TIDMVLS
RNS Number : 8393B
Velocys PLC
15 January 2018
News release
Velocys plc
("Velocys" or the "Company")
15 January 2018
Fund raise of approximately GBP18.4 million
Velocys plc (VLS.L), the renewable fuels company, is pleased to
announce that it intends to raise
approximately GBP18.4 million (gross) by way of a firm placing
and placing and open offer.
Highlights:
-- Fund raising of approximately GBP18.4 million (before expenses):
o Approximately GBP14 million (before expenses) by way of a firm
placing of 139,605,000 New Ordinary Shares (the "Firm Placing
Shares") at a placing price of 10 pence per share (the "Placing
Price") (the "Firm Placing"); and
o GBP4.4 million (before expenses) by way of an open offer (the
"Open Offer") made to Eligible Shareholders of 44,057,946 New
Ordinary Shares (the "Open Offer Shares") at the Placing Price.
o Both the Firm Placing and the Placing and Open Offer are
strongly supported by existing Shareholders. Approximately half of
the Firm Placing Shares have been placed with the Company's
existing Shareholders. In addition, all of the Open Offer Shares
have been conditionally placed with two of the Company's existing
Shareholders, Henderson and Lansdowne, subject to clawback to
satisfy valid acceptances by Eligible Shareholders under the Open
Offer (the "Placing and Open Offer" and, together with the Firm
Placing, the "Capital Raising").
-- The Placing Price represents a discount to the closing
mid-market price of the Ordinary Shares as at 12 January 2018 of
17.25 pence per Ordinary Share.
-- The Firm Placing Shares will represent approximately 42.2 per
cent. of the Enlarged Share Capital (provided that no options,
warrants or convertible loan notes are exercised). The Firm Placing
Shares are not subject to clawback and are not part of the Open
Offer.
-- The Open Offer Shares will represent approximately 13.3 per
cent. of the Enlarged Share Capital (provided that no options,
warrants or convertible loan notes are exercised).
-- Net proceeds of the Capital Raising will be used
predominantly: (i) towards funding initial development costs in
respect of the Company's Mississippi biorefinery while the Company
pursues strategic investment for development costs and the project
capex; (ii) to progress the Company's UK waste-to-renewable jet
fuel project; and (iii) to fund the Company's working capital and
central operating costs, including additional support to ENVIA
until it reaches sustainable profitability expected in the second
quarter of 2018.
-- The Capital Raising is conditional (amongst other things)
upon the passing of certain resolutions. A General Meeting is being
convened for the purpose of considering the relevant resolutions at
10.00 a.m. on 31 January 2018 at the offices of Mayer Brown
International LLP, 201 Bishopsgate, London, EC2M 3AF. Neither the
Firm Placing nor the Placing and Open Offer is being underwritten
by Numis Securities or Canaccord Genuity.
David Pummell, CEO of Velocys, said:
"We now have our commercial scale technology in operation at
ENVIA Oklahoma and have made considerable progress in 2017 taking
forward our new strategy to enter the renewable fuels markets and
grow material supply positions. Today's financing ensures Velocys
can take forward both the development of our second biorefinery in
the US, targeting final investment decision around the middle of
2019 and completing the feasibility study for the third biorefinery
in the UK.
We would like to thank existing shareholders for their support
and welcome some significant new shareholders to the register. We
are also pleased to include an open offer element that allows
shareholders who are resident in the United Kingdom to
participate."
- Ends -
For further information, please contact:
Velocys +44 1235 838
David Pummell, CEO 621
Numis Securities (Nomad and joint
broker)
Alex Ham
Stuart Skinner
Jamie Lillywhite +44 20 7260
Tom Ballard 1000
Canaccord Genuity (Joint broker)
Henry Fitzgerald-O'Connor +44 20 7523
Ben Griffiths 8000
Camarco (Financial communications
& PR)
Billy Clegg
Georgia Edmonds +44 20 3757
Tom Huddart 4983
Certain information contained in this announcement would have
constituted inside information (as defined by Article 7 of
Regulation (EU) No 596/2014) ("MAR") prior to its release as part
of this announcement. In addition, market soundings (as defined in
MAR) were taken in respect of the Capital Raising with the result
that certain persons became aware of inside information (as defined
in MAR), as permitted by MAR. Therefore, those persons that
received inside information in a market sounding are no longer in
possession of such inside information relating to the Company and
its securities.
www.velocys.com
IMPORTANT NOTICES
This document does not constitute an offer to buy, acquire or
subscribe for, or the solicitation of an offer to buy, acquire or
subscribe for, New Ordinary Shares or an invitation to buy, acquire
or subscribe for the New Ordinary Shares in any jurisdiction. This
document has not been filed with, examined or approved by the
Financial Conduct Authority or the London Stock Exchange or any
other regulatory authority.
Numis Securities Limited ("Numis"), which is authorised and
regulated in the United Kingdom by the Financial Conduct Authority
and is a member of the London Stock Exchange, is acting as
nominated adviser and joint broker to the Company for the purposes
of the AIM Rules. Canaccord Genuity Limited ("Canaccord"), which is
authorised and regulated in the United Kingdom by the Financial
Conduct Authority and is a member of the London Stock Exchange, is
acting as joint broker to the Company for the purposes of the AIM
Rules. Numis and Canaccord are each acting exclusively for the
Company in connection with the Firm Placing and the Placing and
Open Offer, and will not be responsible to anyone other than the
Company for providing the protections afforded to their respective
clients or for providing advice in relation to the proposals in
this document or any other matter referred to in this document.
Neither Numis nor Canaccord have authorised the contents of this
document for any purpose and, without limiting the statutory rights
of any person to whom this document is issued, no representation or
warranty, express or implied, is made by either Numis or Canaccord
as to any of the contents or completeness of this document.
This announcement contains (or may contain) certain
forward-looking statements with respect to certain of the Company's
current expectations and projections about future events. These
statements, which sometimes use words such as "anticipate",
"believe", "intend", "estimate", "expect" and words of similar
meaning, reflect the directors' beliefs and expectations and
involve a number of risks, uncertainties and assumptions that could
cause actual results and performance to differ materially from any
expected future results or performance expressed or implied by the
forward-looking statement. Statements contained in this
announcement regarding past trends or activities should not be
taken as a representation that such trends or activities will
continue in the future. The information contained in this
announcement is subject to change without notice and neither Numis
nor Canaccord nor, except as required by applicable law, the
Company assumes any responsibility or obligation to update publicly
or review any of the forward-looking statements contained herein.
You should not place undue reliance on forward-looking statements,
which speak only as of the date of this announcement.
The distribution of this announcement outside the United Kingdom
may be restricted by law and therefore any persons outside the
United Kingdom into whose possession this announcement comes should
inform themselves about and observe any such restrictions as to the
Firm Placing, the Placing and Open Offer, the New Ordinary Shares
and the distribution of this announcement. Any failure to comply
with such restrictions may constitute a violation of the securities
laws of any jurisdiction outside of the United Kingdom. This
announcement does not constitute an offer to sell or an invitation
to subscribe for, or the solicitation of an offer to buy or to
subscribe for, shares in any jurisdiction in which such an offer or
solicitation is unlawful. In particular, this announcement is not
for release, publication or distribution, directly, or indirectly,
in whole or in part, in, into or from the United States, Australia,
New Zealand, Canada, the Republic of South Africa, Japan or to any
US Person, or any national, resident or citizen of Australia, New
Zealand, Canada, the Republic of South Africa or Japan. No offering
of New Ordinary Shares, or any other securities of the Company, is
being made in the United States and this announcement, and the
information contained herein, does not constitute an offer to sell
or a solicitation of an offer to buy any New Ordinary Shares or any
other securities of the Company in the United States.
No person has been authorised to give any information or to make
any representation other than those contained in this announcement
(or the circular to be sent to Shareholders today) in connection
with the Firm Placing, the Placing and Open Offer and Admission
and, if given or made, such information or representation must not
be relied upon as having been authorised by or on behalf of the
Company, Numis or Canaccord or any of their respective directors,
employees or officers.
Information to Distributors
Solely for the purposes of the product governance requirements
of Directive 2014/65/EU on markets in financial instruments, as
amended ("MiFID II") and local implementing measures, and
disclaiming all and any liability, whether arising in tort,
contract or otherwise, which any "manufacturer" (for the purposes
of the Product Governance Requirements) may otherwise have with
respect thereto, the Firm Placing Shares and the Open Offer Shares
have been subject to a product approval process, which has
determined that such Firm Placing Shares and the Open Offer Shares
are: (i) compatible with an end target market of retail investors
and investors who meet the criteria of professional clients and
eligible counterparties, each as defined in MiFID II; and (ii)
eligible for distribution through all distribution channels as are
permitted by MiFID II (the "Target Market Assessment").
Notwithstanding the Target Market Assessment, Distributors should
note that: the price of Firm Placing Shares and the Open Offer
Shares may decline and investors could lose all or part of their
investment; Firm Placing Shares and the Open Offer Shares offer no
guaranteed income and no capital protection; and an investment in
Firm Placing Shares and the Open Offer Shares is compatible only
with investors who do not need a guaranteed income or capital
protection, who (either alone or in conjunction with an appropriate
financial or other adviser) are capable of evaluating the merits
and risks of such an investment and who have sufficient resources
to be able to bear any losses that may result therefrom. The Target
Market Assessment is without prejudice to any contractual, legal or
regulatory selling restrictions in relation to the Firm Placing and
the Placing and Open Offer. For the avoidance of doubt, the Target
Market Assessment does not constitute: (a) an assessment of
suitability or appropriateness for the purposes of MiFID II; or (b)
a recommendation to any investor or group of investors to invest
in, or purchase, or take any other action whatsoever with respect
to the Firm Placing Shares and the Open Offer Shares.
1. Introduction
The Board has today announced that it proposes to raise, subject
to certain conditions, approximately GBP18.4 million (before
expenses) by way of a firm placing and a placing and open offer
comprising: (i) approximately GBP14 million (before expenses) by
way of a firm placing of 139,605,000 New Ordinary Shares at a
placing price of 10 pence per share; and (ii) GBP4.4 million
(before expenses) by way of an open offer made to Eligible
Shareholders of 44,057,946 New Ordinary Shares at a price of 10
pence per share. The Open Offer Shares have been conditionally
placed with two of the Company's existing shareholders, Henderson
and Lansdowne, subject to clawback to satisfy valid acceptances by
Eligible Shareholders under the Open Offer (the "Placing and Open
Offer" and, together with the Firm Placing, the "Capital Raising").
The Placing Price represents a discount to the closing mid-market
price of the Ordinary Shares as at 12 January 2018 of 17.25 pence
per Ordinary Share.
The Directors intend to use the net proceeds raised by the
Capital Raising as follows: (i) GBP13.6 million to be used towards
funding initial direct and indirect development costs in respect of
the Company's Mississippi biorefinery while the Company pursues
strategic investment for development costs and the project capex;
and (ii) GBP3.5 million to be used for working capital and central
costs, including costs to pursue the Company's UK
waste-to-renewable jet fuel project and to support ENVIA. Details
of the basis on which the Directors have estimated the Company's
funding requirements are set out in paragraph 5 below.
The Capital Raising is conditional (amongst other things) upon
the passing of certain resolutions in order to ensure that the
Directors have the necessary authorities and powers to allot the
Firm Placing Shares and Open Offer Shares for cash on a
non-pre-emptive basis. A General Meeting is therefore being
convened for the purpose of considering the Resolutions at 10.00
a.m. on 31 January 2018 at the offices of Mayer Brown International
LLP, 201 Bishopsgate, London, EC2M 3AF. The Capital Raising is also
conditional on the Joint Broker Placing Agreement becoming
unconditional and not being terminated in accordance with its
terms. Neither the Firm Placing nor the Placing and Open Offer is
being underwritten by Numis or Canaccord.
The purpose of this document is to provide you with details of,
and the reasons for, the Capital Raising and why the Directors
believe it to be in the best interests of the Company and its
Shareholders and, further, why they recommend that you vote in
favour of the Resolutions. The Directors intend to vote in favour
of the Resolutions in respect of their legal and/or beneficial
shareholdings amounting, in aggregate, to 315,789 Ordinary Shares
representing approximately 0.22 per cent. of the Ordinary Shares in
issue as at the date of this document.
Further details of the Firm Placing and the Placing and Open
Offer are set out in paragraphs 6 and 7 below, respectively.
2. Information on the Company's projects
(a) ENVIA - the Company's commercial reference plant
In September 2016, construction of the first plant incorporating
the Company's technology was completed. This was ENVIA Energy's
plant in Oklahoma City, which acts as the commercial scale
reference plant for the Company's technology, and which uses
landfill gas as well as pipeline natural gas as feedstock. ENVIA
subsequently delivered the start-up of the commercial scale
Fischer-Tropsch modules and upstream units, culminating in the
first Fischer-Tropsch product being successfully produced in
February 2017. In June 2017, the first finished, products (premium
renewable waxes, diesel and naphtha) were produced and in September
2017 the plant produced its first sustainable revenues. In October
2017, the plant achieved an operational capacity of 200 barrels per
day and the Directors believe that the plant will continue ramping
up to its target operational capacity of 250 barrels per day.
Finished saleable products are meeting customer product
specifications and revenues are being generated from sales to
product offtakers.
The Company expects that the ENVIA plant will obtain Renewable
Identification Number qualification during the first quarter of
2018, with the first qualified Renewable Identification Number sale
and positive cash flows expected during the second quarter of 2018.
The Velocys reactor technology in the ENVIA plant represents the
commercial system that will be used in the Company's future
renewable fuels biorefineries.
The board of ENVIA is in the process of assessing the likely
funding requirements of the project to achieve positive cash flows,
following which it may seek contributions from some or all of the
joint venture partners (including the Company).
(b) Mississippi - the Company's second US biorefinery, using woody biomass
Overview
In October 2017, the Company signed a site option agreement with
Adams County in the State of Mississippi for its second US
biorefinery to be located in Natchez, Mississippi. The Company has
been offered economic development incentives from Adams County (for
which Natchez is the county seat) estimated to be worth the
equivalent of $42 million. The Directors expect the project to
qualify for additional incentives worth up to $15 million, provided
via Mississippi's Advantage Jobs Act and other statutory tax
incentives. These incentive packages would reduce the Company's
future tax liabilities and are subject to the Company meeting
certain minimum requirements for capital investment and local
employment opportunities. The Company has also received commitments
from Adams County worth approximately $4 million (relating to the
land and upgrades to the site) and $1 million site upgrade
commitments from local utility suppliers, further increasing the
attractiveness of the site.
The site and local area benefits from: (i) an attractive
regulatory and tax regime; (ii) the availability of an abundant
local supply of low cost forestry residue that will form the
feedstock of the plant; (iii) advantaged transportation
infrastructure including barge, rail and road; (iv) accessible
utilities; (v) land that meets all the required criteria including
space and terrain to support an industrial development; (vi) a
local workforce skilled in servicing the forestry industry; and
(vii) a local community with facilities and amenities that will
attract additional skilled personnel during construction and
ongoing plant operations. The choice of the 100-acre Natchez site
was confirmed after the Company analysed a broad set of operational
and tax considerations at twelve possible sites in four States in
the Southeast of the United States. Due diligence, including site
visits, was completed at each of these sites and incentive offers
were received from each State in question. The Directors believe
that the Natchez biorefinery will be the first of a series of woody
biomass residue conversion to renewable fuels biorefineries to be
set up by the Company.
The Company began the process of selecting strategic partners
for its Mississippi biorefinery projects in early 2017 and
continues to assess and refine its choice of partners. Site
permitting is ongoing. Pre-FEED has been completed and the
integrated technology demonstration is expected to commence
shortly. The initial phase of the FEED engineering study will
commence in the first quarter of 2018. The Company is in the
process of selecting an EPC partner to complete the FEED study.
The Company estimates that total remaining capital for it to
develop the project to FID will be in the order of GBP45 million.
In addition to the expenditure proposed by the Company from the net
proceeds of the Capital Raising, the Company intends to secure
investment by a strategic partner.
In respect of the project capex, details of which are set out
below, the Company intends that equity letters of intent in
relation to the Mississippi plant are expected to be entered into
during the first half of 2019, with FID and signature of
feed/offtake agreements expected during the middle part of 2019.
Plant construction is then expected to commence following FID, with
plant commissioning expected to begin during 2021.
