Placing to raise £40 million

THIS ANNOUNCEMENT, INCLUDING THE APPENDIX, AND THE INFORMATION CONTAINED IN IT, 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 STATE OR JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION. PLEASE SEE THE IMPORTANT NOTICE AT THE END OF THIS ANNOUNCEMENT.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF THE UK VERSION OF THE MARKET ABUSE REGULATION (EU NO. 596/2014) WHICH FORMS PART OF ENGLISH LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018.

 

Distribution Finance Capital Holdings plc

Placing of 72,727,273 new Ordinary Shares at 55 pence per share to raise £40 million

Distribution Finance Capital Holdings plc (AIM: DFCH) ("DF Capital", the "Company" and together with its subsidiary undertakings, the "Group"), the holding company of DF Capital Bank Limited ("DF Capital Bank"), a newly authorised bank providing personal savings products and working capital solutions to dealers and manufacturers across the UK, today announces that it has conditionally placed with certain new and existing institutional and other investors, and entered into a direct subscription agreement in respect of, 72,727,273 new ordinary shares of one penny each ("Ordinary Shares") in the capital of the Company (the "Placing Shares") at a price of 55.0 pence per Placing Share (the "Placing Price") to raise £40.0 million (before expenses) (the "Placing").

The Placing Shares represent approximately 68.2 per cent. of the Ordinary Shares in issue as at the date of this announcement (together with the appendix, being this "Announcement") ("Existing Ordinary Shares").

 

Highlights

·      Proceeds of the Placing of £40.0 million before expenses (approximately £38.6 million after expenses).

·      Net proceeds of the Placing to be primarily utilised to accelerate the Group's business plan and loan book growth by:

o  unlocking significant and current pipeline of demand;

o  allowing the Group to provide larger facilities to select customers where the Group is currently restricted due to regulatory large exposure limits; and

o  removing the current £270 million constraint on the loan book and should support a loan book of up to £550 million.

·      The acceleration of the Group's loan book growth, coupled with the loan book being entirely funded by retail deposits, should hasten the achievement of run-rate profitability into the fourth quarter of 2021. Certain of the directors of the Company (the "Directors" or the "Board") have conditionally agreed to subscribe for an aggregate of 381,464 Ordinary Shares through the Placing.

·      The Placing is conditional upon, among other things, the passing of the resolutions which are to be proposed at a general meeting of the Company to be held on 22 February 2021 (the "General Meeting") (the "Resolutions") and admission of the Placing Shares to trading on AIM ("Admission") taking place by 8.00 a.m. on 23 February 2021 (or such later date as Investec Bank plc ("Investec") may decide being not later than 8.00 a.m. on 2 March 2021).

·      The Board believes that raising equity finance using the flexibility provided by a non-pre-emptive placing is the most appropriate and optimal structure for the Company at this time.  This allows both certain existing institutional shareholders and new institutional investors the opportunity to participate in the Placing.

·    Investec is acting as nominated adviser, sole bookrunner and sole broker to the Company in relation to the Placing.

Carl D'Ammassa, Chief Executive Officer of DF Capital, commented:

"2020 was a strong year of delivery for the Group. Having received our banking licence and successfully launched our retail savings products, we now have sustainable low-cost funding in place that supports our growth plans.

"We have a proven track record of highly secured lending and have navigated the impact of COVID-19 well. Our working capital products are in demand and we see additional near-term opportunities to provide funding to dealers and manufacturers to support their needs. The Placing announced today will help us accelerate our business plan and unlock potential further growth opportunities, bringing forward our run-rate profitability."

 

A shareholder circular (the "Circular"), extracts of which are set out below, containing further details of the Placing and a notice of General Meeting of the Company to be convened for 10.00 a.m. on 22 February 2021 at which the Resolutions will be tabled, is expected to be sent to the Company's shareholders (the "Shareholders") today.  A copy of the Circular will also be made available on the Company's website, https://www.dfcapital-investors.com/investors/documents-circulars/.

 

The person responsible for arranging the release of this Announcement on behalf of the Company is Gavin Morris, a Director of the Company.

 

Enquiries:

 

Distribution Finance Capital Holdings plc	+44 (0) 161 413 3391
Carl D'Ammassa - Chief Executive Officer
Gavin Morris - Chief Financial Officer
Kam Bansil - Head of Investor Relations
Investec Bank plc (Nominated Adviser, sole bookrunner and sole broker)	+44 (0) 207 597 5970
David Anderson Bruce Garrow Maria Gomez de Olea

 

This Announcement contains inside information for the purposes of Article 7 of the UK version of EU Regulation 596/2014 which forms part of English law by virtue of the European Union (Withdrawal) Act 2018 (the "UK MAR").  In addition, market soundings (as defined in the UK MAR) were taken in respect of the Placing with the result that certain persons became aware of inside information (as defined in the UK MAR), as permitted by the UK MAR. This inside information is set out in this Announcement. Therefore, those persons that received inside information in a market sounding are no longer in possession of such inside information relating to the Company and its securities.

 

 

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.

IMPORTANT NOTICES

MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THIS ANNOUNCEMENT (INCLUDING THE APPENDIX) AND THE TERMS AND CONDITIONS SET OUT HEREIN (TOGETHER, THIS "ANNOUNCEMENT") ARE DIRECTED ONLY AT PERSONS WHOSE ORDINARY ACTIVITIES INVOLVE THEM IN ACQUIRING, HOLDING, MANAGING AND DISPOSING OF INVESTMENTS (AS PRINCIPAL OR AGENT) FOR THE PURPOSES OF THEIR BUSINESS AND WHO HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS AND ARE: (1) IF IN A MEMBER STATE OF THE EUROPEAN ECONOMIC AREA ("EEA"), QUALIFIED INVESTORS AS DEFINED IN ARTICLE 2(e) OF REGULATION (EU) 2017/1129 (THE "EU PROSPECTUS REGULATION"); OR (2) IF IN THE UNITED KINGDOM, QUALIFIED INVESTORS AS DEFINED IN ARTICLE 2(e) OF REGULATION (EU) 2017/1129 WHICH FORMS PART OF DOMESTIC LAW PURSUANT TO THE EUROPEAN UNION (WITHDRAWAL) ACT 2018 (THE "UK PROSPECTUS REGULATION") WHO ALSO: (A) FALL WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005, AS AMENDED (THE "ORDER") (INVESTMENT PROFESSIONALS); (B) FALL WITHIN ARTICLE 49(2)(a) TO (d) (HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC.) OF THE ORDER; OR (C) ARE PERSONS TO WHOM IT IS OTHERWISE LAWFUL TO COMMUNICATE IT (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS").

THIS ANNOUNCEMENT AND THE INFORMATION IN IT MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS.  PERSONS DISTRIBUTING THIS ANNOUNCEMENT MUST SATISFY THEMSELVES THAT IT IS LAWFUL TO DO SO.  ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS ANNOUNCEMENT RELATES IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS.  THIS ANNOUNCEMENT DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN DISTRIBUTION FINANCE CAPITAL HOLDINGS PLC.

THIS ANNOUNCEMENT IS NOT AN OFFER OF SECURITIES FOR SALE OR SUBSCRIPTION INTO THE UNITED STATES. THE PLACING SHARES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (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 (INCLUDING ITS TERRITORIES AND POSSESSIONS, ANY STATE OF THE UNITED STATES AND THE DISTRICT OF COLUMBIA) (THE "UNITED STATES" OR THE "US") 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.  NO PUBLIC OFFERING OF THE PLACING SHARES IS BEING MADE IN THE UNITED STATES OR ELSEWHERE.

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 OR INTO OR FROM THE UNITED STATES, AUSTRALIA, CANADA, THE REPUBLIC OF SOUTH AFRICA OR JAPAN OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.

The distribution of this Announcement and/or the Placing and/or issue of the Placing Shares in certain jurisdictions may be restricted by law.  No action has been taken by the Company, Investec or any of their respective affiliates, agents, directors, officers, consultants, partners or employees ("Representatives") 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 Investec to inform themselves about and to observe any such restrictions.

This Announcement or any part of it is for information purposes only and does not constitute or form part of any offer to issue or sell, or the solicitation of an offer to acquire, purchase or subscribe for, any securities in the United States, Australia, Canada, the Republic of South Africa or Japan or any other jurisdiction in which the same would be unlawful.  No public offering of the Placing Shares is being made in any such jurisdiction.

All offers of the Placing Shares in the United Kingdom or the EEA will be made pursuant to an exemption from the requirement to produce a prospectus under the UK Prospectus Regulation or the EU Prospectus Regulation, as appropriate.  In the United Kingdom, this Announcement is being directed solely at persons in circumstances in which section 21(1) of the Financial Services and Markets Act 2000 (as amended) does not require the approval of the relevant communication by an authorised person.

