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RNS

Results of Placing

Released 12:22 31-Jul-2017

RNS Number : 5957M
Pacific Industrial & Log REIT PLC
31 July 2017
 

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ANNOUNCEMENT, INCLUDING THE APPENDIX (TOGETHER, THE "ANNOUNCEMENT") AND THE INFORMATION IN IT, IS RESTRICTED, AND IS NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA, JAPAN OR THE REPUBLIC OF SOUTH AFRICA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

THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN THE COMPANY. THIS ANNOUNCEMENT HAS BEEN ISSUED BY AND IS THE SOLE RESPONSIBILITY OF THE COMPANY.

THIS ANNOUNCEMENT IS NOT AN OFFER FOR SALE OR SUBSCRIPTION IN ANY JURISDICTION IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL UNDER THE SECURITIES LAWS OF ANY SUCH JURISDICTION. THIS ANNOUNCEMENT IS NOT AN OFFER OF OR SOLICITATION TO PURCHASE OR SUBSCRIBE FOR SECURITIES IN THE UNITED STATES.

The information communicated in this announcement is inside information for the purposes of Article 7 of Regulation 596/2014.

31 July 2017

Pacific Industrial & Logistics REIT plc

(the "Company")

RESULTS OF PLACING

Pacific Industrial & Logistics REIT plc is pleased to announce the results of the placing initially announced on 14 July 2017 (the "Placing").

·                       46,086,957 Placing Shares have been conditionally placed with Placees at 115 pence per Placing Share to raise gross proceeds of approximately £53.0 million. The Placing is not underwritten.

·                       The Placing Shares represent, in aggregate, approximately 214.8 per cent. of the Ordinary Shares in issue as at 28 July 2017 (the latest practicable date prior to the release of this announcement) and will represent approximately 67.7 per cent. of the Enlarged Share Capital.

·                       The Placing Price of 115 pence per Ordinary Share represents: (i) a discount of approximately 2.1 per cent. to the closing price of 117.5 pence per Ordinary Share as at 13 July 2017 (the day prior to the initial announcement of the Placing); and (ii) a discount of approximately 0.9 per cent. to the EPRA Net Asset Value per Ordinary Share as at 31 March 2017 of 116.1 pence.

·                       The Placing is conditional, inter alia, on the approval of the Resolutions to be proposed in connection of the Placing at the General Meeting of the Company to be held at 10.00 a.m. on 16 August 2017 and upon Admission of the Placing Shares to trading on AIM. It is expected that Admission of the Placing Shares will occur at 8.00 a.m. on 17 August 2017.

·                       The net proceeds of the Placing, together with debt finance, will be used by the Company to fund an identified pipeline of acquisitions that meet the Company's investment objective and investing policy.

Nigel Rich, Non-Executive Chairman of the Company, commented:

"We firmly believe that the underlying drivers supporting investment in the industrial and logistics real estate sector will remain favourable moving forward. In particular the sector presents a strong total return proposition for investors with prospects for rental growth off affordable existing rents and acquisitions at attractive net initial yields.

We are pleased to have secured the support of investors and look forward to deploying the new capital in our identified pipeline."

 

Further enquiries:

Pacific Industrial & Logistics REIT Plc
Richard Moffitt
Sam Tucker

+44 (0) 207 591 1600

Canaccord Genuity - Nominated Adviser, Joint Financial Adviser and Sole Bookrunner
Bruce Garrow / Charlie Foster / Ben Griffiths
ECM
Antony Isaacs / Sam Lucas

+44 (0)20 7523 8000

Kinmont- Joint Financial Advisor
Mat Thackery

+44 (0)20 7087 9100

Radnor Capital Partners - Capital Advisory and Placing Agent
Tom Durie / Joshua Cryer

+44 (0)20 3897 1830

FTI - Financial PR and IR adviser to the Company
Claire Turvey/Richard Gotla

+44 (0)20 3727 1241

 

EXPECTED PLACING TIMETABLE

Publication of the Circular

31 July 2017

Latest time and date for receipt of Forms of Proxy

10.00 a.m. on 14 August 2017

General Meeting

10.00 a.m. on 16 August 2017

Announcement of results of General Meeting

16 August 2017

Admission of Placing Shares and the LTIP Shares

8.00 a.m. on 17 August 2017

Expected date for CREST accounts to be credited in relation to Placing Shares and the LTIP Shares

17 August 2017

Dispatch of definitive share certificates (where applicable) in relation to Placing Shares and the LTIP Shares

by no later 24 August 2017

Certain of the events in the above timetable are conditional upon, amongst other things, the approval of the Resolutions at the General Meeting.

If any of the events contained in the timetable should change, the revised times and dates will be notified by means of an announcement through a Regulatory Information Service.

A reference to a time in this announcement is to London time unless otherwise stated.

 

PLACING STATISTICS

Placing Price

115 pence

Number of Placing Shares

46,086,957

Gross proceeds of the Placing

£53.0 million

Estimated net proceeds of the Placing

£51.1 million

Number of LTIP Shares

520,557

Number of Ordinary Shares in issue as at the date of this announcement

21,457,210

Number of Ordinary Shares at Admission following the issue of the Placing Shares and the LTIP Shares*

68,064,724

Number of Warrants in issue at Admission*

3,012,000

Placing Shares expressed as a percentage of the Enlarged Share Capital*

67.7 per cent.

*Assuming no Warrants are exercised before Admission.

 

1.                Introduction

On 14 July 2017, the Company announced its intention to raise up to £110 million (before fees and expenses) by means of the Placing to fund an identified pipeline of acquisitions that meet the Company's investment objective and investing policy.

The Company is pleased to announce that it has conditionally placed 46,086,957 new Ordinary Shares at a price of 115 pence per Placing Share pursuant to the Placing, raising gross proceeds of £53.0 million. The new Ordinary Shares have been conditionally placed with a combination of new and existing shareholders.

On 12 June 2017, the Company announced, inter alia, that it would continue to review the management fee and long-term incentive arrangements as the Company grows its institutional investor base. As a result of this process, the Company announced the proposed changes to the management arrangements on 14 July 2017. The changes to the management arrangements are set out below. These changes, which are related party transactions under the AIM Rules, are conditional upon completion of the Placing but are not subject to Shareholder approval.

The allotment of the Placing Shares and the LTIP Shares (which will be issued as part of the proposed changes to the management arrangements described below) are conditional, inter alia, upon the Company obtaining approval of the Shareholders at the General Meeting to grant the Directors the authority to allot such Ordinary Shares and to disapply statutory pre-emption rights which would otherwise apply to such allotment.

2.                Background to and reasons for the Placing

The Company benefits from a highly-experienced Board and Management Team with broad industry credentials and connections which have been built up over several decades. In the period since IPO, the Company has not only executed a number of successful property investments but has established a significant pipeline of potential transactions, all within the Company's investment objective and investing policy. The Directors continue to target scale, income and an attractive total return through adherence to the Company's investing policy of acquiring smaller, single-tenant industrial and logistics properties. The Company may invest across the UK but focuses on the regional logistics zones in the Midlands and South East. Following recent engagement with investors and lending banks, the Company is now in a position to begin to move into a more advanced execution phase on a number of properties from within its pipeline.

The Directors believe that the Placing will have the following principal benefits for Shareholders:

·                       Provide additional capital which will enable the Company to execute some of its pipeline of potential transactions.

·                       Diversify the Company's income stream and asset base by increasing the number of tenants and properties within the portfolio upon the capital being deployed.

·                       Enhance the Company's position as an institutionally-backed, entrepreneurial and focused REIT.

·                       Enlarge the Company, thereby spreading certain operating costs over a larger capital base and reducing the Company's total expense ratio, in turn contributing to the Company's dividend-paying capacity.

·                       Increase the number of Ordinary Shares in issue, which may provide Shareholders with additional liquidity and the Company with a more diversified Shareholder base.

3.                Market overview and the Company's position, portfolio update and pipeline

3.1               Market overview and the Company's position

The Directors believe that a number of structural and commercial factors currently support the attractive opportunity in the last mile/regional industrial and logistics real estate sub-sectors targeted by the Company:

·                       Strong occupier demand, in particular due to growth in e-commerce and investment by retailers in their associated supply chain (it is estimated that for every £1 billion1 of new online retail sales, 1.125 million square feet of new distribution space is required, with a current annual average of approximately 4.5 million square feet of incremental demand).

·                       Supply of lettable space in industrial and logistics real estate across the UK has declined, being more than one third lower than the most recent peak of 2009.

·                       The planning permission regime in the United Kingdom is not supporting growth in supply to catch-up with increased demand in key logistics locations.

·                       With high building and land costs there is a lack of speculative development of new premises.

·                       Quality income-producing assets can be acquired at 30 to 70 per cent. of replacement cost.

·                       Smaller lot size focus of less than £10 million and less than 250,000 square feet avoids competition with institutional investors for acquisitions, but tenant quality can be maintained.

·                       Acquisitions can be made in the region of 6.5 to 7.5 per cent. Net Initial Yields, at affordable rents (in the region of £4.50 to £5.50 per square foot), on an overall LTV of 35 to 40 per cent. with a significant margin over financing costs, thus presenting an attractive income, capital growth and total return proposition.

