TIDMDCTA
RNS Number : 1864O
Directa Plus PLC
30 September 2019
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THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
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THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC
DOMAIN AND SUCH PERSONS SHALL THEREFORE CEASE TO BE IN POSSESSION
OF INSIDE INFORMATION.
30 September 2019
Directa Plus plc
("Directa Plus" or the "Company")
Proposed acquisition of 51 per cent. of Setcar S.A
Placing, Open Offer and Notice of General Meeting
Directa Plus (AIM: DCTA), a leading producer and supplier of
graphene nanoplatelets based products for use in consumer and
industrial markets, today announces that it is has entered into a
conditional agreement to acquire 51 per cent. of the issued share
capital of Setcar S.A. ("Setcar"), a Romanian waste management and
decontamination services business, for a total cash consideration
(together with its acquisition partner, GVC) of EUR4.1 million,
(the "Acquisition").
In addition the Company announces a conditional placing of new
ordinary shares in the Company and the launch of an open offer to
raise up to GBP8.24 million before expenses.
Acquisition highlights
-- Directa Plus has today agreed to acquire 51 per cent. of Setcar.
-- Setcar is being jointly acquired with GVC Investment Company
Limited, a company owned by the ultimate beneficial owner of GSP
Group, a leading provider of offshore integrated services for the
oil and gas industry with rigs in operation in Romania, Turkey,
Greece and Mexico, who have today agreed to acquire 47.03 per cent.
of Setcar.
-- The total consideration payable by the Company and GVC, in
proportion to their shareholdings in Setcar, is EUR4.1 million. An
existing shareholder in Setcar will remain a minority shareholder
and immediately following Completion will hold 1.97 per cent.
-- Privately owned Setcar, established in 1994, is a highly
regarded environmental remediation services company based in
Braila, Romania, and operating in the Black Sea region.
-- Setcar has been a commercial partner of Directa Plus since
2014 and has contributed to the industrial development of
Grafysorber mobile decontamination units.
-- For the year ended 31 December 2018, in accordance with
Romanian GAAP, Setcar reported audited revenues of EUR3.96 million
and EBITDA of EUR0.25 million.
Placing highlights
Directa Plus has conditionally raised approximately GBP7.24
million before expenses by the placing of 9,648,000 Placing Shares
at a price of 75 pence per Placing Share.
The Company is also making an Open Offer, for up to 1,345,169
million new Ordinary Shares, to raise up to approximately GBP1
million, on the basis of 1 Open Offer Share for every 38 Existing
Ordinary Shares held by Qualifying Shareholders at the Record Date.
The Open Offer will provide Qualifying Shareholders with the
opportunity to subscribe for new Ordinary Shares from the date of
this announcement to 17 October 2019.
The Company intends to use the proceeds of the Placing as
follows:
-- EUR2.1 million for the acquisition of 51 per cent. of Setcar;
-- EUR1.3 million to invest in revenue growth in the
environmental sector and applications development;
-- EUR1.0 million to improve the G+ production facility in order
to deliver the on-going reduction of production cost, increased
production capacity and automation;
-- EUR1.4 million to fund research and development activities on
the improvement of G+ applications in key markets, to develop new
IP and to maintain the Company's existing patents portfolio;
and
-- EUR2.44 million for general working capital.
In addition, any further monies received under the Open Offer
will be used to further support the Company's strategy as well as
for general working capital purposes.
The Placing and the Open Offer are conditional, amongst other
matters, on the passing of the Resolutions respectively at the
General Meeting to be held at 11 a.m. on 18 October 2019 at the
offices of Directa Plus plc, 3rd floor, 11-12 St. James's Square,
London, SW1Y 4LB at which the resolutions required to give effect
to the Placing and Open Offer will be proposed.
The Company intends to publish the Circular setting out details
of the Acquisition. Placing, the terms and conditions of the Open
Offer and the Notice of General Meeting together with application
forms for the Open Offer later today. The Circular will be
available at this time on the Company's website at
www.directa-plus.com.
Giulio Cesareo, Chief Executive Officer of Directa Plus,
commented:
"This is a transformational transaction for Directa Plus. Just
as we are seeking to do in textiles, we are now proposing to take
more control of the environmental supply chain to capture maximum
value from the commercial offering made possible by our Grafysorber
technology.
"We are acquiring the expertise, the engineering ingenuity and
the ability to operate from a well-established service provider
which will drastically reduce the time to capture a share of the
large global market for hydrocarbon remediation and recovery.
