Strategic Update, Demerger of DFC and Zopa Sale
17 April 2019
THIS ANNOUNCEMENT, INCLUDING THE APPENDICES AND THE INFORMATION CONTAINED IN THEM, IS RESTRICTED AND IS NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO OR FROM THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, OR THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH SUCH PUBLICATION, RELEASE OR DISTRIBUTION WOULD BE UNLAWFUL. PLEASE SEE THE IMPORTANT NOTICES WITHIN THIS ANNOUNCEMENT. THIS ANNOUNCEMENT IS NOT AN OFFER OF SECURITES FOR SALE OR SOLICITATION OF AN OFFER TO BUY THE SECURITIES DISCUSSED HEREIN IN THE UNITED STATES, AUSTRALIA, CANADA, JAPAN OR IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS STIPULATED UNDER THE MARKET ABUSE REGULATION (EU) NO.596/2014.
TRUFIN PLC
("TruFin" or the "Company")
DEMERGER OF DFC
SALE OF ZOPA
RETURN OF VALUE TO SHAREHOLDERS
CONDITIONAL SALE OF SHARES IN DFC HOLDINGS ON BEHALF OF
ARROWGRASS MASTER FUND AND TRUFIN EBT
NOTICE OF GENERAL MEETING
TruFin is announcing, subject to shareholder approval, the demerger of Distribution Finance Capital Limited ("DFC") from TruFin to a new holding company, Distribution Finance Capital Holdings plc ("DFC Holdings") to be admitted to trading on AIM. TruFin believes that this will maximise the opportunity for DFC to obtain a bank licence.
TruFin has also negotiated the sale of its entire stake in Zopa Group Limited ("Zopa") to Arrowgrass Master Fund Ltd ("Arrowgrass") for £44.5 million, subject to TruFin shareholder approval, and is investing £25 million of the proceeds of the sale into DFC to fund its Tier 1 equity.
Subject to the Demerger being completed, the Board is proposing to return a minimum £10 million to shareholders during 2019, with £5 million being returned by 30 June 2019 and the remaining £5 million by 31 December 2019. The Board is currently considering the most appropriate arrangement to facilitate this.
In addition, Arrowgrass and the TruFin Employee Benefit Trust ("TruFin EBT") have conditionally placed 20.66% of DFC Holdings (the "Sale Shares") to institutional investors (the "Vendor Placing") at the Placing Price of 90 pence per Sale Share, reflecting 1.2x Equity Book Value of DFC. This will result in Arrowgrass holding less than 50% of DFC Holdings at the time of admission of DFC Holdings to trading on AIM.
An accelerated bookbuild to allow further investors to participate at the Placing Price will be launched following this announcement and will be open for a short period. Macquarie is acting as Sole Bookrunner in connection with the Vendor Placing, including the accelerated bookbuild. The result of the Vendor Placing will be announced as soon as possible after close of the accelerated bookbuild. The timings for the close of the bookbuild process are at the absolute discretion of Macquarie. The terms and conditions of the Vendor Placing are set out in Part B of this announcement.
Henry Kenner, Chairman and Chief Executive Officer commented:
"This has been a truly momentous period for TruFin. Having completed the TruFin IPO in February 2018, we have seen, in the full year 2018 results announced today, our businesses deliver in terms of customer penetration and combined revenues with this momentum continuing into 2019.
However, in December 2018 we announced a delay to DFC obtaining a bank licence. After due consideration and in order to provide DFC with the best possible opportunity to obtaining a bank licence we have decided to propose the demerger of DFC into a separate AIM listed company.
We are immensely proud that we founded DFC, nurtured it, financed it and backed the highly experienced management team to create a robust and valuable niche lender. We have every confidence in the team as it looks to complete the bank licence process and continue its exciting growth trajectory.
The sale of the Zopa stake held by TruFin is an acceleration of the commitment made at the time of the TruFin IPO to recycle capital, where possible, within the Group to fund the growth ambitions of DFC and the other lending businesses. Following this disposal, an early return of value to TruFin shareholders during 2019 is appropriate as evidence of our ability to deliver for our shareholders.
Following the proposed transactions announced today, we will ensure that the reorganised TruFin Group will be scaled appropriately.
Whilst we did not anticipate the need to demerge DFC so soon after the TruFin IPO, we have acted swiftly and decisively with a focus on shareholder value. The remaining TruFin Group has the core objectives of reaching profitability and maximising the value of shareholders' assets.
Scalable niche lenders are highly sought after due to their rarity and attractive return profiles. Our experience to date with DFC and Zopa highlights our ability to originate and fund these exceptional opportunities. We wish them both every success for the future!
Meanwhile, our remaining businesses continue to demonstrate attractive growth profiles and are showing encouraging signs of becoming powerful origination engines. We look forward to supporting them in 2019 and beyond.
Finally, I would like to express my thanks to shareholders for your ongoing support.
Henry Kenner"
For further information, please contact:
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TruFin plc |
0203 743 1340 |
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Macquarie Capital (Europe) Limited (NOMAD and joint broker) |
0203 037 2000 |
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Liberum Capital Limited (Joint broker) |
0203 100 2000 |
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Blue Pool Communications (PR) |
07501 271 083 |
About TruFin plc:
TruFin plc is the holding company for an operating group of companies that are niche lenders and early payment providers. TruFin Group combines the benefits of both the traditional relationship banking model and developments in the FinTech sector. The Company was admitted to AIM in February 2018 and trades under the ticker symbol: TRU. More information is available on the Company website www.TruFin.com
1. Background to the proposals
TruFin is the holding company of an operating group comprising three growth-focused FinTech and banking businesses operating in three niche finance markets supply chain finance, invoice finance and dynamic discounting. In addition, TruFin owns a minority stake in Zopa, a leading UK consumer peer-to-peer lender, which operates independently of the TruFin Group.
TruFin has today announced the publication of its financial results for the year ended 31 December 2018 together with a trading update, which are available on its website www.trufin.com.
Since the IPO of TruFin in February 2018, TruFin's main business in the supply chain finance sector, DFC, has continued to successfully grow its balance sheet. To date, DFC's balance sheet growth has been funded by both debt and equity from TruFin and third party wholesale funding.
The award of a bank licence to DFC would diversify DFC's funding sources and also enable DFC to replace the funding provided by TruFin in the medium term. Customer deposits, obtained under a banking licence, would be an attractively priced and dependable source of funding for DFC. In June 2018, DFC therefore submitted a banking licence application to the PRA.
Following engagement with the PRA, the TruFin Board considers that to maximise the opportunity for DFC to obtain a bank licence in the short to medium term the following should occur:
- DFC should no longer form part of the wider TruFin Group, which engages in financial services activities, but which is not regulated as a banking group;
- Arrowgrass should reduce its voting control over DFC, whether direct or indirect, to below 50%; and
- DFC should be capitalised with an incremental £25 million to provide sufficient capital to support the next 12 months of expected balance sheet growth following licence award as set out in DFC's regulatory business plan.
Following a review, the TruFin Board has concluded that the award of the banking licence to DFC in the short to medium term is the best option for maximising value for TruFin Shareholders. The TruFin Board is therefore proposing:
- the Demerger of DFC into a separate AIM listed company, with the existing shareholders in TruFin being given one new share in a new holding company of DFC for each existing TruFin Ordinary Share; and
- the sale of its stake in Zopa to Arrowgrass for a total cash consideration of £44.5 million, equal to the carrying book value of Zopa in TruFin's accounts as at 31 December 2018.
On Admission (and prior to any sell down by Arrowgrass and the TruFin EBT) the TruFin Shareholders will hold 91.3% of DFC Holdings.
The sale of TruFin's stake in Zopa, when aggregated with the Demerger constitutes a fundamental change of business for the purpose of Rule 15 of the AIM Rules. Accordingly, the TruFin Board is seeking TruFin Shareholder approval to sell its stake in Zopa and demerge DFC from the TruFin Group for the purposes of Rule 15 of the AIM Rules at a General Meeting of TruFin Shareholders to be held on 7 May 2019.
It is proposed that DFC will be demerged to a new company called Distribution Finance Capital Holdings plc. DFC Holdings is seeking admission of its entire issued and to be issued ordinary share capital to trading on AIM on 9 May 2019. The Demerger is conditional, inter alia, upon the approval of TruFin Shareholders at the General Meeting and completion of the Zopa Transaction.
If the Demerger proceeds, the TruFin Shareholders who are registered on the TruFin Share Register at the Demerger Record Time will receive one DFC Holdings Ordinary Share for every one TruFin Ordinary Share then held by them.
The Demerger is expected to become effective on 8 May 2019.
Following the Demerger, TruFin will remain the ultimate holding company of the Continuing TruFin Group and will continue to be traded on AIM.
Concurrently with these proposals, Arrowgrass has informed the TruFin Board that it has arranged the disposal of sufficient new shares in DFC Holdings such that after completion of the Demerger, it will own less than 50% of the votes in the equity share capital of DFC Holdings. The TruFin EBT has also agreed to sell its resultant holding of shares in DFC Holdings arising pursuant to the Demerger. Accordingly, TruFin also announces that Arrowgrass and the TruFin EBT have agreed to sell 22,031,874 Sale Shares (representing 20.66% of the DFC Holdings issued share capital on DFC Holdings Admission) at the Placing Price of £0.90 per DFC Holdings Share. Pursuant to the Sale Agreement, the Sale Shares are being offered to institutional and other investors by way of an accelerated bookbuild which will be launched immediately following this announcement subject to the terms and conditions set out in Part B of this announcement. The Arrowgrass Sale and TruFin EBT Sale will occur at the time of, and conditional upon, DFC Holdings Admission.
Certain Directors of TruFin and DFC have indicated an intention to acquire shares in the bookbuild.
On DFC Holdings Admission, DFC Holdings is expected to have a market capitalisation of £96 million, based on the Placing Price. Following the Demerger and DFC Holdings Admission, Arrowgrass will continue to hold 73.62% of TruFin but its shareholding in DFC Holdings will have reduced to 48.99% (assuming no other changes to its TruFin shareholding prior to the Demerger Effective Time).
Later today DFC Holdings expects to publish the DFC Holdings Admission Document in connection with DFC Holdings Admission and TruFin expects to publish the circular containing the Notice of General Meetings.
2. Demerger: in the best interests of TruFin Shareholders
At the time of TruFin's IPO, the TruFin Board had a key strategic objective of obtaining a banking licence for DFC. The rationale then, as now, was that a banking licence offers the most appropriate funding model for DFC's business. Flexibility and depth of the deposits market enables DFC to optimise its business model and be able to continue satisfying its customers' needs independently of wholesale funding markets.
When the PRA informed the TruFin Board of its decision in December 2018 that there was likely to be a delay to the announced timetable for the approval of DFC's banking licence and following the announcement of this to the market, the TruFin Board commenced a review of the best way forward for TruFin Shareholders. As part of that review, consideration was given to all practical means to obtain a banking licence including, inter alia, the possibility of applying prudential consolidation to the wider TruFin Group and whether to withdraw the current application and re-apply at a late date. These were ultimately dismissed as impractical, costly and time-consuming.
The TruFin Board has concluded that the best interests of TruFin Shareholders would be served by prioritising the attainment of a banking licence in as timely a manner as possible.
With this conclusion and given the timetable of the existing licence application made to the PRA, first submitted in June 2018 and subject to a 12 month evaluation and decision making period, the TruFin Management Team has worked with the Board of DFC to pursue the Demerger and listing of DFC Holdings on AIM.
3. TruFin's strategic goals and objectives
Following the Zopa Transaction and Demerger, TruFin will be the holding company of an operating group comprising two growth-focused FinTech businesses operating in invoice finance and dynamic discounting: Oxygen and Satago.
The strategic goal, as at the TruFin IPO, remains that of operating and creating a stable of niche lenders and payment providers whether through organic growth or acquisition.
The Directors believe that each of Oxygen and Satago operates in attractive niche markets. TruFin's flexible product offerings, focus on customer service and the effective use of technology, allows it to address the challenges of scalability and customer acquisition costs.
The Directors continue to believe that the growth of Oxygen and Satago will largely be organic rather than through mergers and acquisitions. However, the Directors will also continue to monitor acquisition opportunities that arise in the normal course of business.
The Directors have the following strategic objectives for each business:
Oxygen's future objectives and strategy
Oxygen will continue to build new client and supplier relationships which, given the operational gearing in the business, are expected to lead in turn to profitability and enhanced performance.
The Directors believe that Oxygen's product offering is well developed, robust and scalable. Oxygen's objective is to sign up more customers, sell more product to existing customers and benefit from inherent operational gearing in the business. In order to attract more customers, Oxygen has invested in improving its sales and onboarding teams through 2018.