The signature of the site option agreement completes one of the
work packages required for the U.S. Department of Agriculture loan
guarantee application. The Company was invited to submit a Phase II
application for the loan guarantee in June 2017, which could apply
to up to $200 million of debt as part of the total installed cost
of the project. The Company has engaged SMBC as the lender of
record and as its financial advisor. A preliminary credit committee
hearing is expected to take place with SMBC in due course, with the
final credit committee hearing thereafter as the project nears FID.
The Company expects to receive the US Department of Agriculture's
conditional commitment of its loan guarantee in the third quarter
of 2018.
Key estimates of Mississippi biorefinery economics[1]
The key estimates of the economic parameters of the Mississippi
biorefinery are as follows:
-- 20 million gallons per year renewable fuels;
-- 900 tonnes per day dry feedstock (approximately $1.00 per gallon);
-- approximately $60 million state and local incentives;
-- $350-425 million estimated capex;
-- $50 million annual OPEX ($2.50 per gallon);
-- $138 million annual revenue ($6.90 per gallon) ($1.52/$0.55/$4.83 from products/state credits/federal credits); and
-- $200 million US Department of Agriculture loan guarantee underwritten by SMBC.
Indicative Mississippi biorefinery capital structure[2]
An indicative capital structure of the Mississippi biorefinery
is as follows:
-- $450-575 million total investment capital, of which:
-- $350-425 million comprises estimated capex;
-- $50-100 million comprises estimated financing costs; and
-- approximately $50 million comprises the estimated development
fee, contingency and other costs.
-- EPC contractors to be engaged by the Company will be of investment grade.
-- The Company foresees a capital structure for the project as follows:
-- $200 million US Department of Agriculture loan guarantee/SMBC
underwritten at low cost of debt;
-- $50 million subordinated debt;
-- $200-325 million equity (infrastructure funds, private equity).
At the point that the Mississippi biorefinery reaches FID, the
Company will have the option to negotiate financing structures with
the equity finance providers which have different capital
requirements for the Company. Indicative structures for the
Mississippi biorefinery equity stakes and returns are as
follows:
Indicative option Range of Company Differentiated economics
NPV (GBP)
1. SPV investment Project fees - SPV investment =
and full carry/uplift GBP7 million ($29 million)
of development Licensing - GBP20 Developers investment
capital. million = ($25 million)
Equity - GBP136 Development fee
million = $0
Velocys NPV = $121
million
Velocys levered
IRR = 43 per cent.
Project levered
IRR = 30 per cent.
Project unlevered
IRR = 11 per cent.
2. No SPV investment Project fees - SPV investment =
and full carry/uplift GBP7 million ($0)
of development Licensing - GBP20 Developers investment
capital. million = ($25 million)
Equity - GBP99 Development fee
million = $0
Velocys NPV = $102
million
Velocys levered
IRR = 47 per cent.
Project levered
IRR = 30 per cent.
Project unlevered
IRR = 11 per cent.
3. No SPV investment, Project fees - SPV investment =
full developer GBP35 million ($0)
fee at FID and Licensing - GBP20 Developers investment
lower uplift million = ($25 million)
carry. Equity - GBP17 Development fee
million = $29 million
Velocys NPV = $48
million
Velocys levered
IRR = 77 per cent.
Project levered
IRR = 32 per cent.
Project unlevered
IRR = 12 per cent.
The Directors anticipate that the economics for subsequent
biorefineries will incrementally improve, as a result of
optimisation of capital and operational expenditure, construction
costs, timeline to commercial operations, process integration costs
and the cost of capital.
Feedstock and markets for the renewable fuels produced at the
Mississippi biorefinery
There are abundant woody biomass residues in the US that are
expected to be used as the feedstock for the Mississippi
biorefinery. Over 300 million dry tonnes of suitable feedstock is
available every year in the United States. It is anticipated that
the Mississippi biorefinery will require approximately 330 thousand
tonnes per year of feedstock, from which it will produce 20 million
gallons per year of renewable fuels. The renewable volume
obligation for cellulosic biofuels is currently 311 million
gallons. This is a small fraction of the overall demand for diesel
and jet fuel in the US, where there is predicted to be strong
demand growth. The demand for jet fuel in the US was estimated to
be 20 billion gallons per year in 2016, with demand expected to
grow by 40 per cent. to reach 28 billion gallons per year in 2040.
The demand for diesel in the US is currently estimated to be 40
billion gallons per year, with demand expected to grow by 25 per
cent. to reach 50 billion gallons per year in 2040.
(c) UK waste-to-renewable jet fuel plant
Overview
In September 2017, the Company entered a partnership with
various parties to prepare a business case for a commercial scale
waste-to-renewable jet fuel plant in the United Kingdom. The plant
will take post-recycled waste, destined for landfill or
incineration, and convert it into clean-burning, sustainable jet
fuel. The Directors believe that the changes to the Renewable
Transport Fuels Obligation recently published by the UK
Government's Department for Transport provide the required
commercial platform for this opportunity as, for the first time,
jet fuel will qualify for credits under the Renewable Transport
Fuels Obligation. Other members of the partnership include UK-based
international airline British Airways (owned by International
Consolidated Airlines Group SA), recycling and waste management
expert, Suez Recycling and Recovery UK Ltd and Norma Investments
Ltd (an affiliate of Ervington, one of the Company's major
shareholders).
The feasibility study for the project has commenced and the
Company has two site options under evaluation for the proposed
plant.
The Directors believe that successfully delivering the UK
waste-to-renewable jet fuel plant project could be the starting
point for entry by the Company into the UK waste market. Based on
an input of 300,000 - 500,000 tonnes per year, the Company believes
that the UK waste-to-renewable jet fuel plant will be capable of
producing an output of between 10 million and 20 million gallons
per year once the plant is fully operational.
Feedstock and market for fuels produced by the UK
waste-to-renewable jet fuel plant
There are estimated to be over 15 million tonnes per year of
waste generated in the UK that the Directors believe is suitable
for use as feedstock for this project. UK jet fuel demand is
currently estimated to be 3.7 billion gallons per year, which is
predicted to grow with a 1 per cent. compound annual growth rate to
4.6 billion gallons per year in 2040. The Renewable Transport Fuel
Obligation development fuel target for 2022 is 100 million gallons
(which is the total volume of qualifying fuels produced in the UK
for which double Renewable Transport Fuel Certificates will be
payable, should the proposed changes to the Renewable Transport
Fuel Obligation be implemented by the Government).
3. Information on the Company
History and development of the Company
The key highlights in the history and development of the Company
are as follows:
-- 2001: Velocys Inc. was incorporated (by Battelle Memorial Institute)
-- 2004: Oxford Catalysts was formed (as a spin out from the University of Oxford)
-- 2006: Oxford Catalysts Group was admitted to trading on AIM
-- 2008: Oxford Catalysts acquired Velocys Inc.
-- 2010: The Company's microchannel Fischer-Tropsch technology
was demonstrated at a field demonstration in Austria
-- 2012: A Fischer-Tropsch field demonstration was carried out
at a Petrobras site in Brazil
-- 2013: Oxford Catalysts Group PLC changed its name to Velocys plc (Ticker: VLS.L)
-- 2014: The ENVIA Energy joint venture was formed. FID for its
Oklahoma City plant followed later that year
-- 2017: the Mississippi Biorefinery project announced
-- 2017: UK waste-to-renewable jet fuel project announced
-- 2017: ENVIA's Oklahoma City plant fully operational
The Velocys team
The Executive Committee of the Company is comprised of David
Pummell (Chief Executive Officer), Dr Paul Schubert (Chief
Operating Officer), John Tunison (Interim Chief Financial Officer)
and Henrik Wareborn (Interim Chief Commercial Officer).
The Executive Committee has extensive experience in oil and gas
(with members of the Executive Committee having previous experience
at BP, Shell and Phillips, as well as in refining and marketing
business management, manufacturing, finance, supply and logistics),
renewable/gas-to-liquid plants (with members of the Executive
Committee having previous experience at Sasol, Syntroleum and SGS,
as well as generally in project management, plant commissioning and
start up, operations and gas-to-liquid products), as well as having
commercial and financing experience (with members of the Executive
Committee having previous experience at Goldman Sachs, Natixis and
generally in investment banking, commodities trading, private
equity/venture capital fundraising and project finance).
Other members of the wider Velocys team have experience in the
oil & gas industry and project engineering, and the team
includes experts in plant commissioning and operations, as well as
commercial, intellectual property and finance professionals.
Business model
Velocys, with its commercial scale technology and new strategy
and business model, is now entering renewable fuels markets to grow
a material supply position. The Company has world class partners,
and the Directors believe that the Company is at the forefront of
unlocking the advanced renewable fuels market. There is strong
legislative support for renewable fuels in the United States at
both the Federal and State levels.
The Company's go to market strategy can be summarised as:
-- identifying attractive markets with scale and optimal locations for future plants;
-- focusing on the Company's priority market - US biomass
residues to renewable jet and diesel;
-- building a consortia of strategic and financial partners to
deliver investment, scale and pace to market; and
-- leveraging the Company's engineering, operational and
technology expertise to optimise future plant costs and
timelines.
Capital structure
In May 2017, the Company raised a total of GBP10 million (before
expenses) which consisted of:
-- GBP9 million of convertible loan notes issued to the
Company's two largest shareholders, Ervington and Lansdowne at a
price of GBP0.50 per loan note. The convertible loan notes were
unsecured, with the final maturity date being 18 months from the
date of issue, with interest accruing at a rate of 8 per cent. per
annum. Conversion was restricted for any note holder if, as a
result of conversion, their shareholding would exceed 29.9 per
cent.; and
-- an equity placing of approximately GBP1 million from other
shareholders at a placing price of GBP0.45 per Ordinary Share.
A total of 146,859,819 Ordinary Shares have been issued and
allotted, with options, warrants and convertible loan notes in
respect of an additional 28,805,933 Ordinary Shares. The total
number of Ordinary Shares, fully diluted is therefore 175,665,752.
As at the close of trading on 12 January 2018, the share price of
the Company was 27.25 pence, giving the Company a market
capitalisation of approximately GBP40 million as at 12 January
2018.
4. Current trading
The Company's financial position and funding requirements
reflect its stage of development as activities become focused on
commercial rollout. Revenues for the period ended 30 June 2017 and
since were minimal, reflecting the Company's transition to
commercial operations.
The interim financial statements for the six months ended 30
June 2017 can be summarised as follows. The revenues for the period
were GBP0.2m (H1 2016: GBP0.5m). Operating loss for the period was
GBP9.4m before and GBP10.1m after exceptional costs (H1 2016:
GBP9.5m before and GBP9.4m after exceptional costs). Cash
(including short term investments) at period end stood at GBP13.8m
(31 December 2016: GBP18.7m), while cash outflow was GBP4.9m (H1
2016: GBP13.3m). Cash outflow included the fundraise of GBP10m
(before expenses) in May 2017, and drawdowns through the period by
ENVIA on the loan facility provided by Velocys of GBP6.9m; cash
outflow excluding these items was GBP7.7m.
5. Use of Proceeds
The Company intends to raise gross proceeds of approximately
GBP18.4 million (before expenses) pursuant to the Capital Raising,
equivalent to approximately GBP17.1 million net of expenses. The
Directors intend that the net proceeds of the Capital Raising will
be used by the Company as follows:
-- GBP4.5 million to be used for its projects, predominantly for
initial development costs in respect of the Company's Mississippi
biorefinery and potentially in support of the ENVIA and the UK
waste-to-renewable jet fuel projects;
-- GBP9.1 million to be used for indirect project development costs; and
-- GBP3.5 million to be used for working capital and central costs.
The Company estimates that total remaining operating and project
costs for it to develop the Mississippi biorefinery project to FID
will be in the order of GBP45 million. In addition to the
expenditure proposed by the Company from the net proceeds of the
Capital Raising, the Company intends to secure investment by a
strategic partner. The Company is targeting strategic project
investment during the first half of 2018 and expects that several
significant development milestones, such as the ENVIA plant
obtaining Renewable Identification Number qualification and
reaching profitability, completion of the integrated technology
demonstration and SMBC preliminary credit committee, will be
achieved during the first half of 2018.
The achievement of FID will be dependent on the Company's
ability to secure the requisite debt and equity funding for the
project capex from strategic partners or otherwise, as well as the
key project procurement, supply and offtake contracts. As such, the
timing of reaching FID is not wholly within the Company's control
and the costs of reaching FID, or the costs of progressing the
development of the Mississippi biorefinery project will be higher
if the Mississippi biorefinery project does not progress to FID in
the timeframes currently anticipated. Should the Company not secure
strategic investment, it will need to seek further funding in due
course in order to be able to cover development costs and its
working capital requirements, which may be from one or a
combination of a capital raising or the realisation of its assets,
such as selling its stake or security in the ENVIA project,
granting additional intellectual property licences or selling
non-core intellectual property.
On achievement of FID, the Company expects to receive: (i) a
licence fee in cash for the supply of its technology, reactors and
catalyst; and (ii) ongoing fees for management and engineering
services to be provided to the project as well as operational
management of plant commissioning and start-up. The Company also
intends to secure either or both of a capital development fee and a
stake in the project with a significant value uplift compared to
its capitalised development costs. The Company's funding
requirements following FID will therefore depend on the final
structure of the FID consortium and on the Company's strategy to
develop and fund its subsequent biorefineries. The financing
options that the Company has will be strategically evaluated by the
Directors throughout the period up to FID.
6. Principal terms of the Firm Placing
The Company proposes raising approximately GBP14 million, before
expenses, by way of a firm placing of up to 139,605,000 new
Ordinary Shares at the Placing Price. The Firm Placing Shares will
be placed by Numis, Canaccord and the Other Brokers as agents for
the Company and pursuant to the Placing Agreements, with
institutional and other professional investors. The Firm Placing is
subject to the terms and conditions set out in Appendix I (which
forms part of this Announcement). The Firm Placing Shares are not
subject to clawback and are not part of the Placing and Open
Offer.
The Placing Price represents a discount to the closing
mid-market price of the Ordinary Shares as at 12 January 2018 of
17.25 pence per Ordinary Share. The Firm Placing Shares will
represent approximately 42.2 per cent. of the Enlarged Share
Capital (provided that no options, warrants or convertible loan
notes are exercised) and will, when issued, rank pari passu in all
respects with the other Ordinary Shares then in issue, including
all rights to all dividends and other distributions declared, made
or paid following Admission.
The Firm Placing is conditional upon (amongst other things):
(a) the passing of the Resolutions at the General Meeting;
(b) the Joint Broker Placing Agreement becoming unconditional
and not having been terminated in accordance with its terms;
(c) Admission occurring on or before 1 February 2018 (or such
later date as Numis, Canaccord and the Company may agree, not being
later than 15 February 2018);
The Joint Broker Placing Agreement contains warranties from the
Company in favour of Numis and Canaccord in relation to, (amongst
other things), the Company and its business. In addition, the
Company has agreed to indemnify Numis and Canaccord in relation to
certain liabilities it may incur in undertaking the Capital
Raising. Numis and Canaccord have the right to terminate the Joint
Broker Placing Agreement in certain circumstances prior to
Admission, in particular, it may terminate in the event that there
has been a material breach of any of the warranties or for force
majeure.
Application will be made for the Firm Placing Shares to be
admitted to trading on AIM, subject to the Joint Broker Placing
Agreement not having been terminated, and it is expected that
trading in the Firm Placing Shares will commence at 8.00 a.m. on 1
February 2018.
Certain of the Directors intend to subscribe for 450,000 Firm
Placing Shares in aggregate at the Placing Price, representing
approximately 0.3 per cent. of the Firm Placing Shares. Assuming
that those Directors subscribe, immediately following Admission
(and assuming no other issuance of new Ordinary Shares prior to
Admission), the Directors of the Company will have a legal and/or
beneficial interest in 765,789 Ordinary Shares.
7. Principal terms of the Placing and Open Offer
The Company considers it important that, where reasonably
practicable, Shareholders have an opportunity to participate in its
equity fundraisings. Accordingly, the Company is proposing to raise
GBP4.4 million (before expenses) by way of the Open Offer. The Open
Offer Shares have been conditionally placed with two of the
Company's existing Shareholders, Henderson and Lansdowne, subject
to clawback to satisfy valid acceptances by Eligible Shareholders
under the Open Offer. Henderson and Lansdowne have agreed under the
terms of the Placing Letters to subscribe for the maximum number of
Open Offer Shares at the Placing Price, subject to clawback, on an
equal basis.