·                       Despite a structural shortage of lettable space in the subsector, it remains an active and well-traded market - 2016 saw approximately 21.2 million square feet of space taken up in the sub 100,000 square foot bracket alone and greater than £3 billion of real estate transacted.

The Directors believe the Company is the only closed-ended quoted or listed company in the UK with this sole investment focus, a competitive advantage which the Directors believe will increase as the Company grows.

3.2               Portfolio Update

The Group acquired 13 assets between the IPO in April 2016 and period ended 31 March 2017, at which time the tenanted portfolio comprised the properties in the table below. These have proven to be sound investments, with a good geographical spread and a diverse tenant base. The portfolio also presents a variety of asset management opportunities, which have the potential to provide both income growth and capital appreciation.

The average size of the properties in the portfolio at 31 March 2017 was 48,514 square feet. The WAULT at the same date was 4.4 years.

Portfolio as at 31 March 2017

Tenant

Location

Month of acquisition

Acquisition cost (£m)2

Net book value (£m)

Size (sq ft)

Price's Patent Candles Ltd

Bedford

April 2016

2.20

2.38

44,338

Jas Bowman & Sons

Bedford

April 2016

2.68

3.15

39,306

The BSS Group Ltd

Northampton

April 2016

0.75

0.76

13,633

ACO Technologies Plc

Bedford

April 2016

1.68

2.45

38,716

Blackburns Metals Ltd

Bedford

April 2016

1.25

1.75

24,008

Ball and Young Ltd

Bedford

April 2016

1.10

1.57

22,672

Ideal Industries Ltd

Bedford

April 2016

2.85

2.30

42,320

The BSS Group Ltd

Bedford

April 2016

2.30

4.90

59,607

Marshall Thermo King Ltd

Dunstable

April 2016

0.60

0.75

9,452

Winit (UK) Ltd

Bardon

April 2016

6.00

6.08

73,466

Void3

Bedford

April 2016

1.39

1.55

21,140

Professional Fulfilment Services Ltd

Bedford

April 2016

1.39

1.55

21,165

Arqadia Ltd

Bedford

April 2016

2.81

3.13

42,707

Tangerine Confectionery Ltd

Chesterfield

January 2017

4.66

5.00

108,194

PUMA United Kingdom Ltd

Leeds

March 2017

6.05

6.10

62,117

Total at 31 March 2017



37.71

43.42

622,841

CBRE independently valued the portfolio as at 31 March 2017 in accordance with the RICS Valuation - Professional Standards. The portfolio's market value at 31 March 2017 was £43.4 million, compared with the assets' combined purchase price of £39.5 million, including purchaser costs. This represents an increase of £3.9 million or 9.8 per cent., on the aggregate purchase price. The portfolio valuation uplift was driven largely by successful asset management initiatives which were largely undertaken on the Initial Portfolio, given the limited hold period of the Chesterfield and Leeds assets prior to the year end. The Initial Portfolio's rent was uplifted by 8.6 per cent. during the period whilst its valuation increased by over 17 per cent.

3.3               Pipeline4

The Company is currently engaged in negotiations on potential acquisitions that meet its investment objective and investing policy.

Within the opportunities currently being considered, the Company has commenced negotiations on a number of portfolios of well-located regional logistics assets that are available to acquire in separate off market transactions.

Portfolio

Description

Value

1.

9 assets. Capital value of £61 per square foot. WAULT of 2.7 years. Low average rents of £4.80 per square foot.

£45.5 million at 7.3 per cent. NIY

2.

6 assets. Capital value of £79 per square foot. WAULT of 5.8 years. Low average warehouse rents of £4.35 per square foot.

£31 million at 7.0 per cent. NIY

The aggregate gross acquisition cost of these portfolios is approximately £81.6 million, which reflects a blended Net Initial Yield of 7.2 per cent. The Directors believe there is significant potential to grow rents and lengthen leases over the medium term. These portfolios have strong existing tenant bases, are fully occupied, have a WAULT of 3.9 years and offer attractive reversionary potential.

The Company expects to deploy the net proceeds of the Placing within three months of Admission. The acquisition of any potential investments by the Company is subject to, among other things, completion of the Placing, completion of satisfactory due diligence, successful negotiation of terms with vendors and the approval of the Directors. There can be no guarantee that any of the potential investments will be completed.

In addition, the Company has also identified a number of other portfolios of well-located regional logistics assets that are available to acquire in separate off market transactions that meet its investment objective and investing policy, including:

Portfolio

Description

Value

3.

12 assets. Low capital value of £71 per square foot. WAULT of 7.1 years. Low local rents of £5.46 per square foot.

£83 million at 7.2 per cent. NIY

The acquisition of this portfolio (and any other further investments) by the Company would, in addition to the matters described above, also be subject to a future equity fundraising or other such capital event. The Company continues to discuss potential additional equity and debt financing for further acquisitions.

4.                Management arrangements

Introduction

The Company appointed Pacific Capital Partners Limited, a member of the Pacific Group, as the manager of the Company at the time of the IPO. The Manager acts as the Company's manager for the purposes of the AIFMD and certain other ancillary services. The Manager has delegated the day-to-day administration of the Company to PIML (an affiliate of the Manager).

On 12 June 2017, the Company announced, inter alia, that it would continue to review the management fee and long-term incentive arrangements as the Company grows its institutional investor base. As a result of this process, and subject to completion of the Placing, the management arrangements will be amended as set out below.

4.1               The Management Agreement

Under the current management agreement, expenses incurred by the Manager are recharged to the Company and the Manager also receives a management fee payable half yearly in arrears. The management fee is not paid until Shareholders receive an annual dividend yield (by reference to the IPO issue price) of at least 6.0 per cent., following which the Manager receives a percentage of the excess annual yield as follows:

Annual dividend yield5

Manager's share of excess yield

From 6.0 per cent. to 7.0 per cent.

20

From 7.0 per cent. to 8.0 per cent.

25

Greater than 8.0 per cent.

30

Following completion of the capital raise announced on 9 November 2016, the annualised total running costs of the Company (excluding interest, the costs of the IPO, any further fundraisings, costs associated with acquisitions and irrecoverable property costs) were capped at £535,000 for the financial period from incorporation to 31 March 2017.

On 12 June 2017, the Company announced that, following discussions between the Board and the Manager, the annual total running costs of the Group (excluding finance charges, performance fees, long-term incentive plan charges and direct property costs) would be capped at £650,000 per annum until an equity fundraising or other such capital event.

Subject to the completion of the Placing, the Company and the Manager have agreed to a new management fee such that the cost recharge, the excess of dividend yield management fee and the annual total running cost cap described above are replaced with a management fee of 0.95 per cent. per annum of the Group's EPRA NAV, payable quarterly in arrears.

4.2               The Long Term Incentive Plan

The Board believes that the success of the Company depends, in part, on the future performance of the Pacific Group and the Management Team. The Directors also recognise the importance of ensuring that the Pacific Group and the Management Team are incentivised and identify closely with the long-term success of the Company, in alignment with the Shareholders.

The Company has agreed, subject to completion of the Placing, to amend the existing LTIP adopted at the time of IPO as detailed below:

4.2.1            Existing LTIP

20.0 per cent. of the Company's total return over eight per cent. per annum from the date of IPO to 13 July 2017 (being the day immediately prior to the announcement of the proposed Placing) will be crystallised and the resulting value will be paid by way of the issue of 520,557 Ordinary Shares to Pacific Industrial LLP (an affiliate of the Manager) (the "LTIP Shares") at Admission and will be subject to a lock-in until the third anniversary of the IPO.

4.2.2            New LTIP

The new LTIP will have an EPRA NAV element and a share price element and will be assessed on: (i) 30 September 2020 (the "First Calculation Date"); and (ii) 30 September 2023 (the "Second Calculation Date").

The EPRA NAV element will be 10 per cent. of the excess of the EPRA NAV per Ordinary Share return6 over an annualised 9 per cent. hurdle7, multiplied by the number of Ordinary Shares in issue at relevant calculation date. The share price element will be 10 per cent. of the excess of the share price return over an annualised 9 per cent. hurdle8, multiplied by the number of Ordinary Shares in issue at the relevant calculation date.

At the First Calculation Date, the share price element and the EPRA NAV element hurdle shall be calculated by reference to the Placing Price.

At the Second Calculation Date, if a payment has been made at the First Calculation Date under either element, the hurdle for that element at the Second Calculation Date shall be re-set to be based on the prevailing EPRA NAV per Ordinary Share/share price as at the First Calculation Date (as applicable). If no payment is made under an element at the First Calculation Date, then the hurdle for that element shall continue to be calculated by reference to the Placing Price.

If there is a change of control, the LTIP will be assessed by applying the relevant offer price to the EPRA NAV element and the share price element calculations at the date of the change of control.

The LTIP will be paid in shares or, at the Board's discretion, cash.

If the Manager's appointment under the Management Agreement is terminated for cause, Pacific Industrial LLP's awards under the LTIP shall automatically lapse.

5.                Borrowing and gearing policy

The Company will seek to use gearing to enhance returns over the long-term and, in addition, will seek to fix its borrowing rates. It is the Directors' current intention to target gearing of no more than 40 per cent. of gross asset value on new acquisitions and to therefore reduce the LTV ratio from the 42.4 per cent. level as at 31 March 2017.