Setcar is being jointly acquired with GVC, a company owned by the
ultimate beneficial owner of GSP Group. Our Industrial partner will
bring us important commercial relationships which will enable us to
enter and grow in this market."
This summary should be read in conjunction with the full text of
the following announcement.
For further information please visit
http://www.directa-plus.com/ or contact:
Directa Plus plc +39 02 36714458
Giulio Cesareo, CEO
Marco Ferrari, CFO
Cantor Fitzgerald Europe (Nominated Adviser
and Joint Broker) +44 20 7894 7000
Rick Thompson, Philip Davies Will Goode
(Corporate Finance)
Caspar Shand Kydd (Sales)
N+1 Singer (Joint Broker) +44 20 7496 3069
Mark Taylor, Lauren Kettle, Mia Gardner
Tavistock (Financial PR and IR) +44 20 7920 3150
Simon Hudson, Edward Lee, Barnaby Hayward
About Directa Plus
Our focus is principally on the two sectors in which we have
strong commercial advantage through developed and launched products
and a technological lead: environmental (based on our
Grafysorber(R) product) and textiles (based on our G+ products). In
addition, we will continue to pursue opportunities in elastomers
and composites (including tyres and asphalt), also using our G+
products. All our products are hypoallergenic, non-toxic and
sustainably produced.
Proposed Acquisition of 51 per cent. of Setcar S.A.
Placing of 9,648,000 new Ordinary Shares
Open Offer of up to 1,345,169 new Ordinary Sharesin each case at
75 pence per share and Notice of General Meeting
1. Introduction
Directa Plus announced today that it has conditionally agreed to
acquire 51 per cent. of the issued share capital of Setcar S.A., a
Romanian waste management and decontamination services business,
for a total cash consideration (together with its acquisition
partner, GVC) of EUR4.1 million.
The Company has also announced today a Fundraising to raise a
total of up to approximately GBP8.24 million (before expenses) by
way of:
-- a Placing of 9,648,000 new Ordinary Shares at the Issue Price
to Placees to raise gross proceeds of GBP7.24 million. The Placing
is conditional, inter alia, upon Shareholders approving the
Resolutions at the General Meeting and on the Placing Agreement not
having been terminated in accordance with its terms. The
Conditional Placing is also dependent on the occurrence of
Admission; and
-- an Open Offer of up to 1,345,169 new Ordinary Shares at the
Issue Price to Qualifying Shareholders to raise net proceeds of up
to approximately GBP1 million on the basis of 1 Open Offer Share
for every 38 Existing Ordinary Shares held on the Record Date, at
the Issue Price, payable in full at the time of acceptance of the
Open Offer. Shareholders subscribing for their full entitlement
under the Open Offer may also request additional Open Offer Shares
through the Excess Application Facility.
The Issue Price represents a discount of 3.8 per cent. to the
closing price of 78 pence per Existing Ordinary Share on 27
September 2019 (being the last business day prior to the
announcement of the Acquisition and Fundraising).
The purpose of this announcement is to set out the background to
and the reasons for the Fundraising and to give details of the
Acquisition, to explain why the Board considers the Fundraising and
Acquisition to be in the best interests of the Company and its
Shareholders as a whole and why the Directors recommend that you
vote in favour of the Resolutions required to be passed to
implement them.
The Placing and the Open Offer are conditional, amongst other
matters, on the passing of the Resolutions respectively at the
General Meeting. Notice of the General Meeting to be held at 11.00
a.m. on 18 October 2019 at the offices of Directa Plus plc, 3rd
floor, 11-12 St. James's Square, London, SW1Y 4LB at which the
resolutions required to give effect to the Placing and Open Offer
will be proposed.
2. Background to and reasons for the Acquisition and Fundraising
Introduction
Directa Plus is one of the largest producers and suppliers of
graphene-based products for use in consumer and industrial markets.
The Company's graphene manufacturing capability uses proprietary
patented technology based on a plasma super expansion process.
Starting from natural graphite, each step of Directa Plus'
production process - expansion, exfoliation and drying - creates
graphene-based materials and hybrid graphene materials ready for a
variety of uses and available in various forms such as powder,
liquid and paste.
This proprietary production process uses a physical process,
rather than a chemical process, to process graphite into pristine
graphene nanoplatelets, which enables Directa Plus to offer a
sustainable, non-toxic product, without unwanted by-products.
