Proposed Placing to raise a minimum of £4.0m

THIS ANNOUNCEMENT (INCLUDING THE APPENDIX) AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.

 

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (596/2014/EU). IN ADDITION, MARKET SOUNDINGS (AS DEFINED IN MAR) WERE TAKEN IN RESPECT OF CERTAIN OF THE MATTERS CONTAINED IN THIS ANNOUNCEMENT, WITH THE RESULT THAT CERTAIN PERSONS BECAME AWARE OF SUCH INSIDE INFORMATION, AS PERMITTED BY MAR. UPON THE PUBLICATION OF THIS ANNOUNCEMENT THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN AND SUCH PERSONS SHALL THEREFORE CEASE TO BE IN POSSESSION OF INSIDE INFORMATION.

 

 

FOR IMMEDIATE RELEASE

3 July 2019

 

Rainbow Rare Earths Limited ("Rainbow" or the "Company") (LSE: RBW)

 

Proposed Placing to raise a minimum of £4.0 million (US$5.0 million) net of expenses

 

Rainbow, the high-grade rare earth producer, today announces a proposed placing by way of an accelerated bookbuild to raise a minimum of US$5.0 million (net of expenses).

 

Highlights

 

·    The Company intends to raise a minimum of US$5.0 million (net of expenses) through the proposed Placing of new Ordinary Shares arranged by Arden Partners plc and Turner Pope Investments Limited (TPI) with new and existing investors at a price of not less than 3p per Placing Share.

 

·    The Placing will allow the Company to invest in increasing production growth at its fully operational Gakara Rare Earth Project in Burundi through the opening of new mining sites

 

·    Funding will also strengthen the Group's  balance sheet by  providing additional stability during the ramp-up of production from the new mining areas over the coming months

 

·    Minimum net proceeds will be applied in the following principal areas:

o  Purchase of new mining fleet to replace locally rented equipment

o  Development and opening of two new mining areas

o  Providing working capital prior to additional mining areas delivering production

 

·    Excessive demand for Placing shares will be used for

o  Additional drilling campaign focused on larger-scale, lower grade Kiyenzi area alongside metallurgical testwork focused on efficient processing of this ore

o  Strengthening balance sheet

 

·    Rainbow's largest shareholder, Pella Ventures Limited (in which the Company's Chairman, Adonis Pouroulis has a beneficial interest), is converting its US$700,000 loan, as announced on 7 May 2019, at the Placing Price.

·    Rainbow's Board and management have agreed that a total of £145,789 in fees and deferred cash bonuses which were outstanding as of 30 June 2019, shall be satisfied by the issue to them of new Ordinary Shares, determined by reference to the Placing Price, as well as directly subscribing for at least a further £10,000 of Ordinary Shares by reference to the Placing Price

 

Completion of the Placing remains subject to a number of conditions, inter alia, publication of a Prospectus and the approval by Shareholders of a special resolution to authorise the issue of new Ordinary Shares (in connection with the Placing, as well as the other issuances of new Ordinary Shares as set out above) which will be sought at an extraordinary general meeting of the Company to be convened for that purpose (the "Extraordinary General Meeting"), details of which can be found below.

 

 

Further details of the Placing

 

Arden Partners and Turner Pope are acting as joint brokers in connection with the Placing. Pursuant to the terms of the Placing Agreement, Arden Partners and Turner Pope are acting as joint bookrunners in connection with the Placing.

 

The Placing, which will be undertaken by way of an accelerated bookbuild, will be launched immediately following the release of this Announcement and will be made available to eligible existing Shareholders and new institutional investors. The timing of the closing of the Bookbuilding Process will be at the sole discretion of the Joint Bookrunners. The completion of the Bookbuilding Process containing details of the Placing Price and the number of Placing Shares will be announced as soon as practicable.

 

The obligations of the Joint Brokers pursuant to the Placing Agreement remain subject to the terms and satisfaction of certain conditions set out in the appendix (the "Appendix") to this Announcement. The Placing is not underwritten.

 

Under the terms of the Placing, the Company intends to place the Placing Shares with eligible existing Shareholders and new institutional and High net worth investors. The Placing is not being made generally available to members of the public.

 

By choosing to participate in the Placing and by making an oral 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.

 

The Placing Shares, when issued, will be fully paid and will rank pari passu in all respects with the Existing Ordinary Shares, including the right to receive all dividends and other distributions declared, made or paid after the date of issue.

 

Following publication of the Prospectus and the passing of a special resolution at the Extraordinary General Meeting, application will be made for Admission.

 

If the special resolution is not approved at the Extraordinary General Meeting, the Placing will not be able to proceed, in which case the Company would require up to approximately US$5 million (£4.0 million) net of expenses to make up the shortfall required for the Company to have sufficient working capital for at least the next twelve months following the expected date of the Prospectus, and to deliver the stated production strategy.

 

Admission is expected to take place on or around 8.00 a.m. on 22 July 2019 and settlement is expected to occur on or around 22 July 2019. The Placing is conditional on, inter alia, the Placing Agreement becoming unconditional in all respects and not being terminated and Admission becoming effective on or before 8.00 a.m. on 22 July 2019 (or such later time and/or date as the Company, and the Joint Brokers may agree).

 

The Appendix sets out further information relating to the Placing and the terms and conditions of the Placing.

 

This Announcement should be read in its entirety. In particular, investors should read and understand the information provided in the "Important Notices" section of this Announcement and the detailed terms, conditions and additional information relating to the Placing described in the Appendix.

 

Circular and notice of Extraordinary General Meeting

 

A circular containing details and notice of the Extraordinary General Meeting, to be held on 19 July 2019 to, inter alia, pass the resolutions required to enable the Company to issue the New Ordinary Shares (including the Placing Shares), is expected to be published and despatched to Shareholders today. Following its publication, the circular will be available on the Company's website www.rainbowrareearths.com.  

 

Background to and reasons for the Placing

 

Rainbow's focus is the Gakara Project, one of the highest-grade (47%-67% total rare earth oxide) rare earths projects globally.  The Company listed on the London Stock Exchange in January 2017 with the intention to fast-track the fully permitted Gakara Project to production ahead of targeted first sales of concentrate by the end of 2017. This was achieved on time and followed by concentrate production increasing during 2018 with 475 tonnes of concentrate sold between January and June 2018; and 650 tonnes of concentrate sold between July and December 2018.  Rainbow has a ten-year distribution and offtake agreement with multinational thyssenkrupp Materials Trading secured for the sale of up to 10,000tpa concentrate produced.

 

The Gakara basket is weighted heavily towards the magnet rare earths, including neodymium and praseodymium, which are driving demand and account for approximately 70% of annual global rare earth element sales due to their use in vital components in motors, generators, wind turbines, and electric vehicles.

 

In both January and May 2019, the Company announced that production of concentrate had fallen behind initial expectation and remained challenging. Rainfall during the six months to March 2019 disrupted mining operations as the locally-rented haul trucks available proved incapable of performing in wet conditions which limited waste stripping and dumping. The replacement of the inadequate rented machines with newer more suitable models is a critical component in Rainbow's plans to address mining performance issues. 

 

The Gakara Project provides Rainbow with the unique combination of extracting extremely high-grade ore, allowing for a short and foreseeable path to positive cash flows, as well as a high volume deposit at Kiyenzi indicating significant long-term opportunity for further exploration in our concession area. The Company has therefore developed a strategy to operate additional mining areas in order to de-risk the fluctuations caused by operating at a limited scale and to deliver profitability. 

 

Utilising the net Placing proceeds, the Company will swiftly move to secure new mining fleet capable of working efficiently in Burundi's conditions and to develop mining operations at the Kiyenzi and Gomvyi Centre areas. As previously announced, the Company expects both areas to be in operation in the latter half of calendar 2019. A further new mining area is planned to be in operation in 2020, to replace Gasagwe which, as originally planned, is expected to reach the end of its life in the next 12 months. It is the Company's intention that a minimum of four pits are in operation continuously to smooth individual pit production variances.

 

The Company's 2018 exploration campaign revealed a previously unknown larger low-grade area at Kiyenzi.  It is now proposed to conduct a much larger drilling and exploration campaign on this area with the intention of being able to define a multi-million tonne resource.  In addition, further laboratory testing is required on the full extent of all 2018 drill core in order to identify any previously unconsidered rare earth mineralisation, alongside metallurgical testing to best identify the appropriate processing route for this lower-grade ore.

   

The Board therefore believes this placement will deliver long term value for existing and new Shareholders.

 

Current trading and prospects

 

As announced by the Company on 7 May 2019, production from the existing two mining areas, Gasagwe and Murambi, during the first part of the year was disappointing and principally caused by issues related to poor quality locally-rented machinery which proved incapable of operating efficiently in wet conditions. 

 

Although Burundi's dry season has now commenced, enabling a much more consistent rate of operational activity from the existing rented fleet, there is inevitably a backlog of waste removal to be completed before Gasagwe and Murambi are operating at normal production levels. This will be the focus for July and August prior to utilising any new machinery due to be purchased with the proceeds of the Placing, which is expected to be on site prior to the next rainy season in Burundi.  Total concentrate production in the year to 30 June 2019 was 800  tonnes, as forecast in early May.