The Open Offer has been structured such that the maximum amount
that can be raised by the Company under the Open Offer will not
exceed the sterling equivalent of EUR5 million. This maximum limit
has been set to ensure that the Company is not required to produce
an approved prospectus pursuant to section 85 of FSMA. The issue of
a prospectus would considerably increase the costs of the
fundraising and it would take much longer to complete, as any such
prospectus would require the prior approval of the UKLA. Based on a
GBP:EUR exchange rate of 1.1233, this means that the maximum amount
which could be raised under the Open Offer is GBP4,451,171. The
Company is proposing to raise GBP4.4 million (before expenses) by
way of the Open Offer.
On, and subject to the terms and conditions of the Open Offer,
the Company invites Eligible Shareholders, being only Shareholders
who are resident in the United Kingdom on the Ex-Entitlement Date,
to apply for their Basic Entitlement of Open Offer Shares at the
Placing Price. Each Eligible Shareholder's Basic Entitlement has
been calculated on the basis of 3 Open Offer Shares for every 10
Existing Ordinary Shares held at the Record Date.
Eligible Shareholders are also invited to apply for additional
Open Offer Shares in accordance with the Excess Entitlement. Any
Open Offer Shares not issued to an Eligible Shareholder pursuant to
their Basic Entitlement will be apportioned between those Eligible
Shareholders who have applied for the Excess Entitlement at the
sole discretion of the Board, provided that no Eligible Shareholder
shall be required to subscribe for more Open Offer Shares than he
or she has specified on the Application Form or through CREST.
The Open Offer is conditional upon:
(a) the passing of the Resolutions at the General Meeting;
(b) the Joint Broker Placing Agreement becoming unconditional
and not having been terminated in accordance with its terms;
(c) Admission occurring on or before 1 February 2018 (or such
later date as Numis, Canaccord and the Company may agree, not being
later than 15 February 2018);
The Open Offer Shares have not been and are not intended to be
registered or qualified for sale in any jurisdiction other than the
United Kingdom. Accordingly, unless otherwise determined by the
Company and effected by the Company in a lawful manner, the
Application Form will not be sent to Existing Shareholders with
registered addresses in any jurisdiction other than the United
Kingdom since to do so would require compliance with the relevant
securities laws of that jurisdiction. Applications from any such
person will be deemed to be invalid. If an Application Form is
received by any Shareholder whose registered address is elsewhere
but who is in fact a resident or domiciled in a territory other
than the United Kingdom, he/she should not seek to take up his/her
allocation.
Appendix II, together with the Circular and the accompanying
Application Form, contains the terms and conditions of the Open
Offer.
If an Eligible Shareholder does not wish to apply for Open Offer
Shares he should not complete or return the Application Form or
send a USE message through CREST.
8. Related party transactions
The participation of each of Ervington, Lansdowne and Henderson
in the Capital Raising constitutes a related party transaction
under the AIM Rules as each is a substantial shareholder (within
the meaning of the AIM Rules). Ervington are subscribing for
40,000,000 Firm Placing Shares at the Placing Price and Lansdowne
are subscribing for 30,000,000 Firm Placing Shares at the Placing
Price. In addition, each of Lansdowne and Henderson are
conditionally subscribing, subject to clawback, for 22,000,000 Open
Offer Shares at the Placing Price in respect of which they will
receive a commission of 5.25 per cent. of the aggregate value at
the Placing Price from the Company. The Directors consider, having
consulted with Numis, the Company's nominated advisor, that the
terms of the related party transaction are fair and reasonable in
so far as its Shareholders are concerned.
9. Resolutions
The Company currently does not have sufficient authority to
allot shares under the Act to effect the Capital Raising.
Accordingly the Resolutions, summarised below, are being proposed
at the General Meeting to ensure that the Directors have sufficient
authority to allot and issue the Firm Placing Shares on a
non-pre-emptive basis and to allot and issue the Open Offer
Shares.
(a) Resolution 1 is an ordinary resolution to grant authority to
the Directors under s551 of the Act to allot relevant securities,
up to a maximum aggregate nominal amount of GBP1,836,630 pursuant
to the Capital Raising, such authority expiring at the earlier of
the Company's next annual general meeting and 30 April 2019.
If Resolution 1 is passed, the Directors will have the
authority, under the Act, to allot Ordinary Shares up to the
maximum aggregate nominal amount of GBP1,836,630 (being the maximum
required for the purposes of issuing the Firm Placing Shares and
Open Offer Shares); and
(b) Resolution 2 is a special resolution, conditional upon the
passing of Resolution 1, to empower the Directors, pursuant to s570
of the Act, to allot Ordinary Shares up to a maximum aggregate
nominal amount of GBP1,836,630 on a non-pre-emptive basis pursuant
to the Capital Raising, such authority expiring at the earlier of
the Company's next annual general meeting and 30 April 2019.
If Resolution 2 is passed, the Directors will have the power,
under the Act, to allot the Firm Placing Shares without offering
those shares to existing Shareholders and to allot the Open Offer
Shares without offering the Open Offer Shares to Shareholders
resident in a Restricted Jurisdiction and to avoid the need to
issue fractional entitlements to Ordinary Shares.
These authorities are required to enable the Directors to effect
the Capital Raising and are in addition to the general authorities
that were granted by Shareholders at the Company's annual general
meeting on 22 June 2017, which gave the Directors authority to
allot relevant securities up to a maximum aggregate nominal amount
of GBP480,052.39 under s551 of the Act and to allot Ordinary Shares
up to a maximum aggregate nominal amount of GBP144,015.72 on a
non-pre-emptive basis under s570 of the Act (such authorities
expire at the next annual general meeting of the Company or 31 July
2018, whichever is earlier).
Resolution 1 is an ordinary resolution and requires a majority
of more than 50 per cent. of the Shareholders voting to be passed.
Resolution 2 is a special resolution and requires the approval of
more than 75 per cent. of the Shareholders voting to be passed.
The General Meeting is to be held at the offices of Mayer Brown
International LLP, 201 Bishopsgate, London EC2M 3AF at 10.00 a.m.
on 31 January 2018.
10. Recommendation
The Directors consider that the Capital Raising and the
Resolutions are in the best interests of the Company and its
Shareholders as a whole. The Company is reliant on the net proceeds
of the Capital Raising to meet its immediate liquidity
requirements, to continue to implement its strategy and, in
particular, to progress the Mississippi biorefinery while the
Company seeks to secure strategic investment for development costs
and the project capex. If the Resolutions are not passed by
Shareholders, the Capital Raising will not proceed. In these
circumstances, the Directors will need to reconsider the Company's
strategy and the Company would need to seek alternative funding,
which may not be available on terms which are acceptable to the
Company or at all, in which case the Company may be unable to meet
its future liabilities as they fall due. Accordingly, the Directors
unanimously recommend that Shareholders vote in favour of the
Resolutions, as they intend to do in respect of their own legal
and/or beneficial shareholdings, amounting, in aggregate, to
315,789 Ordinary Shares (representing approximately 0.22 per cent.
of the Ordinary Shares in the issue as
at the date of this document).
DEFINITIONS
The following definitions apply throughout this document, unless
the context requires otherwise.
"Act" the UK Companies Act 2006,
as amended
"Admission" admission of the New Ordinary
Shares to trading on AIM
becoming effective in
accordance with Rule 6
of the AIM Rules
"AIM" the market of that name
operated by London Stock
Exchange plc
"AIM Rules" the AIM Rules for Companies
published by the London
Stock Exchange as they
may be amended and replaced
from time to time
"Application Form" the non-CREST application
form relating to the Open
Offer and enclosed with
the Circular for use by
Eligible non-CREST Shareholders
"Articles" the articles of association
of the Company (as amended
from time to time)
"Basic Entitlement" entitlement to subscribe
for Open Offer Shares,
allocated to an Eligible
Shareholder pursuant to
the Open Offer on the
Record Date as described
in Appendix II
"Board" or "Directors" the board of directors
of the Company
"Canaccord" Canaccord Genuity Limited,
a company incorporated
in England and Wales,
with registered number
01774003, whose registered
office is at 88 Wood Street,
London EC2V 7QR
"Capital Raising" the Firm Placing and the
Placing and Open Offer
"Circular" the Circular to be distributed
by the Company in connection
with the Capital Raising
"Closing Date" the date on which the
Open Offer will close,
being 11.00 a.m. on 30
January 2018 or such later
time and date as the Company
and Joint Brokers may
agree
"Company" or "Velocys" Velocys plc, a public
limited company incorporated
in England & Wales under
registered number 05712187
and having its registered
office at Harwell Innovation
Centre, 173 Curie Avenue,
Harwell, Oxfordshire,
England, OX11 0QG
"CREST" the relevant system (as
defined in the Regulations)
which enables title to
units of relevant securities
(as defined in the Regulations)
to be evidenced and transferred
without a written instrument
and in respect of which
Euroclear UK & Ireland
Limited is the Operator
(as defined in the Regulations)
"Eligible CREST Shareholders" Eligible Shareholders
whose Existing Ordinary
Shares are held in uncertificated
form in a CREST account
"Eligible Non-CREST Shareholders" Eligible Shareholders
whose Existing Ordinary
Shares are held in certificated
form
"Eligible Shareholders" Shareholders on the Ex-Entitlement
Date that are not resident
in a Restricted Jurisdiction
"Enlarged Share Capital" the issued Ordinary Share
capital of the Company
immediately following
Admission comprising the
Existing Ordinary Shares
and the New Ordinary Shares
assuming no exercise of
any warrants or options
"ENVIA" ENVIA Energy, LLC, a joint
venture between Waste
Management Inc, Ventech
Projects Investments LLC
and the Company
"Ervington" Ervington Investments
Limited
"Ex-Entitlement Date" the date on which the
Ordinary Shares are marked
'ex' for entitlement by
the London Stock Exchange
under the Open Offer,
being 15 January 2018
"Excess Entitlement" Open Offer Shares in excess
of the Basic Entitlement,
but not in excess of the
total number of Open Offer
Shares, allocated to an
Eligible Shareholder pursuant
to the Open Offer as described
in Appendix II
"Executive Committee" the executive committee
of the Company, comprising
David Pummell (Chief Executive
Officer), Dr Paul Schubert
(Chief Operating Officer),
John Tunison (Interim
Chief Financial Officer)
and Henrik Wareborn (Interim
Chief Commercial Officer)
"Existing Ordinary Shares" the 146,859,819 Ordinary
Shares in issue as at
the date of this document
being the entire issued
share capital of the Company
prior to the Capital Raising
"Firm Placing" the placing of the Firm
Placing Shares at the
Placing Price by Numis,
Canaccord and Other Brokers
as agents for and on behalf
of the Company pursuant
to the terms of the Placing
Agreements.
"Firm Placing Shares" 139,605,000 new Ordinary
Shares to be issued in
connection with the Firm
Placing
"Form of Proxy" the accompanying form
of proxy for use by Shareholders
in relation to the General
Meeting
"FSMA" the Financial Services
and Markets Act 2000 (as
amended)
"General Meeting" the general meeting of
the Company to be held
at 10.00 a.m. on 31 January
2018
"Henderson" Janus Henderson Investors
"Joint Broker Placing the conditional agreement
Agreement" dated 15 January 2018
relating to the Capital
Raising, between the Company,
Numis and Canaccord
"Joint Brokers" Numis and Canaccord
"Lansdowne" Lansdowne Partners (UK)
LLP of 15 Davies Street,
London, W1K 3AG
"London Stock Exchange" London Stock Exchange
plc
"Link Asset Services" a trading name of Link
Market Services Limited
"New Ordinary Shares" the Firm Placing Shares
and the Open Offer Shares
"Notice of General Meeting" the notice of General
Meeting
"Numis" Numis Securities Limited,
a private limited company
incorporated in England
& Wales under registered
number 2285918 and having
its registered office
at 10 Paternoster Square,
London EC4M 7LT
"Official List" the Official List of the
UKLA
"Open Offer" the offer to Eligible
Shareholders, constituting
an invitation to apply
for the Open Offer Shares
at the Placing Price on
the terms and subject
to the conditions set
out in the Circular and,
in the case of Eligible
Non-CREST Shareholders,
in the Application Form
"Open Offer Entitlements" entitlements to subscribe
for Open Offer Shares
pursuant to the Basic
Entitlement and Excess
Entitlement
"Open Offer Shares" 44,057,946 new Ordinary
Shares to be issued in
connection with the Placing
and Open Offer
"Ordinary Shares" ordinary shares of 1 penny
each in the capital of
the Company
"Other Brokers" MC Peat & Co LLP, Turner
Pope Investments (TPI)
Limited and Capital Access
Group Limited
"Overseas Shareholders" holders of Ordinary Shares
who are resident in, or
citizens of, countries
outside of the UK
"Placing" the conditional placing
of 44,057,946 new Ordinary
Shares with Henderson
and Lansdowne, subject
to clawback to satisfy
valid acceptances by Eligible
Shareholders under the
Open Offer
"Placing Agreements" the Joint Broker Placing
Agreement and the other
conditional agreements
relating to the Firm Placing
between the Company and
each of the Other Brokers
"Placing Letters" the letters between Numis
and each of Henderson
and Lansdowne relating
to the Placing
"Placing Price" 10 pence per New Ordinary
Share
"Receiving Agent" Link Asset Services, a
trading name of Link Market
Services Limited
"Record Date" 5.00 p.m. on 11 January
2018, being the record
date for the Open Offer
"Registrar" Link Market Services Limited,
a private limited company
incorporated in England
& Wales under registered
number 02605568 and having
its registered office
at The Registry, 34 Beckenham
Road, Beckenham, Kent,
BR3 4TU
"Regulations" the UK Uncertificated
Securities Regulations
2001 (SI 2001 No. 3755),
as amended
"Resolutions" the resolutions to be
proposed at the General
Meeting as set out in
the Notice of General
Meeting
"Restricted Jurisdiction" any jurisdiction except
the UK. Jurisdictions
outside the UK include,
but are not limited, to
the United States, Canada,
Australia, New Zealand,
the Republic of South
Africa and Japan
"Shareholders" the holders of Ordinary
Shares from time to time,
each individually being
a "Shareholder"
"SMBC" Sumitomo Mitsui Banking
Corporation
"UK" or "United Kingdom" the United Kingdom of
Great Britain and Northern
Ireland
"US" or "United States" the United States of America,
its territories and possessions,
any state of the United
States and the District
of Colombia
"$" the lawful currency of
the United States
"GBP" the lawful currency of
the United Kingdom
GLOSSARY
The terms set out below have the following meanings throughout
this document, unless the context requires otherwise.
"EPC" engineer, procurement
and construction
"FEED" front end engineering
design
"FID" final investment decision
"IRR" interest rate of return
"NPV" net present value
"Renewable Identification a renewable identification
Number" or "RIN" number assigned to a batch
of biofuel to track its
production, use and trading
as required by the Renewable
Fuel Standard
"Renewable Transport Fuel the Renewable Transport
Obligation" Fuel Obligation Order
published 5 November 2012
APPIX I
TERMS AND CONDITIONS OF THE PLACING
IMPORTANT INFORMATION ON THE FIRM PLACING FOR INVITED FIRM
PLACEES ONLY
THIS ANNOUNCEMENT INCLUDES STATEMENTS, ESTIMATES, OPINIONS AND
PROJECTIONS WITH RESPECT TO ANTICIPATED FUTURE PERFORMANCE OF THE
GROUP ("FORWARD-LOOKING STATEMENTS") WHICH REFLECT VARIOUS
ASSUMPTIONS CONCERNING ANTICIPATED RESULTS TAKEN FROM THE GROUP'S
CURRENT BUSINESS PLAN OR FROM PUBLIC SOURCES WHICH MAY OR MAY NOT
PROVE TO BE CORRECT. THESE FORWARD LOOKING STATEMENTS CAN BE
IDENTIFIED BY THE USE OF FORWARD LOOKING TERMINOLOGY, INCLUDING THE
TERMS "ANTICIPATES", "TARGET", "BELIEVES", "ESTIMATES", "EXPECTS",
"INTS", "MAY", "PLANS", "PROJECTS", "SHOULD" OR "WILL", OR, IN EACH
CASE, THEIR NEGATIVE OR OTHER VARIATIONS OR COMPARABLE TERMINOLOGY
OR BY DISCUSSIONS OF STRATEGY, PLANS, OBJECTIVES, GOALS, FUTURE
EVENTS OR INTENTIONS. SUCH FORWARD-LOOKING STATEMENTS REFLECT
CURRENT EXPECTATIONS BASED ON THE CURRENT BUSINESS PLAN AND VARIOUS
OTHER ASSUMPTIONS AND INVOLVE SIGNIFICANT RISKS AND UNCERTAINTIES
AND SHOULD NOT BE READ AS GUARANTEES OF FUTURE PERFORMANCE OR
RESULTS AND WILL NOT NECESSARILY BE ACCURATE INDICATIONS OF WHETHER
OR NOT SUCH RESULTS WILL BE ACHIEVED. AS A RESULT, PROSPECTIVE
INVESTORS SHOULD NOT RELY ON SUCH FORWARD-LOOKING STATEMENTS DUE TO
THE INHERENT UNCERTAINTY THEREIN. NO REPRESENTATION OR WARRANTY IS
GIVEN AS TO THE COMPLETENESS OR ACCURACY OF THE FORWARD-LOOKING
STATEMENTS CONTAINED IN THIS ANNOUNCEMENT. FORWARD-LOOKING
STATEMENTS SPEAK ONLY AS OF THE DATE OF SUCH STATEMENTS AND, EXCEPT
AS REQUIRED BY THE FCA, THE LONDON STOCK EXCHANGE, THE AIM RULES OR
APPLICABLE LAW, THE COMPANY UNDERTAKES NO OBLIGATION TO UPDATE OR
REVISE PUBLICLY ANY FORWARD-LOOKING STATEMENTS, WHETHER AS A RESULT
OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE. NO STATEMENT IN
THIS ANNOUNCEMENT IS INTED TO BE A PROFIT FORECAST AND NO STATEMENT
IN THIS ANNOUNCEMENT SHOULD BE INTERPRETED TO MEAN THAT EARNINGS
PER SHARE OF THE COMPANY FOR THE CURRENT OR FUTURE FINANCIAL
YEARS WOULD NECESSARILY MATCH OR EXCEED THE HISTORICAL PUBLISHED
EARNINGS PER SHARE OF THE COMPANY.
