Proposed Issue of Equity

14 June 2019

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (EC NO. 596/2014) ("MAR").

NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, THE REPUBLIC OF SOUTH AFRICA, JAPAN OR ANY OTHER JURISDICTION IN WHICH THE PUBLICATION, DISTRIBUTION OR RELEASE OF THIS ANNOUNCEMENT WOULD BE UNLAWFUL.

This announcement is an advertisement for the purposes of the Prospectus Rules of the UK Financial Conduct Authority ("FCA") and does not constitute a prospectus. Investors must subscribe for or purchase any shares referred to in this announcement only on the basis of information contained in a prospectus expected to be published later today by Augmentum Fintech plc (the "Prospectus") in its final form and not in reliance on this announcement. A copy of the Prospectus will, following publication, be available for inspection from the Company's registered office and on its website (www.augmentum.vc).  This announcement does not constitute, and may not be construed as, an offer to sell or an invitation or recommendation to purchase, sell or subscribe for any securities or investments of any description, or a recommendation regarding the issue or the provision of investment advice by any party.

LEI: 213800OTQ44T555I8S71

Augmentum Fintech plc
(the “Company” or “Augmentum Fintech”)

Proposed Initial Placing, Offer for Subscription and Intermediaries Offer

Further to the announcement made by the Company on 5 June 2019, the Board of Directors of Augmentum Fintech is pleased to announce the proposed issue of new ordinary shares (“Ordinary Shares”) to raise gross proceeds of approximately £30 million (the “Initial Issue”) at a price of 112 pence per new Ordinary Share (the “Issue Price”), details of which will be set out in the Prospectus. The Initial Issue will comprise an Initial Placing, Offer for Subscription and Intermediaries Offer. The Initial Issue forms part of a proposed Share Issuance Programme of up to 150 million new Ordinary Shares and/or C shares (the “Share Issuance Programme”).

Summary

·      Initial Issue of up to 26,785,714 new Ordinary Shares pursuant to an Initial Placing, Offer for Subscription and Intermediaries Offer, targeting gross proceeds of up to approximately £30 million*

·      The Issue Price is 112 pence per new Ordinary Share. This represents a premium of approximately 2.2 per cent. to the Company’s audited Net Asset Value per Ordinary Share as at 31 March 2019 of 109.6 pence per Ordinary Share

·      The Issue Price represents a discount of 0.9 per cent. to the closing price per Ordinary Share on 13 June 2019 of 113 pence per Ordinary Share

·      The results of the Initial Issue are expected to be announced on 2 July 2019

·      The Initial Issue forms part of a 12 month Share Issuance Programme of up to 150 million new Ordinary and/or C shares, details of which were announced on 5 June 2019 and further set out in the Prospectus to be published later today

*The Board have reserved the right to increase the size of the Initial Issue up to a total of 44,642,857 new Ordinary Shares, equating to gross proceeds of up to approximately £50 million.

Commenting on today's announcement, Neil England, Chairman of Augmentum Fintech plc said:

“There is a significant opportunity for fintech businesses in the UK and wider Europe. We are uniquely positioned to take advantage of this and our previously stated ambition is for a much more substantial fund over time; expected to come from a combination of underlying NAV growth and the introduction of new capital.

We have successfully delivered on our investment strategy following our IPO last year and now that the Company is substantially fully committed, the Board believes the time is right to raise further funds. This will enable us to take advantage of some interesting opportunities in our identified pipeline.”

Background to the Company

Augmentum Fintech is the UK’s only publicly listed investment company focusing on the fintech sector, having launched on the main market of the London Stock Exchange in March 2018, giving businesses access to patient capital and support, unrestricted by conventional fund timelines.

On 5 March 2019, the Company announced that it had substantially fully committed the net cash proceeds from the IPO and that it expected to issue further Ordinary Shares in due course in order to continue the growth in its portfolio. Since that announcement, the identified pipeline of opportunities identified by the Portfolio Manager has grown to £450 million, and on 5 June 2019, the Board posted a circular to Shareholders convening a general meeting, to be held at 9.00 a.m. on 1 July 2019, to increase the Company’s share issuance authorities.