 

The prices for separated rare earth materials rose sharply in May and June 2019 following the imposition by Chinese authorities of a ban on imported rare earth production from Myanmar (a proportion of which was rumoured to be illegal Chinese production) and following announcements by China that it might consider seeking ways to restrict or ban exports of certain rare earths products as part of the well-publicised 'trade war' with the USA.

 

As at 3 July 2019 the reference 'basket price' for Rainbow's concentrate was estimated to be US$11.83/kg, which has increased 14% since 1 May 2019.  Rainbow has direct exposure to these increasing prices through the structure of its Distribution and Offtake Agreement with ThyssenKrupp Materials Trading, which references the published prices for separated rare earth oxides. Rainbow takes an approximately 70 per cent. discount to published prices on its concentrate.

 

Use of proceeds

 

The minimum net proceeds of the Placing shall be used as follows:

 

·          purchase of new mining fleet to replace and expand the capacity of the existing rented equipment and to allow for additional mining areas (US$1.8 million (£1.4 million));

·          mine development and exploration costs to bring additional mining areas into production (US$1.6 million (£1.3 million));

·          working capital for operational and corporate purposes during the development period of the two new pits (US$1.6 million (£1.3 million));

 

To the extent that funds are raised in excess of the minimum amount, the Company may use the excess for either or both of:

 

·          enhanced drilling and exploration work across the Gakara Project, including the lower grade area at Kiyenzi but also additional high-grade vein areas;

·          restructuring of the balance sheet by reducing debt/creditors.

 

 

The Placing Agreement

 

Pursuant to the Placing Agreement, the Joint Brokers have agreed to use their respective reasonable endeavours as the placing agents of the Company to procure subscribers for the Placing Shares at the Placing Price.

 

The Placing Agreement provides, inter alia, for payment by the Company to the Joint Brokers of commissions based on the number of Placing Shares placed by the Joint Brokers multiplied by the Placing Price.

 

Pursuant to the Placing Agreement, the Company has given the Joint Brokers certain warranties, representations and undertakings as to the business and operations of the Group as well as the share capital of the Company, including the Placing Shares. The Company has also agreed to indemnify the Joint Brokers for certain loss and in respect of claims which may arise out of the Placing. The Placing Agreement may be terminated in customary circumstances, including in the event of a material adverse change in the financial markets or the circumstances of the Group.

 

The Company will bear all other expenses of, and incidental to, the Placing including the fees of the London Stock Exchange, registrars' fees, all legal and accounting fees incurred by the Company and the Joint Brokers and all relevant stamp duty and other taxes and duties payable. The Placing is not being underwritten by the Joint Brokers.

 

The terms and conditions of participation in the Placing are set out in the Appendix.

 

Conversion and Subscriptions by Directors

 

On 7 May 2019 Rainbow announced that it had entered into a convertible loan facility of US$700,000 with its largest shareholder, Pella Ventures Limited, in which the Company's Chairman Adonis Pouroulis has a beneficial interest.  The terms of the convertible loan facility allow for Rainbow to convert the balance and any outstanding interest into new Ordinary Shares at the same price as any equity fundraising and consequently Rainbow will issue new Ordinary Shares to Pella Ventures Limited following completion of the Placing (such number being determined by reference to the Placing Price) in full satisfaction of the Pella Convertible Loan.

 

Alex Lowrie who is a director of the Company have indicated that he intends to subscribe for £10,000 at the Placing Price.

 

In addition, the Board of Directors and certain Senior Managers of the Company have agreed to accept new Ordinary Shares at the Placing Price in lieu of outstanding fees and deferred cash bonuses in the following amounts:

 

Name	Position	Amount £
Adonis Pouroulis	Chairman	14,167
Shawn McCormick	Non-Executive Director	9,167
Atul Bali	Non-Executive Director	9,167
Robert Sinclair	Non-Executive Director	9,167
Martin Eales	CEO	35,477
Jim Wynn	CFO	25,341
Gilbert Midende	Director General, Burundi	24,094
Cesare Morelli	Technical Director	19,209
TOTAL		145,789

 

 

Expected Timetable of Events

 

Announcement of the Placing and Bookbuild commences	3 July 2019
Announcement of the closing of the Placing and Bookbuild	3 July 2019
Publication of Prospectus	On or around 10 July 2019
EGM of the Company	19 July 2019
Admission and commencement of dealings in the New Ordinary Shares  (including the Placing Shares) on the Official List	On or around 8.00 a.m. on 22 July 2019
New Ordinary Shares credited to CREST members' accounts	22 July 2019
Despatch of definitive share certificates in certificated form	within 10 business days of Admission

 

Each of the times and dates above refer to London time and are subject to change by the Company. Any such change will be notified to Shareholders by an announcement through a Regulatory Information Service. 

 

Capitalised terms used but not defined in this Announcement shall have the meanings given to such terms in the section headed "Definitions" below save that any capitalised term defined in the Appendix shall have such meaning in the Appendix to the exclusion, in the Appendix only, of any definition of such term elsewhere in this Announcement.

 

 

 

 

 

 

 

For further information, please contact:

 

Rainbow Rare Earths Ltd	Martin Eales	Tel: +44 (0) 20 3910 4550
Arden Partners plc	Paul Shackleton (corporate)   Mark Pilcher (Dealing desk)	Tel: +44 (0) 20 7614 5900
Turner Pope Investments Limited	James Pope	Tel: +44 (0) 20 3621 4120
St Brides Partners Ltd	Priit Piip Isabel de Salis	Tel: +44 (0) 20 7236 1177

  

 

 

 

 

IMPORTANT NOTICES

 

NEITHER THIS ANNOUNCEMENT NOR ANY COPY OF IT MAY BE MADE, DISTRIBUTED OR TRANSMITTED, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO AUSTRALIA, CANADA, JAPAN, SOUTH AFRICA, THE UNITED STATES OR TO ANY PERSONS IN ANY OF THOSE JURISDICTIONS EXCEPT IN COMPLIANCE WITH APPLICABLE SECURITIES LAWS. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF THE SECURITIES LAWS OF THESE JURISDICTIONS. THE RELEASE, PUBLICATION OR DISTRIBUTION OF THIS ANNOUNCEMENT IN CERTAIN JURISDICTIONS MAY BE RESTRICTED BY LAW AND THEREFORE PERSONS IN SUCH JURISDICTIONS INTO WHICH THIS ANNOUNCEMENT IS RELEASED, PUBLISHED OR DISTRIBUTED SHOULD INFORM THEMSELVES ABOUT AND OBSERVE SUCH RESTRICTIONS.

 

PERSONS (INCLUDING, WITHOUT LIMITATION, NOMINEES AND TRUSTEES) WHO HAVE A CONTRACTUAL OR OTHER LEGAL OBLIGATION TO FORWARD A COPY OF THIS ANNOUNCEMENT SHOULD SEEK APPROPRIATE ADVICE BEFORE TAKING ANY ACTION.

 

 

THIS ANNOUNCEMENT DOES NOT CONSTITUTE, OR FORM PART OF, AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO SUBSCRIBE FOR OR PURCHASE, ANY SECURITIES IN AUSTRALIA, CANADA, JAPAN, SOUTH AFRICA, THE UNITED STATES OR IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL.

 

THE SECURITIES REFERRED TO IN THIS ANNOUNCEMENT HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "US SECURITIES ACT"), OR WITH ANY SECURITIES REGULATORY AUTHORITY IN ANY STATE OF THE UNITED STATES, AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES EXCEPT TO CERTAIN INVESTORS IN RELIANCE ON AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE US SECURITIES ACT. THERE WILL BE NO PUBLIC OFFER OF THE PLACING SHARES IN THE UNITED STATES.

 

THIS ANNOUNCEMENT IS NOT A PROSPECTUS FOR THE PURPOSES OF DIRECTIVE 2003/71/EC AS AMENDED (INCLUDING AMENDMENTS BY DIRECTIVE 2010/73/EU, TO THE EXTENT IMPLEMENTED IN THE RELEVANT MEMBER STATE) (THE "PROSPECTUS DIRECTIVE"). INVESTORS SHOULD NOT SUBSCRIBE FOR OR PURCHASE ANY SECURITIES REFERRED TO IN THIS ANNOUNCEMENT EXCEPT ON THE BASIS OF INFORMATION ABOUT THE COMPANY THAT IS PUBLICLY AVAILABLE. THIS ANNOUNCEMENT DOES NOT CONSTITUTE A RECOMMENDATION CONCERNING THE PLACING.

