TIDMRM2
RNS Number : 6485O
RM2 International SA
21 May 2018
21 May 2018
RM2 International S.A.
Launch of Open Offer
RM2 International S.A. ("RM2" or the "Company"), the sustainable
smart pallet innovator, announces an open offer to raise up to
approximately GBP4.3 million (before expenses) through the issue of
up to 430,161,622 new ordinary shares in the Company ("Ordinary
Shares") ("Open Offer Shares") at an issue price of 1 pence per
share ("Issue Price") (the "Open Offer").
The Company intends to use the net proceeds of the Open Offer in
the same manner as it intends to use the net proceeds of the
placing it announced on 29 March 2018 (the "Placing"), namely to
fund: (i) the retrofitting of existing inventory of RM2 BLOCKPAL
with ELIoT track and trace devices, (ii) the production of new RM2
ELIoT pallets and (iii) its sales and general administrative
costs.
The Issue Price represents a discount of 37.5 per cent. to the
closing price of an Ordinary Share on AIM on 17 May 2018 of 1.6
pence. The Directors do not believe that the Issue Price is
representative of the true underlying value of the Company, however
in order to provide Shareholders who were not able to take part in
the Placing with an opportunity to invest in the Company on the
same terms, the Issue Price has been set equal to the price at
which the Placing occurred. Furthermore, in order to maximise the
number of Open Offer Shares available under the Open Offer for
qualifying shareholders, the key investors who participated in the
Placing, and the Directors, will not be allowed to participate in
the Open Offer.
Details of the Open Offer
Pursuant to the Open Offer, qualifying shareholders will be
given the opportunity to subscribe for:
1.15 Open Offer Shares for every 1 Existing Ordinary Share held
at the Open Offer Record Date
The Open Offer provides an opportunity for all qualifying
shareholders to participate in the fundraising by both subscribing
for their respective basic entitlements and by subscribing for
excess shares under an excess application facility, subject to
availability.
Further information on the Open Offer is set out in this
announcement and the Circular to be posted today to qualifying
shareholders, along with the Application Form.
Unless defined above, capitalised terms are as per the
Definitions section at the end of this announcement and in the
Circular.
For further information:
RM2 International S.A. +44 (0)20 7638 9571
Kevin Mazula, Chief Executive Officer
Jean-Francois Blouvac, Chief Financial Officer
Strand Hanson Limited (Nominated & Financial Adviser and Broker) +44 (0)20 7409 3494
James Spinney / Ritchie Balmer / James Bellman
Citigate Dewe Rogerson (Financial PR) +44 (0)20 7638 9571
Simon Rigby / Ellen Wilton
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 .
Notes to Editors
RM2 International S.A. specialises in pallet development,
manufacture, supply and management to establish a leading presence
in global pallet supply and improve the supply chain of
manufacturing and distribution businesses through the effective and
efficient use and management of composite pallets. It is quoted on
the AIM market of the London Stock Exchange under the symbol RM2.L.
For further information, please visit www.rm2.com
OPEN OFFER OF UP TO 430,161,622 OPEN OFFER SHARES
1. Introduction
As announced on 29 March 2018, the Company has raised US$36
million (before fees and expenses) by way of a Placing (effected in
two tranches, the first of which has been completed and the second
tranche of which is conditional) of 2,535,211,265 Placing Shares to
existing institutional investors, certain directors and members of
senior management at the Issue Price of 1 pence per Placing Share.
The Issue Price represented a discount of approximately 76 per
cent. to the closing mid-market price of 4.25 pence on 27 March
2018, being the latest practicable date prior to the announcement
of the Placing, and a discount of approximately 48 per cent. from
the three month historical average closing mid-market price of 2.91
pence, as of the same date.
The issuance of the first tranche of 1,279,049,295 Placing
Shares (gross proceeds of $18,162,500) took place following
authorisation received at the general meeting of the Company held
on 13 April 2018. The issuance of the second tranche of
1,256,161,970 Placing Shares (gross proceeds of $17,837,500) should
occur ten business days following a drawdown notice issued by the
Company and is subject to the satisfaction of certain key
performance indicators described in the shareholder circular dated
29 March 2018.
In addition, as announced on 29 March 2018, in order to provide
Shareholders who were not able to take part in the Placing with an
opportunity to invest, the Company is providing all Qualifying
Shareholders with the opportunity to subscribe for an aggregate
amount of up to 430,161,622 Open Offer Shares, to raise up to
GBP4.3 million (before expenses) for the Company, on the basis of
1.15 Open Offer Shares for every 1 Existing Ordinary Share held on
the Open Offer Record Date, at 1 pence per Open Offer Share.
Shareholders subscribing for their full entitlement under the Open
Offer may also request additional Open Offer Shares through the
Excess Application Facility.
In order to maximise the number of Open Offer Shares available
under the Open Offer to Qualifying Shareholders, the Key Investors
who participated in the Placing will not be allowed to participate
in the Open Offer. Further, the remaining Directors (noting R. Ian
Molson is included in the definition of Key Investors) have also
agreed not to participate in the Open Offer. The Open Offer
Entitlements which could otherwise have been made available to the
Key Investors and the remaining Directors under the Open Offer will
be made available to Qualifying Shareholders under the Open Offer
and form part of the Qualifying Shareholders' Basic
Entitlements.
The Company intends to use the net proceeds of the Open Offer in
the same manner as the Placing, namely to fund: (i) the
retrofitting of existing inventory of RM2 BLOCKPAL with ELIoT track
and trace devices, (ii) the production of new RM2 ELIoT pallets and
(iii) its sales and general administrative costs.
2. Background to and reasons for the Open Offer
2.1 Information on the Company
RM2 specialises in pallet development, manufacture, supply and
management and is seeking to establish a leading presence in global
pallet supply and improve the supply chain of manufacturing and
distribution businesses through the effective and efficient use and
management of composite pallets.
2.2 RM2's strategic progress
Operational and technological changes have been implemented over
the past 18 months to align the Company's organisation to the
demands of the marketplace.
Firstly, it transitioned to an outsourced production model to
experienced, world class partners, which allowed it to close down
its manufacturing facility in Toronto. One of these partners,
Jabil, now has a dedicated facility in Ciudad Juarez in Mexico,
which is fully built out.
The Company also enhanced its proposition by developing and
launching a smart pallet with active tracking, called ELIoT
(described below). Through this transition period, the Company
reduced its demand of non-ELIoT pallets and as such Jabil has not
been operating at capacity. With a portion of the proceeds from the
first tranche of the Placing, orders have been placed to permit
Jabil to commence retrofitting existing inventory of RM2 BLOCKPAL
smart pallets with ELIoT devices.
Equipment is also on site with RM2's other manufacturing
partner, Zhenshi in China. The Company has, however, recently
exchanged letters with Zhenshi regarding a termination of the
agreement and indemnities to cover costs incurred to date through
the time of removal of this equipment from Zhenshi's site.