It is also a focus of Oxygen's management to ensure that its customers fully benefit from the implementation of its services and to that end it continues to develop techniques to on-board more suppliers in a more efficient and timely manner.
In the medium term, Oxygen aims to continue its expansion in the UK public sector including with smaller councils and through further expansion into the NHS and Central Government. Simultaneously, Oxygen will pursue growth in the corporate sector, initially targeting large corporates with similar characteristics to the public sector.
Additionally, Oxygen plans to expand its product offering to its customer base. To that end it acquired Porge during 2018 and this has now been integrated into Oxygen. The strategy is to roll out this research insight service to existing customers of both companies.
The TruFin Board has every confidence in Oxygen's value and performance. However, TruFin will consider over time whether Oxygen would be more highly valued by an alternative owner. Once Oxygen has further demonstrated the achievement of key performance targets, the TruFin Board may therefore consider initiating a sale process.
Satago's future objectives and strategy
At the time of TruFin Admission, the Company stated that Satago was a nascent business with great potential. During 2018, that potential has begun to be realised.
In the core invoice financing business, customer acquisition is the key to success. The business' strategy was, and remains, to adopt a partnership model as a means of gaining the necessary traction and brand awareness. During 2018 the number of interested partners has grown materially and the business is starting to see the direct benefits in terms of business volumes. The Satago management is optimistic that these partnerships will develop further during 2019 and form the basis for future growth.
As the business has grown, the demand for a broader range of financing products has become increasingly apparent. The launch of such products will be explored in 2019, initially focusing on other short-term working capital facilities. Such new products will round out Satago's overall customer offering.
Satago's technology has been a key factor in attracting potential partners and customers. To that end it is a core objective to continue to invest in the platform.
With an increasing market presence and Satago's technological strength, various fee-paying services are now being considered in addition to the core lending business as another source of revenue.
In addition to the core business, Satago also offers some niche speciality lending in two verticals that exhibit attractive funding opportunities: mobile games publishing and the funding of financial intermediaries. It is a strategic goal to continue to develop these existing verticals, and where appropriate, add additional niches.
Satago will continue to target its origination of high yielding short-dated working capital assets, while managing risk via a superior understanding of the credit risk of prospective counterparties provided by its advanced technology and integrated customer business model.
Board and organisational structures
There are no expected immediate changes to the board or senior management of TruFin, DFC or DFC Holdings following the Demerger.
However, the TruFin Board will be conducting a full review of Head Office costs following the Demerger to ensure they are scaled appropriately for the Continuing TruFin Group.
Financial effects of the Demerger and Zopa Transaction
Having made due and careful enquiry, the Directors are of the opinion that, taking into account the net proceeds of the Zopa Transaction, the Company and the Continuing TruFin Group will have sufficient working capital available for their present requirements, that is, for at least the 12 months following the Demerger Effective Date.
For the financial year ended 31 December 2018, the TruFin Group had gross turnover of £9.5 million and an underlying operating loss, excluding share based payment charge, of £12.8 million. As at 31 December 2018, the TruFin Group had total net assets of £153.2 million.
For the financial year ended 31 December 2018, DFC had gross turnover of £5.2 million and an underlying operating loss of £7.0 million. As at 31 December 2018, DFC had total net assets of £54.6 million.
At 31 December 2018, DFC had outstanding loans to TruFin (the "TruFin Loans") amounting to £10 million and preference shares (together with accrued but unpaid dividends) amounting to approximately £4 million. Since the year end, these preference shares have been repaid and advanced as further TruFin Loans. These, together with a further £5 million advanced since the year end by TruFin, means that the total outstanding amount of TruFin Loans at the date of this announcement, is approximately £19 million. The TruFin Loans shall accrue interest at a rate of 5% per annum, and (i) £5,000,000 is repayable by 1 December 2019; (ii) £5,000,000 is repayable by 1 June 2020; and (iii) 8,868,219 is repayable by 1 December 2020, in each case, together with any accrued, but unpaid interest thereon.
Following completion of the Zopa Transaction but prior to the Demerger, TruFin Holdings will subscribe for £25 million of new DFC Shares pursuant to the Subscription and Share Exchange Agreement.
Completion of the Zopa Transaction shall result in the investment held by the TruFin Group being reduced by £44.5 million with a corresponding increase in cash.
TruFin will also return a minimum of £10 million to TruFin Shareholders during 2019, of which a return of at least £5 million shall be effected by 30 June 2019 and the remainder by 31 December 2019. The TruFin Board is currently considering the most appropriate arrangement to facilitate this.
4. Summary of how the Demerger is to be effected
The Demerger is to be effected by TruFin returning to TruFin Shareholders capital in an amount equal to the market value of TruFin's shareholding in DFC as at the Demerger Effective Time. The return of capital to TruFin Shareholders will be satisfied by the transfer by TruFin to DFC Holdings of its DFC Shares and the allotment and issue by DFC Holdings of 97,368,420 DFC Holdings Demerger Shares credited as fully paid to the holders of TruFin Ordinary Shares who are registered on the TruFin Share Register at the Demerger Record Time.
Subject to the passing of a resolution by TruFin Shareholders, this will involve:
- the conversion of the existing TruFin Ordinary Shares of no par value into TruFin Ordinary Shares of £1.90 each by transferring the amount to the credit of TruFin's stated capital account immediately prior to the conversion to TruFin's nominal account;
- the subdivision and redesignation of each TruFin Ordinary Share of £1.90 each into one TruFin New Ordinary Share of £0.91 each and one DFC Cancellation Share of £0.99 each credited as fully paid;
- the cancellation of the DFC Cancellation Shares and the reduction of TruFin's nominal capital account, which is expected to amount to £96.4 million in aggregate; and
- the return of capital by TruFin to TruFin Shareholders of an amount equal to the market value of TruFin's shareholding in DFC as at the Demerger Effective Time. The return of capital to TruFin Shareholders will be satisfied by the transfer by TruFin to DFC Holdings of 21,861,433 DFC Shares and the allotment and issue of 97,368,420 DFC Holdings Demerger Shares credited as fully paid by DFC Holdings to TruFin Shareholders who are registered on the TruFin Share Register at the Demerger Record Time on the basis of one DFC Holdings Ordinary Share for every one TruFin Ordinary Share then held.
DFC Holdings' share capital comprises one ordinary share and 50,000 redeemable preference shares and, therefore, the TruFin Board intends to allot and issue Redeemable Shares in TruFin prior to the Demerger becoming effective in order to ensure that the share capital of DFC Holdings mirrors as nearly as may be the share capital of TruFin as at the Demerger Record Time.
DFC Holdings will be an unquoted public limited company pending its admission to trading on AIM which is expected to take place at 8.00 a.m. on the Business Day following the Demerger.
The Demerger is conditional, inter alia, on:
- the approval by TruFin Shareholders of the Demerger Resolutions;
- completion of the Zopa Transaction and the subsequent £25 million subscription into DFC from the proceeds of the Zopa Transaction;
- the DFC Introduction Agreement not being terminated prior to the Demerger Effective Time; and
- no other events or developments occurring or existing that, in the judgment of the TruFin Board, in its sole and absolute discretion, would make it inadvisable to effect the Demerger.
Save for the approval of TruFin Shareholders, no other approvals are outstanding for the implementation of the Demerger.
Neither TruFin nor DFC Holdings will have a shareholding in the other following the Demerger.
Henry Kenner and James van den Bergh will be the only directors common to both TruFin and DFC Holdings after the Demerger.
It is proposed that an application will be made for the DFC Holdings Ordinary Shares to be admitted to trading on AIM on or around 9 May 2019.
The relationship agreement between Arrowgrass, Macquarie and TruFin will continue despite the Demerger as a result of Arrowgrass continuing to hold 73.62% of TruFin's issued share capital following the Demerger (assuming no other changes to its TruFin shareholding prior to the Demerger Effective Time).
Each of Arrowgrass and Watrium has also entered into a relationship agreement with DFC Holdings as a result of their expected shareholdings in DFC Holdings on DFC Holdings Admission, further details of which will be set out in the DFC Holdings Admission Document.
5. Exchange of shares in DFC for shares in DFC Holdings
Conditional upon and with effect on DFC Holdings Admission, the DFC Management Shareholders, TruFin EBT and DFC EBT have agreed to transfer their DFC Management Shares in exchange for the issue of the 9,273,505 DFC Holdings Ordinary Shares in DFC Holdings issued share capital on DFC Holdings Admission.
6. Summary of Zopa Transaction and Use of Proceeds
The TruFin Board has today announced that it has agreed definitive terms to sell its stake in Zopa to Arrowgrass for a total cash consideration of £44.5 million.
It had been anticipated at the time of the IPO of TruFin that Zopa would look to carry out an IPO and at that future time the Directors would consider whether to sell TruFin's interest in Zopa, subject to a satisfactory valuation being achieved and the Directors determining how the proceeds should be allocated to maximise TruFin Shareholder value. The agreement with Arrowgrass, announced today, brings forward that decision.
At the time of TruFin's IPO, TruFin's c.15% stake in Zopa was valued at £36.5 million. Since that time, Zopa has undertaken a further capital raise which led to TruFin raising the value of its stake in Zopa to £44.5 million, as previously announced on 3 August 2018. As at 31 December 2018, Zopa's carrying value was £44.5 million.
The Zopa Transaction is conditional upon the passing of the Demerger Resolutions at the General Meeting and is expected to complete upon conclusion of the General Meeting on 7 May 2019.
The total cash proceeds of the Zopa Transaction are intended to be used by TruFin for the following purposes:
- £25 million for capitalising DFC's balance sheet for lending. Accordingly, it is proposed that following completion of the Zopa Transaction but prior to the Demerger, TruFin Holdings will subscribe for £25 million of new DFC Shares pursuant to the Subscription and Share Exchange Agreement;
- £9.5 million for additional working capital to support and implement the strategy of the Continuing TruFin Group, including the costs and expenses payable by the Company relating to the Demerger;
- to return a minimum of £10 million to TruFin Shareholders during 2019, of which a return of at least £5 million shall be effected by 30 June 2019 and the remainder by 31 December 2019. The TruFin Board is currently considering the most appropriate arrangement to facilitate this.
In the event that Arrowgrass ceases to be an "Affiliate" of TruFin Holdings for the purposes of Zopa's articles of association (i.e. Arrowgrass ceases to hold directly or indirectly more than 50% of the voting rights in TruFin Holdings) such that it would be required under the articles to retransfer the shares to TruFin Holdings (and a waiver or amendment to such provisions is not obtained), Arrowgrass shall transfer the shares back to TruFin Holdings for nil consideration, whereupon the Re-Transfer Agreement entered into by TruFin Holdings and Arrowgrass on 17 April 2019 shall apply and Arrowgrass shall retain the benefit of economic rights to the shares in Zopa whilst TruFin Holdings holds the legal and beneficial ownership in such shares.
TruFin Shareholders should be aware that if the Demerger Resolutions are not approved at the General Meeting and the Zopa Transaction does not take place on or around 7 May 2019, the net proceeds of the Zopa Transaction will not be received by TruFin Holdings and the Demerger would not proceed.
If the Demerger Resolutions are not approved by the TruFin Shareholders the TruFin Board would be limited in its ability to implement the strategy of either the TruFin Group or the DFC Group. Further, the Company would be forced to seek further finance immediately, most likely through an equity fundraising with existing TruFin Shareholders. The TruFin Board believes that this fundraising route, even if it raises sufficient funds to meet the working capital requirements of the Company, could have an adverse impact on the TruFin Group's business, reputation, financial condition and/or operating results.
The Zopa Transaction constitutes a related party transaction under Rule 13 of the AIM Rules as a result of Arrowgrass ownership of 73.62% of the issued share capital of TruFin.
The Directors of TruFin, having consulted with Macquarie in its capacity as TruFin's nominated adviser for the purposes of the AIM Rules, consider the terms of the Zopa Transaction to be fair and reasonable insofar as the Company's shareholders are concerned.
7. Current trading and prospects
TruFin
2019 has commenced well and revenues for the TruFin Group (including DFC) for the first quarter ended 31 March 2019 were £3.9 million (unaudited).
Oxygen continues to win customers and the sales pipeline for 2019 remains robust.
Satago anticipates strong demand in 2019 from the partnerships it has formed. However, capital remains a constraining factor in realising this demand. Following the Demerger, together with the steps described in this announcement such as the Zopa Transaction, this will be addressed.