Directa Plus' products are made of hybrid graphene materials and
graphene nano-platelets. The products (marketed as G+) have
multiple applications due to its properties. These G+ products can
be categorised into various families, with different products being
suitable for specific practical applications.
Strategy
The Company is principally focused on the two key verticals in
which the Board believes it has a strong commercial advantage
through developed and launched products and a technological
lead:
-- Environmental, based on our Grafysorber(R) product; and
-- Textiles, based on our G+ products.
In addition, the Board remains selective in building out the
pipeline of opportunities in the Elastomers and Composite Material
sectors.
The Board believes that the Company continues to make very good
progress towards commercialising its products, particularly in the
two key vertical markets that have the potential to generate
significant revenues and value for our Shareholders.
The ability to demonstrate strong cash resources to fund the
Company until it achieves positive cash flows will materially
assist Directa Plus to attract and retain blue chip customers and
partners. It will also allow Directa Plus to negotiate commercial
agreements from a position of strength in order to capture more
value for Shareholders from the product launches the Company's
technology enables.
Integrating Directa Plus' intellectual property into new
products allows customers to gain significant competitive
advantage. The Board is committed to seeking to benefit from the
proceeds of customer growth attributed to the Company's products,
rather than merely supplying an essential ingredient. As such,
Directa Plus has adopted a commercialisation model based on
capturing a proportion of these additional revenues and profits, in
order to drive value for our Shareholders. This could take the form
of royalty payments, upfront enabling licence payments,
joint-ventures to get closer to end-users or a combination of all
three.
Setcar S.A.
Privately owned Setcar, established in 1994, is a highly
regarded environmental remediation services company based in
Braila, Romania, and operating in the Black Sea region. The company
offers a full range of services related to the treatment and
disposal of hazardous waste, with a focus on decontamination of
industrial equipment and sites, decontamination of soil and
integrated waste management services.
Setcar is fully authorised and accredited to carry out its
activities. Clients include Arcelormittal, Ford, E ON, Enel,
Lukoil, and OMV Petrom. Setcar is also endorsed by international
bodies such as the United Nations Industrial Development
Organisation.
Setcar has been a commercial partner of Directa Plus since 2014
and has contributed to the industrial development of Grafysorber
mobile decontamination units.
For the year ended 31 December 2018, in accordance with Romanian
GAAP, Setcar reported audited revenues of EUR3.96 million (2017:
EUR2.41 million), EBITDA of EUR0.25 million (2017: EUR0.17
million). Net assets as at 31 December 2018 were EUR3.28 million
(2017: EUR3.26 million).
The Acquisition
The Company has conditionally agreed to acquire 51 per cent. of
Setcar. Setcar is being jointly acquired with GVC, a company owned
by the ultimate beneficial owner of the GSP group, a leading
provider of offshore integrated services for the oil and gas
industry with rigs in operation in Romania, Turkey, Greece and
Mexico, who have conditionally agreed to acquire 47.03% of Setcar.
The total consideration payable by the Company and GVC, in
proportion to their shareholdings in Setcar, is EUR4.1 million. An
existing shareholder in Setcar will remain a minority shareholder
and immediately following Completion will hold 1.97%.
Of the total consideration, EUR2.1 million will be paid in cash
to the owners of Setcar as follows:
-- EUR0.6 million upon Completion
-- EUR0.4 million on 30 April 2020
-- EUR0.85 million on the first anniversary of Completion
-- EUR0.25 million on the second anniversary of Completion.
Immediately following Completion, the Company and GVC will
provide a EUR2 million loan to Setcar, in proportion to their
respective shareholdings in the company, in order to facilitate the
payment of a EUR2 million dividend to the vendors of Setcar. The
loan will then be converted into ordinary shares in Setcar in
proportion to the shareholdings of each of the Company and GVC.
Following Completion, Setcar will be renamed Directa
Environmental Solutions.