Discussions are on-going and in light of these exchanges and its
business plan, the Company is currently re-examining its footprint
in China. The outcome of these exchanges is unknown at present, but
alternatives under consideration could include revising the current
agreement with Zhenshi, the amical or litigious termination of the
contract and/or establishing an agreement with a different contract
manufacturer. Regardless of the outcome of the subcontracting
relationship, RM2 expects to continue to source fibreglass raw
material for pallet production from Zhenshi's affiliate, Jushi.
Secondly, in order to address issues of asset retention,
reduction of theft, and utilization, the Company has developed its
RM2 ELIoT tracking technology. ELIoT comprises a cellular device
which transmits the whereabouts of each pallet, providing a
previously unachievable level of confidence in asset security. The
underlying technology is believed to be unique to RM2. The Company
has conducted a number of trials of ELIoT-enabled pallets with
customers in North America and has signed agreements or is in
advanced negotiations for deployment. While the Directors believe
that the RM2 ELIoT device is a robust product based on trials and
information from component suppliers, it is a new product, and
therefore the longevity of which will be demonstrated over its
course of service.
2.3 Current trading and prospects
RM2 has an extensive pipeline of potential deployments in North
America and Europe, a good percentage of which it expects to be
successfully converted over the upcoming 12-18 months. These
include numerous potential deployments of ELIoT pallets, which have
generated significant interest from existing and potential
customers following a number of trials of the product. The Company
announced on 13 April 2018 that it has entered into a Phase 1
agreement for an initial deployment of ELIoT pallets through 30
June 2018 with a Fortune 500 company in North America following a
year-long trial with this blue chip customer's internal
network.
In addition, the Company has also completed a major trial with a
North American company and discussions on a large-scale
implementation are expected to commence. The Company has also
expanded ongoing trials with other major US-based customers.
The conversion of a subset of these opportunities, deployed and
financed on schedule, is expected to result in the Company
generating positive EBITDA in 2019.
The Company also notes that following the repayment of the
mortgage on the office building in Switzerland sold in the first
quarter of 2018, the Company is debt free.
The Company announced its audited annual results for the year
ended 31 December 2017 today. Shareholders should refer to the
Company's website, or the Company's page on the London Stock
Exchange website, for this announcement.
2.4 Reasons for the Open Offer and use of proceeds
The Open Offer is being conducted in order to provide
Shareholders who were not able to participate in the Placing with
an opportunity to invest in the Company at the same price as the
Key Investors.
The net proceeds of this Open Offer are intended to be used in
the same manner as the Placing, namely to fund: (i) the
retrofitting of existing inventory of RM2 BLOCKPAL with ELIoT track
and trace devices, (ii) the production of new RM2 ELIoT Pallets and
(iii) its sales and general administrative costs.
3. Open Offer
3.1 Information on the Open Offer
Qualifying Shareholders may subscribe for Open Offer Shares in
proportion to their holding of Existing Ordinary Shares held on the
Open Offer Record Date. Shareholders subscribing for their full
entitlement under the Open Offer may also request additional Open
Offer Shares as an Excess Entitlement, up to the total number of
Open Offer Shares available under the Open Offer.
The Open Offer is conditional on Admission becoming effective on
or before 8.00 a.m. on 12 June 2018 (or such later date and/or time
as the Company and Strand Hanson may agree, being no later than 26
June 2018).
3.2 Basic Entitlement
On, and subject to the terms and conditions of the Open Offer,
the Company invites Qualifying Shareholders to apply for their
Basic Entitlement of Open Offer Shares at the Issue Price. Each
Qualifying Shareholder's Basic Entitlement has been calculated on
the following basis:
1.15 Open Offer Shares for every 1 Existing Ordinary Share held
at the Open Offer Record Date
Basic Entitlements will be rounded down to the nearest whole
number of Ordinary Shares.
3.3 Excess Entitlement
Qualifying Shareholders are also invited to apply for additional
Open Offer Shares (up to the total number of Open Offer Shares
available to Qualifying Shareholders under the Open Offer) as an
Excess Entitlement. Any Open Offer Shares not issued to a
Qualifying Shareholder pursuant to their Basic Entitlement will be
apportioned between those Qualifying Shareholders who have applied
for an Excess Entitlement at the sole discretion of the Board,
provided that no Qualifying Shareholder shall be required to
subscribe for more Open Offer Shares than he or she has specified
on the Application Form or through CREST. 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.
The Open Offer Shares will, when issued and fully paid, rank
pari passu in all respects with the Ordinary Shares in issue at
that time, including the right to receive all dividends and other
distributions declared, made or paid after the date of Admission.
The Open Offer is not underwritten.
Qualifying Shareholders should note that the Open Offer is not a
"rights issue". Invitations to apply under the Open Offer are not
transferable unless to satisfy bona fide market claims. 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 for Open Offer Shares
under the Open Offer.
3.4 Settlement and dealings
Application will be made to the London Stock Exchange for the
Open Offer Shares to be admitted to trading on AIM. It is expected
that Admission will become effective and that dealings in the Open
Offer Shares will commence at 8.00 a.m. on 12 June 2018.
3.5 Overseas Shareholders
The Open Offer Shares have not been and are not intended to be
registered or qualified for sale in any jurisdiction other than the
UK. Accordingly, unless otherwise determined by the Company and
effected by the Company in a lawful manner, the Application Form
will not be sent to Shareholders with registered addresses in, or
who are resident or located in the United States or another
Restricted Jurisdiction since to do so would require compliance
with the relevant securities laws of that jurisdiction. The Company
reserves the right to treat as invalid any application or purported
application for Open Offer Shares which appears to the Company or
its agents or professional advisers to have been executed, effected
or despatched in a manner which may involve a breach of the laws or
regulations of any jurisdiction or if the Company or its agents or
professional advisers believe that the same may violate applicable
legal or regulatory requirements or if it provides an address for
delivery of confirmation of book entry registration for Open Offer
Shares, or in the case of a credit of Open Offer Shares in CREST,
to a CREST member whose registered address would not be in the
UK.
Notwithstanding the foregoing and any other provision of the
Circular or the Application Form, the Company reserves the right to
permit any Qualifying Shareholder to apply for Open Offer Shares if
the Company, in its sole and absolute discretion, is satisfied that
the transaction in question is exempt from, or not subject to, the
legislation or regulations giving rise to the restrictions in
question.
Part IV of the Circular together with the accompanying
Application Form, in the case of Qualifying non-CREST Shareholders,
contains the terms and conditions of the Open Offer.
If a Qualifying Shareholder does not wish to apply for Open
Offer Shares he should not complete or return the Application Form
or send a USE message through CREST.
