TIDMVLS
RNS Number : 6526T
Velocys PLC
25 November 2021
Velocys plc
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25 November 2021
Velocys plc
("Velocys", the "Company" or the "Group")
Proposed Placing and Open Offer
Velocys plc (AIM: VLS), the sustainable fuels technology
company, today announces a proposed conditional Placing with
institutional investors to raise approximately GBP25 million in
aggregate before expenses at the Placing Price of 8 pence per
Placing Share. Funds raised will be used primarily to accelerate
the delivery of Velocys' technology and enable the Company to scale
growth with a view to achieving its target of net positive cash
flow during 2024.
In addition, in order to provide Shareholders who have not taken
part in the Placing with an opportunity to participate in the
proposed Fundraise, the Company is providing Eligible Shareholders
the opportunity to subscribe, at the Placing Price, for an
aggregate of up to 25,076,613 new Ordinary Shares, to raise up to
approximately GBP2.0 million via the Open Offer.
Highlights
-- The Placing to raise approximately GBP25 million will be
conducted by way of an accelerated bookbuilding process at the
Placing Price (the "Bookbuild"), which will be launched immediately
following this Announcement in accordance with the terms and
conditions set out in Appendix II.
-- Subject to the successful closing of the Bookbuild, the
Company is also making an Open Offer, for up to 25,076,613 Open
Offer Shares, to raise up to approximately GBP2 million at the
Placing Price, on the basis of 2 Open Offer Shares for every 85
Existing Ordinary Shares held by Eligible Shareholders at the
Record Date. Any entitlements to Open Offer Shares not subscribed
for by Eligible Shareholders will be available to Eligible
Shareholders under the excess application facility for the Open
Offer.
-- The net proceeds of the Fundraise will be used primarily for:
-- capital investment in the current manufacturing capability to
enable output of at least 12 reactors per year;
-- funding to advance the two reference projects (Bayou Fuels in
Mississippi, US and Altalto in Immingham, UK) to the point of
securing external investment into the detailed engineering
stage;
-- setting aside funds to back process guarantees and equipment warranties to clients;
-- general working capital needs over the next 24 months,
including the potential part-payment to secure control of the site
for the Altalto project; and
-- providing a line of sight to achieving net positive cash flow during 2024.
The Placing Price of 8 pence per New Ordinary Share represents a
discount of 8.6 per cent. to the closing mid-market price of 8.75
pence per Existing Ordinary Share as at 24 November 2021.
The Placing Shares are not being made available to the public.
It is envisaged that the Bookbuild will be closed no later than
8.00 p.m. GMT today, 25 November 2021 but may be closed earlier, or
later, at the discretion of the Joint Brokers. Details of the
number of Placing Shares will be announced as soon as practicable
after the closing of the Bookbuild (expected to be 7 a.m. on 26
November 2021). The Placing and the Open Offer are not
underwritten.
The Fundraise is conditional on, inter alia, the passing of the
Resolutions by the Shareholders at the General Meeting to be held
at 10.30 a.m. on 15 December 2021 at Magdalen Centre, Robert
Robinson Avenue, The Oxford Science Park, Oxford OX4 4GA . The
Placing is not conditional on the Open Offer, but the Open Offer is
conditional upon completion of the Placing. Should Shareholder
approval not be obtained at the General Meeting, neither the
Placing nor the Open Offer will proceed.
Set out below in Appendix I is an adapted extract from the draft
Circular that is proposed to be sent to Shareholders after the
closure of the Bookbuild and which provides further information on
the Company, the Placing and the Open Offer. The final Circular,
containing the terms and conditions of the Open Offer and Notice of
General Meeting will be sent to Shareholders and published on the
Company's website on or around 29 November 2021.
The capitalised terms not otherwise defined in the text of this
Announcement are defined in Appendix III and the expected timetable
of the principal events is set out in Appendix IV.
This summary should be read in conjunction with the full text of
the following announcement.
Enquiries:
Velocys
Henrik Wareborn, CEO
Andrew Morris, CFO
Lak Siriwardene, Director of Communications &
Sustainability +44 1865 800821
Panmure Gordon (UK) Limited (Nomad, Joint Bookrunner
& Joint Broker)
Hugh Rich (Corporate Broking)
Emma Earl (Corporate Finance)
John Prior (Corporate Finance)
Mark Rogers (Corporate Finance) +44 20 7886 2500
Shore Capital Stockbrokers Limited (Joint Bookrunner
& Joint Broker)
Henry Willcocks (Corporate Broking)
Toby Gibbs (Corporate Advisory)
James Thomas (Corporate Advisory)
Liam Zabludowicz (Corporate Advisory) +44 20 7408 4090
Buchanan (Financial PR)
Helen Tarbet
Simon Compton +44 20 7466 5000
R adnor Capital (Investor Relations)
Joshua Cryer
Iain Daly +44 20 3897 1830
Notes to Editors
Velocys is an AIM-quoted, international sustainable fuels
technology company, traded on the AIM, providing clients with a
technology solution to enable the production of negative Carbon
Intensity synthetic, drop-in fuels from a variety of waste
materials. SAF ('Sustainable Aviation Fuel') is the only
commercially available, permanent alternative to fossil aviation
fuels.
The technology is IP-protected in all major jurisdictions.
Two reference projects in the US and UK (Bayou Fuels and
Altalto) are designed to accelerate the adoption and standardise
the Velocys proprietary Fischer Tropsch (FT) technology with an
integrated end to end solution, including renewable power and
sequestration. Velocys is enabling commercial scale SAF production
in response to the clean energy transition.
Velocys technology pathway is enabling the next generation of
low carbon sustainable fuels with significant additional positive
air quality impacts.
www.velocys.com
IMPORTANT NOTICES
IMPORTANT NOTICE
The information contained in this announcement is for
information purposes only and does not purport to be full or
complete. The information contained in this announcement is given
at the date of its publication (unless otherwise marked) and is
subject to updating, revision and amendment from time to time. No
reliance may be placed for any purpose on the information contained
in this announcement or its accuracy, fairness or completeness.
Neither this announcement, nor any copy of it, may be taken or
transmitted, published or distributed, directly or indirectly, in
or into the United States or any other jurisdiction where to do so
would constitute a violation of the relevant securities laws of
such jurisdiction. This Announcement is for information purposes
only and does not constitute an offer to sell or issue, or the
solicitation of an offer to buy, acquire or subscribe for any
shares in the Company in the United States or any other state or
jurisdiction in which such offer or solicitation is not authorised
or to any person to whom it is unlawful to make such offer or
solicitation. Any failure to comply with these restrictions may
constitute a violation of securities laws of such
jurisdictions.
The New Ordinary Shares have not been, and will not be,
registered under the US Securities Act of 1933, as amended (the "US
Securities Act") and may not be offered, sold directly or
indirectly, in or into the United States except pursuant to an
applicable exemption from the registration requirements of the US
Securities Act. There will not be any public offering of the New
Ordinary Shares in the United States.
The contents of this Announcement have not been reviewed by any
regulatory authority in Hong Kong. You are advised to exercise
caution in relation to the Placing. If you are in any doubt about
any of the contents of this Announcement, you should obtain
independent professional advice. This is not an offer to the public
and the Placing Documents (as defined below) will not be registered
as a prospectus under the Companies (Winding Up and Miscellaneous
Provisions) Ordinance (Cap. 32 of the laws of Hong Kong) or any
other applicable ordinance in Hong Kong.
This Announcement must not, therefore, be distributed, issued,
circulated or possessed for the purpose of distribution or issue or
circulation, to persons in Hong Kong other than (1) to professional
investors within the meaning of the Securities and Futures
Ordinance (Cap. 571 of the laws of Hong Kong) (including
professional investors falling within the Securities and Futures
(Professional Investors) Rules (Cap. 571D of the laws of Hong
Kong)) or (2) in circumstances which would not constitute an offer
to the public for the purpose of the Companies (Winding Up and
Miscellaneous Provisions) Ordinance (Cap. 32 of the laws of Hong
Kong) or the Securities and Futures Ordinance (Cap. 571 of the laws
of Hong Kong).
This announcement has been issued by, and is the sole
responsibility of, the Company. No undertaking, representation,
warranty or other assurance, express or implied, is made or given
by or on behalf of the Company, Panmure Gordon (UK) Limited
("Panmure Gordon") or Shore Capital Stockbrokers Limited ("Shore
Capital") or any of their respective directors, officers, partners,
employees, agents or advisers or any other person as to the
accuracy or completeness of the information or opinions contained
in this announcement and no responsibility or liability is accepted
by any of them for any such information or opinions or for any
errors, omissions or misstatements, negligence or otherwise in this
announcement.
Panmure Gordon is authorised and regulated in the UK by the FCA
and is acting as nominated adviser and joint broker to the Company.
Panmure Gordon is not acting for, and will not be responsible to,
any person other than the Company for providing the protections
afforded to its customers or for advising any other person on the
contents of this announcement or on any transaction or arrangement
referred to in this announcement. No representation or warranty,
express or implied, is made by Panmure Gordon as to, and no
liability is accepted by Panmure Gordon in respect of, any of the
contents of this announcement. The responsibilities of Panmure
Gordon as the Company's nominated adviser under the AIM Rules for
Companies ("AIM Rules") and the AIM Rules for Nominated Advisers
are owed solely to London Stock Exchange plc and are not owed to
the Company or to any director or shareholder of the Company or any
other person, in respect of his decision to acquire shares in the
capital of the Company in reliance on any part of this
announcement, or otherwise.
Shore Capital is authorised and regulated in the UK by the FCA
and is acting as joint broker to the Company. Shore Capital is not
acting for, and will not be responsible to, any person other than
the Company for providing the protections afforded to its customers
or for advising any other person on the contents of this
announcement or on any transaction or arrangement referred to in
this announcement. No representation or warranty, express or
implied, is made by Shore Capital as to, and no liability is
accepted by Shore Capital in respect of, any of the contents of
this announcement.
The information in this announcement may not be forwarded or
distributed to any other person and may not be reproduced in any
manner whatsoever. Any forwarding, distribution, reproduction, or
disclosure of this information in whole or in part is unauthorised.
Failure to comply with this directive may result in a violation of
applicable securities laws and regulations of other
jurisdictions.
This announcement contains (or may contain) certain
forward-looking statements with respect to certain of the Company's
current expectations and projections about future events and the
Company's future financial condition and performance. These
statements, which sometimes use words such as "aim", "anticipate",
"believe", "may", "will", "should", "intend", "plan", "assume",
"estimate", "expect' (or the negative thereof) and words of similar
meaning, reflect the current beliefs and expectations of the
directors of the Company and/or the Joint Brokers and involve known
and unknown risks, uncertainties and assumptions, many of which are
outside the Company's control and difficult to predict, that could
cause actual results and performance to differ materially from any
expected future results or performance expressed or implied by the
forward-looking statement. The information contained in this
announcement speaks only as of the date of this announcement and is
subject to change without notice and the Company does not assume
any responsibility or obligation to, and does not intend to, update
or revise publicly or review any of the information contained to
this announcement, whether as a result of new information, future
events or otherwise, except to the extent required by the FCA, the
London Stock Exchange or by applicable law.
Any information in this announcement in respect of past
performance (including without limitation past performance of the
Company, its group, shares in the Company and/or the Company's
portfolio) cannot be relied upon as a guide to future performance.
The price of shares and the income from them may fluctuate upwards
or downwards and cannot be guaranteed.
APPIX I
The Fundraise
1. Introduction
The Company proposes to raise, subject to certain conditions:
(i) approximately GBP25 million (before expenses) in aggregate by
way of a conditional placing at a placing price of 8 pence per
share to certain institutional and other investors; and (ii) up to
GBP2 million (before expenses) by way of an Open Offer made to
Eligible Shareholders of up to 25,076,613 Open Offer Shares at a
price of 8 pence per share. The Placing Price represents a discount
of 8.6 percent. to the closing mid-market price of the Ordinary
Shares as at 24 November 2021 of 8.75 pence per Ordinary Share.
The Directors intend to use the net proceeds raised by the
Placing and Open Offer to accelerate the delivery of the Group's
technology, including through inter alia strengthening the Group's
business development activities, scale up of the Group's reactor
manufacturing capabilities and advancing the Group's technology
Reference Projects (the Bayou Fuels Project in Mississippi, US and
the Altalto Immingham Project in the UK) through to third party
financing. Importantly the Directors believe the net proceeds
raised by the Placing and Open Offer provide a line of sight to
Velocys achieving net positive cash flow during 2024. Further
details on the use of proceeds are set out below. The Fundraise
follows the Group's recent announcements that it has secured its
first Sustainable Aviation Fuel (" SAF ") offtake agreement with
Southwest Airlines together with an MOU for an offtake with IAG for
100 percent. of the SAF and the environmental credits to be
produced and generated from the Bayou Fuels Project. Third party
financing for the final engineering phase of the Bayou Fuels
Project is targeted to occur in the first half of 2022 which is
expected to lead to a significant dilution of the Group's stake in
the project.
The Placing and the Open Offer are conditional upon (amongst
other things) the passing of certain resolutions in order to ensure
that the Directors have the necessary authorities and powers to
allot the New Ordinary Shares. A General Meeting is therefore being
convened for the purpose of considering the Resolutions at 10:30
a.m. on 15 December 2021 at Magdalen Centre , Robert Robinson
Avenue, The Oxford Science Park, Oxford OX4 4GA. The Notice of
General Meeting is set out at the end of the Circular . The Placing
and the Open Offer are also conditional on the Placing Agreement
between the Company, Panmure Gordon and Shore Capital becoming
unconditional and not being terminated in accordance with its
terms. The Placing and the Open Offer are not underwritten.
2. Information on the Company
(a) Overview of the Company
The Company is an international sustainable fuels technology
company, providing clients with one of the most sustainable routes
to the economic production of drop-in SAF from a variety of waste
materials. Velocys operates a capital light and scaleable licencing
model offering a technology solution for the development of
synthetic sustainable fuels manufacturing via its proprietary
patented micro-channel Fischer-Tropsch reactors and comprehensive
biorefinery integrated technology package.