THIS ANNOUNCEMENT, INCLUDING THE APPIX (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, AUSTRALIA, NEW
ZEALAND, CANADA, JAPAN OR SOUTH AFRICA OR ANY OTHER JURISDICTION IN
WHICH SUCH PUBLICATION, RELEASE OR DISTRIBUTION WOULD BE
UNLAWFUL.
MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE FIRM
PLACING. THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN ARE
FOR INFORMATION PURPOSES ONLY AND ARE DIRECTED ONLY AT: (A) PERSONS
IN MEMBER STATES OF THE EUROPEAN ECONOMIC AREA WHO ARE QUALIFIED
INVESTORS AS DEFINED IN SECTION 2(7) OF THE FINANCIAL SERVICES AND
MARKETS ACT 2000, AS AMED, ("QUALIFIED INVESTORS") BEING PERSONS
FALLING WITHIN THE MEANING OF ARTICLE 2(1)(E) OF THE EU PROSPECTUS
DIRECTIVE (WHICH MEANS DIRECTIVE 2003/71/EC AND INCLUDES ANY
RELEVANT IMPLEMENTING DIRECTIVE MEASURE IN ANY MEMBER STATE) (THE
"PROSPECTUS DIRECTIVE"); AND (B) IN THE UNITED KINGDOM, TO
QUALIFIED INVESTORS WHO ARE PERSONS WHO (I) HAVE PROFESSIONAL
EXPERIENCE IN MATTERS RELATING TO INVESTMENTS FALLING WITHIN
ARTICLE 19(1) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000
(FINANCIAL PROMOTION) ORDER 2005 (THE "ORDER"); (II) ARE PERSONS
FALLING WITHIN ARTICLE 49(2)(A) TO (D) ("HIGH NET WORTH COMPANIES,
UNINCORPORATED ASSOCIATIONS, ETC") OF THE ORDER; OR (III) ARE
PERSONS TO WHOM IT MAY OTHERWISE BE LAWFULLY COMMUNICATED (ALL SUCH
PERSONS IN (A) OR (B) TOGETHER BEING REFERRED TO AS "RELEVANT
PERSONS").
THIS ANNOUNCEMENT DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE
OR SUBSCRIPTION OF ANY SECURITIES IN THE COMPANY. THIS ANNOUNCEMENT
MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVENT
PERSONS. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS
ANNOUNCEMENT RELATES IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL
BE ENGAGED IN ONLY WITH RELEVANT PERSONS. EACH FIRM PLACEE SHOULD
CONSULT WITH ITS OWN ADVISERS AS TO LEGAL, TAX, BUSINESS AND
RELATED ASPECTS OF AN INVESTMENT IN FIRM PLACING SHARES.
In this Appendix, unless the context requires, "Firm Placee"
means a Relevant Person (including individuals, funds or others)
who has been invited to, and who chooses to, participate in the
Firm Placing and by whom or on whose behalf a commitment to
subscribe for Firm Placing Shares has been given.
No representation or warranty, express or implied, is made or
given by or on behalf of the Company or Canaccord Genuity Limited
("Canaccord") or Numis Securities Ltd ("Numis"), the Company's
nominated adviser, or any of their respective affiliates (within
the meaning of Rule 405 under the US Securities Act of 1933, as
amended (the "Securities Act") or any of such persons' directors,
officers or employees or any other person as to the accuracy,
completeness or fairness of the information or opinions contained
in this Announcement and no liability whatsoever is accepted by the
Company, Numis, Canaccord or any of such persons' Affiliates,
directors, officers or employees or any other person for any loss
howsoever arising, directly or indirectly, from any use of such
information or opinions or otherwise arising in connection
therewith.
This Announcement does not constitute an offer to sell or issue
or the solicitation of an offer to buy or subscribe for Firm
Placing Shares in any jurisdiction in which such offer or
solicitation is or may be unlawful. In particular the Firm Placing
Shares referred to in this Announcement have not been and will not
be registered under the Securities Act or with any securities
regulatory authority of any state or other jurisdiction of the
United States and will be offered or sold only outside of the
United States in accordance with Regulation S under the Securities
Act.
The relevant clearances have not been, nor will they be,
obtained from the securities commission of any province or
territory of Canada; no prospectus has been lodged with or
registered by, the Australian Securities and Investments Commission
or the Japanese Ministry of Finance; and the Firm Placing Shares
have not been, nor will they be, registered under or offered in
compliance with the securities laws of any state, province or
territory of United States, Australia, New Zealand, Canada, Japan
or South Africa. Accordingly, the Firm Placing Shares may not
(unless an exemption under the relevant securities laws is
applicable) be offered, sold, resold or delivered, directly or
indirectly, in or into the United States, Australia, New Zealand,
Canada, Japan or South Africa or any other jurisdiction outside the
United Kingdom.
Persons distributing any part of this Announcement must satisfy
themselves that it is lawful to do so. Persons (including, without
limitation, nominees and trustees) who have a contractual or other
legal obligation to forward a copy of this Announcement should seek
appropriate advice before taking any action. Persons into whose
possession this Announcement comes are required by the Company,
Canaccord and Numis to inform themselves about, and observe, any
such restrictions.
This Announcement does not constitute a recommendation
concerning any investors' options with respect to the Firm Placing.
Investors and prospective investors should conduct their own
investigation, analysis and evaluation of the business and data
described in this Announcement. The price and value of securities
can go down as well as up. Past performance is not a guide to
future performance. The contents of this Announcement are not to be
construed as legal, business, financial or tax advice. Each
investor or prospective investor should consult his, her or its own
legal adviser, business adviser, financial adviser or tax adviser
for legal, financial, business or tax advice.
Firm Placees will be deemed: (i) to have read and understood
this Announcement, including this Appendix, in its entirety; and
(ii) to be participating and making an offer for Firm Placing
Shares on the terms and conditions and to be providing the
representations, warranties, acknowledgements and undertakings,
contained in this Appendix.
This Announcement does not identify or suggest, or purport to
identify or suggest, the risks (direct or indirect) that may be
associated with an investment in the Firm Placing Shares. Any
investment decision to buy Firm Placing Shares in the Firm Placing
must be made solely on the basis of publicly available information,
which has not been independently verified by Numis and
Canacord.
The Firm Placing Shares to be issued pursuant to the Firm
Placing will not be admitted to trading on any stock exchange other
than the AIM market of the London Stock Exchange plc.
1. DETAILS OF THE FIRM PLACING
1.1 Numis and Canaccord today entered into an agreement with the
Company (the "Joint Broker Placing Agreement"). The Company has
also entered into agreements with the Other Brokers (, together
with the Joint Broker Placing Agreement, the "Placing Agreements").
Under the Placing Agreements, subject to certain conditions, Numis,
Canaccord and the Other Brokers, as agents for and on behalf of the
Company, have agreed to use their respective reasonable endeavours
to procure Firm Placees for the Firm Placing Shares at the Placing
Price. The Firm Placing is not being underwritten by Numis,
Canaccord nor the Other Brokers.
1.2 The Firm Placing Shares will, when issued, be credited as
fully paid and will rank pari passu in all respects with the
existing Ordinary Shares, including the right to receive dividends
and other distributions declared or made after the date of issue of
the Firm Placing Shares.
1.3 Separately, the Open Offer Shares have been conditionally
placed with two of the Company's existing shareholders, Henderson
and Lansdowne, subject to clawback to satisfy valid acceptances by
Eligible Shareholders under the Placing and Open Offer.
2. APPLICATIONS FOR ADMISSION TO TRADING
2.1 Application will be made to the London Stock Exchange for
admission to trading of the Firm Placing Shares on its AIM market
("Application").
2.2 It is expected that Admission will become effective at 8.00
a.m. on 1 February 2018 ("Admission") and that dealings in the Firm
Placing Shares will commence at that time.
3. PARTICIPATION IN, AND PRINCIPAL TERMS OF THE FIRM PLACING
3.1 Numis and Canaccord are acting as joint brokers and as
agents for the Company in connection with the Firm Placing,
Application and Admission. Numis and Canaccord are each authorised
and regulated in the United Kingdom by the FCA, and are each acting
exclusively for the Company and no one else in connection with the
matters referred to in this Announcement and will not be
responsible to anyone other than the Company for providing the
protections afforded to the customers of Numis and Canaccord or for
providing advice in relation to the matters described in this
Announcement.
3.2 Participation in the Firm Placing is only available to
persons who may lawfully be, and are invited to participate in it
by Numis and Canaccord. Numis and Canaccord and their respective
Affiliates are each entitled to participate in the Firm Placing as
principals.
3.3 The placing price will be a fixed price of 10 pence per Firm
Placing Share (the "Placing Price"). No commissions will be paid to
Firm Placees or by the Firm Placees in respect of any Firm Placing
Shares.
3.4 Each prospective Firm Placee's allocation of Firm Placing
Shares will be confirmed to prospective Firm Placees orally by
Numis, Canaccord or one of their respective Affiliates, and a
contract note will be dispatched as soon as practicable thereafter
as evidence of such Firm Placee's allocation and commitment. The
terms and conditions of this Appendix will be deemed incorporated
into the contract note. That oral confirmation will constitute an
irrevocable legally binding commitment upon that person (who at
that point will become a Firm Placee) in favour of the Company and
Numis or Canaccord (as applicable) to subscribe for the number of
Firm 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 and each Firm Placee
will be deemed to have read and understood the announcement in its
entirety. An offer to acquire Firm Placing Shares, which has been
communicated by a prospective Firm Placee to Numis or Canaccord (as
applicable) which has not been withdrawn or revoked prior to
publication of this Announcement shall not be capable of withdrawal
or revocation immediately following the publication of this
Announcement without the consent of Numis or Canaccord (as
applicable).
3.5 Each Firm Placee will also have an immediate, separate,
irrevocable and binding obligation, owed to Numis or Canaccord, as
applicable (as agents of the Company), to pay the relevant entity
(or as it may direct) in cleared funds immediately on settlement an
amount equal to the product of the Placing Price and the number of
Firm Placing Shares such Firm Placee has agreed to subscribe for
and the Company has agreed to allot and issue to that Firm Placee.
Each Firm Placee's obligation will be owed to the Company and to
Numis or Canaccord, as applicable.
3.6 Irrespective of the time at which a Firm Placee's allocation
pursuant to the Firm Placing is confirmed, settlement for all Firm
Placing Shares to be subscribed for pursuant to the Firm Placing
will be required to be made at the same time, on the basis
explained below under "Registration and Settlement".
3.7 All obligations under the Firm Placing will be subject to
fulfilment of the conditions referred to below under "Conditions of
the Firm Placing" and to the Firm Placing not being terminated on
the basis referred to below under "Termination of the Joint Broker
Placing Agreement".
3.8 By participating in the Firm Placing, each Firm Placee will
agree that its rights and obligations in respect of the Firm
Placing will terminate only in the circumstances described below
and will not be capable of rescission or termination by the Firm
Placee.
3.9 To the fullest extent permitted by law and applicable FCA
rules, neither (i) Numis, (ii) any of its directors, officers,
employees or consultants, or (iii) to the extent not contained with
(i) or (ii), any person connected with Numis as defined in FSMA
((i), (ii) and (iii) being together "Affiliates" and individually
an "Affiliate"), shall have any liability (including to the extent
permissible by law, any fiduciary duties) to Firm Placees or to any
person other than the Company in respect of the Firm Placing.
3.10 To the fullest extent permitted by law and applicable FCA
rules, neither (i) Canaccord, (ii) any of its directors, officers,
employees or consultants, or (iii) to the extent not contained with
(i) or (ii), any Affiliate of Canaccord), shall have any liability
(including to the extent permissible by law, any fiduciary duties)
to Firm Placees or to any person other than the Company in respect
of the Firm Placing.
3.11 No commissions will be paid to Firm Placees or by the Firm
Placees in respect of any Firm Placing Shares.
4. CONDITIONS OF THE FIRM PLACING
4.1 Numis' and Canaccord's obligations under the Joint Broker
Placing Agreement in respect of the Firm Placing Shares are
conditional on, amongst other things:
(a) none of the warranties in the Joint Broker Placing Agreement
(i) being untrue and inaccurate or misleading to an extent which,
in any such case, would be material, or (ii) on and as of the date
of the Joint Broker Placing Agreement and again at Admission
becoming untrue, inaccurate or misleading to an extent which, in
any such case, would be material by reference to the facts and
circumstances then subsisting;
(b) the Company allotting, subject only to Admission, the Firm
Placing Shares in accordance with the Joint Broker Placing
Agreement;
(c) certain publication of announcement obligations (including
with respect to this Announcement);
(d) the compliance by the Company with all its obligations which
are required to be performed or satisfied on or prior to
Admission;
(e) the respective obligations of Numis and Canaccord under the
Joint Broker Placing Agreement not having been terminated prior to
Admission; and
(f) Admission occurring by 8:00am on 1 February 2018 (or such
later time and date as Numis and Canaccord (acting together) may
agree in unity with the Company not being later than 8:00 a.m. on
15 February 2018).
4.2 If (i) any condition contained in the Joint Broker Placing
Agreement in relation to the Firm Placing Shares is not fulfilled
or waived by Numis and Canaccord (acting together), by the
respective time or date where specified (or such later time or date
as Numis and Canaccord may agree in writing with the Company), (ii)
any such condition becomes incapable of being fulfilled or (iii)
the Joint Broker Placing Agreement is terminated in accordance with
its terms, the Firm Placing will not proceed and the Firm Placee's
rights and obligations hereunder in relation to the Firm Placing
Shares shall cease and terminate at such time and each Firm Placee
agrees that no claim can be made by the Firm Placee in respect
thereof.
4.3 Numis and Canaccord may, acting together and in their sole
discretion and upon such terms as they think fit, waive compliance
by the Company with the whole or any part of any of the Company's
obligations in relation to the conditions in the Joint Broker
Placing Agreement, save that conditions (b) and (f) above relating
to Admission may not be waived. Any such extension or waiver will
not affect the Firm Placees' commitments as set out in this
Announcement.
4.4 Neither Numis nor Canaccord nor the Company shall have any
liability to any Firm Placee (or to any other person whether acting
on behalf of a Firm 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 Firm
Placing nor for any decision they may make as to the satisfaction
of any condition or in respect of the Firm Placing generally, and
by participating in the Firm Placing each Firm Placee agrees that
any such decision is within the absolute discretion of Numis and
Canaccord (acting together).
