TIDMZPHR
RNS Number : 7261T
Zephyr Energy PLC
29 March 2021
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SHARES OF ZEPHYR ENERGY PLC.
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CONTAINED IN THIS ANNOUNCEMENT, WITH THE RESULT THAT CERTAIN
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INFORMATION.
29 March 2021
Zephyr Energy plc
(the "Company" or "Zephyr")
Equity fundraising of GBP10m to fund the upcoming Paradox
lateral well and
to acquire and fund oil producing interests in the Bakken
Formation USA,
and notice of General Meeting
Zephyr Energy plc (AIM: ZPHR), the Rocky Mountain oil and gas
company focused on responsible resource development, is pleased to
announce a placing and subscription of 500,000,000 new ordinary
shares of 0.1 p each in the Company ("Placing Shares"), at a price
of 2.0 pence ("p") per Placing Share, to raise GBP10 million before
expenses (the "Placing"). The Placing has been supported by a range
of new and existing institutional investors, family offices, Zephyr
Board members and other investors, and was conducted by Turner Pope
Investments ("TPI") acting as sole broker for the Company.
The proceeds from the Placing will be invested with the
objective of transforming the Company into a self-sustaining
platform for organic growth with a diverse portfolio of production
assets in two established USA oil producing basins.
Of the funds raised in the Placing, GBP6 million is conditional,
inter alia, on the approval by the Company's Shareholders of
resolutions to provide authority to the Directors to issue and
allot further ordinary shares of 0.1p each ("Ordinary Shares") on a
non-pre-emptive basis, which will be sought at a General Meeting to
be held on 16 April 2021, further details of which are set out
below.
Summary
-- The Placing was carried out at a 2.5% discount to the
Company's closing price of 2.05p per share on Friday 26 March
2021.
-- The Placing will fully fund the $3.5 million State 16-2 CC LN
appraisal well (the "lateral well" or "Paradox lateral") drilling
programme targeting the Company's first production from its Paradox
project (the "Paradox" or the "Paradox project").
-- The Placing also allows the Company to proceed with the
proposed acquisition, and to fund associated capital expenditure
("CAPEX"), of highly economic working interests in currently
producing and near-term production wells in the Bakken Formation,
North Dakota, USA (the "Acquisition" or the "Bakken project").
-- Production from the Acquisition will provide the Company with
immediate oil production and the substantial cashflows expected to
be generated from the Bakken project have the potential to fund
multiple additional Paradox wells over the next 12 months. The
Company will also be able to utilise its historical tax losses of
more than $16 million to offset federal income taxes due on profits
from the Acquisition.
Colin Harrington, Chief Executive of Zephyr, said : "Today's
developments mark a truly ground-breaking moment for the Company.
Following the completion of this ambitious fundraise, Zephyr is
poised to transform itself into a well-capitalised, self-sustaining
platform with a financial flexibility that will enable the Company
to pursue - on an independent basis - the significant upside
potential which exists in our Paradox project.
The key benefit of our proposed Bakken project acquisition is
its potential to generate substantial cashflows which can be
reinvested into our Paradox project. This, combined with the
funding secured to drill the Company's first production target in
the Paradox later this year, means we have taken a massive step
towards unlocking the substantial potential value from the Paradox
project on a timeline and in a manner that is now within our
control.
The combination of a funded Paradox drilling programme and a
cash generating Bakken project will also give us the capacity to
fund any future potential exploration opportunities on the
additional 11 reservoirs in the Paradox we have identified above
and beyond our main target, the Cane Creek reservoir.
The Bakken project acquisition is a perfect addition to our
asset portfolio and is the ideal complement to our Paradox project.
Since I joined the Company in mid-2019, we have evaluated over 75
potential acquisitions, and I believe the Bakken project to be the
single best opportunity we've identified. We have been able to
negotiate the Acquisition on highly favourable economic terms,
particularly when taking into account the recent rise in the oil
price. The fact that the Bakken project wells have had all drilling
risk removed is a major bonus, and the resulting cash flow will
enable us to utilise the Company's historical tax losses of more
than $16 million.