 

THIS ANNOUNCEMENT IS NOT AN INVITATION NOR IS IT INTENDED TO BE AN INDUCEMENT TO ENGAGE IN INVESTMENT ACTIVITY FOR THE PURPOSE OF SECTION 21 OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (AS AMENDED) OF THE UNITED KINGDOM ("FSMA"). THIS ANNOUNCEMENT IS DIRECTED AT AND IS ONLY BEING DISTRIBUTED TO: (A) PERSONS IN MEMBER STATES OF THE EUROPEAN ECONOMIC AREA (THE "EEA") WHO ARE QUALIFIED INVESTORS WITHIN THE MEANING OF ARTICLE 2(1)(E) OF THE PROSPECTUS DIRECTIVE ("QUALIFIED INVESTORS"), (B) IF IN THE UNITED KINGDOM, PERSONS WHO (I) HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS WHO FALL WITHIN THE DEFINITION OF "INVESTMENT PROFESSIONALS" IN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005, AS AMENDED (THE "ORDER"), OR ARE HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS OR PARTNERSHIPS OR TRUSTEES OF HIGH VALUE TRUSTS AS DESCRIBED IN ARTICLE 49(2) OF THE ORDER AND (II) ARE "QUALIFIED INVESTORS" AS DEFINED IN SECTION 86 OF FSMA AND (C) OTHERWISE, TO PERSONS TO WHOM IT MAY OTHERWISE BE LAWFUL TO COMMUNICATE IT TO (EACH A "RELEVANT PERSON"). NO OTHER PERSON SHOULD ACT OR RELY ON THIS ANNOUNCEMENT AND PERSONS DISTRIBUTING THIS ANNOUNCEMENT MUST SATISFY THEMSELVES THAT IT IS LAWFUL TO DO SO. BY ACCEPTING THE TERMS OF THIS ANNOUNCEMENT YOU REPRESENT AND AGREE THAT YOU ARE A RELEVANT PERSON.

 

THIS ANNOUNCEMENT HAS BEEN ISSUED BY AND IS THE SOLE RESPONSIBILITY OF THE COMPANY. APART FROM THE RESPONSIBILITIES AND LIABILITIES, IF ANY, WHICH MAY BE IMPOSED ON THE JOINT BROKERS BY FSMA, 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 THE JOINT BROKERS OR BY ANY OF THEIR RESPECTIVE AFFILIATES OR AGENTS AS TO OR IN RELATION TO, THE ACCURACY OR COMPLETENESS OF THIS ANNOUNCEMENT OR ANY OTHER WRITTEN OR ORAL INFORMATION MADE OR PURPORTED TO BE MADE AVAILABLE BY ANY JOINT BROKER OR ON BEHALF OF ANY JOINT BROKER, THE COMPANY, ITS DIRECTORS OR ANY OTHER PERSON, IN CONNECTION WITH THE COMPANY, THE PLACING OR THE PLACING SHARES. EACH OF THE JOINT BROKERS ACCORDINGLY DISCLAIMS ALL AND ANY LIABILITY WHATSOEVER, WHETHER ARISING IN TORT, CONTRACT OR OTHERWISE (SAVE AS REFERRED TO ABOVE), WHICH IT MIGHT OTHERWISE HAVE IN RESPECT OF THIS ANNOUNCEMENT OR ANY SUCH STATEMENT.

 

EACH JOINT BROKER IS AUTHORISED AND REGULATED IN THE UNITED KINGDOM BY THE FCA AND IS ACTING FOR THE COMPANY IN CONNECTION WITH THE PLACING AND NO ONE ELSE AND WILL NOT BE RESPONSIBLE TO ANYONE OTHER THAN THE COMPANY FOR PROVIDING THE PROTECTIONS AFFORDED TO ITS CLIENTS NOR FOR PROVIDING ADVICE IN RELATION TO THE PLACING, THE CONTENTS OF THIS ANNOUNCEMENT OR ANY TRANSACTION, ARRANGEMENT OR OTHER MATTER REFERRED TO HEREIN.

 

THIS ANNOUNCEMENT MAY NOT BE COPIED, DISTRIBUTED, REPRODUCED OR PASSED ON, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, OR DISCLOSED BY ANY RECIPIENT, TO ANY OTHER PERSON (WHETHER WITHIN OR OUTSIDE SUCH PERSON'S ORGANISATION OR FIRM) OR PUBLISHED IN WHOLE OR IN PART, FOR ANY PURPOSE OR UNDER ANY CIRCUMSTANCES.

 

CERTAIN STATEMENTS AND MATTERS DISCUSSED IN THIS ANNOUNCEMENT MAY CONSTITUTE FORWARD-LOOKING STATEMENTS. FORWARD-LOOKING STATEMENTS ARE STATEMENTS THAT ARE NOT HISTORICAL FACTS AND MAY BE IDENTIFIED BY WORDS SUCH AS "AIM", "ANTICIPATE", "BELIEVE", "CONTINUE", "ESTIMATE", "EXPECT", "INTEND", "MAY", "SHOULD", "STRATEGY", "WILL" AND WORDS OF SIMILAR MEANING, INCLUDING ALL MATTERS THAT ARE NOT HISTORICAL FACTS. THE FORWARD-LOOKING STATEMENTS IN THIS ANNOUNCEMENT ARE BASED UPON VARIOUS ASSUMPTIONS, MANY OF WHICH ARE BASED, IN TURN, UPON FURTHER ASSUMPTIONS. ALTHOUGH THE COMPANY BELIEVES THAT THESE ASSUMPTIONS WERE REASONABLE WHEN MADE, THESE ASSUMPTIONS ARE INHERENTLY SUBJECT TO SIGNIFICANT KNOWN AND UNKNOWN RISKS, UNCERTAINTIES, CONTINGENCIES AND OTHER IMPORTANT FACTORS WHICH ARE DIFFICULT OR IMPOSSIBLE TO PREDICT AND ARE BEYOND ITS CONTROL. THESE STATEMENTS ARE NOT GUARANTEES OF FUTURE PERFORMANCE AND ARE SUBJECT TO KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. GIVEN THESE RISKS AND UNCERTAINTIES, PROSPECTIVE INVESTORS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON FORWARD-LOOKING STATEMENTS.  NONE OF THE FUTURE PROJECTIONS, ESTIMATES, EXPECTATIONS OR PROSPECTS IN THIS ANNOUNCEMENT SHOULD BE TAKEN AS FORECASTS OR PROMISES NOR SHOULD THEY BE TAKEN AS IMPLYING ANY INDICATION, ASSURANCE OR GUARANTEE THAT THE ASSUMPTIONS ON WHICH SUCH FUTURE PROJECTIONS, EXPECTATIONS, ESTIMATES OR PROSPECTS HAVE BEEN PREPARED ARE CORRECT OR EXHAUSTIVE, OR IN THE CASE OF ASSUMPTIONS, FIRSTLY STATED IN THE ANNOUNCEMENT.

 

THE INFORMATION, OPINIONS AND FORWARD-LOOKING STATEMENTS CONTAINED IN THIS ANNOUNCEMENT SPEAK ONLY AS AT ITS DATE AND ARE SUBJECT TO CHANGE WITHOUT NOTICE. EXCEPT AS REQUIRED BY THE FCA, THE LONDON STOCK EXCHANGE OR APPLICABLE LAW, THE COMPANY UNDERTAKES NO OBLIGATION TO UPDATE OR REVISE PUBLICLY ANY FORWARD-LOOKING STATEMENTS, WHETHER AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE. THE JOINT BROKERS AND THEIR RESPECTIVE AFFILIATES EXPRESSLY DISCLAIM ANY OBLIGATION OR UNDERTAKING TO UPDATE, REVIEW OR REVISE ANY FORWARD-LOOKING STATEMENT CONTAINED IN THIS ANNOUNCEMENT WHETHER AS A RESULT OF NEW INFORMATION, FUTURE DEVELOPMENTS OR OTHERWISE.

 

ANY INDICATION IN THIS ANNOUNCEMENT OF THE PRICE AT WHICH ORDINARY SHARES HAVE BEEN BOUGHT OR SOLD IN THE PAST CANNOT BE RELIED UPON AS A GUIDE TO FUTURE PERFORMANCE. PAST PERFORMANCE IS NO GUIDE TO FUTURE PERFORMANCE AND PERSONS NEEDING ADVICE SHOULD CONSULT AN INDEPENDENT FINANCIAL ADVISER. NO STATEMENT IN THIS ANNOUNCEMENT IS INTENDED TO BE A PROFIT FORECAST AND NO STATEMENT IN THIS ANNOUNCEMENT SHOULD BE INTERPRETED TO MEAN THAT EARNINGS PER SHARE OF THE COMPANY FOR THE CURRENT OR FUTURE FINANCIAL YEARS WOULD NECESSARILY MATCH OR EXCEED THE HISTORICAL PUBLISHED EARNINGS PER SHARE OF THE COMPANY. THE PLACING SHARES AND THE INCOME FROM THEM MAY GO DOWN AS WELL AS UP AND INVESTORS MAY NOT GET BACK THE FULL AMOUNT INVESTED ON DISPOSAL OF THE PLACING SHARES.

 

NEITHER THE CONTENTS OF THE COMPANY'S WEBSITE (OR ANY OTHER WEBSITE) NOR THE CONTENTS OF ANY WEBSITE ACCESSIBLE FROM HYPERLINKS ON THE COMPANY'S WEBSITE (OR ANY OTHER WEBSITE) ARE INCORPORATED INTO, OR FORMS PART OF, THIS ANNOUNCEMENT.

 

ALL TIMES AND DATES IN THIS ANNOUNCEMENT MAY BE SUBJECT TO AMENDMENT. THE RELEVANT JOINT BROKER SHALL NOTIFY THE PLACEES AND ANY PERSON ACTING ON BEHALF OF THE PLACEES OF ANY CHANGES.