The Placing Shares have not been approved or disapproved by the US Securities and Exchange Commission, any state securities commission or other regulatory authority in the United States, nor have any of the foregoing authorities passed upon or endorsed the merits of the Placing or the accuracy or adequacy of this Announcement.  Any representation to the contrary is a criminal offence in the United States.  The relevant clearances have not been, nor will they be, obtained from the securities commission of any province or territory of Canada, no prospectus has been lodged with, or registered by, the Australian Securities and Investments Commission or the Japanese Ministry of Finance; the relevant clearances have not been, and will not be, obtained from the South Africa Reserve Bank or any other applicable body in the Republic of South Africa in relation to the Placing Shares; and the Placing Shares have not been, nor will they be, registered under or offered in compliance with the securities laws of any state, province or territory of the United States, Australia, Canada, the Republic of South Africa or Japan.  Accordingly, the Placing Shares may not (unless an exemption under the relevant securities laws is applicable) be offered, sold, resold or delivered, directly or indirectly, in or into the United States, Australia, Canada, the Republic of South Africa or Japan or any other jurisdiction outside the United Kingdom.

Persons (including, without limitation, nominees and trustees) who have a contractual right or other legal obligations to forward a copy of this Announcement should seek appropriate advice before taking any such action.

By participating in the Placing, each person who is invited to and who chooses to participate in the Placing (a "Placee") by making an oral, electronic or written and legally binding offer to acquire Placing Shares will be deemed to have read and understood this Announcement in its entirety, to be participating, making an offer and acquiring Placing Shares on the terms and conditions contained herein and to be providing the representations, warranties, indemnities, acknowledgements and undertakings contained in the Appendix.  Members of the public are not eligible to take part in the Placing and no public offering of Placing Shares is being or will be made.

In the "Important Notices" section of this Announcement and in the Appendix to this Announcement, all references to the "Placing" and "Placing Shares" shall exclude the direct subscription by Thomas Grathwohl, a director of the Company, for 33,312 new Ordinary Shares pursuant to a direct subscription letter entered into by Mr Grathwohl and the Company, and references in those sections of this Announcement to "Placees" shall exclude Mr Grathwohl.

This Announcement may contain, or may be deemed to contain, "forward-looking statements" with respect to certain of the Company's plans and its current goals and expectations relating to its future financial condition, performance, strategic initiatives, objectives and results.  Forward-looking statements sometimes use words such as "aim", "anticipate", "target", "expect", "estimate", "intend", "plan", "goal", "believe", "seek", "may", "could", "outlook" or other words of similar meaning.  By their nature, all forward-looking statements involve risk and uncertainty because they relate to future events and circumstances which are beyond the control of the Company, including amongst other things, United Kingdom domestic and global economic business conditions, market-related risks such as fluctuations in interest rates and exchange rates, the policies and actions of governmental and regulatory authorities, the effect of competition, inflation, deflation, the timing effect and other uncertainties of future acquisitions or combinations within relevant industries, the effect of tax and other legislation and other regulations in the jurisdictions in which the Company and its affiliates operate, the effect of volatility in the equity, capital and credit markets on the Company's profitability and ability to access capital and credit, a decline in the Company's credit ratings; the effect of operational risks; and the loss of key personnel.  As a result, the actual future financial condition, performance and results of the Company may differ materially from the plans, goals and expectations set forth in any forward-looking statements.  Any forward-looking statements made in this Announcement by or on behalf of the Company speak only as of the date they are made.  Except as required by applicable law or regulation, the Company expressly disclaims any obligation or undertaking to publish any updates or revisions to any forward-looking statements contained in this Announcement to reflect any changes in the Company's expectations with regard thereto or any changes in events, conditions or circumstances on which any such statement is based.

Investec Bank plc, is authorised by the Prudential Regulation Authority (the "PRA") and regulated by the Financial Conduct Authority and PRA in the United Kingdom and is acting exclusively for the Company and no one else in connection with the Placing, and Investec will not be responsible to anyone (including any Placees) other than the Company for providing the protections afforded to its clients or for providing advice in relation to the Placing or any other matters referred to in this Announcement.

No representation or warranty, express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by Investec or by any of its Representatives as to, or in relation to, the accuracy or completeness of this Announcement or any other written or oral information made available to or publicly available to any interested party or its advisers, and any liability therefor is expressly disclaimed.

No statement in this Announcement is intended to be a profit forecast or estimate, and no statement in this Announcement should be interpreted to mean that earnings per share of the Company for the current or future financial years would necessarily match or exceed the historical published earnings per share of the Company.

The price of shares and any income expected from them may go down as well as up and investors may not get back the full amount invested upon disposal of the shares.  Past performance is no guide to future performance, and persons needing advice should consult an independent financial adviser.

The Placing Shares to be issued pursuant to the Placing will not be admitted to trading on any stock exchange other than the AIM market of the London Stock Exchange.

Neither the content of the Company's website nor any website accessible by hyperlinks on the Company's website is incorporated in, or forms part of, this Announcement.

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 (a) retail investors, (b) investors who meet the criteria of professional clients and (c) eligible counterparties, each as defined in MiFID II; and (ii) eligible for distribution through all distribution channels as are permitted by MiFID II (the "Target Market Assessment"). Notwithstanding the Target Market Assessment, distributors should note that: the price of the Placing Shares may decline and investors could lose all or part of their investment; 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 requirements of any contractual, legal or regulatory selling restrictions in relation to the Placing.  Furthermore, it is noted that, notwithstanding the Target Market Assessment, Investec 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 with 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.

 

 

 

Placing of 72,727,273 new Ordinary Shares at 55 pence per share

raising £40 million (before expenses)

and

Notice of General Meeting

 

1.    Introduction

Distribution Finance Capital Holdings plc (AIM: DFCH) ("DF Capital", the "Company" and together with its subsidiary undertakings, the "Group"), the holding company of DF Capital Bank Limited ("DF Capital Bank"), a newly authorised bank providing personal savings products and working capital solutions to dealers and manufacturers across the UK, today announces that it has conditionally raised, subject to Shareholder approval, £40.0 million (before expenses) by way of the Placing.

2.    Background to the Placing

Business summary

DF Capital is a niche specialist lender which provides working capital solutions to build relationships with manufacturers and dealers across the UK. DF Capital's products allow manufacturers to match their cash cycle to the lending term, in turn allowing their customers to release the working capital tied up in their day to day operations and stock.

DF Capital's main lending product is inventory finance secured against inventory or stock, which it delivers through a low-cost operating model underpinned by digital features and efficiencies. DF Capital has a strong security position as it advances funds at a discount to the wholesale invoice price charged by the manufacturer, typically at a loan to value of 85 per cent. of wholesale value, or approximately 70 per cent. of retail value.

Currently, DF Capital supports SME dealers across the following sectors: industrial equipment; recreational vehicles; motor vehicles (excluding cars); marine (typically smaller marine craft); and agricultural equipment.

DF Capital's distribution is realised, in part by signing up manufacturers, with each manufacturer bringing on multiple dealers. DF Capital also builds direct relationships with larger dealers. Relationships include UK Original Equipment Manufacturers ("OEMs") such as Willerby, Prestige & Homeseeker, Swift, Bailey Caravans, Triumph Motorcycles and Fairline Yachts, as well as global OEMs such as Terex, Maxus, Erwin Hymer Group, Avant, Ducati Motorcycles, Carthago, and many more.

Bank licence

Prior to DF Capital Bank being granted its banking licence in September 2020, DF Capital was funded entirely through equity and wholesale debt funding. This meant that its net interest margin was low at 2.0 per cent. for the six months ended 30 June 2020, despite the Group delivering a gross yield for the same period of 7.6 per cent.

The Group had applied for the second time, the first time being in August 2018, for a banking licence in August 2019 and had been "bank-ready" since that date, including having invested in its deposit raising capabilities. Therefore, having obtained the banking licence, the Group launched its range of retail saving products in October 2020. Since that date, the Group raised approximately £145 million of retail deposits in the 12 weeks to 31 December 2020. The success of the Group's retail deposit raising allowed the Company to repay all of its more expensive funding lines early, by 9 December 2020.

As stated in the Company's interim results for the six months ended 30 June 2020 published on 30 September 2020, the Group's lending activities were impacted by restrictions of the COVID-19 pandemic. Following the easing of the first lockdown, the Group had limited ability to support new loans due to the restrictions placed on its funding at the time. The Group re-commenced its lending operations fully in November 2020, following the build-up of the required regulatory liquidity buffers as a new bank. The loan book reached £113 million at 31 December 2020, and stood at approximately £125 million at 22 January 2021.

