Proposed Fundraising, CLN Restructuring
THIS ANNOUNCEMENT, INCLUDING ITS APPENDIX (TOGETHER, THE "ANNOUNCEMENT") AND THE INFORMATION CONTAINED HEREIN, IS NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO OR FROM THE UNITED STATES OF AMERICA, AUSTRALIA, CANADA, JAPAN OR THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH IT WOULD BE UNLAWFUL TO DO SO.
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THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF EU REGULATION 596/2014 (WHICH FORMS PART OF DOMESTIC UK LAW PURSUANT TO THE EUROPEAN UNION (WITHDRAWAL) ACT 2018) ("UK MAR") . IN ADDITION, MARKET SOUNDINGS (AS DEFINED IN UK MAR) WERE TAKEN IN RESPECT OF THE PLACING WITH THE RESULT THAT CERTAIN PERSONS BECAME AWARE OF INSIDE INFORMATION (AS DEFINED IN UK MAR), AS PERMITTED BY UK MAR, IN RELATION TO ACTIVE ENERGY GROUP PLC AND ITS SECURITIES. UPON THE PUBLICATION OF THIS ANNOUNCEMENT VIA THE REGULATORY INFORMATION SERVICE, THOSE PERSONS THAT RECEIVED INSIDE INFORMATION IN A MARKET SOUNDING ARE NO LONGER IN POSSESSION OF SUCH INSIDE INFORMATION, WHICH IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.
Active Energy Group Plc / EPIC: AEG / Sector: Alternative Energy
1 February 2021
Active Energy Group Plc
('Active Energy', 'AEG', or the 'Company')
Proposed Fundraising, Convertible Loan Note Restructuring and Board changes
Active Energy, the London quoted international biomass based renewable energy and forestry management business, is pleased to announce its intention to carry out a non-pre-emptive fundraise (the "Fundraising") through the issue and allotment of a minimum of 600,000,000 new Ordinary Shares to raise minimum gross proceeds for the Company of £6 million at a price of 1.0 pence per new Ordinary Share (the "Issue Price"), as well as a proposed restructuring of the £17.7 million of convertible loan notes previously issued by the Company.
The Fundraising will comprise a placing of a minimum of 600,000,000 new Ordinary Shares (the "Placing Shares") with new and existing shareholders (the "Placing"). In addition, participation in the Fundraising is available to individual investors through PrimaryBid.com (the "PrimaryBid Offer") from 4.35 p.m. on 1 February 2021. Further announcements will be made shortly in connection with this offer.
The Placing Shares are being offered by way of an accelerated bookbuild process (the "Bookbuild"), which will be launched immediately following this announcement. Allenby Capital Limited ("Allenby Capital") will be acting as broker. The Placing is subject to the terms and conditions set out in Appendix II to this announcement (which forms part of this announcement, such announcement and its Appendices together being this "Announcement").
Highlights
· Fundraising to raise a minimum of £6 million (before expenses) through the issue of a minimum of 600,000,000 new Ordinary Shares at the Issue Price.
· Certain Directors of the Company have indicated that they intend to acquire in aggregate £20,000 Placing Shares pursuant to the Placing.
· The net proceeds of the Fundraising will be used, inter alia, to finalise the installation and commissioning of the up to 5tph CoalSwitchTM reference plant and the accelerate the development of the up to 50tph CoalswitchTM production plant.
· Conditional on completion of the Fundraising, the Company is proposing to restructure the terms of its existing £17.7 million of outstanding convertible loan notes ("CLNs"), which are listed on The International Stock Exchange and are secured by way of a debenture over the entire assets and undertakings of the Company (the "CLN Restructuring").
· The CLN Restructuring will remove the debenture over the assets and undertakings of the Company and can be undertaken with the consent of at least 50 per cent. of the holders of the CLNs (the "Noteholders") by value. Pursuant to the CLN Restructuring, the conversion price of the 3.295p CLNs will be amended to the Issue Price, such that all CLNs will have a conversion price of 1.0 pence.
· The Company has received undertakings and confirmations of support agreeing to the CLN Restructuring from Noteholders accounting for more than 95 per cent of the value of the CLNs in issue, including from the largest Noteholders by value.
· The Company has received, or expects to receive, instructions from Noteholders holding approximately £15.6 million of CLNs to convert their CLN holdings into New Ordinary Shares in the Company at a conversion price of 1.0 pence, subject to the conditions detailed below. This will result in the issue of 1,560,418,800 New Ordinary Shares pursuant to the CLN Conversions (assuming no further conversion notices are received) resulting in substantially all of the Company's current CLN indebtedness being extinguished.
The Issue Price represents a discount of approximately 13.4 per cent. to the closing middle market price of 1.155 pence per Ordinary Share on 29 January 2021, being the latest practicable date prior to the publication of this Announcement.
In connection with the Placing, the Company has today entered into the Placing Agreement pursuant to which Allenby Capital has agreed, in accordance with its terms, to use reasonable endeavours to procure subscribers for the Placing Shares at the Issue Price. The Placing is not being underwritten.
Participation in the Placing is subject to the terms and conditions set out in Appendix II to this announcement. Allenby Capital will commence the Bookbuild immediately following the publication of this Announcement. The number of Placing Shares which are to be placed at the Issue Price will be determined at the close of the Bookbuild. The timing of the closing of the Bookbuild and the allocations are at the absolute discretion of Allenby Capital and the Company. Details of the number of Placing Shares to be placed will be announced as soon as practicable after the close of the Bookbuild.
The Directors value the Company's private investor base and believe that it is appropriate to provide private and other investors with an opportunity to participate in the Fundraising alongside institutional investors. The Company therefore intends to open this opportunity to individual investors through PrimaryBid.com and further announcements will be made shortly in connection with this offer. For the avoidance of doubt, the PrimaryBid Offer is not part of the Placing and is the sole responsibility of the Company. Allenby Capital has no responsibilities, obligations, duties or liabilities (whether arising pursuant to any contract, law, regulation, or tort) in relation to the same.
The Fundraising and the CLN Restructuring are conditional on, inter alia, the passing of the Resolutions to be proposed at a General Meeting which will be convened shortly.
A circular providing further details of the Fundraising and CLN Restructuring and include a notice convening the General Meeting (the "Circular"), are expected to be sent to Shareholders shortly and be available on the Company's website once published.
Board changes
In conjunction with the Fundraising and the CLN Restructuring and AEG's imminent transition to a commercial producer of CoalSwitchTM, the Company announces the following board changes with immediate effect.
James Leahy, Non-Executive Director, will assume the role of Non-Executive Chairman of AEG. James is also Chairman of the Company's Remuneration Committee.
Antonio Esposito, Chief Operating Officer, has stepped down from the Board but will continue to work with AEG. In the near term, Antonio will focus on the construction and commissioning of the first CoalSwitchTM reference plant at Lumberton and subsequently on the development of future CoalSwitchTM plants in North America.
These board changes follow on from the recent appointment of Andrew Diamond, who joined the AEG Board on 1 January 2021 as Finance Director, as per the Company's announcement of 23 November 2020.
This Announcement should be read in its entirety. In particular, your attention is drawn to the detailed terms and conditions of the Placing and further information relating to the Placing and any participation in the Placing that is described in Appendix II to this Announcement. Set out in Appendix I is an adapted extract from the draft Circular that is proposed to be sent to Shareholders after the closure of the Bookbuild. This contains further details on the Fundraising and CLN Restructuring. The final Circular and Notice of General Meeting is expected to be sent to Shareholders and published on the Company's website shortly.
The capitalised terms not otherwise defined in the text of this Announcement are defined in Appendix III and the expected timetable of the principal events is set out in Appendix IV.
Enquiries:
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Active Energy Group Plc |
Michael Rowan Chief Executive Officer Andrew Diamond Chief Financial Officer
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Allenby Capital Limited Financial adviser in relation to the CLN Restructuring and Joint Broker |
Nick Naylor / James Reeve / Asha Chotai (Corporate Finance) Amrit Nahal (Sales & Corporate Broking)
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Office: +44 (0)20 3328 5656 |
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SP Angel Corporate Finance LLP Nominated Adviser and Joint Broker
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David Hignell / Caroline Rowe |
Office: +44 (0)20 3470 0470 |
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Camarco Financial PR Adviser |
Gordon Poole / Tom Huddart / Emily Hall |
aeg@camarco.co.uk Office: +44 (0) 20 3757 4980 |
About Active Energy Group plc
AEG is a London listed (AIM: AEG) renewable energy company that has developed a proprietary technology which transforms low-cost biomass material into high-value green fuels. Its patented product CoalSwitch™ is a leading drop-in biomass fuel that can be mixed at any ratio with coal or completely replace coal in existing coal-fired power stations without requiring plant modification. AEG's immediate strategic focus is the production and commercialisation of CoalSwitch™ and a low emission CoalSwitch™ blend that utilises other waste materials.
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 ("MiFID II Delegated Directive"); and (c) local implementing measures, (including insofar as MiFID II and the MiFID II Delegated Directive constitute retained EU law (as defined in section 6(7) of the European Union (Withdrawal) Act 2018) in the United Kingdom) ("Retained MiFID Provisions") (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, each as defined in MiFID II and the Retained MiFID Provisions; and (ii) eligible for distribution through all distribution channels as are permitted by MiFID II and the Retained MiFID Provisions (the "Target Market Assessment"). Notwithstanding the Target Market Assessment, investors should note that: the price of the Placing Shares may decline and investors could lose all or part of their investment; Placing Shares offer no guaranteed income and no capital protection; and an investment in the Placing Shares is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Placing. Furthermore, it is noted that, notwithstanding the Target Market Assessment, only investors who have met the criteria of professional clients and eligible counterparties have been procured. 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 the Retained MiFID Provisions; 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.
APPENDIX I - ADAPTED EXTRACTS FROM THE CIRCULAR
1. Introduction
The Company today announces its intention to raise a minimum of £6 million (before expenses) by way of the Fundraising through the issue and allotment of a minimum of 600,000,000 New Ordinary Shares to raise minimum gross proceeds for the Company of £6 million at a price of 1.0 pence per New Ordinary Share.
The Fundraising will comprise a placing of a minimum of 600,000,000 New Ordinary Shares with new and existing shareholders. In addition, participation in the Fundraising is available to individual investors through PrimaryBid.com.
In addition, the Company today announces that Noteholders owning more than 95 per cent of the CLNs have provided undertakings and confirmations of support to implement the proposed CLN Restructuring. Based on instructions that the Company has received or expects to receive the Company will issue 1,560,418,800 New Ordinary Shares to Noteholders in respect of their CLN Conversions (assuming no further conversion notices are received). The Fundraising is conditional on the Majority Noteholder Conversions and the CLN Restructuring completing.
The Issue Price represents a discount of 13.4 per cent to the Company's closing mid-market share price on 29 January 2021, being the latest practical date prior to the Announcement.
The Fundraising, the CLN Restructuring and the Majority Noteholder Conversions are subject to the passing of the Resolutions at the General Meeting. The purpose of this Announcement is to provide Shareholders with further information on the Fundraising and the CLN Restructuring and this Announcement explains why the Board believes the Proposals to be in the best interests of the Company and its Shareholders as a whole.