3.6 Qualifying non-CREST Shareholders
If you are a Qualifying non-CREST Shareholder you will have
received an Application Form, which accompanies the Circular and
which gives details of your Basic Entitlement (as shown by the
number of the Open Offer Shares allocated to you). If you wish to
apply for Open Offer Shares under the Open Offer you should
complete the accompanying Application Form in accordance with the
procedure for application set out in paragraph 4 of Part IV of the
Circular and on the Application Form itself. The completed
Application Form, accompanied by full payment, should be returned
by post to Computershare Investor Services PLC, Corporate Actions
Projects, Bristol BS99 6AH or by hand (during normal business hours
only) to Computershare Investor Services PLC, The Pavilions,
Bridgwater Road, Bristol BS13 8AE so as to arrive as soon as
possible and in any event no later than 11.00 a.m. on 5 June
2018.
3.7 Qualifying CREST Shareholders
Application will be made for the Open Offer Entitlements of
Qualifying CREST Shareholders to be credited to stock accounts in
CREST. It is expected that the Open Offer Entitlements will be
credited to stock accounts in CREST on 12 June 2018. Applications
through the CREST system may only be made by the Qualifying CREST
Shareholder originally entitled or by a person entitled by virtue
of a bona fide market claim. If you are a Qualifying CREST
Shareholder, no Application Form is enclosed but you will receive
credits to your appropriate stock account in CREST in respect of
the Basic Entitlements to which you are entitled. You should refer
to the procedure for application set out in paragraph 4 of Part IV
of the Circular. The relevant CREST instruction must have settled
by no later than 11.00 a.m. on 5 June 2018.
3.8 Admission and dealings
Application will be made to the London Stock Exchange for the
Open Offer Shares to be admitted to trading on AIM. It is expected
that Admission will become effective and that dealings in the Open
Offer Shares will commence at 8.00 a.m. on 12 June 2018 (or such
later date as the Company and Strand Hanson may agree, being not
later than 8.00 a.m. on 26 June 2018).
4. Risk Factors and Additional Information
The attention of Shareholders is drawn to the risk factors set
out in this announcement (and Part II of the Circular) and the
information contained in Parts III to V of the Circular, which
provide additional information on the Open Offer and the
Company.
5. Action to be taken in respect of the Open Offer
Qualifying non-CREST Shareholders wishing to apply for Open
Offer Shares or the Excess Shares must complete the enclosed
Application Form in accordance with the instructions set out in
paragraph 4 of Part IV (Terms and Conditions of the Open Offer) of
the Circular and on the accompanying Application Form and return it
with the appropriate payment to Computershare Investor Services
PLC, Corporate Actions Projects, The Pavilions, Bridgwater Road,
Bristol BS99 6AH, so as to arrive no later than 11.00 a.m. on 5
June 2018.
If you do not wish to apply for any Open Offer Shares under the
Open Offer, you should not complete or return the Application Form.
If you are a Qualifying CREST Shareholder, no Application Form will
be sent to you. Qualifying CREST Shareholders will have Open Offer
Entitlements and Excess CREST Open Offer Entitlements credited to
their stock accounts in CREST. You should refer to the procedure
for application set out in paragraph 4 of Part IV (Terms and
Conditions of the Open Offer) of the Circular. The relevant CREST
instructions must have settled in accordance with the instructions
in paragraph 4 of Part IV of the Circular by no later than 11.00
a.m. on 5 June 2018.
Qualifying CREST Shareholders who are CREST sponsored members
should refer to their CREST sponsors regarding the action to be
taken in connection with the Circular and the Open Offer.
RISK FACTORS
Any investment in the Company is subject to a number of risks.
Accordingly, prospective investors should carefully consider the
risks set out below as well as the other information contained in
this announcement (and the Circular) and any other publicly
available information about the Group before making a decision
whether to invest in the Company. The risks described below are not
the only risks that the Group faces. Additional risks and
uncertainties that the Directors are not aware of or that the
Directors currently believe are immaterial may also impair the
Group's operations. Any of these risks may have a material adverse
effect on the Group's business, financial condition, results of
operations and prospects. In that case, the price of the Ordinary
Shares could decline and investors may lose all or part of their
investment. Prospective investors should consider carefully whether
an investment in the Company is suitable for them in light of the
information in this announcement (and the Circular) and their
personal circumstances.
Before making an investment, prospective investors are strongly
advised to consult an investment adviser authorised under FSMA who
specialises in investments of this kind. A prospective investor
should consider carefully whether an investment in the Company is
suitable in the light of his or her personal circumstances, the
financial resources available to him or her and his or her ability
to bear any loss which might result from such investment.
The following factors do not purport to be a complete list or
explanation of all the risks involved in investing in the Company.
In particular, the Company's performance may be affected by changes
in the market and/or economic conditions and in legal, regulatory
and tax requirements.
1 Risks relating to RM2 and its business
1.1 Early stage of operations
The commencement of RM2 earning material revenues is difficult
to predict and there is no guarantee that RM2 will generate any
material revenues in the near future. RM2 has a limited operating
history upon which its performance and prospects can be evaluated
and faces the risks frequently encountered by developing companies.
These risks include the uncertainty as to which areas to target for
growth. There can be no assurance that RM2's proposed operations
will be profitable or produce a reasonable return, if any, on
investment.
1.2 Product development
RM2 intends to continue to develop products which are designed
to have a commercial application. There is no guarantee that any
such product will be successful nor that any products will actually
result in any commercial applications.
The success of RM2 is reliant upon there being a demand for its
products. In addition, RM2 relies upon third parties to incorporate
its products into their own processes. A particular third party
having access to RM2's products may fail to use the products in an
effective process or the products or processes may not be or become
commercially viable. There can be no assurance that such products
will achieve commercial success or be an attractive alternative to
conventional products or processes.
It is possible that RM2 focuses its activities on a limited
number of products and technologies and that after such further
development has taken place, RM2 finds that the resulting product
is not successful or has no profitable commercial application, or
that the resulting product has been superseded by other products
which have a more profitable commercial application when compared
with those of RM2.
The development and manufacture of products takes some time to
complete. Depending on the process, RM2 may not be able to develop
its products within the timeframe required by its potential
customers and/or that targeted by its competitors. Further, the
success of RM2 may depend on its continued ability to develop new
products and to meet potential customers' changing
requirements.
1.3 Market acceptance
The development of a market for a new product is affected by
many factors, most of which are beyond the control of RM2,
including the emergence of newer and more competitive products or
processes, the costs of the products, regulatory requirements,
including any future regulatory changes, end-users' perceptions as
to the safety of any product and the propensity of end-users to try
new products or processes.
If a market for any product fails to develop or develops more
slowly than anticipated, RM2 may fail to achieve profitability with
respect to the associated products. In addition, RM2 may not
continue to develop such products if market conditions do not
support the continuation of those products.
1.4 RM2 may experience accelerated demand for its products
and services
RM2 expects to be able to meet its current capital expenditures
from internal resources and the net proceeds of the Placing and
Open Offer. In the future, it may explore other sources of
financing including invoice discounting and other debt facilities.
