TIDMHUW
RNS Number : 0305C
Helios Underwriting Plc
13 June 2019
THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR
RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY
OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA,
JAPAN, THE REPUBLIC OF IRELAND, THE REPUBLIC OF SOUTH AFRICA OR ANY
OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR
DISTRIBUTION WOULD BE UNLAWFUL
Neither this Announcement nor any part of it constitutes an
offer to sell, or the solicitation of an offer to buy, subscribe or
acquire new ordinary shares in the capital of the Company in any
jurisdiction in which such an offer or solicitation is unlawful or
would impose any unfulfilled registration, publication or approval
requirements on the Company and/or Shore Capital and Corporate
Limited.
13 June 2019
Helios Underwriting PLC
("Helios" or the "Company")
Placing and Open Offer to raise up to GBP3.05 million,
Proposed Acquisition of the entire issued share capital of
Nameco (No. 1113) Limited,
Waiver of Rule 9 of the City Code on Takeover and Mergers
and
Notice of General Meeting
Fundraising
Helios is pleased to announce that it has conditionally raised
approximately GBP1.15 million (before expenses) by way of a placing
of 895,313 new Ordinary Shares at a price of GBP1.28 per share. In
addition, the Company intends to raise up to a further,
approximately, GBP1.9 million by way of an Open Offer to existing
shareholders on the basis of 1 Open Offer Share for every 10
Existing Ordinary Shares. Each of the Placing and the Open Offer
are conditional, amongst other things, upon the relevant
shareholder authorities being granted at the Company's forthcoming
General Meeting.
Each of the Directors (other than Nigel Hanbury) have
participated, directly or indirectly, in the Placing to a total of
approximately GBP90,000. Will Roseff, a substantial shareholder,
has also participated in the Placing to the amount of GBP800,000.
The Directors have undertaken not to participate in the Open
Offer.
Helios intends to use the net proceeds of the Placing and the
Open Offer to strengthen its balance sheet and provide readily
available funds to acquire further limited liability vehicles that
participate in syndicates at Lloyd's when attractive opportunities
arise.
Settlement and Admission to trading on AIM is expected to occur
on or about 17 July 2019.
Attention is also drawn to Appendix I to this Announcement
entitled "Risk Factors".
Proposed Acquisition
The Company has also entered into a conditional agreement to
acquire the entire issued share capital of Nameco (No. 1113)
Limited, which is ultimately beneficially owned by Nigel Hanbury,
in consideration for GBP2,036,184, to be satisfied by the allotment
and issue of the Consideration Shares to Nigel Hanbury at
Completion.
HIPCC Reorganisation
Nigel Hanbury is currently the indirect 51 per cent. shareholder
of HIPCC, with the remaining 49 per cent. being indirectly held by
Hampden. HIPCC provides a number of reinsurance services to the
Group, including certain quota share reinsurance products, which
have been developed for the Group. The Company and Nigel Hanbury
recognise that these related party arrangements can be viewed as a
potential conflict of interest and, accordingly, have taken steps
to remove that perceived conflict through the HIPCC
Reorganisation.
Rule 9 Waiver
Aspects of the Placing and the issue of the Consideration
Shares, inter alia, give rise to certain considerations under the
City Code. In aggregate, the members of the Concert Party are
interested in shares which carry 30.13 per cent. of the Company's
voting rights. As the members of the Concert Party are interested
in shares which, in the aggregate, carry not less than 30 per cent.
of the voting rights of the Company, but do not hold shares
carrying more than 50 per cent. of the voting rights of the
Company, the acquisition by any member of the Concert Party of an
interest in any other shares which increases the percentage of
shares carrying voting rights in which such member is interested as
a result of the Whitewash Proposals would ordinarily result in the
members of the Concert Party having to make a mandatory offer under
Rule 9 of the City Code.
Pursuant to the City Code, the Panel may waive the requirement
for a general offer to be made in accordance with Rule 9 if,
amongst other things, the Independent Shareholders pass an ordinary
resolution on a poll approving such a waiver. Accordingly, the
Directors are also proposing the Whitewash Resolution to seek the
necessary Shareholder approval.
The Circular detailing the Open Offer and convening the General
Meeting to, inter alia, seek the required shareholder authorities,
together with (in the case of Qualifying Non-CREST Shareholders)
the Application Form in respect of the Open Offer, is expected to
be sent to Shareholders on or about 19 June 2019.
This announcement contains inside information which is disclosed
in accordance with the Market Abuse Regulation (596/2014). Upon the
publication of this Announcement via a Regulatory Information
Service, this information is considered to be in the public
domain.
-Ends-
For further information, please contact:
Helios
Nigel Hanbury - Chief Executive 07787 530 404/
nigel.hanbury@huwplc.com
Arthur Manners - Finance Director 07754 965917
Shore Capital 020 7601 6100
Robert Finlay
David Coaten
Buchanan 020 7466 5000
Helen Tarbet
Henry Wilson
Hannah Ratcliff
Each of Shore Capital and Corporate Limited and Shore Capital
Stockbrokers Limited respectively are acting exclusively for the
Company and no-one else in connection with the Placing and
Admission and will not regard itself as owing duties under the
rules and regulations of the Financial Conduct Authority to any
other person or regard any other persons as its client.
The distribution of this Announcement and the Placing of the
Placing Shares in certain jurisdictions may be restricted by law.
No action has been taken by the Company or Shore Capital that would
permit an offering of such shares or possession or distribution of
this Announcement or any other offering or publicity material
relating to such shares in any jurisdiction where action for that
purpose is required. Persons into whose possession this
Announcement comes are required by the Company and Shore Capital to
inform themselves about, and to observe, such restrictions.
No offering document, prospectus or admission document has been
or will be submitted to be approved by the FCA or submitted to the
London Stock Exchange in relation to the Placing. The Placing
Shares are being offered to a limited number of specifically
invited persons only and will not be offered in such a way as to
require a prospectus in the UK or in any other jurisdiction. This
Announcement contains no offer to the public within the meaning of
section 102B FSMA or otherwise.
ADDITIONAL INFORMATION
1. Introduction
The Company has grown successfully by implementing its strategy
of consolidating Lloyd's nameco's to build a fund of Lloyd's
underwriting capacity. In order to continue that growth strategy,
the Company intends to carry out the Fundraising, the Acquisition
and the HIPCC Reorganisation, further details of which are set out
below.
The Company today announces that it has conditionally raised
gross proceeds of approximately GBP1.15 million (before expenses)
pursuant to the Placing. In addition, the Company intends to raise
up to a further, approximately, GBP1.9 million by way of an Open
Offer to existing shareholders, on the basis of 1 Open Offer Share
for every 10 Existing Ordinary Shares, at an issue price of GBP1.28
per share.
The Issue Price represents a discount of approximately 7 per
cent. to the Closing Price of GBP1.375 per Ordinary Share on 12
June 2019. Application will be made to the London Stock Exchange
for the New Ordinary Shares to be admitted to trading on AIM.