The Company has sufficient cash in hand for the Directors to be satisfied that it is solvent and is carrying on as a going concern. Looking ahead to March 2022 however, the Directors do not believe that the Company would have sufficient resources to repay the CLNs on the repayment date of 15 March 2022 should the Proposals not proceed. However, the Company has gained support from Noteholders to conditionally convert their CLNs pursuant to the Majority Noteholder Conversions as set out in further detail in paragraph 8 below. Shareholders should be aware that if the Resolutions are not approved at the General Meeting, the Company will require additional funding to satisfy its liabilities as they fall due, which may not be available or may not be available on terms that are favourable to the Company. In this instance, the Company may need to take steps to protect the interest of its creditors. In addition, the Company will not be able to fund various growth opportunities in North America, which is likely to adversely impact operations at Lumberton and result in a delay to the commercialisation of CoalSwitchTM.
2. Background on the Company
Information on the Company
The Company is a biomass based renewable energy business focussed on using its proprietary technology to transform low-cost or waste biomass material into renewable biomass fuels, thus creating 'next generation' biomass products. The Company is continuing to develop its existing lumber business, as well as expanding its proprietary technology to allow for global applications, in order to capitalise on the renewed focus on renewable energy in the US.
The Company's principal focus is on biomass production, and the production of a variety of biomass fuels using its existing proprietary CoalSwitchTM technology, and by developing new technology using waste resources. CoalSwitchTM pellets have many advantages over traditional coal and white pellets, including their calorific value, sourcing of feedstock and the low ash percentage of the fuel.
To support future biomass production, the Company has developed a feedstock supply network for the operations at its Lumberton site in the US. The Company aims to use waste timber resources, "next generation crops" and biowaste materials as its primary feedstock resources for its biomass production, thus creating a fully integrated business model focussed on environmentally friendly solutions. The Company's existing lumber operations complement its biomass production facilities and generate revenues independently of its biomass revenues, as lumber and feedstock products are sold to customers directly.
The Company will offer additional services to its customers, including logistics services for delivery of biomass fuels and feedstock. The Company will also look to enable the sale and licencing of its proprietary technology to forestry and industrial partners where appropriate, as well as developing other derivative product services.
CoalSwitchTM
The Company's key focus is the commercialisation of its proprietary product, CoalSwitchTM, which can be co-fired with coal in existing coal-fired power stations.
The Board has identified a number of advantages of CoalSwitchTM, including:
- CoalSwitchTM can be used in existing coal-fires power stations without significant retrofitting of the power-station infrastructure.
- CoalSwitchTM utilises low value waste wood, forestry, pulp mill and saw mill by products.
- CoalSwitchTM results in a zero net greenhouse emission or carbon footprint.
- CoalSwitchTM can be economically pelletised, briquetted or balled, either alone or blended with coal without the use of costly chemical binders.
- CoalSwitchTM has hydrophobic qualities, which removes the need to costly climate-controlled storage facilities, unlike the white pellets currently used in the industry.
- CoalSwitchTM has the ability to increase energy density and bulk density of biomass to levels comparable to coal, and as a result the transport costs are more efficient, providing economic benefits for power utilities.
On 4 August 2020, the Company announced that the Construction and Air Permit for the Company's CoalSwitch™ plant at Lumberton, North Carolina had been granted by the North Carolina Division of Air Quality, enabling Active Energy to commence the final stage planning and construction for a CoalSwitch™ plant targeting production capacity of up to 5 tonnes per hour.
In December 2020, Active Energy, announced that it had been awarded a further U.S. patent for its CoalSwitch™ process and the beneficiation of biomass, ensuring Active Energy holds the legal rights to exclude any other company from producing, selling or using the claimed CoalSwitch™ process for over 17 years.
On 22 December 2020, the Company announced that it had received its first order for CoalSwitch™ from PacifiCorp, the largest grid operator in the western United States. In accordance with the order, Active Energy will be supplying up to 900 tonnes of biomass feedstock from its Lumberton site for delivery by mid-June 2021. PacifiCorp owns generation capacity from a diverse mix of hydro, wind, natural gas, coal, solar and geothermal resources. It is a US company and is owned by Berkshire Hathaway Energy.
Lumberton
The Company continues to develop various operations at its wholly owned facility at Lumberton, North Carolina. Lumberton covers 151 acres of land and is adjacent to a biomass power facility, and therefore has established infrastructure and facilities. The lumber operations at the site were originally established to secure a feedstock supply for the CoalSwitchTM product, as it provides ready waste resources with materials available for sourcing within ninety minutes of the Lumberton site.
The Company has obtained the required Air and Construction Permit, and auxiliary equipment required for development of the Lumberton site, and has commenced construction of the CoalSwitchTM reference plant that is expected to produce the first commercial quantities of CoalSwitchTM for delivery to customers. The Company is targeting the installation and subsequent commissioning of the plant in early Q2 2021.
The Company plans to increase the production capacity for CoalSwitchTM biomass fuels at Lumberton, with engineering to commence on a larger facility at Lumberton site allowing for production facilities of up to 50tph. In addition, the Company continues to look at other complementary environmental initiatives for the Lumberton site.
3. Reasons for the Fundraising and the CLN Restructuring
The Board is aware that in order to raise the capital required to take advantage of the opportunities immediately available to the Company in North America and to commercialise CoalSwitchTM, the Company needs to access additional funding now. Due to the CLNs being secured over the Company's entire assets and undertakings and the fact that the CLNs are repayable in March 2022, it is not currently possible for the Company to access any alternate finance sources. In order to raise equity funding the Company must undertake the CLN Restructuring simultaneously, without which the Fundraising cannot proceed.
4. Use of proceeds
The net proceeds of the Fundraising will be used for:
· the installation and commissioning of the CoalSwitchTM up to 5tph reference plant;
· accelerating detailed engineering and planning for the CoalSwitch™ up to 50tph production plant;
· capital expenditure to enhance the existing infrastructure and operations at Lumberton;
· the payment of the coupon on the CLNs in respect of the period from 1 October 2020 to 31 January 2021 and other costs associated with the CLN Restructuring; and
· providing the Company with general working capital to cover operations and other corporate costs.
AEG's prime focus will be on the CoalSwitchTM up to 5tph reference plant at Lumberton with commissioning expected in early Q2 2021. The reference plant will be used to satisfy initial orders increasing production volumes toward 5tph and used as a facility for the development of derivative CoalSwitchTM fuels. Thereafter, the Company will focus on its development plans for the up to 50tph production facility at Lumberton. The Directors may, at their sole discretion, apply certain of the net proceeds of the Fundraise to redeem outstanding CLNs should there only be a limited number left outstanding following the CLN Conversions.
5. Board changes
In conjunction with the Proposals and AEG's imminent transition to a commercial producer of CoalSwitchTM, the Company announces the following board changes with immediate effect.
James Leahy, Non-Executive Director, will assume the role of Non-Executive Chairman of AEG. James is also Chairman of the Company's Remuneration Committee.
Antonio Esposito, Chief Operating Officer, will step down from the Board but will continue to work with AEG. In the near term, Antonio will focus on the construction and commissioning of the first CoalSwitchTM reference plant at Lumberton and subsequently on the development of future CoalSwitchTM plants in North America.
These board changes follow on from the recent appointment of Andrew Diamond, who joined the AEG board on 1 January 2021 as Finance Director, as per the Company's announcement of 23 November 2020.
6. Current prospects and outlook
Following the award of the Air and Construction Permit by the North Carolina Division of Air Quality in August 2020, work on AEG's CoalSwitch™ plant, at its Lumberton site has continued at pace. Player Design Inc. has completed the design and engineering work for the up to 5tph CoalSwitch™ reference plant and the bulk of the equipment required to supplement the existing plant is currently being delivered to Lumberton. Construction will commence in early February 2021, with commissioning remaining on schedule for early Q2 2021. This is a significant step forward for AEG, which will provide the Company with the production capability to produce and market its patented CoalSwitch™ product to customers, both within the US and internationally.
In December 2020, AEG received its first order for CoalSwitch™. The order was for up to 900 tonnes of CoalSwitch™ from PacifiCorp, the largest grid operator in the western United States, and AEG's CoalSwitchTM will be burnt at PacifiCorp's Hunter Power Plant in Utah as part of its coal/biomass co-firing demonstration. The performance data from this demonstration is expected to validate the effectiveness of CoalSwitch™ as a renewable fuel capable of being co-fired with coal in the generation of electricity and to confirm that no significant retrofit costs will be required for existing coal fired power plants.
Alongside the rapid development of the CoalSwitch™ plant, AEG's lumber facility is continuing to deliver a steady flow of monthly revenues through the sale of rail ties, and other lumber -products.
The lumber facility serves two primary purposes, being to:
1. develop a network of suppliers to provide a source of waste feedstock for CoalSwitch™ operations; within North Carolina; and
2. demonstrate the operation of an integrated facility selling lumber with an ability to provide the waste products from these production processes as feedstock to CoalSwitch™ operations.
Looking ahead, the Directors believe AEG has an exciting future. The political landscape in the US has a renewed focus on renewables and this includes biomass fuels alongside other renewable solutions. AEG is focused on developing a series of next generation biomass fuels utilising the CoalSwitchTM technologies and other waste products to produce a new generation of biomass fuels and technologies. The up to 5tph CoalSwitch™ plant is scheduled to complete commissioning in early Q2 2021 in time to fulfil the PacifiCorp order. Positive results from this order will allow the Company to satisfy demand from both US and international power companies seeking to improve their environmental credentials at existing coal fired operations or to improve operational efficiencies at existing biomass facilities.
Additionally, future development at the Lumberton site will allow the Company to demonstrate to lumber producers and other industry participants that CoalSwitch™ is an effective product to make better and more eco-friendly use of their waste materials. Beyond this, AEG is well placed to accelerate plans for a larger 50tph CoalSwitch™ plant to be developed at Lumberton, expanding its operations as part of the forest-to-energy biomass supply chain. Therefore, should the Fundraising and the CLN Restructuring proceed, the Directors believe AEG will be on track to achieve its ambition of becoming a leader in the provision of next generation biomass solutions and services.
7. Restructuring of the CLNs
As at the date of this Announcement, the Company has CLNs in issue amounting to £17.7 million, split as follows:
(i) £10.5 million of the CLNs convertible into Ordinary Shares at a conversion price of 3.295p per Ordinary Share; and
(ii) £7.2 million of the CLNs convertible into Ordinary Shares at a conversion price of 1.0p per Ordinary Share.
Both tranches of CLNs have been issued on the same legal terms and attract a coupon of 8 per cent. per annum. All CLNs have a maturity date of 15 March 2022. The CLNs are listed on The International Stock Exchange and are secured by way of a debenture over the entire assets and undertakings of the Company.
Based on the Company's current cash position, it is unlikely that the Company will be able to continue to pay the coupon on the CLNs without the requirement to seek alternative funding. The Company does not currently have the financial resources to repay the CLNs when they mature in March 2022. As a result, following the equity fundraise completed in August 2020, the Board of AEG believes that the quantum of CLNs in issue has deterred potential new investors in the Company, as such the Company has sought to address its debt position so as not to impact its growth ambitions going forward and in order to facilitate the Fundraising.