As at 28 July 2017 (the latest practicable date prior to the publication of this announcement), the Company had £32 million of headroom under its existing debt facility and is in discussions with a number of lenders in respect of additional facilities.

6.                Details of the Placing

6.1               The Placing

46,086,957 Placing Shares have been placed with Placees at 115 pence per Ordinary Share to raise gross proceeds of approximately £53.0 million. The Placing is not underwritten.

The Placing Price represents: (i) a discount of approximately 2.1 per cent. to the closing price of 117.5 pence per Ordinary Share as at 13 July 2017 (the day prior to the announcement of the proposed Placing on 14 July 2017); and (ii) a discount of approximately 0.9 per cent. to the EPRA Net Asset Value per Ordinary Share of 116.1 pence as at 31 March 2017.

The Placing is conditional, inter alia, on the approval of Resolutions 1 and 2 at the General Meeting of the Company to be held at 10.00 a.m. on 16 August 2017 and upon Admission of the Placing Shares to trading on AIM. It is expected that Admission of the Placing Shares will occur on 17 August 2017.

6.2               The Placing Agreement

Pursuant to the terms of the Placing Agreement: (i) Canaccord, as agent for the Company, conditionally agreed to use its reasonable endeavours to place the Placing Shares on a non-underwritten basis at the Placing Price; and (ii) Kinmont and Radnor conditionally agreed to use their respective reasonable endeavours to introduce potential Placees to Canaccord.

The Placing Agreement contains certain warranties from the Company and the Manager in favour of Canaccord, Kinmont and Radnor in relation to, inter alia, certain matters relating to the Company and its business. In addition, the Company and the Manager have agreed to indemnify Canaccord, Kinmont and Radnor in relation to certain liabilities they may incur in respect of the Placing. Canaccord has the right to terminate the Placing Agreement in certain circumstances prior to Admission including, without limitation, in the event of any material breach by the Company, the Investment Manager or PIML of their respective obligations under the Placing Agreement, the occurrence of a force majeure event or a material adverse change in the financial condition of the Group. Under the terms of the Placing Agreement the Company has agreed to pay Canaccord a corporate finance fee and commissions based on the number of Placing Shares which are the subject of the Placing and fees to Kinmont and Radnor.

6.3               PIML interests in the Company following completion of the Placing

Shareholders should note that, following completion of the Placing, Pacific, Sir John Beckwith and his affiliates will be interested in 7,643,478 Ordinary Shares (representing 11.2 per cent. of the Enlarged Share Capital). Accordingly, the terms of the Relationship Agreement (further details of which are set out in the Admission Document) shall automatically cease and determine following completion of the Placing.

7.                Related party transactions

7.1               Participation in the Placing by the Directors and the Management Team

The Directors and Management Team are subscribing for Ordinary Shares at the Placing Price pursuant to the Placing.


As at 28 July 2017

Placing

Following Admission9


Number of Existing Ordinary Shares

Percentage of existing Ordinary Share capital

No. of Placing Shares subscribed for

Number of Ordinary Shares

Percentage of Enlarged Share Capital

Nigel Rich

75,000

0.35%

108,695

183,695

0.3%

Richard Moffitt*

300,000

1.40%

56,521

356,521

0.5%

Mark Johnson*,**

150,000

0.70%

43,478

193,478

0.3%

Bruce Anderson

20,000

0.09%

17,391

37,391

0.1%

Jonathan Gray

20,000

0.09%

20,000

40,000

0.1%

Christopher Turner*

200,000

0.93%

86,956

286,956

0.4%

*Messrs Moffitt, Johnson and Turner are members of Pacific Industrial LLP and, accordingly, will be interested in aggregate in a further 520,557 Ordinary Shares following the issue of the LTIP Shares.

**Shortly after Admission, Mr. Johnson will transfer his Placing Shares registered in his own name into an individual savings account ('ISA') of which he is the beneficiary.

Each of the Directors and the Management Team and the principals of Pacific have agreed, subject to certain customary exceptions, not to sell any Shares for a period of twelve months following Admission.

7.2               Management Agreement and LTIP

The amendments to the Management Agreement and the LTIP and the issue of the LTIP Shares as described in paragraph 4 above are related party transactions pursuant to the AIM Rules. The Independent Directors consider, having consulted with the Company's Nominated Adviser, Canaccord, that the terms of the amendments to the Management Agreement and the LTIP are fair and reasonable insofar as the Company's Shareholders are concerned.

7.3               M1 Agency Fees

At the point the Company acquires certain properties in the pipeline portfolio, it will incur, on an arm's length basis, certain commercial agency fees from M1 Agency LLP. M1 Agency LLP is a partnership in which Richard Moffitt is a designated member. The payment of fees by the Company to M1 Agency LLP will, at the time, be related party transaction for the purposes of the AIM Rules.

8.         Admission and dealings

Application will be made to the London Stock Exchange for the Placing Shares and the LTIP Shares to be admitted to trading on AIM. The Placing Shares and the LTIP Shares will rank, from Admission, pari passu in all other respects with the Existing Ordinary Shares and will have the right to receive all dividends and distributions declared in respect of issued Ordinary Share capital of the Company after Admission. It is expected that Admission will become effective and that dealings in the Placing Shares and the LTIP Shares will commence on 17 August 2017.

9.         General Meeting

A Circular and notice convening the General Meeting, at which the Company will seek shareholder approval to allot the shares and dis-apply pre-emption rights in respect of the Placing, will be posted to shareholders later today. The General Meeting is to be held at the offices of Gowling WLG (UK) LLP, 4 More London Riverside, London SE1 2AU at 10.00 a.m. on 16 August 2017. At the General Meeting, the following resolutions will be proposed:

Resolutions relating to the Placing and the LTIP (Resolutions 1 and 2)

Resolutions 1 and 2 will be proposed to grant the Directors the authority to allot the Placing Shares (which will represent approximately 67.7 per cent. of the Enlarged Share Capital) and the LTIP Shares (which will represent approximately 0.8 per cent. of the Enlarged Share Capital) without first offering them to existing Shareholders on a pre-emptive basis.

The Directors believe it would not be in the Shareholders' best interests to incur the significant additional expense that would be required to implement a fully pre-emptive offer of Ordinary Shares to Shareholders. The Directors have therefore concluded that seeking general authority from Shareholders to issue the Placing Shares other than on a pre-emptive basis is the most flexible and cost-effective method available to the Company.

Resolutions relating to general authority to allot Ordinary Shares and waiver of pre-emption rights (Resolutions 3 and 4)

Resolutions 3 and 4 will, if passed, renew the authorities given to the Directors to allot Ordinary Shares on a non-pre-emptive basis at the time of the Company's first AGM, but reflecting the increased number of Ordinary Shares comprised in the Enlarged Share Capital broadly on the same terms as the equivalent resolution passed at that time. The authority sought under these Resolutions will expire at the earlier of the conclusion of the annual general meeting of the Company in 2018 or 30 September 2018.

10.        Intention of Directors, Management Team and PIML

The Directors and Management Team intend to vote in favour of each of the Resolutions in respect of their aggregate beneficial interest in respect of 765,000 Ordinary Shares, representing approximately 3.6 per cent. of the Existing Ordinary Shares.

PIML, Sir John Beckwith and Sir John Beckwith's affiliates intend to vote in favour of each of the Resolutions in respect of their aggregate beneficial interest in respect of 7.45 million Ordinary Shares, representing approximately 34.7 per cent. of the Existing Ordinary Shares

 

Footnotes

1 JP Morgan (June 2017).

2 All excluding purchaser costs.

3 Void from 24 March 2017.

4 All information relating to the potential investments described in this announcement is indicative, subject to detailed due diligence and may subsequently change as a result.

5 By reference to the IPO issue price.

6 Not taking into account any accrual relating to the LTIP or dilution arising from the issue of Ordinary Shares pursuant to the LTIP.