Velocys has a number of third party clients to whom it supplies
its technology to; in addition Velocys is developing two full-scale
biorefinery Reference Projects, the Bayou Fuels Project in
Mississippi, US and the Altalto Immingham Project in the UK . The
Reference Projects are being developed to accelerate adoption of
the Group's technology and, following the completion of third party
construction capital project financing and commencement of the
detailed engineering stage of these projects, the Reference
Projects are expected to generate significant technology licensing
revenue for the Group.
The Group has recently signed a 15 year fixed price offtake
agreement with Southwest Airlines and an MOU for a 10 year fixed
price offtake with IAG for in aggregate 100 per cent. of the SAF
produced and environmental credits generated from the Bayou Fuels
Project. The Directors believe that these offtake agreements
further validate the demand for the Group's technology and will
significantly de-risk the Bayou Fuels Project which should enable
construction capital financing of the project. Through the
combination of biogenic feedstock, planned renewable power supply
and carbon capture and storage (both currently in the feasibility
phase), Velocys' micro-channel Fischer-Tropsch reactors and
comprehensive biorefinery integrated technology package will enable
the commercial-scale production of SAF at the Bayou Fuels Project
with a strongly negative carbon intensity of down to -144g CO(2)
e/MJ, which is expected to achieve a total of 8.7 million tonnes of
avoided CO(2) over the term of the contracts.
The Group's technology has been commercially demonstrated
through several customer projects: in 2017 a first commercial
demonstration plant (the ENVIA plant, located in Oklahoma, US)
using two of the Group's full-scale Fischer-Tropsch reactors and
catalyst was completed and subsequently produced a fuel output that
qualified under the Renewable Fuels Standard and was sold to
commercial clients. Subsequently, construction of the NEDO I
biomass demonstration project in Japan was successfully completed
in late 2020 using the Group's propriety Fischer-Tropsch
technology. 3,000 litres of fuel from NEDO I were used in a Japan
Airlines scheduled commercial flight in June 2021 becoming the
first such flight using SAF derived from woodchips feedstock at any
scale. Further details of these commercial demonstration plants are
provided below.
The Group is focused on accelerating delivery of Velocys'
technology and driving revenue opportunities.
(b) Technology overview
The Group's technology uses the Fischer-Tropsch process to
convert a pure carbon monoxide and hydrogen syngas via a catalytic
chemical reaction into Fischer-Tropsch products which are
subsequently upgraded into fuels. The technology enables an
economic conversion of a wide range of low or negative- cost,
abundant sustainable feedstocks (including, but not limited to,
woody biomass residue or municipal solid waste that would otherwise
go to landfill or incineration) into high value sustainable fuels
such as SAF . These fuels qualify for decarbonisation credits in
both the United States (under the Renewable Fuels Standard) and in
the United Kingdom (under the Renewable Transport Fuels Obligation
s) . These fuels provide for particulates reductions by up to 90
per cent. and greenhouse gas emissions reductions by up to 70 per
cent. or over 150 per cent. when carbon capture and storage ("CCS")
is incorporated within the biorefinery.
The fuels are designed to "drop-in" and to be blended with
conventional fossil fuels, fully leveraging existing aircraft
engines and logistics infrastructure and are American Society for
Testing and Materials approved for blending with Jet A-1 at up to
50 per cent. No adaptation is therefore required to airport
infrastructure or aeroplane engines.
Although Fischer-Tropsch has been used for decades, Velocys has
developed a highly reactive catalyst and a bespoke reactor to be
used in an innovative way to manufacture sustainable fuels.
Velocys' proprietary Fischer-Tropsch technology comprises
microchannel Fischer-Tropsch reactor cores, containing a highly
active Fischer-Tropsch catalyst made by Velocys' proprietary
organic matrix combustion which are contained within a pressure
containment vessel/reactor. Velocys' technology provides the unique
combination of microchannel reactors and nanocatalyst technology
that allows an 8-10 fold increase in the speed of chemical
reactions compared with conventional Fischer-Tropsch technology,
and therefore much smaller reactors for any given volume of
throughput.
The technology is developed in-house by Velocys and is protected
by a wide range of patents and trademarks across multiple key
jurisdictions. The catalysts are manufactured at commercial scale
by sub-contractors in the US under strict Velocys supervision. The
reactor cores have previously been manufactured by subcontractors
in the US using manufacturing equipment designed and owned by
Velocys, however the Company intends to use some of the proceeds
from the Fundraise to improve the automation and the capacity of
this manufacturing by bringing final assembly, testing and quality
control in-house to a specially designed Company controlled
facility in Ohio while using qualified external contractors for
standard components and sub-assemblies.
(c) Market overview
Commercial aviation is responsible for about 13 per cent. of
transportation greenhouse gas ("GHG") emissions. The aviation
industry seeks to reduce its GHG emissions significantly,
decoupling airline growth from carbon growth. Purchasing fuel is
the primary operating cost for airlines. SAF represent s a
significant global opportunity, with the value of decarbonisation
far exceeding the value of the fuel where there is appropriate
policy support for SAF. The International Air Transport Association
("IATA") has committed to net-zero carbon emissions by 2050,
requiring 450 billion litres of SAF to meet these net-zero
commitments. However, supply is extremely limited - current annual
production is approximately 100 million litres. Electric and
hydrogen are not considered current or short-to-medium term viable
solutions for long haul flights. SAF is a "drop-in" fuel that
requires no modifications to engines or infrastructure and can
still meet international specifications (i.e., ASTM D7566), a
provision under D7566 allows any fuel meeting the specifications to
be reidentified as a conventional fuel. With this inclusion, any
SAF can be seamlessly integrated into the fuel delivery
infrastructure without the need for separate tracking or regulatory
approval, so providing the most viable option to help achieve the
net-zero commitments by 2050.
The Directors believe that the inevitable scale up in production
of SAF and the growing number of government mandates will make the
use of SAF widespread. The US has very competitive carbon
incentives through its existing Federal Renewable Fuel Standard
("RFS") and the Low Carbon Fuels Standard ("LCFS") in California,
together with the SAF Blenders Tax Credit which is currently in
progress through the Senate as part of the Sustainable Skies Act
and the Build Back Better legislation. There is also $4.3 billion
funding for SAF projects aiming to increase production to 120
billion litres. In the UK, the Government's Net Zero Strategy
includes developing a SAF mandate to enable delivery of 10 per
cent. SAF by 2030 with a GBP180 million funding commitment to
support development of SAF biorefineries. The Green Fuels Green
Skies grant initiative (of which Velocys is a recipient) has made
available GBP15 million in grant awards and has on-going support
from the Department for Transport. IATA's net-zero carbon emissions
commitment, aligns with the Paris Agreement for global warming to
not exceed 1.5degc. The EU have proposed to set SAF blending
mandates via the ReFuelEU proposal published in July 2021. These
Directors believe that these would likely be set at 2 per cent. by
2025, 5 per cent. by 2030 and 32 per cent. by 2040. The
International Civil Aviation Organisation ("ICAO") has introduced
Carbon Offsetting and Reduction Scheme for International Aviation
("CORSIA") as a global mandate for decarbonisation of aviation and
the Japanese Government has backed ventures launched to progress
commercial scale SAF production.
The Directors believe that there are a number of benefits of
Velocys' conversion pathway. The Fischer-Tropsch Synthesised
Paraffinic Kerosene ("SPK") route is the most established of the
seven approved technical pathways under ASTM D7566, which allows
the flexible use of large-volume, low-cost sustainable feedstocks
(such as woody biomass residue and municipal solid waste) and
generates clean burning, low carbon sustainable fuel s. Velocys'
standardised solution can ultimately also lead to a reduced cost of
capital for clients when eligible for non-recourse project finance
and can lead to sustainable local production and distribution of
fuel, resulting in increased self-sufficiency and reduced reliance
on fuel imports for the host country.
Expected demand for SAF in Europe and the US, based on the EU's
latest proposals and current incentives in the United States is
expected to reach 3.7 billion litres per year by 2025, equivalent
to 2 per cent. of global jet fuel demand and the equivalent of the
output from 28 reference plants. By 2030, demand for SAF is
expected to rise to 10.3 billion litres per year, equivalent to 5
per cent. of global jet fuel supply and the equivalent of the
output from 78 reference plants. By 2040, demand for SAF is
expected to rise further to 77.6 billion litres per year,
equivalent to 32 per cent. of global jet fuel supply and the
equivalent of the output from 600 reference plants.
Velocys' ambition is to capture 5-7 per cent. of the long term
market share of the demand this will create for proven SAF
technology. The Group has an active and growing pipeline of clients
and projects. In 2025, the Directors expect that one of the Group's
clients will be in commercial scale operation and three of the
Group's clients will be at an advanced stage of construction. At
this stage, the Group is aiming to have total design capacity of
230 million litres per year, equivalent to 6 per cent. of expected
demand for SAF. By 2030, the Directors reasonably anticipate that
12 plants will have been completed by the Group's clients,
delivering a capacity to meet 15 per cent. of the expected demand
for SAF. By 2040, the Directors currently forecast that up to 45
plants will have been completed by the Group's clients with
capacity to produce between 3.5 and 5 billion litres, equivalent to
between 5 per cent. and 7 per cent. of the expected demand for
SAF.
(d) Business model
The Group has a hybrid, capital-light business model, focusing
on delivering Fischer-Tropsch reactors and catalysts to global
clients under site-licence agreements and providing engineering
services over the course of the 25 year expected lifetime of the
assets. Some of Velocys' clients require the Fischer-Tropsch
Technology Island ("FTI", further details of which are provided in
the table below) only such as Red Rock Biofuels LLC ("RRB") in
Oregon, US and Toyo Engineering in Japan. Velocys also offers its
clients a full end-to-end solution for the conversion of solid
sustainable feedstocks to SAF via its so called "Integrated
Technology Package" ("ITP"). The Group's two biorefinery Reference
Projects (the Bayou Fuels Project and the Altalto Immingham
Project) are designed to accelerate the end-to-end technology
adoption as well as providing a source of future revenue to the
Group. To date the Group's technology is already commercially
referenced through its contracts with RRB in Oregon, US and a
consortium including Toyo in Japan. The Group's Fischer-Tropsch
Technology Island has been further demonstrated at commercial scale
by the ENVIA plant in Oklahoma during 2017 and 2018.
The Group's revenue comprises a combination of upfront fees and
recurring fees as follows:
Fischer-Tropsch Technology Integrated Technology
Island ( " FTI " ) Package ( " ITP " )
Upfront fees
* Technology licence fees * Technology licence fees
* Reactor sales * Reactor sales
* Engineering fees * Engineering fees
* Commissioning and start up
* Optimisation fees
------------------------------------------- -------------------------------------------
Recurring
fees * Catalyst sales and replacement * Catalyst sales and replacement
* Decarbonisation royalties
------------------------------------------- -------------------------------------------
In 2021, Velocys recognised revenue of GBP8.2 million following
the delivery of reactors and catalysts to RRB in Oregon and
completion of its contractual obligations under the contract with
RRB awarded in 2017.
The Group is building a growing pipeline of international
clients that are developing biorefineries. This includes developing
its existing relationships such as with Toyo in Japan, and pursuing
new project opportunities. In 2021 Velocys signed a collaboration
agreement with Toyo to start development of their commercial scale
biomass-to-jet fuel project along with other renewable fuel
opportunities. The Group is also undertaking a number of
pre-feasibility studies with potential plant owners to ascertain
the potential for projects to move into pre-detailed engineering
and project development.
Further information on the Group's existing projects is provided
below.
Revenue opportunity
For illustrative purposes to demonstrate the revenue opportunity
for Velocys, the expected net present value to Velocys per a
standard size contracted biorefinery client with 16 reactors
producing a capacity of 115 million litres per year is $89 million,
using a discount rate of 8 per cent. This estimate comprises
upfront and recurring revenues from the proprietary reactors and
catalysts, fees from engineering and commissioning services,
technology licence fees, optimisation fees and decarbonisation
royalties. By way of illustration, the potential profile of revenue
streams of a typical ITP project are provided below. (All values
are indicative, based on Velocys internal/proprietary information,
which has not been verified by any independent source, unless
specifically noted. The values have been provided for illustrative
purposes only and are not an indication of future revenues.)
Pre-construction phase (years 1-2)
-- Year 1: engineering fees (c.US$1.5 million); and
-- Year 2: technology licence fee (c. US$3 million) and engineering fees (c.US$2.5 million).
Financial close (year 3)
-- Technology licence fee (c.US$ 1.8 million), engineering fees
(c.US$1.5 million) and reactor and catalyst sales (c.US$ 18
million).
Construction phase (years 3-4)
-- Year 4: reactor and catalyst sales (c.US$14.4 million); and
-- Year 5: technology licence fee (c.US$1.3 million),
engineering fees (c.US$1 million) and reactor and catalyst sales
(c.US$ 3.9 million).
Commercial operations phase (years 6-25)
-- Catalyst regeneration service and catalyst sales (c.US$6.3
million every year) and decarbonisation royalties (c.US$6.7 million
annually).
Growth strategy
Velocys' growth strategy is to:
-- strengthen its business development function to grow its client pipeline;
-- invest in the scale-up of its reactor manufacturing capacity;
-- capitalise on strategic alliances with its technology
partners to further enhance the Group's standardised integrated
solution;
-- accelerate its collaborations with technology partners and to
outsource standardised activities to remain capital light;
-- target geographical markets where the regulatory environment
and/or pricing economies create the highest value opportunities for
its clients; and
-- expand engineering and technical resources to support its
clients' needs from feasibility stage to detailed engineering.
The Directors reasonably believe the growth strategy will enable
the Group to have 12 clients with completed plants by 2030 with
capacity to reach up to 15 per cent. of expected SAF demand with
potential additional significant growth projected beyond this - the
Directors currently forecast that up to 45 plants will have been
completed by the Group's clients by 2040.
(e) Bayou Fuels Project in Mississippi, US: reference project
Overview
In October 2017, the Group signed a site option agreement with
Adams County in the State of Mississippi for a biorefinery facility
to be located in Natchez, Mississippi and secured total site
incentives of approximately $60 million. The Bayou Fuels Project
will produce SAF for airline transportation in the US from the
paper and lumber industries including woody biomass forest residue
that would otherwise rot on the forest floor.
On 19 November 2021 the US House of Representatives passed a
bill that provides a SAF Blenders Tax Credit, which will be worth
$1.75/gallon for the SAF produced from the Bayou Fuels Project. The
US administration has recently announced additional policy
incentives to accelerate the production of SAF, with up to $5 per
gallon by way of federal producer tax credit available from 2027,
which would replace the SAF Blenders Tax Credit.