3.    Reasons for the Placing and use of proceeds

As previously announced, the Directors believe that the current capital base of the Group is sufficient to support a loan book of up to £270 million. Given the significant and current pipeline of demand for its lending products, the Directors believe that the net proceeds of the Placing of approximately £38.6 million will allow the Group to support anticipated near-term opportunities and accelerate achievement of run- rate profitability by accelerating loan book growth by removing the current constraint of £270 million. The Directors believe that, together, the net proceeds of the Placing and the capital already available to the Group, should support a loan book of up to £550 million.

Specifically, the net proceeds of the Placing will be used to unlock a significant and current pipeline of demand allowing DF Capital to consider larger facilities for select customers where the Group is currently restricted due regulatory large exposure limits. The Group, as at 12 January 2021, had identified seven opportunities from current customers who may be considering potential enlarged facilities, which subject to further credit assessment could be between £12.3 million to £16.5 million each, a potential aggregate increase of up to £74.4 million from their aggregate loan balances as at 31 December 2020 of £32.2 million. As at the same date, the Group had identified an aggregate facility pipeline of approximately £850 million, comprising the current loan book and capacity in existing facilities, increasing the existing facility limits of the seven customers referred to above, new facilities in the process of negotiation, potential new facilities and new leads being qualified.

Additionally, the net proceeds of the Placing will primarily be utilised to accelerate the Group's business plan, loan book growth and accordingly the development of new products and features. These products and features may include increased ability for customers to manage and transfer between deposit accounts, an instant access product and a business savings account. The net proceeds of the Placing will also enable the Group to consider entering new sectors with its existing core inventory finance product, accelerate entry into adjacent market and products to meet anticipated demand, and also consider inorganic growth opportunities. The Directors believe that the £22 billion funding gap for SMEs (as estimated by the Bank of England) may be exacerbated as many incumbent banks face back-book challenges or will be managing CBILS or BBILS loans, which could contract their lending further, which would present existing and new product growth opportunities for the Group.

The Directors believe that the increase of the Group's loan book growth, coupled with the loan book being entirely funded by retail deposits, should accelerate the achievement of run-rate profitability into the fourth quarter of 2021 for the Group.

4.    Current trading and outlook

The Company announced on 25 January 2021 a trading update for the 12 months ended 31 December 2020, the full text of which is set out below.

"Distribution Finance Capital Holdings plc, a newly authorised bank providing working capital solutions to dealers and manufacturers across the UK, announces a trading update for the 12 months ended 31 December 2020.

"Having received authorisation as a bank without restrictions from the Prudential Regulation Authority on 29 September 2020, the Group launched its retail deposit products on 14 October 2020. The Company has raised over £145m of deposits during the 12 weeks to 31 December 2020. Its savings products were over-subscribed against the Group's targets soon after launch, which in turn allowed the Group to build a highly diversified savings product maturity profile including 90 day notice, 1 year, 15 month, 18 month and 2 year fixed rate products, each at a competitive deposit rate of below 1.3%.  The Group has also been awarded feefo's "Trusted Service Award 2021"in light of the ratings and reviews received from its personal savings customers since launching its retail deposit products.

"The Group re-commenced its lending operation fully on 4 November 2020, following the build-up of the required regulatory liquidity buffers as a new bank. The loan book reached £113m at 31 December 2020, up by c36% from a low of £83m in October 2020.

"The Group's lending was impacted immediately before Christmas 2020 by Brexit uncertainties and delays at ports in light of the restrictions put in place caused by the new variant of the COVID-19 virus. This restricted or delayed the movement of manufactured products from Europe to UK based dealers. This backlog has now extensively cleared and the Group is seeing strong demand for its lending products as dealers continue to replenish their stock levels following a successful period of trading through the second half of 2020. At 22 January 2021, the Group's loan book stood at approximately £125m.

"As previously announced, the successful launch of its deposit strategy enabled the Group to repay early all forms of more expensive debt by 9 December 2020, and the Group's loan book is now entirely supported by retail deposits which significantly improves its anticipated net interest margin to approximately 6% on a look forward basis from 1 January 2021. Given the strength of depositor demand, expected savings rate trend and the short tenor of the Company's current lending products, the Group does not currently anticipate participating in the Bank of England's TFSME scheme.  The Group expects to have the infrastructure in place to participate in future Bank of England schemes, should it prove operationally viable to join and should its loan book meet any scheme eligibility criteria at that time. 

"The Group is pleased to also announce that the quality of its arrears performance has continued the previously reported trend of improvement, now sitting significantly lower than the levels seen in periods prior to the onset of the global pandemic. 

"Additionally, during December 2020, the Group reached a significant lending milestone, having provided over £1bn of cumulative funding to dealers and manufacturers since it started lending activities in 2017."

5.    Details of the Placing

Under the terms of the Placing, Investec has today conditionally placed with certain new and existing institutional and other investors on behalf of the Company by way of a non-pre-emptive placing, and the Company has entered into a direct subscription agreement in respect of,, an aggregate of 72,727,273 new Ordinary Shares at the Placing Price. Pursuant to the direct subscription agreement entered into by the Company and Thomas Grathwohl (the "Direct Subscription Agreement"), Mr Grathwohl has agreed to subscribe, subject to shareholder approval, for 33,312 new Ordinary Shares (the "Direct Subscription Shares") at the Placing Price. The Placing Shares will represent approximately 40.5 per cent. of the Company's issued share capital as enlarged by the Placing Shares (the "Enlarged Issued Share Capital") following Admission. The Placing Shares will be issued credited as fully paid and will be identical to, and rank pari passu in all respects with, the Existing Ordinary Shares, including the right to receive all future distributions, declared, paid or made in respect of the Ordinary Shares following the date of Admission. The Placing is not being underwritten.

The Board believes that raising equity finance using the flexibility provided by a non-pre-emptive placing is the most appropriate and optimal structure for the Company at this time. This allows both certain existing institutional shareholders and new institutional investors the opportunity to participate in the Placing.

Application will be made to the London Stock Exchange for Admission. It is expected that Admission  will become effective in respect of, and that dealings on AIM will commence in, the Placing Shares, at 8.00 a.m. on 23 February 2021. Following Admission, the Company will have 179,369,199 Ordinary Shares in issue.

The Placing is conditional upon, among other things, the Resolutions being duly passed by shareholders of the Company at the General Meeting to be held at 10.00 a.m. on 22 February 2021.

6.    Directors' participation in the Placing

All of the Directors have confirmed that, as of the date of the Announcement, they support the Placing.

The following Directors have agreed to participate in the Placing and conditionally subscribe for the following number of Placing Shares at the Placing Price:

Name	Role	Number of Placing Shares	Ordinary Shares held following Placing	Percentage of Enlarged Issued Share Capital
John Baines	Chairman	202,698	499,920	0.28
Carl D'Ammassa	Chief Executive Officer	90,909	245,440	0.14
Gavin Morris	Chief Financial Officer	54,545	267,978	0.15
Thomas Grathwohl1	Independent non-executive director	33,312	33,312	0.02
1.     For regulatory reasons, Thomas Grathwohl is subscribing for the Direct Subscription Shares pursuant to the Direct Subscription Agreement.

7.    Related party transactions

Pursuant to the Placing, the Company has conditionally placed 18,181,818 Placing Shares at the Placing Price with Arrowgrass Master Fund Ltd ("Arrowgrass"), the Company's largest Shareholder that as at 4 February 2021 (being the latest practicable date prior to the publication of the Announcement) had an interest in 52,448,082 Ordinary Shares representing approximately 49.2 per cent. of the Company's Existing Ordinary Shares. Following completion of the Placing, and assuming it does not acquire or dispose of any Ordinary Shares other than pursuant to the Placing, Arrowgrass will have an interest in 70,629,900 Ordinary Shares, representing approximately 39.4 per cent. of the Enlarged Issued Share Capital. This participation by Arrowgrass in the Placing constitutes a related party transaction for the purposes of Rule 13 of the AIM Rules for Companies (the "AIM Rules") as its subscription for Placing Shares will exceed 5 per cent. in certain of the class tests (as defined in the AIM Rules). Accordingly, the Directors consider, having consulted with the Company's nominated adviser, Investec, that the terms of the participation by Arrowgrass in the Placing are fair and reasonable insofar as Shareholders are concerned.