Settlement and Admission to trading on AIM is expected to occur on
or about 17 July 2019.
Shares issued pursuant to the Placing and the Open Offer will
rank for the Company's 2018 final dividend of 1.5p per share
together with its special dividend of 1.5p per share, making a
total of 3p per share ("Dividends"), subject to being admitted to
trading on AIM prior to 19 July 2019 and subject to shareholder
approval of the Dividends at the Company's annual general
meeting.
Shareholder approval will be sought in respect of the
authorities required to implement the Fundraising at the General
Meeting.
2. Background to and reasons for the Acquisition and Fundraising and use of proceeds
Helios' strategy is to build a fund of Lloyd's underwriting
capacity through the acquisition and consolidation of acquired
limited liability vehicles. Quota share reinsurance is utilised to
reduce the exposure of the portfolio and assist in the financing of
acquisitions.
This strategy has increased the portfolio from GBP12.9 million
at the start of the 2013 underwriting year to GBP53.7 million
currently. During that period, the Company has acquired 36
companies for a total consideration of GBP38.9 million.
There are approximately 1,700 limited liability vehicles which
are Lloyd's members, with an estimated GBP2.0 billion of capacity
and the Board believes there has been a change in sentiment amongst
owners of smaller such limited liability vehicles as rising costs,
regulatory pressures and requirements to fund recent losses on the
Lloyd's market have all been causing concerns for an aged investor
base. Accordingly, the Board expects a good flow of such companies
to come onto the market for sale. As at 29 May 2019, there were
approximately 17 such vehicles currently for sale, with an
aggregate value of GBP7.8 million.
Helios will look to continue to exploit the available
acquisition opportunities to grow its portfolio at attractive
prices and to continue its participation in the better managed
syndicates by building strategic stakes, which are difficult and
expensive to replicate.
The Acquisition is in line with the Company's strategy to
increase its underwriting capacity, but also enables Nigel Hanbury
to continue to invest in the Company's share capital, within the
context of the Fundraising.
The Company has conditionally raised gross proceeds of GBP1.15
million through the Placing, and is seeking to raise up to a
further, approximately, GBP1.9 million pursuant to the Open Offer,
in order to provide additional funding to continue to expand its
portfolio of capacity that participates on syndicates at
Lloyds.
The net proceeds of the Fundraising will strengthen the balance
sheet and provide readily available funds to expand the capacity
portfolio by acquiring further limited liability vehicles.
3. Information on Nameco 1113
Nameco 1113 is a limited liability member of Lloyd's and the
Acquisition represents an opportunity for Helios to continue to
build its participations on the better syndicates at Lloyd's. The
2019 underwriting capacity of Nameco 1113 is GBP1,994,276. The
capacity acquired together with the capacity retained by Helios is
as follows:
Year of Account
2016 2017 2018 2019
GBPm GBPm GBPm GBPm
----- ----- ----- ----
Retained 1.0 1.8 2.00 2.0
Reinsured 1.8 - - -
----- ----- ----- ----
Total Capacity 2.8 1.8 2.0 2.0
----- ----- ----- ----
Nameco 1113 participates in a spread of Lloyd's syndicates that
broadly matches the existing portfolio of Helios. However, Nameco
1113 has a significant participation of approximately GBP499,275 in
Lloyds' Syndicate 1176, which following Completion, would increase
Helios' participation in that syndicate toGBP1,448,810 for the 2019
year of account. Syndicate 1176 insures against nuclear risk and
liability, including physical damage loss and business interruption
to civil nuclear power stations, as well as risk and liability in
the wider nuclear fuel cycle. This syndicate participation
represents 2.6 per cent. of the enlarged capacity portfolio.
Nameco 1113 entered into quota share reinsurance arrangements in
respect of 64 per cent. of its portfolio for the 2016 underwriting
year. Helios intends to reinsure 70 per cent. of the 2019
underwriting year in line with its stated strategy of reducing
"on-risk" exposures. In the year ended 31 December 2017, Nameco
1113 made a loss before tax of GBP335,669 on gross premiums written
of GBP1.7 million. Nameco 1113 has cash and near-cash of
approximately GBP1.2 million, of which approximately GBP700,000 is
expected to be released as free cash following the re-financing
using quota share reinsurance. The Humphrey valuation of Nameco
1113 adjusted for deferred tax provisions is approximately GBP2.3
million and the consideration being paid is GBP2,036,184, a 13 per
cent. discount to the adjusted valuation. The Consideration Shares
issued pursuant to the Acquisition will rank for the Dividends,
subject to being admitted to trading on AIM prior to the record
date of the close of business on 19 July 2019 and subject to the
requisite shareholder approval of the Dividends at the Company's
annual general meeting.
Forecasts in respect of Nameco 1113's 2017 and 2018 open years
of account are set out below:
Year of account Nameco 1113 Forecast of syndicate
syndicate profit
capacity (as at 28 May 2019)
(GBP'000)
----------------- ------------
Result / Mid-point
(GBP'000)
----------------- ------------ ---------------------
2017 1,796 4.42%
2018 2,035 2.27%
Source: Syndicate data and Helios analysis (before quota share
and early release)
The Acquisition constitutes a related party transaction for the
purpose of the AIM Rules.
4. HIPCC Reorganisation
Nigel Hanbury is currently the indirect 51 per cent. shareholder
of HIPCC, with the remaining 49 per cent. being indirectly held by
Hampden. HIPCC provides a number of reinsurance services to the
Group, including certain quota share reinsurance products, which
have been developed for the Group. The Company and Nigel Hanbury
recognise that these related party arrangements can be viewed as a
potential conflict of interest and, accordingly, have taken steps
to remove that perceived conflict through the HIPCC
Reorganisation.
Pursuant to the HIPCC Framework Agreement, Upperton, the Company
and other relevant parties have agreed to amend certain of the
Group's arrangements with HIPCC starting from the 2020 underwriting
year. The HIPCC Reorganisation will have the effect of removing the
economic benefit that Nigel Hanbury (through Upperton) would
otherwise receive in respect of the Group's arrangements with
HIPCC, in return for a one-off cash payment of GBP100,000.
Pursuant to the HIPCC Framework Agreement, an amount equal to
the profits derived by HIPCC from the Group's arrangements with it,
in any relevant underwriting year, is to be paid to Helios. An
amount equal to 49 per cent. of those profits (together with an
amount equal to certain tax liabilities that would be payable by
Hampden solely as a result of this arrangement) are then paid to
Hampden, in order to ensure that it is not disadvantaged by the
HIPCC Reorganisation. The HIPCC Framework Agreement is to be
effective from the 2020 Lloyd's years of account, until the earlier
of Nigel Hanbury ceases to be a director of the Company, or the end
of the year of account in which Nigel Hanbury ceases to have any
direct or indirect, legal or beneficial, interest in the share
capital and voting rights of HIPCC.
The HIPCC Reorganisation constitutes a related party transaction
for the purpose of the AIM Rules.