The Group intends to commence a structured, competitive process
to secure the necessary development capital investment by one or
more strategic partners in the first half of 2022. The Group
expects one or more clients to finance and own the construction of
the Bayou Fuels Project with the terms of the financing determining
Velocys' interests in the project post-financing. Potential
scenarios include, inter alia, Velocys retaining a minority
interest in the project or converting its interest into a
"decarbonisation royalty" or receiving a development fee.
In September 2019, Velocys entered into a non-binding agreement
with Oxy Low Carbon Ventures to capture the biogenic CO(2)
generated by the plant and securely store it underground
permanently: so called, CO(2) sequestration. This in combination
with the use of biogenic feedstock, planned renewable power supply
and Velocys' carbon mitigation technology has the capacity to
generate a carbon intensity score of -144g CO2e/MJ for the plant's
SAF output, which is highly desirable for purchasers of the
products and significantly improves decarbonisation credit revenues
further.
In June 2021, the Group announced the execution of a strategic
framework agreement with Koch Project Solutions, a subsidiary of
Koch Engineered Solutions, who have been engaged to provide a full
cost and schedule guarantee for the project.
Offtake agreements
Multi-year offtake contracts have been agreed, covering 100 per
cent. of the SAF expected to be produced by the biorefinery
plant.
(i) Offtake agreement with Southwest Airlines
On 10 November 2021, Velocys Renewables LLC entered into its
first offtake agreement for the SAF to be produced by the project
with Southwest Airlines, America's largest domestic airline. The
agreement covers the purchase by Southwest Airlines of an expected
219 million gallons of SAF at a fixed price and floor price for
greenhouse gas credits, over a fifteen-year term from 2026, when
the biorefinery is scheduled to begin commercial delivery of fuel.
After blending, this is expected to produce approximately 575
million gallons of net zero SAF.
This offtake agreement covers two thirds of the project
facility's planned production and de-risks up to $2 billion
revenues over the life of the contract. Each gallon of SAF
generated by the project is expected to generate tradable
greenhouse gas credits for which Southwest Airlines guarantees a
minimum price payable to the project (included in the fuel fixed
price), de-risking a significant proportion of the revenue stream
to the project. The project may additionally benefit from the value
of greenhouse gas credits if sold above the minimum price
underwritten by Southwest Airlines.
Southwest Airlines and Velocys have also, as part of the offtake
agreement, agreed to a long-term strategic alliance for future
US-based biorefineries in which Velocys may be involved with the
right for Southwest Airlines to purchase significant volumes of SAF
from such facilities.
The offtake agreement is subject to certain customary conditions
precedent including completion of satisfactory financing for the
project's front-end engineering and design phase and certain
construction milestones, eligibility for greenhouse gas credits as
well as the enactment of the proposed SAFs tax credit
legislation.
(ii) Offtake memorandum of understanding with IAG
On 10 November 2021, Velocys Renewables LLC entered into a
non-binding memorandum of understanding for the offtake of SAF to
be produced at the project with International Consolidated Airlines
Group S.A. ("IAG").
This covers the purchase by IAG's constituent airlines, which
includes British Airways, Aer Lingus and Iberia amongst others, of
an expected 73 million gallons of SAF, in aggregate, at a fixed
price. After blending, this is expected to produce the equivalent
of approximately 192 million gallons of net zero SAF during the
term of the agreement, which will last for ten years from the
expected commencement date of operation of the project in 2026.
This represents one third of the facility's planned annual output
and complements the binding offtake agreement for the remaining two
thirds annual output entered into on the same date with Southwest
Airlines as described above.
The intention of the parties is to convert the memorandum of
understanding, which includes all material terms for the offtake,
into a binding agreement as soon as possible within the next six
months. The memorandum of understanding also includes an option for
IAG to invest in the project development phases.
The fixed price fuel purchase agreement includes a price support
mechanism by IAG for the greenhouse gas credits associated with the
SAF production. As a result, the agreement is expected to generate
revenues of over $800 million to the project and achieve an
estimated total of 2.2 million tonnes of avoided CO(2) over the
term of the offtake.
Future milestones
Initial engineering for the project has commenced, with detailed
engineering expected to commence in 2022 . Signature of the final
commercial agreements for the project, FID and financial close is
expected in 2023, following which plant construction is expected to
commence in 2024. Construction is targeted to be completed early in
2026 followed by plant commissioning and start up, with full scale
commercial operations targeted to commence in 2027.
(f) Altalto Immingham Project in Immingham, UK: reference project
Overview
In September 2017, the Group entered into a joint development
agreement with various parties as detailed below to execute a
feasibility study for a commercial scale waste-to-sustainable fuels
plant in the United Kingdom. The plant will take household and
commercial waste which, after recyclates have been removed, would
be destined for landfill or incineration, and instead convert that
waste into clean-burning SAF and naphtha. The commercial co-sponsor
of the project is British Airways.
Funding history and securing the site
The initial feasibility stage of the project was successfully
completed in June 2018. At that time, GBP4.9 million of funding was
secured from the partners, including Velocys, to deliver the next
development phase of the project. British Airways and Shell
subsequently committed a further GBP3.8 million of funding in
aggregate to cover the remaining development work. This included
completion of initial engineering work, planning and permitting,
utilities supplies and detailed engineering preparation. Velocys
continues to execute all the work to progress the project in line
with the joint development agreement. In January 2021 Shell
withdrew from the project, formally relinquishing all interests in
the project. As part of the funding package in June 2018, a grant
of GBP0.4 million was secured from the UK Department for Transport
under the Future Fuels for Flight and Freight Competition, and a
further grant of GBP0.5 million was made in June 2020.
On 18 December 2018, a site was secured for the project. The
site, of approximately 80 acres, near Immingham, North East
Lincolnshire, is within an enterprise zone and earmarked for
industrial development within the local development plan. Planning
consent for the Development was granted subject to conditions in
May 2020. Access to the site is by way of an option agreement,
entered into by Altalto Immingham Ltd ("Altalto"), a subsidiary of
Velocys, on 18 December 2018. The agreement gives Altalto the
right, for a three-year period, to acquire Rula Developments
(Immingham) Limited (" Rula "), the company which owns the site,
from its current shareholders. The option period ends in December
2021 and Velocys has concluded in principle a transaction with the
owners of Rula, which would lead to a GBP2.5 million part-payment
(by the parties to the joint development agreement) of the
consideration for the site to secure control of it. Concurrently
Velocys is discussing the purchase of Rula by a third party who
would become the landlord for Altalto. The decision as to whether
to proceed with the acquisition of the Immingham site will be made
as part of the project's final investment decision, which is
dependent on progress of UK government policy. In the event that
the Group, in consultation with its co-commercial sponsor, British
Airways, decides not to proceed with the acquisition of the site,
the residual liabilities that may be incurred by the Group as a
result are not expected to be material to Velocys.
On 1 September 2021, it was announced that the Company would be
the recipient of a grant up to the value of GBP2.4 million for the
Altalto Immingham Project. The Grant is issued by the UK Department
for Transport under the Green Fuels, Green Skies Competition and is
to be deployed in progressing project development work. All funds
are expected to be received by the end of June 2022 for all work
that is incurred and paid for by the end of March 2022. Any work
not completed by the end of March 2022 will not receive any grant
funding under this competition so will either be stopped or have to
be paid for by the Altalto shareholders.
Future milestones
The first geotechnical work is ongoing, and detailed engineering
is expected to commence in 2023. Financial close is expected in
2024, with construction of the plant being targeted to commence in
2024 and to be completed by mid-2026, following which commissioning
and startup will commence in 2027 with full scale commercial
operation expected in 2027.
(g) Current revenue generating client: Toyo, Nagoya, Japan
On 18 September 2019, the Group and Toyo entered into agreements
in relation to a pilot plant for generating SAF using woody biomass
feedstock, as part of a project funded by the Japanese government
(the NEDO I project, in Nagoya, Japan). The project involves Toyo,
Mitsubishi Hitachi Power Systems, Chubu Electric Power and the
Japan Aerospace Exploration Agency. Under the agreements, Toyo has
paid a total of $4 million to the Group in two tranches: $0.5
million which has already been received by the Group as a
non-refundable deposit, with the remaining $3.5 million paid into
escrow.
In December 2019, Velocys delivered a pilot scale
Fischer-Tropsch reactor and catalyst to Toyo which was used in the
NEDO I demonstration project during 2020. The Directors believe
that the relationship with Toyo provides recognition of Velocys'
technology as one of the core elements to the ability to produce
synthetic jet fuel which meets the Japanese quality standards.
Following the successful completion of the NEDO I demonstration, on
8 February 2021, Velocys entered a collaboration agreement with
Toyo to begin the development of a commercial project to produce
SAF and other renewable fuels in Japan - the NEDO II biomass to
sustainable aviation fuels plant. Initial engineering of the NEDO
II plant has commenced, with detailed engineering expected in 2022.
Financial close is expected in 2023, with construction in 2024 and
2025, commissioning and start up in 2026, and full-scale commercial
operations expected at the end of 2026. The NEDO II project is
expected to be similar in scale to the RRB biorefinery, details of
which are set out below.
On 25 August 2021, it was announced that the Group's
Fischer-Tropsch technology has been selected for an e-fuels project
by Toyo Engineering Corporation and its consortium of six leading
Japanese companies, including Toshiba Energy Systems &
Solutions Corporation, Toshiba Corporation, Idemitsu Kosan Co.,
Ltd., Japan CCS Co., Ltd., and All Nippon Airways Co., Ltd. These
six companies are being commissioned by the Ministry of the
Environment, Government of Japan jointly to commence a
demonstration project to convert carbon gasses and hydrogen
directly into SAF.
(h) Current revenue generating client: Red Rock Biofuels, Oregon, USA
In May 2018, Velocys received a "notice to proceed" to commence
manufacturing of Fischer-Tropsch reactors and catalysts for the RRB
biorefinery that will be located in Lakeview, Oregon, USA. RRB has
commenced construction of the biorefinery, which will incorporate
Velocys' technology, and produce low-carbon, renewable diesel and
jet fuel from woody biomass. Velocys' role in this project is as a
licensor for its Fischer-Tropsch technology to be used for the
project as the central processing unit.
The expected output of the biorefinery in Lakeview is
approximately 15 million gallons per year of renewable
transportation fuels including diesel and jet fuel. RRB has in
place contracts from several airlines to purchase 100 per cent. of
the jet fuel produced each year.
Velocys delivered four Fischer-Tropsch reactors to RRB in the
first half of 2020 and completed the loading of catalyst into the
reactors in December 2020. In the first half of 2021 Velocys was
able to demonstrate that it had completed all contractual
obligations to RRB and thereby recognised GBP8.2m of revenue
resulting in GBP3.3m gross profit.
(i) Completed demonstration project in Oklahoma: ENVIA joint venture
In September 2016, construction of the first demonstration plant
incorporating the Group's Fischer-Tropsch technology was completed
and commercial scale catalyst loading was proven. In February 2017,
the first Fischer-Tropsch product was successfully produced and, in
June 2017, the first finished products (being renewable waxes,
diesel and naphtha) were produced. In September 2017, the plant
generated revenue for the first time. In October 2017, the plant
achieved an operational capacity of 200 barrels per day and, in
early 2018, Q-RIN qualification under the Renewable Fuels Standard
was achieved, validating the pathway. The ENVIA plant completed the
demonstration of the Velocys Fischer-Tropsch technology and was the
culmination of 17 years of development and testing, with over 5,000
hours of cumulative runtime achieved across the two full-scale
Velocys Fischer-Tropsch reactors, stress testing the plant's
equipment and technology under various conditions. In total, 1.6
million litres of finished fuel and wax were delivered by the
plant.
In May 2018, a gas-leak was detected at the ENVIA plant and the
plant was safely temporarily put in recycling mode. Subsequent
investigations found that the ancillary coolant system was the root
cause of the leak. The ancillary coolant system was designed by a
third party and had no relation to any Velocys technology deployed
at the plant. The damaged equipment and loss of commercial revenue
was covered under ENVIA's commercial insurance policies. On 10
September 2018, operations at the ENVIA demonstration plant were
suspended and the decision was taken by Velocys that it had
accumulated a sufficient number of operating hours on the two
licensed commercial scale Fischer-Tropsch reactors for the
demonstration to be considered completed. Following the winding
down of the ENVIA joint venture, the Group has been conducting an
extensive and valuable post-operative analysis of the reactors and
catalyst. This post-operative analysis is under way, and the
results generated will be incorporated by Velocys in even more
comprehensive instructions to its clients regarding the operation
of its catalyst and reactors under a wide range of conditions,
showing the benefit from the knowledge accumulated from the
demonstration plant in Oklahoma.
3. Current Trading
On 23 September 2021 Velocys announced its interim results for
the six months to 30 June 2021, demonstrating that the Group has
achieved an important milestone, recognising GBP8.2m of revenue and
GBP3.3m gross profit for the first half of 2021 from our first
major commercial customer contract with RRB. The downwards trend in
the Group's operating loss continued, declining to GBP2.0m in
HY2021 from GBP2.6m in HY2020 (GBP5.2m in HY2019 and GBP11.0m in
2018). This has shown the determination by the Group to control its
spending whilst also delivering to our customers and progressing
the two Reference Projects.
Financial highlights
-- Revenue of GBP8.2m (HY2020: GBP0.2m), mainly from licensing
fees and sales of reactors and catalyst for customer contract
awarded in 2017.
-- Gross profit of GBP3.3m (HY2020: GBP0.1m).
-- Operating loss of GBP2.0m (HY2020: GBP2.6m).
-- Cash at period end of GBP8.3m (31 December 2020: GBP13.1m).
-- Cash outflow of GBP4.8m (HY2020: cash outflow GBP3.2m).
4. Use of Proceeds
The Directors intend to use the net proceeds from the Fundraise
as follows:
-- At least GBP5 million to be used as capital investment in
manufacturing capability to enable output of at least 12 reactors
per year and in addition the build-up of reactor parts inventory to
expedite commissioning of that equipment;
-- GBP5 million to be used as funding to advance the Bayou Fuels
Project and the Altalto Immingham Project to the point of securing
external investment into the detailed engineering stage;
-- GBP4 million to back process guarantees and equipment
warranties to the Group's clients; and
-- the balance of the net proceeds of the Fundraise will be used
for business development and for general working capital needs and
Group running costs over the next two years, with a potential
part-payment to secure control of the site for the Altalto
Immingham Project.