DFC
During the first three months of the current financial year DFC has continued to see strong demand for its product offering. This has resulted in loans advanced increasing by in excess of 25% to £143 million (unaudited) and credit lines increasing by 26% to £253 million (unaudited) for the three months to end of March 2019. This has been coupled with strong growth in the number of manufacturers and dealers signed up.
For the remainder of 2019 the Directors expect to see continuation of this strong asset growth, even if a bank licence is not obtained during the year, given the existing funding in place and assuming that the current advanced discussions on mezzanine funding successfully conclude. The potential granting of a bank licence is not expected to require significant incremental investment during the year as the governance and operating processes required are already in place.
DFC signed an initial £40 million committed senior facility with Citibank in December 2017. The senior facility with Citibank first extended to £100 million in September 2018 and earlier today was further extended to £155 million (the "Citi SFA"). Under the Citi SFA, the provision of finance to DFC is indirect; Citibank advance funds to DFC Funding No. 1 Limited ("DFC Funding") (a special purpose vehicle which is not part of the Group and over which Citibank have taken security) to enable DFC Funding to purchase loan receivables from DFC. As part of the arrangement, DFC has provided DFC Funding with a £20 million mezzanine revolving loan facility and a £5 million junior facility to allow DFC Funding to acquire from DFC certain loans made by DFC to dealers.
Information on the financial performance of DFC for the financial year ended 31 December 2018 and business outlook is contained within the DFC Holdings Admission Document, enclosed with this document.
8. Share incentive arrangements
A. Existing Share incentive arrangements
The Company has historically incentivised senior management by offering participation in the TruFin plc Performance Share Plan 2018 (the "PSP") and the TruFin plc Joint Share Ownership Plan 2018 (the "JSOP").
The TruFin plc Performance Share Plan 2018
As at the date of this announcement, options in respect of 9,276,316 TruFin Ordinary Shares have been granted under the PSP, equivalent to approximately 9.53% of TruFin's issued share capital. There are three categories of options granted under the PSP which are set out below.
PSP Market Value Awards
Options over a total of 4,868,420 TruFin Ordinary Shares were granted to the TruFin Management Team on the date of TruFin Admission in the following amounts (the "PSP Market Value Awards"), equivalent to, at the time of grant, approximately 5% of the Company's issued share capital:
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Name |
Number of TruFin Ordinary Shares |
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Henry Kenner |
2,190,789 |
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James van den Bergh |
1,703,947 |
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Jason Rogers |
486,842 |
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Raxita Kapashi |
486,842 |
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Total |
4,868,420 |
The PSP Market Value Awards have an exercise price of 190p per share and vest automatically in 20% tranches on the achievement of share price targets. The PSP Market Value Awards were a one off award made at the time of TruFin Admission and therefore further awards on the same terms have not and will not be granted in the future under the PSP. Following vesting, the PSP Market Value Awards are exercisable until the tenth anniversary of TruFin Admission. Further details in respect of the PSP Market Value Awards were set out in Part 4 of the TruFin Admission Document.
PSP Performance Awards
Nil cost options over a total of 1,000,001 TruFin Ordinary Shares were granted to the TruFin Management Team on the date of TruFin Admission in the following amounts (the "PSP Performance Awards"), equivalent to, at the time of grant, approximately 1.3% of the Company's issued share capital:
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Name |
Number of TruFin Ordinary Shares |
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Henry Kenner |
368,421 |
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James van den Bergh |
263,158 |
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Jason Rogers |
184,211 |
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Raxita Kapashi |
184,211 |
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Total |
1,000,001 |
The PSP Performance Awards vest on the third anniversary of the date of TruFin Admission to the extent that performance targets relating to the business plans of Oxygen and DFC are met. It is intended that PSP Performance Awards (or similar) will be granted annually under the PSP. Following vesting, the PSP Performance Awards are exercisable until the tenth anniversary of the date of TruFin Admission. Further details in respect of the PSP Performance Awards were set out in Part 4 of the TruFin Admission Document.
PSP Founder Awards
Nil cost options over a maximum of 3,407,895 TruFin Ordinary Shares, in aggregate, were granted to Henry Kenner and James van den Bergh (the "TruFin Founders") on the date of TruFin Admission in the following amounts (the "PSP Founder Awards"), equivalent to, at the time of grant, approximately 3.5% of the Company's issued share capital:
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Name |
Number of TruFin Ordinary Shares |
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Henry Kenner |
1,825,658 |
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James van den Bergh |
1,582,237 |
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Total |
3,407,895 |
The PSP Founder Awards vest automatically in tranches of 25% per year from the first anniversary of the date of TruFin Admission. The maximum number of TruFin Ordinary Shares that option holders are entitled to receive in connection with the PSP Founder Awards is limited. If the market value of a TruFin Ordinary Share exceeds 190p at the time of vesting, the number of TruFin Ordinary Shares subject to the vested part of the PSP Founder Award is reduced to ensure that the maximum aggregate value (at the time of vesting) of the TruFin Ordinary Shares in respect of which the PSP Founder Award has vested, is limited to 190p per TruFin Ordinary Share.
25% of the PSP Founder Awards vested on 21 February 2019, the result of which was that the award holders are entitled to exercise their PSP Founder Awards in respect of the following number of TruFin Ordinary Shares:
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Name |
Number of TruFin Ordinary Shares |
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Henry Kenner |
437,973 |
|
James van den Bergh |
379,577 |
|
Total |
817,550 |
Following vesting, the PSP Founder Awards are exercisable until the tenth anniversary of TruFin Admission. Further details in respect of the PSP Founder Awards are set out in Part 4 of the TruFin Admission Document.
Joint Share Ownership Plan 2018
Under the JSOP, award holders jointly hold TruFin Ordinary Shares with the trustee of the TruFin plc Employee Benefit Trust (the "TruFin EBT Trustee").
JSOP awards in respect of, in aggregate, 3,407,895 TruFin Ordinary Shares were awarded to Henry Kenner and James van den Bergh on the date of TruFin Admission in the following amounts (the "JSOP Founder Awards"), equivalent to, at the time of grant, approximately 3.5% of the Company's issued share capital:
|
Name |
Number of TruFin Ordinary Shares |
|
Henry Kenner |
1,825,658 |
|
James van den Bergh |
1,582,237 |
|
Total |
3,407,895 |
The JSOP Founder Awards vest automatically in tranches of 25% per year from the first anniversary of TruFin Admission. Upon vesting, the award holders become entitled to the value of the relevant TruFin Ordinary Shares over and above 190p per TruFin Ordinary Share. Further details in respect of the JSOP Founder Awards were set out in Part 4 of the TruFin Admission Document.
25% of the JSOP Founder Awards vested on 21 February 2019, the result of which was that the award holders became entitled to the value, as at the vesting date, over and above 190p per TruFin Ordinary Share in respect of 25% of the TruFin Ordinary Shares subject to the JSOP Founder Awards. Based on the closing share price of 198p per TruFin Ordinary Share on 20 February 2019, 4.04% (being the balance of the share price at vesting above 190p, expressed as a percentage) of the TruFin Ordinary Shares subject to the vested part of the JSOP Founder Awards became beneficially owned by the TruFin Founders. As a consequence, they became the beneficial holders of the following number of TruFin Ordinary Shares:
|
Name |
Number of TruFin Ordinary Shares received on vesting of 25% of the JSOP Founder Awards |
|
Henry Kenner |
18,441 |
|
James van den Bergh |
15,982 |
|
Total |
34,423 |
The balance of TruFin Ordinary Shares (being 817,550 TruFin Ordinary Shares) that were also subject to the 25% of the JSOP Founder Awards that has vested have ceased to be subject to the JSOP and are legally and beneficially held by the TruFin EBT Trustee.
The JSOP Founder Awards and the PSP Founder Awards will together deliver, in aggregate, a maximum of 3,407,895 existing TruFin Ordinary Shares.
B. Effect of the Demerger and DFC Holdings Admission on the share incentive arrangements
As a result of and in consequence of the Demerger, the Remuneration Committee have agreed with award holders that certain actions should be taken in relation to the existing share incentive arrangements. A summary of the relevant actions that it is intended are taken is set out below. The Remuneration Committee consider that the resulting outcome is fair for TruFin Shareholders and the relevant award holders in light of the Demerger and DFC Holdings Admission.
The actions that are intended to be taken are each in accordance with the terms on which the original awards were granted except that the protection from dilution in respect of the TruFin Founder Awards, and the ability for TruFin Market Value Awards holders to benefit from a return of value to TruFin Shareholders (in each case as referred to further below), have been approved of in addition by the Remuneration Committee, as set out in more detail below.
Founder Awards
The impact of the Demerger and DFC Holdings Admission on the JSOP Founder Awards and the PSP Founder Awards (the "TruFin Founder Awards") is as follows.
DFC Holdings Shares held by the TruFin EBT Trustee and the TruFin Founders
In respect of the 25% of the TruFin Ordinary Shares under the JSOP Founder Awards that have vested, as a result of the Demerger, and without any action being taken by the TruFin EBT Trustee or the TruFin Founders, the TruFin EBT Trustee will, in its sole capacity, receive 817,550 DFC Holdings Shares and the TruFin Founders will, in their respective individual capacities, receive the following number of DFC Holdings Shares:
|
Name |
Number of DFC Holdings Shares |
|
Henry Kenner |
18,441 |
|
James van den Bergh |
15,982 |
|
Total |
34,423 |
In respect of the remaining 75% of the TruFin Ordinary Shares subject to the JSOP Founder Awards that have not yet vested, as a result of the Demerger, and without any action being taken by the TruFin EBT Trustee or the TruFin Founders, the TruFin EBT Trustee and the TruFin Founders will jointly receive 2,555,922 DFC Holdings Shares as follows:
|
Name |
Number of DFC Holdings Shares |
|
Henry Kenner and TruFin EBT Trustee |
1,369,244 |
|
James van den Bergh and TruFin EBT Trustee |
1,186,678 |
|
Total |
2,555,922 |
As set out below in more detail, it has been agreed that the aggregate number of 3,373,472 DFC Holdings Shares to be received by the TruFin EBT Trustee in connection with the TruFin Founder Awards as a result of the Demerger shall cease to be subject to the terms of the JSOP and/or the PSP, and will instead be awarded to the TruFin Founders by the TruFin EBT Trustee (subject to the restrictions set out below).
Replacement Founder Awards
In order to ensure that Arrowgrass' post-Demerger shareholding (when aggregated with the shareholding of the TruFin EBT Trustee) in DFC Holdings remains below 50%, it has been agreed that the TruFin EBT Trustee will award part of the DFC Holdings Shares it receives as a result of the Demerger (and which cease to be subject to the terms of the JSOP and/or the PSP) to the TruFin Founders. The number of DFC Holdings Shares to be transferred to each of the TruFin Founders will be proportionate to the number of TruFin Ordinary Shares subject to their original TruFin Founder Awards (the "Replacement Founder Awards").
DFC Holdings Shares subject to the Replacement Founder Awards will be subject to a restriction on transfer and clawback which will cease to apply as follows:
(i) 33% of the DFC Holdings Shares shall cease to be subject to a restriction on transfer and clawback on 21 February 2020;
(ii) 33% of the DFC Holdings Shares shall cease to be subject to a restriction on transfer and clawback on 21 February 2021; and
(iii) 34% of the DFC Holdings Shares shall cease to be subject to a restriction on transfer and clawback on 21 February 2022, (each a "Relevant Date").
If the Replacement Founder Award holder ceases to be an employee or director within the TruFin Group before a Relevant Date due to death, ill-health, injury or disability, the restriction on transfer will cease to apply to the portion of the DFC Holdings Shares that are otherwise still subject to a restriction on transfer. If the Replacement Founder Award holder ceases to be an employee or director within the TruFin Group due to having resigned or given notice prior to 21 February 2021 or due to summary dismissal for gross misconduct prior to 21 February 2022, the DFC Holdings Shares subject to the Replacement Founder Award (that have not otherwise ceased to be subject to clawback) will be transferred by them to (or to any other person at the direction of) TruFin for nil consideration.
If the Replacement Founder Award holder ceases to be an employee or director (that have not otherwise ceased to be subject to clawback) within the TruFin Group for any other reason prior to a Relevant Date, the DFC Holdings Shares will cease to be subject to clawback but will remain subject to a restriction on transfer on the same basis as set out above.
In the event of a delisting, a takeover (including by way of a court sanctioned scheme of arrangement), or the voluntary winding up of DFC Holdings or TruFin, the Replacement Founder Award shall cease to be subject to a restriction on transfer and clawback.