5. TERMINATION OF THE JOINT BROKER PLACING AGREEMENT
5.1 Numis and Canaccord (acting together) are entitled, at any
time prior to Admission, to terminate the Joint Broker Placing
Agreement in respect of the Firm Placing Shares in accordance with
the terms of the Joint Broker Placing Agreement by giving written
notice to the Company in certain circumstances, including but not
limited to if any of the warranties given to Numis and Canaccord in
the Joint Broker Placing Agreement, which Numis and Canaccord
(acting together) being untrue, inaccurate or misleading in any
material respect, the failure of the Company to comply with its
material obligations under the Joint Broker Placing Agreement or
the occurrence of a force majeure event which prevents any party
not seeking to terminate from performing its obligations under the
Joint Broker Placing Agreement.
5.2 By participating in the Firm Placing, Firm Placees agree
that the exercise by Numis and Canaccord of any right of
termination or other discretion under the Joint Broker Placing
Agreement shall be within the absolute discretion of Numis and
Canaccord (acting together) that it need not make any reference to
Firm Placees and that none of Numis, Canaccord or the Company (or
any of their respective directors, officers or employees) shall
have any liability to Firm Placees whatsoever in connection with
any such exercise.
6. NO ADMISSION DOCUMENT OR PROSPECTUS
6.1 No offering document, admission document or prospectus has
been or will be submitted to be approved by the FCA or submitted to
the London Stock Exchange in relation to the Firm Placing or the
Firm Placing Shares and Firm Placees' commitments will be made
solely on the basis of the information contained in this
Announcement (including this Appendix) and the Exchange Information
(as defined below).
6.2 Each Firm Placee, by accepting a participation in the Firm
Placing, agrees that the content of this Announcement is
exclusively the responsibility of the Company and confirms that it
has neither received nor relied on any other information (other
than the Exchange Information), representation, warranty, or
statement made by or on behalf of the Company or Numis or Canaccord
or any other person and neither Numis nor Canaccord nor the Company
nor any other person will be liable for any Firm Placee's decision
to participate in the Firm Placing based on any other information,
representation, warranty or statement which the Firm Placees may
have obtained or received. Each Firm 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 Firm Placing. Nothing in this paragraph shall
exclude the liability of any person for fraudulent
misrepresentation.
7. REGISTRATION AND SETTLEMENT
7.1 Settlement of transactions in the Firm Placing Shares (ISIN:
GB00B11SZ269) following Admission will take place within the system
administered by Euroclear UK & Ireland Limited ("CREST"),
subject to certain exceptions. Numis and Canaccord reserve the
right to require settlement for, and delivery of, the Firm Placing
Shares (or a portion thereof) to Firm Placees in certificated form
if, in their opinion, delivery or settlement is not possible or
practicable within the CREST system within the timetable set out in
this Announcement or would not be consistent with the regulatory
requirements in any Firm Placee's jurisdiction.
7.2 Each Firm Placee allocated Firm Placing Shares in the Firm
Placing will be sent a contract note in accordance with the
standing arrangements in place with Numis or Canaccord (as
applicable), stating the number of Firm Placing Shares allocated to
it at the Placing Price, the aggregate amount owed by such Firm
Placee to Numis or Canaccord (as applicable) and settlement
instructions. Each Firm Placee agrees that it will do all things
necessary to ensure that delivery and payment is completed in
accordance with either the standing CREST or certificated
settlement instructions that it has in place with Numis or
Canaccord (as applicable).
7.3 The Company will (via its registrar) deliver the Firm
Placing Shares to a CREST account operated by Numis or Canaccord
(as applicable) as agent for the Company and Numis or Canaccord (as
applicable) will enter its delivery (DEL) instruction into the
CREST system. Numis or Canaccord (as applicable) will hold any Firm
Placing Shares delivered to this account as nominee for the Firm
Placees. The input to CREST by a Firm Placee of a matching or
acceptance instruction will then allow delivery of the relevant
Firm Placing Shares to that Firm Placee against payment.
7.4 It is expected that settlement will take place on 1 February
2018 in accordance with the instructions set out in the contract
note.
7.5 Interest is chargeable daily on payments not received from
Firm Placees on the due date in accordance with the arrangements
set out above at the rate of two percentage points above the base
rate of Barclays Bank plc from time to time.
7.6 Each Firm Placee agrees that, if it does not comply with
these obligations, Numis or Canaccord (as applicable) may sell any
or all of the Firm Placing Shares allocated to that Firm Placee on
such Firm Placee's behalf and retain from the proceeds, for Numis'
or Canaccord's account and benefit (as applicable), an amount equal
to the aggregate amount owed by the Firm Placee plus any interest
due. The relevant Firm 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) which may arise upon the sale of such Firm
Placing Shares on such Firm Placee's behalf.
7.7 If Firm Placing Shares are to be delivered to a custodian or
settlement agent, Firm Placees should ensure that the contract note
is copied and delivered immediately to the relevant person within
that organisation.
7.8 Insofar as Firm Placing Shares are registered in a Firm
Placee's name or that of its nominee or in the name of any person
for whom a Firm Placee is contracting as agent or that of a nominee
for such person, such Firm Placing Shares should, subject as
provided below, be so registered free from any liability to UK
stamp duty or stamp duty reserve tax.
7.9 Firm Placees will not be entitled to receive any fee or
commission in connection with the Firm Placing.
8. REPRESENTATIONS AND WARRANTIES
8.1 By participating in the Firm Placing, each Firm Placee (and
any person acting on such Firm Placee's behalf) irrevocably
acknowledges, undertakes, represents, warrants and agrees (as the
case may be) that:
(a) it has read and understood this Announcement (including the
Appendix) in its entirety and its subscription for the Firm Placing
Shares is subject to and based on the terms and conditions of the
Firm Placing as referred to and included in this Announcement and
undertakes not to redistribute or duplicate this Announcement;
(b) no offering document, admission document or prospectus has
been prepared in connection with the Firm Placing and that it has
not received and will not receive a prospectus, admission document
or other offering document in connection with the Firm Placing;
(c) the Ordinary Shares are admitted to trading on AIM, and the
Company is therefore required to publish certain business and
financial information in accordance with the AIM Rules and the
other applicable rules and practices of the London Stock Exchange
and/or the FCA (collectively "Exchange Information"), which
includes the Company's most recent balance sheet and profit and
loss account and that it is able to obtain or access such
information or comparable information concerning any other publicly
traded company without undue difficulty;
(d) (i) it has made its own assessment of the Company, the Firm
Placing Shares and the terms and conditions of the Firm Placing and
has relied on its own investigation of the business, financial or
other position of the Company in accepting a participation in the
Firm Placing and has satisfied itself that the information is still
current; (ii) none of Numis, Canaccord, the Company, any of their
respective Affiliates or any person acting on behalf of any of them
has provided, or will provide it, with any material regarding the
Firm Placing Shares in addition to this Announcement; and (iii) it
has not requested Numis, Canaccord, the Company or any of their
respective Affiliates or any person acting on behalf of any of them
to provide it with any such information;
(e) the content of this Announcement is exclusively the
responsibility of the Company and that none of Numis, Canaccord,
their Affiliates or any person acting on their behalf has or shall
have any liability for any information, representation or statement
contained in this Announcement or any information previously or
concurrently published by or on behalf of the Company and will not
be liable for any Firm Placee's decision to participate in the Firm
Placing based on any information, representation or statement
contained in this Announcement or elsewhere;
(f) the only information on which it has relied in committing
itself to subscribe for the Firm Placing Shares is contained in
this Announcement and any Exchange Information and that it has not
received or relied on any information given or any representations,
warranties or statements, express or implied, made by Numis,
Canaccord or the Company or any of their Affiliates or any person
acting on behalf of any of them and none of Numis, Canaccord, the
Company, any of their Affiliates or any person acting on behalf of
any of them will be liable for its decision to accept an invitation
to participate in the Firm Placing based on any information,
representation, warranty or statement other than that contained in
this Announcement and any Exchange Information;
(g) it has neither received nor relied on any "inside
information" as defined in the EU Market Abuse Regulation 596/2014
concerning the Company in accepting this invitation to participate
in the Firm Placing and is not purchasing Firm Placing Shares on
the basis of "inside information";
(h) it has the funds available to pay for the Firm Placing
Shares it has agreed to subscribe for and acknowledges, agrees and
undertakes that it will pay the total subscription amount in
accordance with the terms of this Announcement on the due time and
date set out herein, failing which the relevant Firm Placing Shares
may be placed with other Firm Placees or sold at such price as
Numis or Canaccord (as applicable) determines;
(i) it: (i) is entitled to subscribe for the Firm Placing Shares
under the laws of all relevant jurisdictions; (ii) has fully
observed such laws; (iii) has the requisite capacity and authority
and is entitled to enter into and to perform its obligations as a
subscriber for Firm Placing Shares and will honour such
obligations; and (iv) has obtained all necessary consents and
authorities (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) to enable it to enter into the transactions
contemplated hereby and to perform its obligations in relation
thereto and, in particular, if it is a pension fund or investment
company it is aware of and acknowledges it is required to comply
with all applicable laws and regulations with respect to its
subscription for Firm Placing Shares;
(j) it is not, and any person who it is acting on behalf of is
not, and at the time the Firm Placing Shares are subscribed will
not be, a resident of, or with an address in, the United States,
Australia, New Zealand, Canada, Japan or South Africa, and it
acknowledges and agrees that the Firm Placing Shares have not been
and will not be registered or otherwise qualified under the
securities legislation of the United States, Australia, New
Zealand, Canada, Japan or South Africa and may not be offered,
sold, or acquired, directly or indirectly, within those
jurisdictions
(k) (i) the Firm Placing Shares have not been and will not be
registered under the Securities Act or with any state or other
jurisdiction of the United States, nor approved or disapproved by
the US Securities and Exchange Commission, any state securities
commission in the United States or any other United States
regulatory authority, (ii) it will not offer, sell or deliver,
directly or indirectly, any Firm Placing Shares in or into the
United States other than pursuant to an effective registration
under the Securities Act or in a transaction exempt from, or not
subject to, the registration requirements thereunder and in
compliance with any applicable securities laws of any state or
other jurisdiction of the United States, and (iii) it is outside of
the United States, not acting on a non-discretionary basis for the
account or benefit of a person located within the United States at
the time the undertaking to acquire the Firm Placing Shares is
given and is otherwise acquiring the Firm Placing Shares in an
"offshore transaction" meeting the requirements of Regulation S
under the Securities Act;
(l) it is a person of a kind described in (i) Article 19(5)
(Investment Professionals) and/or 49(2) (high net worth companies
etc.) of the Financial Services and Markets Act 2000 (Financial
Promotion) Order 2005, as amended, and/or an authorised person as
defined in section 31 of FSMA; and (ii) section 86(7) of FSMA
("Qualified Investor"), being a person falling within Article
2.1(e) of Directive 2003/71/EC as amended (the "Prospectus
Directive"). For such purposes, it undertakes that it will acquire,
hold, manage and (if applicable) dispose of any Firm Placing Shares
that are allocated to it for the purposes of its business only;
(m) if a financial intermediary, as that term is used in Article
3(2) of the Prospectus Directive, that the Firm Placing Shares
purchased by it in the Firm Placing will not be acquired on a
non-discretionary basis on behalf of, nor will they be acquired
with a view to their offer or resale to, persons in a Member State
of the European Economic Area which has implemented the Prospectus
Directive other than Qualified Investors, or in circumstances in
which the prior consent of Numis and Canaccord has been given to
the offer or resale;
(n) 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 Firm Placing Shares in
circumstances in which section 21(1) of FSMA does not require
approval of the communication by an authorised person and it
acknowledges and agrees that this Announcement has not been
approved by Numis or Canaccord in their capacity as an authorised
person under section 21 of FSMA and it may not therefore be subject
to the controls which would apply if it was made or approved as
financial promotion by an authorised person;
(o) it is aware of and acknowledges that it has complied with
and will comply with all applicable provisions of FSMA with respect
to anything done by it in relation to the Firm Placing Shares in,
from or otherwise involving, the United Kingdom;
(p) it will not make any offer to the public of the Firm Placing
Shares and has not offered or sold and will not offer or sell any
Firm Placing Shares to persons in the United Kingdom or elsewhere
in the European Economic Area prior to Admission except to persons
whose ordinary activities involve them in acquiring, holding,
managing or disposing of investments (as principal or agent) for
the purposes of their business or otherwise in circumstances which
have not resulted in and which will not result in an offer to the
public in the United Kingdom within the meaning of section 85(1) of
FSMA or an offer to the public in any other member state of the
European Economic Area within the meaning of the Prospectus
Directive (which includes any relevant implementing measure in any
Member State of the European Economic Area);
(q) it has not been engaged to subscribe for the Firm Placing
Shares on behalf of any other person who is not a Qualified
Investor unless the terms on which it is engaged enable it to make
decisions concerning the acceptance of offers of transferable
securities on the client's behalf without reference to the client
as described in section 86(2) of FSMA;
(r) it is aware of and acknowledges that it is required to
comply, and does and will comply, with its obligations under the
Criminal Justice Act 1993 and the EU Market Abuse Regulation
596/2014 in connection with money laundering and terrorist
financing under the Proceeds of Crime Act 2002, the Terrorism Act
2000, the Terrorism Act 2006 and the Money Laundering Regulations
2017 and the Money Laundering Sourcebook of the FCA (the
"Regulations") and, if making payment on behalf of a third party,
that satisfactory evidence has been obtained and recorded by it to
verify the identity of the third party as required by the
Regulations;
(s) it is aware of the obligations regarding insider dealing in
the Criminal Justice Act 1993, with all applicable provisions of
FSMA, the EU Market Abuse Regulation 596/2014 and the Proceeds of
Crime Act 2002 and confirms that it has and will continue to comply
with those obligations;
(t) the allocation, allotment, issue and delivery to it, or the
person specified by it for registration as a holder of Firm Placing
Shares, will not give rise to a stamp duty or stamp duty reserve
tax liability under any of sections 67, 70, 93 or 96 of the Finance
Act 1986 (depositary receipts and clearance services) and that no
instrument under which it subscribes for Firm Placing Shares
(whether as principal, agent or nominee) would be subject to stamp
duty or the increased rates referred to in those sections and that
it, or the person specified by it for registration as a holder of
Firm Placing Shares, is not participating in the Firm Placing as
nominee or agent for any person or persons to whom the allocation,
allotment, issue or delivery of Firm Placing Shares would give rise
to such a liability;
(u) it, or the person specified by it for registration as a
holder of the Firm Placing Shares, will be liable for any stamp
duty and all other stamp, issue, securities, transfer,
registration, documentary or other duties or taxes (including any
interest, fines or penalties relating thereto), if any, payable on
acquisition of any of the Firm Placing Shares or the agreement to
subscribe for the Firm Placing Shares and acknowledges and agrees
that none of Numis, Canaccord the Company, any of their respective
Affiliates or any person acting on behalf of them will be
responsible for any liability to stamp duty or stamp duty reserve
tax resulting from a failure to observe this requirement. Each Firm
Placee and any person acting on behalf of such Firm Placee agrees
to participate in the Firm Placing, and agrees to indemnify the
Company, Canaccord and Numis on an after tax basis in respect of
the same, on the basis that the Firm Placing Shares will be
allotted to the CREST stock account of Numis or Canaccord (as
applicable) who will hold them as nominee on behalf of such Firm
Placee until settlement in accordance with its standing settlement
instructions;
(v) none of Numis, Canaccord any of their Affiliates 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 for any information previously
published by or on behalf of the Company or any other written or
oral information made available to or publicly available or filed
information or any representation, warranty or undertaking relating
to the Company, and will not be liable for its decision to
participate in the Firm Placing based on any information,
representation, warranty or statement contained in this
Announcement or elsewhere, provided that nothing in this paragraph
shall exclude any liability of any person for fraud;
(w) none of Numis, Canaccord any of their Affiliates or any
person acting on behalf of any of them, is making any
recommendations to it, advising it regarding the suitability of any
transactions it may enter into in connection with the Firm Placing
and that its participation in the Firm Placing is on the basis that
it is not and will not be a client of Numis or Canaccord and that
Numis and Canaccord have no duties or responsibilities to it for
providing the protections afforded to its clients or customers
under the rules of the FCA, for providing advice in relation to the
Firm Placing, in respect of any representations, warranties,
undertakings or indemnities contained in the Joint Broker Placing
Agreement or 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;
(x) in order to ensure compliance with the Money Laundering
Regulations 2017, Numis and Canaccord (for themselves and as agents
on behalf of the Company) or the Company's registrars may, in their
absolute discretion, require verification of its identity. Pending
the provision to Numis, Canaccord or the Company's registrars, as
applicable, of evidence of identity, definitive certificates in
respect of the Firm Placing Shares may be retained at Numis' and
Canaccord's absolute discretion or, where appropriate, delivery of
the Firm Placing Shares to it in uncertificated form, may be
retained at Numis' or Canaccord's or the Company's registrars', as
the case may be, absolute discretion. If within a reasonable time
after a request for verification of identity Numis or Canaccord (as
applicable) (for itself and as agent on behalf of the Company) or
the Company's registrars have not received evidence satisfactory to
them, Numis or Canaccord and/or the Company may, at its absolute
discretion, terminate its commitment in respect of the Firm
Placing, in which event the monies payable on acceptance of
allotment will, if
already paid, be returned without interest to the account of the
drawee's bank from which they were originally debited;
(y) Numis and Canaccord may, and their Affiliates acting as an
investor for its or their own account(s) may, subscribe for and/or
purchase Firm Placing Shares and, in that capacity may retain,
purchase, offer to sell or otherwise deal for its or their own
account(s) in the Firm Placing Shares, any other securities of the
Company or other related investments in connection with the Firm
Placing or otherwise. Accordingly, references in this Announcement
to the Firm Placing Shares being offered, subscribed, acquired or
otherwise dealt with should be read as including any offer to, or
subscription, acquisition or dealing by, Numis, Canaccord and/or
any of their respective Affiliates acting as an investor for its or
their own account(s). Neither Numis nor Canaccord nor the Company
intend to disclose the extent of any such investment or transaction
otherwise than in accordance with any legal or regulatory
obligation to do so;
(z) these terms and conditions and any agreements entered into
by it pursuant to these terms and conditions, and all
non-contractual or other obligations arising out of or in
connection with them, shall be governed by and construed in
accordance with the laws of England and Wales and it submits (on
behalf of itself and on behalf of any person on whose behalf it is
acting) to the exclusive jurisdiction of the English courts as
regards any claim, dispute or matter arising out of any such
contract, except that enforcement proceedings in respect of the
obligation to make payment for the Firm Placing Shares (together
with any interest chargeable thereon) may be taken by the Company,
Canaccord or Numis in any jurisdiction in which the relevant Firm
Placee is incorporated or in which any of its securities have a
quotation on a recognised stock exchange;
(aa) the Company, Canaccord and Numis and their respective
Affiliates and others will rely upon the truth and accuracy of the
foregoing agreements, acknowledgements, representations, warranties
and undertakings which are given to Numis and Canaccord, on their
own behalf and on behalf of the Company, and are irrevocable;
(bb) it irrevocably appoints any duly authorised officer of
Numis or Canaccord as agent for the purpose of executing and
delivering to the Company and/or its registrars any documents on
its behalf necessary to enable it to be registered as the holder of
any of the Firm Placing Shares for which it agrees to subscribe or
purchase upon the terms of this Announcement;
(cc) it will indemnify on an after tax basis and hold the
Company, Numis, Canaccord 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, undertakings, agreements
and acknowledgements in this Appendix and further agrees that the
provisions of this Appendix shall survive after completion of the
Firm Placing;
(dd) it has knowledge and experience in financial, business and
international investment matters and is required to evaluate the
merits and risks of subscribing for the Firm Placing Shares; (ii)
it is experienced in investing in securities of this nature and is
aware that it may be required to bear, and is able to bear, the
economic risk of, and is able to sustain a complete loss in
connection with the Firm Placing; and (iii) it has relied upon its
own examination and due diligence of the Company and its associates
taken as a whole, and the terms of the Firm Placing, including the
merits and risks involved and has satisfied itself concerning the
relevant tax, legal, currency and other economic consideration
relevant to its subscription for Firm Placing Shares;
(ee) none of the Company, Numis or Canaccord are making any
undertaking or warranty to any Firm Placee regarding the legality
of an investment in the Firm Placing Shares by such Firm Placee
under any legal, investment or similar laws or regulations; and
(ff) its commitment to subscribe for Firm Placing Shares on the
terms set out herein and in the contract note will continue
notwithstanding any amendment that may in future be made to the
terms of the Firm Placing and that Firm Placees will have no right
to be consulted or require that their consent be obtained with
respect to the Company's conduct of the Firm Placing.