A need to fulfil large orders rapidly may require RM2 to seek
additional capital which could entail the issuance of new equity,
debt financing or some combination thereof. If RM2 is unable to
raise the necessary additional financing for any expanded working
capital requirement it could adversely affect its ability to expand
its business.
1.5 RM2 is expected to experience rapid growth. If RM2 is
not able to effectively manage its growth, its operations
could be damaged and profitability reduced
RM2's business and operations are expected to experience rapid
growth. This future growth could place significant demands on RM2's
operational and financial infrastructure and its ability to expand
to meet such growth will be tested. RM2 may need to expand and
enhance its infrastructure and technology, and improve its
operational and financial systems and procedures and controls from
time to time in order to be able to match that growth. If RM2 is
unable to manage its growth effectively, its operations could be
harmed and profitability reduced. The growth of RM2's sales and
profits in the future will depend, in part, on its ability to
expand its operations through the roll-out of its products and
services to new potential customers and into new markets and
geographies. Furthermore, in order to manage its planned expansion,
it will need continually to evaluate the adequacy of its management
capability, operational procedures, financial controls and
information systems. Accordingly, there can be no assurance that
RM2 will be able to achieve its expansion goals on a timely or
profitable basis.
1.6 RM2 will need to ensure that its financial risk limitation
policies, procedures and practices remain suitable as
RM2 grows
The financial risk limitation policies, procedures and practices
RM2 has established to date are suitable for a company of the size
and stage of development of RM2. As RM2 seeks to grow, the design
and implementation of RM2's policies, procedures and practices used
to identify, monitor and control a variety of risks may fail to be
effective. RM2's financial risk limitation methods rely on a
combination of internally developed technical controls, industry
standard practices, observation of historical market behaviour and
human supervision. These methods may not adequately prevent future
losses.
A lack of effective internal controls could have a material
adverse effect on RM2's reputation, business, financial condition
and operating results. Any material weaknesses may materially
adversely affect RM2's ability to report accurately its financial
condition and results of operations in the future in a timely and
reliable manner.
1.7 RM2's expansion may not be successful
RM2's operations are subject to certain risks including changes
in government policies, changes in political and economic
conditions, changes in regulatory environments, exposure to
different legal, regulatory or fiscal standards, difficulties in
staffing and managing operations, and potentially adverse tax
consequences. There are no guarantees that RM2 will be able to
successfully expand its operations in line with its current
expectations.
1.8 RM2 may experience unforeseen delays and cost overruns
when rolling out its products and services
Management effort and financial resources are being employed by
RM2 in rolling out its products and services to potential
customers. Although RM2 has budgeted for expected costings,
additional expenses in the event of unforeseen delays, cost
overruns, unanticipated expenses, regulatory changes and increases
in the price of materials and other manufacturing equipment
utilised in the production of RM2's pallets may negatively affect
RM2's business, financial condition and results of operations.
1.9 RM2 is dependent on developing relationships with existing
and potential customers
The success of RM2's business is, and is expected to continue to
be, dependent on the development of commercial relationships with
its existing and potential customers and suppliers. There is no
guarantee that these relationships will be developed sufficiently
to the point of generating significant revenue for RM2, or that
such potential customers will not seek to use alternative providers
of products and services similar to those of RM2.
1.10 RM2 is dependent on continued availability of raw materials
and manufacturing equipment
The raw materials and manufacturing equipment utilised by RM2's
manufacturing partners in the delivery of its products and services
are readily available from a number of suppliers and
counterparties. However, any restriction on the availability of
such items may negatively affect RM2's business, financial
condition and results of operations.
1.11 The Company depends on component and product manufacturing
and logistical services provided by outsourcing partners
Substantially all of the Company's manufacturing is performed in
whole or in part by outsourcing partners. The Company has also
outsourced much of its transportation and logistics management.
While these arrangements may lower operating costs, they also
reduce the Company's direct control over production and
distribution. It is uncertain what effect such diminished control
will have on the quality or quantity of products or services, or
the Company's flexibility to respond to changing conditions.
Although arrangements with these partners may contain provisions
for warranty expense reimbursement, the Company may remain
responsible to the consumer for warranty service in the event of
product defects and could experience an unanticipated product
defect or warranty liability.
Any failure of the Company's outsourcing partners to perform may
have a negative impact on the Company's cost or supply of
components or finished goods. In addition, manufacturing or
logistics in these locations or transit to final destinations may
be disrupted for a variety of reasons including, but not limited
to, natural and man-made disasters, information technology system
failures, commercial disputes, military actions or economic,
business, labour, environmental, public health, or political
issues.
The Company has invested in manufacturing process equipment,
much of which is held at certain of its outsourcing partners, and
has made prepayments to certain of its suppliers associated with
long-term supply agreements. While these arrangements help ensure
the supply of components and finished goods, if these outsourcing
partners or suppliers experience severe financial problems or other
disruptions in their business, such continued supply could be
reduced or terminated and the net realisable value of these assets
could be negatively impacted.
1.12 The Company faces substantial inventory and other asset
risk in addition to purchase commitment cancellation risk
The Company orders products and builds inventory in advance of
purchase orders. Because the Company's markets are developing,
competitive and subject to other changes, there is a risk the
Company will forecast incorrectly and order or produce excess or
insufficient amounts of products.
1.13 Future operating results depend upon the Company's ability
to obtain RM2 ELIoT components and products in sufficient
quantities on commercially reasonable terms and on the
timely introduction of LTE-m (Long Term Evolution (4G))
technology
Because the Company currently obtains RM2 ELIoT components and
products from single or limited sources, the Company is subject to
significant supply and pricing risks. There can be no assurance
that the Company will be able to negotiate, extend or renew supply
agreements on similar terms, or at all. Suppliers of components may
suffer from poor financial conditions, which can lead to business
failure for the supplier or consolidation within a particular
industry, further limiting the Company's ability to obtain
sufficient quantities of components on commercially reasonable
terms. The effects of global or regional economic conditions on the
Company's suppliers also could affect the Company's ability to
obtain components and products. Therefore, the Company remains
subject to significant risks of supply shortages and price
increases.
The cellular LTE-m network is expected to be introduced
throughout much of North America in the course of 2018. That
network will permit the utilization of a new, simpler and
less-expensive chip-set. When a component or product uses new
technologies, initial capacity constraints may exist until the
suppliers' yields have matured or manufacturing capacity has
increased. The supply of components could be delayed or
constrained, or a key manufacturing vendor could delay shipments of
completed products to the Company.
1.14 Exchange rate fluctuations
RM2's principal revenues in the near term are expected to be
earned in US$. Currency fluctuations may affect RM2's operating
cash flow since certain of its costs and revenues are likely to be
denominated in a number of different currencies other than US$ and
any potential income may become subject to exchange control or
similar restrictions. Fluctuations in exchange rates between
currencies in which RM2 operates may cause fluctuations in its
financial results which are not necessarily related to its
underlying operations.