The Company intends to use certain of the proceeds of the Fundraising to pay to Noteholders the interest accrued on the CLNs for the period from 1 October 2020 to 31 January 2021.
The Company is proposing to amend the terms of the CLN Instrument as follows:
1. the conversion price in respect of any CLN originally issued with a conversion price of 3.295 pence shall be amended to the Issue Price (being 1.0 pence);
2. the interest rate applicable to the CLNs shall be reduced to five per cent (5%) per annum with effect from the date of Admission and shall be payable by bi-annual instalments on 30 June and 31 December in each year;
3. the security granted by the Company and its subsidiaries in favour of Noteholders shall be released; and
4. the financial covenants and negative pledge given by the Company in favour of Noteholders pursuant to the CLN Instrument shall be deleted.
Under the terms of the CLN Instrument, the rights of the Noteholders may at any time be modified with the consent of the Company and an approval by way of resolution in writing signed by or on behalf of a Noteholder Majority.
The Company has already received signed written resolutions and undertakings/confirmations of support approving the CLN Restructuring from a Noteholder Majority, conditional on the passing of the Resolutions at the General Meeting and completion of the Fundraising. Accordingly, the terms of the CLN Instrument shall be amended and restated to reflect the CLN Restructuring immediately following the passing of the Resolutions at the General Meeting and completion of the Fundraising.
8. CLN Conversions
The Company has received, or expects to receive, instructions from Noteholders holding approximately £15.6 million CLNs to convert their CLN holdings into Ordinary Shares in the Company, conditional on the passing of the Resolutions at the General Meeting and completion of the Fundraising. In addition, the Company has agreed to redeem certain of the CLNs on completion of the CLN Restructuring.
Noteholders are permitted to convert their CLNs at any time and AEG will facilitate any conversions of CLNs as requested by Noteholders by notice to the Company. Where notices of conversion are received by the Company following 21 January 2021 but prior to 12 February 2021, AEG shall issue CLN New Ordinary Shares to the relevant Noteholder(s) to be admitted to trading on Admission. Any conversion notices received after 12 February 2021 will be acknowledged and processed by the Company in accordance with the 30 day period for conversion set out in the CLN Instrument.
Any CLNs outstanding following the date of Admission will be held on amended and restated terms in accordance with the CLN Restructuring detailed at paragraph 7 above.
9. Details of the Fundraising
The Company intends to raise a minimum of £6 million by way of the Fundraising.
The Issue Price represents a discount of approximately 13.4 per cent to the closing mid-market price of an Ordinary Share of 1.155 pence on 29 January 2021, the last trading day prior to the release of the Announcement.
The Fundraise is conditional, amongst other things, on:
i. the passing of the Resolutions at the General Meeting;
ii. completion of the CLN Restructuring and the Majority Noteholder Conversions; and
iii. the Placing Agreement becoming unconditional in all respects by no later than 8.00 a.m. on 1 February 2021 (or such later date, as Allenby Capital may agree being no later than 8.00 a.m. on 5 March 2021) and not having been terminated in accordance with its terms.
The Placing
The Company is proposing to raise a minimum of £6 million (before fees and expenses) by way of a conditional, non-pre-emptive placing of a minimum of 600,000,000 New Ordinary Shares at the Issue Price.
In connection with the Placing, the Company has entered into the Placing Agreement pursuant to which Allenby Capital has agreed, in accordance with its terms, to use reasonable endeavours to procure subscriptions for the Placing Shares at the Issue Price. The Placing is not underwritten. The Placing Agreement contains customary warranties given by the Company to Allenby Capital in respect of matters relating to the Company and its business and a customary indemnity given by the Company to Allenby Capital in respect of certain liabilities they may incur in respect of the Fundraise. Allenby Capital has the right to terminate the Placing Agreement in certain circumstances prior to Admission, in particular in the event of a material breach of the warranties or a force majeure event.
The PrimaryBid Offer
The PrimaryBid Offer, is open to private and other investors subscribing via PrimaryBid.com and via the PrimaryBid app. The PrimaryBid Offer remains conditional on both the Placing and the CLN Restructuring being or becoming wholly unconditional. The Company relied on an available exemption against the need to publish a prospectus approved by the FCA (acting in its capacity as the UK Listing Authority) in respect of the PrimaryBid Offer. Further details on the PrimaryBid Offer will be announced shortly following this Announcement.
The Placing Shares and the PrimaryBid Offer Shares will rank pari passu in all respects with the Company's Existing Ordinary Shares, including the right to receive all dividends and other distributions declared, made or paid after their date of issue.
10. Directors' intention to participate in the Placing
Certain Directors have indicated that they intend to acquire in aggregate 2,000,000 Placing Shares pursuant to the Placing.
11. Related Party Transactions and changes to substantial shareholders
Gravendonck Private Foundation ("Gravendonck") is a substantial shareholder in the Company and also a Noteholder, holding CLNs of £1.5 million pursuant to the terms of the CLN Instrument. Gravendonck has provided a written resolution to support the CLN Restructuring and has agreed to convert £1.5 million pursuant to the terms of the Majority Noteholder Conversions (together, the "Gravendonck Conversion"). Gravendonck will also receive a cash payment of £41,453 being the coupon on the CLNs held by Gravendonck in respect of the period from 1 October 2020 to 31 January 2021.
The Gravendonck Conversion and coupon payment constitutes a related party transaction in accordance with Rule 13 of the AIM Rules for Companies. The Directors consider, after consultation with the Company's Nominated Adviser, that the terms of the Gravendonck Conversion and coupon payment are fair and reasonable, in so far as Shareholders are concerned.
12. General Meeting
The CLN Restructuring, Majority Noteholder Conversions and the Fundraise are conditional upon, among other things, Shareholders' approval of Resolutions to grant the Board authority to allot the New Ordinary Shares for cash and to grant the Board authority to allot the New Ordinary Shares as if the pre-emption rights in Section 561 of the Companies Act 2006 did not apply.
The Company will shortly post a circular to Shareholders, which will provide further details of the Fundraising and CLN Restructuring and include a notice convening the General Meeting.
APPENDIX II - TERMS AND CONDITIONS OF THE PLACING
IMPORTANT INFORMATION FOR INVITED PLACEES ONLY REGARDING THE PLACING.
MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THIS ANNOUNCEMENT (INCLUDING THIS APPENDIX) AND THE TERMS AND CONDITIONS SET OUT HEREIN (TOGETHER, THIS "ANNOUNCEMENT") ARE DIRECTED ONLY AT PERSONS WHOSE ORDINARY ACTIVITIES INVOLVE THEM IN ACQUIRING, HOLDING, MANAGING AND DISPOSING OF INVESTMENTS (AS PRINCIPAL OR AGENT) FOR THE PURPOSES OF THEIR BUSINESS AND WHO HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS AND ARE: (1) IF IN THE UNITED KINGDOM OR A MEMBER STATE OF THE EUROPEAN ECONOMIC AREA ("EEA"), PERSONS WHO ARE QUALIFIED INVESTORS AS DEFINED IN ARTICLE 2(E) OF REGULATION (EU) 2017/1129 (THE "PROSPECTUS REGULATION"); (2) IF IN THE UNITED KINGDOM, QUALIFIED INVESTORS WHO EITHER (A) FALL WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005, AS AMENDED (THE "ORDER") (INVESTMENT PROFESSIONALS); (B) FALL WITHIN ARTICLE 49(2)(A) TO (D) OF THE ORDER (HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, OR OTHER PERSONS FALLING WITHIN ARTICLE 49(2)(A) OF THE ORDER); OR (C) PERSONS TO WHOM IT MAY LAWFULLY OTHERWISE BE COMMUNICATED (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS").
THIS ANNOUNCEMENT AND THE INFORMATION IN IT ARE FOR INFORMATION PURPOSES ONLY AND MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. PERSONS DISTRIBUTING THIS ANNOUNCEMENT MUST SATISFY THEMSELVES THAT IT IS LAWFUL TO DO SO. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS ANNOUNCEMENT RELATES IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. THIS ANNOUNCEMENT DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN ACTIVE ENERGY GOUP PLC (THE "COMPANY").
THE PLACING SHARES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR JURISDICTION OF THE UNITED STATES, AND MAY NOT BE OFFERED, SOLD OR TRANSFERRED, DIRECTLY OR INDIRECTLY, INTO OR WITHIN THE UNITED STATES EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN COMPLIANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES. THE PLACING SHARES ARE BEING OFFERED AND SOLD ONLY OUTSIDE THE UNITED STATES IN "OFFSHORE TRANSACTIONS" WITHIN THE MEANING OF, AND IN ACCORDANCE WITH, REGULATION S UNDER THE SECURITIES ACT, OR PURSUANT TO AN EXEMPTION FROM, OR TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, AND OTHERWISE IN ACCORDANCE WITH APPLICABLE LAWS. NO PUBLIC OFFERING OF THE PLACING SHARES IS BEING MADE IN THE UNITED STATES OR ELSEWHERE.
THIS ANNOUNCEMENT (INCLUDING THIS APPENDIX) AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM THE UNITED STATES, AUSTRALIA, CANADA, THE REPUBLIC OF SOUTH AFRICA OR JAPAN OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.
THIS ANNOUNCEMENT IS NOT AN OFFER OF SECURITIES FOR SALE OR SUBSCRIPTION INTO THE UNITED STATES. THE SECURITIES REFERRED TO HEREIN HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES, EXCEPT PURSUANT TO AN APPLICABLE EXEMPTION FROM REGISTRATION. NO PUBLIC OFFERING IS BEING MADE IN THE UNITED STATES OR IN ANY COUNTRY OR JURISDICTION WHERE ANY SUCH ACTION FOR THAT PURPOSE IS REQUIRED.
The distribution of this Announcement and/or the Placing and/or issue of, or subscription for, the Placing Shares in certain jurisdictions may be restricted by law. No action has been taken by the Company, Allenby Capital or any of its affiliates, agents, directors, officers or employees that would permit an offer of the Placing Shares or possession or distribution of this Announcement or any other offering or publicity material relating to such Placing Shares in any jurisdiction where action for that purpose is required. Persons into whose possession this Announcement comes are required by the Company and Allenby Capital to inform themselves about and to observe any such restrictions.
This Announcement or any part of it does not constitute or form part of any offer to issue or sell, or the solicitation of an offer to acquire, purchase or subscribe for, any securities in the United States (including its territories and possessions, any state of the United States and the District of Columbia), Australia, Canada, the Republic of South Africa or Japan or any other jurisdiction in which the same would be unlawful.
All offers of the Placing Shares in the United Kingdom or the EEA will be made pursuant to an exemption under the Prospectus Regulation from the requirement to produce a prospectus. In the United Kingdom, this Announcement is being directed solely at persons in circumstances in which section 21(1) of the Financial Services and Markets Act 2000 (as amended) (the "FSMA") does not require the approval of the relevant communication by an authorised person as more particularly described above.
