Proposed fundraising of £8.6 million

Published on 4/10/2017

THIS ANNOUNCEMENT, INCLUDING THE APPENDIX AND THE INFORMATION CONTAINED HEREIN, IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, NEW ZEALAND, SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL. PLEASE SEE THE IMPORTANT NOTICES AT THE END OF THIS ANNOUNCEMENT.

This announcement contains inside information as defined in EU Regulation No. 596/2014 and is in accordance with the Company’s obligations under Article 17 of that Regulation.

Nanoco Group PLC

Proposed fundraising of £8.6 million

Highlights:

• £8.6 million fundraise at 18 pence per share
• The Issue Price of 18 pence represents a discount of approximately 35.7 per cent. to the closing mid-market price of 28 pence per share on 3 October 2017, the latest practicable date prior to the date of this announcement
• Agreed subscription by LOAM funds for the full £8.6 million
• LOAM funds subscription subject to 50 per cent. scale back
• Scaled-back shares to be offered to institutional investors by way of an accelerated bookbuild (conducted by Peel Hunt), which will open with immediate effect, and to Directors and senior management by way of direct subscription with the Company
• Directors and senior management have committed to subscribe for up to 1,281,505 shares (subject to scale-back depending on demand in the ABB), resulting in a maximum subscription by LOAM funds of £8.3 million
• Fundraising conditional upon, amongst other things, shareholder approval
• Proceeds of the Fundraise to be used to allow the Group to retain its existing manufacturing facility at Runcorn, improve the efficiency of its operations and deliver the business plan
• Fundraising to fund the Company beyond July 2019

Michael Edelman, Chief Executive Officer, commented:

“I am delighted we are set to secure the funding which will fully support the Company as we commercialise our technology and take advantage of large and growing market opportunities.

The Board appreciates the patience of shareholders and has worked hard to secure the terms of this important fundraising, which we believe to be in the best interests of the Company and its shareholders as a whole.

We are greatly encouraged by the support of our existing investors, their confidence in Nanoco’s strategy and recognition of the immense potential of our technology.”

The person responsible for arranging for the release of this announcement on behalf of the Company is David Blain, Chief Financial Officer.

Introduction

The Board of Nanoco Group PLC (“Nanoco” or the “Company” or, together with its subsidiary undertakings, the “Group”) announces that it has conditionally raised £8.6 million (before expenses) by way of a subscription by Lombard Odier Asset Management (USA) Corp (“LOAM”) acting in its capacity as discretionary investment manager and agent of certain funds (the “LO Funds”) who have agreed to subscribe for up to 47,655,821 new ordinary shares of 10 pence each in the capital of the Company (“Ordinary Shares”) (the “Fundraising Shares”) at a price of 18 pence per Ordinary Share (“Issue Price”) subject to scale back of up to 23,827,910 new Ordinary Shares (the “Placing Shares”), which are being offered to other institutional investors at the Issue Price through a placing (the “Placing”) by way of an accelerated bookbuilding process (the “Bookbuild”) (which will be launched immediately following this announcement) and also to Directors and senior management of the Company at the Issue Price who are participating in the Fundraising by way of a direct subscription with the Company (the “Fundraising”). The Issue Price represents a discount of approximately 35.7 per cent. to the middle market price of 28 pence per Ordinary Share on 3 October 2017, being the latest practicable date prior to the publication of this announcement.

Peel Hunt LLP (“Peel Hunt”) is acting as sole bookrunner on the Placing. The timing for the close of the bookbuild process is at the discretion of Peel Hunt. Any institutional investors wishing to participate in the Placing should contact Peel Hunt (see details above).

The Directors and certain senior managers of the Company have committed to participate in the Fundraising by subscribing for up to 1,281,505 Ordinary Shares of the 23,827,910 Ordinary Shares being offered pursuant to the scale back of LOAM’s subscription. However this commitment may be scaled back to accommodate demand in the Bookbuild (see further details below). As a result of this commitment, the maximum number of Ordinary Shares that could be issued to the LO Funds is 46,374,316.

The net proceeds of the Fundraising will allow the Group to retain its existing manufacturing facility at Runcorn, improve the efficiency of its operations, deliver the business plan and eliminate any going concern issues. Following the Fundraising the Board forecasts the Company will have cash resources extending beyond 31 July 2019, even in a downside scenario which assumes no sales or grant income, and average monthly operating costs of approximately £670k from October 2017 to July 2018, that then reduce from August 2018 by cost reductions, which are within the Company’s control, of approximately £150k per month.

The Fundraising is conditional, amongst other things, upon the Company obtaining shareholder approval for the issue of shares pursuant to the Fundraising on a non pre-emptive basis and the Issue Price (as further described below). A circular (the “Circular”), which requires approval by the FCA, will (conditional on FCA approval being received) be sent to shareholders in due course in connection with the Fundraising convening a general meeting (the “General Meeting”), to be held on or before 30 November 2017 at the latest.

In the event that the Fundraising becomes unconditional, the Company will have 285,934,927 Ordinary Shares in issue (excluding 12,222 treasury shares) (the “Enlarged Share Capital”).

The Board considers the Fundraising to be in the best interests of the Company and its shareholders as a whole and it intends to unanimously recommend that shareholders vote in favour of the resolutions to be proposed at the General Meeting (the “Resolutions”).

The Directors and senior management of the Company who have committed to subscribe for new Ordinary Shares and who (directly or indirectly) hold Ordinary Shares have given irrevocable commitments to the Company in respect of their entire legal and beneficial holdings of Ordinary Shares to vote in favour of the Resolutions amounting, in aggregate, to 16,088,941 Ordinary Shares representing approximately 6.8 per cent. of the Company’s issued share capital (excluding treasury shares).

In addition, LOAM has undertaken to the Company to use its best endeavours to procure that each of the LO Funds that holds Ordinary Shares, which as at today’s date hold an aggregate of 726,652 Ordinary Shares representing approximately 0.3 per cent of the Company’s issued share capital (excluding treasury shares), votes in favour of the Resolutions in respect of any Ordinary Shares held by them as at the date of the General Meeting. In addition, Lombard Odier Asset Management (Europe) Limited has undertaken to the Company to use its best endeavours to procure that each of the funds managed by it, which as at today’s date hold an aggregate of 32,636,495 Ordinary Shares representing approximately 13.7 per cent. of the Company’s issued share capital (excluding treasury shares), votes in favour of the Resolutions in respect of any Ordinary Shares held by them as at the date of the General Meeting. The LO Funds are interested in an additional 2,479,231 Ordinary Shares, representing approximately 1.0 per cent. of the Company’s issued share capital (excluding treasury shares), under financial instruments which do not confer voting rights.

Whilst the Board believes that alternative sources of funding may be available to the Group, it is of the view that, if available, the terms associated with any such alternative funding would be significantly more onerous than the terms of the Fundraising.  In addition, there can be no guarantee that such alternative financing will be available to the Group. It is therefore of the utmost importance that shareholders vote in favour of the Resolutions. If the Resolutions are not passed by Shareholders at the General Meeting and the Fundraising does not proceed, the Company will need to seek alternative sources of funding but, given the current stage of the Company’s development, this outcome is unlikely to be favourable to shareholders.

Use of proceeds

In order to fulfil sales generated through the commercial agreements anticipated in the first half of the Company’s 2018 financial year (ending 31 July 2018) and beyond, the Company needs to maintain and potentially expand (as demand dictates) its Runcorn manufacturing facility.

Furthermore, R&D resource needs to be reinstated as innovation is critical to success in the display industry. The Company needs to continue to improve, expand and protect its substantial patent portfolio in order to stay ahead of the competition. In particular, the Company has a strong R&D pipeline including CFQD film (a current product), CFQD colour filter (3 – 5 years to develop) and CFQLED (5+ years to develop). Beyond display products, the Company has opportunities in industries including lighting and life sciences.