On 11 June 2019, the Company announced its Final Results for the period from incorporation to 31 March 2019, which confirmed:

·      Launch size of the fund was £94 million (on 13 March 2018) and NAV as at 31 March 2019 was £103.1 million

·      The initial portfolio acquired on IPO has generated an annualised IRR of 28% since IPO (annualised as at 31 March 2019 valuation)

·      The net IPO proceeds are substantially fully committed and the Company had £25 million of available cash as at 31 March 2019, of which £15 million was earmarked for follow-on opportunities within the existing portfolio (since which date £8.5 million has been invested in follow-ons)

·      Since launch, the Portfolio Manager has reviewed approximately 675 opportunities, with a combined worth of over £1.5 billion, including the current pipeline of £450 million of opportunities

Subsequent to the Company’s Final Results announcement, on 13 June 2019 the Company announced it had made an aggregate of £8.5 million of follow-on investments into three portfolio companies, Tide, Monese and DueDil.

Reasons for the Initial Issue and use of proceeds

The Board, as advised by the Portfolio Manager, believes that there continue to be attractive opportunities for the Company to deliver returns for Shareholders through investment in a portfolio of fintech businesses in the UK and wider Europe and to generate capital growth over the long term for Shareholders.

The Company intends to use the net proceeds of the Initial Issue to acquire investments in accordance with the Company's investment objective and investment policy, in particular including those investments that form part of the identified pipeline.

Benefits of the Share Issuance Programme, including the Initial Issue

The Board of Directors of the Company believes that the Share Issuance Programme will have the following principal benefits for Shareholders:

·     Raise additional funds in a timely manner to enable the Company to take advantage of opportunities to make further investments in accordance with its investment policy;

·     Increase the market capitalisation of the Company, helping to make the Company attractive to a wider investor base;

·     A greater number of Shares in issue should improve liquidity in the secondary market for the Shares and make the Shares more attractive to a wider range of investors;

·     Grow the Company, thereby spreading the Company’s fixed running costs across a larger equity capital base which should over time reduce the level of ongoing expenses per Share; and

·     Give the Company the ability to issue new Ordinary and/or C Shares tactically, so as to manage better the premium to Net Asset Value at which the Shares may trade.

Overview of the Initial Issue

The Company is targeting an issue of up to approximately £30 million (gross) or approximately £29 million (net of expenses) through the issue of 26,785,714 new Ordinary Shares pursuant to the Initial Issue at the Issue Price of 112 pence per new Ordinary Share.  If the overall demand exceeds this target the Directors have reserved the right, following consultation with Fidante Capital and Peel Hunt, to increase the size of the Issue to a maximum of approximately £50 million (gross). The actual number of new Ordinary Shares to be issued pursuant to the Initial Issue, and therefore the Gross Issue Proceeds, are not known as at the date of this announcement but will be notified by the Company via a Regulatory Information Service prior to Admission. The Directors intend to use the net proceeds of the Initial Issue to acquire investments in accordance with the Company's investment policy and objective, as more fully set out in the Prospectus. The new Ordinary Shares will, following Admission, rank pari passu in all respects with the Existing Ordinary Shares.

The Issue Price is calculated by reference to the NAV per Ordinary Share as at 31 March 2019 (audited) of 109.60 pence plus a premium of approximately 2.2 per cent. as a contribution towards the costs and expenses of the Initial Issue.

The Initial Issue is not being underwritten.

Initial Placing

Each of Fidante Capital and Peel Hunt has agreed to use its respective reasonable endeavours to procure subscribers pursuant to the Initial Placing for the Ordinary Shares at the Issue Price on the terms and subject to the conditions set out in the Share Issuance Agreement.  

The terms and conditions which shall apply to any subscription for Ordinary Shares procured by Fidante Capital and Peel Hunt are set out in the Prospectus.