Pursuant to the Placing, the Company has conditionally placed 7,272,727 Placing Shares at the Placing Price with Watrium AS ("Watrium"), the Company's second largest Shareholder that as at 4 February 2021 (being the latest practicable date prior to the publication of the Announcement) had an interest in 16,373,366 Ordinary Shares representing approximately 15.4 per cent. of the Company's Existing Ordinary Shares. Following completion of the Placing, and assuming it does not acquire or dispose of any Ordinary Shares other than pursuant to the Placing, Watrium will have an interest in 23,646,093 Ordinary Shares, representing approximately 13.2 per cent. of the Enlarged Issued Share Capital.  This participation by Watrium in the Placing constitutes a related party transaction for the purposes of Rule 13 of the AIM Rules as its subscription for Placing Shares will exceed 5 per cent. in certain of the class tests (as defined in the AIM Rules). Accordingly, the Directors consider, having consulted with the Company's nominated adviser, Investec, that the terms of the participation by Watrium in the Placing are fair and reasonable insofar as Shareholders are concerned.

8.    Recommendation

The Placing is conditional, amongst other things, upon the passing of the Resolutions at the General Meeting.

 

In the opinion of the Directors, the Placing and the Resolutions to be proposed at the General Meeting are in the best interests of the Company and Shareholders as a whole. Accordingly, your Directors intend to unanimously recommend Shareholders vote in favour of the Resolutions to be proposed at the General Meeting as those Directors who are also Shareholders intend to do in respect of their own beneficial holdings of Ordinary Shares (in respect of which they have the power to exercise or direct the exercise of voting rights) which, in aggregate, amount to 748,519 Ordinary Shares representing approximately 0.7 per cent. of the Existing Ordinary Shares.

 

Expected timetable of principal events

Announcement and date of posting of the Circular	5 February 2021
Last time and date for receipt of Forms of Proxy and CREST Proxy Instructions	10.00 a.m. on 18 February 2021
General Meeting	10.00 a.m. on 22 February 2021
Admission and dealings in the Placing Shares expected to commence on AIM	8.00 a.m. on 23 February 2021

 

 

 

APPENDIX - TERMS AND CONDITIONS OF THE PLACING

IMPORTANT INFORMATION FOR INVITED PLACEES ONLY REGARDING THE PLACING.

MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THIS ANNOUNCEMENT (INCLUDING THE APPENDIX) AND THE TERMS AND CONDITIONS SET OUT HEREIN (TOGETHER, THIS "ANNOUNCEMENT") ARE DIRECTED ONLY AT PERSONS WHOSE ORDINARY ACTIVITIES INVOLVE THEM IN ACQUIRING, HOLDING, MANAGING AND DISPOSING OF INVESTMENTS (AS PRINCIPAL OR AGENT) FOR THE PURPOSES OF THEIR BUSINESS AND WHO HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS AND ARE: (1) IF IN A MEMBER STATE OF THE EUROPEAN ECONOMIC AREA ("EEA"), QUALIFIED INVESTORS AS DEFINED IN ARTICLE 2(e) OF REGULATION (EU) 2017/1129 (THE "EU PROSPECTUS REGULATION"); OR (2) IF IN THE UNITED KINGDOM, QUALIFIED INVESTORS AS DEFINED IN ARTICLE 2(e) OF REGULATION (EU) 2017/1129 WHICH FORMS PART OF DOMESTIC LAW PURSUANT TO THE EUROPEAN UNION (WITHDRAWAL) ACT 2018 (THE "UK PROSPECTUS REGULATION") WHO ALSO (A) FALL WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005, AS AMENDED (THE "ORDER") (INVESTMENT PROFESSIONALS); (B) FALL WITHIN ARTICLE 49(2)(a) TO (d) (HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC.) OF THE ORDER; OR (3) ARE PERSONS TO WHOM IT IS OTHERWISE LAWFUL TO COMMUNICATE IT (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS").

THIS ANNOUNCEMENT AND THE INFORMATION IN IT MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS.  PERSONS DISTRIBUTING THIS ANNOUNCEMENT MUST SATISFY THEMSELVES THAT IT IS LAWFUL TO DO SO.  ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS ANNOUNCEMENT RELATES IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS.  THIS ANNOUNCEMENT DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN DISTRIBUTION FINANCE CAPITAL HOLDINGS PLC.

THIS ANNOUNCEMENT IS NOT AN OFFER OF SECURITIES FOR SALE OR SUBSCRIPTION INTO THE UNITED STATES. THE PLACING SHARES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (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 (INCLUDING THIS 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 OR INTO OR FROM THE UNITED STATES, AUSTRALIA, CANADA, THE REPUBLIC OF SOUTH AFRICA OR JAPAN OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.

The distribution of this Announcement and/or the Placing and/or issue of the Placing Shares in certain jurisdictions may be restricted by law.  No action has been taken by the Company, Investec or any of their respective Representatives 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 Investec to inform themselves about and to observe any such restrictions.

This Announcement or any part of it is for information purposes only and does not constitute or form part of any offer to issue or sell, or the solicitation of an offer to acquire, purchase or subscribe for, any securities in the United States (including its territories and possessions, any state of the United States and the District of Columbia), Australia, Canada, the Republic of South Africa or Japan or any other jurisdiction in which the same would be unlawful.  No public offering of the Placing Shares is being made in any such jurisdiction.

All offers of the Placing Shares in the United Kingdom or the EEA will be made pursuant to an exemption from the requirement to produce a prospectus under the UK Prospectus Regulation or the EU Prospectus Regulation, as appropriate.  In the United Kingdom, this Announcement is being directed solely at persons in circumstances in which section 21(1) of the Financial Services and Markets Act 2000 (as amended) (the "FSMA") does not require the approval of the relevant communication by an authorised person.

The Placing Shares have not been approved or disapproved by the US Securities and Exchange Commission, any state securities commission or other regulatory authority in the United States, nor have any of the foregoing authorities passed upon or endorsed the merits of the Placing or the accuracy or adequacy of this Announcement.  Any representation to the contrary is a criminal offence in the United States.  The relevant clearances have not been, nor will they be, obtained from the securities commission of any province or territory of Canada, no prospectus has been lodged with, or registered by, the Australian Securities and Investments Commission or the Japanese Ministry of Finance; the relevant clearances have not been, and will not be, obtained from the South Africa Reserve Bank or any other applicable body in the Republic of South Africa in relation to the Placing Shares and the Placing Shares have not been, nor will they be, registered under or offered in compliance with the securities laws of any state, province or territory of the United States, Australia, Canada, the Republic of South Africa or Japan.  Accordingly, the Placing Shares may not (unless an exemption under the relevant securities laws is applicable) be offered, sold, resold or delivered, directly or indirectly, in or into the United States, Australia, Canada, the Republic of South Africa or Japan or any other jurisdiction outside the United Kingdom.

Persons (including, without limitation, nominees and trustees) who have a contractual right or other legal obligations to forward a copy of this Announcement should seek appropriate advice before taking any such action.

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 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.

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

In particular, each such Placee represents, warrants, undertakes, agrees and acknowledges (amongst other things) to Investec and the Company that:

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

 

2.         in the case of a Relevant Person in the United Kingdom who acquires any Placing Shares pursuant to the Placing:

(a)        it is a Qualified Investor within the meaning of Article 2(e) of the UK Prospectus Regulation; and

(b)        in the case of any Placing Shares acquired by it as a financial intermediary, as that term is used in Article 5(1) of the UK Prospectus Regulation:

i.          the Placing Shares acquired by it in the Placing have not been acquired on behalf of, nor have they been acquired with a view to their offer or resale to, persons in the United Kingdom other than Qualified Investors or in circumstances in which the prior consent of Investec 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 other than Qualified Investors, the offer of those Placing Shares to it is not treated under the UK Prospectus Regulation as having been made to such persons; and

3.         in the case of a Relevant Person in a member state of the EEA (each a "Relevant State") who acquires any Placing Shares pursuant to the Placing:

(a)        it is a Qualified Investor within the meaning of Article 2(e) of the EU Prospectus Regulation; and

(b)        in the case of any Placing Shares acquired by it as a financial intermediary, as that term is used in Article 5(1) of the EU Prospectus Regulation:

(i)       the Placing Shares acquired by it in the Placing have not been acquired on behalf of, nor have they been acquired with a view to their offer or resale to, persons in a Relevant State other than Qualified Investors or in circumstances in which the prior consent of Investec has been given to the offer or resale; or

(ii)      where Placing Shares have been acquired by it on behalf of persons in a Relevant State other than Qualified Investors, the offer of those Placing Shares to it is not treated under the EU Prospectus Regulation as having been made to such persons; and

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

 

5.         it understands (or if acting for the account of another person, such person has confirmed that such person understands) the resale and transfer restrictions set out in this Appendix; and

 

6.         except as otherwise permitted by the Company and subject to any available exemptions from applicable securities laws, it (and any account referred to in paragraph 4 above) is outside of the United States acquiring the Placing Shares in "offshore transactions" as defined in and in accordance with Regulation S under the Securities Act; and

 

7.         the Company and Investec will rely upon the truth and accuracy of the foregoing representations, warranties, acknowledgements and agreements.