As such, the Company intends to use the net proceeds it receives from the Fundraising to eliminate any going concern issues and provide sufficient working capital for its needs including:

• To retain and enhance the Runcorn production facility in order to exploit significant sales opportunities;
• To improve the negotiating position opposite customers from a strong balance sheet position;
• To reinstate diminished research and development resources in order to stay ahead of competition by way of the following;
  • Exploiting current film technology by maintaining a competitive edge; and
  • Investing in next generation CFQD based display technology focusing on colour filters and electroluminescent displays.
• To continue to strengthen and protect the Company’s substantial intellectual property portfolio; and
• To eliminate going concern issues and to provide working capital to help exploit the future opportunity of the CFQD platform in other markets including;
  • Life sciences (GMP toxicology testing);
  • Lighting; and
  • 2 Dimensional materials.

Following the Fundraising, the Board forecasts the Company will have cash resources extending beyond 31 July 2019, even in a downside scenario which assumes no sales or grant income, and average monthly operating costs of approximately £670k from October 2017 to July 2018, that then reduce from August 2018 by cost reductions, which are within the Company’s control, of approximately £150k per month.

Current trading

The Directors confirm that, since the announcement made by the Company on 25 August 2017 regarding its full year performance for FY17 and its outlook for FY18, the business has continued to trade in line with the Board’s expectations.

Principal terms and conditions of the Fundraising

The “LO Subscription”

LOAM as agent for the LO Funds has agreed to subscribe in full for the Fundraising Shares at the Issue Price equivalent to a cash subscription of approximately £8.6 million (the “Agreed Subscription”). LOAM has also agreed that the subscription for the Fundraising Shares shall be capable of being scaled back at the determination of the Company by up to an aggregate 23,827,910 new Ordinary Shares to allow participation in the Fundraising by: (i) the Directors and other senior management of the Company; and (ii) other institutional shareholders pursuant to the Placing. The LO Funds’ subscription shall not be capable of being less than 23,827,911 new Ordinary Shares, equivalent to a cash subscription of £4.3 million. In view of the commitment by those Directors and senior managers of the Company who have agreed to subscribe for Ordinary Shares as detailed above, the maximum number of Ordinary Shares that could be subscribed for by the LO Funds is 46,374,316 equating to a maximum cash subscription of approximately £8.3 million.

In consideration for entering into this agreement (the “LO Subscription Agreement”) and agreeing to subscribe in full for the Fundraising Shares, LOAM will receive reimbursement of certain transaction expenses together with, conditional upon admission of the Fundraising Shares to listing on the premium listing segment of the Official List and to trading on the Main Market (“Admission”), a subscription commission of £150k, equivalent to approximately 1.75 per cent of the Agreed Subscription (the “Subscription Commission”). In the event that Admission does not occur, LOAM will not receive any commission payment.

In the event that the LO Subscription Agreement becomes unconditional in accordance with its terms, funds managed by LOAM (and its affiliates) will be interested in between 20.9 per cent and 28.8 per cent. of the Enlarged Share Capital, depending on the number of Fundraising Shares issued to them.

Given the level of their holding of Ordinary Shares immediately following Admission, the Company has agreed, with effect from Admission and for such time as funds managed by LOAM (and its affiliates) continue to be interested in not less than 20 per cent of the Ordinary Share capital of the Company, for LOAM to have the right to nominate a non-executive director to the Board.

LOAM may (acting reasonably) terminate the Subscription Agreement at any time up to and including Admission in certain circumstances, including (amongst others) a breach of the warranties given to LOAM, the occurrence of any material adverse change in the condition, financial or otherwise, or in the earnings, assets, liabilities, cash flows, business, operations or prospects of the Company or the Group taken as a whole, the occurrence of a force majeure event or the Company not having complied with its obligations under the Subscription Agreement. The Placing Agreement will terminate on termination of the Subscription Agreement. If LOAM exercises its right to terminate the Subscription Agreement then the Fundraising will not proceed.

The Placing

The Bookbuild will open with immediate effect following this announcement. The Placing will be executed in accordance with the terms of the conditional agreement dated 4 October 2017 made between the Company and Peel Hunt (the “Placing Agreement”) under which, subject to the conditions set out therein, Peel Hunt has agreed to use its reasonable endeavours to procure subscribers for the Placing Shares at the Issue Price and as set out in the Placing Agreement. The Placing is subject to the terms and conditions set out in the appendix to this Announcement (the “Appendix”). The Placing is not being underwritten.

The number of Placing Shares will be determined by the Company in consultation with Peel Hunt at the close of the Bookbuild. The timing of the closing of the Bookbuild and allocations are at the discretion of Peel Hunt and the Company. Details of the number of Placing Shares will be announced as soon as practicable after the closing of the Bookbuild.

The Placing is conditional on, inter alia, each of the conditions to the Fundraising (as described below) and the Placing Agreement becoming unconditional in all respects and not having been terminated in accordance with its terms prior to the relevant time of Admission.

Under the Placing Agreement, the Company has agreed to pay a corporate finance fee and placing commission to Peel Hunt, together with reimbursement of certain costs and expenses. Peel Hunt is entitled, in certain circumstances, to terminate the Placing Agreement prior to Admission.

This Announcement should be read in its entirety. In particular, your attention is drawn to the “Important Notices” section of this Announcement, and to the detailed terms and conditions of the Placing and further information relating to the Bookbuild described in the Appendix. By choosing to participate in the Placing and by making an oral and legally binding offer to acquire Placing Shares, investors will be deemed to have read and understood this Announcement in its entirely and to be making such offer on the terms and subject to the conditions in it, and to be providing the representations, warranties and acknowledgements contained in the Appendix.

The Director and Senior Management Subscription

Certain of the Directors and other senior management of the Company have committed to subscribe at the Issue Price for, in aggregate, 1,281,505 new Ordinary Shares pursuant to a direct subscription with the Company (the “Director and Senior Management Subscription”). However this commitment may be scaled back to accommodate demand in the Bookbuild. The number of Ordinary Shares to be issued pursuant to the Director and Senior Management Subscription will be determined at the discretion of the Company in consultation with Peel Hunt as part of the Bookbuild process and allocation of Placing Shares in the Placing. Details of the number of Ordinary Shares to be issued pursuant to the Director and Senior Management Subscription will be announced as soon as practicable after the closing of the Bookbuild.

The Fundraising Shares

The Fundraising Shares will, when issued, be credited as fully paid and will rank pari passu in all respects with the existing issued Ordinary Shares. This includes the right to receive all dividends and other distributions declared or paid in respect of such Ordinary Shares after the date of issue of the Fundraising Shares.

The Fundraising Shares will be issued, whether pursuant to the subscription by the LO Funds, the Placing or the Director and Senior Management Subscription, at the Issue Price which represents a discount of approximately 35.7 per cent to the closing mid-market price of 28 per Ordinary Share on 3 October 2017, being the latest practicable date prior to the publication of this announcement.

Given the level of the discount at which it is proposed the Fundraising Shares are issued, shareholders will be asked to approve the issue of the Fundraising Shares at the Issue Price pursuant to a resolution to be set out in the Circular.

The Fundraising Shares will represent 16.7 per cent of the Enlarged Share Capital.

Conditions to the Fundraising

The Fundraising is conditional, amongst other things, upon:

• the approval by the FCA of the Circular;
• the passing by the requisite majority of the Company’s shareholders of resolutions to (a) grant authorities to the Directors to allot further shares for cash on a non-pre-emptive basis;  and (b) approve the Issue Price;
• the LO Subscription Agreement becoming unconditional in all respects and not having been terminated in accordance with its terms; and
• Admission,

in each case by no later than 30 November 2017.

Admission

Application will be made for the Fundraising Shares to be admitted to the premium listing segment of the Official List of the Financial Conduct Authority and to trading on the main market for listed securities of the London Stock Exchange plc. It is expected that Admission will occur immediately following the day on which the General Meeting is held, provided that Admission shall occur no later than 30 November 2017. It is currently anticipated that Admission will occur in November 2017.

Right to nominate a non-executive director

Conditionally upon Admission and for so long as funds managed by LOAM (and its affiliates) are interested in not less than 20 per cent of the Ordinary Share capital of the Company, LOAM shall have the right to nominate a non-executive director to the Board. Any such nomination shall be subject to approval by the nominations committee of the Board whilst the appointment of such nominee will, following appointment to the Board, be subject to approval by Shareholders at the next following annual general meeting of the Company if required by the Company’s articles and thereafter such nominee will be subject to retirement by rotation in accordance with the Company’s articles.