"The next few months will see a flurry of corporate and
operational activity - including the completion of the Acquisition,
first Bakken oil production and revenues for the Company, the
Bakken well completions, the drilling of the State 16-2 lateral
well targeting our first production in the Paradox and the release
of additional analysis of the overlying reservoir zone in the
Paradox. The team has shown fantastic energy and resilience to get
the Company to this position, and we look forward to continuing
delivering on these key objectives for our Shareholders.
"I would like to thank TPI and the rest of our adviser team for
the successful execution of the Placing, a fantastic effort and
outcome, and I would very much like to take this opportunity to
welcome our new Shareholders and institutional investors on
board.
" In conclusion, I'd like to note that we are currently
operating in particularly exciting and unusual times - times which
simultaneously offer strengthening commodity prices as well as
reduced drilling and service costs, and times in which
opportunistic acquisitions, such as the Bakken project, can be made
at highly compelling valuations. Zephyr's Board has elected to be
opportunistic in these exceptional times in order to position the
Company for significant long-term growth - and that growth now has
the potential to be achieved without the need for future external
funding while giving the Company autonomy and flexibility to
deliver the value from its existing asset portfolio.
"We will be providing regular updates as we progress through
this transformational period and in the meantime, we will continue
to operate in line with our core values of being responsible
stewards of both our investors' capital and of the environment in
which we work."
Details of and reasons for the Acquisition
The proposed Acquisition will provide the Company with low-risk
oil production from already drilled wells and is expected to
generate substantial cashflows that can be utilised across the
Company, including funding for the additional development of the
Paradox project.
The key details of the Acquisition are as follows:
-- Acquisition of non-operated working interests in five wells
(one producing well and four drilled but uncompleted wells (a "DUC"
or "DUCs") in Mountrail County, North Dakota, USA (the " Bakken
Interests ")
-- The Bakken Interests on the five wells range from 16.8% to 37.2%
-- The wells are operated by Whiting Petroleum, an active and
highly experienced operator in the Bakken region (the " Operator
")
-- The Company is acquiring the Bakken Interests from a
privately owned exploration and production company based in the US
(the " Seller ") which has not funded any of its historic or future
CAPEX obligations on the Bakken Interests
-- Zephyr agreed headline terms with the Seller when the oil
price was at $45 per barrel of oil (" bo "), subject to further due
diligence, funding and final documentation
-- The producing well has been on production since March 2020
-- The four DUCs are scheduled to be completed in May 2021 and
production revenues are targeted to be received by August 2021
-- 2P Reserves being acquired are estimated at 449,434 barrels
of oil equivalent (" boe ") to Zephyr
-- The five wells are spread across three separate drilling
pads, creating production diversification
The key benefits of the Acquisition are as follows:
-- A low-risk acquisition with substantial near-term cash flow expected
-- No remaining drilling risk - all five wells have been drilled successfully to target depth
-- Excellent complement to (and funding source for) the higher
risk, higher upside Paradox Basin development
-- No federal tax payments will be payable in the short-term as
profits can be offset against Zephyr's historic tax losses
The economics on the Acquisition as calculated by Zephyr are
extremely attractive and establish Zephyr as an immediate oil
producer. Once the DUC wells are online, Zephyr forecasts that the
Bakken Interests will provide:
-- up to $8 million of undiscounted cash flow to Zephyr over the
following 12 months to deploy into the Paradox development or into
additional projects, and in total, $15 million of undiscounted cash
flow, at $60/bo
-- 2P Internal Rate of Return (" IRR "): 47% at $60/bo
-- 2P net present value at a 10% discount rate (NPV-10): $4.3 million
-- A cash flow breakeven oil price of $36.69/bo
-- H2 2021: approximately 720 boepd average production anticipated
-- a one-year payback
Terms of the Acquisition
Zephyr has a conditional agreement with the Seller providing
exclusivity for Zephyr to acquire the Bakken Interests by 31 March
2021 (the " Agreement "). Zephyr has already paid the Seller a
non-refundable deposit of $50,000. Pursuant to the Agreement, to
acquire the Bakken Interests Zephyr is required to make cash
payments by 31 March 2021 (for which proceeds from the Placing will
be used) totalling approximately $4 million, primarily representing
the outstanding historical CAPEX due to the Operator, with the
balance of less than 8 per cent. being payable to the Seller and
which equates to less than $1.00 per proved boe acquired.