No prospectus

The Placing Shares are being offered to a limited number of specifically invited persons only and will not be offered in such a way as to require any prospectus or other offering document to be published.  No prospectus or other offering document has been or will be submitted to be approved by the FCA in relation to the Placing or the Placing Shares and Placees' commitments will be made solely on the basis of their own assessment of the Company, the Placing Shares and the Placing based on the information contained in this Announcement and any information publicly announced through a Regulatory Information Service (as defined in the AIM Rules for Companies (the "AIM Rules")) by or on behalf of the Company on or prior to the date of this Announcement (the "Publicly Available Information") and subject to any further terms set out in the contract note or electronic trade confirmation to be sent to individual Placees.

Each Placee, by participating in the Placing, agrees that the content of this Announcement is exclusively the responsibility of the Company and confirms that it has neither received nor relied on any information (other than the Publicly Available Information), representation, warranty or statement made by or on behalf of Investec or the Company or any other person and none of Investec, the Company nor any other person acting on such person's behalf nor any of their respective Representatives has or shall have any liability for any Placee's decision to participate in the Placing based on any other information, representation, warranty or statement.  Each Placee acknowledges and agrees that it has relied on its own investigation of the business, financial or other position of the Company in accepting a participation in the Placing.  No Placee should consider any information in this Announcement to be legal, tax or business advice.  Nothing in this paragraph shall exclude the liability of any person for fraudulent misrepresentation.

Details of the Placing Agreement and the Placing Shares

Investec has today entered into a placing agreement (the "Placing Agreement") with the Company under which, on the terms and subject to the conditions set out in the Placing Agreement, Investec, as agent for and on behalf of the Company, has agreed to use its reasonable endeavours to procure Placees for the Placing Shares.  The Placing is not being underwritten.

The Placing Shares will, when issued, be subject to the articles of association of the Company, be credited as fully paid and will rank pari passu in all respects with the existing issued ordinary shares of one penny each ("Ordinary Shares") in the capital of the Company, including the right to receive all dividends and other distributions declared, made or paid in respect of such Ordinary Shares after the date of issue of the Placing Shares.

Lock-up

As part of the Placing, the Company has agreed that it will not for a period of 180 days after (but including) Admission, directly or indirectly, issue, offer, sell, lend, pledge, contract to sell or issue, grant any option, right or warrant to purchase or otherwise dispose of any Ordinary Shares (or any interest therein or in respect thereof) or other securities of the Company exchangeable for, convertible into or representing the right to receive Ordinary Shares or any substantially similar securities or otherwise enter into any transaction (including derivative transaction) directly or indirectly, permanently or temporarily, to dispose of any Ordinary Shares or undertake any other transaction with the same economic effect as any of the foregoing or announce an offering of Ordinary Shares or any interest therein or to announce publicly any intention to enter into any transaction described above.  This agreement is subject to certain customary exceptions and does not prevent the grant or exercise of options under any of the Company's existing share incentives and share option schemes, or following Admission the issue by the Company of any Ordinary Shares upon the exercise of any right or option or the conversion of a security already in existence.

Application for admission to trading

Application will be made to the London Stock Exchange for admission of the Placing Shares to trading on AIM.

It is expected that Admission will take place on or before 8.00 a.m. on 23 February 2021 and that dealings in the Placing Shares on AIM will commence at the same time.

Principal terms of the Placing

1.         Investec is acting as sole bookrunner to the Placing, as agent for and on behalf of the Company.

 

2.         Participation in the Placing will only be available to persons who may lawfully be, and are, invited by Investec to participate.  Investec and any of its affiliates are entitled to enter bids in the Placing.

 

3.         The price per Placing Share (the "Placing Price") is fixed at 55.0 pence.

 

4.         Each Placee's allocation will be determined by Investec in its discretion following consultation with the Company and will be confirmed to Placees either orally or by email by Investec.

 

5.         Each Placee's allocation and commitment will be evidenced by a contract note or electronic trade confirmation issued to such Placee by Investec (or, in respect of any Placee in a Relevant State with which Investec is restricted from contracting (a "Restricted Relevant State"), Investec Europe Limited ("IEL") in its capacity as agent for an on behalf of Investec).  The terms of this Appendix will be deemed incorporated in that contract note or electronic trade confirmation.

 

6.         Each Placee's allocation and commitment to acquire Placing Shares 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 Investec's consent will not be capable of variation or revocation after the time at which it is submitted.  Each Placee will have an immediate, separate, irrevocable and binding obligation, owed to Investec (as agent for the Company), to pay to it (or as it may direct, including, without limitation, in respect of any Placee in a Restricted Relevant State, to IEL in its capacity as agent for an on behalf of Investec) in cleared funds an amount equal to the product of the Placing Price and the number of Placing Shares such Placee has agreed to acquire and the Company has agreed to allot and issue to that Placee.

 

7.         Except as required by law or regulation, no press release or other announcement will be made by Investec 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.

 

8.         Irrespective of the time at which a Placee's allocation(s) pursuant to the Placing is/are confirmed, settlement for all Placing Shares to be acquired pursuant to the Placing will be required to be made at the same time, on the basis explained below under "Registration and Settlement".

 

9.         All obligations under the Placing will be subject to fulfilment of the conditions referred to below under "Conditions of the Placing" and to the Placing not being terminated on the basis referred to below under "Termination of the Placing".

 

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

 

11.        To the fullest extent permissible by law and applicable FCA rules, neither:

(a)        Investec or the Company;

(b)        any of their respective affiliates, agents, directors, officers, consultants, partners or employees; nor

(c)        to the extent not contained within (a) or (b), any person connected with Investec as defined in the FSMA ((b) and (c) being together "affiliates" and individually an "affiliate" of Investec);

shall have any liability (including to the extent permissible by law, any fiduciary duties) to Placees or to any other person whether acting on behalf of a Placee or otherwise.  In particular, neither Investec, the Company nor any of their respective affiliates shall have any liability (including, to the extent permissible by law, any fiduciary duties) in respect of Investec's conduct of the Placing or of such alternative method of effecting the Placing as Investec and the Company may agree.

Registration and Settlement

If Placees are allocated any Placing Shares in the Placing they will be sent a contract note or electronic trade confirmation which will confirm the number of Placing Shares allocated to them, the Placing Price and the aggregate amount owed by them to Investec (or, in respect of any Placee in a Restricted Relevant State, to IEL in its capacity as agent for an on behalf of Investec).

Each Placee will be deemed to agree that it will do all things necessary to ensure that delivery and payment is completed as directed by Investec in accordance with either the standing CREST or certificated settlement instructions which they have in place with Investec.

Settlement of transactions in the Placing Shares (ISIN: GB00BJ7HMR72) following Admission will take place within the CREST system, subject to certain exceptions. Settlement through CREST is expected to occur on 23 February 2021 (the "Settlement Date") in accordance with the contract notes or electronic trade confirmations.  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 Investec may agree that the Placing Shares should be issued in certificated form.  Investec reserves the right to require settlement for the Placing Shares, and to deliver the Placing Shares to Placees, by such other means as it deems necessary if delivery or settlement to Placees is not practicable within the CREST system or would not be consistent with regulatory requirements in the jurisdiction in which a Placee is located.

Interest is chargeable daily on payments not received from Placees on the due date in accordance with the arrangements set out above, in respect of either CREST or certificated deliveries, at the rate of three percentage points above the prevailing base rate of Barclays Bank plc as determined by Investec.

Each Placee is deemed to agree that, if it does not comply with these obligations, Investec may sell any or all of the Placing Shares allocated to that Placee on their behalf and retain from the proceeds, for Investec's own account and benefit, an amount equal to the aggregate amount owed by the Placee plus any interest due.  The relevant Placee will, however, remain liable for any shortfall below the Placing Price and for any stamp duty or stamp duty reserve tax (together with any interest or penalties) imposed in any jurisdiction which may arise upon the sale of such Placing Shares on its behalf.  By participating in the Placing, each Placee confers on Investec all such authorities and powers necessary to carry out such sale and agrees to ratify and confirm all actions which Investec lawfully takes in pursuance of such sale.

If Placing Shares are to be delivered to a custodian or settlement agent, Placees must ensure that, upon receipt, the conditional contract note or the electronic trade confirmation is copied and delivered immediately to the relevant person within that organisation.  Insofar as Placing Shares are registered in a Placee's name or that of its nominee or in the name of any person for whom a Placee is contracting as agent or that of a nominee for such person, such Placing Shares should, subject as provided below, be so registered free from any liability to United Kingdom stamp duty or stamp duty reserve tax.  If there are any circumstances in which any United Kingdom stamp duty or stamp duty reserve tax or other similar taxes or duties (including any interest and penalties relating thereto) is payable in respect of the allocation, allotment, issue, sale, transfer or delivery of the Placing Shares (or, for the avoidance of doubt, if any stamp duty or stamp duty reserve tax is payable in connection with any subsequent transfer or agreement to transfer Placing Shares), the Company shall not be responsible for payment thereof.  Placees will not be entitled to receive any fee or commission in connection with the Placing.