Smaller related party transaction

The commitment by one of the Directors, Brendan Cummins, to subscribe for Ordinary Shares pursuant to the Director and Senior Management Subscription is a smaller related party transaction falling within Listing Rule 11.1.10R because his commitment to subscribe for a maximum of 277,777 Ordinary Shares for maximum aggregate subscription proceeds of £49,999 exceeds the 0.25% threshold as set out in LR11.1.10R. This announcement is being made in accordance with Listing Rule 11.1.10R(c).

In the event that Brendan Cummins is issued the maximum number of Ordinary Shares which he has committed to subscribe for, he will hold 0.1 per cent. of the Enlarged Share Capital.

Important Information

The information contained within this Announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (Regulation 596/2014). Upon the publication of this Announcement via a Regulatory Information Service this inside information is now considered to be in the public domain.

This Announcement has been issued by and is the sole responsibility of the Company.

This Announcement, including the Appendix, and the information contained herein is not for release, publication or distribution, directly or indirectly, in whole or in part, in or into or from the United States, Canada, Australia, Japan, the Republic of South Africa or any other jurisdiction where to do so might constitute a violation of the relevant laws or regulations of such jurisdiction.

This Announcement does not constitute or form part of any offer to sell, or any solicitation of an offer to buy, securities in the United States. Securities may not be offered or sold in the United States absent: (i) registration under the Securities Act of 1933 (the “Securities Act”); or (ii) an available exemption from registration under the Securities Act. The Placing Shares have not been and will not be registered under the Securities Act or under the securities laws of any state or other jurisdiction of the United States and may not be offered, sold, resold or delivered, directly or indirectly, in or into the United States absent registration except pursuant to an exemption from or in a transaction not subject to the registration requirements of the Securities Act. No public offering of the Placing Shares is being made in the United States.

This Announcement does not constitute an offer to sell or issue or a solicitation of an offer to buy or subscribe for Placing Shares in any jurisdiction including, without limitation, the United States, Canada, Australia, Japan, the Republic of South Africa or any other jurisdiction in which such offer or solicitation is or may be unlawful (a “Prohibited Jurisdiction”). This Announcement and the information contained herein are not for publication or distribution, directly or indirectly, to persons in a Prohibited Jurisdiction unless permitted pursuant to an exemption under the relevant local law or regulation in any such jurisdiction. No action has been taken by the Company or Peel Hunt or any of their respective affiliates that would permit an offer of the Placing Shares or possession or distribution of this Announcement or any other publicity material relating to such Placing Shares in any jurisdiction where action for that purpose is required. Persons receiving this Announcement are required to inform themselves about and to observe any such restrictions.

This Announcement is directed at and is only being distributed to: (A) persons in member states of the European Economic Area who are “qualified investors”, as defined in article 2.1(e) of the Prospective Directive (Directive 2003/71/EC) as amended; (B) if in the United Kingdom, persons who (i) have professional experience in matters relating to investments who fall within the definition of “investment professionals” in article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 as amended (the “Order”) or fall within the definition of “high net worth companies, unincorporated associations etc” in article 49(2)(a) to (d) of the Order and (ii) are “qualified investors” as defined in section 86 of the  Financial Services and Markets Act 2000 (“FSMA”); or (C) otherwise to persons to whom it may otherwise lawfully be communicated (each, a “Relevant Person”). No other person should act or rely on this Announcement and persons distributing this Announcement must satisfy themselves that it is lawful to do so. By accepting the terms of this Announcement, you represent and agree that you are a Relevant Person.

Persons (including, without limitation, nominees and trustees) who have a contractual or other legal obligation to forward a copy of this Announcement should seek appropriate advice before taking any action.

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.

Peel Hunt, which is authorised and regulated in the United Kingdom by the FCA, is acting exclusively for the Company and no-one else in connection with the Placing or the matters referred to in this Announcement, will not regard any other person as its client in relation to the Placing and will not be responsible to anyone other than the Company for providing the protections afforded to their respective clients or for providing advice in relation to the Placing or any transaction or arrangement referred to in this Announcement.

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 Peel Hunt or by any of its affiliates or agents as to or in relation to, the accuracy or completeness of this Announcement or 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.

Certain statements in this Announcement are forward-looking statements which are based on the Company’s expectations, intentions and projections regarding its future performance, anticipated events or trends and other matters that are not historical facts. These statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Given these risks and uncertainties, prospective investors are cautioned not to place undue reliance on forward-looking statements. Forward-looking statements speak only as of the date of such statements and, except as required by applicable law, the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. The information contained in this Announcement is subject to change without notice and neither the Company nor Peel Hunt assume any responsibility or obligation to update publicly or review any of the forward-looking statements contained herein.

APPENDIX – TERMS AND CONDITIONS OF THE PLACING

IMPORTANT INFORMATION FOR INVITED PLACEES ONLY REGARDING THE PLACING.

MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. ALL OFFERS OF THE PLACING SHARES WILL BE MADE PURSUANT TO AN EXEMPTION UNDER DIRECTIVE 2003/71/EC (AND AMENDMENTS THERETO), AND INCLUDING ANY RELEVANT IMPLEMENTING MEASURE, IN THE RELEVANT MEMBER STATE OF THE EEA (THE PROSPECTUS DIRECTIVE), FROM THE REQUIREMENT TO PRODUCE A PROSPECTUS FOR OFFERS OF THE PLACING SHARES. THIS ANNOUNCEMENT AND THE TERMS AND CONDITIONS SET OUT IN THIS ANNOUNCEMENT ARE FOR INFORMATION PURPOSES ONLY AND ARE DIRECTED ONLY AT PERSONS WHO ARE: (A) PERSONS IN AN EEA MEMBER STATE WHICH HAS IMPLEMENTED THE PROSPECTUS DIRECTIVE (A RELEVANT MEMBER STATE), UNDER THE FOLLOWING EXEMPTIONS UNDER THE PROSPECTUS DIRECTIVE, IF AND TO THE EXTENT THEY HAVE BEEN IMPLEMENTED IN THAT RELEVANT MEMBER STATE: (I) TO ANY LEGAL ENTITY WHICH IS A QUALIFIED INVESTOR AS DEFINED IN THE PROSPECTUS DIRECTIVE; (II) TO FEWER THAN 150 NATURAL OR LEGAL PERSONS (OTHER THAN QUALIFIED INVESTORS AS DEFINED IN THE PROSPECTUS DIRECTIVE), AS PERMITTED UNDER THE PROSPECTUS DIRECTIVE; OR (III) IN ANY OTHER CIRCUMSTANCES WHICH DO NOT REQUIRE THE PUBLICATION BY THE COMPANY OF A PROSPECTUS PURSUANT TO ARTICLE 3 OF THE PROSPECTUS DIRECTIVE, PROVIDED THAT NO SUCH OFFER TO THE PUBLIC SHALL RESULT IN A REQUIREMENT FOR THE PUBLICATION BY THE COMPANY OR PEEL HUNT OF A PROSPECTUS PURSUANT TO ARTICLE 3 OF THE PROSPECTUS DIRECTIVE; AND (B) (I) INVESTMENT PROFESSIONALS FALLING WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005, (THE ORDER); OR (II) HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS AND OTHER PERSONS FALLING WITHIN ARTICLE 49(2)(A) TO (D) OF THE ORDER (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS RELEVANT PERSONS).

NO OTHER PERSON SHOULD ACT OR RELY ON THIS ANNOUNCEMENT AND PERSONS DISTRIBUTING THIS ANNOUNCEMENT MUST SATISFY THEMSELVES THAT IT IS LAWFUL TO DO SO.  BY ACCEPTING THE TERMS OF THIS ANNOUNCEMENT YOU REPRESENT AND AGREE THAT YOU ARE A RELEVANT PERSON.  THIS APPENDIX AND THE TERMS AND CONDITIONS SET OUT HEREIN MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS.  PERSONS DISTRIBUTING THIS ANNOUNCEMENT MUST SATISFY THEMSELVES THAT IT IS LAWFUL TO DO SO. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS APPENDIX AND THE TERMS AND CONDITIONS SET OUT HEREIN RELATE IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. THIS APPENDIX DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN THE COMPANY.