The Offer for Subscription 

The minimum subscription amount for new Ordinary Shares pursuant to the Offer for Subscription is £1,000 and, if the application is for a higher amount, the amount must be a multiple of £1,000, although the Board may accept applications below these minimum amounts in their absolute discretion. The aggregate subscription price is payable in full on application. Multiple subscriptions under the Offer for Subscription by individual investors will not be accepted.

The Intermediaries Offer

Investors may also subscribe for Ordinary Shares at the Issue Price pursuant to the Intermediaries Offer. Only the Intermediaries' retail investor clients in the United Kingdom, the Channel Islands and the Isle of Man are eligible to participate in the Intermediaries Offer. Investors may apply to any one of the Intermediaries to be accepted as their client.

No Ordinary Shares allocated under the Intermediaries Offer will be registered in the name of any person whose registered address is outside the United Kingdom, the Channel Islands or the Isle of Man. A minimum subscription amount of £1,000 per Underlying Applicant will apply. Allocations to Intermediaries will be determined solely by the Company (following consultation with Peel Hunt, Fidante Capital and the Portfolio Manager).

Conditions

The Initial Issue is conditional, inter alia, on:

(i)               the passing of the Issue Resolutions to be proposed at the General Meeting to be held on 1 July 2019;

(ii)             the Share Issuance Agreement becoming unconditional in respect of the Initial Issue (save as to Admission) and not having been terminated in accordance with its terms prior to Admission; and

(iii)            Admission occurring by 8.00 a.m. on 4 July 2019 (or such later date, not being later than 1 August 2019, as the Company, Fidante Capital and Peel Hunt may agree).

If the Initial Issue does not proceed, application monies received will be returned to applicants without interest within 14 days at the applicants' risk.

Scaling Back

In the event that commitments under the Initial Issue exceed the maximum number of Ordinary Shares available, applications under the Initial Issue will be scaled back at the Company's discretion (in consultation with Fidante Capital, Peel Hunt and the Portfolio Manager).

Dilution

If 26,785,714 Ordinary Shares are issued pursuant to the Initial Issue and to the extent that Shareholders did not participate in the Initial Issue, there would be a dilution of approximately 22.2 per cent. in their ownership and voting interests in the Company.

Directors' Participation

Each of the Directors intends to participate in the Initial Issue and intend to, in aggregate, subscribe for 60,000 new Ordinary Shares.

Expected Timetable

	2019
Prospectus published and Initial Issue opens	14 June
General Meeting	9.00 a.m. on 1 July
Latest time and date for receipt of completed Application Forms in respect of the Offer for Subscription	11.00 a.m. on 1 July
Latest time and date for receipt of completed applications from the Intermediaries in respect of the Intermediaries Offer	3.00 p.m. on 1 July
Latest time and date for commitments under the Initial Placing	4.00 p.m. on 1 July
Publication of results of the Initial Issue	2 July
Admission and dealings in Ordinary Shares issued pursuant to the Initial Issue commence	8.00 a.m. on 4 July
CREST accounts credited with uncertificated Ordinary Shares	4 July
Where applicable, definitive share certificates despatched by post in the week commencing**	15 July
** Underlying Applicants who apply to Intermediaries for Ordinary Shares under the Intermediaries Offer will not receive share certificates.
Any changes to the expected timetable set out above will be notified by the Company through a Regulatory Information Service.

Fidante Partners Europe Limited (trading as “Fidante Capital”) and Peel Hunt LLP (“Peel Hunt”) are acting as Joint Sponsors and Joint Bookrunners to the Company. Peel Hunt is acting as Intermediaries Offer Adviser to the Company. 

Applications will be made to the Financial Conduct Authority and the London Stock Exchange for all of the new Ordinary Shares to be issued pursuant to the Initial Issue to be admitted to the premium listing segment of the Official List and to trading on the Main Market. It is expected that Admission will become effective and dealings in the Ordinary Shares will commence at 8.00 a.m. on 4 July 2019.

