Placing and Proposed Admission to Trading on AIM

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN (THIS "ANNOUNCEMENT") IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN, INTO OR FROM THE UNITED STATES, AUSTRALIA, CANADA, NEW ZEALAND, THE REPUBLIC OF SOUTH AFRICA OR JAPAN OR ANY OTHER JURISDICTION WHERE TO DO SO MIGHT CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION (EACH A "RESTRICTED JURISDICTION").

Investors should not use this Announcement as the basis for any investment in the securities of the Company which should only be made on the basis of information contained in the admission document (the "Admission Document") published by CT Automotive Group plc (the "Company" and, together with its subsidiary undertakings, the "Group" or "CT Automotive") in connection with the proposed admission of its ordinary shares of 0.5 pence each ("Ordinary Shares") to trading on the AIM market ("AIM") of London Stock Exchange plc (the "London Stock Exchange"), ("Admission").  The Admission Document will, from Admission,  be available for inspection on the Company's website at https://ct-automotive.net/.

For immediate release

20 December 2021

CT AUTOMOTIVE GROUP PLC

PLACING AND PROPOSED ADMISSION TO TRADING ON AIM

CT Automotive, a leading designer, developer and supplier of interior components to the global automotive industry, is pleased to announce the successful pricing of its initial public offering (the "IPO") and conditional placing (the "Placing") of 22,871,905 new Ordinary Shares at 147 pence per share to raise gross proceeds of £33.6 million for the Company. The Placing attracted strong support from high quality institutional investors.

It is expected that Admission will take place and dealings in the Ordinary Shares on AIM will commence at 8.00 a.m. on 23 December 2021 under the AIM TIDM "CTA".  On Admission, the Company will have a market capitalisation at the Placing Price of approximately £75 million and a free float of approximately 45 per cent.

Liberum Capital Limited ("Liberum") is acting as Nominated Adviser, sole bookrunner and sole broker in relation to the Placing and Admission.

Investment highlights

CT Automotive is engaged in the design, development and manufacture of bespoke automotive interior finishes (for example dashboard panels and fascia finishes) and kinematic assemblies (for example air registers, arm rests, deployable cup holders and storage systems), as well as their associated tooling, for the world's leading automotive original equipment suppliers ("OEMs") and global Tier One manufacturers.

The Company is headquartered in the UK with a low-cost manufacturing footprint. Key production facilities are located in Shenzhen and Ganzhou, China complemented by additional manufacturing facilities in Turkey, the Czech Republic and the UK.

CT Automotive's operating model enables it to pursue a price leadership strategy, supplying high quality parts to customers at a lower overall landed cost than competitors. This has helped the Company build a high-quality roster of OEM end customers, both directly and via Tier One suppliers including Faurecia and Marelli. End customers include volume manufacturers, such as Nissan, and luxury car brands such as Bentley and Lamborghini. In addition, the Group supplies electric car manufacturers, including Lucid. It has also recently started working with e.Go Mobile, a German manufacturer which plans to launch a series of small electric vehicles for the budget end of the market.

The Company currently supplies component part types to over 45 different models for 17 OEMs and delivered over four million systems in the 12 months to 31 December 2020. Since its formation, the Company has been the only significant new entrant into the market, which is characterised by high barriers to entry. This is due to stringent supplier on-boarding requirements and risk aversion resulting from the significant costs that could arise due to production line stoppages in the event that components were not delivered to the requisite quality and safety standards and on time.

CT Automotive has a consistent track record of revenue growth, operating profitability and cash generation since formation in 2000 and prior to the impact of COVID-19 in 2020. In the year ended 31 December 2019, the Group generated production revenue of $100 million, representing 30.3 per cent. growth each year over 10 years.

The Company has long-term agreements with its customers and during the six months ended 30 June 2021 saw a strong recovery from COVID-19 related factory shutdowns across the sector in the first half of 2020 in spite of disruption to production caused by a global shortage of semiconductors.

While in the second half of 2021 the semiconductor shortage impacted global vehicle production and the Group's trading, the Directors expect trading to recover as automotive production volumes increase.

The Group is positioned to recover strongly with c.95 per cent. of anticipated revenue in 2022 and c.90 per cent. of anticipated revenue in 2023 expected to come from projects which are currently underway or on which the Group is already the nominated supplier. The Directors anticipate that production volumes will recover during FY 2022, ahead of automotive supply chain issues resolving fully in FY 2023.

Reasons for Admission and use of proceeds

Pursuant to the Placing, the Company has conditionally raised net proceeds of approximately £30.8 million to fund the full repayment of the Group's existing term debt and substantially reduce existing overall debt. This is expected to unlock free cash flow to fund investment in the next phase of its growth and facilitate the pursuit of strategic growth opportunities. These include enlarging its facilities in Europe and North America - including investing in new facilities in Mexico and expanding existing capacity in the Czech Republic - taking on an increased number of new programmes, increasing R&D expenditure and entering more strategic partnerships.