THIS ANNOUNCEMENT (INCLUDING THIS APPENDIX) AND THE INFORMATION CONTAINED HEREIN IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, NEW ZEALAND, SOUTH AFRICA, JERSEY OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.

THE PLACING SHARES ARE BEING OFFERED: (I) OUTSIDE THE UNITED STATES IN ACCORDANCE WITH REGULATION S UNDER THE US SECURITIES ACT OF 1933, AS AMENDED (THE SECURITIES ACT); AND (II) INSIDE THE UNITED STATES PURSUANT TO SECTION 4(A)(2) UNDER THE SECURITIES ACT ONLY TO “QUALIFIED INSTITUTIONAL BUYERS” AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT (QIBs) WHO ARE ALSO “ACCREDITED INVESTORS” AS DEFINED IN RULE 501 (A) OF REGULATION D UNDER THE SECURITIES ACT (ACCREDITED INVESTORS).

THE PLACING SHARES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT, OR UNDER THE APPLICABLE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES, AND MAY NOT BE OFFERED, SOLD, RESOLD, TRANSFERRED OR DELIVERED, DIRECTLY OR INDIRECTLY WITHIN, INTO OR IN THE UNITED STATES, EXCEPT PURSUANT TO AN APPLICABLE 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 RELEVANT STATE OR OTHER JURISDICTION OF THE UNITED STATES.  THERE WILL BE NO PUBLIC OFFER OF THE PLACING SHARES IN THE UNITED STATES.

EACH PLACEE SHOULD CONSULT WITH ITS OWN ADVISERS AS TO THE LEGAL, TAX, BUSINESS AND RELATED ASPECTS OF A PURCHASE OF PLACING SHARES.

This announcement (the Announcement) is for information purposes only and does not constitute an offer to sell or issue or the solicitation of an offer to buy, subscribe for or otherwise acquire any Placing Shares in any jurisdiction in which any such offer or solicitation would be unlawful.

All offers of the Placing Shares will be made pursuant to an exemption under the Prospectus Directive from the requirement to produce a prospectus. This Announcement is being distributed and communicated to persons in the UK only in circumstances to which section 21(1) of FSMA does not apply.

The distribution of this Announcement and the Placing and/or issue of the Placing Shares in certain jurisdictions may be restricted by law. No action has been taken by the Company, Peel Hunt or any of their respective affiliates that would permit an offer of the Placing Shares or possession or distribution of this Announcement or any other offering or publicity material relating to such Placing Shares in any jurisdiction where action for that purpose is required. Persons into whose possession this Announcement comes are required by the Company and Peel Hunt to inform themselves about and to observe any such restrictions.

This Announcement should be read in its entirety. In particular, you should read and understand the information provided in the Important Notices section of this Announcement.

By participating in the Bookbuild and the Placing, Placees will be deemed to have read and understood this Announcement in its entirety, to be participating, making an offer and acquiring Placing Shares on the terms and conditions contained in this Appendix and to be providing the representations, warranties, indemnities, acknowledgements and undertakings contained in this Appendix. In particular, each such Placee represents, warrants, undertakes, agrees and acknowledges (amongst other things), that:

1        it is a Relevant Person and undertakes that it will acquire, hold, manage or dispose of any Placing Shares that are allocated to it for the purposes of its business; and

2        in the case of a Relevant Person in a Relevant Member State who acquires any Placing Shares pursuant to the Placing:

(a)      it is a Qualified Investor; and

(b)      in the case of any Placing Shares acquired by it as a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive,

(i)       the Placing Shares acquired by it in the Placing have not been acquired on behalf of, nor have they been acquired with a view to their offer or resale to, persons in any Relevant Member State other than Qualified Investors or in circumstances in which the prior consent of Peel Hunt has been given to the offer or resale; or

(ii)      where Placing Shares have been acquired by it on behalf of persons in any member state of the EEA other than Qualified Investors, the offer of those Placing Shares to it is not treated under the Prospectus Directive as having been made to such persons; and

3        it is acquiring the Placing Shares for its own account or is acquiring the Placing Shares for an account with respect to which it exercises sole investment discretion and has the authority to make and does make the representations, warranties, indemnities, acknowledgements and agreements contained in this Announcement; and

4        it understands (or, if acting for the account of another person, such person understands) the resale and transfer restrictions set out in this Appendix; and

5        subject to any available exemptions from applicable securities laws, it (and any account referred to in paragraph 3 above) is either (i) outside the United States acquiring the Placing Shares in an “offshore transaction” as defined in and in accordance with Regulation S under the Securities Act or (ii) inside the United States and is a QIB who is also an Accredited Investor and who has duly executed a US investor letter in a form provided to it and delivered the same to Peel Hunt or its affiliates.

The information in this Announcement may not be forwarded or distributed to any other person and may not be reproduced in any manner whatsoever. Any forwarding, distribution, dissemination, reproduction, or disclosure of this information in whole or in part is unauthorised. Failure to comply with this directive may result in a violation of the U.S. Securities Act or the applicable laws of other jurisdictions.

No prospectus

No prospectus or other offering document has been or will be submitted to be approved by the FCA in relation to the Bookbuild or the Placing and Placees’ commitments will be made solely on the basis of the information contained in this Announcement and any information publicly announced through a Regulatory Information Service as defined in the Listing Rules by or on behalf of the Company on or prior to the date of this Announcement (the Publicly Available Information) and subject to any further terms set forth in the contract note or trade confirmation sent to individual Placees. Each Placee, by participating in the Bookbuild and the Placing, agrees that it has neither received nor relied on any information, representation, warranty or statement made by or on behalf of Peel Hunt or the Company other than the Publicly Available Information and none of Peel Hunt, the Company nor any person acting on such person’s behalf nor any of their affiliates has or shall have any liability for any Placee’s decision to participate in the Bookbuild and the Placing based on any other information, representation, warranty or statement. Each Placee acknowledges and agrees that it has relied on its own investigation of the business, financial or other position of the Company in accepting a participation in the Placing. Nothing in this paragraph shall exclude the liability of any person for fraudulent misrepresentation.

Details of the Fundraising

Peel Hunt has entered into the Placing Agreement with the Company under which it has undertaken, on the terms and subject to the conditions set out in the Placing Agreement, to use reasonable endeavours to procure Placees for the Placing Shares to raise gross proceeds of  approximately £4,289,023.80 million.  The Placing is not underwritten.

The number of Placing Shares to be issued pursuant to the Placing will be determined by the Company in consultation with Peel Hunt but in any event will not be more than 23,827,910 Placing Shares.  Each Placee will be required to pay an amount equal to the Issue Price in respect of each Placing Share issued to it.

LOAM (as agent for the LO Funds) has entered into the LO Subscription Agreement with the Company pursuant to which LOAM as agent for the LO Funds have committed, subject to certain conditions, to subscribe for up to 47,655,821 Ordinary Shares at the Issue Price subject to scale back of up to 23,827,910 Ordinary Shares to be made available to (i) investors pursuant to the Placing and (ii) Directors and certain senior managers of the Company pursuant to the DSM Subscription.  Certain Directors and senior managers of the Company will enter into DSM Subscription Letters pursuant to which they will commit to participate in the fundraising by subscribing for up to 1,281,505 Ordinary Shares in aggregate.  However this commitment may be scaled back to accommodate demand under the Placing.  As a result of this commitment, the maximum number of Ordinary Shares that will be issued to the LO Funds is 46,374,316.

The Placing is conditional upon, inter alia, the LO Subscription Agreement becoming unconditional in accordance with its terms.  The LO Subscription Agreement shall terminate if Admission has not become effective by 30 November 2017.

LOAM may, acting reasonably in the context of the proposed subscription by the LO Funds of the Subscription Shares, terminate the LO Subscription Agreement by giving notice in writing to the Company to that effect at any time up to and including Admission in certain circumstances, including (among others), a breach of the warranties given to LOAM, the occurrence of any material adverse change in, or any development reasonably likely to involve a material adverse change in the condition (financial or otherwise), earnings, assets, liabilities, cash flows, business, operations or prospects of the Company or the Group taken as a whole, the occurrence of a force majeure event or the Company not having complied with its obligations under the LO Subscription Agreement.