The Placing Shares have not been approved or disapproved by the US Securities and Exchange Commission, any state securities commission or other regulatory authority in the United States, nor have any of the foregoing authorities passed upon or endorsed the merits of the Placing or the accuracy or adequacy of this Announcement. Any representation to the contrary is a criminal offence in the United States. 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; relevant clearances have not been, and will not be, obtained from the South Africa Reserve Bank or any other applicable body in the Republic of South Africa in relation to the Placing Shares; and the 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 the United States, Australia, Canada, the Republic of South Africa or Japan. Accordingly, the 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, Canada, the Republic of South Africa or Japan or any other jurisdiction outside the United Kingdom.
Persons (including, without limitation, nominees and trustees) who have a contractual right or other legal obligations to forward a copy of this Announcement should seek appropriate advice (the contents and costs for which neither the Company nor Allenby Capital shall be responsible for) before taking any such action.
This Announcement should be read in its entirety. In particular, you should read and understand the information provided in the "Important Notices" section of this Announcement.
By participating in the Bookbuild and the Placing, each Placee (and any person acting on such person's behalf) will be deemed to have read and understood this Announcement in its entirety, to be participating, making an offer and subscribing for Placing Shares on the terms and conditions contained herein and to be providing the representations, warranties, indemnities, acknowledgements, agreements and undertakings contained in this Appendix.
EACH PLACEE SHOULD CONSULT WITH ITS OWN ADVISERS AS TO THE LEGAL, REGULATORY, TAX, BUSINESS AND RELATED ASPECTS OF A PURCHASE OR SUBSCRIPTION FOR THE PLACING SHARES. Neither the Company nor Allenby Capital shall be responsible for the costs or content of any such advice.
In particular, each such Placee represents, warrants, acknowledges, agrees and undertakes (amongst other things) that:
1. it is a Relevant Person and undertakes that it will subscribe for, hold, manage or dispose of any Placing Shares that are allocated to it for the purposes of its business;
2. in the case of a Relevant Person in a member state of the EEA or the United Kingdom (each a "Relevant State") who subscribes for any Placing Shares pursuant to the Placing:
(a) it is a Qualified Investor within the meaning of Article 2(e) of the Prospectus Regulation; and
(b) in the case of any Placing Shares acquired by it as a financial intermediary, as that term is used in Article 5(1) of the Prospectus Regulation: (i) the Placing Shares acquired by it in the Placing have not been acquired on behalf of, nor have they been acquired with a view to their offer or resale to, persons in a Relevant State other than Qualified Investors or in circumstances in which the prior consent of Allenby Capital has been given to the offer or resale; or (ii) where Placing Shares have been acquired by it on behalf of persons in a Relevant State other than Qualified Investors, the offer of those Placing Shares to it is not treated under the Prospectus Regulation as having been made to such persons;
3. it is subscribing for the Placing Shares for its own account or is subscribing for the Placing Shares for an account with respect to which it exercises sole investment discretion and has the authority to make and does make the representations, warranties, indemnities, acknowledgements, agreements and undertakings contained in this Announcement (including this Appendix);
4. it understands (or if acting for the account of another person, such person has confirmed that such person understands) the resale and transfer restrictions set out in this Appendix; and
5. except as otherwise permitted by the Company and subject to any available exemptions from applicable securities laws, it (and any account referred to in paragraph 4 above) is outside the United States subscribing for the Placing Shares in "offshore transactions", as defined in and in accordance with Regulation S under the Securities Act.
No prospectus or other offering document
The Placing Shares are being offered to a limited number of specifically invited persons only and will not be offered in such a way as to require any prospectus or other offering document to be published. No prospectus or other offering document has been or will be submitted to be approved by the FCA in relation to the Placing or the Placing Shares and Placees' commitments will be made solely on the basis of the information contained in this Announcement (including this Appendix) and any information publicly announced through a Regulatory Information Service by or on behalf of the Company on or prior to the date of this Announcement (the "Publicly Available Information") and subject to any further terms set forth in the contract note and/or electronic communication to be sent to individual Placees.
Bases of Participation in the Placing
Each Placee, by participating in the 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 information (other than the Publicly Available Information), representation, warranty or statement made by or on behalf of Allenby Capital or the Company or any other person and none of Allenby Capital, the Company nor any other person acting on such person's behalf nor any of their respective affiliates has or shall have any liability for any Placee's decision to participate in the Placing based on any other information, representation, warranty or statement. Each Placee acknowledges and agrees that it has relied on its own investigation of the business, financial or other position of the Company in accepting a participation in the Placing. No Placee should consider any information in this Announcement to be legal, tax or business advice. Nothing in this paragraph shall exclude the liability of any person for fraudulent misrepresentation.
Details of the Placing Agreement and the Placing Shares
Allenby Capital has today entered into a placing agreement (the "Placing Agreement") with the Company under which, on the terms and subject to the conditions set out in the Placing Agreement, Allenby Capital, as agent for and on behalf of the Company, has agreed to use its reasonable endeavours to procure Placees for the Placing Shares. The Placing is not underwritten (in whole or in part) by Allenby Capital or any other person.
The Placing Shares will, when issued, be subject to the memorandum and articles of association of the Company, be credited as fully paid and will rank pari passu in all respects with the then existing issued ordinary shares of one penny each ("Ordinary Shares") in the capital of the Company, including the right to receive all dividends and other distributions declared, made or paid in respect of such Ordinary Shares after the date of issue of the relevant Placing Shares.
The Placing Price and the final number of Placing Shares will be announced as soon as practicable after the close of the Bookbuild through a Regulatory Information Service
Applications for admission to trading
Applications will be made to the London Stock Exchange for admission of the Placing Shares to trading on AIM.
It is expected that Admission will take place at 8.00 a.m. (London time) on or around 23 February 2021 and that dealings in the Placing Shares on AIM will commence at the same time. Admission is conditional upon, among other things, the Resolutions being duly passed at the General Meeting.
The Bookbuild
Allenby Capital will, following this Announcement, commence the Bookbuild to determine demand for participation in the Placing by Placees. This Appendix gives details of the terms and conditions of, and the mechanics of participation in, the Placing. The book will be open with immediate effect. No commissions will be paid to Placees or by Placees in respect of any Placing Shares.
Allenby Capital and the Company shall be entitled to effect the Placing by such alternative method to the Bookbuild as they may, in their sole discretion, determine.
Taxation and eligibility for investment
No representation or warranty is hereby made as to the tax consequences of an investment in the Placing Shares or with respect to the eligibility of the Placing Shares for investment by any investor.
Principal terms of the Bookbuild and Placing
1. Allenby Capital is acting as sole bookrunner and broker to the Placing, as agent for and on behalf of the Company, on the terms and subject to the conditions of the Placing Agreement.
2. Participation in the Placing will only be available to persons who may lawfully be, and are, invited by Allenby Capital to participate. Allenby Capital and any of its affiliates are entitled to enter bids in the Bookbuild.
3. The aggregate Placing Price is payable to Allenby Capital (as agent for the Company) by all Placees whose bids are successful. To bid in the Bookbuild. Placees should communicate their bid by telephone to their usual sales contact at Allenby Capital. Each bid should state the number of Placing Shares which a prospective Placee wishes to subscribe for.
4. Each Placee's allocation will be determined by Allenby Capital in its discretion following consultation with the Company and will be confirmed orally or in writing (including email) by Allenby Capital as soon as practicable following the close of the Bookbuild. Allenby Capital may choose to accept bids, either in whole or in part, on the basis of allocations determined at their absolute discretion, in consultation with the Company, and may scale down any bids for this purpose on such basis as they may determine or be directed. The Bookbuild is expected to close no later than 8:00 p.m. (London time) on 1 February 2021 but may be closed earlier or later at the discretion of Allenby Capital. Allenby Capital may, in agreement with the Company, accept bids that are received after the Bookbuild has closed. The Company reserves the right to reduce the amount to be raised pursuant to the Placing in its discretion.
5. Following the provision of the confirmation referred to in paragraph 4 above, each Placee's allocation and commitment will be evidenced by a contract note or electronic communication issued to such Placee by Allenby Capital. The terms of this Appendix will be deemed incorporated in that contract note or electronic communication.
6. Each Placee's allocation and commitment to acquire Placing Shares will be made on the terms and subject to the conditions in this Appendix and the Company's articles of association and will give rise to a legally binding commitment by the Placee concerned in favour of Allenby Capital and the Company and except with Allenby Capital's and the Company's consents will not be capable of variation or revocation after the time at which it is submitted. Each Placee will have an immediate, separate, irrevocable and binding obligation, owed to Allenby Capital (as agent for the Company), to pay to it (or as it may direct) in cleared funds an amount equal to the product of the Placing Price and the number of Placing Shares such Placee has agreed to subscribe for and the Company has agreed to allot and issue to that Placee.
7. Except as required by law or regulation, no press release or other announcement will be made by Allenby Capital or the Company using the name of any Placee (or its agent), in its capacity as Placee (or agent), other than with such Placee's prior written consent.
8. Irrespective of the time at which a Placee's allocation(s) pursuant to the Placing is/are confirmed, settlement for the Placing Shares to be subscribed for pursuant to the Placing will be required to be made at the same time, on the basis explained below under "Registration and settlement".
9. All obligations under the Bookbuild and Placing will be subject to fulfilment or (where applicable) waiver of the conditions referred to below under "Conditions of the Placing" and to the Placing not being terminated on the basis referred to below under "Termination of the Placing".
10. By participating in the Bookbuild, each Placee will agree that its rights and obligations in respect of the Placing will terminate only in the circumstances described below and will not be capable of rescission or termination by the Placee.
11. To the fullest extent permissible by law and applicable FCA rules, neither: (a) Allenby Capital; (b) any of its affiliates or divisions; and (c) the directors, officers, employees and agents of each such persons, shall have any liability to Placees or to any other person whether acting on behalf of a Placee or otherwise. In particular, neither Allenby Capital nor any of its affiliates or person acting on its behalf shall have any liability (including, to the extent permissible by law, any fiduciary duties) in respect of Allenby Capital's conduct of the Bookbuild or of such alternative method of effecting the Placing as Allenby Capital and the Company may agree.
Registration and settlement
If Placees are allocated any Placing Shares in the Placing they will be sent a contract note or electronic communication which will confirm the number of Placing Shares allocated to them (at the Placing Price) and the aggregate amount owed by them to Allenby Capital.
Each Placee will be deemed to agree that it will do all things necessary to ensure that delivery and payment is completed as directed by Allenby Capital in accordance with either the standing CREST or certificated settlement instructions which they have in place with Allenby Capital.
Settlement of transactions in the Placing Shares (ISIN: GB00B1YMN108) following Admission will take place within the CREST system, subject to certain exceptions. Settlement through CREST will be on a T+2 basis unless otherwise notified by Allenby Capital and is expected to occur on 23 February 2021 in accordance with the contract notes or other electronic communication. Settlement will be on a delivery versus payment basis. However, in the event of any difficulties or delays in the admission of the Placing Shares to CREST or the use of CREST in relation to the Placing, the Company and Allenby Capital may agree that the Placing Shares should be issued in certificated form. Allenby Capital reserves the right to require settlement for the Placing Shares, and to deliver the Placing Shares to Placees, by such other means as it deems necessary if delivery or settlement to Placees is not practicable within the CREST system or would not be consistent with regulatory requirements in the jurisdiction in which a Placee is located.