8.2 The representations, warranties, acknowledgements and
undertakings contained in this Appendix are given to the Company,
and to Numis and Canaccord for themselves and on behalf of the
Company and are irrevocable.
8.3 The agreement to settle a Firm Placee's subscription (and/or
the subscription of a person for whom such Firm Placee is
contracting as agent) free of stamp duty and stamp duty reserve tax
depends on the settlement relating only to a subscription by it
and/or such person direct from the Company for the Firm Placing
Shares in question. Such agreement assumes that the Firm Placing
Shares are not being subscribed for in connection with arrangements
to issue depositary receipts or to transfer the Firm Placing Shares
into a clearance service. If there are any such arrangements, or
the settlement relates to any other subsequent dealing in the Firm
Placing Shares, UK stamp duty or stamp duty reserve tax may be
payable, for which neither the Company nor Numis nor Canaccord will
be responsible, and the Firm Placee to whom (or on behalf of whom,
or in respect of the person for whom it is participating in the
Firm Placing as an agent or nominee) the allocation, allotment,
issue or delivery of Firm Placing Shares has given rise to such UK
stamp duty or stamp duty reserve tax undertakes to pay such UK
stamp duty or stamp duty reserve tax forthwith and to indemnify on
an after-tax basis and to hold harmless the Company and Numis and
Canaccord in the event that any of the Company and/or Numis and/or
Canaccord have incurred any such liability to UK stamp duty or
stamp duty reserve tax. If this is the case, each Firm Placee
should seek its own advice and notify Numis and Canaccord
accordingly.
8.4 In addition, Firm Placees should note that they will be
liable for any stamp duty and all other stamp, issue, securities,
transfer, registration, documentary or other duties or taxes
(including any interest, fines or penalties relating thereto)
payable outside the United Kingdom by them or any other person on
the subscription by them of any Firm Placing Shares or the
agreement by them to subscribe for any Firm Placing Shares.
8.5 Each Firm Placee, and any person acting on behalf of the
Firm Placee, acknowledges and agrees that neither Numis nor
Canaccord owe any fiduciary or other duties to any Firm Placee in
respect of any representations, warranties, undertakings or
indemnities in the Joint Broker Placing Agreement.
8.6 Each Firm Placee and any person acting on behalf of each
Firm Placee, acknowledges and agrees that Numis, Canaccord nor any
of their Affiliates may, at their absolute discretion, agree to
become a Firm Placee in respect of some or all of the Firm Placing
Shares.
8.7 When a Firm Placee or person acting on behalf of the Firm
Placee is dealing with Numis or Canaccord, any money held in an
account with Numis or Canaccord (as applicable) on behalf of the
Firm Placee and/or any person acting on behalf of the Firm Placee
will not be treated as client money within the meaning of the rules
and regulations of the FCA made under FSMA. The Firm Placee
acknowledges and agrees 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 Numis' or Canaccord's money
(as applicable) in accordance with the client money rules and will
be used by Numis or Canaccord in the course of its own business;
and the Firm Placee will rank only as a general creditor of Numis
or Canaccord (as applicable).
8.8 Past performance is no guide to future performance and
persons needing advice should consult an independent financial
adviser.
8.9 Neither the content of the Company's website nor any website
accessible by hyperlinks on the Company's website is incorporated
in, or forms part of, this Announcement.
8.10 All times and dates in this Announcement may be subject to
amendment. Numis and Canaccord shall notify the Firm Placees and
any person acting on behalf of a Firm Placee of any changes.
DEFINITIONS
The following definitions apply throughout this Announcement
unless the context otherwise requires:
"Admission" - admission of the New Ordinary Shares to trading on
AIM becoming effective in accordance with Rule 6 of the AIM
Rules
"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 as they may be amended and replaced from time
to time
"Announcement" - this announcement (including the Appendix to
this announcement)
"Canaccord" - Canaccord Genuity Limited, a company incorporated
in England and Wales, with registered number 01774003, whose
registered office is at 88 Wood Street, London EC2V 7QR
"Company" - Velocys plc, a public limited company incorporated
in England & Wales under registered number 05712187 and having
its registered office at Harwell Innovation Centre, 173 Curie
Avenue, Harwell, Oxfordshire, England, OX11 0QG
"CREST" - the relevant system (as defined in the Regulations)
which enables title to units of relevant securities (as defined in
the Regulations) to be evidenced and transferred without a written
instrument and in respect of which Euroclear UK & Ireland
Limited is the Operator (as defined in the Regulations)
"FCA" - the Financial Conduct Authority
"Firm Placing" - the placing of the Firm Placing Shares at the
Placing Price by Numis, Canaccord and Other Brokers as agents for
and on behalf of the Company pursuant to the terms of the Placing
Agreements
"Firm Placing Shares" - 139,605,000 new Ordinary Shares to be
issued in connection with the Firm Placing
"FSMA" - the Financial Services and Markets Act of 2000 (as
amended)
"Group" - the Company and its subsidiary undertakings prior to
completion of the Acquisition
"Joint Broker Placing Agreement" - the conditional agreement
dated 15 January 2018 relating to the Capital Raising, between the
Company, Numis and Canaccord
"London Stock Exchange" - London Stock Exchange plc
"Numis" - Numis Securities Limited, a private limited company
incorporated in England & Wales under registered number 2285918
and having its registered office at 10 Paternoster Square, London
EC4M 7LT
"Open Offer" - the offer to Eligible Shareholders, constituting
an invitation to apply for the Open Offer Shares at the Placing
Price on the terms and subject to the conditions set out in the
Circular and, in the case of Eligible Non-CREST Shareholders, in
the Application Form
"Open Offer Shares" - 44,057,946 new Ordinary Shares to be
issued in connection with the Placing and Open Offer
"Ordinary Shares" - ordinary shares of 1 penny each in the
capital of the Company
"Other Brokers" - MC Peat & Co LLP, Turner Pope Investments
(TPI) Limited and Capital Access Group Limited
"Placing" - the conditional placing of 44,057,946 new Ordinary
Shares with Henderson and Lansdowne, subject to clawback to satisfy
valid acceptances by Eligible Shareholders under the Open Offer
"Placing Agreements" - the Joint Broker Placing Agreement and
the other conditional agreements relating to the Firm Placing
between the Company and each of the Other Brokers
"Placing Price" - 10 pence per new Ordinary Share
"Prospectus Directive" - the Directive of the European
Parliament and of the Council of the European Union 2003/71/EC, as
amended
"Regulations" - the UK Uncertificated Securities Regulations
2001 (SI 2001 No. 3755), as amended
"Securities Act" - the United States Securities Act of 1933, as
amended
"UK" or "United Kingdom" - the United Kingdom of Great Britain
and Northern Ireland
"United States" or "US" - United States of America, its
territories and possessions, any state of the United States of
America and the District of Columbia and all other areas subject to
its jurisdiction
APPIX II
TERMS AND CONDITIONS OF THE OPEN OFFER
1. Introduction
The Company invites Eligible Shareholders to apply, on and
subject to the terms and conditions set out in the Circular and in
the Application Form, and subject to the Articles of the Company,
for Open Offer Shares at the Placing Price, free from all expenses,
payable in cash in full on application. Subject to certain minimum
subscriptions set out below, Eligible Shareholders are being given
the opportunity to subscribe for their Basic Entitlement at the
Placing Price payable in full on application and free of all
expenses, pro rata to their existing shareholdings.
In addition to their Basic Entitlement, but only where they have
exercised their Basic Entitlement in full, Eligible Shareholders
are invited to subscribe for such Excess Entitlement at the Placing
Price, free from all expenses, payable in cash in full on
application as they may choose.
Any Open Offer Shares not issued to an Eligible Shareholder
pursuant to their Basic Entitlement will be apportioned between
those Eligible Shareholders who have applied for Excess
Entitlements at the sole discretion of the Board, provided that no
Eligible Shareholder shall be required to subscribe for more Open
Offer Shares than he or she has specified on the Application Form
or through CREST.
Only Eligible Shareholders, which means only Shareholders who
are resident in the UK, will be eligible to make an application for
Open Offer Shares. Shareholders domiciled in any other territory,
including any other EEA member state, will not be permitted to
apply for any Open Offer Shares.
The Open Offer Shares have been conditionally placed with two of
the Company's existing Shareholders, Henderson and Lansdowne,
subject to clawback to satisfy valid acceptances by Eligible
Shareholders under the Open Offer. Henderson and Lansdowne have
agreed under the terms of the Placing Letters to subscribe for the
maximum number of Open Offer Shares at the Placing Price, subject
to clawback, on an equal basis.
The Open Offer has been structured such that the maximum amount
that can be raised by the Company under the Open Offer will not
exceed the sterling equivalent of EUR5 million. This maximum limit
has been set to ensure that the Company is not required to produce
an approved prospectus pursuant to section 85 of FSMA. The issue of
a prospectus would considerably increase the costs of the
fundraising and it would take much longer to complete, as any such
prospectus would require the prior approval of the UKLA. Based on a
GBP:EUR exchange rate of 1.1233, this means that the maximum amount
which could be raised under the Open Offer is GBP4,451,171. The
Company is proposing to raise GBP4.4 million (before expenses) by
way of the Open Offer.
The Placing Price represents a discount of approximately 63.3
per cent. to the closing mid-market price of 27.25 pence per
Existing Ordinary Share on 12 January 2018.
The Open Offer Shares will, when issued and fully paid, rank
pari passu in all respects with the Existing Ordinary Shares and
the Firm Placing Shares, including the right to receive all
dividends and other distributions declared, made or paid after the
date of their issue. The allotment and issue of the Open Offer
Shares will be made upon and be subject to the terms and conditions
set out in the Circular and in the Application Form.
Application will be made to the London Stock Exchange for the
Open Offer Shares to be admitted to trading on AIM. It is expected
that Admission will become effective and that dealings in the Open
Offer Shares will commence on AIM at 8.00 a.m. on 1 February
2018.
If an Eligible Shareholder does not wish to apply for Open Offer
Shares he should not complete or return the Application Form.
A maximum number of 44,057,946 Open Offer Shares will be offered
to Eligible Shareholders as part of the Open Offer. In no
circumstances will more than this number of Ordinary Shares be
issued pursuant to the Open Offer, even if the Open Offer is over
subscribed.
2. Principal terms and conditions of the Open Offer
Eligible Shareholders are being given the opportunity to
subscribe for their Basic Entitlement at the Placing Price payable
in full on application and free of all expenses, pro rata to their
existing shareholdings on the basis of:
3 Open Offer Shares for every 10 Existing Ordinary Shares
held at the Record Date. Basic Entitlement will be rounded down
to the nearest whole number of shares, Fractional entitlements
which would have otherwise arisen will not be issued, but will be
aggregated and made available under the excess application
facility.
Eligible Shareholders are also invited to apply for additional
Open Offer Shares in accordance with the Excess Entitlement. Any
Open Offer Shares not issued to an Eligible Shareholder pursuant to
their Basic Entitlement will be apportioned between those Eligible
Shareholders who have applied for Excess Entitlements at the sole
discretion of the Board, provided that no Eligible Shareholder
shall be required to subscribe for more Open Offer Shares than he
or she has specified on the Application Form or through CREST.
Eligible Shareholders may apply for, on and subject to the terms
and conditions set out in the Circular and in the accompanying
Application Form, any whole number of Open Offer Shares at the
Placing Price subject to the minimum subscription of GBP100 and
thereafter in multiples of GBP100.
Only Eligible Shareholders, which means only Shareholders who
are resident in the UK, will be eligible to make an application for
Open Offer Shares. Shareholders domiciled in any other territory,
including any other EEA member state, will not be permitted to
apply for any Open Offer Shares.
Eligible Shareholders should be aware that the Open Offer is not
a rights issue and the Application Form is not a negotiable
document and cannot be traded. Applications for Open Offer Shares
may only be made by the Eligible Shareholder originally entitled or
by a person entitled by virtue of a bona fide market claim. Open
Offer Shares not applied for under the Open Offer will not be sold
in the market for the benefit of those who do not apply under the
Open Offer and Eligible Shareholders who do not apply to take up
Open Offer Shares will have no rights under the Open Offer.
The Open Offer Shares have been conditionally placed with two of
the Company's existing Shareholders, Henderson and Lansdowne,
subject to clawback to satisfy valid acceptances by Eligible
Shareholders under the Open Offer. Henderson and Lansdowne have
agreed under the terms of the Placing Letters to subscribe for the
maximum number of Open Offer Shares at the Placing Price, subject
to clawback, on an equal basis.
