Date) as the Company and the Joint Brokers may agree and (iii) in
the case of the Second Placing Shares, the passing of the
Resolutions at the Annual General Meeting of the Company, (iv) in
the case of the Second Placing Shares, First Admission taking place
not later than 8.00 a.m. on 27 April 2020 or such later date (being
not later than the Long Stop Date) as the Company and the Joint
Brokers may agree and Second Admission taking place not later than
8.00 a.m. on 30 April 2020 or such later date (being not later than
the Long Stop Date) as the Company and the Joint Brokers may agree,
and (v) the Joint Brokers' obligations under the Placing Agreement
becoming unconditional in all other respects. The Joint Brokers may
extend the time and/or date for the fulfilment of any of the
conditions in the Placing Agreement to a time no later than 8.00
a.m. on the Long Stop Date. If any such condition is not fulfilled
(and, if capable of waiver under the Placing Agreement, is not
waived by the Joint Brokers) by the relevant time, the Placing will
lapse and your rights and obligations in respect of the Placing
will cease and terminate at such time (save in respect of accrued
rights and obligations). For the avoidance of doubt Admission of
the First Placing Shares is not conditional on Admission of the
Second Placing Shares taking place in accordance with the terms of
the Placing Agreement.
The Joint Brokers may terminate the Placing Agreement prior to
the relevant Admission in certain circumstances including, inter
alia, following a material breach of the Placing Agreement by the
Company. The exercise of any right of termination pursuant to the
Placing Agreement, any waiver of any condition in the Placing
Agreement and any decision by the Joint Brokers whether or not to
extend the time for satisfaction of any condition in the Placing
Agreement are within the Joint Brokers' absolute discretion (as is
the exercise of any right or power of the Joint Brokers under the
terms of this Appendix). Neither of the Joint Brokers will have any
liability to you or to anyone else in respect of any such
termination, waiver or extension or any decision to exercise or not
to exercise any such right of termination, waiver or extension.
If the Placing Agreement is terminated in accordance with its
terms, the rights and obligations of each Placee in respect of the
Placing as described in this Announcement shall cease and terminate
at such time and no claim can be made by any Placee in respect
thereof.
6. Placees' warranties and undertakings
By communicating a bid to the Joint Brokers under the Bookbuild
you will irrevocably acknowledge and confirm and warrant and
undertake to, and agree with, each of the Company and the Joint
Brokers, in each case as a fundamental term of your application for
Placing Shares, that:
(a) you agree to and accept all the terms set out in this Announcement;
(b) your rights and obligations in respect of the Placing will
terminate only in the circumstances referred to in this
Announcement and will not be subject to rescission or termination
by you in any circumstances;
(c) your obligations under the Placing are valid, binding and
enforceable and that you have all necessary capacity and authority,
and have obtained all necessary consents and authorities to enable
you to commit to participation in the Placing and to perform your
obligations in relation thereto and will honour its
obligations;
(d) this Announcement, which has been issued by the Company, is
within the sole responsibility of the Company;
(e) you have not been, and will not be, given any warranty or
representation in relation to the Placing Shares or to the Company
or to any other member of its Group in connection with the Placing,
other than by the Company as included in this Announcement or to
the effect that the Company is not now in breach of its obligations
under the London Stock Exchange's AIM Rules for Companies or under
the EU Market Abuse Regulation (596/2014) to disclose publicly in
the correct manner all such information as is then required to be
so disclosed by the Company;
(f) you have not relied on any representation or warranty in
reaching your decision to subscribe for Placing Shares under the
Placing, save as given or made by the Company as referred to in the
previous paragraph;
(g) you are not a client of the Joint Brokers in relation to the
Placing and the Joint Brokers are not acting for you in connection
with the Placing and will not be responsible to you in respect of
the Placing for providing protections afforded to its or their
clients;
(h) you have not been, and will not be, given any warranty or
representation by either of the Joint Brokers or any Allenby
Capital Person or Dowgate Capital Person in relation to any Placing
Shares, the Company or any other member of its Group and neither of
the Joint Brokers or any Allenby Capital Person or Dowgate Capital
Person will have any liability to you for any information contained
in this Announcement, the content of which is exclusively the
responsibility of the Company, or which has otherwise been
published by the Company or for any decision by you to participate
in the Placing based on any such information or on any other