The DFC Holdings Shares received by the TruFin EBT Trustee as a result of the Demerger that are not awarded to the TruFin Founders in connection with the Replacement Founder Awards shall be disposed of by the TruFin EBT Trustee and the proceeds will be paid to the TruFin Founders as a bonus, the whole amount of which will be used by the TruFin Founders for the purpose of funding the income tax and employee social security contributions that will arise in relation to the Replacement Founder Awards and such bonus payment.
Original TruFin Founder Awards
The PSP Founder Awards and JSOP Founder Awards in respect of the TruFin Ordinary Shares shall continue on the same terms except that any reference to the TruFin Ordinary Share price in the related terms and conditions will be appropriately adjusted by reference to the respective share price of DFC Holdings and TruFin to reflect the Demerger.
In addition, in order to reflect the original intention at the time of TruFin Admission, the Remuneration Committee has agreed that the TruFin Founders and the TruFin EBT Trustee shall be protected from dilution in respect of the TruFin Founder Awards in the event of any equity fundraising by TruFin of up to £50 million that commences on or prior to 31 December 2021.
PSP Market Value Awards
As a result of the impact that the Demerger will have on the term of the PSP Market Value Awards, it has been agreed that the PSP Market Value Awards will be split in two so that:
(i) part of the award will remain as an option in respect of TruFin Ordinary Shares (the "TruFin Market Value Awards"); and
(ii) part of the award will be replaced with an award in respect of DFC Holdings Shares (the "DFC Market Value Awards").
The TruFin Market Value Award
The TruFin Market Value Awards will be on the same terms as the original PSP Market Value Awards except that the exercise price will be appropriately adjusted by reference to the respective share price of DFC Holdings and TruFin to reflect the Demerger.
In addition, the Remuneration Committee has agreed that the TruFin Market Value Award holders will be given the opportunity to benefit from any value returned to TruFin Shareholders (following the Demerger and DFC Holdings Admission and prior to the exercise of the TruFin Market Value Awards). Where applicable, TruFin Market Value Award holders will be entitled to receive a cash payment at the time of the subsequent TruFin annual bonus cycle. Any such cash payment would be made (where relevant) in addition to any adjustment made to the exercise price and the target thresholds in connection with the return of value.
The DFC Market Value Award
The TruFin EBT Trustee will, conditional upon and immediately following the subscription by TruFin Holdings of 6,530,303 A ordinary shares in DFC, acquire 478,870 DFC Shares from TruFin for nil consideration. Such DFC Shares will, as part of the Share Exchange, be exchanged by the TruFin EBT Trustee for such number of DFC Holdings Shares as have an equivalent aggregate value (as at the time of the Share Exchange) as the DFC Shares exchanged.
The DFC Market Value Awards will comprise a restricted share award pursuant to which the award holder will hold DFC Holdings Shares in proportion to the number of TruFin Ordinary Shares subject to their original PSP Market Value Awards.
The DFC Holdings Shares subject to the DFC Market Value Awards will be provided by the TruFin EBT Trustee using part of the DFC Holdings Shares it receives as part of the Share Exchange and will be held by TruFin Management Team subject to a restriction on transfer and clawback which will cease to apply as follows:
(i) 33% of the DFC Holdings Shares shall cease to be subject to a restriction on transfer and clawback on 21 February 2020;
(ii) 33% of the DFC Holdings Shares shall cease to be subject to a restriction on transfer and clawback on 21 February 2021; and
(iii) 34% of the DFC Holdings Shares shall cease to be subject to a restriction on transfer and clawback on 21 February 2022, (each a "Relevant Date").
If the DFC Market Value Award holder ceases to be an employee or director within the TruFin Group before a Relevant Date due to death, ill-health, injury or disability, the restriction on transfer will cease to apply to the portion of the DFC Holdings Shares that are otherwise still subject to a restriction on transfer.
If the DFC Market Value Award holder ceases to be an employee or director within the TruFin Group due to having resigned or given notice prior to 21 February 2021 or due to summary dismissal for gross misconduct prior to 21 February 2022, the DFC Holdings Shares subject to the DFC Market Value Award (that have not otherwise ceased to be subject to clawback) will be transferred by them to (or to any other person at the direction of) TruFin for nil consideration.
If the DFC Market Value Award holder ceases to be an employee or director within the TruFin Group for any other reason prior to a Relevant Date, the DFC Holdings Shares (that have not otherwise ceased to be subject to clawback) will cease to be subject to clawback but will remain subject to a restriction on transfer on the same basis as set out above.
In the event of a delisting, a takeover (including by way of a court sanctioned scheme of arrangement), or the voluntary winding up of DFC Holdings or TruFin, the DFC Market Value Awards shall cease to be subject to a restriction on transfer and clawback.
The DFC Holdings Shares received by the TruFin EBT Trustee in connection with Share Exchange that are not awarded to the TruFin Management Team by the TruFin EBT Trustee in connection with the DFC Market Value Awards shall be disposed of by the TruFin EBT Trustee and the proceeds will be paid to the TruFin Founders as a bonus, the whole amount of which will be used by the TruFin Management Team for the purpose of funding the income tax and employee social security contributions that will arise in relation to the DFC Market Value Awards and such bonus payment.
PSP Performance Awards
As a result of the Demerger, the part of the performance condition relating to the business plan of DFC will be deemed to be achieved in full in accordance with the terms of the original award. To reflect this, it has been agreed that a cash payment will be made to the award holders calculated by reference to 50% of the TruFin Ordinary Shares subject to the PSP Performance Awards and a price per share of 190p. Any such cash payment will be made at the time of the TruFin annual bonus cycle in February 2020.
The PSP Performance Awards will continue on in their terms except that the performance condition will relate solely to the business plan of Oxygen.
The maximum number of TruFin Ordinary Shares in respect of which awards may be granted to the TruFin Management Team under the PSP prior to 21 February 2021 will be calculated by reference to a share price of 190p (being the TruFin Admission price) as appropriately adjusted by reference to the respective share price of DFC Holdings and TruFin to reflect the Demerger.
9. General Meeting
The General Meeting of the Company will be held at the offices of Travers Smith LLP at 10 Snow Hill, London, EC1A 2AL on 7 May 2019 at 10.00 a.m. at which the following Resolutions will be proposed.
The four Resolutions that are to be proposed at the General Meeting are:
(1) Approve the Demerger and Zopa Transaction
Resolution 1, which will be proposed as a ordinary resolution, is to approve the Demerger and Zopa Transaction for the purposes of Rule 15 of the AIM Rules;
(2) Resolution 2, which will be proposed as a special resolution, is to:
(i) Authority to allot Shares
authorise the Directors to allot the Redeemable Shares up to £50,000 in nominal value provided that such authority shall (subject to limited exceptions), expire fifteen months from the passing of the Resolution or, if earlier, the conclusion of the next annual general meeting of TruFin;
(ii) Conversion to par value shares
convert all issued TruFin Ordinary Shares of no par value into TruFin Ordinary Shares of £1.90 each;
(iii) Subdivision and redesignation
subdivide and redesignate all 97,368,421 TruFin Ordinary Shares of £1.90 each to 97,368,421 TruFin New Ordinary Shares of £0.91 each and 97,368,421 DFC Cancellation Shares of £0.99 each credited as fully paid;
(iv) Authority for TruFin Capital Reduction
approve the terms of the TruFin Reduction of Capital by the cancellation of the DFC Cancellation Shares and the reduction of the nominal capital account of TruFin;
(v) Authority to allot Redeemable Shares on a non pre-emptive basis
dis-apply TruFin Shareholders' pre-emption rights in relation to the allotment of the 50,000 Redeemable Shares to James van den Bergh provided that such authority shall (subject to limited exceptions), expire fifteen months from the passing of the Resolution or, if earlier, the conclusion of the next annual general meeting of TruFin; and
(vi) Amendment to memorandum and articles of association of TruFin amend the memorandum and articles of association of TruFin to reflect Resolutions 2(ii), (iii) and (iv).
(3) Resolution 3, which will be proposed as an ordinary resolution, is to authorise the Directors to allot relevant securities up to £29,535,088 in nominal value (representing approximately one third of the share capital of the Company following the TruFin Reduction of Capital) provided that such authority shall (subject to limited exceptions), expire fifteen months from the passing of the Resolution or, if earlier, the conclusion of the next annual general meeting of TruFin.
(4) Resolution 4, which will be proposed as a special resolution, is to dis-apply TruFin Shareholders' pre-emption rights in relation to the allotment of equity securities for cash on a non pre-emptive basis up to an aggregate nominal amount of £8,860,526 (representing 10% of the Company's issued share capital following the TruFin Reduction of Capital) provided that such authority shall (subject to limited exceptions), expire fifteen months from the passing of the Resolution or, if earlier, the conclusion of the next annual general meeting of TruFin.
Resolutions 3 and 4 are being sought by the Company to replace its existing similar authorities obtained at its annual general meeting on 19 June 2018 following the proposed conversion to par value shares pursuant to Resolution 2(ii). There is currently no intention to issue TruFin Ordinary Shares pursuant to these Resolutions.
The Demerger is not conditional upon the passing of Resolutions 3 and 4.
TruFin Shareholders should read the Notice of General Meeting that will be contained in the circular to be posted to shareholders later today for the full text of the Resolutions and for further details about the General Meeting.
10. Irrevocable Undertakings
Whilst Arrowgrass is supportive of the Demerger and Zopa Transaction, given its involvement in the Demerger and Zopa Transaction, it will abstain from voting on Resolution 1.
The Company has received an irrevocable undertaking to vote in favour of Resolution 2 from Arrowgrass holding, in total, 71,684,544 TruFin Ordinary Shares, representing, in aggregate, 73.62% of the Company's issued ordinary share capital.
11. Importance of the vote and recommendation
If the Demerger Resolutions are not approved by TruFin Shareholders and the Zopa Transaction does not complete, the TruFin Board will be limited in its ability to implement the strategy of either the TruFin Group or the DFC Group and there will be working capital risks for the TruFin Group and the DFC Group. This could have an adverse impact on the TruFin Group's and DFC Group's respective businesses, reputation, financial condition and/or operating results. Please refer to the risk factors in Part II for further details.
The Directors consider that the Resolutions are in the best interests of the Company and would promote the success of the TruFin Group for the benefit of TruFin Shareholders as a whole. Accordingly, the Directors unanimously recommend that TruFin Shareholders vote in favour of the Resolutions to be proposed at the General Meeting.
IMPORTANT NOTICES
No action has been taken by the Company, Macquarie or any of their respective affiliates, agents, directors, officers or employees that would permit an offer of the Sale Shares or possession or distribution of this announcement or any other offering or publicity material relating to such Sale Shares in any jurisdiction where action for that purpose is required.
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 Directive) to be published. Persons needing advice should consult an independent financial adviser.
THIS ANNOUNCEMENT, INCLUDING THE APPENDICES AND THE INFORMATION CONTAINED IN THEM, IS RESTRICTED AND IS NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO OR FROM THE UNITED STATES, AUSTRALIA, CANADA, JAPAN OR THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH SUCH PUBLICATION, RELEASE OR DISTRIBUTION WOULD BE UNLAWFUL. FURTHER, THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND IS NOT AN OFFER OF SECURITIES FOR SALE OR SOLICITATION OF AN OFFER TO BUY THE SECURITIES DISCUSSED HEREIN IN THE UNITED STATES, AUSTRALIA, CANADA, JAPAN OR THE REPUBLIC OF SOUTH AFRICA OR IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL. THIS ANNOUNCEMENT HAS NOT BEEN APPROVED BY THE LONDON STOCK EXCHANGE, NOR IS IT INTENDED THAT IT WILL BE SO APPROVED.
The securities referred to herein have not been and will not be registered under the US Securities Act 1933, as amended (the "Securities Act") or under the securities laws of any state or other jurisdiction of the United States, and may not be offered or sold directly or indirectly in or into 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 the securities laws of any state or any other jurisdiction of the United States. No public offering of securities is being made in the United States.
The relevant clearances have not been, nor will they be, obtained from the securities commission of any province or territory of Canada, no prospectus has been lodged with, or registered by, the Australian Securities and Investments Commission or the Japanese Ministry of Finance; the relevant clearances have not been, and will not be, obtained for the South Africa Reserve Bank or any other applicable body in the Republic of South Africa in relation to the Sale Shares and the Sale Shares have not been, nor will they be, registered under or offering in compliance with the securities laws of any state, province or territory of Australia, Canada, Japan or the Republic of South Africa. Accordingly, the Sale 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 Australia, Canada, Japan or the Republic of South Africa.
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.