RM2 does not currently have any foreign currency hedges in
place. If and when appropriate, the adoption of a hedging policy
will be considered by the Board.
1.15 Competition
There can be no assurance that potential competitors of RM2,
which may have greater financial, research and development, sales
and marketing and personnel resources than RM2, are not currently
developing, or will not in the future develop, products and
strategies that are equally or more effective and/or economical as
any products or strategies developed by RM2 or which would
otherwise render its products or strategies obsolete.
RM2 operates within competitive markets and the Directors
believe that it has adopted a competitive business strategy.
However, RM2's business, results, operations and financial
condition could be materially adversely affected by the actions of
its competitors (including their marketing and pricing strategies
and product and services development).
RM2 may be forced to change the nature of its business as a
result of competitive factors and there is no assurance that RM2
will be able to compete successfully in the market place in which
it seeks to operate.
1.16 Manufacturing technology
Even if new and advanced manufacturing or production equipment
becomes available for the production of RM2's products, RM2 may not
have funds available or be able to obtain necessary financing on
acceptable terms to acquire it for use by its manufacturing
contractors, or agree for its manufacturing contractors to acquire
or utilise it. Further, any investment RM2 may make in a perceived
technological advance may not be effective, economically successful
or otherwise accepted in the market.
1.17 RM2's expenses include fixed costs
A significant proportion of RM2's costs may be fixed and may not
then be easily reduced in the short-term. Therefore, RM2 may not be
able to reduce certain expenses promptly in response to any future
reduction in revenue. Should such a reduction occur and RM2 be
unable to reduce its fixed expenses accordingly, its business,
financial condition and results of operations may be materially
adversely affected.
1.18 Ability to attract and retain key executives, officers,
managers and technical personnel
RM2 is headquartered in Luxembourg. The Chief Executive Officer
is currently based in North America and the Chief Financial Officer
and the principal sales office are located in Switzerland.
Attracting, training, retaining and motivating technical and
managerial personnel, including individuals with significant
technical expertise is a critical component of the future success
of RM2's business. RM2 may encounter difficulties in attracting or
retaining qualified personnel. Managing from disparate locations
can pose challenges in communication and decision-making. Continued
growth may cause a significant strain on existing managerial,
operational, financial and information systems resources.
The performance of RM2 depends, to a significant extent, upon
the abilities and continued efforts of its existing senior
management as well as the recruitment of further senior management
in line with the planned growth in operations. The loss of the
services or failure to recruit key management personnel or the
failure to retain or recruit key employees or the inability to
effectively communicate across international offices could
adversely affect RM2's ability to maintain and/or improve its
operating and financial performance. In common with many
businesses, the success of RM2 will, to a significant extent, be
dependent on the expertise and experience of the Directors and key
senior management, the loss of one or more of whom could have a
material adverse effect on RM2.
1.19 RM2's disaster recovery plans may not be sufficient and
if they are not then there could be a material adverse
effect on its financial position
RM2 depends on the performance, reliability and availability of
its information technology and communications systems. Any damage
to or failure of its systems could result in disruptions to RM2's
operations and websites, which could reduce its revenues and
profits, and damage its brands.
RM2's systems are vulnerable to damage or interruption from
power loss, telecommunications failures, computer viruses, computer
denial of service attacks or other attempts to harm its systems,
natural disasters, including floods and fires, volcanic ash and
vandalism, terrorist attacks or other acts.
RM2's disaster recovery plans may not adequately address every
potential event and its insurance policies may not cover any loss
in full or in part (including losses resulting from business
interruptions) or damage that it suffers fully or at all.
RM2 relies on third parties, including data centres and
bandwidth providers, to host and operate its websites. Any failure
or interruption in the services provided by these third parties
could harm its operations and reputation. In addition, RM2 may have
little or no control over these third parties, which increases its
vulnerability to service problems. Any disruptions in the services
provided by these parties or any failure of these providers to
handle current or higher visitor traffic or transaction volumes
could significantly harm RM2's business. RM2 may in the future
experience disruptions or delays in these services. If these
providers were to suffer financial or other difficulties, their
services could be interrupted or discontinued and replacement
providers may be uneconomical or unavailable. Any of these events
could have a material adverse effect on RM2's business, operating
profit and overall financial condition.
1.20 Political, economic, regulatory and legislative considerations
Adverse developments in the political, legal, economic and
regulatory environment may materially and adversely affect the
financial position and business prospects of RM2. Political and
economic uncertainties include, but are not limited to,
expropriation, nationalisation, changes in interest rates, the
retail prices index, changes in taxation, changes in trade tariffs
and trade treaties and changes in law. Whilst RM2 strives to
continue to take effective measures such as prudent financial
management and efficient operating procedures, there is no
assurance that adverse political, economic, legal and regulatory
factors will not materially and adversely affect RM2.
1.21 Development of technology
Continuing research on and development of RM2's technology may
be required and there can be no assurance that any of its future
technology will be successfully developed or exploited. RM2 may
encounter delays and incur additional research and development
costs and expenses over and above those anticipated or allowed for
by the Directors. For example while the Directors believe that
ELIoT is a robust product based on trials and information from
component suppliers, it is a new product which has not yet been
able to demonstrate its longevity.
1.22 Unforeseen factors and developments
RM2's ability to implement its business strategy may be
adversely affected by factors that it cannot currently foresee,
such as unanticipated costs and expenses, technological change and
severe economic downturn. All of these factors may necessitate
changes to the business strategy described in this announcement
(and the Circular).
1.23 Market acceptance and future funding
Whilst the Directors believe that there are viable markets for
RM2's products and services, there can be no assurance that these
will be generally adopted by RM2's existing and potential client
base.
Whilst the Directors believe that, taking into account the net
proceeds of the Placing and Open Offer, RM2 has sufficient working
capital for its present requirements, that is for at least 12
months from the date of Admission, there can be no assurance that
RM2 would have sufficient resources to fund further development
beyond that period.
1.24 Regulatory environment
RM2's operations may be subject to a variety of national,
federal, provincial, state, foreign and local laws and regulations,
including environmental, health and safety laws, regulations,
treaties and conventions (together, Regulations).
This includes, inter alia, those controlling the discharge of
materials into the environment, requiring removal and clean-up of
environmental contamination, establishing certification, licensing,
health and safety, taxes, labour and training standards, operation
of equipment or otherwise relating to the protection of human
health and the environment, and export control regulations. The
amendment or modification of existing Regulations or the adoption
of new Regulations curtailing or further regulating RM2's business
could have a material adverse effect on RM2's operating results and
financial condition.
Whilst RM2 intends to work to comply with all applicable
Regulations, it cannot predict the extent to which future earnings
or capital expenditures may be affected by compliance with such new
Regulations. In addition, RM2 may be subject to significant fines,
penalties or liability if it does not comply with any such existing
or future Regulations.
There may be a change in the regulatory environment which may
materially adversely affect RM2's ability to implement successfully
the strategy set out in this announcement (and the Circular).