Board appointments

The Company is also pleased to announce the appointments of Tracey James as senior independent non-executive director and Francesca Ecsery and Raymond Bench as independent non-executive directors. These appointments will take effect upon Admission.

Simon Phillips, Founder and Chairman of CT Automotive, commented:

"We are thrilled to announce our admission to trading on AIM, marking an important next chapter for CT Automotive. Since founding the business over twenty years ago, we have successfully disrupted the development tooling industry, growing to join the ranks of only a handful of trusted manufacturers of interior car parts for some of the world's biggest automotive brands. We are excited about the opportunities ahead and are well positioned to build on our strong track record of growth, client relationships and manufacturing excellence."

"I would like to thank each and every one of our hardworking people for their ongoing commitment and to our new shareholders for their support. I am also delighted to welcome Tracey, Francesca and Ray to the CT Automotive Board. Their mix of skills, experience and guidance will be invaluable to help us grow and develop the business."

Scott McKenzie, Chief Executive Officer of CT Automotive, commented:

"The IPO is the natural next step in CT Automotive's journey. We are an essential part of the supply chain for a growing number of the world's leading car manufacturers in a market worth approximately US$6.5 billion. The funds raised through the Placing will increase our capacity to invest in the growth of the business, supporting our ambitions to develop relationships with more manufacturers and further increase our market share."

For further information, please contact:

CT Automotive via. Engine MHP

Simon Phillips, Founder and Executive Chairman

Scott McKenzie, Chief Executive Officer

David Wilkinson, Chief Financial Officer

Engine MHP (Financial PR)                                                                                          Tel: +44 (0)20 3100 8540

Tim Rowntree                                                                                                                 [email protected]

Charlie Barker

Alex Janiaud

Liberum (Sole Bookrunner, Sole Broker and Nominated Adviser)                      Tel: +44 (0)20 3100 2000

Richard Lindley

Benjamin Cryer

Chris Whitaker

Notes to editors

Placing highlights:

·   The Company has raised gross proceeds of £33.6 million through the conditional placing of 22,871,905 new Ordinary Shares at 147 pence per share.

·    The Placing attracted strong support from high quality institutional investors.

·    On Admission, the Company will have 50,933,289 Ordinary Shares in issue and a free float of approximately 45 per cent.

·    The net proceeds of the Placing of approximately £30.8 million will be used to fund the full repayment of the Group's existing term debt and substantially reduce existing overall debt. This is expected to unlock free cash flow to support the next phase of its growth and facilitate the pursuit of strategic growth opportunities. These include enlarging its facilities in Europe and North America, taking on an increased number of new programmes, increasing R&D expenditure and entering more strategic partnerships.

·    Based on the Placing Price, the market capitalisation of the Company will be approximately £75 million on Admission.

·   The Company's executive directors retain a substantial shareholding in the Company on Admission, amounting to approximately 45 per cent. of the Ordinary Shares in issue on Admission.

·     The Company's ISIN is GB00BMHYGR77 and its SEDOL is BMHYGR7.

History

The Group was co-founded by Simon Phillips in 2000 and initially focused on establishing a presence in, and disrupting, the automotive development tooling industry. Having established the Group as a reliable supplier of tooling, the founders took the strategic decision to position the Group as a manufacturer of final interior components, alongside associated design and tooling services.

In 2017, Scott McKenzie and David Wilkinson, along with Simon Phillips, led a management buyout (MBO) from the other founders. In the four years following the MBO the Group has continued to grow adding 10 new OEMs to its platform, supported by a total 2,698 permanent employees as at 31 December 2020.

Directors

Simon Phillips (Executive Chair)

Simon co-founded CT Automotive in 2000 having identified an opportunity to disrupt the automotive tooling market. He led the business as Chief Executive Officer until 2014, developing the business model from its original tooling focus into the global Serial Production operation it is today. Following the appointment of Scott McKenzie as Chief Executive Officer, Simon has focused on driving the continued growth of CT Automotive and identifying new strategic opportunities.

Simon was a shareholder in an injection moulding company in the UK prior to exiting that business and co-founding CT Automotive. Simon has an engineering background having studied Mechanical Engineering at Portsmouth University, with a specific emphasis on sub-sonic to super-sonic flight.

Scott McKenzie (Chief Executive Officer)

Scott joined CT from Magna International in 2007 following a career in automotive interior development and program management and has specialised in new product development and manufacturing operations in the Far East since 2001.

With a background of Polymer Sciences and Technologies alongside tooling and injection moulding, Scott progressed to Operations Director before being appointed as  Group Managing Director in September 2014.