 

THIS ANNOUNCEMENT SHOULD BE READ IN ITS ENTIRETY. BY PARTICIPATING IN THE BOOKBUILD AND THE PLACING, PLACEES WILL BE DEEMED TO HAVE READ AND UNDERSTOOD THIS ANNOUNCEMENT IN ITS ENTIRETY, TO BE PARTICIPATING, MAKING AN OFFER AND SUBSCRIBING FOR PLACING SHARES ON THE TERMS AND CONDITIONS CONTAINED HEREIN AND TO BE PROVIDING THE REPRESENTATIONS, WARRANTIES, INDEMNITIES, ACKNOWLEDGEMENTS AND UNDERTAKINGS CONTAINED HEREIN.  

 

EACH PLACEE SHOULD CONSULT WITH ITS OWN ADVISERS AS TO LEGAL, TAX, BUSINESS AND RELATED ASPECTS OF THE SUBSCRIPTION FOR PLACING SHARES.

 

THIS ANNOUNCEMENT HAS BEEN ISSUED BY, AND IS THE SOLE RESPONSIBILITY, OF THE COMPANY.  THE PERSON RESPONSIBLE FOR ARRANGING RELEASE OF THE INFORMATION ON BEHALF OF THE COMPANY IS MARTIN EALES. 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 ARDEN OR TURNER POPE OR BY ANY OF THEIR RESPECTIVE 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.

 

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 "MIFID II PRODUCT  GOVERNANCE REQUIREMENTS"), AND DISCLAIMING ALL AND ANY LIABILITY, WHETHER ARISING IN TORT, CONTRACT OR OTHERWISE, WHICH ANY "MANUFACTURER" (FOR THE PURPOSES OF THE MIFID II PRODUCT GOVERNANCE REQUIREMENTS) MAY OTHERWISE HAVE WITH RESPECT THERETO, THE PLACING SHARES HAVE BEEN SUBJECT TO A PRODUCT APPROVAL PROCESS, WHICH HAS DETERMINED THAT 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 PERMITTED BY MIFID II (THE "TARGET MARKET ASSESSMENT"). 

 

NOTWITHSTANDING THE TARGET MARKET ASSESSMENT, DISTRIBUTORS SHOULD NOTE THAT: THE PRICE OF THE PLACING SHARES MAY DECLINE AND INVESTORS COULD LOSE ALL OR PART OF THEIR INVESTMENT; THE 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 REQUIREMENT OF ANY CONTRACTUAL, LEGAL OR REGULATORY SELLING RESTRICTIONS IN RELATION TO THE PLACING. FURTHERMORE, IT IS NOTED THAT, NOTWITHSTANDING THE TARGET MARKET ASSESSMENT, THE JOINT BROKERS WILL ONLY PROCURE INVESTORS WHO MEET THE CRITERIA OF PROFESSIONAL CLIENTS AND ELIGIBLE COUNTERPARTIES.  

 

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 IN RESPECT TO THE PLACING SHARES.

 

EACH DISTRIBUTOR IS RESPONSIBLE FOR UNDERTAKING ITS OWN TARGET MARKET ASSESSMENT IN RESPECT OF THE PLACING SHARES AND DETERMINING APPROPRIATE DISTRIBUTION CHANNELS.

 

 

 

 

APPENDIX

 

TERMS AND CONDITIONS OF THE PLACING

IMPORTANT INFORMATION ON THE PLACING FOR INVITED PLACEES ONLY

 

 

MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING.

 

THIS ANNOUNCEMENT IS NOT AN INVITATION NOR IS IT INTENDED TO BE AN INDUCEMENT TO ENGAGE IN INVESTMENT ACTIVITY FOR THE PURPOSE OF SECTION 21 OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (AS AMENDED) OF THE UNITED KINGDOM ("FSMA"). THIS ANNOUNCEMENT AND THE TERMS AND CONDITIONS SET OUT IN THIS APPENDIX ARE  DIRECTED AT AND IS ONLY BEING DISTRIBUTED TO: (A) PERSONS IN MEMBER STATES OF THE EUROPEAN ECONOMIC AREA (THE "EEA") WHO ARE QUALIFIED INVESTORS WITHIN THE MEANING OF ARTICLE 2(1)(E) OF THE PROSPECTUS DIRECTIVE ("QUALIFIED INVESTORS"), (B) IF IN THE UNITED KINGDOM, PERSONS WHO (I) HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS WHO FALL WITHIN THE DEFINITION OF "INVESTMENT PROFESSIONALS" IN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005, AS AMENDED (THE "ORDER"), OR ARE HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS OR PARTNERSHIPS OR TRUSTEES OF HIGH VALUE TRUSTS AS DESCRIBED IN ARTICLE 49(2) OF THE ORDER AND (II) ARE "QUALIFIED INVESTORS" AS DEFINED IN SECTION 86 OF FSMA AND (C) OTHERWISE, TO PERSONS TO WHOM IT MAY OTHERWISE BE LAWFUL TO COMMUNICATE IT TO (EACH A "RELEVANT PERSON"). NO OTHER PERSON SHOULD ACT OR RELY ON THIS ANNOUNCEMENT AND PERSONS DISTRIBUTING THIS ANNOUNCEMENT MUST SATISFY THEMSELVES THAT IT IS LAWFUL TO DO SO.  ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS APPENDIX AND THE TERMS AND CONDITIONS SET OUT HEREIN RELATE IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. BY ACCEPTING THE TERMS OF THIS ANNOUNCEMENT YOU REPRESENT AND AGREE THAT YOU ARE A RELEVANT PERSON. THIS APPENDIX DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES OF THE COMPANY.

 

THE PLACING SHARES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE APPLICABLE SECURITIES LAWS OF AUSTRALIA, CANADA, JAPAN OR SOUTH AFRICA AND SUBJECT TO CERTAIN EXCEPTIONS, MAY NOT BE OFFERED OR SOLD, DIRECTLY OR INDIRECTLY, IN AUSTRALIA, CANADA, JAPAN OR SOUTH AFRICA. THERE WILL BE NO PUBLIC OFFERING OF THE PLACING SHARES IN AUSTRALIA, CANADA, JAPAN OR SOUTH AFRICA OR ELSEWHERE.

 

THE PLACING SHARES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE US SECURITIES ACT OR WITH ANY SECURITIES REGULATORY AUTHORITY IN ANY STATE OF THE UNITED STATES, AND ARE BEING OFFERED AND SOLD OUTSIDE THE UNITED STATES IN COMPLIANCE WITH REGULATION S UNDER THE US SECURITIES ACT. THERE WILL BE NO PUBLIC OFFER OF THE PLACING SHARES IN THE UNITED STATES.

 

THE PLACING SHARES HAVE NOT BEEN RECOMMENDED, APPROVED OR DISAPPROVED BY ANY UNITED STATES FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY IN THE UNITED STATES. FURTHER, THE FOREGOING AUTHORITIES HAVE NOT 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 DISTRIBUTION OF THIS ANNOUNCEMENT AND THE PLACING AND/OR ISSUE OF THE PLACING SHARES IN CERTAIN JURISDICTIONS MAY BE RESTRICTED BY LAW. PERSONS DISTRIBUTING THIS ANNOUNCEMENT MUST SATISFY THEMSELVES THAT IT IS LAWFUL TO DO SO. PERSONS (INCLUDING, WITHOUT LIMITATION, NOMINEES AND TRUSTEES) WHO HAVE A CONTRACTUAL OR OTHER LEGAL OBLIGATION TO FORWARD A COPY OF THIS APPENDIX OR THE ANNOUNCEMENT OF WHICH IT FORMS PART SHOULD SEEK APPROPRIATE ADVICE BEFORE TAKING ANY ACTION.

 

NO ACTION HAS BEEN TAKEN BY THE COMPANY, ARDEN, TURNER POPE OR ANY OF THEIR RESPECTIVE AFFILIATES THAT WOULD PERMIT AN OFFER OF THE PLACING SHARES OR POSSESSION OR DISTRIBUTION OF THIS ANNOUNCEMENT OR ANY OTHER OFFERING OR PUBLICITY MATERIAL RELATING TO SUCH PLACING SHARES IN ANY JURISDICTION WHERE ACTION FOR THAT PURPOSE IS REQUIRED. PERSONS INTO WHOSE POSSESSION THIS ANNOUNCEMENT COMES ARE REQUIRED BY THE COMPANY AND EACH OF ARDEN AND TURNER POPE TO INFORM THEMSELVES ABOUT AND TO OBSERVE ANY SUCH RESTRICTIONS. 

 

THIS ANNOUNCEMENT SHOULD BE READ IN ITS ENTIRETY. IN PARTICULAR, YOU SHOULD READ AND UNDERSTAND THE INFORMATION PROVIDED IN THE "IMPORTANT NOTICES" SECTION OF THIS ANNOUNCEMENT. BY PARTICIPATING IN THE BOOKBUILD AND THE PLACING, PLACEES WILL BE DEEMED TO HAVE READ AND UNDERSTOOD THIS ANNOUNCEMENT IN ITS ENTIRETY, TO BE PARTICIPATING, MAKING AN OFFER AND SUBSCRIBING FOR PLACING SHARES ON THE TERMS AND CONDITIONS CONTAINED HEREIN AND TO BE PROVIDING THE REPRESENTATIONS, WARRANTIES, INDEMNITIES, ACKNOWLEDGEMENTS AND UNDERTAKINGS CONTAINED HEREIN.  