Terms not otherwise defined in this announcement have the meanings that will be given to them in the Prospectus. This summary should be read in conjunction with the full text of the announcement and the Prospectus, when available.

The Company will shortly be publishing a Prospectus in connection with the Initial Issue and Share Issuance Programme. The Prospectus be available, subject to certain access restrictions, on the Company's website (www.augmentum.vc), at the Company's registered office at 25 Southampton Buildings, London, WC2A 1AL, and at the National Storage Mechanism via www.morningstar.co.uk/uk/NSM.

For further information, please contact:

Augmentum Tim Levene, Portfolio Manager Nigel Szembel, Investor Relations	[phone] [phone] [e-mail]
Fidante Capital (Joint Sponsor and Joint Bookrunner)      Nick Donovan John Armstrong-Denby Will Talkington	[phone]
Peel Hunt (Joint Sponsor, Joint Bookrunner and Intermediaries Offer Adviser)                                        Liz Yong Luke Simpson	[phone]
Frostrow Victoria Hale, Company Secretary	[phone] [e-mail]

Notes to Editors

Augmentum Fintech plc is one of Europe’s leading venture capital investors focusing exclusively on the fintech sector. Augmentum Fintech invests in fast growing fintech businesses that are disrupting the banking, insurance, asset management and wider financial services sectors. Augmentum Fintech is the UK’s only publicly listed investment company focusing on the fintech sector, having launched on the main market of the London Stock Exchange in 2018, giving businesses access to patient capital and support, unrestricted by conventional fund timelines.

Disclaimer

This announcement is an advertisement and does not constitute a prospectus and investors must subscribe for or purchase any shares referred to in this announcement only on the basis of information contained in the Prospectus expected to be published by the Company shortly and not in reliance on this announcement. Copies of the Prospectus may, subject to any applicable law, be obtained from the registered office of the Company and at the National Storage Mechanism at http://www.morningstar.co.uk/NSM and on the Company's website. This announcement does not constitute, and may not be construed as, an offer to sell or an invitation to purchase investments of any description or a recommendation regarding the issue or the provision of investment advice by any party. No information set out in this announcement is intended to form the basis of any contract of sale, investment decision or any decision to purchase shares in the Company.

This is a financial promotion and is not intended to be investment advice. The content of this announcement, which has been prepared by and is the sole responsibility of the Company, has been approved by Augmentum Fintech Management Limited solely for the purposes of section 21(2)(b) of the Financial Services and Markets Act 2000 (as amended).

This announcement is not for release, publication or distribution, directly or indirectly, in or into the United States (including its territories and possessions, any state of the United States and the District of Columbia, collectively, the "United States"), Australia, Canada, the Republic of South Africa, Japan or any other jurisdiction where such distribution is unlawful, or to US Persons, as defined in Regulation S. The distribution of this announcement may be restricted by law in certain jurisdictions and persons into whose possession any document or other information referred to herein comes should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction. This announcement is not an offer of securities for sale into the United States. Each of Fidante Partners Europe Limited (trading as Fidante Capital) ("Fidante") and Peel Hunt LLP ("Peel Hunt"), which are authorised and regulated in the United Kingdom by the FCA, are acting exclusively for the Company and for no-one else in connection with the Initial Issue, the Share Issuance Programme or any Admission and the other arrangements referred to in this announcement and will not regard any other person as their respective clients in relation to the Initial Issue, the Share Issuance Programme or any Admission and the other arrangements referred to in this announcement and will not be responsible to anyone other than the Company for providing the protections afforded to their respective clients, nor for providing advice in connection with the Initial Issue and the other arrangements referred to in this announcement.

The Shares have not been, and will not be, registered under the US Securities Act 1933 ("US Securities Act") or with any securities regulatory authority of any state or other jurisdiction of the United States, and may not be offered or sold within the United States or to or for the account or benefit of US Persons (as defined in Regulation S under the US Securities Act ("Regulation S"). In addition, the Company has not been and will not be registered under the US Investment Company Act of 1940, as amended. Outside the United States, the Ordinary Shares may be sold to non-US Persons pursuant to the provisions of Regulation S.