3. Conditions and further terms of the Open Offer
The Open Offer is conditional on:
(a) the Resolutions being passed at the General Meeting; and
(b) the Joint Broker Placing Agreement becoming unconditional in
all respects, save for any condition relating to Admission of the
Open Offer Shares.
Accordingly, if these conditions are not satisfied or waived
(where capable of waiver), the Open Offer will not proceed and any
applications made by Eligible Shareholders will be rejected. In
such circumstances, application monies will be returned (at the
applicant's sole risk), without payment of interest, as soon as
practicable thereafter.
No temporary documents of title will be issued in respect of the
Open Offer Shares held in uncertificated form. Definitive
certificates in respect of Open Offer Shares taken up are expected
to be posted to those Eligible Shareholders who have validly
elected to hold their Open Offer Shares in certificated form by 8
February 2018. In respect of those Eligible Shareholders who have
validly elected to hold their Open Offer Shares in uncertificated
form, the Open Offer Shares are expected to be credited to their
stock accounts maintained in CREST by as soon as possible after
8.00 a.m. on 1 February 2018.
All monies received by the Receiving Agent in respect of Open
Offer Shares will be credited to a non-interest bearing account by
the Receiving Agent.
If for any reason it becomes necessary to adjust the expected
timetable as set out in the Circular, the Company will make an
appropriate announcement to a Regulatory Information Service giving
details of the revised dates.
4. Procedure for Application and Payment
The action to be taken by you in respect of the Open Offer
depends on whether, at the relevant time, you have an Application
Form in respect of the Open Offer or you have Open Offer
Entitlements credited to your CREST stock account.
Eligible Shareholders who hold all their Existing Ordinary
Shares in certificated form will receive a personalised Application
Form. The Application Form will show the number of Ordinary Shares
held at the Record Date. It will also show Eligible Shareholders
their Basic Entitlement and the total number of Open Offer Shares
available under their Open Offer Entitlement that can be allotted
in certificated form. Eligible Shareholders who hold all their
Existing Ordinary Shares in CREST will be allotted Open Offer
Shares in CREST. Eligible Shareholders who hold Existing Ordinary
Shares partly in certificated and partly in uncertificated form
will be treated as having separate holdings for the purpose of
calculating their Basic Entitlement. It will be possible for
Eligible Shareholders to deposit Open Offer Entitlements into, and
withdraw them from, CREST.
Eligible Shareholders who do not wish to apply for any Open
Offer Shares under the Open Offer should not complete or return the
Application Form or submit a USE message through CREST. Eligible
Shareholders who hold their Ordinary Shares through a nominee and
who wish to apply for Open Offer Shares must contact their nominee
as such Eligible Shareholders will not be able to apply for Open
Offer Shares directly using the Application Form.
(a) If you receive an Application Form in respect of your Open
Offer Entitlements under the Open Offer
(i) General
Subject as provided in paragraph 7 of this Appendix II in
relation to Overseas Shareholders, Eligible Non-CREST Shareholders
will receive an Application Form. The Application Form shows the
number of Existing Ordinary Shares registered in your name on the
Open Offer Record Date. It also shows the number of Open Offer
Shares for which you may apply pursuant to your Basic Entitlement,
(on an initial pro rata basis) as shown by the total number of Open
Offer Shares allocated to you. You may apply for less than your
initial pro rata entitlement should you wish to do so. You may also
apply for additional Open Offer Shares by completing Box 3 on the
Application Form relating to your Excess Entitlement.
Eligible Non-CREST Shareholders may also hold such an
Application Form by virtue of a bona fide market claim. If the
total number of Open Offer Shares applied for by all Eligible
Shareholders exceeds 44,057,946 or if the proceeds of the Open
Offer would otherwise be EUR5 million or more, applications for
Open Offer Shares will be scaled back at the discretion of the
Directors. The instructions and other terms set out in the
Application Form forms part of the terms of the Open Offer in
relation to Eligible Non-CREST Shareholders.
(ii) bona fide market claims
Applications to acquire Open Offer Shares may only be made on
the Application Form and may only be made by the Eligible Non-CREST
Shareholder named in it or by a person entitled by virtue of a bona
fide market claim in relation to a purchase of Ordinary Shares
through the market prior to the Ex-Entitlement Date. Application
Forms may not be assigned, transferred or split, except to satisfy
bona fide market claims up to 3.00 p.m. on 26 January 2018. The
Application Form will not be a negotiable document and will not be
separately tradeable.
Shareholders should note that Excess Entitlements will not be
subject to Euroclear's market claims process. Qualifying CREST
Shareholders claiming Excess Entitlements by virtue of a bona fide
market claim are advised to contact the Receiving Agent to request
a credit of the appropriate number of entitlements to their CREST
account.
An Eligible Non-CREST Shareholder who has sold or otherwise
transferred all or part of his holding of Ordinary Shares prior to
the Ex-Entitlement Date, should consult his broker or other
professional adviser as soon as possible, as the invitation to
acquire Open Offer Shares under the Open Offer may be a benefit
which may be claimed by the transferee. Eligible Non-CREST
Shareholders who have sold all or part of their registered holdings
should, if the market claim is to be settled outside CREST,
complete Box 13 on the Application Form and immediately send it to
the stockbroker, bank or other agent through whom the sale or
transfer was effected for transmission to the purchaser or
transferee. The Application Form should not, however be forwarded
to or transmitted to any territory outside the United Kingdom. If
the market claim is to be settled outside CREST, the beneficiary of
the claim should follow the procedures set out in the Application
Form. If the market claim is to be settled in CREST, the
beneficiary of the claim should follow the procedure set out in
paragraph 4(b)(ii) of this Appendix II below.
(iii) Application procedures
Eligible Non-CREST Shareholders wishing to apply to acquire Open
Offer Shares should complete the Application Form in accordance
with the instructions printed on it. If the total number of Open
Offer Shares applied for by all Eligible Shareholders exceeds
44,057,946 or if the proceeds of the Open Offer would otherwise be
EUR5 million or more, applications will be scaled back at the
Directors discretion.
Completed Application Forms should be posted in the pre-paid
envelope accompanying the Application Form or returned by post or
by hand (during normal business hours only) to the Receiving Agent,
Link Asset Services, Corporate Actions, The Registry, 34 Beckenham
Road, Beckenham, Kent, BR3 4TU (who will act as Receiving Agent in
relation to the Open Offer) so as to be received by the Receiving
Agent by no later than 11:00 a.m. on 30 January 2018, after which
time Application Forms will not be valid. Eligible Non-CREST
Shareholders should note that applications, once made, will be
irrevocable and receipt thereof will not be acknowledged. Eligible
Shareholders are recommended to allow at least four working days
for delivery if posted by first class post. If you have any
questions relating to the Circular, and the completion and return
of the Application Form, please telephone Link Asset Services on
+44 (0)371 664 0321. Calls are charged at the standard geographic
rate and will vary by provider. Calls outside the United Kingdom
will be charged at the applicable international rate. The helpline
is open between 9.00 a.m. - 5.30 p.m., Monday to Friday excluding
public holidays in England and Wales. Please note that Link Asset
Services cannot provide any financial, legal or tax advice and
calls may be recorded and monitored for security and training
purposes.
All payments must be in pounds sterling and made by cheque or
bankers' draft and should be made payable to "Link Market Services
Ltd re: Velocys PLC a/c - Acceptance A/C" and crossed "A/C payee
only". Cheques or banker's drafts must be drawn in sterling on a
bank or building society in the UK which is either a member of the
Cheque and Credit Clearing Company Limited or the CHAPS Clearing
Company Limited or which has arranged for its cheques and banker's
drafts to be cleared through facilities provided by any of those
companies or committees. Such cheques or banker's drafts must bear
the appropriate sort code in the top right-hand corner and must be
for the full amount payable on the application. No application will
be considered unless these requirements are fulfilled. Eurocheques
will not be accepted.
Cheques should be drawn on the personal account to which the
Eligible Shareholder has sole or joint title to the funds. Third
party cheques may not be accepted with the exception of bankers'
drafts/building society cheques where the bank/building society has
confirmed the name of the account holder on the back of the
draft/cheque and has added their stamp. The account name must be
the same as that of the applicant.
Cheques and bankers' drafts will be presented for payment upon
receipt and it is a term of the Open Offer that cheques will be
honoured on first presentation. If cheques or bankers' drafts are
presented for payment before the conditions of the Open Offer are
fulfilled, the application monies will be kept in a separate
non-interest bearing bank account pending fulfilment of such
conditions. If all the conditions of the Open Offer have not been
fulfilled or (where appropriate) waived by 31 January 2018 (or such
later date as the Company and its advisers may agree but in any
event not later than 7 February 2018), application monies will be
returned, without interest, by crossed cheque in favour of the
applicant(s) (at the applicant's risk) through the post within 14
days after that date.
The Company may in its sole discretion, but shall not be obliged
to, treat an Application Form as valid and binding on the person by
whom or on whose behalf it is lodged, even if not completed in
accordance with the relevant instructions or not accompanied by a
valid power of attorney where required, or if it otherwise does not
strictly comply with the terms and conditions of the Open Offer.
The Company further reserves the right (but shall not be obliged)
to accept either:
A. Application Forms received after 11.00 a.m. on 30 January 2018; or
B. applications in respect of which remittances are received
before 11.00 a.m. on 30 January 2018 from authorised persons (as
defined in FSMA) specifying the Open Offer Shares applied for and
undertaking to lodge the Application Form in due course but, in any
event, within two Business Days.
Multiple applications will not be accepted. All documents and
remittances sent by post by or to an applicant (or as the applicant
may direct) will be sent at the applicant's own risk.
If Open Offer Shares have already been allotted to an Eligible
Non-CREST Shareholder and such Eligible Non-CREST Shareholder's
cheque or banker's draft is not honoured upon first presentation or
such Eligible Non-CREST Shareholder's application is subsequently
otherwise deemed to be invalid, Link Asset Services shall be
authorised (in its absolute discretion as to manner, timing and
terms) to make arrangements, on behalf of the Company, for the sale
of such Eligible Non-CREST Shareholder's Open Offer Shares and for
the proceeds of sale (which for these purposes shall be deemed to
be payments in respect of successful applications) to be paid to
and retained by the Company. None of Link Asset Services, Joint
Brokers, or the Company nor any other person shall be responsible
for, or have any liability for, any loss, expense or damage
suffered by such Eligible Non-CREST Shareholders.
The instructions, notes and other terms set out in the
Application Form constitute part of the terms of the Open
Offer.
All enquiries in connection with the procedure for application
and completion of the Application Form should be addressed to the
Receiving Agent, Link Asset Services, Corporate Actions, The
Registry 34 Beckenham Road, Beckenham, Kent, BR3 4TU or you can
contact the Receiving Agent Link Asset Services on +44 (0)371 664
0321. Calls are charged at the standard geographic rate and will
vary by provider. Calls outside the United Kingdom will be charged
at the applicable international rate. The helpline is open between
9.00 a.m. - 5.30 p.m., Monday to Friday excluding public holidays
in England and Wales. Please note that Link Asset Services cannot
provide any financial, legal or tax advice and calls may be
recorded and monitored for security and training purposes.
(b) If you have your Basic Entitlement and Excess Entitlement
credited to your stock account in CREST in respect of your
entitlement under the Open Offer
(i) General
Each Eligible CREST Shareholder will receive a credit to his
stock account in CREST in respect of his Basic Entitlement and also
in respect of his Excess Entitlement (equal in size to the maximum
number of Open Offer Shares available under the Open Offer less an
amount equal to the Eligible Shareholder's Basic Entitlement). The
CREST stock account to be credited will be an account under the
participant ID and member account ID that apply to the Ordinary
Shares held on the Record Date by the Eligible CREST Shareholder in
respect of whom the Open Offer Entitlements have been allocated. If
for any reason the Open Offer Entitlements cannot be admitted to
CREST by, or the stock accounts of Eligible CREST Shareholders
cannot be credited by, 5.00 p.m. on 16 January 2018, or such later
time and/or date as the Company and Joint Brokers may decide, an
Application Form will be sent to each Eligible CREST Shareholder in
substitution for the Open Offer Entitlements which should have been
credited to his stock account in CREST. In these circumstances the
expected timetable as set out in the Circular will be adjusted as
appropriate and the provisions of the Circular applicable to
Eligible Non-CREST Shareholders with Application Forms will apply
to Eligible CREST Shareholders who receive such Application
Forms.
CREST members who wish to apply to acquire some or all of their
entitlements to Open Offer Shares should refer to the CREST Manual
for further information on the CREST procedures referred to below.
Should you need advice with regard to these procedures, please
contact the Receiving Agent Link Asset Services on +44 (0)371 664
0321. Calls are charged at the standard geographic rate and will
vary by provider. Calls outside the United Kingdom will be charged
at the applicable international rate. The helpline is open between
9.00 a.m. - 5.30 p.m., Monday to Friday excluding public holidays
in England and Wales. Please note that Link Asset Services cannot
provide any financial, legal or tax advice and calls may be
recorded and monitored for security and training purposes.
(ii) Market claims
Although Open Offer Entitlements will be admitted to CREST and
be enabled for settlement, applications in respect of Open Offer
Entitlements may only be made by the Eligible Shareholder
originally entitled or by a person entitled by virtue of a bona
fide market claim. Transactions identified by the CREST Claims
Processing Unit as "cum" the Open Offer Entitlement will generate
an appropriate market claim transaction and the relevant Open Offer
Entitlement(s)) will thereafter be transferred accordingly.
Shareholders should note that Excess Entitlements will not be
subject to Euroclear's market claims process. Qualifying CREST
Shareholders claiming Excess Entitlements by virtue of a bona fide
market claim are advised to contact the Receiving Agent to request
a credit of the appropriate number of entitlements to their CREST
account.
(iii) Unmatched Stock Event ("USE") instructions
Eligible CREST Shareholders who are CREST members and who want
to apply for Open Offer Shares in respect of all or some of their
Open Offer Entitlements in CREST must send (or, if they are CREST
sponsored members, procure that their CREST sponsor sends) an USE
instruction to Euroclear which, on its settlement, will have the
following effect: (i) the crediting of a stock account of the
Receiving Agent under the participant ID and member account ID
specified below, with a number of Open Offer Entitlements
corresponding to the number of Open Offer Shares applied for; and
(ii) the creation of a CREST payment, in accordance with the CREST
payment arrangements in favour of the payment bank of the Receiving
Agent in respect of the amount specified in the USE instruction
which must be the full amount payable on application for the number
of Open Offer Shares referred to in (i) above.
(iv) Content of USE instruction in respect of Basic Entitlements
The USE instruction must be properly authenticated in accordance
with Euroclear 's specifications and must contain, in addition to
the other information that is required for settlement in CREST, the
following details:
A. the number of Open Offer Shares for which application is
being made and the number of Basic Entitlements being delivered to
the Receiving Agent;
B. the ISIN of the Basic Entitlement. This is GB00BFNX4971;
C. the CREST participant ID of the accepting CREST member;
D. the CREST member account ID of the accepting CREST member
from which the Basic Entitlements are to be debited;
E. the participant ID of the Receiving Agent in its capacity as
a CREST receiving agent. This is 7RA33;
F. the member account ID of the Receiving Agent in its capacity
as a CREST receiving agent. This is 29440VEL;
G. the amount payable by means of a CREST payment on settlement
of the USE instruction. This must be the full amount payable on
application for the number of Open Offer Shares referred to in (i)
above;
H. the intended settlement date. This must be on or before 11:00
a.m. on 1 February 2018; and
I. the Corporate Action Number for the Open Offer. This will be
available by viewing the relevant corporate action details in
CREST.
In order for an application under the Open Offer to be valid,
the USE instruction must comply with the requirements as to
authentication and contents set out above and must settle on or
before 11:00 a.m. on 1 February 2018. In order to assist prompt
settlement of the USE instruction, CREST members (or their
sponsors, where applicable) may consider adding the following
non-mandatory fields to the USE instruction:
1. a contact name and telephone number (in the free format shared note field); and
2. a priority of at least 80.
CREST members and, in the case of CREST sponsored members, their
CREST sponsors, should note that the last time at which a USE
instruction may settle on 30 January 2018 in order to be valid is
11:00 a.m. on that day.
In the event that the Placing and Open Offer do not become
unconditional by 8.00 a.m. on 1 February 2018 or such later time
and date as the Company and Joint Brokers determine (being no later
than 8.00 a.m. on 15 February 2018), the Open Offer will lapse, the
Open Offer Entitlements admitted to CREST will be disabled and the
Receiving Agent will refund the amount paid by a Eligible CREST
Shareholder by way of a CREST payment, without interest, as soon as
practicable, but within 14 days, thereafter.