5. Trading Update
Helios provides a limited liability direct investment into the
Lloyd's insurance market and is quoted on AIM (ticker: HUW). Helios
trades within the Lloyd's insurance market and has a portfolio of
syndicate capacity of GBP53.7 million for the 2019 year of account.
The portfolio provides a good spread of classes of business being
concentrated in property insurance and reinsurance.
On 31 May 2019, the Company announced its final results for the
financial year ended 31 December 2018 which included the following:
a 32 per cent. increase in the capacity portfolio from the six
acquisitions of 2018 and a further acquisition in 2019; operating
profit before goodwill, impairment and tax of GBP608,000 (2017:
loss of GBP406,000); earnings per share of 3.14p (2017: loss of
4.75p): adjusted net asset value increased to GBP1.90 per share
(2017: GBP1.60 per share); Helios retained capacity for 2019 open
underwriting year of GBP15.8 million (2018 year of account: GBP12.3
million); and the catastrophe losses in 2018 of GBP5.2 million were
reduced by reinsurance to GBP1.3 million.
The announcement also included the following outlook
statement:
"Our strategy to build a fund of capacity on quality syndicates
at Lloyd's continues to develop with the growth of the capacity
portfolio by 32 per cent. in the year 2018.
The 2018 underwriting year was affected by the second year of
catastrophe claims above the Lloyd's market long-term average. The
losses in the year affected both the 2017 and 2018 underwriting
years and have been fully recognised in these accounts so any
improvement in the next two years will contribute to earnings. In
addition, firmer market conditions should be reflected in the
underwriting returns in the future.
The strategy of building a capacity portfolio of the better
available syndicates at Lloyd's should allow Helios to maintain its
outperformance of returns on capacity against the Lloyd's market.
The recent soft underwriting conditions will distinguish the better
managed syndicates which will deliver top quartile performance
within the Lloyd's market which will reinforce the demand for these
syndicates and assist in the recovery of the auction values. We
anticipate more opportunities to acquire LLVs at attractive
prices."
6. Details of the Acquisition Agreement
Pursuant to the Acquisition Agreement, the Company has
conditionally agreed to acquire the entire issued share capital of
Nameco 1113 in consideration for GBP2,036,184, to be satisfied by
the allotment and issue of the Consideration Shares to Nigel
Hanbury at the Issue Price.
The Acquisition Agreement is conditional, amongst other things,
upon:
(a) the passing of the necessary shareholder resolutions at the General Meeting;
(b) Lloyd's approval of the change of control of Nameco 1113 as
a result of the Acquisition; and
(c) Admission having occurred on 17 July 2019 (or such later
time and date as may be agreed between Shore Capital and the
Company pursuant to the Placing and Open Offer Agreement).
If the conditions set out above are not satisfied or waived by
no later than 18 July 2019, the Acquisition Agreement will
automatically terminate and cease to have any further force and
effect, save in respect of any antecedent breaches. Subject to the
satisfaction of the conditions, Completion, and the issue of the
Consideration Shares, is expected to occur at Admission.
The Acquisition Agreement contains customary warranties given by
Nigel Hanbury to the Company in respect of, inter alia, Nameco 1113
and its operations. Nigel Hanbury has also undertaken to indemnify
the Company in respect of any liabilities for tax of Nameco 1113
arising in respect of, amongst other things, the 2016 and prior
closed years of account and any costs, liabilities or losses
arising from the enforcement of the existing security granted by
Nameco 1113 to Lloyd's in relation to Nomina No. 084 LLP (which is
ultimately controlled by Nigel Hanbury), pending the release of
such security. The liability of Nigel Hanbury pursuant to the
warranties is subject to certain customary limitations, both as to
the time in respect of which a claim may be made and the amount
that may be recovered. The Acquisition Agreement is subject to
English law.
7. Details of the Fundraising
Details of the Placing
The Company entered into the Placing and Open Offer Agreement,
pursuant to which Shore Capital has agreed to use its reasonable
endeavours to procure subscribers for new Ordinary Shares as agent
for the Company, pursuant to the Placing, at the Issue Price.
The Placing is conditional, inter alia, upon:
(a) the passing of the necessary shareholder resolutions at the General Meeting;
(b) the Placing and Open Offer Agreement becoming unconditional
in all respects (save in respect of the condition in respect of
Admission having occurred) and not having been terminated in
accordance with its terms; and
(c) Admission occurring by not later than 8.00 a.m. on 17 July
2019 (or such later time and/or date as the Company and Shore
Capital may agree, not being later than 18 July 2019).
Accordingly, if any of such conditions are not satisfied or, if
applicable, waived, the Placing will not proceed. Shore Capital may
in its absolute discretion waive the conditions referred to above,
other than that relating to Admission.
Under the Placing and Open Offer Agreement, certain warranties
have been given by the Company to Shore Capital concerning, inter
alia, the accuracy of the Announcement and the presentation to
potential investors, the affairs of the Company and certain
taxation and other matters, and certain indemnities have been given
by the Company in relation to Shore Capital's involvement in the
Placing and Admission.
The Placing and Open Offer Agreement may be terminated by Shore
Capital at any time prior to Admission in certain circumstances
including, among other things, following a breach by the Company of
the Placing and Open Offer Agreement or on the occurrence of
certain force majeure events.
For the avoidance of doubt, Shore Capital is not underwriting
the Placing or the Open Offer.
Details of the Open Offer
The Open Offer provides an opportunity for all Qualifying
Shareholders to participate in the fundraising by subscribing for
their respective Open Offer Entitlements. Pursuant to the Open
Offer, Qualifying Shareholders will be given the opportunity to
subscribe at the Issue Price for:
1 Open Offer Share for every 10 Existing Ordinary Shares
registered in the name of the relevant Qualifying Shareholder on
the Record Date.
Qualifying Shareholders applying for their Open Offer
Entitlements in full may also apply, under the Excess Application
Facility, for Excess Shares in addition to their Open Offer
Entitlements, should they wish. The Excess Application Facility
will comprise Open Offer Shares that are not taken up by Qualifying
Shareholders under the Open Offer pursuant to their Open Offer
Entitlements. Applications under the Excess Application Facility
will therefore only be satisfied to the extent that other
Qualifying Shareholders do not apply for their Open Offer
Entitlements in full. Qualifying Shareholders can apply for any
number of Excess Shares under the Excess Application Facility,
although if applications exceed the maximum number available, the
applications will be scaled back on a pro rata basis or otherwise
at the discretion of the Directors.
Assuming that the maximum number of Open Offer Shares are
allotted and issued pursuant to the Open Offer, the Open Offer
would raise gross proceeds of approximately GBP1.9 million. The
Open Offer is not being underwritten. The Open Offer Shares will
rank for the Dividends, subject to the shares being admitted to
trading on AIM prior to 19 July 2019 and subject to shareholder
approval of the Dividends at the Company's annual general
meeting.
The ability to participate in the Open Offer is subject to
certain restrictions relating to Qualifying Shareholders with
registered addresses or located or resident in countries outside of
the UK. Subject to certain exceptions, Application Forms will not
be despatched to, and Open Offer Entitlements will not be credited
to the stock accounts in CREST of Shareholders with registered
addresses in, any Restricted Jurisdiction.