Upon completion of the Acquisition, the Company will be
responsible for payment of future CAPEX obligations on the Bakken
Interests to complete the DUCs, which will be paid directly to the
Operator and is estimated to be approximately $4.2 million, and
which will become due after the wells are completed (currently
scheduled for May 2021). Therefore, total historical and future
CAPEX on the Bakken Interests payable by Zephyr is estimated to be
approximately $7.9 million and equates to $17.35/boe acquired, with
first revenue from the DUC wells expected by August 2021.
Status of the Acquisition process
-- Zephyr has exclusivity to acquire the Bakken Interests until 31 March 2021
-- Financial, technical and commercial due diligence completed
-- Land and lease checks completed
-- Financial modelling completed
-- Technical evaluation and asset review completed
-- Assignments and closing documentation drafted
The Acquisition is expected to complete on 31 March 2021 and
remains conditional on, inter alia, final contract, Zepyhr paying
approximately $4 million by 31 March 2021, release of Operator
liens and transfer of title.
Paradox project update and next steps
On 15 March 2021, the Company announced a comprehensive update
on the Paradox project, which included confirmation of evidence of
oil saturation across entirety of the continuous core acquired from
the Company's Cane Creek reservoir target. The Company also
announced it had elected to proceed with the near-term drilling of
the Paradox lateral. The lateral will target the Cane Creek
reservoir and will utilise the pre-existing roads, pad and wellbore
from the State 16-2 well as a low-cost, low environmental impact
sidetrack host.
It is estimated that the cost of the Paradox lateral well will
be approximately $3.5 million and funds from the second tranche of
the Placing (as detailed below) will be allocated towards drilling
this sidetrack well. It is currently expected that the Paradox
lateral will be drilled in July of this year.
The Company continues to refine the cost and economic benefits
of the lateral. The Paradox lateral is forecast by the Company's
Board to have strong economics based on its 2C estimate, which
includes:
-- A single-well net present value of approximately $8.2 million
at $60.00 per barrel of oil and at a ten per cent. discount rate
(NPV-10)
-- A cash flow breakeven oil price of $20.55 per barrel of oil
-- A single-well estimated ultimate recovery of 694,000 barrels of oil equivalent
The Board's decision to proceed with the Paradox lateral was
made following the initial analysis of the significant reservoir
data that was obtained from the drilling operations on the State
16-2 well that were completed in January 2021. This data included
113 feet of continuous core obtained from the Cane Creek
reservoir.
The highlights from that analysis were as follows:
-- Initial analysis of the Cane Creek continuous core data
provided further evidence of hydrocarbon saturation across the Cane
Creek reservoir.
-- The structure to be drilled has comparable geometry and form
to other productive structures found within the neighbouring Cane
Creek Field, and is characterised by multiple seismic indicators
along its length that may represent natural fracture networks
within the Cane Creek reservoir.
-- When integrated with the recently acquired log data, existing
3D seismic data, and geologic and regional analogue analysis, the
Board believes there is a strong justification to proceed to test
the Cane Creek reservoir zone with a target to deliver initial oil
production.
The use of the State 16-2 well's top hole enables a substantial
well cost reduction and drilling risk mitigation.