David Wilkinson (Chief Financial Officer)

David is a Chartered Accountant and during his 11 years in practice worked across a range of disciplines including Audit, Tax, Business Services and Corporate Finance and dealt with a wide range of companies both large and small. He began advising CT Automotive on strategy, M&A opportunities and funding in 2004, and was then invited to join CT Automotive as Group Finance Director in 2011. Prior to CT Automotive he spent seven years as an M&A adviser at BDO, specialising in selling businesses and executing Management Buy-Outs for clients across a wide range of sectors.

Tracey James (Senior Independent Non-Executive Director)

Tracey is a Chartered Accountant who has spent 26 years with Grant Thornton UK LLP, with the last 14 years as an Audit Partner. Tracey was a member of Grant Thornton's Oversight Board and also served on the Audit & Risk and Pensions Committees. She was also previously Finance Director of Karl Storz Endoscopy Canada (1999-2000). Tracey is currently a Non-Executive Director and Chair of the Audit Committee at Gattaca plc, as well as a Non-Executive Director of ECO Animal Health. Tracey has also previously held Non-Executive Directorships at Places for People Group Limited and Activate Learning, where roles included the Chair of the Audit Committee.

Francesca Ecsery (Non-Executive Director)

Francesca has over 20 years' experience as a director of both public companies and start-ups in the digital, retail, fast-moving consumer goods and leisure industries. She is a Harvard MBA, fluent in five languages and has special expertise in multi-platform consumer marketing, branding and sustainable commercial strategies. Francesca is also a Non-Executive Director of Marshall Motors plc, Société Air France SA, F&C Investment Trust plc and the Association of Investment Companies. Her previous executive experience includes McKinsey, PepsiCo, Thorn EMI, Thomas Cook and STA Travel.

Raymond (Ray) Bench (Non-Executive Director)

Ray has worked in the global automotive industry for the past 30 years; 12 of which were spent working for a Chinese OEM. He is an experienced automotive design engineer with extensive knowledge of automotive design processes. Ray has significant experience of business and departmental management, including having been part of Shanghai Motor UK Technical Centre's UK senior leadership team. Ray's experience also includes leadership roles at MG Rover Group, Rover Group, and Land Rover.

 IMPORTANT NOTICES

Neither this Announcement nor any copy of it may be taken or transmitted, published or distributed, directly or indirectly, in, into or from the United States of America (including its territories and possessions, any state of the United States and the District of Columbia (the "United States" or the "US")), Australia, Canada, New Zealand, the Republic of South Africa or Japan or to any persons in any of those jurisdictions or any other jurisdiction where to do so would constitute a violation of the relevant securities laws of such jurisdiction (each a "Restricted Jurisdiction").  Any failure to comply with this restriction may constitute a violation of United States, Australian, Canadian, Japanese or South African securities laws.

This Announcement does not constitute, or form part of, any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for any shares or other securities in any Restricted Jurisdiction.  The Placing and the distribution of this Announcement and other information in connection with the Placing and Admission in certain jurisdictions may be restricted by law and persons into whose possession this Announcement, any document or other information referred to herein comes should inform themselves about and observe any such restrictions.  Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.  Neither this Announcement nor any part of it nor the fact of its distribution shall form the basis of or be relied on in connection with or act as an inducement to enter into any contract or commitment whatsoever.

The Ordinary Shares mentioned herein have not been, and will not be, registered under the US Securities Act of 1933 (as amended) (the "US Securities Act"), and may not be offered or sold in the United States except pursuant to an exemption from, or a transaction not subject to, the registration requirements of the US Securities Act. There will be no public offer of the Ordinary Shares in the United States and the information contained herein does not constitute an offering of securities for sale in the United States, Canada, Australia, the Republic of South Africa, New Zealand or Japan. No money, securities or other consideration is being solicited and, if sent in response to the information contained herein, will not be accepted.

The Placing has only been directed at (A) persons in member states of the European Economic Area who are "qualified investors" within the meaning of Article 2(e) of Regulation (EU) 2017/1129, as amended from time to time, (the "Prospectus Regulation"); (B) if in the United Kingdom, persons who are qualified investors within the meaning of the UK version of the Prospectus Regulation which forms part of domestic law pursuant to the European Union (Withdrawal) Act 2018 and who (i) have professional experience in matters relating to investments who fall within the definition of "Investment Professionals" in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 as amended (the "Order"); or (ii) are high net worth companies, unincorporated associations or partnership or trustees of high value trusts as described in Article 49(2) of the Order; and (C) otherwise, to persons to whom it may otherwise be lawfully directed (all such persons being referred to as "relevant persons").