The Open Offer is conditional, inter alia, upon the
following:
(a) the passing of the necessary shareholder resolutions at the General Meeting;
(b) the Placing and Open Offer Agreement becoming unconditional
in all respects (save in respect of the condition in respect of
Admission having occurred) and not having been terminated in
accordance with its terms; and
(c) Admission occurring by not later than 8.00 a.m. on 17 July
2019 (or such later time and/or date as the Company and Shore
Capital may agree, not being later than 18 July 2019).
If the conditions set out above are not satisfied or, if
applicable, waived (where capable of waiver), the Open Offer will
lapse; and any Open Offer Entitlements and Excess CREST Open Offer
Entitlements admitted to CREST will, after that time and date, be
disabled and application monies under the Open Offer will be
refunded to the applicants, by cheque (at the applicant's risk) 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.
Application for Admission
Application will be made to the London Stock Exchange for the
New Ordinary Shares to be admitted to trading on AIM. Admission of
the New Ordinary Shares is expected to take place, and dealings on
AIM are expected to commence, at 8.00 a.m. on 17 July 2019 (or such
later times and/or dates as may be agreed between the Company and
Shore Capital). No temporary documents of title will be issued.
The New Ordinary Shares will, with effect from Admission, rank
pari passu in all respects with the Existing Ordinary Shares and
will carry the right to receive all dividends and distributions
declared, made or paid on or in respect of the Ordinary Shares
after Admission.
Accordingly, on the assumption that Admission takes place on 17
July 2019 as currently envisaged and resolutions 2 and 3 to be
proposed at the Company's annual general meeting convened for 28
June 2019 are passed, the New Ordinary Shares would carry the
rights to receive the dividends, of 3p per Ordinary Share in
aggregate, proposed to be paid on 31 July 2019 to holders of
Ordinary Shares registered at the close of business on 19 July
2019.
8. Directors' and major Shareholder's interests and intentions
in relation to the Fundraising
Each of the Directors (other than Nigel Hanbury) have, directly
or indirectly, subscribed for Placing Shares pursuant to the
Placing, for an aggregate subscription of approximately GBP90,000
at the Issue Price. Pursuant to the Acquisition, Nigel Hanbury is
to be allotted and issued the Consideration Shares. The Directors
have also undertaken not to participate in the Open Offer.
In addition, Will Roseff, a substantial shareholder who is
interested in 25 per cent of the Company's current issued share
capital, has also participated in the Placing subscribing for an
amount of approximately GBP800,000 at the Issue Price.
9. Waiver of Rule 9 of the City Code
Pursuant to the City Code, the Panel may waive the requirement
for a general offer to be made in accordance with Rule 9 if,
amongst other things, the shareholders of a company who are
independent of the person who would otherwise be required to make
an offer, and any person acting in concert with it, pass an
ordinary resolution on a poll approving such a waiver.
Each of Nigel Hanbury, Hampden, Nicholas Wentworth-Stanley,
Jeremy Evans, Sir Michael Oliver, Peter Nutting, Timothy Oliver,
Susan Oliver, Charles Camroux-Oliver, James Camroux-Oliver and
Alexa Pearmund are considered by the Panel to be acting in concert
in respect of the Company and together are interested in shares
which carry 30.13 per cent. of the Company's voting rights. As the
members of the Concert Party are interested in shares which, in the
aggregate, carry not less than 30 per cent. of the voting rights of
the Company, but do not hold shares carrying more than 50 per cent.
of the voting rights of the Company, the acquisition by any member
of the Concert Party of an interest in any other shares which
increases the percentage of shares carrying voting rights in which
such member is interested as a result of the Whitewash Proposals
(including through an increase of the proportionate voting
interests of any member as a result of a buyback of Ordinary
Shares) would ordinarily result in the members of the Concert Party
having to make a mandatory offer under Rule 9 of the City Code.
The Panel has agreed, subject to the passing of the Whitewash
Resolution by the Independent Shareholders on a poll at the General
Meeting, to waive the obligation of the members of the Concert
Party to make a mandatory offer for the Ordinary Shares not already
owned by them which would otherwise arise following completion of
the Whitewash Proposals. Accordingly, the Company will be proposing
the Whitewash Resolution at the GM to seek the approval of
Independent Shareholders to the Waiver.
10. Related Party Transactions
As Nigel Hanbury is a director of, and substantial shareholder
in, the Company, both the Acquisition and the HIPCC Reorganisation
constitute related party transactions for the purpose of the AIM
Rules.
The Independent Directors consider, having consulted with Shore
Capital, the Company's nominated adviser, that the terms of the
Acquisition and the HIPCC Reorganisation are fair and reasonable in
so far as Shareholders are concerned.
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
2019
Record Date for entitlement to participate 6.00 p.m. on 12 June
in the Open Offer
Announcement of the Fundraising 13 June
Ex-entitlement date for the Open 13 June
Offer
Despatch of the Circular, the form 19 June
of proxy and, to certain Qualifying
Non-CREST Shareholders, the Application
Form
Open Offer Entitlements credited as soon as possible after
to CREST stock accounts of Qualifying 8.00 a.m. on 20 June
CREST Shareholders
Recommended latest time and date 4.30 p.m. on 9 July
for requesting withdrawal of Open
Offer Entitlements from CREST
Latest time for depositing Open Offer 3.00 p.m. on 10 July
Entitlements into CREST
Latest time and date for splitting 3.00 p.m. on 11 July
Application Forms
Latest time and date for receipt 12 noon on 12 July
of forms of proxy for the General
Meeting
Latest time and date for receipt 11.00 a.m. on 15 July
of completed Application Forms and
payment in full under the Open Offer
or settlement of relevant CREST instruction
(as appropriate)
General Meeting 12 noon on 16 July
Result of the General Meeting and 16 July
Open Offer announced
Admission of the New Ordinary Shares 8.00 a.m. on 17 July
to trading on AIM
New Ordinary Shares in uncertificated 17 July
form expected to be credited to accounts
in CREST (uncertificated holders
only)
Expected despatch of definitive share Week commencing 29 July
certificates for the New Ordinary
Shares (certificated holders only)
Notes:
(1) The ability to participate in the Open Offer is subject to
certain restrictions relating to Qualifying Shareholders with
registered addresses or located or resident in countries outside
the UK (particularly the Excluded Overseas Shareholders), Subject
to certain exceptions, Application Forms will not be despatched to,
and Open Offer Entitlements will not be credited to, the stock
accounts in CREST of Shareholders with registered addresses in any
of the Restricted Jurisdictions.
(2) Each of the times and dates set out in the above timetable
and mentioned in this Announcement is subject to change by the
Company, in which event details of the new times and dates will be
notified by an announcement through a Regulatory Information
Service.
(3) References to times in this Announcement are to London times unless otherwise stated.