information provided to you;
(i) you will pay the full subscription sum at the Placing Price
as and when required in respect of all Placing Shares finally
allocated to you and will do all things necessary on your part to
ensure that payment for such shares and their delivery to you or at
your direction is completed in accordance with the standing CREST
instructions (or, where applicable, standing certificated
settlement instructions) that you have in place the Joint Brokers
or that you put in place with the Joint Brokers;
(j) should any stamp duty or stamp duty reserve tax be payable
on a Placee's subscription of shares under the Placing, this will
be to the account of the Placee and neither the Company nor the
Joint Brokers will be responsible in respect thereof and if any
such person is obliged by law to pay any such tax, they shall be
entitled to recover it from the Placee;
(k) you are permitted to subscribe for Placing Shares in
accordance with the laws of all relevant jurisdictions which apply
to you and you have complied, and will fully comply, with all such
laws (including where applicable, the Anti-Terrorism, Crime and
Security Act 2001, the Proceeds of Crime Act 2002 (as amended) and
the Money Laundering, Terrorist Financing and Transfer of Funds
(Information on the Payer) Regulations) and have obtained all
governmental and other consents (if any) which may be required for
the purpose of, or as a consequence of, such subscription, and you
will provide promptly to the Joint Brokers such evidence, if any,
as to the identity or location or legal status of any person which
the Joint Brokers may request from you (for the purpose of its
complying with any such laws or ascertaining the nationality of any
person or the jurisdiction(s) to which any person is subject or
otherwise) in the form and manner requested by the Joint Brokers on
the basis that any failure by you to do so may result in the number
of Placing Shares that are to be allotted and/or issued to you or
at your direction pursuant to the Placing being reduced to such
number, or to nil, as the Joint Brokers may decide;
(l) you have complied and will comply with all applicable
provisions of the Financial Services and Markets Act 2000 (FSMA)
with respect to anything done or to be done by you in relation to
any Placing Shares in, from or otherwise involving the United
Kingdom and you have not made or communicated or caused to be made
or communicated, and you will not make or communicate or cause to
be made or communicated, any "financial promotion" in relation to
Placing Shares in contravention of section 21 of FSMA;
(m) you are a Relevant Person or a person to whom this
Announcement may otherwise be lawfully communicated;
(n) in the case of a Relevant Person who acquires any Placing
Shares pursuant to the Placing acquired by it as a financial
intermediary, as that term is used in Article 5(1) of the
Prospectus Regulation, it represents and warrants that:
(i) the Placing Shares acquired by it in the Placing will not be
and have not been acquired on behalf of, nor will they be or have
they been acquired with a view to their offer or resale to, persons
other than Relevant Persons or in circumstances in which the prior
consent of the Joint Brokers has been given to the offer or resale;
or
(ii) where Placing Shares have been acquired by it on behalf of
persons in the United Kingdom or any member state of the EEA other
than Relevant Persons, the offer of those Placing Shares to it is
not treated under the Prospectus Regulation as having been made to
such persons;
(o) you are acting as principal only in respect of the Placing
or, if you are acting for any other person (i) you are duly
authorised to do so, (ii) you are and will remain liable to the
Company and/or the Joint Brokers for the performance of all your
obligations as a Placee in respect of the Placing (regardless of
the fact that you are acting for another person), (iii) you are
both an "authorised person" for the purposes of FSMA and a
"qualified investor" as defined at Article 2(e) of Regulation (EU)
2017/1129 (known as the Prospectus Regulation) acting as agent for
such person, and (iv) such person is either (1) a FSMA qualified
investor or (2) a "client" (as defined in section 86(2) of FSMA) of
yours that has engaged you to act as his agent on terms which
enable you to make decisions concerning the Placing or any other
offers of transferable securities on his behalf without reference
to him;
(p) where you is acquiring Placing Shares for one or more
managed accounts, you represent and warrant that you are authorised
in writing by each managed account: (a) to acquire the Placing
Shares for each managed account; (b) to make on its behalf the
representations, warranties, acknowledgments, undertakings and
agreements in this Announcement; and (c) to receive on its behalf
any investment letter relating to the Placing in the form provided
to it by the Joint Brokers;
(q) nothing has been done or will be done by you in relation to
the Placing or to any Placing Shares that has resulted or will
result in any person being required to publish a prospectus in
relation to the Company or to any Ordinary Shares in accordance