The Board believes that the Acquisition will:
-- create a business case in a European country with a real need
for environmental clean-up, which could be replicated in other
countries;
-- provide a significant business opportunity within captive
off-shore applications generated through partnership with GVC. The
combined company is entitled to participate in international
tenders;
-- present the opportunity to control a direct commercial
channel capable of significantly improving the Grafysorber
commercial ramp-up on the market and to fulfil the market
expectations in one of the main company verticals;
-- further the development of technologies and equipment that
use Grafysorber as a base material, combined with the opportunity
to deal directly with the end-user will give Directa Plus the
possibility to increase revenues and margins, protecting the
know-how); and
-- facilitate development of (with the possibility to patent)
other Grafysorber applications in the environmental field
(pollutants other than hydrocarbons or in synergy with other
materials / technologies, other applications such as soil or air
treatment etc.) leveraging on the competence of the personnel and
the Setcar laboratory equipment.
Following Completion, Directa Environmental Solutions will enter
into several commercial contracts, already signed by the Company's
acquisition partner, GVC, or an entity in the GSP group, for the
provision of environmental services to a number of multinational
oil and gas companies. These contracts will extend across several
years starting between October 2019 and late 2020 and represent a
revenue opportunity of at least EUR8 million.
3. Use of proceeds from the Placing and Open Offer
The Company intends to use the proceeds of the Placing as
follows:
-- EUR2.1 million for the acquisition of 51 per cent. of Setcar;
-- EUR1.3 million to invest in revenue growth in the
environmental sector and applications development;
-- EUR1.0 million to improve the G+ production facility in order
to deliver the on-going reduction of production cost, increased
production capacity and automation;
-- EUR1.4 million to fund research and development activities on
the improvement of G+ applications in key markets, to develop new
IP and to maintain the Company's existing patents portfolio;
and
-- EUR2.44 million for general working capital.
In addition, any further monies received under the Open Offer
will be used to further support the Company's strategy as well as
for general working capital purposes.
Interim results for the six months ended 30 June 2019
The Company has today announced interim results for the six
months ended 30 June 2019.
Revenue for the six months to 30 June 2019 increased by 56 per
cent to EUR894,693 (2018: EUR573,822), whilst the loss before tax
was similar to last year at EUR1,778,890 (2018: loss of
EUR1,753,053). Cash at the period end was EUR4,760,951
(EUR4,947,457 at the end of the comparable period and EUR5,503,884
as at 31 December 2018).
4. The Placing
Subject to the satisfaction of the conditions under the Placing,
including inter alia, the passing of the Resolutions, the Company
will place a total of 9,648,000 new Ordinary Shares raising in
aggregate approximately GBP7.24 million (before expenses). The
Placing Shares have been placed by Cantor Fitzgerald and N+1
Singer, as agent for the Company with institutional and other
investors. The Placing Shares will be allotted at the Issue
Price.
The Issue Price represents a discount of 3.8 per cent. to the
closing price of 78 pence per Existing Ordinary Share on 27
September 2019 (being the last business day prior to the
announcement of the Acquisition and Fundraising).
The Placing of the New Ordinary Shares will be conducted in two
separate tranches over two Business Days to assist EIS and VCT
investors to claim certain tax reliefs.
It is intended that the Company will issue the First Tranche
Placing Shares to the persons nominated by the Company in
accordance with the Placing Agreement no later than 3.00 p.m. on 18
October 2019, being one Business Day prior to Admission. The issue
of the First Tranche Placing Shares will not be conditional on
Admission. It is intended that the Company will issue the Second
Tranche Placing Shares in accordance with the Placing Agreement no
later than 8.00 a.m. on 21 October 2019. The issue of the Second
Tranche Placing Shares will be conditional on Admission. Investors
should be aware of the possibility that only the First Tranche
Placing Shares might be issued and that none of the remaining
Second Tranche Placing Shares are issued.
The Placing (other than in respect of the First Tranche Placing
Shares) is conditional upon, inter alia, Admission occurring no
later than 8.00 a.m. on 21 October 2019 (or such later date as the
Company, Cantor Fitzgerald and N+1 Singer shall agree, being no
later than 31 October 2019.
The Fundraising is not underwritten by Cantor Fitzgerald or N+1
Singer or any other person.
If the conditions relating to the issue of the Placing Shares
are not satisfied, the Placing Shares will not be issued and the
Company will not receive the related placing monies. In this
situation, the Company would not have sufficient resources to fully
implement the strategy outlined above.
The Placing Agreement
Pursuant to the terms of the Placing Agreement, Cantor
Fitzgerald and N+1 Singer have conditionally agreed to use
reasonable endeavours, as agents of the Company, to procure
subscribers for the Placing Shares at the Issue Price. The
Fundraising has not been underwritten by Cantor Fitzgerald, N+1
Singer or any other person.