(4) Different deadlines and procedures for applications may
apply in certain cases. For example, if you hold your Ordinary
Shares through a CREST member or other nominee, that person may set
an earlier date for application and payment than the dates noted
above.
(5) The timetable above assumes that the relevant Resolutions in
the Notice of General Meeting are duly passed.
APPIX I
RISK FACTORS
The nature of the insurance underwriting business, the
regulatory regime applicable to insurance and to corporate members
of Lloyd's and the consequence of past years' underwriting losses
at Lloyd's will give rise to a number of specific risk factors. The
following list is not exhaustive but is intended to draw investors'
attention to certain aspects of the risks involved. Potential
investors and Shareholders should carefully consider the risks
described below before making a decision to invest in the
Company.
It should be noted that, as stated above, this list is not
exhaustive and that other risk factors will apply to an investment
in the Company. If any of the following risks actually occur, the
Company's business, financial condition and/or results or future
operations could be materially adversely affected. In such
circumstances, the trading price of the New Ordinary Shares could
decline and an investor may lose all or part of their investment.
There can be no certainty that the Company will be able to
implement successfully the strategy set out in this Announcement or
the documents referred to in this Announcement. Additional risks
and uncertainties not currently known to the Directors or which the
Directors currently deem immaterial, may also have an adverse
effect on the Company.
This Announcement contains forward looking statements that
involve risks and uncertainties. The Company's actual results could
differ materially from those anticipated in the forward looking
statements as a result of many factors, including the risks faced
by the Company which are described below and elsewhere in this
Announcement. Prospective investors should carefully consider the
other information in this Announcement. The risks listed below do
not necessarily comprise all the risks associated with an
investment in the Company.
An investment in the Company may not be suitable for you.
Investors are accordingly advised to consult an independent
financial adviser duly authorised under FSMA, if you are resident
in the United Kingdom, or if not, from an appropriately authorised
independent financial adviser, who in each case specialises in
advising upon the acquisition of shares and other securities before
making a decision to invest.
Underwriting of insurance risks
The underwriting of insurance risks is, by its nature, a
high-risk business, and returns can never be guaranteed. The
Group's insurance business involves assuming the risk of loss from
persons or organisations that are directly exposed to an underlying
loss. Insurance risk arises from this risk transfer due to inherent
uncertainties about the occurrence, amount and timing of insurance
liabilities. Underwriting risk comprises four elements:
(a) Event risk - the risk that individual risk losses or
catastrophes lead to claims that are higher than anticipated in
plans and pricing;
(b) Cycle risk - the risk that business is written without full
knowledge as to the (in)adequacy of rates, terms and
conditions;
(c) Pricing risk - the risk that the level of expected loss is
understated in the pricing process; and
(d) Expense risk - the risk that the allowance for expenses and
inflation in pricing is inadequate.
It is inherent in the nature of underwriting businesses that it
is difficult to forecast even short-term trends or returns in any
single year. Not only do the results from underwriting insurance
change but investment income and capital appreciation, which form
an important part of underwriting returns, are affected by interest
rates, exchange rates, taxation changes and investment
performance.
The past results of Lloyd's and of individual syndicates are a
matter of historic record and may not be relied upon as a guide to
future prospects. Previously profitable business may subsequently
be loss-making, the nature of business written may change, reserves
created against future claims may prove to be inadequate, a
syndicate's reinsurance programme may be ineffective and/or its
reinsurers may fail.
Claims asserted under certain insurance contracts may typically
not be settled for more than one year from the date the contract
becomes effective. Such underwriting may involve a substantial
degree of risk and may not show any return for a considerable
period of time. In fact, in some circumstances, the ultimate
financial performance of a syndicate's year of account may not be
determined for an extended period of time, which may inhibit the
release of any underwriting profits.
As part of its overall risk mitigation and capital management
strategy, the Group purchases quota share reinsurance to seek to
mitigate its insurance risk. The Group's stop loss programme
complements the Group's quota share reinsurance seeking to protect
the Group's capital from adverse results from the portfolio of
syndicate participations. However, the Group's reinsurance may not
mitigate all these underwriting risks.
Unpredictable and multiple losses
The portfolio of the Group's syndicate participations expose it
to losses arising out of unpredictable natural and other
catastrophic events, such as hurricanes, windstorms, tsunamis,
severe winter weather, earthquakes, floods, fires and explosions,
as well as "man-made" disasters, such as acts of war, terrorism,
piracy and political instability, the emergence of latent risks,
changes in law and the interpretation of law or precedent
(including in relation to the measurement of damages), as well as
social and political changes, and fluctuations in the global
investment markets and the capacity of the global insurance market.
The incidence and severity of catastrophes are inherently
unpredictable and the Group's losses from such catastrophes could
be substantial. Although the Group attempts to manage its exposure
to such events through the selection of the syndicates in which it
participates, a single catastrophic event could affect multiple
geographic zones and/or the frequency and/or severity of
catastrophic events could exceed its estimates.
Each syndicate in which the Group participates will have its own
risk profile and the Group participates in a range of syndicates in
an attempt to balance such risks. Nameco 1113 has a significant
participation of approximately GBP500,000 in Lloyds' Syndicate
1176, which following Completion, would represent a 50 per cent.
increase on Helios' existing participation in that syndicate of
approximately GBP1,000,000 for the 2019 year of account. Syndicate
1176 insures against nuclear risk and liability, including physical
damage loss and business interruption to civil nuclear power
stations, as well as risk and liability in the wider nuclear fuel
cycle. The largest values that the syndicate insures are normally
nuclear power stations, although the syndicate also covers
manufacturers of nuclear fuel and radioisotopes, their transport
and ultimately their safe storage. Whilst underwriting nuclear risk
can be highly profitable it also carries a great deal of risk.
Accordingly, it should be noted that the Group will have an
increased exposure to nuclear-related losses through its increased
participation in Syndicate 1176 for the 2019 year of account and,
should it wish to maintain such level of exposure, in subsequent
years of account.
Cyclicality of insurance business
The insurance and reinsurance business historically has been a
cyclical industry with significant fluctuations in operating
results due to competition, catastrophic events, general economic
and social conditions and other factors. This cyclicality has
produced periods characterised by intense price competition due to
excessive underwriting capacity (soft market conditions) as well as
periods when shortages of capacity resulted in much more favourable
premium levels (hard market conditions). In addition, increases in
the frequency and severity of losses suffered can significantly
affect these cycles. Accordingly, the performance of the Group's
underwriting business is likely to be affected by this cyclicality
to a certain extent, and there can be no guarantee that companies
in the Group which are members of Lloyd's ("corporate members")
will realise any profit from their underwriting business.
Underwriting returns would be impaired if the insurance pricing
environment remained poor for a sustained period of time.
Funds at Lloyd's
The Group's corporate members are required to contribute funds
of an approved form that are lodged and held in trust at Lloyd's as
security for a member's underwriting activities, known as "funds at
Lloyd's" ("FAL"). A member's funds at Lloyd's may contain only
those assets that Lloyd's prescribes as acceptable assets, which
include debt securities, bonds and other money and capital market
instruments, shares, cash and cash equivalents, letters of credit
and guarantees.