5. Principal terms of the Placing
The Company is conducting a conditional, non-pre-emptive placing
of approximately GBP25 million at the Placing Price. The Placing
Shares will be placed by Panmure Gordon and Shore Capital as agents
for the Company and pursuant to the Placing Agreement, with
institutional and other professional investors.
The Placing Price represents a discount of 8.6 percent. to the
closing mid-market price of the Ordinary Shares as at 24 November
2021 of 8.75 pence per Ordinary Share. The Placing Shares will,
when issued, be credited as fully paid and will rank pari passu in
all respects with the other Ordinary Shares then in issue,
including all rights to all dividends and other distributions
declared, made or paid following the relevant Admission .
The VCT Placing is conditional upon (amongst other things):
(a) the passing of the Resolutions at the General Meeting;
(b) the Placing Agreement becoming unconditional and the Placing
Agreement not having been terminated in accordance with its terms;
and
(c) VCT Admission occurring on or before 16 December 2021 (or
such later date as Panmure Gordon, Shore Capital and the Company
may agree, not being later than 31 December 2021).
The General Placing is conditional upon (amongst other
things):
(a) the passing of the Resolutions at the General Meeting;
(b) the Placing Agreement becoming unconditional and the Placing
Agreement not having been terminated in accordance with its terms;
and
(c) General Admission occurring on or before 17 December 2021
(or such later date as Panmure Gordon, Shore Capital and the
Company may agree, not being later than 31 December 2021).
Shareholders should note that it is possible that VCT Admission
occurs but General Admission does not occur. General Admission is
conditional on VCT Admission occurring. If VCT Admission and
General Admission do not occur then the Company will not receive
the relevant net proceeds in respect of VCT Admission and General
Admission and the Company may not be able to finance the activities
referred to in the Circular.
The Placing Agreement contains warranties from the Company in
favour of Panmure Gordon and Shore Capital in relation to (amongst
other things) the Company and its business. In addition, the
Company has agreed to indemnify Panmure Gordon and Shore Capital in
relation to certain liabilities it may incur in undertaking the
Placing. Panmure Gordon and Shore Capital have the right to
terminate the Placing Agreement in certain circumstances prior to
General Admission, in particular, it may terminate in the event
that there has been a material breach of any of the warranties or
for force majeure (and other introducers and placing agents also
have the right to terminate their agreements in certain
circumstances) .
The Company believes that the VCT Shares will rank as a
qualifying holding for the purposes of investment by VCTs. However,
no assurance has been obtained from HMRC or any other person that a
subscription for VCT Shares is a qualifying holding for the purpose
of investment by VCTs.
None of the Directors or the Company give any warranty or
undertaking that any VCT investment in the Company is a qualifying
holding, or that VCT qualifying status will not be withdrawn, nor
do they warrant or undertake that the Company will conduct its
activities in a way that qualifies for or preserves its status or
the status of any investment in Ordinary Shares. Investors
considering taking advantage of any of the reliefs available to
VCTs should seek their own professional advice in order that they
may fully understand how the rules apply in their individual
circumstances and what they are required to do in order to claim
any reliefs (if available). As the rules governing VCT reliefs are
complex and interrelated with other legislation, if any potential
investors are in any doubt as to their tax position, require more
detailed information than the general outline above, or are subject
to tax in a jurisdiction other than the UK, they should consult
their professional advisers.
Application will be made for the VCT Shares and the General
Placing Shares to be admitted to trading on AIM. It is expected
that trading in the VCT Shares will commence at 8.00 a.m. on 16
December 2021 and that trading in the General Placing Shares will
commence at 8.00 a.m. on 17 December 2021.
It is expected that certain Directors in the Company intend to
subscribe for New Ordinary Shares through the Placing for an
aggregate amount of at least approximately GBP50,000. Further
details will be announced as appropriate in due course.
6. Principal terms of the Open Offer
The Company considers it important that, where reasonably
practicable, Shareholders have an opportunity to participate in its
equity fundraisings. Accordingly, the Company intends to raise up
to approximately GBP2 million (before expenses) by way of the Open
Offer.
The Open Offer has been structured such that the maximum amount
that can be raised by the Company under the Open Offer will not
exceed the sterling equivalent of EUR 8 million. The limit of
approximately GBP2 million for the Open Offer has been set to allow
existing Shareholders to participate in the fundraise, taking into
account the dilution of Shareholders not able to participate in
respect of the Placing and the capital needs of the Company. The
maximum aggregate limit of the Open Offer also ensures that the
Company is not required to produce an approved prospectus pursuant
to section 85 of FSMA. The issue of a prospectus would considerably
increase the costs of the fundraising and it would take much longer
to complete, as any such prospectus would require the prior
approval of the FCA.
On and subject to the terms and conditions of the Open Offer,
the Company invites Eligible Shareholders, being Shareholders who
are resident in the United Kingdom only on the Ex-Entitlement Date,
to apply for their Basic Entitlement of Open Offer Shares at the
Placing Price. Each Eligible Shareholder's Basic Entitlement has
been calculated on th e basis of 2 Open Offer Shares for every 85
Existing Ordinary Shares held at the Record Date.
Eligible Shareholders are also invited to apply for additional
Open Offer Shares in accordance with the Excess Entitlement. Any
Open Offer Shares not issued to an Eligible Shareholder pursuant to
their Basic Entitlement will be apportioned between those Eligible
Shareholders who have applied for the Excess Entitlement at the
sole discretion of the Board, provided that no Eligible Shareholder
shall be required to subscribe for more Open Offer Shares than they
have specified on the Application Form or through CREST.
The Open Offer is conditional upon (amongst other things):
(a) the passing of the Resolutions at the General Meeting;
(b) the Placing Agreement becoming unconditional and the Placing
Agreement not having been terminated in accordance with its terms;
and
(c) General Admission occurring on or before 17 December 2021
(or such later date as Panmure Gordon, Shore Capital and the
Company may agree, not being later than 31 December 2021).
The Open Offer Shares have not been and are not intended to be
registered or qualified for sale in any jurisdiction other than the
United Kingdom. Accordingly, unless otherwise determined by the
Company and effected by the Company in a lawful manner, the
Application Form will not be sent to existing Shareholders with
registered addresses in any jurisdiction other than the United
Kingdom since to do so would require compliance with the relevant
securities laws of that jurisdiction. Applications from any such
person will be deemed to be invalid. If an Application Form is
received by any Shareholder whose registered address is elsewhere
but who is in fact a resident or domiciled in a territory other
than the United Kingdom, he/she should not seek to take up his/her
allocation.
The Circular contains the full terms and conditions of the Open
Offer.
7. Recommendation
The Directors consider that the Fundraise and the Resolutions
are in the best interests of the Company and its Shareholders as a
whole. The Company is reliant on the net proceeds of the Fundraise
to meet its ongoing liquidity requirements and to continue to
implement its strategy. If the Resolutions are not passed by
Shareholders, the Fundraise will not proceed. In these
circumstances, the Directors will need to reconsider the Company's
strategy and the Company may need to seek alternative funding,
which may not be available on terms which are acceptable to the
Company or at all. Accordingly, the Directors unanimously recommend
that Shareholders vote in favour of the Resolutions, as they intend
to do in respect of their own legal and/or beneficial
shareholdings, amounting, in aggregate, to 5,002,723 Ordinary
Shares (representing approximately 0.5 per cent. of the Ordinary
Shares in the issue as at the date of the Circular).
APPIX II
TERMS AND CONDITIONS OF THE PLACING
INTRODUCTION
IMPORTANT INFORMATION FOR PLACEES ONLY REGARDING THE
PLACING.
THIS ANNOUNCEMENT, INCLUDING THIS APPIX, AND THE INFORMATION IN
IT, IS RESTRICTED, AND IS NOT FOR PUBLICATION, RELEASE OR
DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART IN OR
INTO THE UNITED STATES, CANADA, AUSTRALIA, NEW ZEALAND, THE
REPUBLIC OF SOUTH AFRICA OR JAPAN ("THE EXCLUDED TERRITORIES") OR
ANY OTHER JURISDICTION IN WHICH SUCH PUBLICATION OR DISTRIBUTION
WOULD BE UNLAWFUL.
IMPORTANT INFORMATION ON THE PLACING FOR INVITED PLACEES
ONLY.
THE PLACING SHARES THAT ARE THE SUBJECT OF THE PLACING ARE NOT
BEING OFFERED OR SOLD TO ANY PERSON IN THE EUROPEAN UNION OR THE
UK, OTHER THAN TO QUALIFIED INVESTORS, WHICH INCLUDES LEGAL
ENTITIES WHICH ARE REGULATED BY THE FCA OR ENTITIES WHICH ARE NOT
SO REGULATED WHOSE CORPORATE PURPOSE IS SOLELY TO INVEST IN
SECURITIES.
MEMBERS OF THE PUBLIC IN THE UK OR ELSEWHERE ARE NOT ELIGIBLE TO
TAKE PART IN THE PLACING. THIS ANNOUNCEMENT (INCLUDING THIS APPIX)
AND THE TERMS AND CONDITIONS SET OUT HEREIN ARE FOR INFORMATION
PURPOSES ONLY AND ARE DIRECTED ONLY AT: (A) PERSONS IN A MEMBER
STATE OF THE EUROPEAN ECONOMIC AREA WHO ARE QUALIFIED INVESTORS
(WITHIN THE MEANING OF THE PROSPECTUS REGULATION (EU) 2017/1129)
("PROSPECTUS REGULATION"); (B) PERSONS IN THE UNITED KINGDOM WHO
ARE QUALIFIED INVESTORS WITHIN THE MEANING OF THE UK VERSION OF THE
PROSPECTUS REGULATION WHICH IS PART OF UK LAW BY VIRTUE OF THE
EUROPEAN UNION (WITHDRAWAL) ACT 2018 AS AMED AND SUPPLEMENTED
(INCLUDING BY THE UK PROSPECTUS AMMENT REGULATIONS 2019 AND THE
FINANCIAL SERVICES AND MARKETS ACT 2000 (PROSPECTUS) REGULATIONS
2019) WHO ALSO (I) HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING
TO INVESTMENTS FALLING WITHIN ARTICLE 19(5) OF THE FINANCIAL
SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005
("ORDER") (INVESTMENT PROFESSIONALS) OR (II) FALL WITHIN ARTICLE
49(2)(A) TO (D) OF THE ORDER (HIGH NET WORTH COMPANIES,
UNINCORPORATED ASSOCIATIONS ETC.) AND (C) THOSE PERSONS TO WHOM IT
MAY OTHERWISE BE LAWFULLY COMMUNICATED (EACH SUCH PERSONS REFERRED
TO ABOVE BEING A "RELEVANT PERSON"). THIS ANNOUNCEMENT (INCLUDING
THIS APPIX) AND THE TERMS AND CONDITIONS SET OUT HEREIN MUST NOT BE
ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. ANY
INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS ANNOUNCEMENT
(INCLUDING THIS APPIX) AND THE TERMS AND CONDITIONS SET OUT HEREIN
RELATES IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED
IN ONLY WITH RELEVANT PERSONS.
THIS APPIX, AND THE ANNOUNCEMENT OF WHICH IT FORMS PART, IS FOR
INFORMATION PURPOSES ONLY IS NOT INTED TO FORM THE BASIS OF ANY
INVESTMENT ACTIVITY OR DECISION, AND SHOULD NOT BE CONSIDERED AS A
RECOMMATION BY THE COMPANY THAT ANY RECIPIENT SHOULD ACQUIRE ANY
INTEREST IN THE SHARE CAPITAL OR ANY OTHER INTEREST IN THE COMPANY.
IT DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF
ANY SECURITIES IN THE COMPANY. IF YOU ARE IN ANY DOUBT AS TO
WHETHER YOU ARE A RELEVANT PERSON YOU SHOULD CONSULT A PROFESSIONAL
ADVISER FOR ADVICE.
THIS ANNOUNCEMENT IS NOT AN OFFER FOR SALE OR SUBSCRIPTION IN
ANY JURISDICTION IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL UNDER THE SECURITIES LAWS OF ANY SUCH JURISDICTION. THIS
ANNOUNCEMENT IS NOT AN OFFER OF OR SOLICITATION TO PURCHASE OR
SUBSCRIBE FOR SECURITIES IN THE UNITED STATES. THE SECURITIES
REFERRED TO HEREIN HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER
THE U.S. SECURITIES ACT OF 1933, AS AMED (THE "SECURITIES ACT"),
AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES EXCEPT PURSUANT
TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT. THE PLACING SHARES ARE BEING OFFERED AND SOLD ONLY
(I) OUTSIDE OF THE UNITED STATES IN "OFFSHORE TRANSACTIONS" AS
DEFINED IN AND IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES
ACT ("REGULATION S") AND OTHERWISE IN ACCORDANCE WITH APPLICABLE
LAWS AND; (II) IN THE UNITED STATES TO A LIMITED NUMBER OF
"QUALIFIED INSTITUTIONAL BUYERS" ("QIB") AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT PURSUANT TO AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THERE WILL BE NO
PUBLIC OFFER OF THE SECURITIES MENTIONED HEREIN IN THE UNITED
STATES.
EACH PLACEE SHOULD CONSULT WITH ITS OWN ADVISERS AS TO LEGAL,
TAX, BUSINESS AND RELATED ASPECTS OF AN INVESTMENT IN PLACING
SHARES. THE PRICE OF THE PLACING SHARES IN THE COMPANY AND THE
INCOME FROM THEM (IF ANY) MAY GO DOWN AS WELL AS UP AND INVESTORS
MAY NOT GET BACK THE FULL AMOUNT INVESTED ON DISPOSAL OF THE
PLACING SHARES.