The EIS/VCT Placing is conditional, inter alia, upon the
Resolutions being duly passed at the General Meeting. The
Conditional Placing is conditional, inter alia, upon the
Resolutions being duly passed at the General Meeting and Admission
becoming effective on or before 8.00 a.m. on 21 October 2019 (or
such later time and/or date as the Company, Cantor Fitzgerald and
N+1 Singer may agree, but in any event by no later than 8.00 a.m.
on 31 October 2019. If any of the conditions in relation to the
Placing are not satisfied, the Placing Shares (other than possibly
the First Tranche Placing Shares) will not be issued and all monies
received from the investors in respect of the Placing Shares will
be returned to them (at the investors' risk and without interest)
as soon as possible thereafter.
The Placing Agreement contains warranties from the Company in
favour of Cantor Fitzgerald and N+1 Singer in relation to, inter
alia, the accuracy of certain information in this announcement, the
circular and other matters relating to the Company and its
business. In addition, the Company has agreed to indemnify Cantor
Fitzgerald and N+1 Singer in relation to certain liabilities it may
incur in respect of the Fundraising. Cantor Fitzgerald and N+1
Singer have the right to terminate the Placing Agreement or Placing
prior to Admission in certain circumstances that are customary for
an agreement of this nature, in particular in the event of any
breach of the warranties given to Cantor Fitzgerald and N+1 Singer
in the Placing Agreement which either of Cantor Fitzgerald or N+1
Singer considers to be material in the context of the Fundraising,
the failure of the Company to comply, in any material respect, with
any of its obligations under the Placing Agreement, the occurrence
of a change in (amongst other things) national or international
financial or political conditions which in the reasonable opinion
of either Cantor Fitzgerald or N+1 Singer is likely to affect the
Placing in a material way, or a material adverse change in the
condition (financial, operational, legal or otherwise), earnings,
business, management, property, assets, rights, results of
operations or prospects of the Company which is material in the
context of the Fundraising.
Settlement and dealings
Application will be made to the London Stock Exchange for the
New Ordinary Shares to be admitted to trading on AIM. It is
expected that Admission will occur and that dealings will commence
at 8.00 a.m. on 21 October 2019 on which date it is also expected
that the Placing Shares will be enabled for settlement in
CREST.
The New Ordinary Shares will, when issued, rank pari passu in
all respects with the Existing Ordinary Shares including the right
to receive dividends and other distributions declared following
Admission.
5. Related Party Transactions
Certain Directors and Substantial Shareholders (as defined in
the AIM Rules) in the Company have subscribed for Placing Shares in
connection with the Placing. The number of Placing Shares
conditionally subscribed for by each such Director and Substantial
Shareholder pursuant to the Placing, and their resulting
shareholdings on Admission, are set out below:
Shareholder Existing Number of Number of Ordinary Percentage
Ordinary Existing Placing Shares held of Enlarged
Shares Ordinary Shares post Admission* Share Capital
held Shares held subscribed held*
as a percentage for
of all Existing
Ordinary
Shares
Nant Capital,
LLC / Patrick
Soon-Shiong 11,343,440 22.19% 6,280,000 17,623,440 28.37%
Dompe Holdings
S.r.l. 6,926,666 13.55% 593,333 7,519,999 12.11%
Galbiga Immobiliare
S.r.l.** 3,448,791 6.75% 356,000 3,804,791 6.13%
* assuming the Open Offer is fully subscribed
** Giulio Cesareo, CEO of the Company, and his family are the
sole beneficiaries of the Ordinary Shares held by Galbiga
Immobiliare S.r.l.
Nant Capital, LLC and Dompe Holdings S.r.l. are "Substantial
Shareholders" in the Company for the purposes of the AIM Rules.
Their conditional subscription for Placing Shares pursuant to the
Placing (as described above) and the participation of certain
Directors as stated above will be related party transactions for
the purposes of the AIM Rules. The Directors who are independent of
the related party transaction, having consulted with Cantor
Fitzgerald Europe, the Company's nominated adviser for the purposes
of the AIM Rules, consider the terms of the participations of each
of Giulio Cesareo, Nant Capital, LLC and Dompe Holdings S.r.l. in
the Placing to be fair and reasonable insofar as Shareholders are
concerned.