The Board's target is to deliver first oil production - and
benefit from the improved commodity price environment - in a rapid
and responsible manner . Permitting and detailed drill planning
efforts for the lateral are underway, and the Company has targeted
a spud date of July 2021, subject to final permit approval.
On a project-wide 2C basis, the Cane Creek reservoir on the
Company's acreage (which includes the State 16-2LN CC) is a
reservoir of substantial scale and is estimated by Zephyr to
hold:
-- Net recoverable resources of over 12mmboe; and
-- A net present value of approximately $156 million using a
flat oil price of $60 per barrel of oil and a ten per cent.
discount rate.
The above estimates only include forecast resources in the Cane
Creek reservoir and do not include the significant potential upside
from additional overlying reservoirs which are being evaluated
following the drilling of the State 16-2 well. The estimates for
the Cane Creek reservoir were calculated by Zephyr in accordance
with the Company's Competent Persons Report prepared by Gaffney
Cline & Associates in June 2018, and will be revised further
once all data from the State 16-2 well has been processed.
In addition, the analysis and interpretation work on the
multiple shallower reservoir targets continues to progress. Initial
results have provided encouraging evidence for the presence of
multiple stacked continuous oil and gas plays, and significant
additional data remains to be processed and analysed over the
coming months.
Use of Placing Proceeds
Proceeds from the Placing will fully fund the upcoming State
16-2 LN CC drilling programme on the Company's project in the
Paradox Basin, details of which were announced on 15 March 2021 and
summarised above.
The Placing will also fully fund the acquisition of, and CAPEX
related to, an attractive portfolio of non-operated production and
near-term production assets in the Bakken Formation, a prolific
Rocky Mountain oil and gas basin located in North Dakota to the
north-east of Zephyr's existing Paradox Basin holdings.
In particular, the Placing proceeds will be used as follows:
-- Approximately $3.5 million to drill the Paradox lateral,
which will target the Company's first oil production on its Paradox
project, details of which were announced on 15 March 2021.
-- Approximately $1.7 million to support and accelerate the
development build-out of the Paradox project.
-- Approximately $4 million to acquire and fund unpaid
historical drilling CAPEX related to a portfolio of attractive,
non-operated working interests in five drilled wells in the Bakken
Formation, North Dakota, USA, as detailed above.
-- Approximately $4.2 million of additional completion CAPEX
investment on the Bakken Interests when the four DUC wells are
completed and tied in for production (currently scheduled for May
2021). First cashflows from the DUC wells are expected to be
received by Zephyr by August 2021.
Of the funds raised in the Placing, GBP6 million is conditional,
inter alia, on the approval by the Company's shareholders of
resolutions at a General Meeting to be held on 16 April 2021,
further details of which are set out below.
Details of the Placing
In total, 500,000,000 Placing Shares are proposed to be issued
pursuant to the Placing, at a price of 2.0p per Placing Share (the
"Placing Price") to raise gross proceeds of GBP10 million. The
Placing Shares (save for director subscriptions as detailed below)
have been conditionally placed by Turner Pope Investments (TPI)
Limited ("TPI"), as agent and broker of the Company, with certain
new and existing institutional and other investors pursuant to a
Placing Agreement, as detailed below.
The Company currently has limited shareholder authority to issue
Ordinary Shares for cash on a non-pre-emptive basis. Accordingly,
the Placing is being conducted in two tranches as set out
below:
1. First tranche
A total of GBP4 million, representing the issue of 200,000,000
Placing Shares at the Placing Price (the "First Placing Shares"),
has been raised within the Company's existing share allotment
authorities which was granted at the Company's general meeting held
on 2 November 2020 (the "First Placing"). Application will be made
for the First Placing Shares to be admitted to trading on AIM and
it is expected that their admission to AIM will take place on or
around 30 March 2021 ("First Admission"). The issue of the First
Placing Shares is conditional, inter alia, on First Admission
becoming effective and the Placing Agreement becoming unconditional
in respect of the First Placing Shares and not being terminated in
accordance with its terms prior to First Admission.