Placees will be deemed to have read and understood this
announcement and these terms and conditions in their entirety and
to be making such offer on the terms and conditions and to be
providing the representations, warranties, acknowledgements, and
undertakings contained in this Appendix. In particular, each such
Placee represents warrants and acknowledges that:
1. it is a Relevant Person and undertakes that it will acquire,
hold, manage or dispose of any Placing Shares that are allocated to
it for the purposes of its business;
2. in the case of any Placing Shares acquired by it as a
financial intermediary, as that term is used in Article 5(1) of the
Prospectus Regulation, (i) the Placing Shares acquired by it have
not been acquired on behalf of, nor have they been acquired with a
view to their offer or resale to, persons in any Member State of
the EEA or the UK other than Qualified Investors or in
circumstances in which the prior consent of the Joint Brokers has
been given to the offer or resale; or (ii) where Placing Shares
have been acquired by it on behalf of persons in any Member State
of the EEA or the UK other than Qualified Investors, the offer of
those Placing Shares to it is not treated under the Prospectus
Regulation as having been made to such persons; and/or
3. except as otherwise permitted by the Company and subject to
any available exemptions from applicable securities laws, it (and
any person on whose account it is acting) is (a) located outside
the United States and is acquiring the Placing Shares in an
"offshore transaction" as defined in, and in accordance with,
Regulation S; or (b) is a dealer or other professional fiduciary in
the United States acting on a discretionary basis for a non-U.S.
Person as defined in and in reliance on Regulation S; or (c) if
within the United States, is a QIB .
The Company and the Joint Brokers will rely upon the truth and
accuracy of the foregoing representations, acknowledgements and
agreements. Neither of the Joint Brokers makes any representation
to any Placee regarding an investment in the Placing Shares
referred to in this announcement (including this Appendix).
This announcement (including this Appendix) does not constitute
an offer and may not be used in connection with an offer, to sell
or issue or the solicitation of an offer to buy or subscribe for
Placing Shares in any jurisdiction in which such offer or
solicitation is or may be unlawful. This announcement (including
this Appendix) and the information contained herein is not for
publication or distribution, directly or indirectly, to persons in
the United States, the Excluded Territories or in any jurisdiction
in which such publication or distribution is unlawful. Persons who
come into possession of this announcement are required by the
Company to inform themselves about and to observe any restrictions
of transfer of this announcement. No public offer of securities of
the Company under the Placing is being made in the United Kingdom,
the United States or any Excluded Territory.
In particular, the Placing Shares referred to in this
announcement have not been and will not be registered under the
Securities Act or under any laws of, or with any securities
regulatory authority of, any state or other jurisdiction of the
United States, and may not be offered, sold, resold, transferred or
delivered, directly or indirectly, in the United States except
pursuant to an exemption from, or in a transaction not subject to,
the registration requirements of the Securities Act and in
compliance with any applicable securities laws of any state or
other jurisdiction in the United States. The Placing Shares are
only being offered and sold only (i) outside the United States in
offshore transactions as defined in and in accordance with
Regulation S ; and (ii) in the United States to a limited number of
QIBs pursuant to an exemption from the registration requirements of
the Securities Act. Any offer or sale of Placing Shares in the
United States will be made only by broker-dealers who are
registered as such under the Exchange Act. The Company has not
registered and will not be registered under the U.S. Investment
Company Act of 1940, as amended.
The relevant clearances have not been, nor will they be,
obtained from the securities commission of any province or
territory of Canada; no prospectus has been lodged with or
registered by the Australian Securities and Investments Commission
or the Japanese Ministry of Finance; and the Placing Shares have
not been, nor will they be, registered under or offered in
compliance with the securities laws of any state, province or
territory of any of the Excluded Territories. Accordingly, the
Placing Shares may not (unless an exemption under the relevant
securities laws is applicable) be offered, sold, resold or
delivered, directly or indirectly, in or into the Excluded
Territories or any other jurisdiction outside the United
Kingdom.
Persons (including, without limitation, nominees and trustees)
who have a contractual or other legal obligation to forward a copy
of this Appendix or the announcement of which it forms part should
seek appropriate advice before taking any action.
TIMETABLE FOR THE PLACING
Various dates referred to in this Announcement are stated on the
basis of the expected timetable for the Placing. It is possible
that some of these dates may be changed. To facilitate the
application for VCT relief in respect of the VCT Placing Shares,
such shares will be allotted on 15 December 2021 conditional upon
Admission becoming effective on 16 December 2021 ("First
Admission"). The General Placing Shares will be allotted on 15
December 2021, conditional upon Admission becoming effective on 17
December 2021 ("Second Admission").
DETAILS OF THE PLACING
The Joint Brokers have entered into the Placing Agreement with
the Company under which the Joint Brokers have (severally, and not
jointly or jointly and severally), on the terms and subject to the
conditions set out therein, undertaken to use their respective
reasonable endeavours to procure, as agents for the Company,
subscribers for the Placing Shares at the Placing Price.
The Placing Agreement contains customary warranties and
indemnities given by the Company to the Joint Brokers as to matters
relating to the Company and its business in respect of liabilities
arising out of, or in connection with, the Placing.
The Bookbuild is expected to at 8.00 p.m. GMT today, 25 November
2021, but may be closed earlier, or later, at the discretion of the
Joint Brokers. The Joint Brokers may, in agreement with the
Company, accept bids received after the Bookbuild has closed.
The Joint Brokers (after consultation with the Company and on
the basis of allocations agreed between the Company and the Joint
Brokers) reserve the right to scale back the number of Placing
Shares to be subscribed by any Placee in the event of applications
in excess of the target amount under the Placing. The Company and
the Joint Brokers also reserve the right not to accept offers to
subscribe for Placing Shares or to accept such offer in part rather
than in whole. The Joint Brokers shall be entitled to effect the
Placing by such method as they shall in their sole discretion
determine. To the fullest extent permissible by law, neither of the
Joint Brokers nor any holding company of a Joint Broker nor any
subsidiary branch or affiliate of a Joint Broker (each an
affiliate) nor any person acting on behalf of any of the foregoing
shall have any liability to the Placees (or to any other person
whether acting on behalf of a Placee or otherwise). In particular,
neither of the Joint Brokers, nor any affiliate thereof nor any
person acting on their respective behalfs shall have any liability
to Placees in respect of their conduct of the Bookbuild or the
Placing.
Each Placee's obligations will be owed to the Company and to the
Joint Brokers. Following the confirmation referred to below in the
paragraph entitled "Participation in, and principal terms of, the
Placing", each Placee will also have an immediate, separate,
irrevocable and binding obligation, owed to the Joint Brokers, to
pay to Panmure Gordon or Shore Capital (as the case maybe) (or as
they shall each respectively direct) in cleared funds an amount
equal to the product of the Placing Price and the number of Placing
Shares which such Placees has agreed to acquire.
Each Placee and any person acting on behalf of such Placee
agrees to indemnify on demand and hold each of the Joint Brokers
and the Company, and their respective affiliates harmless from any
costs, claims, liabilities and expenses (including legal fees and
expenses) arising out of or in connection with any breach of the
acknowledgments, undertakings, representations, warranties and
agreements set forth in these terms and conditions and any contract
note.
The Placing is also conditional upon the Placing Agreement
becoming unconditional and the Placing Agreement not being
terminated in accordance with its terms. Further details of
conditions in relation to the Placing are set out below in the
paragraph entitled "Conditions of the Placing". All obligations
under the Placing will be subject to the fulfilment of the
conditions referred to below in the paragraph entitled "Conditions
of the Placing".
To the fullest extent permitted by law, each Placee acknowledges
and agrees that it will not be entitled to exercise any remedy of
rescission at any time. This does not affect any other rights the
Placee may have.
APPLICATION FOR ADMISSION TO TRADING
Application will be made to the London Stock Exchange for the
First Admission and the Second Admission. It is expected that
settlement of the VCT Shares and First Admission will become
effective on or around 8.00 a.m. on 16 December 2021 and dealings
in the VCT Shares will commence at that time. Settlement of the
General Placing Shares and Second Admission is expected to become
effective on or around 8.00 a.m. on 17 December 2021 and dealings
in the General Placing Shares will commence at that time.
Settlement of transactions in the VCT Shares following First
Admission and the General Placing Shares following Second Admission
will take place within the system administered by CREST, subject to
certain exceptions. The Company reserves the right to require
settlement for and delivery of the Placing Shares to Placees in
certificated form if either of the Joint Brokers or the Company in
its absolute discretion considers this to be necessary or
desirable.
PAYMENT FOR SHARES
Each Placee has a separate, irrevocable and binding obligation
to pay the Placing Price in cleared funds for the number of Placing
Shares duly allocated to the Placee under the Placing in the manner
and by the time directed by the Joint Brokers. If any Placee fails
to pay as so directed and/or by the time directed, the relevant
Placee's application for Placing Shares shall at the Joint Brokers'
discretion either be rejected or accepted in which case the
paragraph below entitled "Registration and Settlement" shall apply
to such application.
PARTICIPATION IN, AND PRINCIPAL TERMS OF, THE PLACING
Each Joint Broker (whether through itself or any of its
affiliates) is arranging the Placing as placing agent of the
Company and using its reasonable endeavours to procure Placees at
the Placing Price for the Placing Shares.
Participation in the Placing will only be available to persons
who may lawfully be, and are, invited to participate by the Joint
Brokers. The Joint Brokers and its affiliates may participate in
the Placing as principal.
By participating in the Placing, Placees will be deemed to have
read and understood this announcement, including this Appendix, in
its entirety and to be participating and making an offer for
Placing Shares on the terms and conditions, and to be providing the
representations, warranties, acknowledgements, agreements and
undertakings contained in this Appendix.
This Appendix gives details of the terms and conditions of, and
the mechanics of participation in, the Placing. No commissions will
be paid to Placees or by Placees in respect of any Placing
Shares.
The number of Placing Shares to be issued, and the extent of
each Placee's participation in the Placing (which will not
necessarily be the same for each Placee), will be agreed between
the Joint Brokers and the Company following completion of the
bookbuilding process in respect of the Placing (the "Bookbuild").
No element of the Placing will be underwritten. The aggregate
number of Placing Shares will be announced on a Regulatory
Information Service following completion of the Bookbuild.
A Placee's commitment to acquire a fixed number of Placing
Shares under the Placing will be agreed orally or by email with a
Joint Broker as agent of the Company. Each Placee's allocation will
be confirmed to Placees orally or by email by the relevant Joint
Broker, and a form of confirmation will be dispatched as soon as
possible thereafter. The oral or email confirmation to such Placee
will constitute an irrevocable legally binding commitment upon such
person (who will at that point become a Placee) in favour of the
Joint Brokers and the Company, under which it agrees to acquire the
number of Placing Shares allocated to it at the Placing Price on
the terms and conditions set out in this Appendix and in accordance
with the articles of incorporation of the Company.
Except as required by law or regulation, no press release or
other announcement will be made by the Joint Brokers or the Company
using the name of any Placee (or its agent), in its capacity as
Placee (or agent), other than with such Placee's prior written
consent.
Irrespective of the time at which a Placee's allocation pursuant
to the Placing is confirmed, settlement for all Placing Shares to
be acquired pursuant to the Placing will be required to be made on
the basis explained below under the paragraph entitled
"Registration and Settlement".
All obligations under the Placing will be subject to fulfilment
or (where applicable) waiver of, amongst other things, the
conditions referred to below and to the Placing not being
terminated on the basis referred to below.
By participating in the Placing, each Placee will agree that its
rights and obligations in respect of the Placing will terminate
only in the circumstances described below and will not be capable
of rescission or termination by the Placee.
To the fullest extent permissible by law, none of the Company,
the Joint Brokers or any of their respective affiliates shall have
any liability to Placees (or to any other person whether acting on
behalf of a Placee or otherwise under these terms and conditions).
In particular, none of the Company, the Joint Brokers or any of its
respective affiliates shall have any liability (including to the
fullest extent permissible by law, any fiduciary duties) in respect
of the Joint Brokers' conduct of the Placing. Each Placee
acknowledges and agrees that the Company is responsible for the
issue of the Placing Shares to the Placees and the Joint Brokers
shall have no liability to the Placees for the failure of the
Company to fulfil those obligations.
CONDITIONS OF THE PLACING
The Placing is conditional upon the Placing Agreement becoming
unconditional and not having been terminated in accordance with its
terms.
The Joint Brokers' obligations under the Placing Agreement
(which are several and not joint, or joint and several) in respect
of the VCT Shares are conditional on, inter alia:
1. the Company allotting, subject only to First Admission, the
VCT Shares in accordance with the Placing Agreement;
2. First Admission having occurred;
3. the Company having complied with its obligations under the Placing Agreement; and
4. the passing of the Resolutions to be proposed at a general
meeting of the Company to be held on
or around 15 December 2021, or any adjournment thereof.
The Joint Brokers' obligations under the Placing Agreement
(which are several and not joint, or joint and several) in respect
of the General Placing Shares are conditional on, inter alia:
1. the VCT Placing Shares being unconditionally allotted and
issued to the relevant Placees on First Admission and First
Admission having occurred;
2. the Company allotting, subject only to Second Admission, the
General Placing Shares in accordance with the Placing
Agreement;
3. Second Admission having occurred; and
4. the Company having complied with its obligations under the Placing Agreement.
If (a) any of the conditions contained in the Placing Agreement
in relation to the Placing Shares are not fulfilled or waived by
the Joint Brokers by the respective time or date where specified
(or such later time or date as the Company and the Joint Brokers
may agree not being later than 3.00 p.m. on the "Final Date" (being
31 December 2021; or (b) the Placing Agreement is terminated as
described below, the Placing in relation to the Placing Shares will
lapse and the Placee's rights and obligations hereunder in relation
to the Placing Shares shall cease and terminate at such time and
each Placee agrees that no claim can be made by the Placee in
respect thereof.
Subject to certain exceptions, the Joint Brokers may, at their
absolute discretion and upon such terms as they think fit, waive,
or extend the period (up to the Final Date) for, compliance by the
Company with the whole or any part of any of the Company's
obligations in relation to the conditions in the Placing Agreement.
Any such extension or waiver will not affect Placees' commitments
as set out in this announcement.
Neither of the Joint Brokers nor the Company shall have any
liability to any Placee (or to any other person whether acting on
behalf of a Placee or otherwise) in respect of any decision they
may make as to whether or not to waive or to extend the time and/or
date for the satisfaction of any condition to the Placing nor for
any decision they may make as to the satisfaction of any condition
or in respect of the Placing generally and by participating in the
Placing each Placee agrees that any such decision is within the
absolute discretion of the Joint Brokers.