7 Hurdle adjusted for all distributions per share (including dividends and returns of capital).

8 Hurdle adjusted for all distributions per share (including dividends and returns of capital).

9 Assuming no Warrants are exercised before Admission.

 

DEFINITIONS

The following definitions apply throughout this announcement, unless the context requires otherwise:

Admission

the admission of the Placing Shares and, as the context requires, the LTIP Shares to trading on AIM becoming effective in accordance with the AIM Rules

Admission Document

the admission document of the Company dated 7 April 2016 and published in connection with the IPO

AIFMD

the Alternative Investment Fund Managers Directive (2011/61/EU), including any implementing regulations and national legislation implementing the AIFMD into a member state of the EU, as applicable

AIM

the market of that name operated by the London Stock Exchange

AIM Rules

the AIM Rules for Companies published by the London Stock Exchange governing admission to and trading on AIM, as may be amended from time-to-time

Board

the board of directors of the Company

Canaccord

Canaccord Genuity Limited, the Company's nominated adviser, joint financial adviser and sole bookrunner

CBRE

CBRE Limited, a company registered in England and Wales with company number 03536032, in its capacity as the Company's independent valuer

certificated or in certificated form

the description of a share or security which is not in uncertificated form (that is, not in CREST)

Company

Pacific Industrial & Logistics REIT plc

CREST

the relevant systems for the paperless settlement of trades in securities and the holding of uncertificated securities operated by Euroclear UK & Ireland Limited in accordance with the CREST Regulations

CREST Regulations

the Uncertificated Securities Regulations 2001 (SI 2001 No. 3755), including (i) any enactment or subordinate legislation which amends or supersedes those regulations and (ii) any applicable rules made under those regulations for the time being in force

Directors

the directors of the Company

Enlarged Share Capital

the Ordinary Shares in issue immediately following the issue and allotment of the Placing Shares and the LTIP Shares at Admission (assuming no Warrants are exercised before Admission)

EPRA Guidelines

the EPRA Best Practices Recommendations Guidelines published by the European Public Real Estate Association, as amended from time-to-time

EPRA NAV

the Company's balance sheet net asset value adjusted to meet EPRA Guidelines by, inter alia, excluding the impact of any fair value adjustments to debt and related derivatives

EPRA NAV per Ordinary Share

the EPRA NAV divided by the diluted number of Ordinary Shares in issue from time-to-time

Existing Ordinary Shares

the Ordinary Shares in issue as at the date of this announcement

FCA

the Financial Conduct Authority

FSMA

the Financial Services and Markets Act 2000, as may be amended from time-to-time

General Meeting

the general meeting of the Company convened for 10.00 a.m. on 16 August 2017 (or any adjournment or postponement thereof)

Group

the Company, together with its subsidiaries and subsidiary undertakings

Independent Directors

Nigel Rich, Jonathan Gray and Bruce Anderson

Initial Portfolio

the portfolio of 11 properties acquired by the Company on 14 April 2016 for a purchase price of £27 million

IPO

the admission of the entire issued and to be issued ordinary share capital of the Company to trading on AIM, which took place on 13 April 2016

Kinmont

Kinmont Limited, joint financial adviser to the Company

LTV

the ratio of gross debt less cash, short-term deposits and liquid investments to the aggregate value of properties and investments

London Stock Exchange

London Stock Exchange plc

LTIP

the long-term incentive plan of the Company

LTIP Shares

has the meaning given to it at paragraph 4.2.1

Management Agreement

the amended and restated management agreement dated 31 July 2017, between the Company and the Manager

Management Team

Richard Moffitt and Christopher Turner

Manager

Pacific Capital Partners Limited, a company registered in England and Wales with company number 02849777, the manager to the Company

Net Initial Yield or NIY

annualised current passing rent less non-recoverable property expenses such as empty rates, divided by the property valuation plus notional purchasers' costs

Notice of General Meeting

the notice of General Meeting, set out at the end of the Circular

Ordinary Shares

ordinary shares of £0.01 each in the capital of the Company

Placee

any person who has conditionally agreed to subscribe for the Placing Shares

Pacific Group

Sir John Beckwith, PIL, PIML, Pacific Industrial LLP and each of their affiliates

Pacific Industrial LLP

Pacific Industrial LLP, a limited liability partnership registered in England and Wales with company number OC407145

PIML

Pacific Investments Management Limited, a company registered in England and Wales with company number 01722436

PIL

Pacific Investments Limited, a company registered in England and Wales with company number 04384561

Placing

the placing of the Placing Shares pursuant to the Placing Agreement

Placing Agreement

the placing agreement dated 31 July 2017 between the Company (1); the Manager (2); Canaccord (3); Kinmont (4); Radnor (5) and PIML (6) relating to the Placing

Placing Price

115 pence per Placing Share

Placing Shares

46,086,957 new Ordinary Shares which are to be placed in accordance with the terms of the Placing, conditional inter alia on the passing of Resolutions 1 and 2

Professional Investor

has the meaning provided in the AIFMD

Radnor

Radnor Capital Partners Limited, capital advisor and agent to the Placing

Relationship Agreement

the relationship agreement dated 7 April 2016 entered into between the Company (1); PIML (2) and finnCap Limited (3)

Resolutions

the resolutions set out in the Notice of General Meeting

Shareholders

holders of Ordinary Shares

Subscription Period

the period beginning on the date of the Warrant Instrument and ending on 12 March 2019

Subscription Price

the price of £0.97 per Ordinary Share at which the Subscription Rights are exercisable during the Subscription Period (or such adjusted price as may be determined from time to time in accordance with the provisions described in condition 3 of the Warrant Instrument)

Subscription Right

the right of a Warrantholder to subscribe for one new Ordinary Share at the Subscription Price for every Warrant of which he is the holder pursuant to the terms of the Warrant Instrument

UK or United Kingdom

the United Kingdom of Great Britain and Northern Ireland

UK Listing Authority

the FCA acting in its capacity as the competent authority for the purposes of FSMA

Warrantholder

a registered holder for the time being of Warrants

Warrant Instrument

the warrant instrument executed and delivered as a deed poll by the Company on 22 March 2016

Warrants

the 3,012,000 warrants, each compromising a Subscription Right in respect of one new Ordinary Share, constituted by the Warrant Instrument or the aggregate number for the time being issued and outstanding (and a reference to a Warrant is a reference to any one of the Warrants)

WAULT

the weighted average unexpired lease term remaining to first break, or expiry, across the portfolio weighted by contracted rental income (including rent-frees). The calculation excludes residential leases and properties allocated as developments

 

IMPORTANT NOTICE

The information contained in this announcement is for information purposes only and does not purport to be full or complete. No reliance may be placed for any purpose on the information contained in this announcement or its accuracy, fairness or completeness.

This announcement does not constitute an offer to sell, or the solicitation of an offer to acquire or subscribe for, Ordinary Shares in any jurisdiction where such offer or solicitation is unlawful or would impose any unfulfilled registration, qualification, publication or approval requirements on the Company or the Manager or Canaccord or Kinmont or Radnor. The offer and sale of Ordinary Shares has not been and will not be registered under the applicable securities laws of Canada, Australia, Japan, New Zealand or the Republic of South Africa. Subject to certain exemptions, the Shares may not be offered to or sold within Canada, Australia, Japan, New Zealand or the Republic of South Africa or to any national, resident or citizen of Canada, Australia, Japan, New Zealand or the Republic of South Africa.

The Ordinary Shares have not been, and will not be, registered under the US Securities Act, or the securities laws of any other jurisdiction of the United States. The Ordinary Shares may not be offered or sold, directly or indirectly, in or into the United States (except pursuant to an exemption from, or a transaction not subject to, the registration requirements of the US Securities Act). No public offering of the Ordinary Shares is being made in the United States. The Ordinary Shares are being offered and sold only outside the United States in "offshore transactions" within the meaning of, and in reliance on, Regulation S under the US Securities Act.

The Ordinary Shares have not been approved or disapproved by the United States Securities and Exchange Commission, any state securities commission in the United States or any other regulatory authority in the United States, nor have any of the foregoing authorities passed on or endorsed the merits of the Placing or the Subscription or the accuracy or adequacy of the information contained in this announcement. Any representation to the contrary is a criminal offence in the United States.

The securities referred to herein have not been registered under the applicable securities laws of Australia, Canada, Japan or the Republic of South Africa and, subject to certain exceptions, may not be offered or sold within Australia, Canada, Japan or the Republic of South Africa or to any national, resident or citizen of Australia, Canada, Japan or the Republic of South Africa.

The distribution of this announcement outside the UK may be restricted by law. No action has been taken by the Company, the Manager, Canaccord or Kinmont or Radnor that would permit a public offer of Ordinary Shares in any jurisdiction outside the UK or possession of this announcement where action for that purpose is required. Persons outside the UK who come into possession of this announcement should inform themselves about the distribution of this announcement in their particular jurisdiction. Failure to comply with those restrictions may constitute a violation of the securities laws of such jurisdiction.

FORWARD LOOKING STATEMENTS

This announcement contains (or may contain) certain forward-looking statements with respect to certain of the Company's plans and its current goals and expectations relating to its future financial condition and performance and which involve a number of risks and uncertainties. The Company cautions readers that no forward-looking statement is a guarantee of future performance and that actual results could differ materially from those contained in the forward-looking statements. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements sometimes use words such as "aim", "anticipate", "target", "expect", "estimate", "intend", "plan", "goal", "believe", "predict" or other words of similar meaning. Examples of forward-looking statements include, amongst others, statements regarding or which make assumptions in respect of the planned use of the proceeds for the Placing, the Group's liquidity position, the future performance of the Group, future interest rates and currency controls, the Group's future financial position, plans and objectives for future operations and any other statements that are not historical fact. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances, including, but not limited to, economic and business conditions, the effects of continued volatility in credit markets, market-related risks such as changes in interest rates and foreign exchanges rates, the policies and actions of governmental and regulatory authorities, changes in legislation, the further development of standards and interpretations under IFRS applicable to past, current and future periods, evolving practices with regard to the interpretation and application of standards under IFRS, the outcome of pending and future litigation or regulatory investigations, the success of future acquisitions and other strategic transactions and the impact of competition. A number of these factors are beyond the Company's control. As a result, the Company's actual future results may differ materially from the plans, goals, and expectations set forth in the Company's forward-looking statements. Any forward-looking statements made in this announcement by or on behalf of the Company speak only as of the date they are made. These forward looking statements reflect the Company's judgement at the date of this announcement and are not intended to give any assurance as to future results. Except as required by the FCA, the London Stock Exchange, the AIM Rules or applicable law, the Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained in this announcement to reflect any changes in the Company's expectations with regard thereto or any changes in events, conditions or circumstances on which any such statement is based.