A general meeting of the Company’s shareholders will be held in due course to consider certain resolutions to approve the Issue Price and to grant authorities to Directors to allot further shares for cash on a non-pre-emptive basis. Allotment of the Fundraising Shares will take place as soon as practicable following the General Meeting (or any adjournment thereof), conditional on Admission.

The Fundraising Shares will, when issued, be credited as fully paid and will rank pari passu in all respects with the existing Ordinary Shares, including the right to receive all dividends and other distributions declared, made or paid in respect of such Ordinary Shares after the date of issue of the new Ordinary Shares.

As part of the Placing, the Company has agreed that it will not, inter alia, issue or sell any Ordinary Shares for a period of 90 days after Admission without prior consent from Peel Hunt. This agreement is subject to certain customary exceptions and does not prevent the Company from granting options under, and allotting and issuing Ordinary Shares pursuant to options granted under, the Company’s existing employee share schemes in accordance with normal practice.

Application for admission to listing and trading

Application will be made to the FCA for admission of the Fundraising Shares to listing on the premium segment of the Official List and to the London Stock Exchange for admission to trading of the Fundraising Shares on the London Stock Exchange’s main market for listed securities.

It is expected that Admission will take place in November 2017 and that dealings in the Fundraising Shares on the London Stock Exchange’s main market for listed securities will commence at the same time.

Principal terms of the Bookbuild and the Placing

1. Peel Hunt is acting as bookrunner and placing agent of the Company in connection with the Bookbuild and the Placing.
2. The Bookbuild and the Placing shall be conducted by way of accelerated bookbuild to establish the number of Placing Shares to be allocated to Placees.  The Bookbuild will commence on the release of this Announcement and is expected to close by no later than at 8.00 a.m. on 5 October 2017 but will be closed at a time to be determined by Peel Hunt in its absolute discretion.  The Company reserves the right to accept bids that are received after the Bookbuild has closed.
3. Participation in the Bookbuild and the Placing will only be available to persons who may lawfully be, and are, invited by Peel Hunt to participate. Peel Hunt and its affiliates are entitled to participate in the Bookbuild and Placing as principal.
4. The price payable by all Placees will be a fixed price of 18 pence per Placing Share.
5. To bid in the Bookbuild, Placees should communicate their bid by telephone to their usual sales contact at Peel Hunt. Each bid should state the number of Placing Shares which a prospective Placee wishes to acquire at the Issue Price. Bids may be scaled down by Peel Hunt on the basis referred to below.
6. Each Placee’s allocation will be determined by the Company in its sole discretion following consultation with Peel Hunt and confirmed orally by Peel Hunt (as agent of the Company) to the relevant Placee and a trade confirmation or contract note will be dispatched as soon as possible thereafter. A bid in the Bookbuild constitutes a legally binding commitment by the Placee concerned, in favour of Peel Hunt and the Company, under which it agrees to acquire the number of Placing Shares allocated to it at the Issue Price on the terms and subject to the conditions set out in this Appendix and the Company’s articles of association and, except with Peel Hunt’s consent, will not be capable of variation or revocation after the time at which it is submitted.  Each Placee has an immediate, separate, irrevocable and binding obligation owed to Peel Hunt (as agent for the Company) to pay in cleared funds at the relevant time in accordance with the requirements set out below under ‘Registration and Settlement’, an amount equal to the product of the Issue Price and the number of Placing Shares such Placee has agreed to subscribe for.
7. The Company and Peel Hunt reserve the right (i) to scale back the number of Placing Shares to be subscribed for by any Placee in the event of oversubscription of the Placing; and (ii) not to accept offers for Placing Shares or to accept such offers in part rather than in full.  The Company reserves the right to reduce the amount to be raised pursuant to the Placing, in agreement with Peel Hunt.  The total number of shares to be issued pursuant to the Placing and the DSM Subscription shall not exceed, in aggregate, 23,827,910 Ordinary Shares.  The Company will release the Placing Results Announcement following the close of the Bookbuild, detailing the aggregate number of the Placing Shares, the aggregate number of the DSM Subscription Shares and the aggregate number of Subscription Shares to be issued.
8. Each Placee’s allocation and commitment will be evidenced by a contract note or trade confirmation issued to such Placee by Peel Hunt. The terms of this Appendix will be deemed incorporated therein.
9. Except as required by law or regulation, no press release or other announcement will be made by Peel Hunt or the Company using the name of any Placee (or its agent), in its capacity as Placee (or agent), other than with such Placee’s prior written consent.
10. Irrespective of the time at which a Placee’s allocation(s) pursuant to the Bookbuild and Placing is/are confirmed, settlement for all Placing Shares to be acquired pursuant to the Placing will be required to be made at the same time, on the basis explained below under ‘Registration and Settlement’.
11. All obligations under the Placing will be subject to fulfilment of or (where applicable) waiver of, amongst other things, the conditions referred to below under Conditions of the Placing and to the Placing not being terminated on the basis referred to below under Termination of the Placing.
12. By participating in the Bookbuild and the Placing, each Placee agrees that its rights and obligations in respect of the Placing will terminate only in the circumstances described below and will not be capable of rescission or termination by the Placee.
13. To the fullest extent permissible by law, neither Peel Hunt nor any of its affiliates nor any of its or its affiliates’ agents, members, directors, officers or employees shall have any liability to Placees (or to any other person whether acting on behalf of a Placee or otherwise). In particular, neither Peel Hunt nor any of its affiliates nor any of its or their agents, members, directors, officers or employees shall have any liability (including, to the extent permissible by law, any fiduciary duties) in respect of the Peel Hunt’s conduct of the Placing or the Bookbuild.

Registration and Settlement

Settlement of transactions in the Placing Shares (ISIN: GB00B01JLR99) following Admission will take place within the CREST system provided that Peel Hunt reserves that right to require settlement for, and delivery of, the Placing Shares (or a portion thereof) to Placees by such other means that it deems necessary if delivery or settlement is not possible or practicable within CREST within the timetable set out in this Announcement or would not be consistent with the regulatory requirements of any relevant jurisdiction. Settlement through CREST for the Placees will be on a T+2 basis unless otherwise notified by Peel Hunt. Settlement will be on a delivery versus payment basis. However, in the event of any difficulties or delays in the admission of the Placing Shares to CREST or the use of CREST in relation to the Placing, the Company and Peel Hunt may agree that the Placing Shares should be issued in certificated form.

Each Placee will be sent a contract note or trade confirmation which will confirm the number of Placing Shares allocated to them and the aggregate amount owed by them to Peel Hunt. Each Placee is deemed to agree that it will do all things necessary to ensure that delivery and payment is completed in accordance with either the standing CREST or certificated settlement instructions which they have in place with Peel Hunt or otherwise as Peel Hunt may direct.

Interest is chargeable daily on payments not received from Placees on the due date in accordance with the arrangements set out above, in respect of either CREST or certificated deliveries, at the rate of two percentage points above prevailing LIBOR as determined by Peel Hunt.

If Placees do not comply with their obligations Peel Hunt may sell any or all of their Placing Shares on their behalf and retain from the proceeds, for its own account and benefit (as agent for the Company), an amount equal to the Issue Price of each share sold plus any interest due. Placees will, however, remain liable and shall indemnify Peel Hunt on demand for any shortfall below the Issue Price and for any stamp duty or stamp duty reserve tax (together with any interest or penalties) which may arise upon the sale of their Placing Shares on their behalf.  Each Placee confers on Peel Hunt all such authorities and powers necessary to carry out any such sale and agrees to ratify and confirm all actions which Peel Hunt lawfully undertakes in pursuance of such sale.

If Placing Shares are to be delivered to a custodian or settlement agent, Placees must ensure that, upon receipt, the conditional contract note or trade confirmation is copied and delivered immediately to the relevant person within that organisation. Insofar as Placing Shares are registered in a Placee’s name or that of its nominee or in the name of any person for whom a Placee is contracting as agent or that of a nominee for such person, such Placing Shares should, subject as provided below, be so registered free from any liability to UK stamp duty or stamp duty reserve tax. Placees will not be entitled to receive any fee or commission in connection with the Bookbuild or the Placing.