RIGHT TO TERMINATE UNDER THE PLACING AGREEMENT
Either Joint Brokers is entitled, at any time before the Second
Admission, to terminate the Placing Agreement by giving notice to
the Company in certain circumstances, including, inter alia:
1. the Company is in breach of any of its material obligations
under the Placing Agreement or cannot comply with such material
obligation; or
2. any of the warranties given by the Company to the Joint
Brokers under the Placing Agreement is or if repeated at any time
up to Admission would cause it to be untrue, inaccurate or
misleading in any material respect; or
3. if, amongst other things, there is a substantial change in
any national or international political, military, diplomatic,
economic, financial or market conditions (including any significant
deterioration in response to the COVID-19 pandemic) which in the
Joint Broker's opinion (acting in good faith and after such
consultation with the Company or the other Joint Broker as shall be
practicable in the circumstances) would have or be likely to have a
material and adverse effect on the Placing, the Open Offer or
dealings in New Ordinary Shares in the secondary market or is of
such magnitude to render the Placing or the creation of a market in
the New Ordinary Shares temporarily or permanently impracticable or
inadvisable; or
4. if it comes to the notice of the Joint Broker that any
statement contained in any Placing document become untrue,
inaccurate or misleading in any material respect or matters have
arisen which would, if the Circular was issued at that time,
constitute a material omission therefrom.
Following First Admission, the Placing Agreement is not capable
of termination to the extent that it relates to the Placing of VCT
Shares. Following Second Admission, the Placing Agreement is not
capable of termination to the extent it relates to the Placing of
any of the General Placing Shares. For the avoidance of doubt,
First Admission is not conditional on Second Admission taking place
.
The rights and obligations of the Placees shall terminate only
in the circumstances described in these terms and conditions and in
the Placing Agreement and will not be subject to termination by the
Placee or any prospective Placee at any time or in any
circumstances. By participating in the Placing, Placees agree that
the exercise by a Joint Broker of any right of termination or other
discretion under the Placing Agreement shall be within the absolute
discretion of such Joint Broker and that it need not make any
reference to Placees and that it shall have no liability to Placees
whatsoever in connection with any such exercise or decision not to
exercise. Placees will have no rights against the Joint Brokers,
the Company or any of their respective directors or employees under
the Placing Agreement pursuant to the Contracts (Rights of Third
Parties) Act 1999 (as amended).
NO PROSPECTUS
The Placing Shares are being offered to Relevant Persons only
and will not be offered in such a way as to require a prospectus in
the United Kingdom or elsewhere under the Prospectus Regulation
Rules Sourcebook published by the FCA. No offering document or
prospectus has been or will be submitted to be approved by the FCA
or any other party in relation to the Placing and Placees'
commitments will be made solely on the basis of the information
contained in this announcement (including this Appendix) and
certain business and financial information the Company is required
to publish in accordance with the Companies Act 2006, the AIM Rules
and the rules and practices of the FCA (collectively "Exchange
Information"), save that in the case of Exchange Information a
Placee's right to rely on that information is limited to the right
that such Placee would have as a matter of law in the absence of
this paragraph .
Each Placee, by accepting a participation in the Placing, agrees
that the content of this announcement, including this Appendix, is
exclusively the responsibility of the Company and confirms that it
has not relied on any other information (other than the Exchange
Information), representation, warranty, or statement made by or on
behalf of the Company or the Joint Brokers or any other person and
neither of the Joint Brokers nor the Company nor any other person
will be liable for any Placee's decision to participate in the
Placing based on any other information, representation, warranty or
statement which the Placees may have obtained or received. Each
Placee acknowledges and agrees that it has relied on its own
investigation of the business, financial or other position of the
Company in accepting a participation in the Placing. Nothing in
this paragraph shall exclude the liability of any person for
fraudulent misrepresentation.
REGISTRATION AND SETTLEMENT
Settlement of transactions in the Placing Shares (ISIN:
GB00B11SZ269) following First Admission and Second Admission will
take place within the relevant system administered by Euroclear,
being CREST provided that, subject to certain exceptions, the Joint
Brokers reserve the right to require settlement for, and delivery
of, the Placing Shares (or a portion thereof) to Placees by such
other means that they deem necessary if delivery or settlement is
not possible or practicable within CREST within the timetable set
out in this announcement or would not be consistent with the
regulatory requirements in any Placee's jurisdiction. Settlement of
transactions in the VCT Shares following First Admission and the
General Placing Shares following Second Admission will take place
within the system administered by CREST, subject to certain
exceptions. The Company reserves the right to require settlement
for and delivery of the Placing Shares to Placees in certificated
form if any of the Joint Brokers or the Company in its absolute
discretion considers this to be necessary or desirable.
Following the close of the Bookbuild, each Placee allocated
Placing Shares in the Placing will be sent a form of confirmation
stating the number of Placing Shares allocated to it at the Placing
Price, the aggregate amount owed by such Placee to the relevant
Joint Broker (as agent for the Company) and settlement instructions
(including the trade date which will be 13 December 2021). Each
Placee agrees that it will do all things necessary to ensure that
delivery and payment is completed in accordance with either the
CREST or certificated settlement instructions that it has in place
with the relevant Joint Broker. Each Placee will also be sent a
trade confirmation on the trade date (referred to above) confirming
the details of the trade (being the acquisition of the relevant
number of Placing Shares).
Admission and settlement may occur at an earlier date.
Settlement will be on a delivery versus payment basis. However, in
the event of any difficulties or delays in the admission of the
Placing Shares to CREST or the use of CREST in relation to the
Placing, the Company and the Joint Brokers may agree that the
Placing Shares should be issued in certificated form. The Joint
Brokers and the Company reserves the right to require settlement
for the Placing Shares, and to deliver the Placing Shares to
Placees, by such other means as they deem necessary if delivery or
settlement to Placees is not practicable within the CREST system or
would not be consistent with regulatory requirements in a Placee's
jurisdiction.
Interest is chargeable daily on payments not received from
Placees on the due date in accordance with the arrangements set out
above at the rate of two percentage points above Libor as
determined by the relevant the Joint Broker.
Each Placee is deemed to agree that, if it does not comply with
these obligations, the Joint Brokers (or either of them) may sell
any or all of the Placing Shares allocated to that Placee on such
Placee's behalf and retain from the proceeds, for the relevant the
Joint Brokers' account and benefit (as agent for the Company), an
amount equal to the aggregate amount owed by the Placee plus any
interest due. Any excess proceeds will pass to the relevant Placee
at its risk. The relevant Placee will, however, remain liable and
shall indemnify the Joint Brokers on demand for any shortfall below
the aggregate amount owed by it and may be required to bear any
stamp duty or stamp duty reserve tax or securities transfer tax
(together with any interest or penalties) which may arise upon the
sale of such Placing Shares on such Placee's behalf. By
communicating a bid for Placing Shares, each Placee confers on the
Joint Brokers all such authorities and powers necessary to carry
out any such sale and agrees to ratify and confirm all actions
which the Joint Brokers lawfully takes in pursuance of such
sale.
If Placing Shares are to be delivered to a custodian or
settlement agent, Placees should ensure that the form of
confirmation is copied and delivered immediately to the relevant
person within that organisation.
Insofar as Placing Shares are registered in a Placee's name or
that of its nominee or in the name of any person for whom a Placee
is contracting as agent or that of a nominee for such person, such
Placing Shares should, subject as provided below, be so registered
free from any liability to UK stamp duty or stamp duty reserve tax
or securities transfer tax. Placees will not be entitled to receive
any fee or commission in connection with the Placing.
REPRESENTATIONS, WARRANTIES AND FURTHER TERMS
By submitting a bid and/or participating in the Placing, each
Placee (and any person acting on such Placee's behalf) makes the
following representations, warranties, acknowledgements, agreements
and undertakings (as the case may be) to the Company and the Joint
Brokers, namely that, each Placee (and any person acting on such
Placee's behalf):
1. represents and warrants that it has read and understood this
announcement, including this Appendix, in its entirety and that its
subscription for and purchase of the Placing Shares is subject to,
and based upon, all the terms, conditions, representations,
warranties, acknowledgements, agreements and undertakings and other
information contained herein and undertakes not to redistribute or
duplicate this announcement (including this Appendix);
2. acknowledges that no offering document or prospectus has been
prepared in connection with the placing of the Placing Shares and
represents and warrants that it has not received and will not
receive a prospectus, admission document or other offering document
in connection therewith;
3. acknowledges that the Ordinary Shares are admitted to trading
on AIM, and the Company is therefore required to publish Exchange
Information, which includes a description of the nature of the
Company's business and the Company's most recent balance sheet and
profit and loss account and that the Placee is able to obtain or
access such information without undue difficulty, and is able to
obtain access to such information or comparable information
concerning any other publicly traded company, without undue
difficulty;
4. acknowledges that the content of this announcement (including
this Appendix) is exclusively the responsibility of the Company,
and that neither Joint Broker, their affiliates or any person
acting on their behalf has or shall have any liability for any
information, representation or statement contained in this
announcement (including this Appendix) or any information
previously or concurrently published by or on behalf of the Company
(including any Exchange Information), and will not be liable for
any Placee's decision to participate in the Placing based on any
information, representation or statement contained in this
announcement (including this Appendix) or otherwise. Each Placee
further represents, warrants and agrees that the only information
on which it is entitled to rely and on which such Placee has relied
in committing itself to acquire the Placing Shares is contained in
this announcement (including this Appendix) and any Exchange
Information (save that in the case of Exchange Information, a
Placee's right to rely on that information is limited to the right
that such Placee would have as a matter of law in the absence of
this paragraph) , such information being all that it deems
necessary to make an investment decision in respect of the Placing
Shares and that it has neither received nor relied on any other
information given or representations, warranties or statements made
by the Joint Brokers or the Company or any of their respective
directors, officers or employees or any person acting on behalf of
any of them (including with respect to the Company, the Placing,
the Placing Shares or the accuracy, completeness or adequacy of any
publicly available information), or, if received, it has not relied
upon any such information, representations, warranties or
statements, and neither of the Joint Brokers nor the Company will
be liable for any Placee's decision to accept an invitation to
participate in the Placing based on any other information,
representation, warranty or statement. Each Placee further
acknowledges and agrees that it may not place the same degree of
reliance on this announcement as it may otherwise place on a
prospectus or admission document. Each Placee further acknowledges
and agrees that it has relied solely on its own investigation of
the business, financial or other position of the Company and the
terms of the Placing in deciding to participate in the Placing and
it will not rely on any investigation that the Joint Brokers, their
affiliates or any other person acting on their behalf has or may
have conducted;
5. represents and warrants that it has neither received nor
relied on any confidential price sensitive information concerning
the Company in accepting this invitation to participate in the
Placing;
6. time is of the essence as regards its obligations under this announcement;
7. acknowledges that the Joint Brokers do not have any duties or
responsibilities to it, or its clients, similar or comparable to
the duties of "best execution" and "suitability" imposed by the
Conduct of Business Sourcebook in the FCA's Handbook of Rules and
Guidance and that neither Panmure Gordon nor Shore Capital is
acting for it or its clients and that the Joint Brokers will not be
responsible for providing protections to their respective
clients;
8. acknowledges that neither of the Joint Brokers, any of their
affiliates or any persons acting on behalf of them has or shall
have any liability for any publicly available or filed information
(including any Exchange Information) or any representation relating
to the Company, provided that nothing in this paragraph excludes
the liability of any person for fraudulent misrepresentation made
by that person;
9. that, save in the event of fraud on the part of the relevant
Joint Brokers (and to the extent permitted by the FCA), neither of
the Joint Brokers, their respective ultimate holding companies nor
any direct or indirect subsidiary undertakings of such holding
companies, nor any of their respective directors and employees
shall be liable to Placees for any matter arising out of either
Joint Brokers' role as placing agent or otherwise in connection
with the Placing and that where any such liability nevertheless
arises as a matter of law, Placees will immediately waive any claim
against any of such persons which it may have in respect
thereof;
10. represents and warrants that a) (i) it is not a person
located in the United States and is eligible to participate in an
"offshore transaction" as defined in and in accordance with
Regulation S and the Placing Shares were not offered to it by means
of "directed selling efforts" as defined in Regulation S; or (ii)
it is both a QIB and will duly execute a US investor letter and
deliver the same to one of the Joint Brokers or their respective
affiliates;
11. acknowledges that the Placing Shares have not been and will
not be registered under the Securities Act or under any laws of, or
with any securities regulatory authority of, any state or other
jurisdiction of the United States, and that the Placing Shares are
only being offered and sold (i) outside the United States in
offshore transactions as defined in and pursuant to Regulation S
under the Securities Act; and (ii) in the United States to a
limited number of QIBs pursuant to an exemption from the
registration requirements of the Securities Act. ;
12. unless otherwise specifically agreed in writing with the
Joint Brokers, represents and warrants that neither it nor the
beneficial owner of such Placing Shares will be a resident of
Restricted Jurisdiction;
13. acknowledges that the Placing Shares have not been and will
not be registered under the securities legislation of Restricted
Jurisdiction and, subject to certain exceptions, may not be
offered, sold, taken up, renounced or delivered or transferred,
directly or indirectly, within those jurisdictions;
14. that, in relation to any Placee located in Hong Kong, it is
a professional investor as defined under the Securities and Futures
Ordinance (Cap. 571);
15. represents and warrants that the issue to it, or the person
specified by it for registration as holder, of Placing Shares will
not give rise to a liability under any of sections 67, 70, 93 or 96
of the Finance Act 1986 (depositary receipts and clearance
services) and that the Placing Shares are not being acquired in
connection with arrangements to issue depositary receipts or to
transfer Placing Shares into a clearance system;
16. represents and warrants that: (i) it has complied with and
will continue to comply with its obligations under the Market Abuse
Regulation (EU) No. 596/2014 (or the Market Abuse Regulation (EU)
No. 596/2014 as retained in UK law), Criminal Justice Act 1993 and
Part VIII of the Financial Services and Markets Act 2000, as
amended ("FSMA") and other applicable law; (ii) in connection with
money laundering and terrorist financing, it has complied with its
obligations under the Proceeds of Crime Act 2002 (as amended), the
Terrorism Act 2000 (as amended), the Terrorism Act 2006, the Money
Laundering, Terrorist Financing and Transfer of Funds (Information
on the Payer) 2017 Regulations, and any other applicable law (where
all such legislation listed under this (ii) shall together be
referred to as the "AML Legislation"); and (iii) it is not a
person: (1) with whom transactions are prohibited under the Foreign