6. Details of the Open Offer
In order to provide Shareholders with an opportunity to
participate, the Company is providing all Qualifying Shareholders
with the opportunity to subscribe at the Issue Price for an
aggregate of up to 1,345,169 Open Offer Shares. This allows
Shareholders to participate on a pre-emptive basis whilst providing
the Company with the flexibility to raise additional equity capital
to further improve its financial position.
Shareholders are being offered the opportunity to apply for
additional Open Offer Shares in excess of their pro rata
entitlements to the extent that other Shareholders do not take up
their entitlements in full. In the event of applications in excess
of the maximum number of Open Offer Shares available, the Company
will decide on the basis for allocation. The Open Offer Shares have
not been placed subject to clawback nor have they been
underwritten. Consequently, there may be fewer than 1,345,169 Open
Offer Shares issued pursuant to the Open Offer.
A Qualifying Non-CREST Shareholder who has sold or transferred
all or part of their holding of Existing Ordinary Shares prior to
the Ex-entitlement Date, should consult their broker or other
professional adviser as soon as possible, as the invitation to
acquire Open Offer Shares under the Open Offer may be a benefit
which may be claimed by the transferee. Qualifying Non-CREST
Shareholders who have sold all or part of their registered holdings
should, if the market claim is to be settled outside CREST,
complete Box 11 on the Application Form and immediately send it to
the stockbroker, bank or other agent through whom the sale or
transfer was effected for transmission to the purchaser or
transferee. The Application Form should not, however, subject to
certain exceptions, be forwarded to or transmitted in or into a
Restricted Jurisdiction.
The Directors intend to participate in the Open Offer.
Basic Entitlement
Qualifying Shareholders are invited, on and subject to the terms
and conditions of the Open Offer, to apply for any number of Open
Offer Shares (subject to the limit on the number of Excess Shares
that can be applied for using the Excess Application Facility) at
the Issue Price. Qualifying Shareholders have a Basic Entitlement
of:
1 Open Offer Share for every 38 Existing Ordinary Shares
registered in the name of the relevant Qualifying Shareholder on
the Record Date.
Basic Entitlements under the Open Offer will be rounded down to
the nearest whole number and any fractional entitlements to Open
Offer Shares will be disregarded in calculating Basic Entitlements
and will be aggregated and made available to Qualifying
Shareholders under the Excess Application Facility.
The aggregate number of Open Offer Shares available for
subscription pursuant to the Open Offer will not exceed 1,345,169
Open Offer Shares.
Allocations under the Open Offer
In the event that valid acceptances are not received in respect
of all of the Open Offer Shares under the Open Offer, unallocated
Open Offer Shares will be allotted to Qualifying Shareholders to
meet any valid applications under the Excess Application Facility.
The Company may satisfy valid applications for Excess Shares of
applicants in whole or in part but reserves the right not to
satisfy any excess above any Open Offer Entitlements. The Board may
scale back applications made in excess of Open Offer Entitlements
on such basis as it reasonably considers to be appropriate.
Excess Application Facility
The Open Offer is structured to allow Qualifying Shareholders to
subscribe for Open Offer Shares at the Issue Price pro rata to
their holdings of Existing Ordinary Shares. Qualifying Shareholders
may also make applications in excess of their pro rata initial
entitlement. Any such applications will be granted at the absolute
discretion of the Company. If applications under the Excess
Application Facility are received for more than the total number of
Open Offer Shares available following take-up of Open Offer
Entitlements, such applications will be scaled according to the
Directors' discretion to the number of excess Open Offer Shares
applied for by Qualifying Shareholders under the Excess Application
Facility. Applications under the Excess Application Facility may be
allocated in such manner as the Directors may determine, in their
absolute discretion, and no assurance can be given that any
applications under the Excess Application Facility by Qualifying
Shareholders will be met in full or in part or at all.
Not all Shareholders will be Qualifying Shareholders.
Shareholders who are located in, or are citizens of, or have a
registered address in Restricted Jurisdictions will not qualify to
participate in the Open Offer. The attention of Overseas
Shareholders is drawn to paragraph 5 of Part III of the
circular.
Qualifying Shareholders should note that the Open Offer is not a
rights issue. Qualifying Non-CREST Shareholders should be aware
that the Application Form is not a negotiable document and cannot
be traded. Qualifying Shareholders should also be aware that in the
Open Offer, unlike in a rights issue, any Open Offer Shares not
applied for will not be sold in the market nor will they be placed
for the benefit of Qualifying Shareholders who do not apply under
the Open Offer.