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 as to, or in relation to, and no responsibility or liability is or will be accepted by Macquarie or by any of its affiliates or agents as to, or in relation to, the contents of this announcement, including its accuracy, completeness or verification or for any other statement made or purported to be made by it, or on its behalf, the Company or any other person in connection with the Company, the Zopa Transaction, the Demerger, the Vendor Placing or DFC Holdings Admission or for any other written or oral information made available to or publicly available to any interested party or its advisers, and any liability therefore is expressly disclaimed. Nothing in this announcement should be read as a promise or representation in this respect, whether or not to the past or the future. Macquarie and its affiliates and agents disclaim to the fullest extent permitted by law all and any responsibility or liability whatsoever, whether arising in tort, contract or otherwise, which it might otherwise have in respect of this announcement or any such statement.
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.
This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014 ("MAR"). The person responsible for arranging release of this information on behalf of the Company is Henry Kenner, Executive Chairman. In addition, market soundings (as defined in MAR) were taken in respect of the Zopa Transaction, the Demerger and the Vendor Placing with the result that certain persons became aware of inside information (as defined in MAR), as permitted by MAR. This inside information is set out in this announcement. Therefore, those persons that received inside information in a market sounding are no longer in possession of such inside information relating to the Company and its securities.
Information to Distributors
Solely for the purposes of the product governance requirements contained within: (a) EU Directive 2014/65/EU on markets in financial instruments, as amended ("MiFID II"); (b) Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593 supplementing MiFID II; and (c) local implementing measures (together, the "MiFID II Product Governance Requirements"), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any "manufacturer" (for the purposes of the MiFID II Product Governance Requirements) may otherwise have with respect thereto, the Sale Shares have been subject to a product approval process, which has determined that the Sale Shares are: (i) compatible with an end target market of retail investors and investors who meet the criteria of professional clients and eligible counterparties, each as defined in MiFID II; and (ii) eligible for distribution through all distribution channels as are permitted by MiFID II (the "Target Market Assessment"). Notwithstanding the Target Market Assessment, distributors should note that: the price of the Sale Shares may decline and investors could lose all or part of their investment; the Sale Shares offer no guaranteed income and no capital protection; and an investment in the Sale 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 Vendor Placing. Furthermore, it is noted that, notwithstanding the Target Market Assessment, Macquarie has only procured investors who meet the criteria of professional clients and eligible counterparties.
For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of MiFID II; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the Sale Shares.
Each distributor is responsible for undertaking its own target market assessment in respect of the Sale Shares and determining appropriate distribution channels.
PART A
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
|
Event time and/or date |
2019 |
|
Date of this announcement |
17 April |
|
Latest time and date for receipt of Forms of Proxy |
10.00 a.m. on 5 May |
|
General Meeting |
10.00 a.m. on 7 May |
|
Completion of Zopa Transaction |
on 7 May |
|
Latest time and date for lodging transfers of TruFin Shares in order for the transferee to be registered at the Demerger Record Time |
5.00 p.m. on 8 May |
|
Demerger Record Time |
5.00 p.m. on 8 May |
|
Conversion, subdivision and redesignation of the existing TruFin Ordinary Shares into the DFC Cancellation Shares and TruFin New Ordinary Shares |
6.00 p.m. on 8 May |
|
Effective Date of the TruFin Reduction of Capital |
11.00 p.m. on 8 May |
|
Demerger Effective Time (issue of DFC Holdings Demerger Shares) |
11.00 p.m. on 8 May |
|
Estimated time and date for the admission of the DFC Holdings Ordinary Shares to trading on AIM |
8.00 a.m. on 9 May |
|
CREST accounts credited with DFC Holdings Ordinary Shares (including the Sale Shares) |
8.00 a.m. on 9 May |
|
Expected date for despatch of definitive share certificates for DFC Holdings Ordinary Shares |
By 16 May |
(1) The times and dates set out in the expected timetable of principal events above and mentioned throughout this announcement may be adjusted by TruFin and DFC Holdings in consultation with Macquarie, in which event details of the new times and dates will be notified to the London Stock Exchange, and where appropriate, TruFin Shareholders.
(2) All references in this announcement to times are to British Summer Time unless otherwise stated.
PART B
TERMS AND CONDITIONS OF THE VENDOR PLACING
MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE VENDOR PLACING. THESE TERMS AND CONDITIONS ARE FOR INFORMATION PURPOSES ONLY AND ARE DIRECTED ONLY AT: (A) PERSONS IN MEMBER STATES OF THE EUROPEAN ECONOMIC AREA WHO ARE QUALIFIED INVESTORS AS DEFINED IN SECTION 86(7) OF THE FSMA, AS AMENDED, ("QUALIFIED INVESTORS") BEING PERSONS FALLING WITHIN THE MEANING OF ARTICLE 2(1)(E) OF THE EU PROSPECTUS DIRECTIVE (WHICH MEANS DIRECTIVE 2003/71/EC AND INCLUDES ANY RELEVANT MEASURE IN ANY MEMBER STATE OF THE EUROPEAN ECONOMIC AREA) ("MEMBER STATE") THAT HAS IMPLEMENTED THE DIRECTIVE (THE "PROSPECTUS DIRECTIVE"); (B) IN THE UNITED KINGDOM, QUALIFIED INVESTORS WHO ARE PERSONS WHO: (I) FALL WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 (THE "ORDER"); (II) FALL 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 AND THESE TERMS AND CONDITIONS (THE "ANNOUNCEMENT") MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THESE TERMS AND CONDITIONS RELATE IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS.
Each Placee should consult with its own advisers as to legal, tax, business and related aspects in relation to any acquisition of Sale Shares.
(a) Introduction
These terms and conditions ("Terms and Conditions") apply to persons making an offer to acquire Sale Shares under the Vendor Placing. Each person to whom these conditions apply, as described above, who confirms his agreement to Macquarie (whether orally or in writing) to acquire Sale Shares under the Vendor Placing (each a "Placee" and together, "Placees") hereby agrees with Macquarie, Arrowgrass Master Fund Ltd ("Arrowgrass"), TruFin plc ("TruFin"), the TruFin plc Employee Benefit Trust (the "TruFin EBT") and Distribution Finance Capital Holdings Plc ("DFC Holdings" and together with Macquarie, Arrowgrass, TruFin and TruFin EBT, the "Beneficiaries") to be bound by the contract note issued by Macquarie to such Placee and these Terms and Conditions, being the terms and conditions upon which Sale Shares will be sold under the Vendor Placing. A Placee shall, without limitation, become so bound if Macquarie confirms to such Placee its allocation of Sale Shares under the Vendor Placing.
Upon being notified of its allocation of Sale Shares in the Vendor Placing, a Placee shall be contractually committed to acquire the number of Sale Shares allocated to them at the Placing Price and, to the fullest extent permitted by law, will be deemed to have agreed not to exercise any rights to rescind or terminate or otherwise withdraw from such commitment. Dealing may not begin before any notification is made.
(b) Summary of the Vendor Placing
The Placing Price is 90 pence per Sale Share and the Vendor Placing comprises the sale by Arrowgrass of 19,443,907 Sale Shares and the sale by the TruFin EBT of 2,587,967 Sale Shares. All Sale Shares sold pursuant to the Vendor Placing will be sold, payable in full, at the Placing Price.
The Vendor Placing is subject to satisfaction of the conditions set out in the Sale Agreement, including DFC Holdings Admission occurring and becoming effective by no later than 8.00 am on 9 May 2019 or such later time and/or date as DFC Holdings and Macquarie may agree, being not later than 8.00 am on 16 May 2019, and neither the Sale Agreement nor the DFC Introduction Agreement having been terminated in accordance with their respective terms.
Application will be made to the London Stock Exchange for the DFC Holdings Ordinary Shares to be admitted to trading on AIM. It is expected that DFC Holdings Admission will take place and dealings in the DFC Holdings Ordinary Shares will commence on AIM at 8.00 am (London time) on 9 May 2019.
The Sale Shares will rank pari passu in all respects with the existing DFC Holdings Ordinary Shares and will rank in full for all dividends and other distributions after DFC Holdings Admission declared, made or paid on the ordinary share capital of DFC Holdings. Further details of the rights attached to the Sale Shares are set out in paragraph 3 of Part 4 of the pathfinder version of the DFC Holdings Admission Document ("Pathfinder Admission Document").
There will be no public offering of securities in the United States. The Sale Shares have not been, and will not be, registered under the US Securities Act or with any securities regulatory authority of any state or other jurisdiction of the United States. The Sale Shares may not be offered or sold, directly or indirectly, in, into or within the United States or to or for the account or benefit of any persons within the United States absent registration or an exemption from registration under the US Securities Act.
Certain restrictions that apply to the distribution of the Pathfinder Admission Document, this announcement and the Sale Shares being sold under the Vendor Placing in jurisdictions outside the United Kingdom are described in paragraph (c) below headed "Selling and transfer restrictions".
(c) Selling and transfer restrictions
The distribution of the Pathfinder Admission Document, this announcement and the offer of Sale Shares in certain jurisdictions may be restricted by law and therefore persons into whose possession this announcement and the Pathfinder Admission Document comes should inform themselves about and observe any restrictions, including those set out in the paragraphs that follow. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.
No action has been, or will be, taken in any jurisdiction that would permit a public offering of the Sale Shares, or possession or distribution of the Pathfinder Admission Document or this announcement or any other offering material in any country or jurisdiction where action for that purpose is required. Accordingly, the Sale Shares may not be offered or sold, directly or indirectly, and neither this announcement, nor the Pathfinder Admission Document nor any other offering material or advertisement in connection with the Sale Shares may be distributed or published, in or from any country or jurisdiction except under circumstances that will result in compliance with any and all applicable rules and regulations of any such country or jurisdiction.
Neither this announcement nor the Pathfinder Admission Document constitutes an offer or invitation to acquire, underwrite or dispose of, or any solicitation of any offer or invitation to acquire, underwrite or dispose of, any DFC Holdings Ordinary Shares or other securities of DFC Holdings to any person in any jurisdiction to whom it is unlawful to make such offer, invitation or solicitation in such jurisdiction. Persons who seek to participate in the Vendor Placing must inform themselves about and observe any such restrictions and must be persons who are able to lawfully receive this announcement and the Pathfinder Admission Document in their jurisdiction. Any failure to comply with any such restrictions may constitute a violation of the securities laws of any such jurisdiction. Neither this announcement nor the Pathfinder Admission Document constitutes an offer or invitation (or a solicitation of any offer or invitation) to acquire, underwrite or dispose of or otherwise deal in any DFC Holdings Ordinary Shares or other securities of DFC Holdings in the United States, Australia, Canada, the Republic of South Africa or Japan, or in any other jurisdiction in which any such offer, invitation or solicitation is or would be unlawful.
The Sale Shares have not been approved or disapproved by the US Securities and Exchange Commission, any state securities commission in the United States or any US regulatory authority, nor have any of the foregoing authorities passed upon or endorsed the merits of the offering of the Sale Shares or the accuracy or adequacy of this announcement. Any representation to the contrary is a criminal offence in the United States.
Members of the public are not eligible to take part in the Vendor Placing.
Further details of the restrictions that apply to the distribution of this announcement, the Pathfinder Admission Document and the Sale Shares being sold under the Vendor Placing in jurisdictions outside the United Kingdom are set out in the "Important Information" section of the Pathfinder Admission Document.
(d) Agreement to acquire Sale Shares
Each Placee will be deemed to have read these Terms and Conditions in their entirety.
Conditional on: (i) DFC Holdings Admission occurring and becoming effective by 8.00 am (London time) on 9 May 2019 (or such later time and/or date as DFC Holdings and Macquarie may agree, being not later than 8.00 a.m. on 16 May 2019); (ii) the Sale Agreement and the DFC Introduction Agreement being otherwise unconditional in all respects and neither having been terminated in accordance with its respective terms on or before DFC Holdings Admission; and (iii) the confirmation mentioned under paragraph (a) above, a Placee agrees to become a member of DFC Holdings and agrees to acquire Sale Shares at the Placing Price. The number of Sale Shares acquired by such Placee under the Vendor Placing shall be in accordance with the arrangements described above.
Participation in the Vendor Placing will only be available to persons who may lawfully be, and are, invited to participate by Macquarie. Macquarie and its affiliates may participate in the Vendor Placing as principal.
An offer to acquire Sale Shares, which has been communicated by a prospective Placee to Macquarie which has not been withdrawn or revoked prior to publication of this announcement, will not be capable of withdrawal or revocation immediately following the publication of this announcement without the consent of Macquarie.