Conditions of the Placing

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

The obligations of Investec under the Placing Agreement are, and the Placing is, conditional upon, inter alia:

(a)        the Resolutions having been duly passed (without amendment) at the General Meeting (or at any adjournment thereof);

(b)        in the opinion of Investec (acting in good faith), none of the warranties and undertakings on the part of the Company contained in the Placing Agreement being untrue, inaccurate or misleading at Admission, by reference to the facts and circumstances then subsisting;

(c)        compliance by the Company with its obligations under the Placing Agreement in so far as they are required to be performed prior to Admission save for any non-compliance or non-performance which in the opinion of Investec (acting in good faith) are not material in the context of the Group (taken as a whole), the Placing or Admission; and

(d)        Admission having become effective at or before 8.00 a.m. on 23 February 2021 or such later time and/or date as Investec may determine being not later than 8.00 a.m. on 2 March 2021,

(all conditions to the obligations of Investec included in the Placing Agreement being together, the "conditions").

If any of the conditions are not fulfilled or, where permitted, waived by Investec in accordance with the Placing Agreement within the stated time periods (or such later time and/or date as the Company and Investec may agree), or the Placing Agreement is terminated in accordance with its terms, the Placing will lapse and the Placee's rights and obligations shall cease and terminate at such time and each Placee agrees that no claim can be made by or on behalf of the Placee (or any person on whose behalf the Placee is acting) in respect thereof.

By participating in the Placing, each Placee agrees that its rights and obligations cease and terminate only in the circumstances described above and under "Termination of the Placing" below and will not be capable of rescission or termination by it.

Investec may, in its absolute discretion and upon such terms as it thinks fit, waive fulfilment of certain conditions in whole or in part, or extend the time provided for fulfilment of one or more conditions. Certain conditions including the condition relating to Admission referred to in paragraph (d) above may not be waived.  Any such extension or waiver will not affect Placees' commitments as set out in this Appendix.

Investec may terminate the Placing Agreement in certain circumstances, details of which are set out below.

Neither Investec nor any of its affiliates nor the Company shall have any liability to any Placee (or to any other person whether acting on behalf of a Placee or otherwise) in respect of any decision any of them may make as to whether or not to waive or to extend the time and/or date for the satisfaction of any condition to the Placing nor for any decision any of them may make as to the satisfaction of any condition or in respect of the Placing generally and by participating in the Placing each Placee agrees that any such decision is within the absolute discretion of Investec.

 

Termination of the Placing

Investec may, in its absolute discretion, by notice to the Company, terminate the Placing Agreement at any time up to Admission if, inter alia, in the good faith opinion of Investec:

(a)        there has been a breach of the warranties given to it;

(b)        there has been a material adverse change;

(c)        any statement contained in this Announcement or any other document or announcement issued or published by or on behalf of the Company in connection with the Placing is or has become or has been discovered to be untrue or inaccurate in any material respect or misleading; or

(d)        there has been a force majeure event.

If the Placing Agreement is terminated in accordance with its terms, the rights and obligations of each Placee in respect of the Placing as described in this Announcement shall cease and terminate at such time and no claim can be made by any Placee in respect thereof.

By participating in the Placing, each Placee agrees with the Company and Investec that the exercise by the Company or Investec of any right of termination or any other right or other discretion under the Placing Agreement shall be within the absolute discretion of the Company or Investec or for agreement between the Company and Investec (as the case may be) and that neither the Company nor Investec need make any reference to such Placee and that none of the Company, Investec nor any of their respective Representatives shall have any liability to such Placee (or to any other person whether acting on behalf of a Placee or otherwise) whatsoever in connection with any such exercise.  Each Placee further agrees that they will have no rights against Investec, IEL, the Company or any of their respective directors or employees under the Placing Agreement pursuant to the Contracts (Rights of Third Parties) Act 1999 (as amended).

By participating in the Placing, each Placee agrees that its rights and obligations terminate only in the circumstances described above and under the "Conditions of the Placing" section above and will not be capable of rescission or termination by it after the issue by Investec (or IEL in its capacity as agent for an on behalf of Investec (as applicable)) of a contract note or electronic trade confirmation confirming each Placee's allocation and commitment in the Placing.

Representations, warranties and further terms

Each Placee (and any person acting on such Placee's behalf) irrevocably confirms, represents, warrants, acknowledges and agrees (for itself and for any such prospective Placee) with the Company and Investec (in its capacity as bookrunner and placing agent of the Company in respect of the Placing) that (save where Investec expressly agrees in writing to the contrary):

1.         it has read and understood this Announcement in its entirety and that its acquisition of the Placing Shares is subject to and based upon all the terms, conditions, representations, warranties, indemnities, acknowledgements, agreements and undertakings and other information contained herein and that it has not relied on, and will not rely on, any information given or any representations, warranties or statements made at any time by any person in connection with Admission, the Placing, the Company, the Placing Shares or otherwise, other than the information contained in this Announcement and the Publicly Available Information;

 

2.         it has not received and will not receive a prospectus or other offering document in connection with the Placing and acknowledges that no prospectus or other offering document:

(a)        is required under the UK Prospectus Regulation or other applicable law; and

(b)        has been or will be prepared in connection with the Placing;

3.         the Ordinary Shares are admitted to trading on AIM, and that the Company is therefore required to publish certain business and financial information in accordance with the AIM Rules and the Market Abuse Regulation (EU Regulation No. 596/2014 which forms part of English law pursuant to the European Union (Withdrawal) Act 2018 (the "UK MAR")), which includes a description of the nature of the Company's business and the Company's most recent balance sheet and profit and loss account and that it is able to obtain or access such information without undue difficulty, and is able to obtain access to such information or comparable information concerning any other publicly traded company, without undue difficulty;

 

4.         it has made its own assessment of the Placing Shares and has relied on its own investigation of the business, financial or other position of the Company in accepting a participation in the Placing and neither Investec nor the Company nor any of their respective Representatives nor any person acting on behalf of any of them has provided, and will not provide, it with any material regarding the Placing Shares or the Company or any other person other than the information in this Announcement or the Publicly Available Information; nor has it requested Investec, the Company, any of their respective Representatives or any person acting on behalf of any of them to provide it with any such information;

 

5.         neither Investec nor any person acting on behalf of it nor any of its Representatives has or shall have any liability for any Publicly Available Information, or any representation relating to the Company, provided that nothing in this paragraph excludes the liability of any person for fraudulent misrepresentation made by that person;

6.        

(a)        the only information on which it is entitled to rely on and on which it has relied in committing to acquire the Placing Shares is contained in this Announcement and the Publicly Available Information, such information being all that it deems necessary to make an investment decision in respect of the Placing Shares and it has made its own assessment of the Company, the Placing Shares and the terms of the Placing based on the information in this Announcement and the Publicly Available Information;

(b)        neither Investec, nor the Company (nor any of their respective Representatives) have made any representation or warranty to it, express or implied, with respect to the Company, the Placing or the Placing Shares or the accuracy, completeness or adequacy of the Publicly Available Information, nor will it provide any material or information regarding the Company, the Placing or the Placing Shares;

(c)        it has conducted its own investigation of the Company, the Placing (including its terms and conditions) and the Placing Shares, satisfied itself that the information is still current and relied on that investigation for the purposes of its decision to participate in the Placing; and

(d)        it has not relied on any investigation that Investec or any person acting on its behalf may have conducted with respect to the Company, the Placing or the Placing Shares;

7.         the content of this Announcement and the Publicly Available Information has been prepared by and is exclusively the responsibility of the Company and that neither Investec nor any persons acting on its behalf is responsible for or has or shall have any liability for any information, representation, warranty or statement relating to the Company contained in this Announcement or the Publicly Available Information nor will they be liable for any Placee's decision to participate in the Placing based on any information, representation, warranty or statement contained in this Announcement, the Publicly Available Information or otherwise.  Nothing in this Appendix shall exclude any liability of any person for fraudulent misrepresentation;

 

8.         neither it nor the beneficial owner of the Placing Shares is, nor will, at the time the Placing Shares are acquired, either of them be a resident of Australia, Canada, the Republic of South Africa or Japan;

 