1.25 Intellectual property and proprietary rights
RM2 relies upon maintaining the confidentiality of the exact
nature of the BLOCKPAL manufacturing process and its RM2 ELIoT
technology and does not for example have any patents. The details
of the manufacturing process and its RM2 ELIoT technology are the
Company's most important intellectual property. The Company
protects this intellectual property by ensuring that its relevant
employees and manufacturers have confidentiality provisions in
their employment and manufacturing contracts preventing them from
disclosing the confidential information of the Group to anyone
outside of the Group. RM2 ensures relevant suppliers have entered
into non-disclosure agreements restricting disclosure by such
suppliers of the confidential information of the Group.
However, RM2 cannot be sure that other competitors will not
infringe upon, violate, challenge or reverse engineer its
intellectual property in the future. If RM2 is not able to
adequately protect or enforce its intellectual property rights, its
business, results of operations and financial condition may be
materially adversely affected.
RM2 is also subject to the risk that third parties may allege
that RM2's operations and use of technology infringes upon their
intellectual property rights. RM2 cannot be sure that such
litigation will not be brought against RM2 in the future and, if
brought, whether RM2 would be successful in defending itself
against such claims. Moreover, defending such claims may result in
protracted litigation, which could result in substantial costs and
the diversion of RM2's resources, as a result of which RM2's
business, results of operations and financial condition may be
adversely affected. Furthermore, RM2 customer contracts may contain
indemnities, whereby RM2 may agree to indemnify its customers for
third party intellectual property infringement claims and RM2
cannot be sure that it would have no liability to its customers in
such circumstances.
1.26 Reliance on manufacturing sector for bulk of pallet orders
RM2 is reliant on the manufacturing sector of the economy to
produce goods in sufficient volumes to drive demand for pallets on
which to transport those goods. A reduction in manufacturing output
may lead to a reduction in the size of the pallet market and in
turn RM2 may find it more difficult to obtain orders to produce or
lease pallets.
1.27 Increases in input costs
RM2's operations require raw materials, road transportation and
water and electricity supply. Any increase in these input costs
would affect the profitability of RM2 which may find it difficult
to pass on such increased costs to potential customers.
1.28 Litigation
The Company is involved in various claims, proceedings and
threats of litigation arising in the ordinary course of business,
including matters relating to employees, VAT, transfer pricing,
contracts and intellectual property. While there are uncertainties
inherent in the ultimate outcome of such matters and it is
impossible to determine at present the ultimate costs that may be
incurred, management believes the resolution of such uncertainties
and the incurrence of such costs will not have a material adverse
effect on the Company's financial position, results of operations
or cash flows.
2. Risks relating to the Company's domicile
2.1 Disclosure of interests in shares
Under the Luxembourg Companies Law, shareholders in RM2 are not
obliged to disclose their interests in a company in the same way as
shareholders of certain public companies incorporated in the United
Kingdom. In particular, the Disclosure Guidance and Transparency
Rules do not apply. The Articles have been amended to incorporate
provisions equivalent to those contained in the Disclosure Guidance
and Transparency Rules, but these may be amended by a resolution of
the Shareholders.
2.1 Takeovers
As RM2 is not admitted to trading on a "regulated market", it is
not subject to any takeover laws in Luxembourg or elsewhere.
3. Risks relating to the Ordinary Shares
3.1 Suitability
Investment in the Ordinary Shares may not be suitable for all
readers of this announcement (and the Circular). All potential
investors are accordingly advised to consult a person authorised
under FSMA who specialises in investments of this nature before
making any investment decisions.
3.2 Investment in AIM-traded securities
Investment in shares traded on AIM involves a higher degree of
risk, and such shares may be less liquid, than shares in companies
which are listed on the Official List. The AIM Rules are less
demanding than those rules that govern companies admitted to the
Official List. It is emphasised that no application is being made
for the admission of RM2's securities to the Official List or to
any other investment exchange other than AIM. An investment in the
Ordinary Shares may be difficult to realise. Prospective investors
should be aware that the value of an investment in RM2 may go down
as well as up and that the market price of the Ordinary Shares may
not reflect the underlying value of RM2. Investors may therefore
realise less than, or lose all of, their investment.
3.3 Share price volatility and liquidity
The share price of quoted companies can be highly volatile and
shareholdings can be illiquid. The price at which the Ordinary
Shares are quoted and the price which investors may realise for
their Ordinary Shares will be influenced by a large number of
factors, some specific to RM2 and its operations and others which
may affect quoted companies generally. These factors could include
the performance of RM2, large purchases or sales of the Ordinary
Shares, currency fluctuations, legislative changes and general
economic, political, regulatory or social conditions.
3.4 Placing Shares issued in two tranches
Issuance of the second tranche of Placing Shares is conditional
on the satisfaction of certain key performance indicators. In
addition, the subscribers for the second tranche of Placing Shares
may be unable to provide the funds for the purchase of such shares
at the time the Company issues a drawdown notice. The occurrence of
either of these circumstances would lead to the second tranche of
Placing Shares not being issued, in which case the Company will not
have the resources to carry out its business plan.
3.5 Access to further capital
Following completion of the Placing and Open Offer, RM2 may in
future require additional funds to produce pallets and to respond
to business challenges, enhancing existing products and services
and further developing its sales and marketing channels and
capabilities. Accordingly, RM2 may need to engage in further equity
or debt financings to secure additional funds. If RM2 raises
additional funds through further issues of equity or convertible
debt securities, existing shareholders could suffer further
significant dilution, and any new equity securities or convertible
debt securities could have rights, preferences and privileges
superior to those of current shareholders. Any debt financing
secured by RM2 in the future could involve restrictive covenants
relating to its capital raising activities and other financial and
operational matters, which may make it more difficult for RM2 to
obtain additional capital and to pursue business opportunities,
including potential acquisitions. In addition, RM2 may not be able
to obtain additional financing on terms favourable to it, if at
all. If RM2 is unable to obtain adequate financing or financing on
terms satisfactory to it, when required, its ability to continue to
support its business growth and to respond to business challenges
could be significantly limited or could affect its financial
viability.
3.6 Dilution
To the extent that Shareholders do not take up the offer of Open
Offer Shares under the Open Offer, their proportionate ownership
and voting interest in the Company will be reduced and the
percentage that their shareholdings represent of the ordinary share
capital of the Company will, following Admission, be reduced
accordingly. If available, future financings to provide required
capital may dilute shareholders' proportionate ownership in RM2.
Following completion of the Open Offer, RM2 may raise capital in
the future through public or private equity financings or by
issuing debt securities convertible into Ordinary Shares, or rights
to acquire these securities (which, in any such case, may not be
made available to existing holders of Ordinary Shares). If RM2
raises significant amounts of capital by these or other means, that
could cause further dilution for RM2's existing shareholders.
Moreover, the Open Offer and/or the further issue of Ordinary
Shares could have a negative impact on the trading price and
increase the volatility of the market price of the Ordinary Shares.