Conditions
The Open Offer is conditional upon, inter alia, the passing of
the Resolutions and Admission.
If the conditions are not satisfied, the Open Offer will not
proceed and any Open Offer Entitlements admitted to CREST will
thereafter be disabled and application monies under the Open Offer
will be refunded to the applicants, at the applicant's risk either
as a cheque by first class post to the address set out on the
Application Form or returned direct to the account of the bank or
building society on which the relevant cheque or banker's draft was
drawn in the case of Qualifying Non-CREST Shareholders and by way
of a CREST payment in the case of Qualifying CREST Shareholders,
without interest, as soon as practicable thereafter.
7. Resolutions and General Meeting
The Placing and Open Offer are both conditional upon, amongst
other things, the Directors obtaining appropriate Shareholder
authorities at the General Meeting to allot the Placing Shares and
the Open Offer Shares and to disapply statutory pre-emption rights
which would otherwise apply to such allotment.
A notice convening the General Meeting to be held at the offices
of Directa Plus plc, 3rd floor, 11-12 St. James's Square, London,
SW1Y 4LB at 11 a.m. on 18 October 2019. An explanation of each of
the Resolutions is set out below.
Resolution 1: Authority to allot shares
If passed by Shareholders, this resolution would give the
Directors the authority to allot (a) the Placing Shares; (b) the
Open Offer Shares; and (c) Ordinary Shares up to an aggregate
nominal amount of GBP51,758 (representing 20,703,201 Ordinary
Shares). The amount in (c) represents approximately one-third of
the Enlarged Share Capital (assuming all Open Offer Shares are
subscribed for in full). Unless revoked, varied or extended, the
authority sought under this resolution will expire at the
conclusion of the annual general meeting in 2020 or the close of
business on 30 June 2020, whichever is sooner.
If passed, this resolution would give the Directors authority to
allot the same percentage of Ordinary Shares that they would have
been authorised to allot had the Fundraising not taken place. Other
than in respect of the Fundraising, the Directors have no present
intention to exercise the authority sought under this resolution.
However, it is considered prudent to maintain the flexibility that
this authority provides so that the Company can more readily take
advantage of possible opportunities. These authorities are without
prejudice to previous allotments or rights to receive allotments
made under existing authorities.
Resolution 1 will be proposed as an ordinary resolution and
requires a simple majority of Shareholders present, in person or by
proxy, to vote in favour in order to be passed. This authority will
replace the authority under section 551 of the Act given to the
Directors at the 2019 AGM.
As at the date of this announcement, the Company did not hold
any shares in treasury.
Resolution 2: Disapplication of pre-emption rights
This resolution would, if passed, allow the Directors to allot
equity securities or sell treasury shares for cash (other than in
connection with an employee share scheme), without having to offer
such shares to existing shareholders in proportion to their own
holdings (known as pre-emption rights).
The Act requires that, if the Company issues new shares, or
grants rights to subscribe for or to convert any security into
shares for cash or sells any treasury shares, it must first offer
them to existing shareholders in proportion to their current
holdings. It is proposed that the Directors be authorised to issue
shares for cash without first offering them to existing
shareholders in proportion to their existing shareholdings in the
following circumstances: (a) in connection with the Placing; (b) in
connection with the Open Offer; and (c) a rights issue or other
pre-emptive offer or an offer to holders of other equity securities
if required by the right of those securities or if the Directors
otherwise consider necessary. The resolution also enables the
Directors to modify the statutory pre-emption rights to deal with
legal, regulatory or practical problems that may arise on a rights
or other pre-emptive offer or issue.
Resolution 2 will be proposed as a special resolution and
requires a majority of at least 75 per cent. of those present, in
person or by proxy, to vote in favour to be passed. If passed, this
authority will expire, unless revoked, varied or extended, at the
same time as the authority to allot shares given pursuant to
Resolution 1. These authorities are without prejudice to previous
allotments or rights to receive allotments made under existing
authorities.
The Directors consider the authority in this resolution to be
appropriate in order to allow the Company flexibility to finance
business opportunities or to conduct a pre-emptive offer or rights
issue.
8. EIS/VCT
The Company received advance assurance on 1 April 2016 from HMRC
that it is a qualifying company for the purposes of the Enterprise
Investment Scheme ("EIS Advance Assurance"). On 5 July 2019 and 8
August 2019, the Company applied to HMRC to receive advance
assurance that it continues, and will continue following completion
of the Acquisition, to be a qualifying company for EIS Advance
Assurance and is a qualifying company for the purposes of the
Venture Capital Trust rules ("VCT Advance Assurance").