(v) Content of USE instruction in respect of Excess Entitlements
The USE instruction must be properly authenticated in accordance
with Euroclear's specifications and must contain, in addition to
the other information that is required for settlement in CREST, the
following details:
A. the number of Excess Entitlements for which application is being made;
B. the ISIN of the Excess Entitlements. This is GB00BFNX4B95;
C. the CREST participant ID of the accepting CREST member;
D. the CREST member account ID of the accepting CREST member
from which the Excess Entitlements are to be debited;
E. the participant ID of the Receiving Agent in its capacity as
a CREST receiving agent. This is 7RA33;
F. the member account ID of the Receiving Agent in its capacity
as a CREST receiving agent. This is 29440VEL;
G. the amount payable by means of a CREST payment on settlement
of the USE instruction. This must be the full amount payable on
application for the number of Excess Entitlements referred to in
(i) above;
H. the intended settlement date. This must be on or before 11:00
a.m. on 1 February 2018; and
I. the Corporate Action Number for the Open Offer. This will be
available by viewing the relevant corporate action details in
CREST.
In order for an application under the Open Offer to be valid,
the USE instruction must comply with the requirements as to
authentication and contents set out above and must settle on or
before 11.00 a.m. on 30 January 2018. In order to assist prompt
settlement of the USE instruction, CREST members (or their
sponsors, where applicable) may consider adding the following
non-mandatory fields to the USE instruction:
1. a contact name and telephone number (in the free format shared note field); and
2. a priority of at least 80.
CREST members and, in the case of CREST sponsored members, their
CREST sponsors, should note that the last time at which a USE
instruction may settle on 30 January 2018 in order to be valid is
11.00 a.m. on that day.
In the event that the Placing and Open Offer do not become
unconditional by 8.00 a.m. on 1 February 2018 or such later time
and date as the Company and Joint Brokers determine (being no later
than 8.00 a.m. on 15 February 2018), the Open Offer will lapse, the
Open Offer Entitlements admitted to CREST will be disabled and the
Receiving Agent will refund the amount paid by a Eligible CREST
Shareholder by way of a CREST payment, without interest, within 14
days thereafter.
(vi) Deposit of Open Offer Entitlements into, and withdrawal from, CREST
An Eligible Non-CREST Shareholder's entitlements to apply for
Open Offer Shares under the Open Offer set out in his Application
Form may be deposited into CREST (either into the account of the
Eligible Shareholder named in the Application Form or into the name
of a person entitled by virtue of a bona fide market claim),
provided that such Eligible Non-CREST Shareholder is also a CREST
member. Similarly, Open Offer Entitlements held in CREST may be
withdrawn from CREST so that the entitlements under the Open Offer
are reflected in an Application Form. Normal CREST procedures
(including timings) apply in relation to any such deposit or
withdrawal, subject (in the case of a deposit into CREST) to the
provisions of the Application Form. A holder of an Application Form
who is proposing to deposit the entitlements set out in such form
into CREST is recommended to ensure that the deposit procedures are
implemented in sufficient time to enable a person holding or
acquiring such Open Offer Entitlements following their deposit into
CREST, to take all necessary steps in connection with taking up
such entitlements prior to 3.00 p.m. on 25 January 2018. A holder
of an Application Form who deposits his Open Offer Entitlement into
his CREST account, will receive a credit to such account for his
Open Offer Entitlement which will be managed by the Registrars.
In particular, having regard to normal processing times in CREST
and on the part of the Receiving Agent, the recommended latest time
for depositing an Application Form with the CREST Courier and
Sorting Service, where the person entitled wishes to hold the
entitlement under the Open Offer set out in such Application Form
as Open Offer Entitlements, is 3.00 p.m. on 25 January 2018 and the
recommended latest time for receipt by Euroclear of a
dematerialised instruction requesting withdrawal of Open Offer
Entitlements from CREST is 4.30 p.m. on 24 January 2018 in either
case so as to enable the person acquiring or (as appropriate)
holding the Open Offer Entitlements following the deposit or
withdrawal (whether as shown in an Application Form or held in
CREST) to take all necessary steps in connection with applying in
respect of the Open Offer Entitlements prior to 11.00 a.m. on 30
January 2018. Delivery of an Application Form with the CREST
deposit form duly completed whether in respect of a deposit into
the account of the Eligible Shareholder named in the Application
Form or into the name of another person, shall constitute a
representation and warranty to the Company and the Receiving Agent
by the relevant CREST member(s) that it/they is/are not in breach
of the provisions of the notes under the paragraph headed
"Instructions for depositing entitlements under the Open Offer into
CREST" on page 3 of the Application Form, and a declaration to the
Company and the Receiving Agent from the relevant CREST member(s)
that they are not a citizen or resident (of any territory other
than the United Kingdom, where such deposit is made by a
beneficiary of a market claim, a representation and warranty that
the relevant CREST member(s) is/are entitled to apply under the
Open Offer by virtue of a bona fide market claim.
(vii) Validity of application
A USE instruction complying with the requirements as to
authentication and contents set out above which settles by no later
than 11.00 a.m. on 30 January 2018 will constitute a valid
application under the Open Offer.
(viii) CREST procedures and timings
CREST members and (where applicable) their CREST sponsors should
note that Euroclear does not make available special procedures in
CREST for any particular corporate action. Normal system timings
and limitations will therefore apply in relation to the input of a
USE instruction and its settlement in connection with the Open
Offer. It is the responsibility of the CREST member concerned to
take (or, if the CREST member is a CREST sponsored member, to
procure that his CREST sponsor takes) such action as shall be
necessary to ensure that a valid application is made as stated
above by 11.00 a.m. on 30 January 2018. In this connection CREST
members and (where applicable) their CREST sponsors are referred in
particular to those sections of the CREST Manual concerning
practical limitations of the CREST system and timings.
(ix) Incorrect or incomplete applications
If a USE instruction includes a CREST payment for an incorrect
sum, the Company, through the Receiving Agent, reserves the
right:
A. to reject the application in full and refund the payment to
the CREST member in question (without interest);
B. in the case that an insufficient sum is paid, to treat the
application as a valid application for such lesser whole number of
Open Offer Shares as would be able to be applied for with that
payment at the Placing Price, refunding any unutilised sum to the
CREST member in question (without interest); and
C. in the case that an excess sum is paid, to treat the
application as a valid application for all the Open Offer Shares
referred to in the USE instruction, refunding any unutilised sum to
the CREST member in question (without interest).
(x) Company's discretion as to the rejection and validity of applications
The Company may in its sole discretion:
A. treat as valid (and binding on the CREST member concerned) an
application which does not comply in all respects with the
requirements as to validity set out or referred to in this Part III
(Terms and Conditions of the Open Offer);
B. accept an alternative properly authenticated dematerialised
instruction from a CREST member or (where applicable) a CREST
sponsor as constituting a valid application in substitution for or
in addition to a USE instruction and subject to such further terms
and conditions as the Company may determine;
C. treat a properly authenticated dematerialised instruction (in
this sub-paragraph the "first instruction") as not constituting a
valid application if, at the time at which the Registrar receives a
properly authenticated dematerialised instruction giving details of
the first instruction or thereafter, either the Company or the
Receiving Agent has received actual notice from Euroclear of any of
the matters specified in Regulation 35(5)(a) of the CREST
Regulations in relation to the first instruction. These matters
include notice that any information contained in the first
instruction was incorrect or notice of lack of authority to send
the first instruction; and
D. accept an alternative instruction or notification from a
CREST member or CREST sponsored member or (where applicable) a
CREST sponsor, or extend the time for settlement of a USE
instruction or any alternative instruction or notification, in the
event that, for reasons or due to circumstances outside the control
of any CREST member or CREST sponsored member or (where applicable)
CREST sponsor, the CREST member or CREST sponsored member is unable
validly to apply for Open Offer Shares by means of the above
procedures. In normal circumstances, this discretion is only likely
to be exercised in the event of any interruption, failure or
breakdown of CREST (or any part of CREST) or on the part of the
facilities and/or systems operated by the Receiving Agent in
connection with CREST.
(xi) Lapse of the Open Offer
In the event that the Placing and Open Offer do not become
unconditional by 8.00 a.m. on 1 February 2018 or such later time
and date as the Company, Numis and Canaccord may agree (being no
later than 15 February 2018), the Placing and Open Offer will
lapse, the Open Offer Entitlements admitted to CREST will be
disabled and the Receiving Agent will refund the amount paid by a
Eligible CREST Shareholder by way of a CREST payment, without
interest, within 14 days thereafter.
5. Warranties
An Eligible Shareholder who makes or is treated as making a
valid application or Open Offer Shares:
(a) represents and warrants that he has the right, power and
authority, and has taken all action necessary, to make the
application under the Open Offer and to execute, deliver and
exercise his rights, and perform his obligations, under any
contracts resulting therefrom and that he is not a person otherwise
prohibited or restricted by legal or regulatory requirements from
applying for Open Offer Shares or acting on behalf of any such
person on a non-discretionary basis;
(b) agrees to pay the amount payable on application in
accordance with the payment procedures described in this Appendix
II;
(c) agrees that all applications and contracts resulting
therefrom under the Open Offer shall be governed by, and construed
in accordance with, the laws of England;
(d) confirms that in making the application he is not relying on
any information or representation in relation to the Company other
than that contained in the Circular, and the applicant accordingly
agrees that no person responsible solely or jointly for the
Circular or any part thereof, or involved in the preparation
thereof, shall have any liability for any such information or
representation not so contained and further agrees that, having had
the opportunity to read the Circular, he will be deemed to have had
notice of all the information in relation to the Company contained
in the Circular;
(e) represents and warrants that he is the Eligible Shareholder
originally entitled to relevant Open Offer Entitlements or that he
has received such Open Offer Entitlements by virtue of a bona fide
market claim;
(f) represents and warrants that in relation to each and every
Open Offer Entitlement that he has received from a person other
than the Company, he is entitled to apply under the Open Offer in
relation to such Open Offer Entitlements by virtue of a bona fide
market claim;
(g) requests that the New Ordinary Shares to which he will
become entitled shall be issued to him on the terms set out in the
Circular, subject to the memorandum of association and articles of
association of the Company;
(h) represents and warrants that they are resident in the United
Kingdom and not resident of any other territory and they will not
offer to sell, directly or indirectly, any of the Open Offer Shares
(or any rights in respect of such Open Offer Shares) in any such
other territory or for the benefit of a resident of any other
territory other than the United Kingdom. In addition, completion of
an Application Form will constitute a representation and warranty
that the person in whose name registration is applied for is a
resident of the United Kingdom and not resident in any other
territory and that they do not hold and have not acquired the Open
Offer Shares comprised in the Application Form for the account or
benefit of a resident of any such other territory or with a view to
the offer, sale or delivery, directly or indirectly, of any Open
Offer Shares or any rights in respect of such Open Offer Shares in
any territory other than the United Kingdom or to a resident of any
other territory;
(i) represents and warrants that he is not, and nor is he
applying as nominee or agent for, a person who is or may be liable
to notify and account for tax under the Stamp Duty Reserve Tax
Regulations 1986 at any of the increased rates referred to in
sections 67, 70, 93 or 96 (depositary receipts and clearance
services) of the Finance Act 1986;
(j) confirms that in making the application he is not relying
and has not relied on the Joint Brokers or any person affiliated
with the Joint Brokers in connection with any investigation of the
accuracy of any information contained in the Circular or his
investment decision; and
(k) represents and warrants that that acceptance by them of
their application for subscription under the Open Offer will not
result in them and/or persons acting in concert with them obtaining
an interest in greater than 29.9 per cent. of the total number of
Ordinary Shares in issue following the Open Offer.
6. Money Laundering Regulations
To ensure compliance with the Money Laundering Regulations 2017
(the "Regulations"), it is a term of the Open Offer that the
Registrars may, at their absolute discretion, require verification
of identity from any person completing an Application Form or
sending a USE message through CREST (the "Applicant") for more than
a sterling equivalent of EUR15,000 and, without prejudice to the
generality of the foregoing, in particular any person who either
(i) tenders payment by way of a cheque or banker's draft drawn on
an account in the name of any person or persons other than the
Applicant or (ii) appears to LinkRegistrars to be acting on behalf
of some other person.
This may involve verification of the identity of any person on
whose behalf the Applicant appears to be acting.
Lodging of an Application Form and sending the USE message
through CREST with the appropriate remittance constitutes a
warranty by the Applicant that the Regulations will not be breached
by the acceptance of the remittance and an undertaking to provide
such evidence of identity at the time of lodging an Application
Form or, in the absolute discretion of the Company, within a
reasonable time thereafter (in each case to be determined at the
absolute discretion of the Company and the Registrars) as may be
required to ensure compliance with the Regulations.
If satisfactory evidence of identity has not been received by
Link Asset Services Limited within a reasonable period of time,
then the Application Form or USE message through CREST in question
may be rejected, in which event the application will not proceed
any further and the application monies (without interest) will be
returned to the bank account on which the cheque was drawn at the
Applicant's own risk.
Where possible Applicants should make payment by their own
cheque. If a bankers' draft or building society cheque is used, the
Applicant should:
(a) write his/her name and address on the back of the draft or
cheque and, in the case of an individual, record his/her date of
birth against his/her name; and
(b) ask the bank or building society to endorse on the reverse
of the draft or cheque the full name and account number of the
person whose account number is being debited and stamp such
endorsement.
The above information is provided by way of guidance to reduce
the likelihood of difficulties, delays and potential rejection of
an Application Form (but without limiting LinkRegistrars Limited's
right to require verification of identity as indicated above).
7. Overseas Shareholders
Only Eligible Shareholders, which means only Shareholders that
are resident and domiciled in the United Kingdom, will be eligible
to make an application for Open Offer Shares, and in particular no
person receiving a copy of this document, the Circular or the
Application Form in any other territory may treat the same as
constituting an offer or invitation to him/her nor should he/she in
any event complete the Application Form. Accordingly, persons
receiving this document, the Circular and Application Form should
not send the same into any other territory, and any copy of this
document, the Circular or the Application Form which is received in
any such jurisdiction is sent for information only, is confidential
and should not be copied or distributed.
The Company reserves the right to treat as invalid any
application or purported application to subscribe for new Ordinary
Shares pursuant to the Open Offer which appears to the Company or
its agent to have been executed, effected or dispatched in a manner
which may involve a breach of the securities laws or regulations of
any jurisdiction or which does not include the warranties set out
in the Application Form.
The Open Offer Shares have not been and are not intended to be
registered or qualified for sale under in any jurisdiction other
than the United Kingdom. Accordingly, unless otherwise determined
by the Company and effected by the Company in a lawful manner, the
Application Form will not be sent to Shareholders with registered
addresses in any other jurisdiction other than the United Kingdom
since to do so would require compliance with the relevant
securities laws of that jurisdiction. Applications from any such
person will be deemed to be invalid. If an Application Form is
received by any Shareholder whose registered address is elsewhere
but who is in fact a resident or domiciled in a territory other
than the United Kingdom, he/she should not seek to take up his/her
allocation.
8. Admission, Settlement and Dealings
Application will be made for the admission of the New Ordinary
Shares to trading on AIM. The result of the Placing and Open Offer
is expected to be announced on or about 31 January 2018 and,
subject to the Open Offer becoming unconditional in all respects,
trading in the Open Offer Shares is anticipated to commence on AIM
for normal settlement on 1 February 2018.
Application will be made for the New Ordinary Shares to be
admitted to CREST with effect from AIM Admission and applicants for
Open Offer Shares will be able to hold their Open Offer Shares in
certificated or uncertificated form.
Notwithstanding any other provision of this document, the
Circular or of the Application Form, the Company reserves the right
to allot and/or issue any Open Offer Shares in certificated form.
In normal circumstances, this right is only likely to be exercised
in the event of any interruption, failure or breakdown of CREST (or
any part of CREST), or on the part of the facilities and/or systems
operated by the Company's registrars in connection with CREST. This
right may also be exercised if the correct details in respect of
bona fide market claims (such as the Member Account ID and
Participation ID details) are not provided as requested on the
Application Form.
For more information as to the procedure for application in each
case, Eligible non-CREST Shareholders are referred to the
Application Form.
[1] All key Mississippi biorefinery economics figures are
estimates and based on the pre-FEED assessment and additional scope
and cost reviews by potential EPC candidates.
[2] All indicative Mississippi biorefinery capital structure
figures are estimates.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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