Interest is chargeable daily on payments not received from Placees on the due date in accordance with the arrangements set out above, in respect of either CREST or certificated deliveries, at the rate of 3 percentage points above the prevailing base rate of Barclays Bank plc as determined by Allenby Capital.
Each Placee is deemed to agree that if it does not comply with these obligations, Allenby Capital may sell any or all of their Placing Shares on their behalf and retain from the proceeds, as agent of the Company, an amount equal to the aggregate amount owed by the Placee (including any interest due). The relevant Placee will, however, remain liable for any shortfall below the Placing Price and for any stamp duty or stamp duty reserve tax (together with any interest or penalties) which may arise upon the sale of their Placing Shares on their behalf.
Each Placee is deemed to agree that if it does not comply with these obligations: (i) the Company may release itself (if it decides in its absolute discretion to do so) and will be released from all obligations it may have to issue any such Placing Shares to such Placee or at its direction which are then unissued; (ii) the Company may exercise all rights of lien, forfeiture and set-off over and in respect of any Placing Shares to the fullest extent permitted under its articles of association or otherwise by law and to the extent that such Placee then has any interest in or rights in respect of any Placing Shares; (iii) the Company or Allenby Capital may sell (and both of them is irrevocably authorised by such Placee to do so) all or any Placing Shares on such Placee's behalf and then retain from the proceeds, for the account and benefit of the Company or, where applicable, Allenby Capital (a) any amount up to the total amount due to it as, or in respect of, subscription monies, or as interest on such monies, for any Placing Shares, (b) any amount required to cover any stamp duty or stamp duty reserve tax (together with any interest or penalties) arising on the sale of such Placing Shares on such Placee's behalf, and (c) any amount required to cover dealing costs and/or commissions necessarily or reasonably incurred by it in respect of such sale; and (iv) such Placee shall remain liable to the Company (and to Allenby Capital as applicable) for the full amount of any losses or shortfall and of any costs which it may suffer or incur as a result of it (a) not receiving payment in full for such Placing Shares by the required time, and/or (b) the sale of any such Placing Shares to any other person at whatever price and on whatever terms actually obtained for such sale by or for it. By communicating a bid for Placing Shares, each Placee confers on Allenby Capital all such authorities and powers necessary to carry out any such sale under this paragraph and agrees to ratify and confirm all actions which Allenby Capital lawfully takes in pursuance of such sale.
If Placing Shares are to be delivered to a custodian or settlement agent, Placees must ensure that, upon receipt, the contract note or other electronic communication is copied and delivered or forwarded/sent immediately to the relevant person within that organisation. Insofar as Placing Shares are registered in a Placee's name or that of its nominee or in the name of any person for whom a Placee is contracting as agent or that of a nominee for such person, such Placing Shares should, subject as provided below, be so registered free from any liability to United Kingdom stamp duty or stamp duty reserve tax. Placees will not be entitled to receive any fee or commission in connection with the Placing.
Conditions of the Placing
The obligations of Allenby Capital in respect of the Placing are conditional upon, inter alia:
(a) the delivery by the Company to Allenby Capital of certain customary documentation;
(b) the Company complying with its obligations under the Placing Agreement to the extent that they fall to be performed on or before Admission;
(c) the Company having allotted, subject only to Admission, the Placing Shares in accordance with the Placing Agreement;
(d) the warranties on the part of the Company contained in the Placing Agreement not being untrue or inaccurate in any material respect and not misleading;
(a) Allenby Capital not having exercised its rights to terminate the Placing Agreement;
(b) the General Meeting having taken place on the date set out in the Notice and the Resolutions having been passed thereat without amendment (save for any amendment agreed by Allenby Capital); and
(c) Admission having become effective not later than 8.00 a.m. on 23 February 2021 (or such later date as Allenby Capital may agree with the Company in writing not being later than 8.00 a.m. on the 5 March 2021),
(all conditions to the obligations of Allenby Capital included in the Placing Agreement being together, the "conditions").
If any of the conditions are not fulfilled or, where permitted, waived or extended to the extent permitted by law or regulations in accordance with the Placing Agreement within the stated time periods (or such later time and/or date as the Company and Allenby Capital may agree), or the Placing Agreement is terminated in accordance with its terms (as to which, see "Termination of the Placing" below), the Placing will cease and determine. If the Placing ceases and determines before Admission, each Placee's rights and obligations shall cease and terminate at such time and each Placee agrees that no claim can be made by or on behalf of the Placee (or any person on whose behalf the Placee is acting) in respect thereof.
By participating in the Bookbuild, each Placee agrees that its rights and obligations cease and terminate only in the circumstances described above and under "Termination of the Placing" below and will not be capable of rescission or revocation or termination by it.
Allenby Capital shall be entitled, in its absolute discretion, to waive fulfilment of all or any of the conditions in whole or in part (to the extent that Allenby Capital is capable of waiving such conditions), or extend the time provided for fulfilment of one or more conditions in respect of all or any part of the performance thereof, save that certain conditions including the conditions relating to the General Meeting and the Resolutions, and Admission referred to above may not be waived. Any such extension or waiver will not affect Placees' commitments as set out in this Appendix.
Allenby Capital may terminate the Placing Agreement in certain circumstances, details of which are set out below under "Termination of the Placing".
Neither Allenby Capital, nor any of its affiliates, agents, directors, officers or employees, nor the Company, nor any person acting on their behalf, has or shall have any liability to any Placee (or to any other person whether acting on behalf of a Placee or otherwise) in respect of any decision any of them may make as to whether or not to waive or to extend the time and/or date for the satisfaction of any condition to the Placing Agreement nor for any decision any of them may make as to the satisfaction of any condition or in respect of the Placing generally and by participating in the Placing each Placee agrees that any such decision is within the absolute discretion of Allenby Capital and the Company.
Termination of the Placing
Allenby Capital may, in its absolute discretion, by notice to the Company, terminate the Placing Agreement at any time up to and including Admission if, inter alia:
(a) any statement contained in this Announcement or any other document or announcement issued or published by or on behalf of the Company in connection with the Placing has become or been discovered to be untrue, inaccurate in any material respect or misleading or that there has been a material omission therefrom; or
(b) any of the Warranties was, when given, untrue, inaccurate or misleading in any material respect, or is not, or has ceased to be, true, accurate or not misleading in any material respect; or
(c) any of the conditions shall have become incapable of fulfilment by the requisite time and/or date; or
(d) there has, in the opinion of Allenby Capital, been a material adverse change in the business of the Company or the Group or in the financial or trading position or prospects of the Company or the Group which in the opinion of Allenby Capital would materially affect the success of the Placing or the distribution of the Placing Shares or make it inadvisable to proceed with the Placing; or
(e) in the opinion of Allenby Capital, there are certain circumstances or events (including, but not limited to, an escalation in any epidemic or pandemic), which in the opinion of Allenby Capital (acting in good faith) would make it inappropriate to proceed with the Placing.
By participating in the Bookbuild, each Placee agrees with the Company and Allenby Capital that the exercise by the Company or Allenby Capital of any right of termination or any other right or other discretion under the Placing Agreement shall be within the absolute discretion of the Company or Allenby Capital or for agreement between the Company and Allenby Capital (as the case may be) and that neither the Company nor Allenby Capital need make any reference to, or consultation with, such Placee and that none of the Company, Allenby Capital nor any of their respective affiliates, agents, directors, officers or employees, nor any person acting on its or their behalf, shall have any liability to such Placee (or to any other person whether acting on behalf of a Placee or otherwise) whatsoever in connection with any such exercise.
By participating in the Placing, each Placee agrees that its rights and obligations terminate only in the circumstances described above and under the "Conditions of the Placing" above and will not be capable of rescission or termination by it after the issue by Allenby Capital of a contract note or other electronic confirmation following the close of the Bookbuild and confirming the Placing Price and each Placee's allocation and commitment in the Placing.