The First Placing is not conditional on the Second Placing (as
defined below) completing (but the Second Placing is conditional on
the First Placing completing). Accordingly, should the First
Placing proceed but not the Second Placing, due to resolutions at
the GM (as defined below) not being passed or for another reason,
the Company will only receive gross proceeds of GBP4 million from
the Placing, which will enable the Acquisition to proceed but will
not provide sufficient funds for the Company's other objectives
such as to drill the Paradox lateral, and therefore the Company
will pursue alternative funding options to achieve this objective.
Further, whilst the Acquisition is expected to complete on 31 March
2021, it remains subject to final conditions such as release of
Operator liens on the Bakken Interests and transfer of title.
2. Second tranche
The balance of the Placing, being GBP6 million and representing
the issue of 300,000,000 Placing Shares at the Placing Price (the
"Second Placing"), is conditional upon, inter alia, the passing of
resolutions to be put to shareholders of the Company at a general
meeting of the Company to be held on 16 April 2021 (the "GM") to
provide authority to the Directors to issue and allot further
Ordinary Shares on a non-pre-emptive basis, whereby such authority
will be utilised by the Directors to enable completion of the
Second Placing. A circular containing a notice of the GM will be
posted to shareholders shortly.
Application will be made for the Second Placing Shares to be
admitted to trading on AIM and it is expected that their admission
to AIM will take place on or around 19 April 2021, conditional on
the passing of the resolutions at the GM ("Second Admission").
In addition to the passing of the resolutions at the GM, the
Second Placing is conditional, inter alia, on First Admission and
Second Admission becoming effective and the Placing Agreement
becoming unconditional in respect of the Second Placing Shares and
not being terminated in accordance with its terms prior to Second
Admission. The First Placing is not conditional on the Second
Placing completing.
The Placing as a whole would, if the necessary resolutions are
approved at the GM, result in the issue of 500,000,000 Placing
Shares, representing, in aggregate, approximately 41 per cent. of
the Company's issued ordinary share capital as enlarged by the
Placing.
The Placing Shares will, when issued, be credited as fully paid
and will rank pari passu in all respects with the existing Ordinary
Shares of the Company, including the right to receive all dividends
or other distributions made, paid or declared in respect of such
shares after the date of issue of the Placing Shares.
Director subscriptions and shareholdings
Origin Creek Energy LLC ("OCE") has subscribed for 2,500,000
Placing Shares in the Second Placing, equivalent to GBP50,000 at
the Placing Price. Rick Grant, the Chairman of Zephyr, and Colin
Harrington, the CEO of Zephyr, are both shareholders and directors
of OCE, and Colin Harrington is indirectly the controlling
shareholder of OCE. Upon First Admission, OCE's interest in
Ordinary Shares will remain unchanged at 134,636,364 Ordinary
Shares but will represent 14.64% of the then issued share capital.
Upon Second Admission, OCE will have an interest in 137,136,364
Ordinary Shares, equivalent to 11.22% of the Company's then issued
share capital.
In addition to OCE, Colin Harrington has also subscribed for
750,000 Ordinary Shares in the Second Placing. Mr Harrington's
total interest in Ordinary Shares will remain unchanged on First
Admission at 135,340,300 (which includes OCE's shareholding) but
will represent 14.72 per cent. of the then issued share capital.
His total interest in the Company on Second Admission will be
138,590,300 Ordinary Shares and will represent 11.34% of the then
issued share capital.
In addition, Rick Grant (Chairman of Zephyr), Chris Eadie (CFO
of Zephyr) and Gordon Stein (Non-Executive Director of Zephyr) have
also each subscribed for Placing Shares in the Second Placing as
follows:
No. of Placing Total shareholding Percentage held
Shares subscribed on Second Admission on Second Admission
Rick Grant* 1,500,000 1,500,000 0.12
------------------- --------------------- ---------------------
Chris Eadie 1,500,000 6,775,095 0.55
------------------- --------------------- ---------------------
Gordon Stein 500,000 2,350,000 0.19
------------------- --------------------- ---------------------
*In addition, Rick Grant has a minority shareholding in OCE
which holds Ordinary Shares, as noted above.