The value of shares and any income from them is not guaranteed and can fall as well as rise due to stock market and currency movements.  When you sell your investment, you may get back less than you originally invested. Figures refer to past performance and past performance is not a reliable indicator of future results. Returns may increase or decrease as a result of currency fluctuations.

This announcement contains forward looking statements, including, without limitation, statements including the words  “believes”, “estimates”, “anticipates”, “expects”, “intends”, “may”, “will” or “should” or, in each case, their negative or other variations or comparable terminology. Such forward looking statements involve unknown risks, uncertainties and other factors which may cause the actual results, financial condition, performance or achievements of the Company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.

These forward-looking statements speak only as at the date of this announcement and cannot be relied upon as a guide to future performance. The Company, the Portfolio Manager, the AIFM, Fidante and Peel Hunt expressly disclaim any obligation or undertaking to update or revise any forward-looking statements contained herein to reflect actual results or any change in the assumptions, conditions or circumstances on which any such statements are based unless required to do so by the Financial Services and Markets Act 2000, the Prospectus Rules of the Financial Conduct Authority, the EU Market Abuse Regulation or other applicable laws, regulations or rules.

The information in this announcement is for background purposes only and does not purport to be full or complete. None of Fidante or Peel Hunt, or any of their respective affiliates, accepts any responsibility or liability whatsoever for, or makes any representation or warranty, express or implied, as to this announcement, including the truth, accuracy or completeness of the information in this announcement (or whether any information has been omitted from the announcement) or any other information relating to the Company or associated companies, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available or for any loss howsoever arising from any use of the announcement or its contents or otherwise arising in connection therewith. Fidante, Peel Hunt and their respective affiliates, accordingly disclaim all and any liability whether arising in tort, contract or otherwise which they might otherwise have in respect of this announcement or its contents or otherwise arising in connection therewith.

In connection with the Initial Issue, Fidante, Peel Hunt and any of their affiliates, may take up a portion of the Ordinary Shares in the Initial Issue as a principal position and in that capacity may retain, purchase, sell, offer to sell for their own accounts such Ordinary Shares and other securities of the Company or related investments in connection with the Initial Issue or otherwise.  Accordingly, references in the Prospectus, once published, to the Shares being issued, offered, subscribed, acquired, placed or otherwise dealt in should be read as including any issue or offer to, or subscription, acquisition, placing or dealing by, Fidante, Peel Hunt and any of their affiliates acting in such capacity.  In addition, Fidante, Peel Hunt and any of their affiliates may enter into financing arrangements (including swaps or contracts for differences) with investors in connection with which Fidante, Peel Hunt and any of their affiliates may from time to time acquire, hold or dispose of Shares. Fidante and Peel Hunt do not intend to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligations to do so.

Information to Distributors

Solely for the purposes of the product governance requirements contained within: (a) EU Directive 2014/65/EU on markets in financial instruments, as amended (“MiFID II”); (b) Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593 supplementing MiFID II; and (c) local implementing measures (together, the “MiFID II Product Governance Requirements”), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any “manufacturer” (for the purposes of the MiFID II Product Governance Requirements) may otherwise have with respect thereto, the Ordinary Shares which are the subject of the Initial Issue have been subject to a product approval process, which has determined that such Ordinary 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 (such term to have the same meaning as in the MiFID II Product Governance Requirements) should note that: the market price of the Ordinary Shares may decline and investors could lose all or part of their investment; the Ordinary Shares offer no guaranteed income and no capital protection; and an investment in the Ordinary Shares is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Issue.  Furthermore, it is noted that, notwithstanding the Target Market Assessment, Fidante Capital and Peel Hunt will only procure investors (pursuant to the Placing) who meet the criteria of professional clients and eligible counterparties.  For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of MiFID II; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the Ordinary Shares. Each distributor is responsible for undertaking its own target market assessment in respect of the Ordinary Shares and determining appropriate distribution channels.