 

EACH PLACEE SHOULD CONSULT WITH ITS OWN ADVISERS AS TO LEGAL, TAX, BUSINESS AND RELATED ASPECTS OF THE SUBSCRIPTION FOR PLACING SHARES.

 

Participation in the Placing is available, and is and may be made, in or from within the Bailiwick of Guernsey, only:

(a)          by persons licensed to do so (or permitted by way of exemption) under the Protection of Investors (Bailiwick of Guernsey) Law, 1987 (as amended) (the "POI Law"); or

(b)          by non-Guernsey bodies who (a) carry on such promotion in a manner in which they are permitted to carry on promotion in or from within, and under the law of certain designated countries or territories which, in the opinion of the Guernsey Financial Services Commission ("GFSC"), afford adequate protection to investors and (b) meet the criteria specified in section 29(c) of the POI Law; or

(c)          to persons licensed under the POI Law, the Banking Supervision (Bailiwick of Guernsey) Law, 1994, the Insurance Business (Bailiwick of Guernsey) Law, 2002, the Insurance Managers and Insurance Intermediaries (Bailiwick of Guernsey) Law, 2002 or the Regulation of Fiduciaries, Administration Businesses and Company Directors, etc. (Bailiwick of Guernsey) Law, 2000 by non-Guernsey bodies who (a) carry on such promotion in a manner in which they are permitted to carry on promotion in or from within, and under the law of certain designated countries or territories which, in the opinion of GFSC, afford adequate protection to investors and (b) meet the criteria specified in section 29(cc) of the POI Law; or

(d)          as otherwise permitted by the GFSC.

The Placing Shares are not available in or from within the Bailiwick of Guernsey other than in accordance with the above paragraphs and must not be relied upon by any person unless made or received in accordance with such paragraphs.

 

Persons who are invited to and who choose to participate in the Placing, by making an oral or written offer to subscribe for Placing Shares, including any individuals, funds or others on whose behalf a commitment to subscribe for Placing Shares is given (and who shall be included within the definition of "Placees") will (i) be deemed to have read and understood this Announcement, including this Appendix, in its entirety; and (ii) be making such offer on the terms and conditions contained in this Appendix, including being deemed to be providing (and shall only be permitted to participate in the Placing on the basis that they have provided) the representations, warranties, acknowledgements and undertakings set out herein.

 

In particular, each such Placee represents, warrants and acknowledges to the Company and the Joint Brokers that:

1.      it is a Relevant Person (as defined in the Announcement above) and undertakes that it will subscribe for, acquire, hold, manage or dispose of any Placing Shares that are allocated to it for the purposes of its business;

2.      it is and the prospective beneficial owner of the Placing Shares is, and at the time the Placing Shares are acquired will be outside the United States acquiring the Placing Shares in an "offshore transaction" as defined in, and in compliance with, Regulation S; and

3.      if it is a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive, that any Placing Shares acquired by it in the Placing will not be acquired on a non-discretionary basis on behalf of, nor will they be acquired with a view to their offer or resale to, persons in circumstances which may give rise to an offer of securities to the public other than an offer or resale in a member state of the EEA which has implemented the Prospectus Directive to Qualified Investors, or in circumstances in which the prior consent of the Joint Brokers has been given to each such proposed offer or resale.

 

The Company and the Joint Brokers will rely upon the truth and accuracy of the foregoing representations, warranties, acknowledgements and agreements.

 

Placees' commitments will be made solely on the basis of the information contained in this Announcement and any Exchange Information (as defined below) previously published by the Company. Each Placee, by participating in the Placing, agrees that the content of this Announcement and all such Exchange Information 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 or the Joint Brokers or any other person and none of the Joint Brokers 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.

 

Each Placee acknowledges and agrees that it has relied on its own investigation of the business, financial or other position of the Company in accepting a participation in the Placing. Nothing in this paragraph shall exclude the liability of any person for fraudulent misrepresentation.

 

Details of the Placing Agreement and the Placing Shares

 

The Joint Brokers have today entered into the Placing Agreement with the Company under which they have agreed as agents for the Company to use their respective reasonable endeavours to procure Placees to take up the Placing Shares, on the terms and subject to the conditions set out therein, at a price and at a number to be determined following the Bookbuild.

 

The Placing Shares will, when issued, be credited as fully paid and will rank pari passu in all respects with the Existing Ordinary Shares, including the right to receive all dividends and other distributions declared, made or paid on or in respect of the Ordinary Shares after the date of issue of the Placing Shares, and will on issue be free of all pre-emption rights, claims, liens, charges, encumbrances and equities.

 

Applications for admission to listing and trading

 

Applications will be made to the FCA for Admission. It is expected that Admission of the Placing Shares will become effective at or around 8:00 a.m. on 22 July 2019 and that dealings in the Placing Shares will commence at that time. The Placing is conditional on, among other things, the publication of the Prospectus and the passing of a special resolution, approving the issue of the New Ordinary Shares (including the Placing Shares) at the Extraordinary General Meeting.

 

Bookbuild

 

The Joint Brokers 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 commissions will be paid to Placees or by Placees in respect of any Placing Shares.

 

The Joint Brokers and the Company shall be entitled to effect the Placing by such alternative method to the Bookbuild as they may, in their sole discretion, determine.

 

Principal terms of the Placing

 

1.      The Joint Brokers are arranging the Placing severally, and not jointly or jointly and severally, as Joint Brokers and agents of the Company. Participation will only be available to persons who may lawfully be, and are, invited to participate by any of the Joint Brokers. Each of the Joint Brokers and their respective affiliates are entitled to enter bids as principal in the Bookbuild.

2.      Following the Bookbuild, the Joint Brokers, in agreement with the Company, will establish the Placing Price payable to the Joint Brokers by all Placees whose bids are successful. The Placing Price and the aggregate proceeds to be raised through the Placing will be agreed between the Joint Brokers and the Company following completion of the Bookbuild and will be recorded in the terms of subscription (the "Terms of Subscription"). The Placing Price and the number of Placing Shares to be issued will be announced on a Regulatory Information Service following completion of the Bookbuild.

3.      To bid in the Bookbuild, Placees should communicate their bid by telephone to their usual sales contact at one of the Joint Brokers. Each bid should state the number of Placing Shares which the prospective Placee wishes to acquire at the Placing Price which is ultimately established by the Company and the Joint Brokers or at prices up to a price limit specified in its bid. Bids may be scaled down by the Joint Brokers on the basis referred to in paragraph 6 below.

4.     The Bookbuild is expected to close no later than 9.00 p.m. (London time) on 3 July 2019 but may be closed earlier or later at the discretion of the Joint Brokers. The Joint Brokers may, in agreement with the Company, accept bids that are received after the Bookbuild has closed. The Company reserves the right to reduce or seek to increase the amount to be raised pursuant to the Placing in its discretion.

5.      Each prospective Placee's allocation and commitment will be confirmed to Placees orally by the relevant Joint Broker as soon as practicable following the close of the Bookbuild, and a contract note or electronic trade confirmation will be dispatched as soon as possible thereafter. The terms of this Appendix will be deemed incorporated therein. The relevant Joint Broker's oral confirmation to such Placee will constitute an irrevocable legally binding commitment upon the Placee concerned in favour of such Joint Broker and the Company under which such Placee agrees to subscribe for the number of Placing Shares allocated to it and to pay the relevant Placing Price on the terms and subject to the conditions set out in this Appendix and in accordance with the Company's corporate documents. Each Placee's obligations will be owed to the Company.

6.      Subject to paragraphs 3 to 5 above, the Joint Brokers will, in effecting the Placing, consult with the Company as to the identity of the Placees and the basis of allocation of the Placing Shares provided, however, that the final decision as to the identity of the Placees and the basis of allocation of the Placing Shares shall be for the Joint Brokers in their absolute discretion. The Joint Brokers may also, notwithstanding paragraphs 3 to 5 above, subject to the prior consent of the Company (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.

7.      A bid in the Bookbuild will be made on the terms and subject to the conditions in this Appendix and will be legally binding on the Placee on behalf of which it is made and except with the relevant Joint Broker's consent will not be capable of variation or revocation after the time at which it is submitted. Each Placee will also have an immediate, separate, irrevocable and binding obligation, owed to the relevant Joint Broker, to pay it (or as it may direct) in cleared funds an amount equal to the product of the Placing Price and the number of Placing Shares that such Placee has agreed to subscribe for and the Company has agreed to allot and issue to that Placee.

8.      Except as required by law or regulation, no press release or other announcement will be made by the Joint Brokers 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.

9.     Irrespective of the time at which a Placee's allocation pursuant to the Placing is confirmed, settlement for all Placing Shares to be subscribed for pursuant to the Placing will be required to be made at the same time on the basis explained below under the paragraph entitled "Registration and Settlement".