The Company has not yet received a letter from HMRC in response
to its applications dated 5 July 2019 and 8 August 2019 authorising
the Company to issue compliance certificates under Section 204(1)
Income Tax Act 2007 in respect of the ordinary shares to be issued,
following receipt of a form EIS1 satisfactorily completed. As a
result of the consultation document on advance assurance HMRC's
policy has changed and as of 2 January 2018, HMRC can no longer
consider VCT Advance Assurance applications where the details of
the potential qualifying holding are not given.
Even if assurance is received, it does not guarantee the
availability of any form of relief under the Enterprise Investment
Scheme to any particular subscriber or that the Company will
constitute a qualifying holding for VCT purposes.
Investors considering taking advantage of EIS relief or making a
qualifying VCT investment are recommended to seek their own
professional advice in order that they may fully understand how the
relief legislation may apply in their individual circumstances. Any
Shareholder who is in any doubt as to his taxation position under
the EIS and VCT legislation, or who is subject to tax in a
jurisdiction other than the UK, should consult an appropriate
professional adviser.
9. Action to be taken by Shareholders
If a hard copy of the Form of Proxy is requested this should be
completed and returned in accordance with the instructions printed
on it so as to arrive at the Company's registrars, Link Asset
Services, The Registry, 34 Beckenham Road, Beckenham, Kent, BR3 4TU
as soon as possible and in any event not later than 11.00 a.m. on
16 October 2019. Completion and return of the Form of Proxy will
not prevent Shareholders from attending the General Meeting and
voting in person should they so wish.
The action to be taken by Qualifying Shareholders in order to
apply for Open Offer Shares under the Open Offer is set out under
"Procedure for Application and Payment" in Part III of the circular
and in the accompanying Application Form.
The articles of association of the Company permit the Company to
issue shares in uncertificated form. CREST is a computerised
paperless share transfer and settlement system which allows shares
and other securities to be held in electronic rather than paper
form. CREST is a voluntary system and Shareholders who wish to
retain certificates will be able to do so.
10. Recommendation
The Board believe that the Placing and Open Offer are in the
best interests of the Company and its Shareholders as a whole and
recommend Shareholders to vote in favour of the Resolutions, as
they intend to do in respect of their own beneficial holdings of
3,673,836 Ordinary Shares, representing approximately 7.2 per cent.
of the current issued share capital of the Company.
Appendix 1: Expected timetable of principal events
Record Date for the Open Offer 6.00 p.m. on 26 September
2019
Announcement of the Firm Placing, 30 September 2019
Conditional Placing and Open Offer
Publication of Circular and Application 30 September 2019
Form
Ex-entitlement date for the Open Offer 8.00 a.m. on 1 October
2019
Open Offer Entitlements and Excess as soon as possible after
CREST Open Offer Entitlements credited 8.00 a.m. on 2 October
to stock accounts of Qualifying CREST 2019
Shareholders
Latest recommended time for requesting 4.30 p.m. on 10 October
withdrawal of Open Offer Entitlements 2019
and Excess CREST Open Offer Entitlements
from CREST
Latest time and date for depositing 3.00 p.m. on 11 October
Open Offer Entitlements and Excess 2019
CREST Open Offer Entitlements in to
CREST
Latest time and date for splitting 3.00 p.m. on 15 October
of Application Forms (to satisfy bona 2019
fide market claims only)
Latest time and date for receipt of 11.00 a.m. on 16 October
Forms of Proxy and CREST voting instructions 2019
for use at the General Meeting
Latest time and date for receipt of 11.00 a.m. on 17 October
completed Application Forms and payment 2019
in full under the Open Offer and settlement
of relevant CREST instructions (as
appropriate)
General Meeting 11.00 a.m. on 18 October
2019
Announce result of Open Offer 18 October 2019
Admission and commencement of dealings 8.00 a.m. on 21 October
in Conditional Placing Shares and 2019
Open Offer Shares commence
CREST members' accounts credited in as soon as possible after
respect of the First Tranche and Second 8.00 a.m. on 21 October
Tranche in uncertificated form 2019
Dispatch of definitive share certificates 4 November 2019
for the Conditional Placing Shares
Open Offer Shares in certificated
form
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END
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