Corrupt Practices Act of 1977 or any economic sanction programmes
administered by, or regulations promulgated by, the Office of
Foreign Assets Control of the U.S. Department of the Treasury; (2)
named on the Consolidated List of Financial Sanctions Targets
maintained by HM Treasury of the United Kingdom; or (3) subject to
financial sanctions imposed pursuant to a regulation of the EU or a
regulation adopted by the United Nations (together, the
"Regulations"); and, if making payment on behalf of a third party,
that satisfactory evidence has been obtained and recorded by it to
verify the identity of the third party as required by the
Regulations and pursuant to AML Legislation and has obtained all
governmental and other consents (if any) which may be required for
the purpose of, or as a consequence of, such purchase, and it will
provide promptly to the Joint Brokers or the Company such evidence,
if any, as to the identity or location or legal status of any
person (including in relation to the beneficial ownership of any
underlying investor) which the Joint Brokers or the Company may
request from it in connection with the Placing (for the purpose of
complying with such Regulations or ascertaining the nationality of
any person or the jurisdiction(s) to which any person is subject or
otherwise or any other information as may be required to comply
with legal or regulatory requirements (including in particular
under the AML Legislation)) in the form and manner requested by the
Joint Brokers or the Company on the basis that any failure by it to
do so may result in the number of Placing Shares that are to be
purchased by it or at its direction pursuant to the Placing being
reduced to such number, or to nil, as the Joint Brokers and the
Company may decide at their sole discretion;
17. if a financial intermediary, as that term is used in Article
5(1) of the UK Prospectus Regulation, represents and warrants that
the Placing Shares purchased by it in the Placing will not be
acquired on a non-discretionary basis on behalf of, nor will they
be acquired with a view to their offer or resale to, persons in a
Member State of the EEA or the UK other than EU Qualified Investors
or UK Qualified Investors respectively, or in circumstances in
which the prior consent of the Joint Brokers has been given to the
offer or resale;
18. represents and warrants that it has not offered or sold and
will not offer or sell any Placing Shares to persons in the EEA or
the UK prior to Admission except to persons whose ordinary
activities involve them in acquiring, holding, managing or
disposing of investments (as principal or agent) for the purposes
of their business or otherwise in circumstances which have not
resulted in and which will not result in an offer to the public in
any Member State of the EEA or the UK within the meaning of the EU
Prospectus Regulation or UK Prospectus Regulation respectively;
19. represents and warrants that it has only communicated or
caused to be communicated and will only communicate or cause to be
communicated any invitation or inducement to engage in investment
activity (within the meaning of section 21 of the FSMA) relating to
the Placing Shares in circumstances in which section 21(1) of the
FSMA does not require approval of the communication by an
authorised person;
20. represents and warrants that it has complied and will comply
with all applicable provisions of the FSMA and the Financial
Services Act 2012 with respect to anything done by it in relation
to the Placing Shares in, from or otherwise involving, the United
Kingdom;
21. if in the United Kingdom, represents and warrants that it is
a UK Qualified Investor who: (i) falls with Articles 49(2)(A) to
(D) or 19(5) of the Financial Promotion Order or (ii) it is a
person to whom the Placing Shares may otherwise be lawfully offered
under the Financial Promotion Order or, if it is receiving the
offer in circumstances under which the laws or regulations of a
jurisdiction other than the United Kingdom would apply, it is a
person to whom the Placing Shares may be lawfully offered under
that other jurisdiction's laws and regulations; and (iii) is a
"professional client" or an "eligible counterparty" within the
meaning of Chapter 3 of the FCA's Conduct of Business
Sourcebook;
22. represents and warrants that it and any person acting on its
behalf is entitled to acquire the Placing Shares under the laws of
all relevant jurisdictions and that it has all necessary capacity
and has obtained all necessary consents and authorities and taken
any other necessary actions to enable it to commit to this
participation in the Placing and to perform its obligations in
relation thereto (including, without limitation, in the case of any
person on whose behalf it is acting, all necessary consents and
authorities to agree to the terms set out or referred to in this
announcement (including this Appendix)) and will honour such
obligations;
23. where it is acquiring Placing Shares for one or more managed
accounts, represents and warrants that it is authorised in writing
by each managed account: (i) to acquire the Placing Shares for each
managed account; (ii) to make on its behalf the representations,
warranties, acknowledgements, undertakings and agreements in this
Appendix and the announcement of which it forms part; and (iii) to
receive on its behalf any investment letter relating to the Placing
in the form provided to it by a Joint Broker ;
24. undertakes that it (and any person acting on its behalf)
will make payment for the Placing Shares allocated to it in
accordance with this announcement (including this Appendix) on the
due time and date set out herein, failing which the relevant
Placing Shares may be placed with other subscribers or sold as the
Joint Brokers may in their sole discretion determine and without
liability to such Placee and it will remain liable and will
indemnify the Joint Brokers on demand for any shortfall below the
net proceeds of such sale and the placing proceeds of such Placing
Shares and may be required to bear the liability for any stamp duty
or stamp duty reserve tax or security transfer tax (together with
any interest or penalties due pursuant to or referred to in these
terms and conditions) which may arise upon the placing or sale of
such Placee's Placing Shares on its behalf;
25. acknowledges that neither of the Joint Brokers , nor any of
their respective affiliates, or any person acting on behalf of any
of them, is making any recommendations to it, advising it regarding
the suitability of any transactions it may enter into in connection
with the Placing and that participation in the Placing is on the
basis that it is not and will not be treated for these purposes as
a client of either Joint Broker and that either of the Joint
Brokers does not have any duties or responsibilities to it for
providing the protections afforded to their respective clients or
customers or for providing advice in relation to the Placing nor in
respect of any representations, warranties, undertakings or
indemnities contained in the Placing Agreement nor for the exercise
or performance of any of their rights and obligations thereunder,
including any rights to waive or vary any conditions or exercise
any termination right;
26. undertakes that the person whom it specifies for
registration as holder of the Placing Shares will be (i) itself; or
(ii) its nominee, as the case may be. Neither of the Joint Brokers
nor the Company will be responsible for any liability to stamp duty
or stamp duty reserve tax resulting from a failure to observe this
requirement. Each Placee and any person acting on behalf of such
Placee agrees to participate in the Placing and it agrees to
indemnify the Company and the Joint Brokers in respect of the same
on the basis that the Placing Shares will be issued to the CREST
stock account of a Joint Broker who will hold them as nominee on
behalf of such Placee until settlement in accordance with its
standing settlement instructions;
27. acknowledges that these terms and conditions and any
agreements entered into by it pursuant to these terms and
conditions and any non-contractual obligations arising out of or in
connection with such agreement shall be governed by and construed
in accordance with the laws of England and it submits (on behalf of
itself and on behalf of any person on whose behalf it is acting) to
the exclusive jurisdiction of the English courts as regards any
claim, dispute or matter (including non-contractual matters)
arising out of any such contract, except that enforcement
proceedings in respect of the obligation to make payment for the
Placing Shares (together with any interest chargeable thereon) may
be taken by the Company or a Joint Broker in any jurisdiction in
which the relevant Placee is incorporated or in which any of its
securities have a quotation on a recognised stock exchange;
28. agrees that the Company, the Joint Brokers and their
respective affiliates and others will rely upon the truth and
accuracy of the foregoing representations, warranties,
acknowledgements and undertakings which are given to each of the
Joint Brokers on its own behalf and on behalf of the Company and
are irrevocable and are irrevocably authorised to produce this
announcement or a copy thereof to any interested party in any
administrative or legal proceeding or official inquiry with respect
to the matters covered hereby;
29. agrees to indemnify on an after-tax basis and hold the
Company, the Joint Brokers and their respective affiliates harmless
from any and all costs, claims, liabilities and expenses (including
legal fees and expenses) arising out of or in connection with any
breach of the representations, warranties, acknowledgements,
agreements and undertakings in this Appendix and that the
provisions of this Appendix shall survive after completion of the
Placing and, further agrees if any of the foregoing is or becomes
no longer true or accurate, the Placee shall promptly notify the
Company and the Joint Brokers;
30. acknowledges that no action has been or will be taken by any
of the Company, the Joint Brokers or any person acting on behalf of
the Company or the Joint Brokers that would, or is intended to,
permit a public offer of the Placing Shares in any country or
jurisdiction where any such action for that purpose is
required;
31. acknowledges that it is an institution that has knowledge
and experience in financial, business and international investment
matters as is required to evaluate the merits and risks of
subscribing for the Placing Shares. It further acknowledges that it
is experienced in investing in securities of this nature and in
this sector and is aware that it may be required to bear, and it,
and any accounts for which it may be acting, are able to bear, the
economic risk of, and is able to sustain, a complete loss in
connection with the Placing. It has relied upon its own examination
and due diligence of the Company and its associates taken as a
whole, and the terms of the Placing, including the merits and risks
involved;
32. acknowledges that its commitment to subscribe for Placing
Shares on the terms set out herein will continue, notwithstanding
any amendment that may in the future be made to the terms of the
Placing and that Placees will have no right to be consulted or
require that their consent be obtained with respect to the
Company's conduct of the Placing;
33. acknowledges that a Joint Broker or any of its affiliates
acting as an investor for its own account may take up shares in the
Company and in that capacity may retain, purchase or sell for its
own account such shares and may offer or sell such shares other
than in connection with the Placing;
34. represents and warrants that, if it is a pension fund or
investment company, its purchase of Placing Shares is in full
compliance with all applicable laws and regulation; and
35. to the fullest extent permitted by law, it acknowledges and
agrees to the disclaimers contained in the announcement, including
this Appendix.
The representations, warranties, acknowledgments and
undertakings contained in this Appendix are given to the Joint
Brokers and the Company and are irrevocable and shall not be
capable of termination in any circumstances.
The agreement to settle a Placee's subscription (and/or the
subscription of a person for whom such Placee is contracting as
agent) free of stamp duty and stamp duty reserve tax depends on the
settlement relating only to a subscription by it and/or such person
direct from the Company for the Placing Shares in question. Such
agreement assumes that the Placing Shares are not being subscribed
for in connection with arrangements to issue depositary receipts or
to transfer the Placing Shares into a clearance service. If there
are any such arrangements, or the settlement relates to any other
subsequent dealing in the Placing Shares, stamp duty or stamp duty
reserve tax may be payable, for which neither the Company nor the
Joint Brokers will be responsible, and the Placee to whom (or on
behalf of whom, or in respect of the person for whom it is
participating in the Placing as an agent or nominee) the
allocation, issue or delivery of Placing Shares has given rise to
such UK stamp duty or stamp duty reserve tax undertakes to pay such
UK stamp duty or stamp duty reserve tax forthwith and to indemnify
on an after-tax basis and to hold harmless the Company and the
Joint Brokers in the event that any of the Company and/or the Joint
Brokers has incurred any such liability to UK stamp duty or stamp
duty reserve tax. If this is the case, each Placee should seek its
own advice and notify the Joint Brokers accordingly.
In addition, Placees should note that they will be liable for
any stamp duty and all other stamp, issue, securities, transfer,
registration, documentary or other duties or taxes (including any
interest, fines or penalties relating thereto) payable outside the
UK by them or any other person on the subscription by them of any
Placing Shares or the agreement by them to subscribe for any
Placing Shares.
Each Placee, and any person acting on behalf of the Placee,
acknowledges that the Joint Brokers does not owe any fiduciary or
other duties to any Placee in respect of any representations,
warranties, undertakings or indemnities in the Placing
Agreement.
Each Placee and any person acting on behalf of the Placee
acknowledges and agrees that the Joint Brokers or any of their
affiliates may, at their absolute discretion, agree to become a
Placee in respect of some or all of the Placing Shares.
When a Placee or person acting on behalf of the Placee is
dealing with a Joint Broker, any money held in an account with such
Joint Broker on behalf of the Placee and/or any person acting on
behalf of the Placee will not be treated as client money within the
meaning of the rules and regulations of the FCA made under the
FSMA. The Placee acknowledges that the money will not be subject to
the protections conferred by the client money rules; as a
consequence, this money will not be segregated from the relevant
Joint Brokers' money in accordance with the client money rules and
will be used by that Joint Broker in the course of its own business
and the Placee will rank only as a general creditor of that Joint
Broker.
All times and dates in this announcement (including this
Appendix) may be subject to amendment, and Placees' commitments,
representations and warranties are not conditional on any of the
expected times and dates in this announcement (including this
Appendix) being achieved. The Joint Brokers shall notify the
Placees and any person acting on behalf of the Placees of any
changes.
Past performance is no guide to future performance and persons
needing advice should consult an appropriately qualified
independent financial adviser.
A Joint Broker is entitled, at its discretion and out of its own
resources, at any time to rebate to some or all of its investors,
or to other parties, part or all of its fees relating to the
Placing.
MISCELLANEOUS
Solely for the purposes of the product governance requirements
contained within: (a) EU Directive 2014/65/EU on markets in
financial instruments, as amended ("MiFID II"); (b) Articles 9 and
10 of Commission Delegated Directive (EU) 2017/593 supplementing
MiFID II; and (c) local implementing measures, each as they form
part of the law of England and Wales by virtue of EUWA (together,
the "Product Governance Requirements"), and disclaiming all and any
liability, whether arising in tort, contract or otherwise, which
any "manufacturer" (for the purposes of the Product Governance
Requirements) may otherwise have with respect thereto, the Placing
Shares have been subject to a product approval process, which has
determined that the Placing Shares are: (i) compatible with an end
target market of retail investors and investors who meet the
criteria of professional clients and eligible counterparties, each
as defined in MiFID II; and (ii) eligible for distribution through
all distribution channels as are permitted by MiFID II (the "Target
Market Assessment"). Notwithstanding the Target Market Assessment,
Placees should note that: the price of the Placing Shares may
decline and investors could lose all or part of their investment;
the Placing Shares offer no guaranteed income and no capital
protection; and an investment in the Placing Shares is compatible
only with investors who do not need a guaranteed income or capital
protection, who (either alone or in conjunction with an appropriate
financial or other adviser) are capable of evaluating the merits
and risks of such an investment and who have sufficient resources
to be able to bear any losses that may result therefrom. The Target
Market Assessment is without prejudice to the requirements of any
contractual, legal or regulatory selling restrictions in relation
to the Placing. Furthermore, it is noted that, notwithstanding the
Target Market Assessment, the Joint Brokers will only procure
investors who meet the criteria of professional clients and
eligible counterparties. For the avoidance of doubt, the Target
Market Assessment does not constitute: (a) an assessment of
suitability or appropriateness for the purposes of MiFID II; or (b)
a recommendation to any investor or Company of investors to invest
in, or purchase, or take any other action whatsoever with respect
to the Placing Shares.