Industry, market and other data

Information regarding markets, market size, market share, market position, growth rates and other industry data pertaining to the Group's business contained in this announcement consists of estimates based on (i) data and reports compiled by professional organisations and analysts; (ii) on data from external sources; and (iii) on the Company's and the Management Team's knowledge of the UK real estate market. Information regarding the macroeconomic environment in the UK has been compiled from publicly available sources. In many cases, there is no readily available external information (whether from trade associations, government bodies or other organisations) to validate market-related analyses and estimates, requiring the Company to rely on internally developed estimates. The Company takes responsibility for compiling, extracting and reproducing market or other industry data from external sources, including third parties or industry or general publications, but neither the Company, Canaccord, Kinmont nor Radnor has independently verified that data. The Company gives no assurance as to the accuracy and completeness of, and takes no further responsibility for, such data. Similarly, while the Company believes its and the Management Team's internal estimates to be reasonable, they have not been verified by any independent sources and the Company cannot give any assurances as to their accuracy.



 

APPENDIX

TERMS AND CONDITIONS OF THE PLACING

IMPORTANT INFORMATION ON THE PLACING FOR INVITED PLACEES ONLY

 

MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING.  THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND IS DIRECTED ONLY AT PERSONS IN THE UNITED KINGDOM WHO: (I) ARE PROFESSIONAL INVESTORS (AS DEFINED IN THE ALTERNATIVE INVESTMENT FUND MANAGERS DIRECTIVE (2011/61/EU) (THE "AIFMD")); (II) 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"); (III) ARE "HIGH NET WORTH COMPANIES", UNINCORPORATED ASSOCIATIONS OR PARTNERSHIPS OR TRUSTEES OF HIGH VALUE TRUSTS AS DESCRIBED IN ARTICLE 49(2) OF THE ORDER; OR (IV) IT MAY OTHERWISE BE LAWFUL TO COMMUNICATE THIS ANNOUNCEMENT TO (EACH A "RELEVANT PERSON").

NO OTHER PERSON SHOULD ACT OR RELY ON THIS ANNOUNCEMENT AND PERSONS DISTRIBUTING THIS ANNOUNCEMENT MUST SATISFY THEMSELVES THAT IT IS LAWFUL TO DO SO.  BY ACCEPTING THE TERMS OF THIS ANNOUNCEMENT YOU REPRESENT, WARRANT AND AGREE THAT YOU ARE A RELEVANT PERSON.  THIS APPENDIX AND THE TERMS AND CONDITIONS SET OUT HEREIN 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 APPENDIX AND THE TERMS AND CONDITIONS SET OUT HEREIN RELATE IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. THIS APPENDIX DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN THE COMPANY.

THE INFORMATION CONTAINED HEREIN IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, THE REPUBLIC OF SOUTH AFRICA, CANADA, NEW ZEALAND OR JAPAN OR ANY JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL. THIS ANNOUNCEMENT (AND THE INFORMATION CONTAINED HEREIN) DOES NOT CONSTITUTE AN OFFER OF SECURITIES FOR SALE IN THE UNITED STATES, AUSTRALIA, THE REPUBLIC OF SOUTH AFRICA, CANADA, NEW ZEALAND OR JAPAN OR IN ANY OTHER JURISDICTION IN WHICH THE SAME WOULD BE UNLAWFUL.

THE PLACING SHARES (AS DEFINED BELOW) HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE US SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), OR UNDER THE APPLICABLE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES, AND MAY NOT BE OFFERED, SOLD, TAKEN UP, RESOLD, TRANSFERRED OR DELIVERED, DIRECTLY OR INDIRECTLY WITHIN, INTO OR IN THE UNITED STATES, EXCEPT PURSUANT TO AN APPLICABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN COMPLIANCE WITH THE SECURITIES LAWS OF ANY RELEVANT STATE OR OTHER JURISDICTION OF THE UNITED STATES. THERE WILL BE NO PUBLIC OFFER OF THE PLACING SHARES IN THE UNITED STATES.

EACH PLACEE (AS DEFINED BELOW) SHOULD CONSULT ITS OWN ADVISERS AS TO LEGAL, TAX, BUSINESS, FINANCIAL AND RELATED ASPECTS OF A SUBSCRIPTION FOR THE PLACING SHARES. THE DISTRIBUTION OF THIS ANNOUNCEMENT, ANY PART OF IT OR ANY INFORMATION CONTAINED IN IT MAY BE RESTRICTED BY LAW IN CERTAIN JURISDICTIONS, AND ANY PERSON INTO WHOSE POSSESSION THIS ANNOUNCEMENT, ANY PART OF IT OR ANY INFORMATION CONTAINED IN IT COMES SHOULD INFORM THEMSELVES ABOUT, AND OBSERVE, SUCH RESTRICTIONS.

The Placing (as defined below) is subject to the AIFMD as implemented by Member States of the European Economic Area ("EEA").  The Placing (as defined below) is directed only at professional investors in the United Kingdom.  The Company has not registered a passport for marketing under the passporting programme set out in the AIFMD in any other member state (each an "Ineligible Member State").  This Announcement, including this Appendix (together, the "Announcement"), may not be distributed in any Ineligible Member State and the Placing (as defined below) may not be made or accepted in any Ineligible Member State. The attention of all prospective investors is drawn to disclosures required to be made under the AIFMD which are set out on the Company's website (including as set out in its most recent annual report and accounts).

Persons who are invited to and who choose to participate in the Placing (as defined below), by making an oral or written offer to subscribe for Placing Shares (as defined below), including any individuals, funds or others on whose behalf a commitment to subscribe for Placing Shares is given ("Placees"), will be deemed to have read and understood this Announcement, in its entirety, and to be making such offer on the terms and conditions, and to be providing the representations, warranties, acknowledgements and undertakings, contained in this Appendix.  In particular each such Placee represents, warrants and acknowledges that:

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

b)    if it is in the UK and/or if it is a financial intermediary (as that term is defined in EU Directive 2003/71/EC) (the "Prospectus Directive"), that any Placing Shares subscribed for by it in the Placing will not be subscribed for on a non-discretionary basis on behalf of, nor will they be subscribed for with a view to their offer or resale to, persons in any member state of the EEA in circumstances which may give rise to an offer of securities to the public other than an offer or resale to Professional Investors (as defined above), or in circumstances in which the prior consent of Canaccord Genuity Limited ("the Bookrunner") has been given to each such proposed offer or resale.

The Bookrunner may require any Placee to agree to such further terms and/or conditions and/or give such additional warranties and/or representations as it (in its absolute discretion) sees fit.

None of the Bookrunner, Radnor Capital Partners Limited, Kinmont Limited (Radnor Capital Partners Limited and Kinmont Limited together, the "Introducing Agents") nor any of their respective affiliates, agents, directors, officers or employees, make any representation to any Placees regarding an investment in the Placing Shares.

Details of the Placing Agreement and of the Placing Shares

The Bookrunner, the Introducing Agents, Pacific Capital Partners Limited (the "Investment Manager"), Pacific Investments Management Limited and the Company have today entered into a placing agreement (the "Placing Agreement") pursuant to which: (i) the Bookrunner has agreed that it will, as agent for and on behalf of the Company, use its reasonable endeavours to procure Placees for up to 46,086,957 new ordinary shares of £0.01 each in the capital of the Company (the "Placing Shares"); and (ii) the Introducing Agents have each agreed, severally and not jointly or jointly and severally, that they will use their reasonable endeavours to introduce Placees to the Bookrunner, each at a price of 115 pence per Placing Share (the "Placing Price") (the "Placing").  None of the Bookrunner nor either Introducing Agent shall be under any obligation to subscribe as principal for any Placing Shares pursuant to the Placing.

The Placing is not being underwritten.

The Placing Shares will, when issued, be credited as fully paid and will rank pari passu in all respects with the existing ordinary shares of £0.01 each in the capital of the Company (the "Ordinary Shares"), including the right to receive all dividends and other distributions declared, made or paid in respect of the Ordinary Shares by reference to a record date on or after the date of Admission (as defined below).

Applications for admission to trading

An Application will be made to London Stock Exchange plc (the "London Stock Exchange") for admission of the Placing Shares to trading on the Alternative Investment Market ("AIM") ("Admission").  It is expected that Admission will become effective on or around 8.00 a.m. (London time) on 17 August 2017 and that dealings in the Placing Shares will commence at that time.

The Placing

This Appendix gives details of the terms and conditions of, and the mechanics for participation in, the Placing.

The Bookrunner shall be entitled to implement the Placing by such alternative method as it may, in its absolute discretion (following consultation with the Company), determine.

Participation in, and principal terms of, the Placing

1.         The Bookrunner is acting as bookrunner and agent of the Company in connection with the Placing. Each of the Introducing Agents are acting as introducing agents of the Company in connection with the Placing.

2.         Participation in the Placing will only be available to persons who may lawfully be, and are, invited to participate by the Bookrunner.  The Bookrunner and the Introducing Agents and their respective agents and affiliates are entitled, but not obliged, to participate in the Placing as principal.