Representations, warranties and further terms
By submitting a bid in the Bookbuild, each prospective Placee (and any person acting on such Placee's behalf) represents, warrants, acknowledges, agrees and undertakes (for itself and for any such prospective Placee) to Allenby Capital and the Company, in each case as a fundamental term of their application for Placing Shares, that (save where Allenby Capital expressly agrees in writing to the contrary):
1. it has read and understood this Announcement in its entirety and that its subscription for the Placing Shares is subject to and based upon all the terms, conditions, representations, warranties, indemnities, acknowledgements, agreements and undertakings and other information contained herein and that it has not relied on, and will not rely on, any information given or any representations, warranties or statements made at any time by any person in connection with Admission, the Placing, the Company, the Placing Shares or otherwise, other than the information contained in this Announcement and the Publicly Available Information, such information being all that it deems necessary to make an investment decision in respect of the Placing Shares;
2. it has not received a prospectus or other offering document in connection with the Placing and acknowledges that no prospectus or other offering document: (a) is required under the Prospectus Regulation or other applicable law; and (b) has been or will be prepared in connection with the Placing;
3. the Ordinary Shares are admitted to trading on AIM, and that the Company is therefore required to publish certain business and financial information in accordance with the AIM Rules and UK MAR as defined on the first page of the announcement of which these terms and conditions form part, which includes a description of the nature of the Company's business and the Company's most recent balance sheet and profit and loss account and that it is able to obtain or access such information without undue difficulty, and is able to obtain access to such information or comparable information concerning any other publicly traded company without undue difficulty;
4. it has made its own assessment of the Placing and the Placing Shares and has relied on its own investigation of the business, financial or other position of the Company in accepting a participation in the Placing (and satisfied itself that the information is still current and does not require any disclosure or offering document or prospectus for such purpose) and neither Allenby Capital nor the Company nor any of their respective affiliates, agents, directors, officers or employees nor any person acting on behalf of any of them has provided, and will not provide, it with any material regarding the Placing Shares or the Company or any other person other than the information in this Announcement or the Publicly Available Information; nor has it requested Allenby Capital, the Company, any of their respective affiliates, agents, directors, employees or officers or any person acting on behalf of any of them to provide it with any such information;
5. neither Allenby Capital nor any person acting on behalf of it nor any of its affiliates, agents, directors, officers or employees has or shall have any liability for any Publicly Available Information, or any oral or written representation relating to the Company, or any misstatements or omissions therein, provided that nothing in this paragraph excludes the liability of any person for fraudulent misrepresentation made by that person;
6. neither Allenby Capital, nor the Company (nor any of their respective affiliates, agents, directors, officers and employees) nor any person acting on behalf of any of them have made any representation or warranty to it, express or implied, with respect to the Company, the Placing or the Placing Shares or the accuracy, completeness or adequacy of this Announcement and the Publicly Available Information;
7. neither Allenby Capital, nor any of its respective affiliates nor any person acting on its or their behalf are providing any service to it, making any recommendations to it, advising it regarding the suitability of any transactions it may enter into to buy any Placing Shares, or providing advice to it in relation to the Placing Shares or the Company;
8. the contents of this Announcement and the Publicly Available Information have been prepared by and are exclusively the responsibility of the Company and that neither Allenby Capital nor its affiliates nor any persons acting on its or their behalf is responsible for or has or shall have any liability for any information, representation, warranty or statement relating to the Company contained in this Announcement, including this Appendix, or the Publicly Available Information nor will they be liable for any Placee's decision to participate in the Placing based on any information, representation, warranty or statement contained in this Announcement, including this Appendix, the Publicly Available Information or otherwise. Nothing in this Appendix shall exclude any liability of any person for fraudulent misrepresentation;
9. the Placing Shares have not been registered or otherwise qualified, and will not be registered or otherwise qualified, for offer and sale nor will a prospectus be cleared or approved in respect of any of the Placing Shares under the securities laws of the United States, or any state or other jurisdiction of the United States, Australia, Canada, the Republic of South Africa or Japan and, subject to certain exceptions, may not be offered, sold, taken up, renounced or delivered or transferred, directly or indirectly, within the United States, Australia, Canada, the Republic of South Africa or Japan or in any country or jurisdiction where any such action for that purpose is required;
10. it is not, and any person who it is acting on behalf of is not, and at the time the Placing Shares are acquired will not be, a resident of, or with an address in, or subject to the laws of, the United States, Australia, Canada, the Republic of South Africa or Japan, and it acknowledges and agrees that the Placing Shares have not been and will not be registered or otherwise qualified under the securities legislation of the United States, Australia, Canada, the Republic of South Africa or Japan and may not be offered, sold, or acquired, directly or indirectly, within those jurisdictions;
11. it and the beneficial owner of the Placing Shares is, and at the time the Placing Shares are subscribed for will be, outside the United States and subscribing for the Placing Shares in an "offshore transaction" as defined in, and in accordance with, Regulation S under the Securities Act; and it has full power to make the representations, warranties, indemnities, acknowledgements, agreements and undertakings herein on behalf of each such account;
12. it understands that the Placing Shares have not been, and will not be, registered under the Securities Act and may not be offered, sold or resold in or into or from the United States except pursuant to an effective registration under the Securities Act, or pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in accordance with applicable state securities laws; and no representation is being made as to the availability of any exemption under the Securities Act for the reoffer, resale, pledge or transfer of the Placing Shares;
13. it (and any account for which it is purchasing) is not acquiring the Placing Shares with a view to any offer, sale or distribution thereof within the meaning of the Securities Act;
14. it understands that:
(a) the Placing Shares are "restricted securities" within the meaning of Rule 144(a)(3) under the Securities Act and will be subject to restrictions on resale and transfer subject to certain exceptions under US law;
(b) no representation is made as to the availability of the exemption provided by Rule 144, Rule 144A or any other exemption under the Securities Act for the reoffer, resale, pledge or transfer of the Placing Shares; and
(c) it will not deposit the Placing Shares in an unrestricted depositary receipt programme in the United States or for US persons (as defined in the Securities Act);
15. it will not offer, sell, transfer, pledge or otherwise dispose of any Placing Shares except:
(a) in an offshore transaction in accordance with Rules 903 or 904 of Regulation S under the Securities Act; or
(b) pursuant to another exemption from registration under the Securities Act, if available, and in each case in accordance with all applicable securities laws of the states of the United States and other jurisdictions;
16. it understands that the Placing Shares are expected to be issued to it through CREST but may be issued to it in certificated, definitive form and acknowledges and agrees that the Placing Shares will, if required, to the extent they are delivered in certificated form, bear a legend to the following effect unless agreed otherwise with the Company:
"THESE SECURITIES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER THE APPLICABLE SECURITIES LAWS OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES, AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (B) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT OR (C) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES. NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THE FOREGOING, THE SECURITIES MAY NOT BE DEPOSITED INTO ANY UNRESTRICTED DEPOSITARY RECEIPT FACILITY IN RESPECT OF THE COMPANY'S SECURITIES ESTABLISHED OR MAINTAINED BY A DEPOSITARY BANK. EACH HOLDER, BY ITS ACCEPTANCE OF THESE SHARES, REPRESENTS THAT IT UNDERSTANDS AND AGREES TO THE FOREGOING RESTRICTIONS.";
17. it is not taking up the Placing Shares as a result of any "general solicitation" or "general advertising" efforts (as those terms are defined in Regulation D under the Securities Act) or any "directed selling efforts" (as such term is defined in Regulation S under the Securities Act);
18. it understands that there may be certain consequences under United States and other tax laws resulting from an investment in the Placing and it has made such investigation and has consulted its own independent advisers or otherwise has satisfied itself concerning, without limitation, the effects of United States federal, state and local income tax laws and foreign tax laws generally;
19. it will not distribute, forward, transfer or otherwise transmit this Announcement or any part of it, or any other presentational or other materials concerning the Placing in or into or from the United States (including electronic copies thereof) to any person, and it has not distributed, forwarded, transferred or otherwise transmitted any such materials to any person;
20. no action has been or will be taken by any of the Company, Allenby Capital or any person acting on behalf of the Company or Allenby Capital that would, or is intended to, permit a public offer of the Placing Shares in the United States or in any country or jurisdiction where any such action for that purpose is required;
21. it has the funds available to pay for the Placing Shares for which it has agreed to acquire;
22. it and/or each person on whose behalf it is participating:
(a) is entitled to acquire Placing Shares pursuant to the Placing under the laws and regulations of all relevant jurisdictions;
(b) has fully observed such laws and regulations;
(c) has capacity and authority and is entitled to enter into and perform its obligations as an acquirer of Placing Shares and will honour such obligations; and
(d) has obtained all necessary consents and authorities (including, without limitation, in the case of a person acting on behalf of a Placee, all necessary consents and authorities to agree to the terms set out or referred to in this Appendix) under those laws or otherwise and complied with all necessary formalities 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 acquisition of Placing Shares;
23. none of Allenby Capital, the Company nor any of their respective affiliates, agents, directors, officers or employees nor any person acting on behalf of any of them is making any recommendations to it or advising it regarding the suitability of any transactions it may enter into in connection with the Placing and that participation in the Placing is on the basis that it is not and will not be a client of Allenby Capital and that Allenby Capital has no duties or responsibilities to it for providing the protections afforded to its clients or for providing advice in relation to the Placing nor in respect of any representations, warranties, undertakings or indemnities contained in the Placing Agreement nor for the exercise or performance of any of its rights and obligations thereunder including any rights to waive or vary any conditions or exercise any termination right;
24. it will make payment to Allenby Capital for the Placing Shares allocated to it in accordance with the terms and conditions of this Announcement on the due times and dates set out in this Announcement, failing which, inter alia, the relevant Placing Shares may be placed with others on such terms as Allenby Capital determines in its absolute discretion without liability to the Placee and it will remain liable for any shortfall below the net proceeds of such sale and the placing proceeds of such Placing Shares and may be required to bear any stamp duty, stamp duty reserve tax or other taxes or duties (together with any interest or penalties due pursuant to the terms set out or referred to in this Announcement) imposed in any jurisdiction which may arise upon the sale of such Placee's Placing Shares on its behalf;
25. its allocation (if any) of Placing Shares will represent a maximum number of Placing Shares which it will be entitled, and required, to subscribe for, and that it may be called upon to subscribe for a lower number of Placing Shares (if any), but in no event in aggregate more than the aforementioned maximum;
26. the person who it specifies for registration as holder of the Placing Shares will be:
(a) the Placee; or
(b) a nominee of the Placee, as the case may be, and that Allenby Capital and the Company will not be responsible for any liability to stamp duty or stamp duty reserve tax resulting from a failure to observe this requirement. Each Placee and any person acting on behalf of such Placee agrees to acquire Placing Shares pursuant to the Placing and agrees to indemnify the Company and Allenby Capital in respect of the same on the basis that the Placing Shares will be allotted to a CREST stock account of Allenby Capital or transferred to a CREST stock account of Allenby Capital who will hold them as nominee on behalf of the Placee until settlement in accordance with its standing settlement instructions with it;
27. the allocation, allotment, issue and delivery to it, or the person specified by it for registration as holder, of Placing Shares will not give rise to a stamp duty or stamp duty reserve tax liability under (or at a rate determined under) any of sections 67, 70, 93 or 96 of the Finance Act 1986 (depository receipts and clearance services) and that it is not participating in the Placing as nominee or agent for any person or persons to whom the allocation, allotment, issue or delivery of Placing Shares would give rise to such a liability;
28. if it is within the United Kingdom, it and any person acting on its behalf (if within the United Kingdom) falls within Article 19(5) and/or 49(2) of the Order and undertakes that it will subscribe for, hold, manage and (if applicable) dispose of any Placing Shares that are allocated to it for the purposes of its business only;
29. if it is within a Relevant State, it is a Qualified Investor as defined in Article 2(e) of the Prospectus Regulation;
30. if it is a financial intermediary, as that term is used in Article 5(1) of the Prospectus Regulation, the Placing Shares acquired by it in the 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 Relevant State other than Qualified Investors, or in circumstances in which the express prior written consent of Allenby Capital has been given to the offer or resale;