Each distributor is responsible for undertaking its own target
market assessment in respect of the Placing Shares and determining
appropriate distribution channels.
The content of this announcement has been issued by, and is the
sole responsibility of, Velocys plc.
The information contained in this announcement is given at the
date of its publication (unless otherwise marked) and is subject to
updating, revision and amendment from time to time. Neither the
content of the Company's website nor any website accessible by
hyperlinks to the Company's website is incorporated in, or forms
part of, this announcement.
Panmure Gordon (UK) Limited, which is authorised and regulated
in the United Kingdom by the FCA, is acting as nominated adviser,
joint bookrunner and joint broker to the Company in connection with
the Placing and Admission and to no-one else and will not be
responsible to anyone other than the Company for providing the
protections afforded to its clients, nor for providing advice in
relation to the Placing or Admission or any other matter referred
to in this Announcement. Panmure Gordon's responsibilities as the
Company's nominated adviser under the AIM Rules for Nominated
Advisers are owed solely to London Stock Exchange plc and are not
owed to the Company or to any director of the Company or to any
other person in respect of any decision to acquire shares in the
Company in reliance on any part of this announcement.
Shore Capital Group Limited, which is authorised and regulated
in the United Kingdom by the FCA, is acting as joint bookrunner and
joint broker to the Company in connection with the Placing and
Admission and to no-one else and will not be responsible to anyone
other than the Company for providing the protections afforded to
its clients, nor for providing advice in relation to the Placing or
Admission or any other matter referred to in this Announcement.
Neither of the Joint Brokers or any of their directors,
officers, employees, advisers, affiliates or agents, accepts any
responsibility or liability whatsoever for or makes any
representation or warranty, express or implied, as to this
announcement, including the truth, accuracy or completeness of the
information in this announcement (or whether any information has
been omitted from the announcement) or for any loss howsoever
arising from any use of the announcement or its contents. The Joint
Brokers and their respective directors, officers, employees,
advisers, affiliates or agents, accordingly disclaim all and any
liability whether arising in tort, contract or otherwise which they
might otherwise have in respect of this announcement or its
contents or otherwise arising in connection therewith.
Data Protection
The processing of a Placee's personal data by the Company will
be carried out in compliance with the applicable data protection
legislation and with its Privacy Notice, a copy of which can be
found on the Company's website
https://www.velocys.com/privacy-policy/ .
Each Placee acknowledges that it has read and understood the
processing activities carried out by the Company as informed in the
referred Privacy Notice.
APPIX III
DEFINITIONS
The following definitions apply throughout this announcement
unless the context otherwise requires:
"Act" the UK Companies Act 2006, as amended
"Admission" VCT Admission in the context of the VCT Shares
and General Admission in the context of the
General Placing Shares and the Open Offer
Shares
"AIM" the market of that name operated by the London
Stock Exchange
"AIM Rules" the AIM Rules for Companies, which set out
the rules and responsibilities for companies
listed on AIM, as amended from time to time
"Altalto Immingham Project" a waste to sustainable fuels biorefinery
project, located in Immingham, North East
Lincolnshire, in development by the Group
in conjunction with commercial partners
"Application Form" the non-CREST application form relating to
the Open Offer and enclosed with the Circular
for use by Eligible Non-CREST Shareholders
"Articles" the articles of association of the Company
(as amended from time to time)
"Basic Entitlement" Entitlement to subscribe for Open Offer Shares,
allocated to an Eligible Shareholder pursuant
to the Open Offer on the Record Date as described
in Part III (Terms and Conditions of the
Open Offer) of the Circular
"Bayou Fuels Project" the Company's reference biorefinery project
in Natchez Mississippi, US
"Board" or "Directors" the board of directors of the Company, whose
names are listed in the Circular
"British Airways" British Airways plc
"Circular" the Circular to be published by the Company
on or about 29 November 2021 setting out
details of the Placing and Open Offer and
containing the Notice of the Annual General
Meeting;
"Company" or "Velocys" Velocys plc, a public limited company incorporated
in England & Wales under registered number
05712187 and having its registered office
at Magdalen Centre, Robert Robinson Avenue,
The Oxford Science Park, Oxford, England,
OX4 4GA.
"CREST" the relevant system (as defined in the Regulations)
which enables title to units of relevant
securities (as defined in the Regulations)
to be evidenced and transferred without a
written instrument and in respect of which
Euroclear UK & Ireland Limited is the Operator
(as defined in the Regulations)
"Disclosure Guidance the Disclosure Guidance and Transparency
and Transparency Rules" Rules issued by the FCA
"Eligible CREST Shareholders" Eligible Shareholders whose Existing Ordinary
Shares are held in uncertificated form in
a CREST account
"Eligible Non-CREST Eligible Shareholders whose Existing Ordinary
Shareholders" Shares are held in certificated form
"Eligible Shareholders" Shareholders on the Ex-Entitlement Date that
are not resident in a Restricted Jurisdiction
"Enlarged Share Capital" the issued Ordinary Share capital of the
Company immediately following General Admission
comprising the Existing Ordinary Shares,
the Placing Shares and the Open Offer Shares
assuming full subscription under the Placing
and the Open Offer and assuming no exercise
of any warrants or options
"ENVIA" ENVIA Energy, LLC, a former joint venture
between Waste Management, Inc., NRG, Ventech
Projects Investments, LLC and the Group which
was liquidated in 2020
"Excess Entitlement" Open Offer Shares in excess of the Basic
Entitlement, but not in excess of the total
number of Open Offer Shares, allocated to
an Eligible Shareholder pursuant to the Open
Offer as described in Part III (Terms and
Conditions of the Open Offer) of the Circular
"Ex-Entitlement Date" the date on which the Ordinary Shares are
marked 'ex' for entitlement by the London
Stock Exchange under the Open Offer, being
29 November 2021
"Existing Ordinary Shares" the 1,065,756,057 Ordinary Shares in issue
as at the date of the Circular being the
entire issued share capital of the Company
prior to the Placing and the Open Offer
"FCA" Financial Conduct Authority
"Form of Proxy" the accompanying form of proxy for use by
Shareholders in relation to the General Meeting
"FSMA" the Financial Services and Markets Act 2000
(as amended)
"Fundraise" the Placing and Open Offer
"General Admission" admission of the General Placing Shares and
Open Offer Shares to trading on AIM becoming
effective in accordance with Rule 6 of the
AIM Rules
"General Meeting" The general meeting of the Company to be
held at 10.30 a.m. on 15 December 2021, notice
of which is set out at the end of the Circular
"General Placing" the conditional placing of the General Placing
Shares to placees
"General Placing Shares" the new Ordinary Shares to be issued, conditional
on General Admission, in connection with
the General Placing
"Group" Velocys plc and its subsidiaries
"IAG" International Airlines Group
"JDA" The joint development agreement (as amended)
between Velocys, British Airways and Shell
relating to the Altalto Immingham Project
"Joint Brokers" Panmure Gordon and Shore Capital
"Link Group" a trading name of Link Market Services Limited,
a company incorporated in England and Wales,
with registered number 02605568, whose registered
office is at Central Square, 10th Floor,
29 Wellington Street, Leeds, England, LS1
4DL
"London Stock Exchange" London Stock Exchange plc
"New Ordinary Shares" the Placing Shares and the Open Offer Shares
to the extent subscribed for under the Open
Offer
"Notice of General Meeting" the notice of General Meeting set out at
the end of the Circular
"Open Offer" the offer to Eligible Shareholders, constituting
an invitation to apply for the Open Offer
Shares at the Placing Price on the terms
and subject to the conditions set out in
the Circular and, in the case of Eligible
Non-CREST Shareholders, in the Application
Form
"Open Offer Entitlements" entitlements to subscribe for Open Offer
Shares pursuant to the Basic Entitlement
and Excess Entitlement
"Open Offer Shares" up to 25,076,613 new Ordinary Shares to be
issued to Eligible Shareholders pursuant
to the Open Offer
"Ordinary Shares" ordinary shares of GBP0.01 each in the capital
of the Company
"Overseas Shareholders" holders of Ordinary Shares who are resident
in, or citizens of, countries outside of
the UK
"Panmure Gordon" Panmure Gordon (UK) Limited, acting as Nominated
Adviser, Joint Bookrunner & Joint Broker
"Placing" the VCT Placing and the General Placing
"Placing Agreement" the conditional agreement dated 25 November
2021 relating to the Placing and Open Offer,
between the Company, Panmure Gordon and Shore
Capital
"Placing Price" 8 pence per New Ordinary Share
"Placing Shares" the VCT Shares and the General Placing Shares
"Prospectus Regulation the Prospectus Regulation Rules made in accordance
Rules" with the Prospectus Regulation Rules Instrument
2019 (FCA: 2019/80)
"Receiving Agent" Link Group
"Record Date" 5.00 p.m. on 25 November 2021, being the
record date for the Open Offer
"Reference Projects" the Bayou Fuels Project and the Altalto Immingham
Project, the purpose of which are to accelerate
adoption of the Group's technology and to
provide a source of income to the Group
"Registrar" Link Group
"Regulations" the UK Uncertificated Securities Regulations
2001 (SI 2001 No. 3755), as amended
"Resolutions" the resolutions to be proposed at the General
Meeting as set out in the Notice of General
Meeting
"Restricted Jurisdiction" any jurisdiction except the UK. Jurisdictions
outside the UK include, but are not limited,
to the United States, Canada, Australia,
New Zealand, the Republic of South Africa
and Japan.
"Shareholders" the holders of Ordinary Shares from time
to time, each individually being a "Shareholder"
"Shell" Shell International Petroleum Company Limited
"Shore Capital" Shore Capital Stockbrokers Limited acting
as Joint Bookrunner & Joint Broker
" Southwest Airlines" Southwest Airlines Co.
"Toyo" Toyo Engineering Corporation
"UK" or "United Kingdom" the United Kingdom of Great Britain and Northern
Ireland
"US" or "United States" the United States of America, its territories
and possessions, any state of the United
States and the District of Colombia
"VCT" a venture capital trust under part 6 of the
Income Tax Act 2007
"VCT Admission" admission of the VCT Shares to trading on
AIM becoming effective in accordance with
Rule 6 of the AIM Rules
"VCT Placing" the conditional placing of the VCT Shares
to placees
"VCT Shares" the new Ordinary Shares to be issued, conditional
on VCT Admission, in connection with the
VCT Placing
"EUR" the single currency of the participating
member states of the European Union
"$" the lawful currency of the United States
"GBP" the lawful currency of the United Kingdom
GLOSSARY
The terms set out below have the following meanings throughout
this announcement, unless the context requires otherwise.
"EPC" engineering, procurement and construction
"drop-in" fuel which can be placed into existing engines
and infrastructure without the need for
modification to them to use the fuel.
"feedstock" raw material processed ingested in the fuel-generation
process
"FID" final investment decision
"FTI" the Fischer-Tropsch (FT) section of a plant,
the design of which is licensed by Velocys
to its customers, comprising multiple FT
reactors and ancillary equipment
"ITP" integrated technology package
"naphtha" a flammable liquid distillate of petroleum
"recyclates" materials capable of being recycled
"Renewable Fuel Standard" the US renewable fuel standard program created
under the Energy Policy Act 2005 and amended
by the Energy Independence and Security
Act 2007
"Renewable Identification a renewable identification number assigned
Number" or "RIN" to a batch of biofuel to track its production
use and trading as required by the Renewable
Fuel Standard
"Renewable Transport certificates awarded under the Renewable
Fuel Certificates" Transport Fuels Obligation
"Renewable Transport the UK Renewable Transport Fuel Obligation
Fuels Obligation" Order published 5 November 2012
"SAF" sustainable aviation fuel
APPENDIX IV
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
Record Date for the Open Offer 5.00 p.m. on 25 November
2021
Announcement of the Placing and Open Offer 25 November 2021
Announcement of the results of the Placing 26 November 2021
Dispatch of the Circular and Application 29 November 2021
Form
Ex-Entitlement Date 8.00 a.m. on 29 November
2021
Basic Entitlements and Excess Entitlements on or as soon as possible
credited to stock accounts in CREST for Eligible after 8.00 a.m. on
CREST Shareholders 30 November 2021
Latest recommended time and date for requested 4.30 p.m. on 8 December
withdrawal of Basic Entitlements and Excess 2021
Entitlements from CREST
Latest time and date for depositing Basic 3.00 p.m. on 9 December
Entitlements and Excess Entitlements into 2021
CREST
Latest time for splitting Application Forms 3.00 p.m. on 10 December
(to satisfy bona fide market claims only) 2021
Last time and date for receipt of Form of 10.30 a.m. on 13 December
Proxy 2021
Latest time and date for receipt of Application 11.00 a.m. on 14 December
Form and payment in full under the Open Offer 2021
or settlement of relevant CREST instructions
(as appropriate)
General Meeting 10.30 a.m. on 15 December
2021
Announcement of results of the General Meeting 15 December 2021
and Open Offer
Admission and dealings in the VCT Shares 8.00 a.m. on 16 December
to commence on AIM 2021
CREST accounts credited with the VCT Shares 16 December 2021
Admission and dealings in the General Placing 8.00 a.m. on 17 December
Shares and the Open Offer Shares to commence 2021
on AIM
CREST accounts credited with the General 17 December 2021
Placing Shares and the Open Offer Shares
Definitive share certificates for the New w/c 27 December 2021
Ordinary Shares to be dispatched (if required)
(1) References to are to London time (unless otherwise stated).
(2) The dates and timing of the events in the above timetable
and in the rest of the Circular are indicative only and may be
subject to change.
(3) If any of the above times or dates should change, the
revised times and/or dates will be notified by an announcement
through a Regulatory Information Service.
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London Stock Exchange. RNS is approved by the Financial Conduct
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END
IOEDKPBKOBDDADB
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