3.         The Bookrunner is arranging the Placing as agent to the Company.

4.         Each prospective Placee's allocation will be determined by the Company in consultation with the Bookrunner and will be confirmed orally by the Bookrunner (as agent for the Company) and a trade confirmation will be despatched thereafter.  This oral confirmation to a Placee will constitute an irrevocable legally binding commitment upon that person (who will at that point become a Placee) in favour of the Bookrunner and the Company to subscribe for the number of Placing Shares allocated to it at the Placing Price on the terms and conditions set out in this Appendix and in accordance with the Company's articles of association.  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 "Right to terminate under the Placing Agreement". 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.

5.         Settlement for all Placing Shares to be subscribed pursuant to the Placing will be required to be made on the basis explained below under "Registration and settlement".

6.         Except as required by law or regulation, no press release or other announcement will be made by the Bookrunner 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.

7.         Canaccord Genuity Limited is authorised and regulated in the United Kingdom by the FCA and is acting as sole bookrunner, nominated adviser and broker to the Company in respect of the Placing. Radnor Capital Partners Limited and Kinmont Limited are each authorised and regulated in the United Kingdom by the FCA and are acting as introducing agents to the Company in respect of the Placing. Each of Canaccord Genuity Limited, Radnor Capital Partners Limited and Kinmont Limited is acting for the Company and for no-one else in connection with the Placing, and will not be treating any other person as its client, in relation thereto and will not be responsible for providing the regulatory protections afforded to its customers nor for providing advice in connection with the Placing or any other matters referred to herein and apart from the responsibilities and liabilities (if any) imposed on Canaccord Genuity Limited, Radnor Capital Partners Limited or Kinmont Limited, as the case may be, by FSMA, any liability therefor is expressly disclaimed. To the fullest extent permissible by law, neither of the Bookrunner, the Introducing Agents nor any of their respective affiliates, agents, directors, officers or employees shall have any responsibility or liability to Placees (or to any other person whether acting on behalf of a Placee or otherwise).  In particular, neither of the Bookrunner, the Introducing Agents nor any of their respective affiliates, agents, directors, officers or employees shall have any liability (including to the fullest extent permissible by law, any fiduciary duties) in respect of the conduct of the Placing or of such alternative method of effecting the Placing as the Bookrunner and the Company may agree.

Conditions of the Placing

The Placing is conditional upon the Placing Agreement becoming unconditional and not having been terminated in accordance with its terms.  The obligations of the Bookrunner under the Placing Agreement are conditional, inter alia, on:

a)         the passing of the resolution to be set out in a notice convening a general meeting of the Shareholders of the Company for on or around 16 August 2017 (or such later date as agreed between the Company and the Bookrunner) to allot the Placing Shares for cash on a non-pre-emptive basis without any amendment not previously approved by the Bookrunner;

b)         none of the warranties or undertakings of the Company or the Investment Manager contained in the Placing Agreement being or having become at any time before Admission untrue, inaccurate or misleading and no fact or circumstance having arisen which would constitute a breach of any warranty or undertaking given under the Placing Agreement;

c)         the Company and the Investment Manager complying with all their respective obligations under the Placing Agreement to the extent the same fall to be performed on or prior to Admission;

d)         the Company allotting, subject only to Admission, the Placing Shares to the Placees in accordance with the Placing Agreement;

e)         no Material Adverse Event (as defined below) having occurred since the date of the Placing Agreement; and

f)          Admission taking place by not later than 8.00 a.m. (London time) on 17 August 2017 (or such later time and/or date, being not later than 8.00 a.m. (London time) on 31 August 2017, as the Bookrunner and the Company may agree).

If: (i) any of the conditions contained in the Placing Agreement, including those described above, are not fulfilled (or, where permitted, waived or extended in writing by the Bookrunner) or have become incapable of fulfilment on or before the date or time specified for the fulfilment thereof (or such later date and/or time as the Bookrunner may agree); or (ii) the Placing Agreement is terminated in the circumstances specified below, the Placing will not proceed and the Placees' rights and obligations hereunder in relation to the Placing Shares shall cease and terminate at such time and each Placee agrees that no claim can be made by the Placee in respect thereof.  Any such extension or waiver will not affect Placees' commitments as set out in this Announcement.

Neither the Bookrunner nor any of its affiliates, agents, directors, officers or employees 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 they may make as to whether or not to waive or to extend the time and/or the date for the satisfaction of any condition to the Placing nor for any decision they may make as to the satisfaction of any condition or in respect of the Placing generally, and by participating in the Placing each Placee agrees that any such decision is within the absolute discretion of the Bookrunner.

Right to terminate under the Placing Agreement

At any time before Admission, the Bookrunner is entitled to terminate the Placing Agreement by giving notice in writing to the Company if, amongst other things: (i) the Company and/or the Investment Manager is in breach of any of their warranties and/or undertakings given under the Placing Agreement and/or the Company and/or the Investment Manager is in breach of any other provision of the Placing Agreement, in either such case which the Bookrunner in good faith considers to be material in the context of the Placing or Admission; (ii) there has been, occurred, happened or come into effect any event or omission which materially (in the opinion of Bookrunner) and adversely affects the financial position and/or prospects of the Company and its group, or which, in the opinion of Bookrunner, is or will be or may be prejudicial in a material respect to the Company or to the Placing or Admission or to the Investment Manager; (a "Material Adverse Event"); or (iii) the Company and/or the Investment Manager has failed to comply with its obligations under any applicable law.

By participating in the Placing, Placees agree that the exercise by the Bookrunner of any right of termination or other discretion under the Placing Agreement shall be within its absolute discretion and that it does not need to make any reference to Placees and that the Bookrunner shall not have any liability to Placees whatsoever in connection with any such exercise or failure so to exercise.

No Prospectus or offering document

No prospectus or offering document has been or will be submitted to be approved by the FCA or submitted to the London Stock Exchange in relation to the Placing or the Placing Shares and no such prospectus or offering document is required (in accordance with the Prospectus Directive) to be published and Placees' commitments will be made solely on the basis of the information contained in this Announcement (including this Appendix) released by the Company today and any information publicly announced to a RIS by or on behalf of the Company on or prior to the date of this Announcement ("Publicly Available Information") and subject to the further terms set forth in the contract note to be provided to individual prospective Placees.

Each Placee, by accepting a participation in the Placing, agrees that the content of this Announcement (including this Appendix) is exclusively the responsibility of the Company and confirms that it has neither received nor relied on any other information, representation, warranty, or statement made by or on behalf of the Company, the Investment Manager, the Bookrunner, the Introducing Agents or any other person and none of the Company, the Investment Manager, the Bookrunner, the Introducing Agents or any of their respective affiliates will be liable for any Placee's decision to participate in the Placing based on any other information, representation, warranty or statement which the Placees may have obtained or received.  Each Placee acknowledges and agrees that it has relied on its own investigation of the business, financial or other position of the Company in accepting a participation in the Placing.  Nothing in this paragraph shall exclude or limit the liability of any person for fraudulent misrepresentation by that person.

Registration and settlement

Settlement of transactions in the Placing Shares (ISIN: GB00BYV8MN78) following Admission will take place within the system administered by Euroclear UK & Ireland Limited ("CREST"), subject to certain exceptions.  The Bookrunner and the Company reserve the right to require settlement for and delivery of the Placing Shares (or a portion thereof) to Placees in certificated form if delivery or settlement is not possible or practicable within the CREST system or would not be consistent with the regulatory requirements in the Placee's jurisdiction.

Each Placee allocated Placing Shares in the Placing will be sent a contract note stating the number of Placing Shares to be allocated to it at the Placing Price and settlement instructions.  Each Placee agrees that it will do all things necessary to ensure that delivery and payment is completed in accordance with the standing CREST or certificated settlement instructions that it has in place with the Bookrunner.

It is expected that settlement will be on 17 August 2017 on a delivery versus payment basis in accordance with the instructions set out in the trade confirmation.

Interest is chargeable daily on payments not received from Placees on the due date in accordance with the arrangements set out above at the rate of two percentage points above LIBOR as determined by the Bookrunner.

Each Placee is deemed to agree that, if it does not comply with these obligations, the Bookrunner (as agent for the Company) may sell any or all of the Placing Shares allocated to that Placee on such Placee's behalf and retain from the proceeds, for the account and benefit of the Bookrunner, an amount equal to the aggregate amount owed by the Placee plus any interest due.  The relevant Placee will, however, remain liable for any shortfall below the aggregate amount owed by it and may be required to bear any stamp duty or stamp duty reserve tax (together with any interest or penalties thereon) or other similar taxes imposed in any jurisdiction which may arise upon the sale of such Placing Shares on such Placee's behalf.

If Placing Shares are to be delivered to a custodian or settlement agent, Placees should ensure that the 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 UK stamp duty or stamp duty reserve tax. Placees will not be entitled to receive any fee or commission in connection with the Placing.