RM2 may also issue further Ordinary Shares, or create further
options over Ordinary Shares, as part of its employee remuneration
policy, which could in aggregate create a substantial dilution in
the value of the Ordinary Shares and the proportion of RM2's share
capital in which investors are interested.
3.7 Future sale of Ordinary Shares
RM2 is unable to predict when and if substantial numbers of
Ordinary Shares will be sold in the open market following the Open
Offer. Any such sales, or the perception that such sales might
occur, could result in a material adverse effect on the market
price of the Ordinary Shares. RM2 may require additional capital in
the future which may not be available to it.
3.8 Exchange rate risk to investors
RM2's functional currency is US$. Fluctuations in currency could
have an adverse effect on the value of an investor's holdings in
RM2 where the principal accounting currency of the investor is not
US$ or where there are inverse fluctuations between Sterling, the
currency in which the Ordinary Shares are quoted, and US$, the
currency in which the Company's results are reported.
3.9 Dividends
There can be no assurance as to whether dividends will be paid
in future or in what amount. Subject to compliance with the
Luxembourg Companies Law and the Articles, the declaration, payment
and amount of any future dividends are subject to the discretion of
the Directors, and will depend on, inter alia, the Company's
earnings, financial position, cash requirements and availability of
profits. A dividend may never be paid and, at present, there is no
intention to pay a dividend in the short to medium term.
3.10 Major shareholder Woodford is able to exercise significant
influence over matters requiring Shareholder approval
Certain investment funds and client mandates discretionary
managed by Woodford currently own a total of 3,220,027,777 Ordinary
Shares, representing, in aggregate, 66.3 per cent. of the Company's
issued share capital and 49.7 per cent. of the voting rights due to
voting limitations in the Company's Articles on certain investment
funds managed by Woodford.
In addition, Woodford benefits from the right to have the Board
nominate for election by the Shareholders such director as Woodford
may designate. For as long as Woodford does not exercise its rights
to designate a director, it will have the right to appoint an
observer to attend Board meetings. For as long as Woodford has
designated a director appointed to the Board, the quorum for Board
meetings will include that director.
As a result, Woodford is able to exercise a significant degree
of influence over matters requiring Shareholder approval, including
the election of Directors and significant corporate
transactions.
The risks noted above do not necessarily comprise all of the
risks potentially faced by RM2 and are not intended to be presented
in any assumed order of priority.
Although RM2 will seek to minimise the impact of the Risk
Factors, investment in RM2 should only be made by investors able to
sustain a total loss of their investment. Potential investors are
strongly recommended to consult an investment adviser authorised
under FSMA, who specialises in investments of this nature before
making any decision to invest.
EXPECTED TIMETABLE OF PRINCIPAL EVENTS IN RELATION TO THE OPEN
OFFER
Open Offer Record Date for entitlements under the Open Offer Close of business 18 May 2018
Announcement of the Open Offer 21 May 2018
Ex-entitlement Date of the Open Offer 7.00 a.m. 21 May 2018
Publication and posting of the Circular including Application 21 May 2018
Forms
Open Offer Entitlements and Excess Entitlements credited to As soon as possible after 8.00 a.m. 22 May 2018
stock accounts of Qualifying CREST
Shareholders in CREST
Recommended latest time and date for requesting withdrawal of 4.30 p.m. 30 May 2018
Open Offer Entitlements and
Excess Entitlements from CREST
Latest time and date for depositing Open Offer Entitlements and 3.00 p.m. 31 May 2018
Excess Entitlements into CREST
Latest time and date for splitting Application Forms (to satisfy 3.00 p.m. 1 June 2018
bona fide market claims only)
Latest time and date for receipt of completed Application Forms 11.00 a.m. 5 June 2018
and payment in full under
the Open Offer or settlement of relevant CREST instructions (as
appropriate)
Announcement of the results of the Open Offer 11 June 2018
Admission and commencement of dealings in Open Offer Shares 8.00 a.m. 12 June 2018
Open Offer Shares in uncertificated form expected to be credited As soon as possible after 8.00 a.m. 12 June 2018
to accounts in CREST
Despatch of confirmations of book entry registration for the Within 10 business days of Admission
Open Offer Shares in book entry
form
If any of the details contained in the timetable above should
change, the revised time and dates will be notified to Shareholders
by means of a Regulatory Information Service (as defined in the AIM
Rules) announcement.
In this announcement, all references to times and dates are to
times and dates in London, UK.
In order to subscribe for Open Offer Shares under the Open
Offer, Qualifying Shareholders will need to follow the procedure
set out in Part IV of the Circular and, where relevant, complete
the accompanying Application Form. If Qualifying Shareholders have
any queries on the procedure for acceptance and payment, or wish to
request another Application Form, they should contact Computershare
Investor Services PLC on +44 (0)370 702 0000, quoting the allotment
number of their Application Form.
Calls to the Computershare Investor Services PLC number from
outside the UK are charged at applicable international rates. Calls
may be recorded and monitored randomly for security and training
purposes. Computershare Investor Services PLC cannot provide advice
on the merits of the Open Offer and cannot give any financial,
legal or tax advice.
SHARE CAPITAL AND OPEN OFFER STATISTICS
Issue Price for each Open Offer Share 1 pence
Discount to an Existing Ordinary Share (as at close of 37.5 per cent.
business on 17 May 2018)
Number of Existing Ordinary Shares in issue as at the
date of this announcement (and the Circular) 4,858,919,891
Basis of Open Offer 1.15 Open Offer Shares for every 1 Existing Ordinary
Share
Maximum number of Open Offer Shares to be issued pursuant
to the Open Offer 430,161,622
Enlarged Share Capital immediately following Admission* 5,289,081,513
Open Offer Shares as a percentage of the Enlarged Share approximately 8.1 per cent.
Capital*
Estimated gross proceeds of the Open Offer receivable by approximately GBP4.3 million
the Company*
Estimated net proceeds of the Open Offer receivable by approximately GBP4.17 million
the Company*
ISIN - Ordinary Shares LU0994178464
ISIN - Open Offer Basic Entitlements LU1822796501
ISIN - Open Offer Excess Entitlements LU1816468455
* assuming full take up of the Open Offer.
DEFINITIONS
The following definitions apply throughout this announcement,
unless the context otherwise requires:
Admission admission of the Open Offer Shares to trading on AIM becoming effective in
accordance with
the AIM Rules
AIM the market of that name operated by the London Stock Exchange
AIM Rules the AIM Rules for Companies governing the admission to and operation of
AIM published by the
London Stock Exchange as amended from time to time
Application Form the application form relating to the Open Offer and enclosed with the
Circular for use by
Qualifying non-CREST Shareholders
Articles the articles of association of the Company in force at the date of this
announcement
Basic Entitlement(s) the pro rata entitlement for Qualifying Shareholders to subscribe for Open
Offer Shares, pursuant
to the Open Offer as described in Part IV of the Circular
BLOCKPAL the composite pallet produced and deployed by the Company
Board or the Directors the Directors of the Company, as at the date of this announcement, whose
names are set out
on page 7 of the Circular
book entry or in book entry form in relation to a share or other security, a share or other security that
is not in uncertificated
form (that is, not in CREST) and that is recorded on the Company's share
register in book
entry form
Circular the circular, dated 21 May 2018, to be posted to Qualifying Shareholders
Company or RM2 RM2 International S.A.