The information contained in this Announcement is for background purposes only and does not purport to be full or complete. Any future purchase of Ordinary Shares at or about the time of Admission should be made solely on the basis of the information contained in the Admission Document. No reliance may or should be placed by any person for any purpose on the information contained in this Announcement or its accuracy, fairness or completeness. The information in this Announcement may be subject to change.

Any investment or investment activity to which this Announcement relates will be available only to relevant persons (as defined above) and will be engaged in only with such persons. Other persons should not rely or act upon this Announcement or any of its contents.

This Announcement does not constitute a recommendation concerning Admission or the Ordinary Shares. The value of Ordinary Shares and the income from them is not guaranteed and can fall as well as rise due to stock market and currency movements. On any sale of an investment an investor may get back less than he or she originally invested. Potential investors should consult a professional adviser as to the suitability of the Ordinary Shares for the person concerned before making any investment decision. Past performance cannot be relied upon as a guide to future performance.

In connection with the Placing, Liberum and any of its affiliates, acting as investors for their own accounts, may subscribe for or purchase Ordinary Shares and in that capacity may retain, purchase, sell, offer to sell or otherwise deal for their own accounts in such Ordinary Shares and other securities of the Company or related investments in connection with the Placing or otherwise.  Accordingly, references in the Admission Document to the Ordinary Shares being offered, subscribed, acquired, placed or otherwise dealt in should be read as including any offer to, or subscription, acquisition, placing or dealing by Liberum and any of its affiliates acting as investors for their own accounts.  In addition, Liberum or its affiliates may enter into financing arrangements and swaps in connection with which it or its affiliates may from time to time acquire, hold or dispose of Ordinary Shares.  Liberum has no intention to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligations to do so.

All statements other than statements of historical fact included in this Announcement, including, without limitation, those regarding the Group's financial position, business strategy, plans and objectives of management for future operations or statements relating to expectations in relation to shareholder returns, dividends or any statements preceded by, followed by or that include the words "targets", "estimates", "envisages", "believes", "expects", "aims", "intends", "plans", "will", "may", "anticipates", "would", "could" or similar expressions or the negative thereof, are, or may be deemed to be forward looking statements.  Such forward looking statements involve known and unknown risks, uncertainties and other important factors beyond the Group's control that could cause the actual results and performance to be materially different from future results and the performance expressed or implied by such forward looking statements. Such forward looking statements are based on numerous assumptions regarding the Group's present and future business strategies and the environment in which the Group will operate in the future.  These forward looking statements speak only as of the date of this Announcement. The Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward looking statements contained herein to reflect any change in the Company's expectations with regard thereto, any new information or any change in events, conditions or circumstances on which any such statements are based, unless required to do so by law or any appropriate regulatory authority.

Liberum, which is authorised and regulated by the Financial Conduct Authority in the United Kingdom, is acting exclusively for the Company and no-one else in connection with the Placing and Admission. Liberum will not regard any other person as its client in relation to the Placing and Admission and will not be responsible to anyone other than the Company for providing the regulatory protections afforded to its clients, nor for providing advice in relation to the contents of this Announcement or any transaction, arrangement or other matter referred to herein.

Neither Liberum, nor any of its directors, officers, employees, advisers or agents accepts any responsibility or liability whatsoever for or makes any representation or warranty, express or implied, as to the truth, accuracy or completeness of the information in this Announcement (or whether any information has been omitted from this Announcement) or any other information relating to the Group, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available or for any loss howsoever arising from any use of this Announcement or its contents or otherwise arising in connection therewith.

Certain figures contained in this Announcement, including financial information, have been subject to rounding adjustments. Accordingly, in certain instances, the sum or percentage change of the numbers contained in this document may not conform exactly with the total figure given.

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.

Product governance

Solely for the purposes of the product governance requirements contained within Chapter 3 of the FCA Handbook Production Intervention and Product Governance Sourcebook (the "UK Product Governance Requirements"), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any "manufacturer" (for the purposes of the UK Product Governance Requirements) may otherwise have with respect thereto, the Ordinary Shares offered pursuant to the Placing (the "Placing Shares") have been subject to a product approval process, which has determined that such securities are: (i) compatible with an end target market of investors who meet the criteria of retail investors and investors who meet the criteria of professional clients and eligible counterparties, each as defined in paragraph 3 of the FCA Handbook Conduct of Business Sourcebook; and (ii) eligible for distribution through all distribution channels (the "Target Market Assessment"). Notwithstanding the Target Market Assessment, distributors (for the purposes of UK Product Governance Requirements) should note that: (a) the price of the Placing Shares may decline and investors could lose all or part of their investment; (b) the Placing Shares offer no guaranteed income and no capital protection; and (c) 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, Liberum have only procured 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 Chapter 9A or 10A respectively of the FCA Handbook Conduct of Business Sourcebook; 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.