Representations and warranties and further terms

By agreeing to acquire Placing Shares in the Placing, each Placee (and any person acting on such Placee's behalf) irrevocably acknowledges, confirms, undertakes, represents, warrants and agrees (as the case may be) with each of the Bookrunner (in its capacity as a bookrunner and agent of the Company), the Introducing Agents (in their capacity as agents to the Company) and the Company, in each case as a fundamental term of its application for Placing Shares, that:

a)    it has read and understood this Announcement (including this Appendix) in its entirety and that its acquisition of 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 undertakes not to redistribute or duplicate this Announcement;

b)    no offering document or prospectus has been or will be prepared in connection with the Placing and it has not received and will not receive a prospectus or other offering document in connection with the Placing or the Placing Shares;

c)    the Placing does not constitute a recommendation or financial product advice and the Bookrunner has had regard to its particular objectives, financial situation and needs;

d)    it is not outside of the United Kingdom nor ordinarily resident or incorporated outside of the United Kingdom;

e)    it has neither received nor relied on any "inside information" as defined in the EU Market Abuse Regulation (596/2014) ("MAR") concerning the Company in accepting this invitation to participate in the Placing;

f)     it has the power and authority to carry on the activities in which it is engaged, to subscribe and/or acquire Placing Shares and to execute and deliver all documents necessary for such acquisition;

g)    none of the Company, the Bookrunner, the Introducing Agents or any of their respective affiliates, agents, directors, officers or employees or any person acting on behalf of any of them has provided, and none of them will provide, it with any material regarding the Placing Shares or the Company or any other person other than this Announcement (including this Appendix), the presentation prepared by the Company in connection with the issue and, if it is  already a shareholder in the Company, the circular provided to the Company's existing shareholders in connection with the placing and nor has it requested either of the Bookrunner, the Company, the Introducing Agents or any of their respective affiliates or any person acting on behalf of any of them to provide it with any such information;

h)    the only information on which it is entitled to rely on and on which it has relied in committing to subscribe for the Placing Shares is contained in 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 Publicly Available Information; 

i)     it has (i) made its own assessment of the Company, the Placing Shares and the terms of the Placing based on this Announcement (including this Appendix) and Publicly Available Information; and (ii) it has conducted its own investigation of the Company, the Placing and the Placing Shares, has satisfied itself that the information is still current and has relied on that investigation for the purposes of its decision to participate in the Placing (such information, together with the information contained in the Announcement (including this Appendix), the "Information");

j)     none of the Company, the Bookrunner, the Introducing Agents or any of their respective affiliates has made any representations to it, express or implied, with respect to the Company, the Placing, the Placing Shares or the accuracy, completeness or adequacy of the Information, and each of them expressly disclaims any liability in respect thereof;

k)    it will not hold the Bookrunner or any of its respective affiliates responsible for any misstatements in or omissions from any Information. Nothing in this paragraph or otherwise in this Announcement (including this Appendix) excludes the liability of any person for fraudulent misrepresentation made by that person;

l)     it and each account it represents is not, and at the time the Placing Shares are subscribed for, neither it nor the beneficial owner of the Placing Shares will be, a resident of Australia, the Republic of South Africa, Canada, Japan, New Zealand or any jurisdiction in which it would be  unlawful to make or accept an offer of the Placing Shares and acknowledges that the Placing Shares have not been and will not be registered under the securities legislation of Australia, the Republic of South Africa, Canada, Japan or New Zealand and, subject to certain exceptions, may not be offered, sold, transferred, taken up, renounced, distributed or delivered, directly or indirectly, within or into those jurisdictions;

m)   it and each account it represents is: (A) not within the United States and will not be within the United States at the time that any buy order for Placing Shares is originated by it; (B) acquiring the Placing Shares in an "offshore transaction" as defined in Regulation S under the Securities Act; and (C) not acquiring any of the Placing Shares as a result of any form of "directed selling efforts" (within the meaning of Regulation S under the Securities Act);

n)    it understands, and each account it represents has been advised that: (i) the Placing Shares have not been and will not be registered under the Securities Act or with any regulatory authority of any other state or other jurisdiction of the United States; (ii) the Placing Shares are being offered and sold only: (a) outside of the United States in accordance with Rule 903 of Regulation S under the Securities Act; or (b) in an "offshore transaction" within the meaning of and pursuant to Regulation S under the Securities Act; and (iii) no representation has been made as to the availability of any exemption under the Securities Act or any relevant state or other jurisdiction's securities laws for the reoffer, resale, pledge or transfer of the Placing Shares;

o)    it will not distribute, forward, transfer or otherwise transmit this Announcement or any other materials concerning the Placing (including any electronic copies thereof), in or into the United States, Australia, the Republic of South Africa, Canada, Japan or New Zealand;

p)    it will not offer or sell any Placing Shares to any person in any jurisdiction in which it would be  unlawful to make or accept an offer of the Placing Shares;

q)    it acknowledges that no person is authorised in connection with the Placing to give any information or make any representation other than as contained in this Announcement and, if given or made, any information or representation must not be relied upon as having been authorised by the Company or the Bookrunner;

r)     the content of this Announcement is exclusively the responsibility of the Company and that none of the Bookrunner, the Introducing Agents or any of their respective affiliates, agents, directors, officers or employees or any person acting on behalf of any of them has or shall have any liability for any information, representation or statement contained in this Announcement or any information previously or subsequently published by or on behalf of the Company, including, without limitation, any of the Information and will not be liable for any Placee's decision to participate in the Placing based on any information, representation or statement contained in this Announcement or otherwise.  Each Placee further represents, warrants and agrees that the only information on which it is entitled to rely and on which such Placee has relied in committing itself to subscribe for the Placing Shares is contained in this Announcement and any information previously published by the Company by notification to a RIS, such information being all that it deems necessary to make an investment decision in respect of the Placing Shares and that it has neither received nor relied on any other information given or representations, warranties or statements made by any of the Bookrunner, the Introducing Agents or the Company and none of the Bookrunner, the Introducing Agents or the Company will be liable for any Placee's decision to accept an invitation to participate in the Placing based on any other information, representation, warranty or statement;

s)    neither it, nor the person specified by it for registration as holder of Placing Shares is, or is acting as nominee or agent for, and the Placing Shares will not be allotted to, a person who is or may be liable to stamp duty or stamp duty reserve tax under any of sections 67, 70, 93 and 96 of the Finance Act of 1986 (depositary receipts and clearance services);

t)     if in the United Kingdom, it has complied with its obligations under MAR and, in connection with money laundering and terrorist financing, under the Proceeds of Crime Act 2002, the Terrorism Act 2000, the Terrorism Act2006, the Anti-Terrorism Crime and Security Act 2001 and the Money Laundering Regulations 2007 (together, the "Regulations") and, if making payment on behalf of a third party, satisfactory evidence has been obtained and recorded by it to verify the identity of the third party as required by the Regulations;

u)    it is acting as principal only in respect of the Placing or, if it is acting for any other person: (i) it is duly authorised to do so and has full power to make the acknowledgments, representations and agreements herein on behalf of each such person; and (ii) it is and will remain liable to the Company and/or the Bookrunner and/or the Introducing Agents 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).  Each Placee agrees that the provisions of this paragraph shall survive the resale of the Placing Shares by or on behalf of any person for whom it is acting;

v)     if a financial intermediary (as that term is used in Article 3(2) of the Prospectus Directive) that the Placing Shares subscribed for by it in the Placing will not be subscribed for on a non-discretionary basis on behalf of, nor will they be subscribed for with a view to their offer or resale to, persons in a member state of the EEA other than Professional Investors, or in circumstances in which the prior consent of the Bookrunner has been given to the proposed offer or resale;

w)    it and any person acting on its behalf falls within Article 19(5) and/or 49(2)(a) to (d) 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;

x)    it has not offered or sold and will not offer or sell any Placing Shares to the public in any member state of the EEA except in circumstances falling within Article 3(2) of the Prospectus Directive which do not result in any requirement for the publication of a prospectus pursuant to Article 3 of that Directive;

y)    it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of FSMA) relating to the Placing Shares in circumstances in which section 21(1) of FSMA does not require approval of the communication by an authorised person;

z)    it has complied and will comply with all applicable provisions of FSMA with respect to anything done by it in relation to the Placing Shares in, from or otherwise involving, the United Kingdom;

aa)  to the fullest extent permitted by law, the Placee acknowledges and agrees to the disclaimers contained in this announcement and acknowledges and agrees to comply with the selling restrictions set out in this announcement;

bb)  if in a member state of the EEA, it is a "professional investor" within the meaning of the AIFMD and, additionally, if in the United Kingdom, it is a person: (i) having professional experience in matters relating to investments and who falls within the definition of "investment professionals" in Article 19(5) of the Order; (ii) who is a high net worth entity falling within Article 49 of the Order; or (iii) to whom this Announcement may otherwise lawfully be communicated;

cc)  no action has been or will be taken by either the Company, the Bookrunner or the Introducing Agents or any person acting on behalf of the Company or any of the Bookrunner or the Introducing Agents that would, or is intended to, permit a public offer of the Placing Shares in any country or jurisdiction where any such action for that purpose is required;

dd)  it and any person acting on its behalf is entitled to subscribe for the Placing Shares under the laws of all relevant jurisdictions which apply to it and that it has fully observed such laws and obtained all such governmental and other guarantees, permits, authorisations, approvals and consents which may be required thereunder and complied with all necessary formalities and that it has not taken any action or omitted to take any action which will or may result in any of the Bookrunner, the Company or any of their respective directors, officers, agents, employees or advisers acting in breach of the legal or regulatory requirements of any jurisdiction in connection with the Placing;