On a bi-annual basis, in June and November of each year, there
is a "coming into line" procedure whereby each member of Lloyd's is
required to demonstrate that they have sufficient eligible assets
to meet their current underwriting liabilities and to support
future underwriting before they may underwrite for the next
following year of account.
In addition, the Group's corporate members are also required to
contribute funds to the Lloyd's central fund. To the extent that
Lloyd's suffers a material exposure in its asset base when compared
with its liabilities, any members may at any such time as required
by Lloyd's be called upon to invest further capital into Lloyd's
portfolio of funds, including both as FAL and by way of a
contribution to the central fund. As a result, this may cause the
Group to incur a material increase in its operating expenses and,
as a result, a material adverse impact on its financial results and
financial condition.
Changes implemented to the list of acceptable assets for
purposes of FAL may also adversely impact the Group, as, the
relevant Group companies would be required to post different
assets, which may be more expensive to obtain and maintain or which
may place an undue restriction on the Group's capital resources.
Lloyd's also has the power to reduce any corporate members'
underwriting capacity or to prohibit a corporate member from
underwriting. Any such event is likely to have a material adverse
effect on the Group's reputation, financial condition and results
of operations.
Withdrawal of FAL
Any of the Group's corporate members may find that assets of a
greater value than the amount of that corporate member's
underwriting commitment are at risk. If the value of the FAL
provided by the corporate member exceeds the amount required to be
held as FAL by Lloyd's (including as a result of appreciation) and
the losses of the corporate member in any year of account exceed
the amount of such FAL, Lloyd's may take the whole of the FAL
provided by that corporate member to meet the call. Profits and
capacity disposal proceeds that have not been released by Lloyd's
may become intermingled with FAL, and be liable to be drawn down as
FAL by Lloyd's.
Until the effective date of a corporate member's resignation
from membership at Lloyd's, a corporate member will continue to be
liable for its debts and obligations and, therefore, for the
underwriting losses in respect of the years of account for which it
made an underwriting commitment. Where the balance of the FAL may
fluctuate in value, a decrease in the FAL may reduce the level of a
corporate member's capacity.
Although a corporate member is able to reduce the level of
business written by it in any year of account or to cease
underwriting, it will not be able to withdraw FAL, or funds forming
part of its premiums trust funds, until permitted to do so by
Lloyd's. Lloyd's imposes restrictions on the withdrawal of FAL in
order to ensure that no funds are withdrawn without adequate
provision being made for potential liabilities.
In underwriting insurance risks, the assets of each corporate
member in the Group, including potential profits and all of the FAL
of each corporate member, will be exposed to the risk of
underwriting losses. In the worst case, all of a corporate member's
assets (including all of its FAL, any pipeline profits, investment
income and value attributed to its underwriting capacity) would be
used to meet underwriting losses.
Performance of Syndicates
Investors should be aware that the categories of business
written and the structure of a syndicate's reinsurance programme,
and accordingly the risks and rewards arising from that syndicate,
vary from syndicate to syndicate. Even if Lloyd's makes an overall
underwriting profit, individual syndicates or lines of business may
show losses (for example due to the mix of business written by that
syndicate), and other factors such as over-capacity can affect
profit.
As the Group's corporate members are under common control, the
Group's corporate members may be exposed to each other's losses.
Lloyd's can require any Group corporate member which participates
on a syndicate which makes a profit to pay out of its profits an
amount equal to the undischarged obligations of a Group corporate
member which has incurred an underwriting loss by virtue of
participating on a syndicate which has made an underwriting
loss.
Should a syndicate as constituted for a given year of account
make a loss upon closure, or if a syndicate as constituted for a
given year of account has funding difficulties, its managing agent
may make a cash call on its members for the year of account
concerned which, if not met promptly from other funds, can be
satisfied by drawing down on the members' FAL. Cash calls for
"working capital" can also be made early in the year of account by
the managing agent of a syndicate, for example to meet liquidity
pressures. There is no guarantee that the Company would have the
funds needed to enable the relevant Group company to meet such
liabilities in which case it may be necessary for the Company to
raise additional capital via equity or debt. Alternatively, it may
be necessary to source FAL elsewhere, including from third party
providers such as reinsurers, which may limit the relevant
corporate member's ability to maintain the level of capacity in the
relevant syndicate in the current or a subsequent year of account.
The cost of obtaining such FAL can impact the Group's
profitability. If a corporate member is unable to obtain
replacement FAL, the reduced level of FAL will affect the
underwriting portfolio, which will likely impact returns
adversely.
Failure of loss limitation methods
Managing agents will seek to limit the exposure of their managed
syndicates to insurance and reinsurance losses through a number of
loss limitation methods, including internal risk management and
security procedures, as well as through the purchase of outwards
reinsurance protection.
Notwithstanding the risk mitigation and underwriting controls
employed by syndicates, one or more catastrophic or other loss
events or a greater frequency of losses than expected could result
in claims that substantially exceed the expectations of the Group,
and which could have a material adverse effect on the financial
condition or results of operations of the Group or any member of
the Group, possibly to the extent of eliminating the funds at
Lloyd's supporting the underwriting of the Group's corporate
members and any statutory surplus.
Reinsurance protection
As part of its overall risk mitigation and capital management
strategy, the Group purchases stop loss and quota share reinsurance
in respect of its corporate members, to seek to protect the Group's
capital from losses from its syndicate portfolio. Market conditions
beyond the Group's control determine the availability and cost of
appropriate reinsurance and the receipt of future reinsurance
recoveries. Additionally, a change in regulation could affect the
availability or price of reinsurance.
Any significant changes in reinsurance pricing may result in the
Group being forced to incur additional expenses for reinsurance,
reducing its capacity on syndicates, having to obtain reinsurance
on less favourable terms or not being able to or choosing not to
obtain reinsurance thereby exposing the Group to increased retained
risk. Any of these could have a material adverse effect on the
Group's financial condition and results of operations, as could the
failure of a reinsurer (for example due to insolvency) from whom
the Group has purchased reinsurance.
Capital requirements
Rules implementing the Solvency II Directive came into effect on
1 January 2016. Solvency II, and the rules which implement it,
introduce a harmonised EU-wide insurance regulatory regime. In
particular, they impose a risk-based capital regime, set out
requirements for the governance, risk management and regulatory
supervision of insurers and introduce certain disclosure and
transparency requirements. Each syndicate's Solvency Capital
Requirement ("SCR") under Solvency II is determined in accordance
with the SCR standard formula and/or the syndicate's approved
internal model. It is a regulatory requirement that any such model
captures all material risks that have been identified. However, it
is subject to the limitations of all complex models and is subject
to the accuracy, completeness and integrity of the data input into
the model. In addition, a standard formula is, by its very nature
and design, a standardised calculation method, and is therefore not
tailored to the individual risk profile of a specific undertaking.