31. it has not offered or sold and will not offer or sell any Placing Shares to persons in a Relevant State prior to the expiry of a period of six months from the relevant Admission except to persons whose ordinary activities involve them in subscribing for, holding, managing or disposing of investments (as principal or agent) for the purposes of their business or otherwise in circumstances which have not resulted and which will not result in an offer to the public in the United Kingdom within the meaning of section 85(1) of the FSMA or an offer to the public in any member state of the EEA within the meaning of the Prospectus Regulation;
32. it has only communicated or caused to be communicated and it will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of the FSMA) relating to Placing Shares in circumstances in which section 21(1) of the FSMA does not require approval of the relevant communication by an authorised person and it acknowledges and agrees that this Announcement has not been approved by Allenby Capital in its capacity as an authorised person under section 21 of the 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;
33. it has complied and it will comply with all applicable laws with respect to anything done by it or on its behalf in relation to the Placing Shares (including all relevant provisions of the FSMA and the Financial Services Act 2012 in respect of anything done in, from or otherwise involving the United Kingdom);
34. if it has received any inside information (for the purposes of the MAR and/or section 56 of the Criminal Justice Act 1993 or other applicable law) about the Company in advance of the Placing, it has not:
(a) dealt (or attempted to deal) in the securities of the Company;
(b) encouraged, recommended or induced another person to deal in the securities of the Company; or
(c) unlawfully disclosed such information to any person, prior to the information being made publicly available;
35. it:
(a) has complied with its obligations in connection with money laundering and terrorist financing under the Proceeds of Crime Act 2002, the Criminal Justice Act 1993, the Terrorism Act 2000 (as amended), the Terrorism Act 2006, the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 and all related or similar rules, regulations or guidelines, issued, administered or enforced by any government agency having jurisdiction in respect thereof and the Money Laundering Sourcebook of the FCA (together, the "Money Laundering Regulations");
(b) is not a person:
(i) with whom transactions are prohibited under the US Foreign Corrupt Practices Act of 1977 or any economic sanction programmes administered by, or regulations promulgated by, the Office of Foreign Assets Control of the U.S. Department of the Treasury;
(ii) named on the Consolidated List of Financial Sanctions Targets maintained by HM Treasury of the United Kingdom; or
(iii) subject to financial sanctions imposed pursuant to a regulation of the European Union or a regulation adopted by the United Nations or other applicable law,
(together with the Money Laundering Regulations, 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 and has obtained all governmental and other consents (if any) which may be required for the purpose of, or as a consequence of, such purchase, and it will provide promptly to Allenby Capital such evidence, if any, as to the identity or location or legal status of any person which it may request from it in connection with the Placing (for the purpose of complying with the Regulations or ascertaining the nationality of any person or the jurisdiction(s) to which any person is subject or otherwise) in the form and manner requested by Allenby Capital on the basis that any failure by it to do so may result in the number of Placing Shares that are to be acquired by it or at its direction pursuant to the Placing being reduced to such number, or to nil, as Allenby Capital may decide at its sole discretion;
36. in order to ensure compliance with the Regulations, Allenby Capital or the Company's registrars may, in their absolute discretion, require verification of its identity. Pending the provision to Allenby Capital or the Company's registrars, as applicable, of evidence of identity, definitive certificates in respect of the Placing Shares may be retained at Allenby Capital's absolute discretion or, where appropriate, delivery of the Placing Shares to it in uncertificated form may be delayed at Allenby Capital'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 Allenby Capital (for itself and as agent on behalf of the Company) or the Company's registrars have not received evidence satisfactory to them, either Allenby Capital and/or the Company may, at its absolute discretion, terminate its commitment in respect of the 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 or CREST account from which they were originally debited;
37. Allenby Capital and its affiliates, acting as an investor for its or their own account(s), may bid or subscribe for and/or purchase Placing Shares and, in that capacity, may retain, purchase, offer to sell or otherwise deal for its or their own account(s) in the Placing Shares, any other securities of the Company or other related investments in connection with the Placing or otherwise. Accordingly, references in this Announcement to the Placing Shares being offered, subscribed, acquired or otherwise dealt with should be read as including any offer to, or subscription, acquisition or dealing by, Allenby Capital and/or any of its affiliates acting as an investor for its or their own account(s). Neither Allenby Capital 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;
38. it acknowledges that its commitment to acquire Placing Shares on the terms set out in this Announcement and in the contract note or other electronic communication will continue notwithstanding any amendment that may in future be made to the terms and conditions of the Placing and that Placees will have no right to be consulted or require that their consent be obtained with respect to the Company's or Allenby Capital's conduct of the Placing;
39. it has knowledge and experience in financial, business and international investment matters as is required to evaluate independently the merits and risks of an investment in the Placing Shares. It further acknowledges that 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 for an indefinite period of, and is able to sustain, a complete loss in connection with the Placing. It is aware and understands that an investment in the Placing Shares involves a considerable degree of risk and will not look to Allenby Capital, any of its respective affiliates or any person acting on its or their behalf for all or part of any such loss or losses it may suffer, and it has been provided a reasonable opportunity to undertake, and has undertaken, such investigation and has been provided with and has evaluated such documents and information as it has deemed necessary to enable it to make an informed and intelligent decision with respect to making an investment in the Placing Shares. It has relied upon its own examination and due diligence of the Company and its affiliates taken as a whole, and the terms of the Placing, including the merits and risks involved;
40. it irrevocably appoints any duly authorised officer of Allenby Capital as its 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 Placing Shares for which it agrees to acquire upon the terms of this Announcement;
41. it is acting as principal only in respect of the Placing or, if it is acquiring the Placing Shares as a fiduciary or agent for one or more investor accounts, it is duly authorised to do so and it has full power and authority to make, and does make, the foregoing representations, warranties, acknowledgements, agreements and undertakings on behalf of each such accounts;
42. time is of the essence as regards its obligations under this Appendix;
43. any document that is to be sent to it in connection with the Placing will be sent at its risk and may be sent to it at any address provided by it to Allenby Capital;
44. the Placing Shares will be issued and subscribed for subject to the terms and conditions of this Appendix;
45. none of its rights or obligations in respect of the Placing is conditional on any other person agreeing to subscribe for any Placing Shares under the Placing and no failure (whether entire or partial) by any other Placee to meet any of its obligations in respect of the Placing will affect any of its obligations in respect of the Placing;
46. the terms and conditions contained in this Appendix and all documents into which this Appendix is incorporated by reference or otherwise validly forms a part and/or any agreements entered into pursuant to these terms and conditions and all agreements to acquire Placing Shares pursuant to the Bookbuild and/or the Placing will be governed by and construed in accordance with English law and it submits to the exclusive jurisdiction of the English courts in relation to any claim, dispute or matter arising out of such contract except that enforcement proceedings in respect of the obligation to make payment for the Placing Shares (together with interest chargeable thereon) may be taken by the Company or Allenby Capital in any jurisdiction in which the relevant Placee is incorporated or in which any of its securities have a quotation on a recognised stock exchange; and
47. the Company, Allenby Capital and others (including each of their respective affiliates, agents, directors, officers and employees) will rely upon the truth and accuracy of the foregoing representations, warranties, acknowledgements, agreements and undertakings, which are given to Allenby Capital on its own behalf and on behalf of the Company and are irrevocable.
By participating in the Placing, each Placee (and any person acting on such Placee's behalf) agrees to indemnify and hold the Company, Allenby Capital and each of their respective affiliates, agents, directors, officers and employees harmless from any and all costs, claims, liabilities and expenses (including legal fees and expenses) directly or indirectly arising out of or in connection with any breach of the representations, warranties, acknowledgements, agreements and undertakings given by the Placee (and any person acting on such Placee's behalf) in this Appendix or incurred by Allenby Capital, the Company or each of their respective affiliates, agents, directors, officers or employees arising from the performance of the Placee's obligations as set out in this Announcement, and further agrees that the provisions of this Appendix shall survive after the completion of the Placing.
The rights and remedies of Allenby Capital and the Company under these terms and conditions are in addition to any rights and remedies which would otherwise be available to each of them and the exercise or partial exercise or partial exercise of one will not prevent the exercise of others.
The agreement to allot and issue Placing Shares to Placees (or the persons for whom Placees are contracting as agent) free of stamp duty and stamp duty reserve tax in the United Kingdom relates only to their allotment and issue to Placees, or such persons as they nominate as their agents, directly by the Company. Such agreement assumes that the Placing Shares are not being acquired in connection with arrangements to issue depositary receipts or to transfer the Placing Shares into a clearance service. If there are any such arrangements, or the settlement related to any other dealings in the Placing Shares, stamp duty or stamp duty reserve tax may be payable. In that event, the Placee agrees that it shall be responsible for such stamp duty or stamp duty reserve tax and neither the Company nor Allenby Capital, nor their respective affiliates nor any person acting on its or their behalf shall be responsible for such stamp duty or stamp duty reserve tax. If this is the case, each Placee should seek its own advice and they should notify Allenby Capital accordingly. In addition, Placees should note that they will be liable for any capital duty, stamp duty and all other stamp, issue, securities, transfer, registration, documentary or other duties or taxes (including any interest, fines or penalties relating thereto) payable outside the United Kingdom by them or any other person on the acquisition by them of any Placing Shares or the agreement by them to acquire any Placing Shares and each Placee, or the Placee's nominee, in respect of whom (or in respect of the person for whom it is participating in the Placing as an agent or nominee) the allocation, allotment, issue or delivery of Placing Shares has given rise to such non-United Kingdom stamp, registration, documentary, transfer or similar taxes or duties undertakes to pay such taxes and duties, including any interest and penalties (if applicable), forthwith and to indemnify on an after-tax basis and to hold harmless the Company and Allenby Capital in the event that either the Company and/or Allenby Capital have incurred any such liability to such taxes or duties.
Allenby Capital is authorised and regulated by the FCA in the United Kingdom and is acting exclusively for the Company and no one else in connection with the Bookbuild and the Placing and will not regard any other person (whether or not a recipient of this document) as a client in relation to the Bookbuild or the Placing and will not be responsible to anyone (including any Placees) other than the Company for providing the protections afforded to its clients or for providing advice in relation to the Bookbuild or the Placing or any other matters referred to in this Announcement.
Each Placee and any person acting on behalf of the Placee acknowledges that Allenby Capital does not owe any fiduciary or other duties to any Placee in respect of any representations, warranties, undertakings, acknowledgements, agreements or indemnities in the Placing Agreement.
Each Placee and any person acting on behalf of the Placee acknowledges and agrees that Allenby Capital may (at its absolute discretion) satisfy its obligations to procure Placees by itself agreeing to become a Placee in respect of some or all of the Placing Shares or by nominating any connected or associated person to do so.
When a Placee or any person acting on behalf of the Placee is dealing with Allenby Capital, any money held in an account with Allenby Capital on behalf of the Placee and/or any person acting on behalf of the Placee will not be treated as client money within the meaning of the relevant rules and regulations of the FCA made under the FSMA. Each Placee acknowledges that the money will not be subject to the protections conferred by the client money rules: as a consequence this money will not be segregated from Allenby Capital's money in accordance with the client money rules and will be held by it under a banking relationship and not as trustee.
Each Placee may be asked to disclose in writing or orally to Allenby Capital:
(a) if he is an individual, his nationality; or
(b) if he is a discretionary fund manager, the jurisdiction in which the funds are managed or owned.
References to time in this Announcement are to London time, unless otherwise stated.
All times and dates in this Announcement may be subject to amendment. Allenby Capital will notify Placees and any persons acting on behalf of the Placees of any changes.
No statement in this Announcement or the Placing Results Announcement (when made) is intended to be a profit forecast or estimate, and no statement in this Announcement or the Placing Results Announcement (when made) 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.
The price of shares and any income expected from them may go down as well as up and investors may not get back the full amount invested upon disposal of the shares. Past performance is no guide to future performance, and persons needing advice should consult an independent financial adviser.
The Placing Shares to be issued pursuant to the Placing will not be admitted to trading on any stock exchange other than the AIM market of the London Stock Exchange.
Neither the content of the Company's websites nor any website accessible by hyperlinks on the Company's websites is incorporated in, or forms part of, this Announcement.