ee)  it irrevocably appoints any director of the Company or any director of the Bookrunner to be its agent and on its behalf (without any obligation or duty to do so) to sign, execute and deliver any documents and do all acts, matters and things as may be necessary for, or incidental to, its subscription for all or any of the Ordinary Shares for which it has given a commitment under the Placing, in the event of its own failure to do so;

ff)    it has all necessary capacity and has obtained all necessary consents and authorities to enable it to commit to its participation in the Placing and to perform its obligations in relation thereto (including, without limitation, in the case of any person on whose behalf it is acting, all necessary consents and authorities to agree to the terms set out or referred to in this Announcement) and will honour such obligations;

gg)  it (and any person acting on its behalf) will make payment for the Placing Shares allocated to it in accordance with the terms and conditions of this Announcement (including this Appendix), on the due time and date set out herein, failing which the relevant Placing Shares may be placed with other persons or sold as the Bookrunner may in its absolute discretion determine and without liability to such Placee;

hh)  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 Bookrunner or 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;

ii)    the person whom it specifies for registration as holder of the Placing Shares will be: (i) itself; or (ii) its nominee, as the case may be.  None of the Company, the Bookrunner or the Introducing Agents will be responsible for any liability to stamp duty or stamp duty reserve tax or other similar taxes resulting from a failure to observe this requirement.  Each Placee and any person acting on behalf of such Placee agrees to indemnify the Company, the Bookrunner and the Introducing Agents and their respective affiliates, agents, directors, officers and employees in respect of the same on an after-tax basis on the basis that the Placing Shares will be allotted to the CREST stock account of  the Bookrunner (or either of them) who will hold them as nominee on behalf of such Placee until settlement in accordance with its standing settlement instructions;

jj)    that none of the Bookrunner, the Introducing Agents nor any of their respective affiliates, agents, directors, officers or employees nor any person acting on behalf of any of them, are 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 the Bookrunner or the Introducing Agents and neither the Bookrunner nor the Introducing Agents have any duties or responsibilities to it for providing the protections afforded to their respective clients or customers or for providing advice in relation to the Placing nor in respect of any representations, warranties, undertakings or indemnities contained in the Placing Agreement nor for the exercise or performance of any of its rights and obligations thereunder including any rights to waive or vary any conditions or exercise any termination right;

kk)  in making any decision to subscribe for the Placing Shares, it has knowledge and experience in financial, business and international investment matters as is required to evaluate the merits and risks of subscribing for the Placing Shares.  It further confirms that it is experienced in investing in securities of this nature in this sector and is aware that it may be required to bear, and is able to bear, the economic risk of participating in, and is able to sustain a complete loss in connection with, the Placing.  It further confirms that it relied on its own examination and due diligence of the Company and its associates taken as a whole, and the terms of the Placing, including the merits and risks involved, and not upon any view expressed or information provided by or on behalf of any of the Bookrunner or the Introducing Agents;

ll)    in connection with the Placing, the Bookrunner and any of its affiliates acting as an investor for its own account may take up Placing Shares in the Company and in that capacity may subscribe for, retain, purchase or sell for its own account such Ordinary Shares and any other securities of the Company or related investments and may offer or sell such securities or other investments otherwise than in connection with the Placing.  The Bookrunner does not intend to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligation to do so;

mm)       these terms and conditions and any agreements entered into by it pursuant to these terms and conditions and any non-contractual obligations arising out of or in connection with such agreements shall be governed by and construed in accordance with the laws of England and Wales and it submits (on behalf of itself and on behalf of any person on whose behalf it is acting) to the exclusive jurisdiction of the English courts as regards any claim, dispute or matter arising out of any such contract, except that enforcement proceedings in respect of the obligation to make payment for the Placing Shares (together with any interest chargeable thereon) may be taken by the Company or the Bookrunner 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;

nn)  the Company, the Bookrunner, each of the Introducing Agents and their respective affiliates and others will rely upon the truth and accuracy of acknowledgements, representations, warranties and agreements set forth herein and which are given to each of the Bookrunner and the Introducing Agents on their own behalf and on behalf of the Company and are irrevocable and it irrevocably authorises the Company and the Bookrunner to produce this Announcement, pursuant to, in connection with, or as may be required by any applicable law or regulation, administrative or legal proceeding or official inquiry with respect to the matters set forth herein.  It agrees that if any of the acknowledgements, representations, warranties and agreements made in connection with its subscribing for and/or acquiring of Placing Shares is no longer accurate, it shall promptly notify the Company and the Bookrunner;

oo)  the Placee has the funds available to pay for the Placing Shares for which it has agreed to subscribe and acknowledges and agrees that it will make payment to the Bookrunner 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 the Bookrunner may, in its absolute discretion determine 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;

pp)  it will indemnify on an after-tax basis and hold the Company, the Bookrunner and each of the Introducing Agents and their respective affiliates harmless from any and all costs, claims, liabilities and expenses (including legal fees and expenses) arising out of or in connection with any breach of the representations, warranties, acknowledgements, agreements and undertakings in this Appendix and further agrees that the provisions of this Appendix shall survive after completion of the Placing;

qq)  none of the Company, the Bookrunner or any of the Introducing Agents owes any fiduciary or other duties to any Placee in respect of any acknowledgements, confirmations, undertakings, representations, warranties or indemnities in the Placing Agreement;

rr)    its acquisition of Placing Shares is in full compliance with applicable laws and regulations;

ss)  it agrees that, having had the opportunity to read this document it shall be deemed to have had notice of all information, undertakings, representations and warranties contained in this document that it is acquiring Ordinary Shares solely on the basis of this document and no other information;

tt)    its name and its participation in the Placing may be disclosed, if required by law or any applicable rules or regulations or in such other circumstances as the Bookrunner may consider appropriate;

uu)  time is of the essence as regards its obligations under this Appendix;

vv)   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 the Bookrunner;

ww) the Placing Shares will be issued subject to the terms and conditions of this Appendix; and

xx)  its commitment to take up Placing Shares on the terms set out in this Announcement (including this Appendix) will continue notwithstanding any amendment that may or in the 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 or the Bookrunner's conduct of the Placing.

The foregoing acknowledgements, confirmations, undertakings, representations and warranties are given for the benefit of the Company, the Bookrunner and each of the Introducing Agents and are irrevocable.

Please also note that 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 relates only to their allotment and issue to Placees, or such persons as they nominate as their agents, direct from the Company for the Placing Shares in question.  Such agreement also assumes that the Placing Shares are not being subscribed for in connection with arrangements to issue depositary receipts or to issue or transfer the Placing Shares into a clearance service.  If there are any such arrangements, or the settlement relates to any other dealing in the Placing Shares, stamp duty or stamp duty reserve tax or other similar taxes may be payable, for which none of the Company or the Bookrunner or any of the Introducing Agents will be responsible and the Placees shall indemnify the Company, the Bookrunner and the Introducing Agents on an after-tax basis for any stamp duty or stamp duty reserve tax paid by them in respect of any such arrangements or dealings.  If this is the case, each Placee should seek its own advice and notify the Bookrunner accordingly.

Neither the Company, the Bookrunner nor any of the Introducing Agents are liable to bear 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 in or outside the United Kingdom by any Placee or any other person on a Placee's acquisition of any Placing Shares or the agreement by a Placee to acquire any Placing Shares.  Each Placee agrees to indemnify on an after-tax basis and hold harmless the Company, the Bookrunner and each Introducing Agent and their respective affiliates, agents, directors, officers and employees from any and all such stamp, issue, securities, transfer, registration, documentary or other duties or taxes (including interest, fines or penalties relating thereto).

Each Placee and any person acting on behalf of each Placee acknowledges and agrees that the Bookrunner or any of their respective affiliates may, at their absolute discretion, agree to become a Placee in respect of some or all of the Placing Shares.

When a Placee or person acting on behalf of the Placee is dealing with the Bookrunner, any money held in an account with the Bookrunner on behalf of the Placee and/or any person acting on behalf of the Placee will not be treated as client money within the meaning of the rules and regulations of the FCA made under FSMA.  The Placee acknowledges that the money will not be subject to the protections conferred by the client money rules; as a consequence, this money will not be segregated from such the Bookrunner's money in accordance with the client money rules and will be used by that the Bookrunner in the course of its own business; and the Placee will rank only as a general creditor of the Bookrunner.

All times and dates in this Announcement may be subject to amendment by the Bookrunner (in its absolute discretion).  The Bookrunner shall notify the Placees and any person acting on behalf of the Placees of any changes.

In this Announcement, "after-tax basis" means in relation to any payment made to the Company, the Bookrunner or its respective affiliates, agents, directors, officers and employees pursuant to this Announcement where the payment (or any part thereof) is chargeable to any tax, a basis such that the amount so payable shall be increased so as to ensure that after taking into account any tax chargeable (or which would be chargeable but for the availability of any relief unrelated to the loss, damage, cost, charge, expense or liability against which the indemnity is given on such amount (including on the increased amount)) there shall remain a sum equal to the amount that would otherwise have been so payable.

 

 


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