Each Placee will have an immediate, separate, irrevocable and binding obligation, owed to Macquarie, to pay in cleared funds immediately on the settlement date, in accordance with the registration and settlement requirements set out below, an amount equal to the product of the Placing Price and the number of Sale Shares allocated to such Placee. Macquarie will procure the transfer of the Sale Shares to each Placee following each Placee's payment to Macquarie of such amount.
Irrespective of the time at which a Placee's allocation pursuant to the Vendor Placing is confirmed, settlement for all Sale Shares to be acquired pursuant to the Vendor Placing will be required to be made at all times and on the basis explained below.
To the fullest extent permissible by law, none of the Beneficiaries, nor any of their respective affiliates, directors or employees shall have any liability to Placees (or to any other person whether acting on behalf of a Placee or otherwise) under these Terms and Conditions. In particular, none of the Beneficiaries nor any of their respective affiliates, shall have any liability (including to the fullest extent permissible by law, any fiduciary duties) in respect of Macquarie's conduct of the Vendor Placing.
Macquarie is acting as agent for Arrowgrass and TruFin EBT and no one else in connection with the Vendor Placing and will not regard any person (whether or not a recipient of these Terms and Conditions) as a client in relation to the Vendor Placing and to the fullest extent permitted by law and applicable Financial Conduct Authority rules, neither Macquarie nor any of its affiliates will have any liability to Placees or to any person other than Arrowgrass and TruFin EBT in respect of the Vendor Placing.
(e) Allocation
Macquarie has solicited indications of interest from prospective Placees to acquire DFC Holdings Ordinary Shares in the Vendor Placing. On this basis, prospective Placees have been asked to specify the number of DFC Holdings Ordinary Shares that they are prepared to acquire at different prices. Multiple applications under the Vendor Placing are permitted.
A number of factors have been considered in deciding the Placing Price and the bases of allocation, including prevailing market conditions, the level and the nature of the demand for DFC Holdings Ordinary Shares, the objective of encouraging long‐term ownership of the DFC Holdings Ordinary Shares.
The Placing Price has been established at a level determined in accordance with these arrangements, taking into account indications of interest received from persons (including market‐makers and fund managers) connected with Macquarie. Accordingly, the Placing Price may be lower than the highest price at which all of the DFC Holdings Ordinary Shares, in respect of which indications of interest have been received or which are available for subscription or sale in the Vendor Placing, could have been accepted.
Placees will be advised verbally or by electronic mail of their allocation as soon as practicable following allocation.
(f) Payment for Sale Shares
Each Placee undertakes to pay the Placing Price for the Sale Shares acquired by such Placee in such manner as shall be directed by Macquarie. In the event of any failure by a Placee to pay as so directed by Macquarie, the relevant Placee shall be deemed hereby to have appointed Macquarie or its nominee to sell (in one or more transactions) any or all of the Sale Shares allocated to it and in respect of which payment has not been made as so directed by Macquarie and retain from the proceeds, for Macquarie's account and benefit (as agent for Arrowgrass and TruFin EBT), an amount equal to the aggregate amount owed by the Placee plus any interest due. The Placee will, however, remain liable and indemnify on demand Macquarie against any shortfall below the aggregate amount owed by it and shall be liable for stamp duty and/or stamp duty reserve tax or securities transfer tax (together with any interest or penalties) (if any) arising in respect of any such sale or sales. By agreeing to acquire Sale Shares, each Placee confers on Macquarie all such authorities and powers necessary to carry out any such sale and agrees to ratify and confirm all actions which Macquarie lawfully takes in pursuance of such sale.
The DFC Holdings Ordinary Shares will be in registered form and can be held in certificated or uncertificated form. Title to certificated DFC Holdings Ordinary Shares (if any) will be evidenced in the register of members of DFC Holdings and title to uncertificated DFC Holdings Ordinary Shares will be evidenced by entry into the operator register maintained by Equiniti Limited (the "Registrar") (which will form part of the register of members of DFC Holdings).
It is intended that allocations of Sale Shares to Placees who wish to hold Sale Shares in uncertificated form will take place through CREST on DFC Holdings Admission. It is intended that, where applicable, definitive share certificates in respect of the Sale Shares will be posted by first class post as soon as is practicable following 16 May 2019 and will be sent at the relevant Placee's risk in each case. Dealings in advance of the crediting of the relevant CREST stock account shall be at the risk of the person concerned. Prior to the despatch of definitive share certificates in respect of any Sale Shares which are not settled in CREST, transfers of those Sale Shares will be certified against the register of members of DFC Holdings. No temporary documents of title will be issued.
(g) Representations and warranties
By receiving this announcement, each Placee and, to the extent applicable, any person confirming his agreement to acquire Sale Shares on behalf of a Placee or authorising Macquarie to notify a Placee's name to the Registrar, is deemed to acknowledge, agree, undertake, represent and warrant to each of the Beneficiaries and the Registrar that:
(i) the Placee has read this announcement in its entirety and acknowledges that its participation in the Vendor Placing shall be made solely on the terms and subject to the conditions set out in these Terms and Conditions, the Sale Agreement and the articles of association of DFC. Such Placee agrees that these Terms and Conditions and the contract note issued by Macquarie to such Placee represent the whole and only agreement between the Placee and the Beneficiaries in relation to the Placee's participation in the Vendor Placing and supersedes any previous agreement between any of such parties in relation to such participation. Accordingly, all other terms, conditions, representations, warranties and other statements which would otherwise be implied (by law or otherwise) shall not form part of these Terms and Conditions. Such Placee agrees that none of the Beneficiaries, nor any of their respective officers, directors, agents or employees will have any liability for any such other information or representation and irrevocably and unconditionally waives any rights it may have in respect of any such other information or representation;
(ii) the Placee agrees that, having read this announcement and the Pathfinder Admission Document, it shall be deemed to have had notice of all information and representations contained in them, that it is acquiring Sale Shares solely on the basis of this announcement, the Pathfinder Admission Document, the final admission document to published by DFC Holdings later on the date of this announcement (the "Final Admission Document") and any supplementary admission document which may be published by DFC Holdings thereafter (as the case may be) and no other information and that in accepting a participation in the Vendor Placing it has had access to all information it believes necessary or appropriate in connection with its decision to acquire Sale Shares;
(iii) the content of this announcement and the Pathfinder Admission Document is exclusively the responsibility of TruFin, TruFin EBT, DFC Holdings and its directors and that neither Macquarie nor any person affiliated with Macquarie or acting on its behalf is responsible for or shall have any liability for any information, representation or statement contained in this announcement, the Pathfinder Admission Document, the Final Admission Document or any supplementary admission document (as the case may be), or any information previously published by or on behalf of TruFin, DFC Holdings or any member of their respective groups and will not be liable for any decision by a Placee to participate in the Vendor Placing based on any information, representation or statement contained in any such documents or otherwise;
(iv) the Placee acknowledges that no person is authorised in connection with the Vendor Placing to give any information or make any representation other than as contained in this announcement, the Pathfinder Admission, the Final Admission Document and any supplementary admission document published by DFC Holdings subsequent to the date of this announcement and, if given or made, any information or representation must not be relied upon as having been authorised by the Beneficiaries;
(v) the Placee acknowledges that time shall be of the essence as regards its obligations to settle payment for the Sale Shares and to comply with its other obligations under the Vendor Placing;
(vi) the Placee has the funds available to pay the Placing Price in respect of the Sale Shares for which it commits to acquire under the Vendor Placing;
(vii) the Placee: (i) is entitled to acquire the Sale Shares under the laws of all relevant jurisdictions; (ii) represents, warrants and undertakes that none of the Beneficiaries will infringe any laws outside the United Kingdom as a result of its agreement to acquire Sale Shares or any actions arising from the Placee's rights and obligations under the Placee's agreement to acquire Sale Shares and under the articles of association of DFC; (iii) has fully observed such laws; (iv) has the requisite capacity and authority and is entitled to enter into and to perform its obligations as an acquirer of Sale Shares and will honour such obligations; and (v) has obtained all necessary consents and authorities (including, without limitation, in the case of any person on whose behalf it is acting, all necessary consents and authorities to agree to the terms set out or referred to in this paragraph to enable it to enter into the transactions contemplated hereby and to perform its obligations in relation thereto and, in particular, if the Placee is a pension fund or investment company, it is aware of and acknowledges that it is required to comply with all applicable laws and regulations with respect to its acquisition of Sale Shares under the Vendor Placing;
(viii) the Placee has not relied on Macquarie or any person affiliated with Macquarie in connection with any investigation of the accuracy of any information contained in this announcement or the Pathfinder Admission Document or its investment decision;
(ix) in agreeing to acquire Sale Shares under the Vendor Placing, the Placee is relying on this announcement, the Pathfinder Admission Document and the Final Admission Document or any supplementary admission document (as the case may be) and not on any draft thereof or other information or representation concerning the Group, the Vendor Placing or the Sale Shares. Such Placee agrees that none of the Beneficiaries, nor their respective officers, directors, employees or agents will have any liability for any such other information or representation and irrevocably and unconditionally waives any rights it may have in respect of any such other information or representation;
(x) Macquarie is not making any recommendations to Placees or advising any of them regarding the suitability or merits of any transaction they may enter into in connection with the Vendor Placing, and each Placee acknowledges that participation in the Vendor Placing is on the basis that it is not and will not be a client of Macquarie and that Macquarie is acting as agent for Arrowgrass and TruFin EBT and no one else, and Macquarie will not be responsible to anyone for the protections afforded to its clients (including Arrowgrass and TruFin EBT), and that Macquarie will not be responsible for anyone (including Arrowgrass and TruFin EBT) for providing advice in relation to the Vendor Placing, the contents of this announcement or the Pathfinder Admission Document or any transaction, arrangements or other matters referred to therein, and Macquarie will not be responsible for anyone other than the relevant parties to the Sale Agreement and the DFC Introduction Agreement in respect of any representations, warranties, undertakings or indemnities contained in the Sale Agreement, the Introduction Agreement or for the exercise or performance of Macquarie' rights and obligations thereunder, including any right to waive or vary any condition or exercise any termination right contained therein;
(xi) save in the event of fraud on its part (and to the extent permitted by the rules of the Financial Conduct Authority), neither Macquarie nor any of its directors or employees shall be liable to a Placee for any matter arising out of the role of Macquarie as DFC Holdings's nominated adviser and broker or otherwise, and that where any such liability nevertheless arises as a matter of law each Placee will immediately waive any claim against Macquarie and any of its respective directors and employees which a Placee may have in respect thereof;
(xii) the Placee has complied with all applicable laws and such Placee will not infringe any applicable law as a result of such Placee's agreement to acquire Sale Shares under the Vendor Placing and/or acceptance thereof or any actions arising from such Placee's rights and obligations under the Placee's agreement to acquire Sale Shares under the Vendor Placing and/or acceptance thereof or under the articles of association of DFC;
(xiii) all actions, conditions and things required to be taken, fulfilled and done (including the obtaining of necessary consents) in order: (i) to enable the Placee lawfully to enter into, and exercise its rights and perform and comply with its obligations to acquire the Sale Shares under the Vendor Placing; and (ii) to ensure that those obligations are legally binding and enforceable, have been taken, fulfilled and done. The Placee's entry into, exercise of its rights and/or performance under, or compliance with its obligations under the Vendor Placing, does not and will not violate: (a) its constitutional documents; or (b) any agreement to which the Placee is a party or which is binding on the Placee or its assets;
(xiv) it understands that no action has been or will be taken in any jurisdiction by the Beneficiaries or any other person that would permit a public offering of the Sale Shares, or possession or distribution of this announcement or the Pathfinder Admission Document, in any country or jurisdiction where action for that purpose is required;
(xv) if the Placee is in the United Kingdom: (i) it is a Relevant Person and undertakes that it will acquire, hold, manage or dispose of any Sale Shares that are allocated to it for the purposes of its business; and (ii) it is acting as principal only in respect of the Vendor Placing, or, if it is acting for any other person: (a) it is and will remain liable to the Beneficiaries for the performance of all its obligations as a Placee in respect of the Vendor Placing (regardless of the fact that it is acting for another person); (b) it is both an "authorised person" for the purposes of FSMA and a "qualified investor" as defined at Article 2.1(e)(i) of the Prospectus Directive acting as agent for such person; and (c) such person is either (1) a "qualified investor" or (2) its "client" (as defined in section 86(2) of FSMA) that has engaged it to act as the client's agent on terms which enable it to make decisions concerning the Vendor Placing or any other offers of transferable securities on his behalf without reference to the client;