with FSMA or the UK Prospectus Regulation Rules or in accordance
with any other laws applicable in any part of the European Union or
the European Economic Area;
(r) you will not treat any Placing Shares in a manner that would
contravene any legislation applicable in any territory or
jurisdiction and no aspect of your participation in the Placing
will contravene any legislation applicable in any territory or
jurisdiction or cause the Company or any of the Joint Brokers to
contravene any such legislation;
(s) (in this paragraph "US person" and other applicable terms
have the meanings that they have in Regulation S made under the
Securities Act) (i) none of the Placing Shares have been or will be
registered under that Act or under the securities laws of any State
of or other jurisdiction within the United States, (ii) subject to
certain exceptions, no Placing Shares may be offered or sold,
resold, or delivered, directly or indirectly, into or within the
United States or to, or for the account or benefit of, any US
person, (iii) you are (unless otherwise expressly agreed with any
of the Joint Brokers) neither within the United States nor a US
person, (iv) you have not offered, sold or delivered and will not
offer sell or deliver any of the Placing Shares to persons within
the United States, directly or indirectly, (v) neither you, your
affiliates, nor any persons acting on your behalf, have engaged or
will engage in any directed selling efforts with respect to the
Placing Shares, (vi) you will not be subscribing Placing Shares
with a view to resale in or into the United States, and (vii) you
will not distribute this Announcement or any offering material
relating to Placing Shares, directly or indirectly, in or into the
United States or to any persons resident in the United States;
(t) the Joint Brokers may satisfy their obligations to procure
Placees by themselves agreeing to become Placees in respect of some
or all of the Placing Shares or by nominating any other Allenby
Capital Person or Dowgate Capital Person or any person associated
with any Allenby Capital Person or Dowgate Capital Person to do so
or by allowing officers of the Company and/or Group employees to
subscribe for Placing Shares under the Placing at the Placing
Price;
(u) time is of essence as regards your obligations under this Appendix;
(v) this Appendix and any contract which may be entered into
between you and the Joint Brokers and/or the Company pursuant to
this Appendix or the Placing, and all non-contractual obligations
arising between you and the Joint Brokers and/or the Company in
respect of the Placing, will be governed by and construed in
accordance with the laws of England, for which purpose you submit
(for yourself and on behalf of any person on whose behalf you are
acting) to the exclusive jurisdiction of the English courts as
regards any claim, dispute, or matter arising out of or relating to
this Appendix or such contract, except that each of the Company and
the Joint Brokers will have the right to bring enforcement
proceedings in respect of any judgement obtained against you in the
English courts or in the courts of any other relevant
jurisdiction;
(w) each right or remedy of the Company or the Joint Brokers
provided for in this Appendix is in addition to any other right or
remedy which is available to such person and the exercise of any
such right or remedy in whole or in part will not preclude the
subsequent exercise of any such right or remedy;
(x) any document that is to be sent to you in connection with
the Placing will be sent at your risk and may be sent to you at any
address provided by you to any of the Joint Brokers;
(y) if you have received any confidential price sensitive
information about the Company in advance of the Placing, you have
not: (a) dealt in the securities of the Company; (b) encouraged or
required another person to deal in the securities of the Company;
or (c) disclosed such information to any person, prior to the
information being made publicly available;
(z) you irrevocably appoint any duly authorised officer of the
Joint Brokers as your agent for the purpose of executing and
delivering to the Company and/or its registrars any documents on
your behalf necessary to enable you to be registered as the holder
of any of the Placing Shares for which you agree to subscribe upon
the terms of this Announcement; and
(aa) by participating in the Placing, each Placee (and any
person acting on such Placee's behalf) agrees to indemnify and hold
the Company, the Joint Brokers and each Allenby Capital Person and
Dowgate Capital Person harmless from any and all costs, claims,
liabilities and expenses (including legal fees and expenses)
arising out of or in connection with any breach of the
representations, warranties, acknowledgements, agreements and
undertakings given by the Placee (and any person acting on such
Placee's behalf) in this Appendix or incurred by any of the Joint
Brokers, any Allenby Capital Person, Dowgate Capital Person or the
Company arising from the performance of the Placee's obligations as
set out in this Announcement, and further agrees that the
provisions of this Appendix shall survive after the completion of
the Placing.