APPENDIX III - DEFINITIONS
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Admission |
admission of the New Ordinary Shares to trading on AIM
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AIM |
the market of that name operated by the London Stock Exchange
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AIM Rules for Companies |
the AIM Rules for Companies published by the London Stock Exchange, as amended
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Allenby Capital |
Allenby Capital Limited, the Company's financial adviser and sole broker pursuant to the AIM Rules
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Announcement |
the announcement of the Proposals released by the Company on 1 February 2021
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Board or Directors |
the directors of the Company as at the date of this document, or any duly authorised committee thereof
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CLN Conversions |
all conversions of CLNs which are notified by Noteholders to the Company following 21 January 2021 but prior to or on 12 February 2021, and the Majority Noteholder Conversions
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CLN Instrument |
the convertible loan note instrument issued by the Company dated 14 March 2017
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CLN Restructuring |
the amendments to the terms of the CLNs as summarised in paragraph 7 of Part I of this document
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Convertible Loan Notes or CLNs |
Active Energy's fixed rate convertible loan notes as constituted by the Convertible Loan Instrument
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Company or Active Energy |
Active Energy Group Plc, a company incorporated in England and Wales with registered number 03148295
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Existing Ordinary Share Capital |
the issued ordinary share capital of the Company at the date of this document, comprising 1,541,178,043 Existing Ordinary Shares
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Existing Ordinary Shares |
ordinary shares of 0.01p each in the capital of the Company in issue as at the date of this document
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FCA |
the Financial Conduct Authority
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FSMA |
the Financial Services and Markets Act 2000, as amended
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Fundraising |
the Placing and the PrimaryBid Offer (and "Fundraise" shall be construed accordingly)
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General Meeting |
the general meeting of the Company convened for 10.00 a.m. on 19 February 2021 and any adjournment thereof, notice of which is set out at the end of this document
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Issue Price |
1.0 pence per New Ordinary Share
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London Stock Exchange |
London Stock Exchange plc
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Majority Noteholder Conversions |
the instructions received or expected to be received by the Company, regarding the conditional CLN Conversions to be undertaken by Noteholders representing 88.25 per cent by value of the CLNs issued by the Company as at the date of this document
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New Ordinary Shares |
new Ordinary Shares to be issued pursuant to the Placing, the PrimaryBid Offer and the CLN Conversions
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Noteholder |
a holder of CLNs
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Noteholder Majority |
Noteholders holding a simple majority in the nominal amount of the Notes in issue from time to time
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Noteholder Written Resolution |
the written resolution circulated to Noteholders prior to or on the date of this document to approve the CLN Restructuring
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Notice or Notice of Meeting |
the notice of General Meeting set out at the end of this document
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Ordinary Shares |
ordinary shares of 0.01p each in the capital of the Company
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Placees |
persons who have agreed to subscribe for Placing Shares under the Placing
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Placing |
the conditional Placing by Allenby Capital, as agent of and on behalf of the Company, of the Placing Shares at the Issue Price on the terms and subject to the conditions of the Placing Agreement
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Placing Agreement |
the agreement dated 1 February 2021 and made between the Company and Allenby Capital, details of which are set out in this document
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Placing Shares |
the minimum of 600,000,000 New Ordinary Shares to be issued pursuant to the Placing
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PrimaryBid Offer |
the conditional offer of New Ordinary Shares made to private investors through the PrimaryBid platform
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PrimaryBid Shares |
New Ordinary Shares to be issued pursuant to the PrimaryBid Offer
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Proposals |
together the Placing, the PrimaryBid Offer, the CLN Restructuring and the Major Noteholder Conversions
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Resolutions |
the resolutions to be proposed at the General Meeting, details of which are set out in the Notice of Meeting
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Shareholders |
holders of Ordinary Shares from time to time
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SP Angel |
SP Angel Corporate Finance LLP, the Company's nominated adviser pursuant to the AIM Rules
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Sterling, £, pence or p |
the lawful currency of the UK
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tph |
tonnes per hour
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United Kingdom or UK |
the United Kingdom of Great Britain and Northern Ireland
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United States or US |
the United States of America, its territories and possessions, any state of the United States and the District of Columbia
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APPENDIX IV - EXPECTED TIMETABLE OF PRINCIPAL EVENTS
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2021 |
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Publication and posting of the Circular and the Form of Proxy
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By 3 February |
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Latest date for conversion notices to be sent to the Company by Noteholders who are not included in the Majority Noteholders for their New Ordinary Shares to be issued at Admission
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12 February |
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Latest time and date for return of Form of Proxy or CREST proxy instructions for the General Meeting
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10.00 a.m. on 17 February |
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General Meeting
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10.00 a.m. on 19 February |
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Admission to trading on AIM of the New Ordinary Shares and enablement in CREST, completion of the CLN Conversions and the CLN Restructuring
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8.00 a.m. on 23 February |
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Despatch of definitive share certificates for the New Ordinary Shares in certificated form (where applicable)
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Within 14 days of Admission |
IMPORTANT NOTICES
Neither this Announcement, nor any copy of it, may be taken or transmitted, published or distributed, directly or indirectly, in, or into the United States, Canada, Australia, Japan, or the Republic of South Africa or to any persons in any of those jurisdictions or any other jurisdiction where to do so would constitute a violation of the relevant securities laws of such jurisdiction. This Announcement is for information purposes only and does not constitute an offer to sell or issue, or the solicitation of an offer to buy, acquire or subscribe for any shares in the capital of the Company in the United States, Canada, Australia, Japan or the Republic of South Africa or any other state or jurisdiction in which such offer or solicitation is not authorised or to any person to whom it is unlawful to make such offer or solicitation. Any failure to comply with these restrictions may constitute a violation of securities laws of such jurisdictions. The Placing Shares have not been, and will not be, registered under the US Securities Act of 1933, as amended (the "US Securities Act") or under any securities laws of any state or other jurisdiction of the United States and may not be offered, sold, resold, transferred or delivered, directly or indirectly, in or into the United States except pursuant to an applicable exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act and in compliance with the securities laws of any state or other jurisdiction of the United States. There will be no public offering of securities in the United States. Any failure to comply with the foregoing restrictions may constitute a violation of US securities laws. The distribution of this Announcement in other jurisdictions may be restricted by law and persons into whose possession this Announcement comes should inform themselves about, and observe, any such restrictions.
There is no intention to register any portion of the Placing in the United States or to conduct any public offering of securities in the United States or elsewhere. All offers of Placing Shares will be made pursuant to an exemption under the Prospectus Regulation (EU) 2017/1129, as amended from time to time, and includes any relevant implementing measure in any member state (the "Prospectus Regulation"), from the requirement to produce a prospectus.
Recipients of this Announcement should conduct their own investigation, evaluation and analysis of the business, data and property described in this Announcement. This Announcement does not constitute a recommendation concerning any investor's options with respect to the Placing. 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 Shareholder or prospective investor should consult with his or her or its own legal adviser, business adviser, financial adviser or tax adviser for legal, financial, business or tax advice.
Members of the public are not eligible to take part in the Placing. This Announcement is for information purposes only and is directed only at: (a) persons in Member States of the European Economic Area who are qualified investors within the meaning of article 2(e) of the Prospectus Regulation ("Qualified Investors"); and (b) in the United Kingdom, Qualified Investors who are persons who (i) have professional experience in matters relating to investments falling within the definition of "investment professionals" in article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Order"); (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 together being referred to as "Relevant Persons"). This Announcement must not be acted on or relied on by persons who are not Relevant Persons.
This Announcement is not being distributed by, nor has it been approved for the purposes of section 21 of the Financial Services and Markets Act 2000, as amended ("FSMA") by, a person authorised under FSMA. This Announcement is being distributed and communicated to persons in the United Kingdom only in circumstances in which section 21(1) of FSMA does not apply. No prospectus will be made available in connection with the matters contained in this Announcement and no such prospectus is required (in accordance with the Prospectus Regulation) to be published. Persons needing advice should consult an independent financial adviser.
Persons (including without limitation, nominees and trustees) who have a contractual right or other legal obligations to forward a copy of this Announcement should seek appropriate advice before taking any action.
This Announcement has been issued by, and is the sole responsibility of, the Company. No representation or warranty, express or implied, is or will be made by the Company or Allenby Capital, or by any of their respective partners, directors, officers, employees, advisers, consultants or affiliates as to or in relation to, the accuracy or completeness of this Announcement or any other written or oral information made available to any interested person or its advisers, and any liability therefore is expressly disclaimed. None of the information in this Announcement has been independently verified or approved by Allenby Capital or any of their respective partners, directors, officers, employees, advisers, consultants or affiliates. Save for any responsibilities or liabilities, if any, imposed on Allenby Capital by FSMA or by the regulatory regime established under it, no responsibility or liability is accepted by Allenby Capital or any of its respective partners, directors, officers, employees, advisers, consultants or affiliates for any errors, omissions or inaccuracies in such information or opinions or for any loss, cost or damage suffered or incurred howsoever arising, directly or indirectly, from any use of this Announcement or its contents or otherwise in connection with this Announcement or from any acts or omissions of the Company in relation to the Placing.
Allenby Capital, which is authorised and regulated in the United Kingdom by the FCA, is acting for the Company and no-one else in connection with the transactions and arrangements described in this Announcement and will not regard any other person (whether or not a recipient of this Announcement) as a client in relation to the transactions and arrangements described in this Announcement. Allenby Capital is not responsible to anyone other than the Company for providing the protections afforded to clients of Allenby Capital or for providing advice in connection with the contents of this Announcement or the transactions and arrangements described herein.
The distribution of this Announcement and the offering of the Placing Shares in certain jurisdictions may be restricted by law. No action has been taken by the Company or Allenby Capital that would permit an offering of such shares or possession or distribution of this Announcement or any other offering or publicity material relating to such shares in any jurisdiction where action for that purpose is required. Persons into whose possession this Announcement comes are required by the Company and Allenby Capital to inform themselves about, and to observe, such restrictions.
No prospectus will be made available in connection with the matters contained in this Announcement and no such prospectus is required (in accordance with the Prospectus Regulation) to be published. Persons needing advice should consult an independent financial adviser.
In connection with the Placing, Allenby Capital and any of its affiliates, acting as investors for their own account, may take up a portion of the shares in the Placing as a principal position and in that capacity may retain, purchase, sell, offer to sell for their own accounts such shares and other securities of the Company or related investments in connection with the Placing or otherwise. Accordingly, references to Placing Shares being offered, acquired, placed or otherwise dealt in should be read as including any issue or offer to, or acquisition, placing or dealing by Allenby Capital and any of its affiliates acting in such capacity. In addition, Allenby Capital and any of its affiliates may enter into financing arrangements (including swaps) with investors in connection with which Allenby Capital and any of its respective affiliates may from time to time acquire, hold or dispose of shares. Allenby Capital does 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.
Cautionary statements
This Announcement may contain and the Company may make verbal statements containing "forward-looking statements" with respect to certain of the Company's plans and its current goals and expectations relating to its future financial condition, performance, strategic initiatives, objectives and results. Forward-looking statements sometimes use words such as "aim", "anticipate", "target", "expect", "estimate", "intend", "plan", "goal", "believe", "seek", "may", "could", "outlook" or other words of similar meaning. By their nature, all forward-looking statements involve risk and uncertainty because they relate to future events and circumstances which are beyond the control of the Company. As a result, the actual future financial condition, performance and results of the Company may differ materially from the plans, goals and expectations set forth in any forward-looking statements. Any forward-looking statements made in this Announcement by or on behalf of the Company speak only as of the date they are made. The information contained in this Announcement is subject to change without notice and except as required by applicable law or regulation, the Company expressly disclaims any obligation or undertaking to publish any updates or revisions to any forward-looking statements contained in this Announcement to reflect any changes in the Company's expectations with regard thereto or any changes in events, conditions or circumstances on which any such statements are based.
Neither the content of the Company's website (or any other website) nor the content of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into or forms part of this Announcement.
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