(xvi) if the Placee is in a Member State which has implemented the Prospectus Directive, it is: (i) a legal entity which is a "qualified investor" as defined under the Prospectus Directive; and/or (ii) otherwise permitted by law to be offered and sold Sale Shares in circumstances which do not require the publication by DFC Holdings of a prospectus pursuant to Article 3 of the Prospectus Directive or other applicable laws;
(xvii) if the Placee is in a Member State, in the case of any Sale Shares acquired by it as a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive: (x) the Sale Shares acquired by it in the Vendor Placing have not been acquired on behalf of, nor have they been acquired with a view to their offer or resale to, persons in any relevant member state other than qualified investors, as that term is defined in the Prospectus Directive, or in other circumstances falling within Article 3(2) of the Prospectus Directive and the prior consent of Macquarie has been given to the offer or resale; or (y) where Sale Shares have been acquired by it on behalf of persons in any relevant Member State other than qualified investors, the offer of those Sale Shares to it is not treated under the Prospectus Directive as having been made to such persons. For the purposes of this provision, the expression an "offer" in relation to any of the Sale Shares in any relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and any Sale Shares to be offered so as to enable an investor to decide to purchase or acquire the Sale Shares, as the same may be varied in that relevant Member State by any measure implementing the Prospectus Directive in that relevant Member State;
(xviii) to the fullest extent permitted by law, the Placee acknowledges and agrees to the disclaimers contained in this announcement and acknowledges and agrees to comply with the selling restrictions set out in the "Important Information" section of the Pathfinder Admission Document;
(xix) the Placee has not taken any action or omitted to take any action which will or may result in DFC Holdings, Macquarie, Arrowgrass or any of their respective directors, officers, agents, affiliates, employees or advisers being in breach of the legal or regulatory requirements of any territory in connection with the Vendor Placing or its acquisition of Sale Shares pursuant to the Vendor Placing;
(xx) the Sale Shares have not been and will not be registered under the US Securities Act or under the securities legislation of, or with any securities regulatory authority of, any state or other jurisdiction of the United States or under the applicable securities laws of Australia, Canada, Japan or the Republic of South Africa or any other jurisdiction outside the United Kingdom;
(xxi) the Placee is, and at the time the Sale Shares are acquired, will be located outside the United States and eligible to participate in an "offshore transaction" as defined in and in accordance with Regulation S;
(xxii) DFC Holdings is not registered under the US Investment Company Act and that DFC Holdings has put in place restrictions to ensure that it is not and will not be required to register under the US Investment Company Act;
(xxiii) the Placee is not acquiring the Sale Shares as a result of any "directed selling efforts" as defined in Regulation S or as a result of any form of "general solicitation" or "general advertising" (each within the meaning of Rule 502(c) of Regulation D under the US Securities Act);
(xxiv) if it is acquiring the Sale Shares for the account of one or more other persons, it has full power and authority to make the representations, warranties, agreements and acknowledgements herein on behalf of each such account;
(xxv) the Placee is acquiring the Sale Shares for investment purposes only and not with a view to any resale, distribution or other disposition of the Sale Shares in violation of the US Securities Act or any other securities laws of any state or other jurisdiction of the United States;
(xxvi) DFC Holdings is not obliged to file any registration statement in respect of any resales of the Sale Shares in the United States with the US Securities and Exchange Commission or with any securities administrator of any state or other jurisdiction of the United States;
(xxvii) if in the future it decides to offer, sell, transfer, assign or otherwise dispose of the Sale Shares, it will do so only in compliance with an exemption from the registration requirements of the US Securities Act and under circumstances with will not require DFC Holdings to register under the US Investment Company Act;
(xxviii) DFC Holdings, and any registrar or transfer agent or other agent of DFC Holdings, will not be required to accept the registration of transfer of any Sale Shares acquired by the Placee, except upon presentation of evidence satisfactory to DFC Holdings that the foregoing restrictions on transfer have been complied with;
(xxix) the Placee invests in or purchases securities similar to the Sale Shares in the normal course of its business and it has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in the Sale Shares;
(xxx) the Placee has conducted its own investigation with respect to DFC Holdings and the Sale Shares and has had access to such financial and other information concerning DFC Holdings and the Sale Shares as the Placee deemed necessary to evaluate the merits and risks of an investment in the Sale Shares, and the Placee has concluded that an investment in the Sale Shares is suitable for it or, where the Placee is not acting as principal, for any beneficial owner of the Sale Shares, based upon each such person's investment objectives and financial requirements;
(xxxi) the Placee or, where the Placee is not acting as principal, any beneficial owner of the Sale Shares, is able to bear the economic risk of an investment in the Sale Shares for an indefinite period and the loss of its entire investment in the Sale Shares;
(xxxii) there may be adverse consequences to the Placee under tax laws in other jurisdictions resulting from an investment in the Sale Shares and the Placee has made such investigation and has consulted such tax and other advisors with respect thereto as it deems necessary or appropriate;
(xxxiii) the Placee is not located in or a resident of the United States, Australia, Canada, Japan or the Republic of South Africa or any other jurisdiction where the offer, sale or acquisition of the Sale Shares would be unlawful and acknowledges that the Sale Shares have not been and will not be registered nor will a prospectus be prepared in respect of the Sale Shares under the securities legislation of the United States, Australia, Canada, Japan, the Republic of Ireland, the Republic of South Africa or any other jurisdiction outside of the United Kingdom and, subject to certain exceptions, the Sale Shares may not be offered or sold, directly or indirectly, in or into those jurisdictions;
(xxxiv) the Placee is 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) wherever payable by it or any other person on the acquisition by it of any Sale Shares or the agreement by it to acquire any Sale Shares;
(xxxv) in the case of a person who confirms to Macquarie on behalf of a Placee an agreement to acquire Sale Shares under the Vendor Placing and/or who authorises Macquarie to notify such Placee's name to the Registrar, that person represents that he has authority to do so on behalf of the Placee;
(xxxvi) the Placee has complied with its obligations in connection with money laundering and terrorist financing under the Proceeds of Crime Act 2002, the Terrorism Act 2000 and the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 ("Money Laundering Regulations 2017") and any other applicable law concerning the prevention of money laundering and, if it is making payment on behalf of a third party, that: (i) satisfactory evidence has been obtained and recorded by it to verify the identity of the third party; and (ii) arrangements have been entered into with the third party to obtain from the third party copies of any identification and verification data immediately on request as required by the Money Laundering Regulations 2017 and, in each case, agrees that pending satisfaction of such obligations, definitive certificates (or allocation under the CREST system) in respect of the Sale Shares comprising the Placee's allocation may be retained at Macquarie's discretion;
(xxxvii) the Placee agrees that, due to anti‐money laundering and the countering of terrorist financing requirements, the Beneficiaries may require proof of identity of the Placee and related parties and verification of the source of the payment before the application can be processed and that, in the event of delay or failure by the Placee to produce any information required for verification purposes, the Beneficiaries may refuse to accept the application and the moneys relating thereto. The Placee holds harmless and will indemnify the Beneficiaries against any liability, loss or cost ensuing due to the failure to process this application, if such information as has been required has not been provided by it or has not been provided on a timely basis;
(xxxviii) the Placee is not, and is not applying as nominee or agent for, a person which is, or may be, mentioned in any of sections 67, 70, 93 and 96 of the Finance Act 1986 (depository receipts and clearance services);
(xxxix) the Placee has complied with and will comply with all applicable provisions of FSMA with respect to anything done by the Placee in relation to the Vendor Placing in, from or otherwise involving the UK;
(xl) if the Placee is in the UK, the Placee is a person: (i) who has professional experience in matters relating to investments falling within article 19(5) of the Order; or (ii) a high net worth entity falling within article 49(2)(a) to (d) of the Order; or (iii) to whom this announcement may otherwise be lawfully communicated, and in all cases is capable of being categorised as a Professional Client or Eligible Counterparty for the purposes of the Financial Conduct Authority Conduct of Business Rules;
(xli) if the Placee is in the EEA, the person is a "Professional Client" or an "Eligible Counterparty" within the meaning of Annex ll/Article 30 of MiFID II (Directive 2014/65/EU) and is not participating in the Vendor Placing on behalf of persons in the EEA other than professional clients or persons in the UK and other Member States (where equivalent legislation exists) for whom the Placee has authority to make decisions on a wholly discretionary basis;
(xlii) the Placee is aware of the obligations regarding insider dealing in the Criminal Justice Act 1993, section 118 of FSMA and the Proceeds of Crime Act 2002 and confirms that it has complied and will continue to comply with those obligations;
(xliii) represents and warrants that its participation in the Vendor Placing would not give rise to an offer being required to be made by it or any person with whom it is acting in concert pursuant to Rule 9 of the City Code on Takeovers and Mergers;
(xliv) in the case of a person who confirms to Macquarie on behalf of a Placee an agreement to acquire Sale Shares under the Vendor Placing and who is acting on behalf of a third party, that the terms on which the Placee (or any person acting on its behalf) are engaged enable it to make investment decisions in relation to securities on that third party's behalf without reference to that third party;
(xlv) the exercise by Macquarie of any rights or discretions under the Sale Agreement or the DFC Introduction Agreement shall be within its absolute discretion and Macquarie need not have any reference to any Placee and shall have no liability to any Placee whatsoever in connection with any decision to exercise or not to exercise or to waive any such right and each Placee agrees that it shall have no rights against Macquarie or any of its directors or employees under the Sale Agreement or the DFC Introduction Agreement;
(xlvi) it irrevocably appoints any director of Macquarie as its agent for the purposes of executing and delivering to Arrowgrass, TruFin, TruFin EBT, DFC Holdings and/or the Registrar any documents on its behalf necessary to enable it to be registered as the holder of any of the Sale Shares agreed to be taken up by it under the Vendor Placing and otherwise to do all acts, matters and things as may be necessary for, or incidental to, its acquisition of any Sale Shares in the event of its failure so to do;
(xlvii) it will indemnify and hold the Beneficiaries, and their respective affiliates and agents harmless from any and all costs, claims, liabilities and expenses (including legal fees and expenses) arising out of or in connection with any breach of the representations, warranties, acknowledgements, agreements and undertakings in this paragraph (g) and further agrees that the provisions of this paragraph (g) will survive after completion of the Vendor Placing;
(xlviii) Macquarie may, in accordance with applicable legal and regulatory provisions, engage in transactions in relation to the Sale Shares and/or related instruments for its own account and, except as required by applicable law or regulation, Macquarie will not make any public disclosure in relation to such transactions;
(xlix) Macquarie and each of its respective affiliates, each acting as an investor for its or their own account(s), may bid for and/or purchase Sale Shares and, in that capacity, may retain, purchase, offer to sell or otherwise deal for its or their own account(s) in the Sale Shares, any other securities of DFC Holdings or other related investments in connection with the Vendor Placing or otherwise. Accordingly, references in this announcement and the Pathfinder Admission Document to the Sale Shares being offered, acquired or otherwise dealt with should be read as including any offer, acquisition or dealing by Macquarie and/or any of its respective affiliates, acting as an investor for its or their own account(s). None of the Beneficiaries intend to disclose the extent of any such investment or transaction otherwise than in accordance with any legal or regulatory obligation to do so;
(l) the Placee confirms that it is not and at DFC Holdings Admission will not be, an affiliate of DFC Holdings or a person acting on behalf of such affiliate and it is not acquiring Sale Shares for the account or benefit of an affiliate of DFC Holdings or of a person acting on behalf of such an affiliate;
(li) the Placee confirms that it will (or will procure that its nominee will) if applicable, make notification to DFC Holdings of the interest in its DFC Holdings Ordinary Shares in accordance with Rule 5 of the DTRs as they apply to DFC Holdings;
(lii) the Placee accepts that the allocation of Sale Shares will be determined by Macquarie in its absolute discretion following consultation with Arrowgrass and TruFin EBT (as the case may be) and that Macquarie may scale down any placing commitments on such basis as it may determine;
(liii) the Placee acknowledges that the representations, undertakings and warranties given by it as contained in the terms and conditions, where relevant, are irrevocable; and
(liv) the Placee acknowledges that the Beneficiaries, and their respective affiliates and agents will rely upon the truth and accuracy of such representations, undertakings and warranties and it agrees that if any of the representations, undertakings or warranties made or deemed to have been made by its application for Sale Shares are no longer accurate, it shall promptly notify the Beneficiaries.
The Beneficiaries will rely upon the truth and accuracy of each of the foregoing representations, warranties and undertakings.
(h) Supply and disclosure of information
If any of the Beneficiaries or the Registrar or any of their respective agents request any information about a Placee's agreement to acquire Sale Shares, such Placee must promptly disclose it to them and ensure that such information is complete and accurate in all respects.