10.   All obligations under the Bookbuild and Placing will be subject to fulfilment or (where applicable) waiver 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".

11.   By participating in the Bookbuild, each Placee agrees that its rights and obligations in respect of the Placing will terminate only in the circumstances described below and will not be capable of rescission or termination by the Placee.

12.   To the fullest extent permissible by law, neither the Joint Brokers, the Company nor any of their respective affiliates, agents, directors, officers or employees shall have any responsibility or liability to Placees (or to any other person whether acting on behalf of a Placee or otherwise). In particular, neither the Joint Brokers, the Company nor any of their respective affiliates shall have any responsibility or liability (including to the extent permissible by law, any fiduciary duties) in respect of the Joint Brokers' conduct of the Bookbuild or of such alternative method of effecting the Placing as the Joint Brokers, their respective affiliates and the Company may agree.

 

Conditions of the Placing

 

The Placing is conditional upon the Placing Agreement becoming unconditional and not having been terminated in accordance with its terms.

 

The Joint Brokers' obligations under the Placing Agreement are conditional on, inter alia:

(a)    the Prospectus being approved pursuant to the Prospectus Rules by the FCA not later than 6.00 p.m. on 10 July 2019 (or such later time and/or date as the Company and the Joint Brokers may agree;

 (b)  Admission occurring not later than 8:00 a.m. London time on 22 July 2019 (or such later time and/or date as the Joint Brokers and the Company may agree in writing);

(c)   the passing of the special resolution (without amendment) at the Extraordinary General Meeting on 19 July 2019 (or, with the Joint Brokers' written consent (such consent not to be unreasonably withheld or delayed), at any adjournment thereof);

(d)   the representations, warranties, undertakings and covenants of the Company contained in the Placing Agreement being true, accurate and complete on and as of the date of the Placing Agreement, as at the time of execution of the Terms of Subscription and immediately before Admission;

(c)    the Company having complied with all of its obligations to be performed or satisfied under the Placing Agreement on or before Admission;  

(d)   the Terms of Subscription having been executed and delivered by the Company and the Joint Brokers;

(e)   the publication of the results of the Placing on a Regulatory Information Service as soon as practicable after the execution of the Terms of Subscription and in any event by not later than 5:00 p.m. London time on  3 July 2019 (or such later time and/or date as the Joint Brokers and the Company may agree in writing);

(f)    a minimum of US$5.0 million (net of expenses) being raised by the Company pursuant to the Placing; and

(g)    the Company allotting, subject only to Admission, the Placing Shares in accordance with the Placing Agreement.

 

If (i) any of the conditions contained in the Placing Agreement, including those described above, are not fulfilled or (where applicable) waived by the Joint Brokers by the respective time or date where specified (or such later time or date as the Company and the Joint Brokers may agree) or (ii) the Placing Agreement is terminated in the circumstances specified below under the paragraph entitled "Termination of the Placing", the Placing will lapse and the Placees' rights and obligations hereunder in relation to the Placing Shares shall cease and terminate at such time and each Placee agrees that no claim can be made by it or on its behalf (or any person on whose behalf the Placee is acting) in respect thereof.

 

The Joint Brokers may, at their discretion and upon such terms as they think fit, waive fulfilment of all or any conditions in the Placing Agreement or extend the time provided for fulfilment of any such conditions in respect of all or any part of the performance thereof, save that the above conditions relating, inter alia, to Admission taking place may not be waived. Any such extension or waiver will not affect Placees' commitments as set out in this Announcement.

 

None of the Joint Brokers shall have any liability to any Placee (or to any other person whether acting on behalf of a Placee or otherwise) in respect of any decision it may make as to whether or not to waive or to extend the time and/or date for the satisfaction of any condition to the Placing nor for any decision they may make as to the satisfaction of any condition or in respect of the Placing generally and by participating in the Placing each Placee agrees that any such decision is within the absolute discretion of the Joint Brokers.

 

Termination of the Placing

 

The Joint Brokers are entitled, at any time before Admission, to terminate the Placing Agreement in accordance with the terms of the Placing Agreement in certain circumstances, including, inter alia if any of the following occurs:

(a)    any matter or circumstance arises as a result of which it is reasonable to expect that any of the conditions to the Placing Agreement will not be satisfied at the required time(s) (if any) and continue not to be satisfied as at Admission;

(b)   any of the warranties was when given at the date of the Placing Agreement, or is when repeated, untrue, inaccurate or misleading;

(c)   any material adverse effect or change in or affecting, or any development reasonably likely to give rise to or involve a material adverse change, in or affecting, the condition (financial, operational, legal or otherwise) or in the earnings, results of operations, business affairs, management, properties, assets, rights, operations, solvency, credit rating, prospects or funding position of the Company and the Company and its subsidiaries and subsidiary undertakings (the "Group") whether or not arising in the ordinary course of business; or

(d)    the occurrence or, in the opinion of any Joint Broker, it being reasonably likely that there will occur:

(i)    any material adverse change in the financial markets in the United States, the United Kingdom, Guernsey, any member or associate member of the European Union or the international financial markets;

(ii)   a suspension or material limitation in the trading in securities by the London Stock Exchange or the New York Stock Exchange or the fixing of minimum or maximum prices for trading or maximum ranges for prices of securities being required by any said exchanges or by such system or by order of any governmental authority or the occurrence of a material disruption in commercial banking or securities settlement or clearance services in the United States or the European Union;

(iii)  any actual or officially announced change in the United Kingdom or Guernsey or any other taxation that would have a materially adverse effect on any member of the Group, the allotment, issue or delivery of the Placing Shares or any imposition of exchange controls by the United States, United Kingdom, Guernsey or any member or associate member of the European Union;

(iv)  a banking moratorium declared by the authorities in the United States, the United Kingdom, Guernsey, New York or a member or associate member of the European Union; or

(v)   any event which in the opinion of any Joint Broker, would make it impracticable or inadvisable to market the Placing Shares or to enforce contracts for sale of the Ordinary Shares or which may prejudice the success of the Placing or dealings in the Placing Shares in the secondary market.

 

Upon such notice being given, the parties to the Placing Agreement shall be released and discharged (except for any liability arising before or in relation to such termination) from their respective obligations under or pursuant to the Placing Agreement, subject to certain exceptions.

 

By participating in the Placing, each Placee agrees that (i) the exercise by any Joint Broker of any right of termination or of any other discretion under the Placing Agreement shall be within the absolute discretion of the relevant Joint Broker and that it need not make any reference to Placees and that it shall have no liability to Placees whatsoever in connection with any such exercise or failure to so exercise and (ii) its rights and obligations terminate only in the circumstances described above and under the paragraph entitled "Conditions of the Placing" above, and its participation will not be capable of rescission or termination by it after oral confirmation by the Joint Brokers of its allocation and commitments following the close of the Bookbuild.

 

Lock-up arrangements

 

As part of the Placing, the Company has agreed that it will not issue any Ordinary Shares for a period of 180 days after Admission without the prior written consent of the Joint Brokers. This lock-up arrangement is subject to (i) the customary exception of the issue of the Company of the Placing Shares and the issue by the Company of any Ordinary Shares upon the exercise of any existing options and warrants, including any options or restricted share grants under the Company's share option scheme and (ii) the issue by the Company of Ordinary Shares in connection with an acquisition of shares or assets by the Company.

 

Registration and settlement

 

Each Placee allocated Placing Shares in the Placing will be sent a contract note or electronic trade confirmation in accordance with the standing arrangements in place with the relevant Joint Broker stating the number of Placing Shares allocated to it at the Placing Price, the aggregate amount owed by such Placee to the Joint Broker and settlement instructions. Each Placee agrees that it will do all things necessary to ensure that delivery and payment is completed in accordance with the standing CREST or certificated settlement instructions in respect of the Placing Shares that it has in place with the relevant Joint Broker.

 

Settlement of transactions in the Placing Shares (ISIN: GG00BD59ZW98) following Admission will take place within the CREST system, subject to certain exceptions. Settlement through CREST is expected to be on 22 July 2019 on a T+3 basis in accordance with the instructions set out in the contract note or electronic trade confirmation sent to Placees unless otherwise notified by the Joint Brokers. Settlement will be on a delivery versus payment basis. However, in the event of any difficulties or delays in the admission of the Placing Shares to CREST or the use of CREST in relation to the Placing, the Company and the Joint Brokers may agree that the Placing Shares should be issued in certificated form. The Company and the Joint Brokers reserve the right to require settlement for and delivery of the Placing Shares to Placees by such other means that they deem necessary if delivery or settlement is not 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.

 

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 prevailing LIBOR as determined by the Joint Brokers.

 

Each Placee is deemed to agree that, if it does not comply with these obligations, the Joint Brokers 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 Joint Brokers' 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 may be required to bear any taxes or duties (together with any related interest, fines or penalties) imposed in any jurisdiction which may arise upon the sale of such Placing Shares on such Placee's behalf.

 

When a Placee or person acting on behalf of the Placee is dealing with any of the Joint Brokers, any money held in an account with any of the Joint Brokers on behalf of the Placee and/or any person acting on behalf of the Placee, will not be treated as client money within the meaning of the rules and regulations of the FCA 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 Joint Brokers' money in accordance with the client money rules and will be used by each of the Joint Brokers in the course of its own business and the Placees will rank only as a general creditor of the relevant Joint Broker.