Placing Agreement
Under the terms of a Placing Agreement between the Company and
TPI, TPI will receive commission from the Company conditional on
First Admission and Second Admission and the Company will give
customary warranties and undertakings to TPI in relation, inter
alia, to its business and the performance of its duties. In
addition, the Company has agreed to indemnify TPI in relation to
certain liabilities that they may incur in undertaking the Placing.
TPI has the right to terminate the Placing Agreement in certain
circumstances prior to First Admission and Second Admission, in
particular, in the event that there has been, inter alia, a
material breach of any of the warranties. The Placing is not being
underwritten.
Warrants
The Company is proposing to issue TPI with 32,350,000 warrants
to subscribe for 32,350,000 new Ordinary Shares ("Broker Warrants")
as part of TPI's fees for undertaking the Placing. The Broker
Warrants will be exercisable at a price of 3 p per Ordinary share,
a 50 per cent. premium to the Placing price, for a period of three
years from issue.
The issue of the Broker Warrants is conditional on the passing
of the resolutions to be put to shareholders of the Company at the
GM to provide authority to the Directors to issue and allot further
Ordinary Shares on a non-pre-emptive basis. The Broker Warrants
will not be admitted to trading on AIM or any other stock
exchange.
Further issue of equity
The Company announces the proposed issue and allotment of
2,428,885 Ordinary Shares in lieu of professional fees incurred by
and due to a professional service-provider engaged by the Company
for services performed in 2020 ("Fee Shares"). The issue of the Fee
Shares is conditional on the passing of applicable resolutions at
the GM.
Application will be made for the Fee Shares to be admitted to
trading on AIM and it is expected that their admission to AIM will
take place on Second Admission.
The Fee Shares will rank pari passu in all respects with the
existing Ordinary Shares of the Company in issue and therefore will
rank equally for all dividends or other distributions declared,
made or paid after the issue of the Fee Shares.
Total voting rights
Following First Admission, the Company's total issued share
capital will consist of 919,339,287 Ordinary Shares, with one
voting right per share. The Company does not hold any shares in
treasury. Therefore, the total number of Ordinary Shares and voting
rights in the Company will be 919,339,287 from First Admission.
This figure may be used by shareholders in the Company as the
denominator for the calculations by which they will determine if
they are required to notify their interest in, or a change in their
interest in, the share capital of the Company pursuant to the FCA's
Disclosure Guidance and Transparency Rules.
Following Second Admission, the Company's total issued share
capital will consist of 1,221,768,172 Ordinary Shares, with one
voting right per share. The Company does not hold any shares in
treasury. Therefore, the total number of Ordinary Shares and voting
rights in the Company will be 1,221,768,172 from Second Admission.
This figure may be used by shareholders in the Company as the
denominator for the calculations by which they will determine if
they are required to notify their interest in, or a change in their
interest in, the share capital of the Company pursuant to the FCA's
Disclosure Guidance and Transparency Rules.
Notice of General Meeting
The Company will publish a Circular to convene the GM to propose
resolutions to enable completion of the Placing.
The GM will be held at 10.00 a.m. on 16 April 2021. The circular
containing the notice of general meeting will be published and sent
to Shareholders tomorrow and will then be available thereafter on
the Company's website, www.zephyrplc.com. Shareholders will not be
able to attend the meeting due to current COVID-19 restrictions and
are strongly urged to vote by proxy in accordance with the
instructions set out in the notice of general meeting.