Conditions of the Placing

The Placing is conditional upon the Placing Agreement becoming unconditional and not having been terminated in accordance with its terms.

The obligations of Peel Hunt under the Placing Agreement are, and the Placing is, conditional on, inter alia:

(a)       each of the warranties contained in the Placing Agreement not being untrue, inaccurate or misleading when made, nor becoming untrue, inaccurate or misleading in any respect as at the date of the General Meeting and the date of Admission (by reference to the facts and circumstances existing at such time);

(b)       in the opinion of Peel Hunt (acting in good faith), there not having occurred a material adverse change in, or any development reasonably likely to give rise to or involve a prospective material adverse change in the condition (financial, operational, legal or otherwise), earnings, management, business affairs, business prospects or solvency of the Group taken as a whole, whether or not foreseeable and whether or not arising in the ordinary course of business;

(c)       the Company having complied with its obligations under the Placing Agreement and the LO Subscription Agreement (to the extent such obligations fall to be performed prior to Admission);

(d)       the LO Subscription Agreement becoming unconditional and not having been terminated in accordance with its terms;

(e)       the Company allotting the Placing Shares, prior to and conditional only on Admission, in accordance with the Placing Agreement;

(f)        the passing of the Resolutions without material amendment at the General Meeting (or any adjournment thereof); and

(g)       Admission taking place not later than 8.00 a.m. (London time) on 17 November 2017,

(all conditions to the obligations of Peel Hunt included in the Placing Agreement being together, the conditions). Peel Hunt and the Company may agree to extend the time and/or date by which any condition is required to be fulfilled to no later than on 3.00 p.m. on 30 November 2017.  Any such extension will not affect Placees’ commitments as set out in this Appendix.

If any of the conditions is not fulfilled or, where permitted, waived to the extent permitted by law or regulations in accordance with the Placing Agreement within the stated time periods (or such later time and/or date as the Company and Peel Hunt may agree), or the Placing Agreement is terminated in accordance with its terms (as to which, see the Termination of the Placing section below), the Placing will lapse and the Placee’s rights and obligations shall cease and terminate at such time and each Placee agrees that no claim can be made by or on behalf of the Placee (or any person on whose behalf the Placee is acting) in respect thereof.

Peel Hunt may, at its absolute discretion and upon such terms as it thinks appropriate, waive fulfilment of all or any of the conditions in whole or in part (to the extent permitted by law or regulation). Any such waiver will not affect Placees’ commitments as set out in this Appendix.

Neither the Company, Peel Hunt, their respective affiliates or their or their respective affiliates’ agents, members, directors, officers or employees shall have any liability to any Placee (or to any other person whether acting on behalf of a Placee or otherwise) in respect of any decision any of them may make as to whether or not to waive or to extend the time and/or date for the satisfaction of any condition to the Placing nor for any decision any of them may make as to the satisfaction of any condition or in respect of the Placing generally and by participating in the Bookbuild and the Placing each Placee agrees that any such decision is within the absolute discretion of Peel Hunt and the Company.  Placees will have no rights against Peel Hunt, the Company or any of their respective members, directors or employees under the Placing Agreement pursuant to the Contracts (Rights of Third Parties) Act 1999 (as amended) or otherwise.

Termination of the Placing

Peel Hunt may in its absolute discretion terminate the Placing Agreement at any time up to and including Admission in certain circumstances, including (among others) a breach of the warranties given to Peel Hunt, the occurrence, in the opinion of Peel Hunt (acting in good faith), of any material adverse change in, or any development reasonably likely to give rise to or involve a prospective material adverse change in the condition (financial, operational, legal or otherwise), earnings, management, business affairs, business prospects or solvency of the Group taken as a whole, whether or not foreseeable and whether or not arising in the ordinary course of business, the occurrence of a force majeure event or any party not having complied with its obligations under the LO Subscription Agreement (to the extent such obligations fall to be performed prior to Admission).  Notice of termination may be communicated by Peel Hunt as soon as practicable to any director of the Company orally or by email and announced to a Regulatory Information Service.

The Placing Agreement will terminate in the event that LOAM exercises its discretion to terminate the LO Subscription Agreement.

If the Placing Agreement is terminated in accordance with its terms, the rights and obligations of each Placee in respect of the Placing as described in this Announcement shall cease and terminate at such time and no claim may be made by any Placee in respect thereof.

Each Placee agrees with the Company and Peel Hunt that the exercise by (i) the Company of any right of termination or any other right or other discretion under the LO Subscription Agreement or the DSM Subscription Letters; or (ii) the Company or Peel Hunt of any right of termination or any other right or other discretion under the Placing Agreement, shall be within the absolute discretion of the Company or Peel Hunt (as the case may be) and that neither the Company nor Peel Hunt need make any reference to such Placee and that none of the Company, Peel Hunt, their respective affiliates or their or their respective affiliates’ agents, members, directors, officers or employees, respectively, shall have any liability to such Placee (or to any other person whether acting on behalf of a Placee or otherwise) whatsoever in connection with any such exercise.

By participating in the Bookbuild, each Placee agrees that its rights and obligations terminate only in the circumstances described above and under the Conditions of the Placing above and will not be capable of rescission or termination by it after oral confirmation of its allocation by Peel Hunt.

Representations, warranties and further terms

By submitting a bid in the Bookbuild, each Placee (and any person acting on such Placee’s behalf) represents, warrants, acknowledges and agrees (for itself and for any such prospective Placee) to the Company and Peel Hunt that:

1        it has read and understood this Announcement in its entirety and that its acquisition of the Placing Shares is subject to and based upon all the terms, conditions, representations, warranties, indemnities, acknowledgements, agreements and undertakings and other information contained in this Appendix and that it has not relied on, and will not rely on, any information given or any representations, warranties or statements made at any time by any person in connection with Admission, the Placing, the Company, the Placing Shares or otherwise, other than the information contained in this Announcement and the Publicly Available Information;

2        it has not received a prospectus or other offering document in connection with the Placing and acknowledges that no prospectus or other offering document has been or will be prepared in connection with the Placing;

3        the Company’s Ordinary Shares are listed on the premium listing segment of the Official List, and that the Company is therefore required to publish certain business and financial information in accordance with the rules and practices of the FCA, which includes a description of the nature of the Company’s business and the Company’s most recent balance sheet and profit and loss account and that it is able to obtain or access such information without undue difficulty, and is able to obtain access to such information or comparable information concerning any other publicly traded company, without undue difficulty;

4        neither Peel Hunt nor the Company nor any of their respective affiliates, or their or their respective affiliates’ agents, members, directors, officers or employees, respectively, nor any person acting on behalf of any of them has provided, and will not provide, it with any material regarding the Placing Shares or the Company or any other person other than the information in this Announcement or the Publicly Available Information, such information being all that it deems necessary to make an investment decision in respect of the Placing Shares; nor has it requested Peel Hunt, the Company, any of their respective affiliates, agents, members, directors, officers or employees or any person acting on behalf of any of them to provide it with any such information;

5        neither Peel Hunt nor any person acting on its behalf nor any of its affiliates, or its or its affiliates, agents, members, directors, officers or employees, has or shall have any liability for this Announcement or the Publicly Available Information, or any representation relating to the Company, provided that nothing in this paragraph excludes the liability of any person for fraudulent misrepresentation made by that person;

6        the content of this Announcement and the Publicly Available Information has been prepared by and is exclusively the responsibility of the Company and that neither Peel Hunt nor any persons acting on its behalf are responsible for or have or shall have any liability for any information or representation, warranty or statement relating to the Company contained in this Announcement or the Publicly Available Information, nor will they be liable for any Placee’s decision to participate in the Bookbuild or Placing based on any information, representation, warranty or statement contained in this Announcement, the Publicly Available Information or otherwise. Nothing in this Appendix shall exclude any liability of any person for fraudulent misrepresentation;