 

If Placing Shares are to be delivered to a custodian or settlement agent, Placees should ensure that upon receipt the contract note or electronic trade confirmation is copied and delivered immediately to the relevant person within that organisation.

 

 

Representations, warranties and acknowledgements

 

By submitting a bid in the Bookbuild, each prospective Placee (and any person acting on such Placee's behalf) represents, warrants and acknowledges to, and agrees with, the Company and the Joint Brokers (for itself and for any such prospective Placee) that:

 

1.      it has read and understood this Announcement, including this Appendix, in its entirety and that its subscription for the Placing Shares is subject to and based upon all the terms, conditions, representations, warranties, acknowledgements, agreements and undertakings and other information contained herein;

2.      it will not distribute, forward, transfer or otherwise transmit this Announcement or any part of it, or any other presentational or other materials concerning the Placing (including electronic copies thereof) to any person, and it has not distributed, forwarded, transferred or otherwise transmitted any such materials to any person;

3.      the Ordinary Shares are admitted to the standard listing segment of the Official List, and that the Company is therefore required to publish certain business and financial information in accordance with the rules and practices of the FCA, and that it is able to obtain or access such information and comparable information concerning other publicly traded companies without undue difficulty;

4.      it has knowledge and experience in financial, business and international investment matters as is required to evaluate the merits and risks of acquiring the Placing Shares. It further acknowledges that it is experienced in investing in securities of this nature, and is aware that it may be required to bear, and is able to bear, the economic risk of, and is able to sustain, a complete loss in connection with the Placing;

5.      the content of this Announcement is exclusively the responsibility of the Company and that none of the Joint Brokers, any of their affiliates or any persons acting on their behalf is responsible for or has or shall have any liability for any information or representation relating to the Company contained in this Announcement or any information publicly announced through a regulatory information services (as defined in the listing rules of the FCA) by or on behalf of the Company on or prior to the date of this Announcement (the "Exchange Information"), provided that nothing in this paragraph excludes the liability of any person for fraudulent misrepresentation made by such person;

6.      the only information on which it is entitled to rely and on which such Placee has relied in committing itself to subscribe for 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 representations, warrants or statements, express or implied, made by or any view expressed by any of the Joint Brokers, the Company or any of their affiliates (including in any management presentation delivered in respect of the Bookbuild) with respect to the Company, the Placing or the Placing Shares or the accuracy, completeness or adequacy of any information contained in this Announcement, the Exchange Information or otherwise, provided that nothing in this paragraph excludes the liability of any person for fraudulent misrepresentation made by such person;

7.      it may not rely on any investigation that any of the Joint Brokers, their affiliates 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 neither the Joint Brokers nor any of their affiliates nor any person acting on their behalf has made any representation or warranty to it, express or implied, with respect to the merits of the Placing, the subscription for or purchase of the 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 for the Placing Shares. It acknowledges and agrees that no information has been prepared by, or is the responsibility of, the Joint Brokers or any of their affiliates or any person acting on their behalf for the purposes of this Placing;

8.      it has conducted its own due diligence, examination and assessment of the Company, the Placing Shares and the terms of the Placing (including the merits and risks involved) and satisfied itself that the information resulting from such investigation is still current and relied on that investigation for the purposes of its decision to participate in the Placing;

9.   the Joint Brokers will not be liable for any Placee's decision to participate in the Placing based on any information, representation, warranty or statement contained in this Announcement or otherwise;

10.   it will not hold any of the Joint Brokers 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 Group or information made available (whether in written or oral form) relating to the Group (the "Information") and that none of the Joint Brokers, their affiliates or any person acting on their behalf, 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;

11.   the Placing Shares have not been registered or otherwise qualified, and will not be registered or otherwise qualified, for offer and sale with any securities regulatory authority of the United States, or any state or other jurisdiction of the United States, Australia, Canada, Japan or South Africa or any jurisdiction in which registration may be required;

12.   subject to certain exceptions, the Placing Shares may not be offered, sold, taken up, renounced or delivered or transferred, directly or indirectly, within the United States, Australia, Canada, Japan or South Africa or any jurisdiction in which it would be unlawful to do so and no action has been or will be taken by any of the Company, the Joint Brokers or any person acting on behalf of the Company or the Joint Brokers that would, or is intended to, permit a public offer of the Placing Shares in the United States, Australia, Canada, Japan or South Africa or in any country or jurisdiction where any such action for that purpose is required;

13.   unless otherwise specifically agreed with a Joint Broker, that it is not and at the time the Placing Shares are acquired, neither it nor the beneficial owner of the Placing Shares will be, a resident of Australia, Canada, Japan,  South Africa or the United States;

14.   it has not offered or sold and will not offer or sell any Placing Shares to persons in the EEA prior to Admission except to Qualified Investors or otherwise in circumstances which have not resulted and which will not result in an offer to the public in any member state of the EEA within the meaning of the Prospectus Directive;

15.   it and/or each person on whose behalf it is participating:

(a)    is entitled to acquire Placing Shares pursuant to the Placing under the laws of all relevant jurisdictions and has fully observed such laws;

(b)   has capacity and authority and is entitled to enter into and perform its obligations as a subscriber of Placing Shares and will honour such obligations; and

(c)    has obtained all necessary consents and authorities (including, without limitation, in the case of a person acting on behalf of a Placee, all necessary consents and authorities to agree to the terms set out or referred to in this Appendix) to enable it to enter into the transactions contemplated hereby and to perform its obligations in relation thereto;

16.   if it is a pension fund or investment company, its acquisition of Placing Shares is in full compliance with applicable laws and regulations;

17.   it is a Relevant Person and undertakes that it will acquire, hold, manage or dispose of any Placing Shares that are allocated to it for the purposes of its business and, in particular:

(a)    if in a member state of the EEA, unless otherwise specifically agreed with a Joint Broker in writing, it is a Qualified Investor;

(b)   if in the United Kingdom, that it is a person (i) having professional experience in matters relating to investments who falls within the definition of "investment professionals" in Article 19(5) of the Order or (ii) who falls within Article 49(2)(a) to (d) ("High Net Worth Companies, Unincorporated Associations, etc.") of the Order, or (iii) to whom this Announcement may otherwise lawfully be communicated;

18.   it and the prospective beneficial owner of the Placing Shares is, and at the time the Placing Shares are acquired will be, either (i) outside the United States acquiring the Placing Shares in an "offshore transaction" as defined in, and in compliance with, Regulation S or (ii) an investor purchasing in reliance on an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act;

19.   if it is a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive:

(a)    the Placing Shares purchased by it in the Placing will not be acquired on a non-discretionary basis on behalf of, nor will they be acquired with a view to their offer or resale to, persons in circumstances which may give rise to an offer of securities to the public other than an offer or resale in any member state of the EEA which has implemented the Prospectus Directive to Qualified Investors, or in circumstances in which the prior consent of the Joint Brokers has been given to each proposed offer or resale; or

(b)   where Placing Shares have been acquired by it on behalf of persons in any member state of the EEA other than Qualified Investors, the offer of those Placing Shares to it is not treated under the Prospectus Directive as having been made to such persons;

20.   it has only communicated or caused to be communicated and it will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of 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;

21.  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;

22.   it is acquiring the Placing Shares for its own account or is acquiring the Placing Shares for an account with respect to which it exercises sole investment discretion and has the authority to make and does make the acknowledgements, representations and agreements contained in this Announcement;

23.   it is purchasing the Placing Shares for investment purposes, and not with a view to distribution or resale, directly or indirectly, in the United States or otherwise in violation of United States securities laws;

24.   it understands that the Placing Shares have not been, and will not be, registered under the US Securities Act or with any state or other jurisdiction of the United States and that the Placing Shares may not be reoffered, resold, pledged or otherwise transferred except (a) outside the United States in compliance with Regulation S under the US Securities Act or (b) in a transaction pursuant to another exemption from, or a transaction not subject to, the registration requirements of the US Securities Act, in each case in compliance with all applicable laws;

25.   it has complied with its obligations (i) under the Criminal Justice Act 1993 and the Market Abuse Regulation (EU 596/2014) and (ii) in connection with money laundering and terrorist financing under the Proceeds of Crime Act 2002, the Criminal Justice Act 1993, the Terrorism Act 2000, the Terrorism Act 2006, the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017)  and any related or similar rules, regulations or guidelines, issued, administered or enforced by any government agency having jurisdiction in respect thereof (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;

26.   it may be asked to disclose in writing or orally to the Joint Brokers:

(a)    if he or she is an individual, his or her nationality; or

(b)   if he or she is a discretionary fund manager, the jurisdiction in which the funds are managed or owned.