(i) Miscellaneous
The rights and remedies of the Beneficiaries and the Registrar 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 of one will not prevent the exercise of others.
(i) On application, each Placee may be asked to disclose, in writing or orally to Macquarie:
1. if he is an individual, his nationality; or
2. if he is a discretionary fund manager, the jurisdiction in which the funds are managed or owned.
(ii) All documents will be sent at the Placee's risk. They may be sent by post to such Placee at an address notified to Macquarie.
(iii) Each Placee agrees to be bound by the articles of association of DFC (as amended from time to time) once the Sale Shares which such Placee has agreed to acquire have been acquired by such Placee.
(iv) The provisions of these Terms and Conditions may be waived, varied or modified as regards specific Placees or on a general basis by Macquarie.
(v) The contract to acquire Sale Shares and the appointments and authorities mentioned herein will be governed by, and construed in accordance with, the laws of England and Wales. For the exclusive benefit of the Beneficiaries and the Registrar, each Placee irrevocably submits to the exclusive jurisdiction of the English courts in respect of these matters. This does not prevent an action being taken against a Placee in any other jurisdiction.
(vi) In the case of a joint agreement to acquire Sale Shares, references to a "Placee" in these terms and conditions are to each of such Placees and such joint Placees' liability is joint and several.
(vii) the Beneficiaries each expressly reserve the right to modify the Vendor Placing (including, without limitation, its timetable and settlement) at any time before allocations of Sale Shares under the Placing are determined.
(viii) the Vendor Placing is subject to the satisfaction of the conditions contained in the Sale Agreement and the DFC Introduction Agreement and neither agreement having been terminated in accordance with its terms on or prior to DFC Holdings Admission. Further details of the terms of the Sale Agreement and the DFC Introduction Agreement are contained in paragraphs 11 and 14, respectively, of Part 4 of the Pathfinder Admission Document.
PART C
DEFINITIONS
In this announcement, where the context permits, the expressions set out below shall bear the following meanings:
|
"Act" |
the Companies Act 2006 |
|
"AIM" |
the market of that name operated by the London Stock Exchange |
|
"AIM Rules" |
the AIM Rules for Companies setting out the rules and responsibilities in relation to AIM companies published by the London Stock Exchange as amended from time to time |
|
"AIM Rules for Nominated Advisers" |
the AIM Rules for Nominated Advisers setting out the eligibility, ongoing obligations and certain disciplinary matters in relation to nominated advisers published by the London Stock Exchange as amended from time to time |
|
"Arrowgrass" |
Arrowgrass Master Fund Ltd |
|
"Arrowgrass Sale" |
the conditional placing by Macquarie of the Arrowgrass Sale Shares at the Placing Price pursuant to and on the terms of the Sale Agreement |
|
"Arrowgrass Sale Shares" |
19,443,907 DFC Holdings Ordinary Shares |
|
"Articles". |
the articles of association of TruFin in force at the date of this announcement |
|
"Business Day" |
a day other than a Saturday or Sunday on which banks are open for commercial business in the City of London |
|
"certificated" or "certificated form" |
the description of a share or other security which is not in uncertificated form (that is not in CREST) |
|
"Circular" |
the circular to be posted to TruFin Shareholders containing Notice of General Meeting |
|
"Company" or "TruFin" |
TruFin plc, a company incorporated in Jersey with registered number 125245 |
|
"Continuing TruFin Group" |
TruFin and its subsidiaries and subsidiary undertakings following the Zopa Transaction and completion of the Demerger, excluding DFC and TruFin's interests in Zopa |
|
"CREST" |
the relevant system (as defined in the CREST Regulations) for paperless settlement of share transfers and the holding of shares in uncertificated form which is administered by Euroclear UK & Ireland Limited |
|
"CREST Manual" |
the compendium of documents entitled CREST Manual issued by CRESTCo from time to time and comprising the CREST Reference Manual, the CREST Central Counterparty Service Manual, the CREST International Manual, the CREST Rules, CCSS Operations Manual, and the CREST Glossary of Terms |
|
"CREST Regulations" |
the Uncertificated Securities Regulations 2001 (SI 2001/3755) and the Companies (Uncertificated Securities) (Jersey) Order 1999 as amended from time to time, and any applicable rules made under those regulations |
|
"CREST Rules" |
the rules from time to time issued by CRESTCo governing the admission of securities to and the operation of the CREST UK System |
|
"CREST UK System" |
the facilities and procedures of the relevant systems of which CRESTCo is the Approved Operator pursuant to the CREST Regulations |
|
CRESTCo" |
Euroclear UK and Ireland Limited, the operator of the CREST UK System or such other person as may for the time being be approved by HM Treasury as operator under the CREST Regulations |
|
"Demerger" |
the proposed demerger of DFC from the TruFin Group to be effected by way of a capital reduction demerger on the terms and subject to the conditions set out in the Demerger Agreement |
|
"Demerger Agreement" |
the agreement between, amongst others, TruFin, DFC and DFC Holdings relating to the Demerger entered into on 17 April 2019 |
|
"Demerger Effective Time" |
The time at which the Demerger becomes effective, expected to be 11.00 p.m. on 8 May 2019 |
|
"Demerger Record Time" |
5.00 p.m. on 8 May 2019 |
|
"Demerger Resolutions" |
the resolutions numbered 1 and 2 set out in the Notice of General Meeting |
|
"DFC" |
Distribution Finance Capital Limited, a company incorporated in England and Wales with registered number 10198535 |
|
"DFC Business" |
DFC's business of being a lender focused on financing supply chains in the UK |
|
"DFC Cancellation Shares" |
B ordinary shares of £0.99 each in the capital of TruFin having the right to all income and capital derived from TruFin's holding of DFC Shares |
|
"DFC EBT" |
the trustee of the employee benefit trust of DFC |
|
"DFC Group" |
DFC and, with effect from the Demerger Effective Time, DFC Holdings and DFC |
|
"DFC Holdings" |
Distribution Finance Capital Holdings plc |
|
"DFC Holdings Admission" |
the admission to trading on AIM of the DFC Holdings Ordinary Shares |
|
"DFC Holdings Admission Document" |
the document comprising an admission document relating to DFC Holdings for the purposes of the DFC Holdings Admission (together with any supplements or amendments thereto) |
|
"DFC Holdings Board" |
the board of directors of DFC Holdings from time to time |
|
"DFC Holdings Demerger Shares" |
the 97,368,420 DFC Holdings Ordinary Shares to be issued pursuant to the Demerger |
|
"DFC Holdings Ordinary Shares" |
ordinary shares of one pence each in the capital of DFC Holdings |
|
"DFC Introduction Agreement" |
the conditional introduction agreement between (i) Macquarie; (ii) DFC Holdings; (iii) the DFC Holdings Board and (iv) the Company entered into on 17 April 2019 in connection with DFC Holdings Admission |
|
"DFC Management Shareholders" |
Chris Dailey, Andrew Stafferton, Adrian Tilley, David Burton, Desmond McNamara, Gavin Morris, Paul Atherton, Philip Tarimo, Stephen Brown and Steve Reynolds |
|
"DFC Management Shares" |
The shares held by the DFC Management Shareholders, TruFin EBT and DFT EBT in the capital of DFC |
|
"DFC Shares" |
A ordinary shares of £0.001 each in the capital of DFC |
|
"Directors" or "TruFin Board" |
the directors of the Company |
|
"Equity Book Value" |
£80 million, being the equity book value of £55 million of DFC set out in the audited accounts of DFC as at 31 December 2018 together with the £25 million subscription into DFC to be made by TruFin following the completion of the Zopa transaction |
|
"Form of Proxy" |
the form of proxy accompanying the Circular for use in connection with the General Meeting |
|
"FCA" |
the UK Financial Conduct Authority |
|
"General Meeting" |
the general meeting (or any adjournment thereof) of the TruFin Shareholders to be convened pursuant to the Notice of General Meeting set out at the end of this document |
|
"HMRC" |
HM Revenue & Customs |
|
"IFRS" |
International Financial Reporting Standards, as adopted for use in the European Union |
|
"London Stock Exchange" |
London Stock Exchange plc |
|
"New Articles" |
the new articles of association of the Company to be adopted pursuant to Resolution 2(vi)(a) |
|
"Nominated Adviser", "Nomad" or "Macquarie" |
the Company's nominated adviser, Macquarie Capital (Europe) Limited |
|
"Notice of General Meeting" |
the notice convening the General Meeting contained in the Circular |
|
"Overseas Shareholders" |
TruFin Shareholders with registered addresses outside the UK and Jersey or who are incorporated in, registered in or otherwise resident or located in, countries outside the UK and Jersey |
|
"Oxygen" |
Oxygen Finance Group Limited and its subsidiary undertakings |
|
"Placees" |
purchasers for the Sale Shares, as procured by Macquarie pursuant to the Sale Agreement |
|
"Placing Price" |
90 pence per Sale Share |
|
"PRA" |
Prudential Regulatory Authority |
|
"Redeemable Shares" |
the 50,000 redeemable shares of £1 each in the capital of the Company to be allotted and issued as part of the Demerger |
|
"Registrar of Companies" |
the Jersey Registrar of Companies |
|
"Remuneration Committee" |
the remuneration committee of the TruFin Board |
|
"Resolutions" |
each of the resolutions which are set out in the Notice of General Meeting |
|
"Re-transfer Agreement" |
the re-transfer agreement entered into by TruFin Holdings and Arrowgrass on 17 April 2019 in relation to the Zopa Transaction |
|
"Sale Agreement" |
the conditional agreement dated 17 April 2019 between (i) Macquarie; (ii) the TruFin EBT; (iii) Arrowgrass and (iv) DFC Holdings relating to the TruFin EBT Sale and the Arrowgrass Sale |
|
"Sale Shares" |
the Arrowgrass Sale Shares and the TruFin EBT Shares |
|
"Satago" |
Satago Financial Solutions Limited and its subsidiary undertakings |
|
"SDRT" |
stamp duty reserve tax |
|
"Share Exchange" |
the exchange of the shares held in DFC by DFC Management, the TruFin EBT and the DFC EBT for 9,273,505 DFC Holdings Ordinary Shares in accordance with the Subscription and Share Exchange Agreement |
|
"Subscription and Share Exchange Agreement" |
the subscription and share exchange agreement dated 17 April 2019 between the DFC Management Shareholders, TruFin EBT, DFC EBT, DFC and DFC Holdings relating to a subscription for new A ordinary shares in DFC and the Share Exchange |
|
"subsidiary" |
has the meaning given in section 1159 of the Act |
|
"subsidiary undertaking" |
has the meaning given in section 1162 of the Act |
|
"TruFin" Admission" |
admission of the entire issued share capital of TruFin to trading on AIM on 21 February 2018 |
|
"TruFin Admission Document" |
the document dated 13 February 2018 and published by TruFin in connection with TruFin Admission |
|
"TruFin EBT" |
the trustee of the TruFin Employee Benefit Trust |
|
"TruFin EBT Sale" |
the conditional placing by Macquarie of the TruFin EBT Sale Shares at the Placing Price pursuant to and on the terms of the Sale Agreement |
|
"TruFin EBT Sale Shares" |
2,587,967 DFC Holdings Ordinary Shares |
|
"TruFin Group" |
in respect of any period prior to the Demerger Effective Time, TruFin and its subsidiaries and subsidiary undertakings (including DFC but excluding TruFin's interests in Zopa following the Zopa Transaction and, in respect of any period following the Demerger Effective Time, the Continuing TruFin Group |
|
"TruFin Holdings". |
TruFin Holdings Limited, a wholly-owned subsidiary of the Company |
|
"TruFin Management Team" |
Henry Kenner, James van den Bergh, Raxita Kapashi and Jason Rogers |
|
"TruFin New Ordinary Shares" |
ordinary shares of £0.91 each in the capital of TruFin following the conversion to par value, subdivision and redesignation pursuant to Resolution 2 |
|
"TruFin Ordinary Shares" |
the existing ordinary shares of no par value each in the capital of TruFin |
|
"TruFin Reduction of Capital". |
the proposed reduction of capital by TruFin by the cancellation of the DFC Cancellation Shares and the reduction of TruFin's nominal capital account |
|
"TruFin Share Register" |
the register of members of the Company |
|
"TruFin Shareholders" |
the holders from time to time of TruFin Ordinary Shares or TruFin New Ordinary Shares, as applicable |
|
"Vendor Placing" |
the placing of the Sale Shares by Macquarie with Placees pursuant to the terms and conditions set out in part B of this announcement |
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