9.         the Placing Shares have not been registered or otherwise qualified, and will not be registered or otherwise qualified, for offer and sale nor will a prospectus be cleared or approved in respect of any of the Placing Shares under the securities laws of the United States, or any state or other jurisdiction of the United States, Australia, Canada, the Republic of South Africa or Japan and, subject to certain exceptions, may not be offered, sold, taken up, renounced or delivered or transferred, directly or indirectly, within the United States, Australia, Canada, the Republic of South Africa or Japan or in any country or jurisdiction where any such action for that purpose is required;

 

10.        it may be asked to disclose in writing or orally to Investec: (i) if he or she is an individual, his or her nationality; or (ii) if he or she is a discretionary fund manager, the jurisdiction in which the funds are managed or owned;

 

11.        it has the funds available to pay for the Placing Shares for which it has agreed to acquire and acknowledges and agrees that it will pay the total subscription amount in accordance with the terms of this Announcement on the due time and date set out herein, failing which the relevant Placing Shares may be placed with other Placees or sold at such price as Investec determines;

 

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

(a)        is entitled to acquire Placing Shares pursuant to the Placing under the laws and regulations of all relevant jurisdictions;

(b)        has fully observed such laws and regulations;

(c)        has capacity and authority and is entitled to enter into and perform its obligations as an acquirer of Placing Shares and will honour such obligations; and

(d)        has obtained all necessary consents and authorities (including, without limitation, in the case of a person acting on behalf of a Placee, all necessary consents and authorities to agree to the terms set out or referred to in this Appendix) under those laws or otherwise and complied with all necessary formalities to enable it to enter into the transactions contemplated hereby and to perform its obligations in relation thereto and, in particular, if it is a pension fund or investment company it is aware of and acknowledges it is required to comply with all applicable laws and regulations with respect to its acquisition of Placing Shares;

13.        it is not, and any person who it is acting on behalf of is not, and at the time the Placing Shares are acquired will not be, a resident of, or with an address in, or subject to the laws of, Australia, Canada, the Republic of South Africa or Japan, and it acknowledges and agrees that the Placing Shares have not been and will not be registered or otherwise qualified under the securities legislation of Australia, Canada, the Republic of South Africa or Japan and may not be offered, sold, or acquired, directly or indirectly, within those jurisdictions;

 

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

 

15.        it understands that the Placing Shares have not been, and will not be, registered under the Securities Act and may not be offered, sold or resold in or into or from the United States except pursuant to an effective registration under the Securities Act, or pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in accordance with applicable state securities laws; and no representation is being made as to the availability of any exemption under the Securities Act for the reoffer, resale, pledge or transfer of the Placing Shares;

 

16.        it is not taking up the Placing Shares as a result of any "directed selling efforts" (as such term is defined in Regulation S under the Securities Act);

 

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

 

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

 

19.        it will make payment to Investec (or IEL, in its capacity as agent for an on behalf of Investec (as applicable)) for the Placing Shares allocated to it in accordance with the terms and conditions of this Announcement on the due times and dates set out in this Announcement, failing which the relevant Placing Shares may be placed with others on such terms as Investec determines in its absolute discretion without liability to the Placee and it will remain liable for any shortfall below the net proceeds of such sale and the placing proceeds of such Placing Shares and may be required to bear any stamp duty or stamp duty reserve tax (together with any interest or penalties due pursuant to the terms set out or referred to in this Announcement) which may arise upon the sale of such Placee's Placing Shares on its behalf;

 

20.        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;

 

21.        no action has been or will be taken by any of the Company, Investec or any person acting on behalf of the Company or Investec that would, or is intended to, permit a public offer of the Placing Shares in the United States or in any country or jurisdiction where any such action for that purpose is required;

 

22.        the person who it specifies for registration as holder of the Placing Shares will be:

(a)        the Placee; or

(b)        a nominee of the Placee, as the case may be,

and that Investec and the Company will not be responsible for any liability to stamp duty or stamp duty reserve tax resulting from a failure to observe this requirement.  Each Placee and any person acting on behalf of such Placee agrees to acquire Placing Shares pursuant to the Placing and agrees to indemnify the Company and Investec in respect of the same on the basis that the Placing Shares will be allotted to a CREST stock account of Investec or transferred to a CREST stock account of Investec who will hold them as nominee on behalf of the Placee until settlement in accordance with its standing settlement instructions with it;

23.        the allocation, allotment, issue and delivery to it, or the person specified by it for registration as holder, of Placing Shares will not give rise to a stamp duty or stamp duty reserve tax liability under (or at a rate determined under) any of sections 67, 70, 93 or 96 of the Finance Act 1986 (depository receipts and clearance services) and that it is not participating in the Placing as nominee or agent for any person or persons to whom the allocation, allotment, issue or delivery of Placing Shares would give rise to such a liability;

 

24.        if it is within the United Kingdom, it and any person acting on its behalf (if within the United Kingdom) falls within Article 19(5) and/or 49(2) of the Order and undertakes that it will acquire, hold, manage and (if applicable) dispose of any Placing Shares that are allocated to it for the purposes of its business only;

 

25.        it has not offered or sold and will not offer or sell any Placing Shares to persons in the United Kingdom or a Relevant State prior to the expiry of a period of six months from Admission except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their business or otherwise in circumstances which have not resulted and which will not result in an offer to the public in the United Kingdom within the meaning of section 85(1) of the FSMA or within the meaning of the UK Prospectus Regulation, or an offer to the public in any member state of the EEA within the meaning of the EU Prospectus Regulation;

 

26.        if it is within the United Kingdom, it is a Qualified Investor as defined in Article 2(e) of the UK Prospectus Regulation and if it is within a Relevant State, it is a Qualified Investor as defined in Article 2(e) of the EU Prospectus Regulation;

 

27.        it has only communicated or caused to be communicated and it will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of the FSMA) relating to Placing Shares in circumstances in which section 21(1) of the FSMA does not require approval of the communication by an authorised person and it acknowledges and agrees that this Announcement has not been approved by Investec in its capacity as an authorised person under section 21 of the FSMA and it may not therefore be subject to the controls which would apply if it was made or approved as financial promotion by an authorised person;

 

28.        it has complied and it will comply with all applicable laws with respect to anything done by it or on its behalf in relation to the Placing Shares (including all relevant provisions of the FSMA and the UK MAR in respect of anything done in, from or otherwise involving the United Kingdom);

 

29.        if it is a financial intermediary, as that term is used in Article 5(1) of the UK Prospectus Regulation, the Placing Shares acquired by it in the Placing will not be acquired on a non-discretionary basis on behalf of, nor will they be acquired with a view to their offer or resale to, persons in the United Kingdom other than Qualified Investors, or in circumstances in which the express prior written consent of Investec has been given to each proposed  offer or resale;

 

30.        if it has received any inside information (for the purposes of the UK MAR and section 56 of the Criminal Justice Act 1993 or other applicable law) about the Company in advance of the Placing, it has not:

(a)        dealt (or attempted to deal) in the securities of the Company or cancelled or amended a dealing in the securities of the Company;

(b)        encouraged, recommended or induced another person to deal in the securities of the Company or to cancel or amend an order concerning the Company's securities; or

(c)        unlawfully disclosed such information to any person, prior to the information being made publicly available;

31.        Investec and its affiliates, acting as an investor for its or their own account(s), may bid or subscribe for and/or purchase Placing Shares and, in that capacity, may retain, purchase, offer to sell or otherwise deal for its or their own account(s) in the Placing Shares, any other securities of the Company or other related investments in connection with the Placing or otherwise.  Accordingly, references in this Announcement to the Placing Shares being offered, subscribed, acquired or otherwise dealt with should be read as including any offer to, or subscription, acquisition or dealing by, Investec and/or any of its affiliates acting as an investor for its or their own account(s).  Neither Investec nor the Company intend to disclose the extent of any such investment or transaction otherwise than in accordance with any legal or regulatory obligation to do so;

 

32.        it:

(a)        has complied with its obligations in connection with money laundering and terrorist financing under the Proceeds of Crime Act 2002 (as amended), the Terrorism Act 2000 (as amended), the Terrorism Act 2006, the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (as amended) and all related or similar rules, regulations or guidelines, issued, administered or enforced by any government agency having jurisdiction in respect thereof and the Money Laundering Sourcebook of the FCA (together, the "Money Laundering Regulations");

(b)        is not a person:

i.     with whom transactions are prohibited under the US Foreign Corrupt Practices Act of 1977 or any economic sanction programmes administered by, or regulations promulgated by, the Office of Foreign Assets Control of the U.S. Department of the Treasury;

ii.     named on the Consolidated List of Financial Sanctions Targets maintained by HM Treasury of the United Kingdom; or

iii.    subject to financial sanctions imposed pursuant to a regulation of the European Union or a regulation adopted by the United Nations or other applicable law,