27.   it will make payment to the Joint Brokers in accordance with the terms and conditions of this Announcement on the due times and dates set out in this Announcement, failing which the relevant Placing Shares may be placed with others on such terms as the Joint Brokers determine and without liability to such Placee, who will remain liable for any amount by which the net proceeds of such sale falls short of the product of the relevant Placing Price and the number of Placing Shares allocated to it and may be required to bear any taxes or duties (together with any related interest, fines or penalties) which may arise on the sale of such Placee's Placing Shares;

28.   its allocation (if any) of Placing Shares will represent a maximum number of Placing Shares which it will be entitled, and required, to subscribe for, and that the Company may call upon it to subscribe for a lower number of Placing Shares (if any), but in no event in aggregate more than the aforementioned maximum;

29.   the Placing Shares will be issued subject to the terms and conditions of this Appendix and the Company's articles of incorporation and that its commitment to acquire Placing Shares on the terms set out herein will continue notwithstanding any amendment that may in future be made to the terms and conditions of the Placing and that Placees will have no right to be consulted or require that their consent be obtained with respect to the Company's or the Joint Brokers' conduct of the Placing;

30.   the Joint Brokers do not owe fiduciary or other duties to any Placee in respect of any representations, warranties, undertakings or indemnities in the Placing Agreement;

31.   none of the Joint Brokers, their respective affiliates and any person acting on behalf of any of them is making any recommendations to it, advising it regarding the suitability of any transactions it may enter into in connection with the Placing and that participation in the Placing is on the basis that it is not and will not be a client of any of the Joint Brokers and that the Joint Brokers have no duties or responsibilities to it for providing the protections afforded to their clients or customers or for providing advice in relation to the Placing nor in respect of any representations, warranties, undertakings or indemnities contained in the Placing Agreement nor for the exercise or performance of any of its rights and obligations thereunder including any rights to waive or vary any conditions or exercise any termination right;

32.   it is not in possession of and has neither received nor relied on any confidential price sensitive information concerning the Company in accepting the invitation to participate in the Placing and it is not subscribing for the Placing Shares on the basis of material non-public information;

33.   in connection with the Placing, the Joint Brokers and any of their affiliates acting as an investor for its own account may subscribe for Placing Shares in the Company and in that capacity may retain, purchase or sell for its own account such Placing 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 or placed should be read as including any issue, offering or placement of such shares in the Company to each of the Joint Brokers or any of their affiliates acting in such capacity. In addition each of the Joint Brokers and any of their affiliates may enter into financing arrangements and swaps with investors in connection with which each of the Joint Brokers and any of their affiliates may from time to time acquire, hold or dispose of such securities of the Company, including the Placing Shares. The Joint Brokers do not intend to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligation to do so;

34.   the Company, the Joint Brokers, their respective affiliates and others will rely upon the truth and accuracy of the foregoing representations, warranties, acknowledgements and agreements, which are given for the benefit of each of the Company and the Joint Brokers (for their own benefit and, where relevant, the benefit of their respective affiliates and any person acting on their behalf) and are irrevocable and it irrevocably authorises the Joint Brokers 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;

35.   the rights and remedies of the Joint Brokers and the Company under the terms and conditions in this Appendix 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; and

36.   these terms and conditions of the Placing and any agreements entered into by it pursuant to these terms and conditions of the Placing, and all non-contractual or other obligations arising out of or in connection with them, shall be governed by and construed in accordance with the laws of England and Wales and it submits (on behalf of itself and on behalf of any person on whose behalf it is acting) to the exclusive jurisdiction of the English courts as regards any claim, dispute or matter arising out of any such contract (including any dispute regarding the existence, validity or termination of such contract or relating to any non-contractual or other obligation arising out of or in connection with such contract), except that enforcement proceedings in respect of the obligation to make payment for the Placing Shares (together with any interest chargeable thereon) may be taken by either the Company or the Joint Brokers in any jurisdiction in which the relevant Placee is incorporated or in which any of its securities have a quotation on a recognised stock exchange.

 

Indemnity

 

By participating in the Placing, each Placee (and any person acting on such Placee's behalf) agrees to indemnify on an after-tax basis and hold the Company, each of the Joint Brokers and each of their respective affiliates harmless from any and all costs, claims, liabilities and expenses (including legal fees and expenses) arising out of or in connection with any breach of the representations, warranties, acknowledgements, agreements and undertakings given by the Placee in this Appendix and further agrees that the provisions of this Appendix shall survive after completion of the Placing.

 

Taxation

 

The allotment and issue of Placing Shares to Placees (or the persons for whom Placees are contracting as agent), together with any transfer of Placing Shares by the Joint Brokers on a Placee's behalf, should be free of any transfer tax imposed in Guernsey.

 

The allotment and issue of Placing Shares to Placees (or the persons for whom Placees are contracting as agent) should be free of any stamp duty or stamp duty reserve tax under the laws of the United Kingdom, provided that: (a) no register for the Placing Shares is kept in the United Kingdom by or on behalf of the Company, and (b) the Placing Shares are not paired with shares issued by a body corporate incorporated in the United Kingdom. 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 Placing Shares, neither the Joint Brokers nor the Company nor any of their affiliates shall be responsible for the payment thereof.

 

Placees are advised to consult with their own advisers regarding the tax aspects of the subscription for Placing Shares.

 

DEFINITIONS

 

In this Announcement, the following words and expressions shall, unless the context provides otherwise, have the following meanings:

 

"Admission"	the admission of the New Ordinary Shares to the standard segment of the Official List in accordance with the Listing Rules and to trading on the Main Market
"Announcement"	this announcement and the Appendix, which forms part of this announcement dated  3 July 2019 regarding the proposed Placing
"Arden Partners"	Arden Partners plc
"Board" or "Directors"	the directors of the Company as at the date of the Announcement
"Bookbuilding Process" or "Bookbuild"	the accelerated bookbuild undertaken by the Company to effect the Placing
"Company" or "Rainbow"	Rainbow Rare Earths Limited
"Conversion"	the issue of the Conversion Shares to: (i) Pella Ventures Limited in satisfaction of its US$700,000 loan; and (ii) the  Directors and certain of the Senior Managers in satisfaction of, in aggregate, £145,788 in outstanding fees and deferred cash bonuses owed by the Company
"Conversion Shares"	the new Ordinary Shares issued, in aggregate, pursuant to the Conversion
"CREST"	the relevant system (as defined in the CREST Regulations) in respect of which Euroclear is the operator (as defined in the CREST Regulations)
Directors and  certain  of the Senior Managers	Adonis Pouroulis, Shawn McCormick, Alex Lowrie, Atul Bali, Robert Sinclair, Martin Eales, Jim Wynn, Cesare Morelli and Gilbert Midende
"EGM" or "Extraordinary General Meeting"	the Extraordinary General Meeting of the Company to be held on 19 July 2019
"EU"	the European Union
"Euroclear"	Euroclear UK & Ireland Limited
"Existing Ordinary Shares"	the 216,339,000 Ordinary Shares in issue on the date of this Announcement
"FCA"	the Financial Conduct Authority of the UK
"FSMA"	Financial Services and Markets Act 2000 (as amended)
"Group"	the Company and its subsidiaries and subsidiary undertakings
"IPO"	the initial public offering of Ordinary Shares and admission to the Official List on 30 January 2017
"JORC Code"	the 2012 edition of the Australasian Joint Ore Reserves Committee Code
"JORC Resource"	a mineral resource, being a concentration of occurrence of solid material of economic interest in or on the Earth's crust in such form grade and quantity that there are reasonable prospects for eventual economic extraction, declared in accordance with the JORC Code
"Joint Brokers"	Arden Partners and Turner Pope
"London Stock Exchange"	London Stock Exchange plc
"Main Market"	the main market of the London Stock Exchange
"New Ordinary Shares"	together the Placing Shares and the Conversion Shares, as well as such Ordinary Shares  as shall arise on the conversion of the loan by Pella Ventures Limited and the new Ordinary Shares taken by the Directors and certain of the Senior Managers in lieu of fees and bonus payments
"Official List"	the official list of the FCA
"Ordinary Shares"	ordinary shares of no par value in the capital of the Company
"Placees"	eligible existing institutional shareholders and new institutional shareholders subscribing for the Placing Shares pursuant to the Placing
"Placing"	the placing by the Company of the Placing Shares with the Placees pursuant to the Placing Agreement
"Placing Price"	a price per Placing Share to be determined at the close of the Bookbuilding Process
"Placing Shares"	the new Ordinary Shares to be issued pursuant to the Placing
"Placing Agreement"	the agreement entered into between the Company and the Joint Brokers dated the date of this Announcement
"Prospectus"	the prospectus expected to be published by the Company on or around 10 July 2019 in respect of the Placing, comprising a prospectus for the purposes of the Prospectus Rules
"Prospectus Rules"	the Prospectus Rules made in accordance with the EU Prospectus Directive 2003/71/EC in relation to offers of securities to the public and the admission of securities to trading on a regulated market
"REE"	rare earth elements
"Regulatory Information Service"	has the meaning given in the Disclosure Guidance and Transparency Rules sourcebook published by the FCA
"Securities Act"	US Securities Act of 1933 (as amended)
"Shareholders"	the holders of Ordinary Shares from time to time
"tpa"	tonnes per annum
"Turner Pope"	Turner Pope Investments (TPI) Limited
"United Kingdom" or "UK"	the United Kingdom of Great Britain and Northern Ireland
"United States", "United States of America" or "US"	the United States of America, its territories and possessions, any State of the United States, and the District of Columbia