7        it: (i) has such knowledge and experience in financial and business matters to be capable of evaluating the merits and the risks of an investment in the Placing Shares; (ii) will not look to Peel Hunt for all or part of any such loss it may suffer; (iii) is able to bear the economic risk of an investment in the Placing Shares; (iv) is able to sustain a complete loss of the investment in the Placing Shares; and (v) has no need for liquidity with respect to its investment in the Placing Shares;

8        (i) the only information on which it is entitled to rely and on which it has relied in committing to subscribe for the Placing Shares is contained in this Announcement or the Publicly Available Information, such information being all that it deems necessary to make an investment decision in respect of the Placing Shares, and it has made its own assessment of the Company, the Placing Shares and the terms of the Placing based on this Announcement and the Publicly Available Information, (ii) Peel Hunt and the Company (or any of their respective affiliates) have not made any representation to it, express or implied, with respect to the Company, the Bookbuild, the Placing or the Placing Shares or the fairness, accuracy, completeness or adequacy of this Announcement or the Publicly Available Information, (iii) it has conducted its own investigation of the Company, the Placing and the Placing Shares, satisfied itself that the information is still current and relied on that investigation for the purposes of its decision to participate in the Bookbuild and the Placing and (iv) it has not relied on any investigation that Peel Hunt or any person acting on its behalf may have conducted with respect to the Company, the Bookbuild, the Placing or the Placing Shares;

9        it is not, and at the time the Placing Shares are acquired will not be, a resident of Australia, Canada, South Africa, New Zealand, Japan or Jersey;

10      it and any account for which it is acting is either: (i) outside the United States and acquiring the Placing Shares in an “offshore transaction” as defined in, and in accordance with, Regulation S or (ii) inside the United States and is a QIB and an Accredited Investor who has duly executed a US investor letter in a form provided to it and delivered the same to Peel Hunt or its affiliates;

11      the Placing Shares have not been registered or otherwise qualified, and will not be registered or otherwise qualified, for offer and sale nor will a prospectus be cleared or approved in respect of any of the Placing Shares under the Securities Act, or under the applicable securities laws of any state or other jurisdiction of the United States, nor approved or disapproved by the US Securities and Exchange Commission, any state securities commission or other regulatory authority in the United States, nor have any of the foregoing authorities passed upon or endorsed the merits of the Placing or the accuracy or adequacy of this Announcement. The Placing Shares have not been registered or otherwise qualified for offer and sale nor will a prospectus be cleared or approved in respect of the Placing Shares under the securities laws of Australia, Canada, South Africa, New Zealand, Japan or Jersey and, subject to certain exceptions, may not be offered, sold, taken up, renounced or delivered or transferred, directly or indirectly, within the United States, Australia, Canada, South Africa, New Zealand, Japan or Jersey or in any country or jurisdiction where any action for that purpose is required;

12      it and/or each person on whose behalf it is participating:

(a)      is entitled to acquire Placing Shares pursuant to the Placing under the laws and regulations of all relevant jurisdictions;

(b)      has fully observed such laws and regulations;

(c)      has capacity and authority and is entitled to enter into and perform its obligations as an acquirer of Placing Shares and will honour such obligations; and

(d)      has obtained all necessary consents and authorities (including, without limitation, in the case of a person acting on behalf of a Placee, all necessary consents and authorities to agree to the terms set out or referred to in this Appendix) to enable it to enter into the transactions contemplated hereby and to perform its obligations in relation thereto;

13      acknowledges that it has received this Announcement solely for its use, has not redistributed or duplicated it (including electronic copies thereof) in whole or in part and undertakes not to do so;

14      it and any person acting on its behalf falls within Article 19(5) and/or 49(2) of the Order, as amended, and undertakes that it will acquire, hold, manage and (if applicable) dispose of any Placing Shares that are allocated to it for the purposes of its business only;

15      it has not offered or sold and will not offer or sell any Placing Shares to persons in the United Kingdom prior to Admission except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their business or otherwise in circumstances which have not resulted and which will not result in an offer to the public in the United Kingdom within the meaning of section 85(1) of FSMA;

16      if within the EEA, it is a Qualified Investor as defined in section 86(7) of FSMA, being a person falling within Article 2.1(c) of the Prospectus Directive;

17      it has only communicated or caused to be communicated and it will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of FSMA) relating to Placing Shares in circumstances in which section 21(1) of FSMA does not require approval of the communication by an authorised person;

18      if it is a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive (including any relevant implementing measure in any member state), the Placing Shares acquired by it in the Placing will not be acquired on a non-discretionary basis on behalf of, nor will they be acquired with a view to their offer or resale to, persons in a member state of the EEA which has implemented the Prospectus Directive other than qualified investors, or in circumstances in which the express prior written consent of Peel Hunt has been given to the offer or resale.

19      it has not offered or sold and will not offer or sell any Placing Shares to persons in the EEA prior to Admission except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purpose of their business or otherwise in circumstances which have not resulted and which will not result in an offer to the public in any member state of the EEA;

20      no action has been or will be taken by any of the Company, Peel Hunt or any person acting on behalf of the Company or Peel Hunt that would, or is intended to, permit a public offer of the Placing Shares in the United States or in any country or jurisdiction where any such action for that purpose is required;

21      none of Peel Hunt, its affiliates and any person acting on its behalf is making any recommendations to it, advising it regarding the suitability of any transactions it may enter into in connection with the Placing and that participation in the Bookbuild and the Placing is on the basis that it is not and will not be a client of Peel Hunt and that Peel Hunt has no duties or responsibilities to it for providing the protections afforded to Peel Hunt’s clients or customers or for providing advice in relation to the Bookbuild or the Placing nor in respect of any representations, warranties, undertakings or indemnities contained in the Placing Agreement nor for the exercise or performance of any of its rights and obligations thereunder including any rights to waive or vary any conditions or exercise any termination right;

22      neither Peel Hunt nor the Company nor any of their respective affiliates nor their respective affiliates’ agents, members, directors, officers or employees nor any person acting on behalf of such persons is making any recommendation to it, advising it regarding the suitability of any transaction it may enter into in connection with the Placing nor providing advice in relation to the Placing nor in respect of any representation, warranty, acknowledgement, agreement, undertaking or indemnity contained in the Placing Agreement nor the exercise or performance of any of Peel Hunt’s rights and obligations thereunder including any rights to waive or vary any conditions or exercise any termination right;

23      acknowledges and accepts that Peel Hunt may, in accordance with applicable legal and regulatory provisions, engage in transactions in relation to the Placing Shares and/or related instruments for their own account and, except as required by applicable law or regulation, Peel Hunt will not make any public disclosure in relation to such transactions;

24      it will make payment to Peel Hunt (as Peel Hunt may direct) for the Placing Shares allocated to it in accordance with the terms and conditions of this Announcement on the due times and dates set out in this Announcement, failing which the relevant Placing Shares may be placed with others or sold on such terms as the Company and Peel Hunt may determine in their absolute discretion without liability to the Placee and it will remain liable and will indemnify Peel Hunt for any shortfall below the net proceeds of such sale and the placing proceeds of such Placing Shares and may be required to bear any stamp duty or stamp duty reserve tax (together with any interest or penalties due pursuant to the terms set out or referred to in this Announcement) which may arise upon the sale of such Placee’s Placing Shares on its behalf;

25      the person who it specifies for registration as holder of the Placing Shares will be: (i) the Placee; or (ii) a nominee of the Placee, as the case may be. Peel Hunt and the Company will not be responsible for any liability to stamp duty or stamp duty reserve tax resulting from a failure to observe this requirement. It agrees to acquire Placing Shares pursuant to the Placing on the basis that the Placing Shares will be allotted to a CREST stock account of Peel Hunt who will hold them as nominee directly or indirectly on behalf of the Placee until settlement in accordance with its standing settlement instructions;

26      it will, or procure that it’s nominee will, make any necessary notifications to the Company of its interests in the Placing Shares in accordance with Chapter 5 of the Disclosure Guidance and Transparency Rules sourcebook;

27      the allocation, allotment, issue and delivery to it, or the person specified by it for registration as holder, of Placing Shares will not give rise to a stamp duty or stamp duty reserve tax liability under (or at a rate determined under) any of sections 67, 70, 93 or 96 of the Finance Act 1986 (depository receipts and clearance services) and that it is not participating in the Placing as nominee or agent for any person or persons to whom the allocation, allotment, issue or delivery of Placing Shares would give rise to such a liability;