For this reason, in some cases, the standard formula might not
reflect the risk profile of a specific undertaking and consequently
the level of own funds it needs. It is also necessary for
estimates, assumptions and judgments to be made by the syndicate's
management where data are incomplete or ambiguous. Accordingly, the
SCR, as modelled by the syndicate's internal model or calculated
pursuant to the standard formula, may not provide an accurate
projection of the capital that the syndicate will, in fact, need in
the future.
The Lloyd's market
The Group relies on the efficient functioning of the Lloyd's
market. If, for whatever reason, the Group's corporate members were
to be restricted or otherwise unable to write insurance through the
Lloyd's market, it could have a material adverse effect on the
Group's business and results of operations. In particular, any
damage to the brand or reputation of Lloyd's, whether such damage
is caused by financial mismanagement, fraudulent activity or
otherwise, or any loss of any international licences in relation to
insurance or reinsurance business may have a material adverse
effect on the ability of the Group's corporate members to
participate in new business and/or the Group's reputation. In
addition, any increase in tax levies imposed on Lloyd's
participants in the relevant jurisdictions around the world in
which they offer insurance or reinsurance or any challenge to the
amount of tax paid by such Lloyd's participants may result in the
Group's corporate members incurring a higher tax charge.
The PRA is the prudential regulator for Lloyd's and has
responsibility for promoting the financial security and soundness
of Lloyd's and its members. Lloyd's is required by the PRA to
establish and maintain appropriate controls over the risks
affecting the funds of members which it holds centrally and to
assess the capital needs of each member operating on its market, in
order to satisfy an annual solvency test for the PRA. Were the PRA
to impose more stringent requirements on Lloyd's this may result in
higher capital requirements or a restriction on trading activities
for its members, including entities within the Group. If Lloyd's
fails to satisfy its solvency test in any year, the PRA may require
Lloyd's to cease trading and/or its members to cease or reduce
their underwriting exposure, which may result in a material adverse
effect to the reputation, financial condition and results of
operations of the Group or any of its corporate members.
The past years have seen considerable changes at Lloyd's,
particularly in the composition and character of its capital base.
It is likely that continuing change will remain a feature of the
Lloyd's capital base for the foreseeable future.
Lloyd's has recently undertaken a performance review, and
prevented certain syndicates writing further business. If Lloyd's
continues this process, any of the syndicates on which the Group's
corporate members participate could be prevented from writing
future business, which could impact the returns of the relevant
corporate members.
Future changes at Lloyd's might involve alterations to the
present annual venture basis of participating in syndicates, which
could have fundamental implications for both Lloyd's and
participation at Lloyd's through the Group's corporate members.
Regulatory powers and changes in regulation
Certain rights or actions of Lloyd's corporate members are
subject to the prior written consent of Lloyd's. Lloyd's has wide
discretionary powers in regulating Lloyd's corporate members and
their underwriting at Lloyd's. Exercise of certain of these powers
could affect the results of the underwriting business of the
Group's corporate members.
The regulation of insurance in the UK is frequently subjected to
substantial reviews and consultations on changes. It is possible
that significant changes in regulation both within and outside the
Lloyd's market will occur. Any current or future regulatory changes
may have an adverse impact on the Group's corporate members, and
subsequently affect the Group's profitability.
Value of capacity
The Board attributes a value to the Group's portfolio of
syndicate capacity in determining the adjusted net asset value per
Ordinary Share. This value of the capacity is based on the weighted
average price of the capacity traded in the Lloyd's capacity
auctions which is dependent on the demand for capacity in these
auctions. If the weighted average prices for syndicate capacity
reduce significantly, it is likely that adjusted net asset value
per Ordinary Share will reduce and that the Board will have to
impair the value of the capacity held on the Group's balance sheet.
This may have a material adverse effect on the financial results of
the Group.
DEFINITIONS
The following definitions apply throughout this announcement
unless the context otherwise requires:
Act the Companies Act 2006;
Acquisition the proposed acquisition by the Company
of the entire issued share capital of
Nameco 1113 from Nigel Hanbury, in accordance
with the terms and conditions of the
Acquisition Agreement;
Acquisition Agreement the conditional agreement dated 12 June
2019 for the acquisition by the Company
of the entire issued share capital of
Nameco 1113 from Nigel Hanbury;
Admission admission of the New Ordinary Shares
to trading on AIM and such admission
becoming effective in accordance with
the AIM Rules;
AIM the AIM market operated by the London
Stock Exchange;
AIM Rules the rules of AIM as set out in the publication
entitled 'AIM Rules for Companies' published
by the London Stock Exchange from time
to time;
Announcement this announcement (including the appendices
to this announcement)
Application Form the application form to be used by Qualifying
Non-CREST Shareholders in connection
with the Open Offer;
Artex Artex Risk Solutions (Guernsey) Limited
of PO Box 230, Heritage Hall, Le Marchant
Street, St Peter Port, Guernsey GY1 4JH,
the manager of HIPCC;
Board or Directors the board of directors of the Company;
certificated or in certificated the description of a share or other security
form which is not in uncertificated form (that
is not in CREST);
Circular the circular in respect of the Open Offer,
expected to be posted to Shareholders
on or about 19 June 2019;
City Code the City Code on Takeovers and Mergers;
Closing Price the closing middle market quotation of
an Ordinary Share as published by the
London Stock Exchange;
Company or Helios Helios Underwriting PLC a company incorporated
in England and Wales with registered
number 05892671 and having its registered
office at 5th Floor 40 Gracechurch Street,
London, United Kingdom, EC3V 0BT;
Completion completion of the Acquisition in accordance
with the terms and conditions of the
Acquisition Agreement;
Concert Party the concert party in respect of the Company
for the purpose of the City Code, comprising
Nigel Hanbury, Hampden, Nicholas Wentworth-Stanley,
Jeremy Evans, Sir Michael Oliver, Peter
Nutting, Timothy Oliver, Susan Oliver,
Charles Camroux-Oliver, James Camroux-Oliver
and Alexa Pearmund and any affiliated
person(s) (as defined in the City Code)
of any of them and "members of the Concert
Party" shall be construed accordingly;
Consideration Shares the 1,590,769 new Ordinary Shares to
be allotted and issued to Nigel Hanbury
at the Issue Price pursuant to the Acquisition
Agreement;
CREST the relevant system (as defined in the
CREST Regulations) in respect of which
Euroclear is the Operator (as defined
in the CREST Regulations);
CREST member a person who has been admitted by Euroclear
as a system member (as defined in the
CREST Regulations);
CREST participant a person who is, in relation to CREST,
a system participant (as defined in the
CREST Regulations);
CREST Regulations the Uncertificated Securities Regulations
2001, as amended;