(together with the Money Laundering Regulations, the "Regulations") and if making payment on behalf of a third party, that satisfactory evidence has been obtained and recorded by it to verify the identity of the third party as required by the Regulations and has obtained all governmental and other consents (if any) which may be required for the purpose of, or as a consequence of, such purchase, and it will provide promptly to Investec (or IEL (as applicable) such evidence, if any, as to the identity or location or legal status of any person which it may request from it in connection with the Placing (for the purpose of complying with the Regulations or ascertaining the nationality of any person or the jurisdiction(s) to which any person is subject or otherwise) in the form and manner requested by Investec on the basis that any failure by it to do so may result in the number of Placing Shares that are to be acquired by it or at its direction pursuant to the Placing being reduced to such number, or to nil, as Investec may decide at its sole discretion;

33.        in order to ensure compliance with the Regulations, Investec (for itself and as agent on behalf of the Company) or the Company's registrars may, in their absolute discretion, require verification of its identity.  Pending the provision to Investec or the Company's registrars, as applicable, of evidence of identity, definitive certificates in respect of the Placing Shares may be retained at Investec's absolute discretion or, where appropriate, delivery of the Placing Shares to it in uncertificated form may be delayed at Investec's or the Company's registrars', as the case may be, absolute discretion.  If within a reasonable time after a request for verification of identity Investec (for itself and as agent on behalf of the Company) or the Company's registrars have not received evidence satisfactory to them, either Investec and/or the Company may, at its absolute discretion, terminate its commitment in respect of the Placing, in which event the monies payable on acceptance of allotment will, if already paid, be returned without interest to the account of the drawee's bank from which they were originally debited;

 

34.        it acknowledges that its commitment to acquire Placing Shares on the terms set out in this Announcement and in the contract note or through the electronic trade confirmation will continue notwithstanding any amendment that may in future be made to the terms and conditions of the Placing and that Placees will have no right to be consulted or require that their consent be obtained with respect to the Company's or Investec's conduct of the Placing;

 

35.        it has knowledge and experience in financial, business and international investment matters as is required to evaluate the merits and risks of acquiring the Placing Shares.  It further acknowledges that it is experienced in investing in securities of this nature and is aware that it may be required to bear, and is able to bear, the economic risk of, and is able to sustain, a complete loss in connection with the Placing.  It has relied upon its own examination and due diligence of the Company and its affiliates taken as a whole, and the terms of the Placing, including the merits and risks involved;

 

36.        it irrevocably appoints any duly authorised officer of Investec (or IEL in its capacity as agent for an on behalf of Investec (as applicable)) as its agent for the purpose of executing and delivering to the Company and/or its registrars any documents on its behalf necessary to enable it to be registered as the holder of any of the Placing Shares for which it agrees to acquire upon the terms of this Announcement;

 

37.        the Company, Investec and others (including each of their respective Representatives) will rely upon the truth and accuracy of the foregoing representations, warranties, acknowledgements and agreements, which are given to Investec on its own behalf and on behalf of the Company and are irrevocable;

 

38.        it is acting as principal only in respect of the Placing or, if it is acquiring the Placing Shares as a fiduciary or agent for one or more investor accounts, it:

(a)        is duly authorised to do so and it has full power and authority to make, and does make, the foregoing representations, warranties, acknowledgements, agreements and undertakings on behalf of each such accounts; and

(b)        will remain liable to the Company and Investec for the performance of all its obligations as a Placee in respect of the Placing (regardless of the fact that it is acting for another person);

39.        time is of the essence as regards its obligations under this Appendix;

 

40.        any document that is to be sent to it in connection with the Placing will be sent at its risk and may be sent to it at any address provided by it to Investec;

 

41.        the Placing Shares will be issued subject to the terms and conditions of this Appendix; and

 

42.        the terms and conditions contained in this Appendix and all documents into which this Appendix is incorporated by reference or otherwise validly forms a part and/or any agreements entered into pursuant to these terms and conditions and all agreements to acquire Placing Shares pursuant to the Placing and all non-contractual or other obligations arising out of or in connection with them, will be governed by and construed in accordance with English law and it submits to the exclusive jurisdiction of the English courts in relation to any claim, dispute or matter arising out of such contract (including any dispute regarding the existence, validity or termination or 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 interest chargeable thereon) may be taken by the Company or Investec in any jurisdiction in which the relevant Placee is incorporated or in which any of its securities have a quotation on a recognised stock exchange.

By participating in the Placing, each Placee (and any person acting on such Placee's behalf) agrees to indemnify and hold the Company, Investec and each of their respective Representatives 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 Investec, the Company or each of their respective Representatives arising from the performance of the Placee's obligations as set out in this Announcement, and further agrees that the provisions of this Appendix shall survive after the completion of the Placing.

The rights and remedies of Investec and the Company under these terms and conditions are in addition to any rights and remedies which would otherwise be available to each of them and the exercise or partial exercise or partial exercise of one will not prevent the exercise of others.

The agreement to allot and issue Placing Shares to Placees (or the persons for whom Placees are contracting as agent) free of stamp duty and stamp duty reserve tax in the United Kingdom relates only to their allotment and issue to Placees, or such persons as they nominate as their agents, direct by the Company.  Such agreement assumes that the Placing Shares are not being acquired in connection with arrangements to issue depositary receipts or to transfer the Placing Shares into a clearance service.  If there are any such arrangements, or the settlement related to any other dealings in the Placing Shares, stamp duty or stamp duty reserve tax may be payable.  In that event, the Placee agrees that it shall be responsible for such stamp duty or stamp duty reserve tax and neither the Company nor Investec shall be responsible for such stamp duty or stamp duty reserve tax.  If this is the case, each Placee should seek its own advice and they should notify Investec accordingly.  In addition, Placees should note that they will be liable for any capital duty, stamp duty and all other stamp, issue, securities, transfer, registration, documentary or other duties or taxes (including any interest, fines or penalties relating thereto) payable outside the United Kingdom by them or any other person on the acquisition by them of any Placing Shares or the agreement by them to acquire any Placing Shares and each Placee, or the Placee's nominee, in respect of whom (or in respect of the person for whom it is participating in the Placing as an agent or nominee) the allocation, allotment, issue or delivery of Placing Shares has given rise to such non-United Kingdom stamp, registration, documentary, transfer or similar taxes or duties undertakes to pay such taxes and duties, including any interest and penalties (if applicable), forthwith and to indemnify on an after-tax basis and to hold harmless the Company and Investec in the event that either the Company and/or Investec have incurred any such liability to such taxes or duties.

The representations, warranties, acknowledgements and undertakings contained in this Appendix are given to Investec (for itself and as agent for and on behalf of the Company) and the Company and are irrevocable.

Investec is authorised by the PRA and regulated by the FCA and the PRA in the United Kingdom and is acting exclusively for the Company and no one else in connection with the Placing, and Investec will not be responsible to anyone (including any Placees) other than the Company for providing the protections afforded to its clients or for providing advice in relation to the Placing or any other matters referred to in this Announcement.

Each Placee and any person acting on behalf of the Placee acknowledges that Investec does not owe any fiduciary or other duties to any Placee in respect of any representations, warranties, undertakings, acknowledgements, agreements or indemnities in the Placing Agreement.

Each Placee and any person acting on behalf of the Placee acknowledges and agrees that Investec may (at its absolute discretion) satisfy its obligations to procure Placees by itself agreeing to become a Placee in respect of some or all of the Placing Shares or by nominating any connected or associated person to do so.

When a Placee or any person acting on behalf of the Placee is dealing with Investec, any money held in an account with Investec on behalf of the Placee and/or any person acting on behalf of the Placee will not be treated as client money within the meaning of the relevant rules and regulations of the FCA made under the FSMA.  Each Placee acknowledges that the money will not be subject to the protections conferred by the client money rules: as a consequence this money will not be segregated from Investec's money in accordance with the client money rules and will be held by it under a banking relationship and not as trustee.

References to time in this Announcement are to London time, unless otherwise stated.

All times and dates in this Announcement may be subject to amendment.  Placees will be notified of any changes.

No statement in this Announcement is intended to be a profit forecast or estimate, and no statement in this Announcement should be interpreted to mean that earnings per share of the Company for the current or future financial years would necessarily match or exceed the historical published earnings per share of the Company.

The price of shares and any income expected from them may go down as well as up and investors may not get back the full amount invested upon disposal of the shares.  Past performance is no guide to future performance, and persons needing advice should consult an independent financial adviser.

The Placing Shares to be issued pursuant to the Placing will not be admitted to trading on any stock exchange other than the AIM market of the London Stock Exchange.

Neither the content of the Company's website nor any website accessible by hyperlinks on the Company's website is incorporated in, or forms part of, this Announcement.