CREST the relevant system (as defined in the CREST Regulations 2001) for the
paperless settlement
of trades and the holding of uncertificated securities, operated by
Euroclear, in accordance
with the same 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 Uncertified Securities Regulations 2001 (SI 2001 No. 3875), as amended
CREST sponsor a CREST participant admitted to CREST as a CREST sponsor
CREST sponsored member a CREST member admitted to CREST as a Sponsored Member (which includes all
CREST Personal
Members)
Depositary Computershare Investor Services plc, registered office at The Pavilions,
Bridgwater Road,
Bristol BS13 8AE
Depositary Interests a depositary interest issued by the Depositary representing an entitlement
to an Ordinary
Share which may be settled through CREST in dematerialised form
ELIoT RM2 ELIoT tracking technology, comprising a cellular device which
transmits the whereabouts
of each BLOCKPAL
Enlarged Share Capital the issued Ordinary Share capital of the Company immediately following the
issue of the Open
Offer Shares
EU the European Union
Euroclear Euroclear UK & Ireland Limited, the operator of CREST
Excess Entitlement(s) Open Offer Shares in excess of the Basic Entitlement, but not in excess of
the total number
of Open Offer Shares, allocated to a Qualifying Shareholder pursuant to
the Open Offer as
described in Part IV of the Circular
Excess Application Facility the arrangement pursuant to which Qualifying Shareholders may apply for
additional Open Offer
Shares in excess of the Basic Entitlement in accordance with the terms and
conditions of the
Open Offer
Excess CREST Open Offer Entitlement in respect of each Qualifying CREST Shareholder, the entitlement to apply
for Open Offer Shares
in addition to the Basic Entitlement credited to the Qualifying CREST
Shareholder's account
in CREST, pursuant to the Excess Application Facility, which is
conditional on the Qualifying
CREST Shareholder taking up his Basic Entitlement in full which may be
subject to scale back
in accordance with the provisions of the Circular
Excess Shares the Open Offer Shares for which Qualifying Shareholders may apply under
the Excess Application
Facility in addition to their Basic Entitlement
Ex-entitlement Date the date on which the Existing Ordinary Shares are marked 'ex' for
entitlement under the Open
Offer being 7.00 a.m. on 21 May 2018
Existing Ordinary Shares The 4,858,919,891 Ordinary Shares in issue as at the date of the Circular
being the entire
issued share capital of the Company prior to the Open Offer
FCA the UK Financial Conduct Authority established pursuant to the Financial
Services Act 2012
and responsible for, among other things, the conduct and regulation of
firms authorised and
regulated under FSMA and the prudential regulation of firms which are not
regulated by the
PRA
FSMA the Financial Services and Markets Act 2000 (as amended)
Group together the Company and its subsidiary undertakings
HMRC Her Majesty's Revenue & Customs
ISIN International Securities Identification Number
Issue Price 1 pence per Open Offer Share
Key Investors together, Woodford, R. Ian Molson and associated family trusts, Polygon
Global Partners LLP
and Richard Cashin and Key Investor shall mean any one of them
London Stock Exchange London Stock Exchange plc
Luxembourg Companies Law Loi du 10 août 1915 concernant les sociétés commerciales
(telle que modifiée)
- Law dated August 10, 1915 concerning commercial companies (as amended)
Official List the Official List of the UKLA
Open Offer the invitation to Qualifying Shareholders to apply for the Open Offer
Shares at the Issue
Price on the terms and conditions outlined in the Circular and, where
relevant, in the Application
Form
Open Offer Entitlements entitlements for Qualifying Shareholders to subscribe for Open Offer
Shares pursuant to the
Basic Entitlement and Excess Entitlement
Open Offer Record Date close of business on 18 May 2018
Open Offer Shares up to 430,161,622 new Ordinary Shares to be issued pursuant to the Open
Offer
Ordinary Shares ordinary shares of $0.01 each in the capital of the Company having the
rights and being subject
to the restrictions contained in the Articles (and as represented by
Depositary Interests
if in uncertificated form in CREST)
Overseas Shareholders Shareholders with registered addresses, or who are citizens or residents
of, or incorporated
in Restricted Jurisdictions
Placing the placing of Placing Shares at the Issue Price announced on 29 March
2018
Placing Shares the new Ordinary Shares issued or to be issued pursuant to the Placing
PRA the UK Prudential Regulation Authority, established pursuant to the
Financial Services Act
2012
Qualifying CREST Shareholders Qualifying Shareholders holding Existing Ordinary Shares which, on the
Company's depositary
interest register on the Open Offer Record Date, are in uncertificated
form in CREST
Qualifying non-CREST Shareholders Qualifying Shareholders holding Existing Ordinary Shares which, on the
Company's share register
on the Open Offer Record Date, are in book entry form
Qualifying Shareholders holders of Existing Ordinary Shares, other than Overseas Shareholders, the
Key Investors and
the Directors (where not included in the definition of Key Investors)
whose names appear on
the Company's share and depositary interest registers on the Open Offer
Record Date as holders
of Existing Ordinary Shares and who are eligible to be offered Open Offer
Shares under the
Open Offer in accordance with the terms and conditions set out in the
Circular
Regulatory Information Service a service approved by the London Stock Exchange for the distribution to
the public of AIM
announcements and included within the list on the website of the London
Stock Exchange
Restricted Jurisdictions the United States, Australia, Canada, Japan, the Republic of South Africa
and any other jurisdiction
where the extension or availability of the Open Offer would breach any
applicable law
Shareholders registered holders of Ordinary Shares
Strand Hanson Strand Hanson Limited, the Company's nominated & financial adviser and
broker under the AIM
Rules
UK the United Kingdom of Great Britain and Northern Ireland
UKLA the UK Listing Authority, being the FCA acting as the competent authority
for the purposes
of Part VI of the FSMA
uncertificated or in uncertificated form a share or other security recorded on the relevant register of the share
or security concerned
as being held in uncertificated from in CREST and title to which, by
virtue of the CREST Regulations,
may be transferred by means of CREST
US or United States the United States of America, its territories and possessions, any state
of the United States
and the District of Columbia
USE unmatched stock event
Woodford Woodford Investment Management Limited, acting as discretionary investment
fund manager for
certain discretionary funds
A reference to GBP is to pounds sterling, being the lawful
currency of the UK. A reference to US$ or $ is to the lawful
currency of the United States.
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
IOEURVURWRAVUAR
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