Contacts:
Zephyr Energy plc Tel: +44 (0)20 7225
Colin Harrington (CEO) 4590
Chris Eadie (CFO)
Allenby Capital Limited - AIM Nominated Tel: +44 (0)20 3328
Adviser 5656
Jeremy Porter / Liz Kirchner
Turner Pope Investments - Broker Tel: +44 (0)20 3657
Andy Thacker / Zoe Alexander 0050
Flagstaff Strategic and Investor Communications
Tim Thompson / Mark Edwards / Fergus Tel: +44 (0) 20 7129
Mellon 1474
Dr Gregor Maxwell, BSc Hons. Geology and Petroleum Geology, PhD,
Technical Adviser to the Board of Zephyr Energy plc, who meets the
criteria of a qualified person under the AIM Note for Mining and
Oil & Gas Companies - June 2009, has reviewed and approved the
technical information contained within this announcement.
Glossary of Terms
1C: Low estimate of Contingent Resources
2C: Best estimate of Contingent Resources
3C: High estimate of Contingent Resources
1P: proven reserves (both proved developed reserves + proved
undeveloped reserves)
2P: 1P (proven reserves) + probable reserves, hence "proved and
probable"
3P: the sum of 2P (proven reserves + probable reserves) +
possible reserves, all 3Ps "proven and probable and possible"
Contingent Resources:
Those quantities of petroleum estimated, as of a given date, to
be potentially recoverable from known accumulations by application
of development projects, but which are not currently considered to
be commercially recoverable due to one or more contingencies.
Contingent Resources may include, for example, projects for
which there are currently no viable markets, or where commercial
recovery is dependent on technology under development, or where
evaluation of the accumulation is insufficient to clearly assess
commerciality. Contingent Resources are further categorized in
accordance with the level of certainty associated with the
estimates and may be sub-classified based on project maturity
and/or characterized by their economic status.
Reserves: Reserves are defined as those quantities of petroleum
which are anticipated to be commercially recovered from known
accumulations from a given date forward
mmboe: million barrels of oil equivalent
Notice to Distributors
Solely for the purposes of the temporary product intervention
rules made under sections S137D and 138M of the FSMA and the FCA
Product Intervention and Product Governance Sourcebook (together,
the "Product Governance Requirements"), 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 Placing
Shares have been subject to a product approval process, which has
determined that the Placing Shares are: (i) compatible with an end
target market of retail investors and investors who meet the
criteria of professional clients and eligible counterparties, as
defined under the FCA Conduct of Business Sourcebook COBS 3 Client
categorisation, and are eligible for distribution through all
distribution channels as are permitted by the FCA Product
Intervention and Product Governance Sourcebook (the "Target Market
Assessment").
Notwithstanding the Target Market Assessment, distributors
should note that: the price of the Placing Shares may decline and
investors could lose all or part of their investment; the Placing
offer no guaranteed income and no capital protection; and an
investment in the Placing is compatible only with investors who do
not need a guaranteed income or capital protection, who (either
alone or in conjunction with an appropriate financial or other
adviser) are capable of evaluating the merits and risks of such an
investment and who have sufficient resources to be able to bear any
losses that may result therefrom. The Target Market Assessment is
without prejudice to the requirements of any contractual, legal or
regulatory selling restrictions in relation to the Placing.
Furthermore, it is noted that, notwithstanding the Target Market
Assessment, Allenby Capital Limited will only procure investors who
meet the criteria of professional clients and eligible
counterparties. For the avoidance of doubt, the Target Market
Assessment does not constitute: (a) an assessment of suitability or
appropriateness for the purposes of the FCA Conduct of Business
Sourcebook COBS 9A and 10A respectively; or (b) a recommendation to
any investor or group of investors to invest in, or purchase, or
take any other action whatsoever with respect to the Placing
Shares.
Each distributor is responsible for undertaking its own target
market assessment in respect of the Placing Shares and determining
appropriate distribution channels.
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(END) Dow Jones Newswires
March 29, 2021 02:00 ET (06:00 GMT)
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