EU the European Union;
Euroclear Euroclear UK & Ireland Limited;
Excess Application Facility the arrangement pursuant to which Qualifying
Shareholders may apply for Open Offer
Shares in excess of their Open Offer
Entitlement provided they have agreed
to take up their Open Offer Entitlement
in full;
Excess CREST Open Offer in respect of each Qualifying CREST Shareholder,
Entitlements the entitlement (in addition to its Open
Offer Entitlement) to apply for Excess
Shares, credited to its stock account
in CREST pursuant to the Excess Application
Facility, which is conditional on such
Qualifying CREST Shareholder agreeing
to take up its Open Offer Entitlement
in full;
Excess Shares the Open Offer Shares which Qualifying
Shareholders may apply for under the
Excess Application Facility;
Excluded Overseas Shareholders other than as agreed by the Company and
Shore Capital or as permitted by applicable
law and regulation, Shareholders who
are located or have registered addresses
in a Restricted Jurisdiction;
Existing Ordinary Shares the 14,848,462 Ordinary Shares in as
at the date of this Announcement (excluding
the 255,778 Ordinary Shares held in treasury
and which do not carry voting rights);
FCA the Financial Conduct Authority;
FSMA the UK Financial Services and Markets
Act 2000, as amended;
Fundraising the Placing and the Open Offer;
General Meeting or GM the General Meeting of the Company, notice
of which is to be set out in the Circular,
and including any adjournment(s) thereof;
Group the Company and its subsidiary undertakings
at the date of this announcement (as
defined in sections 1159 and 1160 of
the Act);
Hampden Hampden Capital plc, a public limited
company, incorporated in England and
Wales with registered number 04174389
and with its registered office address
at 5th Floor, 40 Gracechurch Street,
London, EC3V 0BT;
HIPCC H I PCC Limited, a company incorporated
in Guernsey with registered number 42407
and with its registered office address
at PO Box 230 Heritage Hall Le Marchant
Street St Peter Port Guernsey GY1 4JH;
HIPCC Framework Agreement the agreement between, amongst others,
Upperton, HIPCC, Hampden, Artex and the
Company to effect the HIPCC Reorganisation
dated 12 June 2019;
HIPCC Reorganisation the amendments to the Group's re-insurance
arrangements with HIPCC incepting from
the 2020 underwriting year, which have
the effect of removing the economic benefit
that Nigel Hanbury (through Upperton)
would otherwise receive in respect of
such policies as a 51 per cent. indirect
shareholder of HIPCC;
Independent Directors the Directors, other than Nigel Hanbury
and Jeremy Evans;
Independent Shareholders the Shareholders, other than the members
of the Concert Party;
Issue Price GBP1.28 per New Ordinary Share;
Lloyd's the Society and Corporation of Lloyd's,
commonly referred to as Lloyd's of London;
London Stock Exchange London Stock Exchange plc;
Maximum Potential Buyback the acquisition by the Company of the
maximum number of Ordinary Shares, in
one or a series of transactions, by way
of market purchases pursuant to the Shareholder
authority to be sought at the GM, assuming
that no Ordinary Shares are acquired
by the Company from members of the Concert
Party;
Nameco 1113 Nameco (No. 1113) Limited, a private
limited company, incorporated in England
and Wales with registered number 08668280
and with its registered office address
at 5th Floor, 40 Gracechurch Street,
London, EC3V 0BT;
New Ordinary Shares the Placing Shares, the Open Offer Shares
and the Consideration Shares;
Open Offer the conditional invitation by the Company
to Qualifying Shareholders to apply to
subscribe for Open Offer Shares at the
Issue Price, including pursuant to the
Excess Application Facility, on the terms
and subject to the conditions to be set
out in the Circular in respect of the
Open Offer and in the case of Qualifying
Non-CREST Shareholders only, the Application
Form;
Open Offer Entitlements the entitlements for Qualifying Shareholders
to subscribe for Open Offer Shares under
the Open Offer calculated on the basis
of 1 Open Offer Share for every 10 Existing
Ordinary Shares held by that Qualifying
Shareholder as at the Record Date;
Open Offer Shares the 1,484,846 new Ordinary Shares to
be offered to Qualifying Shareholders
under the Open Offer;
Ordinary Shares ordinary shares of 10 pence each in the
capital of the Company;
Panel the Panel on Takeovers and Mergers;
Placing and Open Offer the placing and open offer agreement
Agreement dated 12 June 2019 between the Company
and Shore Capital;
Placing Shares the new Ordinary Shares to be issued
by the Company under the Placing;
Placing the conditional placing of Placing Shares
at the Issue Price by Shore Capital,
as agent for the Company, in accordance
with the Placing and Open Offer Agreement;
Qualifying CREST Shareholders Qualifying Shareholders holding Existing
Ordinary Shares in a CREST account;
Qualifying Non-CREST Qualifying Shareholders holding Existing
Shareholders Ordinary Shares in certificated form;
Qualifying Shareholders holders of Existing Ordinary Shares on
the register of members of the Company
at the Record Date with the exception
(subject to certain exceptions) of Excluded
Overseas Shareholders;
Record Date 6.00 p.m. on 12 June 2019 being the latest
time by which transfers of Existing Ordinary
Shares must be received for registration
by the Company in order to allow transferees
to be recognised as Qualifying Shareholders;
Regulatory Information has the meaning given in the AIM Rules;
Service
Restricted Jurisdictions each of Australia, Canada, Japan, the
Republic of Ireland, the Republic of
South Africa and the United States (including
its territories and possessions) and
any other jurisdiction where the extension
or availability of the Open Offer, or
the taking of any other action in connection
therewith, would breach any applicable
law or regulation or require the Company
to take any action to make the Open Offer
available to Shareholders in such jurisdiction;
Shareholders holders of Existing Ordinary Shares;
Shore Capital Shore Capital and Corporate Limited (the
Company's nominated adviser) and/or Shore
Capital Stockbrokers Limited (the Company's
broker), as the context requires;
uncertificated recorded on a register of securities
maintained by Euroclear in accordance
with the CREST Regulations as being in
uncertificated form in CREST and title
to which, by virtue of the CREST Regulations,
may be transferred by means of CREST;
UK or United Kingdom the United Kingdom of England, Scotland,
Wales and Northern Ireland;
Upperton Upperton Holdings Limited, a company
incorporated in England and Wales with
registered number 03838601 (being a company
wholly owned by Nigel Hanbury);
United States the United States of America, its territories
and possessions, any state of the United
States of America and the District of
Columbia;
Waiver the waiver granted by the Panel, conditional
upon the passing of the Whitewash Resolution,
of the obligation under Rule 9 to make
a mandatory cash offer for the Ordinary
Shares not already owned by it that would
otherwise arise on any member of the
Concert Party as a result of the Whitewash
Proposals;
Whitewash Proposals the participation by Jeremy Evans (a
member of the Concert Party) in the Placing;
the allotment and issue of the Consideration
Shares (on the assumption that the maximum
number of Open Offer Shares are issued)
to Nigel Hanbury pursuant to the Acquisition
and the Maximum Potential Buyback;
Whitewash Resolution the resolution to approve the Waiver
to be set out in the Notice of GM; and
GBP or pounds sterling pounds sterling, the legal currency of
the United Kingdom.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
MSCBRGDLDGBBGCD
(END) Dow Jones Newswires
June 13, 2019 02:00 ET (06:00 GMT)
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