7. Payment default
Your entitlement to receive any Placing Shares will be
conditional on the Joint Brokers' receipt of payment in full for
such shares by the relevant time to be stated in the written
confirmation referred to above, or by such later time and date as
the Joint Brokers may decide, and otherwise in accordance with that
confirmation's terms. The Joint Brokers may waive this condition
and will not be liable to you for any decision to waive it or
not.
If you fail to make such payment by the required time for any
Placing Shares (1) the Company may release itself, and (if it
decides to do so) will be released from, all obligations it may
have to allot and/or issue any such Placing Shares to you or at
your direction which are then unallotted and/or unissued, (2) the
Company may exercise all rights of lien, forfeiture and set-off
over and in respect of any such Placing Shares to the full extent
permitted under its articles of association or by law and to the
extent that you then have any interest in or rights in respect of
any such shares, (3) the Company or, as applicable, Allenby Capital
and/or Dowgate Capital may sell (and each of them is irrevocably
authorised by you to do so) all or any of such shares on your
behalf and then retain from the proceeds, for the account and
benefit of the Company or, where applicable, Allenby Capital and/or
Dowgate Capital (i) any amount up to the total amount due to it as,
or in respect of, subscription monies, or as interest on such
monies, for any Placing Shares and (ii) any amount required to
cover dealing costs and/or commissions necessarily or reasonably
incurred by it in respect of such sale and (4) you will remain
liable to the Company and to Allenby Capital and/or Dowgate Capital
for the full amount of any losses and of any costs which it may
suffer or incur as a result of it (i) not receiving payment in full
for such Placing Shares by the required time, and/or (ii) the sale
of any such Placing Shares to any other person at whatever price
and on whatever terms are actually obtained for such sale by or for
it. Interest may be charged in respect of payments not received by
Allenby Capital and/or Dowgate Capital for value by the required
time referred to above at the rate of two percentage points above
the base rate of National Westminster Bank plc.
8. Overseas jurisdictions
The distribution of this Announcement and the offering and/or
issue of shares pursuant to the Placing in certain jurisdictions is
restricted by law. FSMA qualified investors who seek to participate
in the Placing must inform themselves about and observe any such
restrictions. In particular, this document does not constitute or
form part of any offer or invitation, nor a solicitation of any
offer or invitation, to subscribe for or acquire or sell or
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Canada, Japan, the Republic of South Africa or Australia or in any
other jurisdiction in which any such offer, invitation or
solicitation is or would be unlawful. The Placing Shares have not
been and will not be registered under the US Securities Act of
1933, as amended or under the securities laws of any State of or
other jurisdiction within the United States, and, subject to
certain exceptions, may not be offered or sold, resold or
delivered, directly or indirectly, in or into the United States, or
to, or for the account or benefit of, any US persons (as defined in
Regulation S under that Act). No public offering of Placing Shares
is being or will be made in the United States.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
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contact rns@lseg.com or visit www.rns.com.
END
IOEBUGDSLXDDGGG
(END) Dow Jones Newswires
April 20, 2020 11:38 ET (15:38 GMT)
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