28      if it has received any confidential price sensitive information about the Company in advance of the Placing, it has not: (a) dealt in the securities of the Company; (b) encouraged or required another person to deal in the securities of the Company; or (c) disclosed such information to any person, prior to the information being made publicly available;

29      it has complied and it will comply with all applicable laws and regulation with respect to anything done by it or on its behalf in relation to the Placing Shares (including all relevant provisions of FSMA and the Financial Services Act 2012 in respect of anything done in, from or otherwise involving the United Kingdom and all relevant provisions of the Market Abuse Regulation);

30      (i) it has complied with its obligations under the Criminal Justice Act 1993 and the Market Abuse Regulation; (ii) in connection with money laundering and terrorist financing, it has complied with its obligations under the Proceeds of Crime Act 2002 (as amended), the Terrorism Act 2000 (as amended), the Terrorism Act 2006 and the Money Laundering Regulations 2007; and (iii) it is not a person: (a) with whom transactions are prohibited under the Foreign Corrupt Practices Act of 1977 or any economic sanction programmes administered by, or regulations promulgated by, the Office of Foreign Assets Control of the U.S. Department of the Treasury; (b) named on the Consolidated List of Financial Sanctions Targets maintained by HM Treasury of the United Kingdom; or (c) subject to financial sanctions imposed pursuant to a regulation of the European Union or a regulation adopted by the United Nations (together, the Regulations); and, if making payment on behalf of a third party, that satisfactory evidence has been obtained and recorded by it to verify the identity of the third party as required by the Regulations and it has obtained all governmental and other consents (if any) which may be required for the purpose of, or as a consequence of, such subscription and payment, and it will provide promptly to Peel Hunt such evidence, if any, as to the identity or location or legal status of any person which Peel Hunt may request from it in connection with the Bookbuild and the Placing (for the purpose of complying with such Regulations or ascertaining the nationality of any person or the jurisdiction(s) to which any person is subject or otherwise) in the form and manner requested by Peel Hunt on the basis that any failure by it to do so may result in the number of Placing Shares that are to be subscribed by it or at its direction pursuant to the Placing being reduced to such number, or to nil, as the Company and Peel Hunt may decide in their sole discretion;

31      its commitment to acquire Placing Shares on the terms set out in this Announcement will continue notwithstanding any amendment that may in future be made to the terms and conditions of the Placing and that Placees will have no right to be consulted or require that their consent be obtained with respect to the Company’s or Peel Hunt’s conduct of the Placing;

32      it has knowledge and experience in financial, business and international investment matters as is required to evaluate the merits and risks of acquiring the Placing Shares. It further acknowledges that it is experienced in investing in securities of this nature and is aware that it may be required to bear, and is able to bear, the economic risk of, and is able to sustain, a complete loss in connection with the Placing. It has relied upon its own examination and due diligence of the Company and its affiliates taken as a whole, and the terms of the Placing, including the merits and risks involved;

33      it shall vote (either in person or by proxy) any existing Ordinary Shares held by it in favour of the Resolutions;

34      the Company, Peel Hunt and others will rely upon the truth and accuracy of the foregoing representations, warranties, acknowledgements and agreements, which are given to Peel Hunt on its own behalf and on behalf of the Company and are irrevocable;

35      if it is acquiring the Placing Shares as a fiduciary or agent for one or more investor accounts, it has full power and authority to make, and does make, the foregoing representations, warranties, acknowledgements, agreements and undertakings on behalf of each such accounts;

36      time is of the essence as regards its obligations under this Appendix;

37      any document that is to be sent to it in connection with the Bookbuild or Placing will be sent at its risk and may be sent to it at any address provided by it to Peel Hunt;

38      the Placing Shares will be issued in the Placing subject to the terms and conditions set out in this Appendix; and

39      this Appendix and all documents into which this Appendix is incorporated by reference or otherwise validly forms a part will be governed by and construed in accordance with English law. All agreements to acquire shares pursuant to the Bookbuild and the Placing will be governed by English law and the English courts shall have exclusive jurisdiction in relation thereto except that proceedings may be taken by the Company or Peel Hunt in any jurisdiction in which the relevant Placee is incorporated or in which any of its securities have a quotation on a recognised stock exchange.

By participating in the Bookbuild and the Placing, each Placee (and any person acting on such Placee’s behalf) agrees to indemnify and hold the Company, Peel Hunt and each of their respective affiliates and each of their and their respective affiliates’ agents, members, directors, officers and employees, respectively, 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 given by the Placee in this Appendix and further agrees that the provisions of this Appendix shall survive after completion of the Placing.

The agreement to allot and issue Placing Shares to Placees (or the persons for whom Placees are contracting as agent) free of stamp duty and stamp duty reserve tax in the UK relates only to their allotment and issue to Placees, or such persons as they nominate as their agents, directly by the Company. Such agreement assumes that the Placing Shares are not being acquired in connection with arrangements to issue depositary receipts or to transfer the Placing Shares into a clearance service. If there were any such arrangements, or the settlement related to other dealings in the Placing Shares, stamp duty or stamp duty reserve tax may be payable, for which neither the Company nor Peel Hunt would be responsible. If this is the case, it would be sensible for Placees to take their own advice and they should notify Peel Hunt accordingly. In addition, Placees should note that they will be liable for any capital duty, stamp duty and all other stamp, issue, securities, transfer, registration, documentary or other duties or taxes (including any interest, fines or penalties relating thereto) payable outside the UK by them or any other person on the acquisition by them of any Placing Shares or the agreement by them to acquire any Placing Shares and each Placee, or the Placee’s nominee, in respect of whom (or in respect of the person for whom it is participating in the Placing as an agent or nominee) the allocation, allotment, issue or delivery of Placing Shares has given rise to such non-UK stamp, registration, documentary, transfer or similar taxes or duties undertakes to pay such taxes and duties, including any interest and penalties (if applicable), forthwith and to indemnify on an after-tax basis and to hold harmless the Company and Peel Hunt in the event that either the Company and/or Peel Hunt have incurred any such liability to such taxes or duties.

The representations, warranties, acknowledgements and undertakings contained in this Appendix are given to Peel Hunt for itself and on behalf of the Company and are irrevocable.

Peel Hunt is authorised and regulated by the FCA in the United Kingdom and is acting exclusively for the Company in connection with the Bookbuild, the Placing and Admission only and no one else and will not regard any other person (whether or not a recipient of this document) as a client in relation to the Bookbuild or the Placing and will not be responsible to anyone (including Placees) other than the Company for providing the protections afforded to its clients or for providing advice in relation to the Bookbuild, the Placing or other matters referred to in this Announcement.

Each Placee and any person acting on behalf of the Placee acknowledges that neither the Company nor Peel Hunt owes any fiduciary or other duties to any Placee in respect of any representations, warranties, undertakings, acknowledgements or agreements or indemnities in the Placing Agreement.

Each Placee and any person acting on behalf of the Placee acknowledges and agrees that Peel Hunt may (at its absolute discretion) satisfy its obligations to procure Placees by itself agreeing to become a Placee in respect of some or all of the Placing Shares or by nominating any connected or associated person to do so.

When a Placee or any person acting on behalf of the Placee is dealing with Peel Hunt, any money held in an account with Peel Hunt on behalf of the Placee and/or any person acting on behalf of the Placee will not be treated as client money within the meaning of the relevant rules and regulations of the FCA which therefore will not require Peel Hunt to segregate such money, as that money will be held by it under a banking relationship and not as trustee.

The price of shares and any income expected from them may go down as well as up and investors may not get back the full amount invested upon disposal of the shares. Past performance is no guide to future performance and persons needing advice should consult an independent financial adviser.

All times and dates in this Announcement may be subject to amendment. Peel Hunt will notify Placees and any persons acting on behalf of the Placees of any changes.

Neither the content of the Company’s website nor any website accessible by hyperlinks on the Company’s website is incorporated in, or forms part of, this Announcement.

Definitions

In this Announcement (including the Appendix), save where the context requires otherwise: