SIMEC Atlantis Energy Placing

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF THE MARKET ABUSE REGULATION (EU) NO. 596/2014 (“MAR”).  IN ADDITION, MARKET SOUNDINGS (AS DEFINED IN MAR) WERE TAKEN IN RESPECT OF THE MATTERS CONTAINED IN THIS ANNOUNCEMENT, WITH THE RESULT THAT CERTAIN PERSONS BECAME AWARE OF INSIDE INFORMATION (AS DEFINED IN MAR), AS PERMITTED BY MAR.  THIS INSIDE INFORMATION IS SET OUT IN THIS ANNOUNCEMENT.  THEREFORE, THOSE PERSONS THAT RECEIVED INSIDE INFORMATION IN A MARKET SOUNDING ARE NO LONGER IN POSSESSION OF SUCH INSIDE INFORMATION RELATING TO THE COMPANY AND ITS SECURITIES. 

THIS ANNOUNCEMENT, INCLUDING THE APPENDIX HERETO AND THE INFORMATION CONTAINED HEREIN, IS RESTRICTED AND IS NOT FOR PUBLICATION, DISTRIBUTION OR RELEASE, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO OR FROM THE UNITED STATES (INCLUDING ITS TERRITORIES AND POSSESSIONS, ANY STATES OF THE UNITED STATES AND THE DISTRICT OF COLUMBIA) (COLLECTIVELY, THE “UNITED STATES”), CANADA, AUSTRALIA, JAPAN OR THE REPUBLIC OF SOUTH AFRICA OR IN OR INTO OR FROM ANY OTHER JURISDICTION IN WHICH SUCH PUBLICATION, DISTRIBUTION OR RELEASE WOULD BE PROHIBITED BY ANY APPLICABLE LAW.

THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND IS NOT AND DOES NOT CONSTITUTE, CONTAIN OR FORM PART OF AN OFFER TO SELL OR ISSUE OR A SOLICITATION TO BUY, SUBSCRIBE FOR OR OTHERWISE ACQUIRE, ANY SECURITIES IN THE UNITED STATES, CANADA, AUSTRALIA, JAPAN OR THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH ANY SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL.

 

28 March 2019

SIMEC Atlantis Energy Limited

Proposed Placing of up to 31,250,000 new Ordinary Shares at 16 pence per share to raise up to £5 million for the Company

Proposed Offer for Subscription for new Ordinary Shares at 16 pence per share on the PrimaryBid platform

Update on proposed Acquisition of SIMEC Green Highland Renewables

Highlights

• Proposed Placing of up to 31,250,000 new Ordinary Shares at 16 pence per share to raise gross proceeds of up to £5 million.
• Placing to be conducted by way of an accelerated bookbuild process by Cantor Fitzgerald Europe in accordance with the terms and conditions set out in the Appendix to this announcement. The accelerated bookbuild will commence immediately following this announcement.
• PrimaryBid Offer for subscription for new Ordinary Shares at 16 pence per share.
• A further announcement launching the PrimaryBid Offer will be made shortly. The PrimaryBid Offer is expected to remain open until 9.00 p.m. today.
• The Placing Price represents a discount of 5.9 per cent. to the mid-market closing price of 17 pence on 27 March 2019, being the last practicable trading day prior to release of this announcement.
• The net proceeds of the Placing are proposed to be used for the purposes of funding part of the payment to be made by the Buyer to complete the Acquisition. If the Acquisition is not completed, the net proceeds of the Placing will be used for the Group’s general corporate purposes.
• Update in relation to the proposed acquisition of SIMEC Green Highlands Renewables, originally announced on 23 November 2018.
• The acquisition of SIMEC GHR, once completed (subject to the satisfaction of a number of pre-conditions):
• is expected to provide an immediate and material contribution to the Company of earnings and cash flow generated by a sizeable portfolio of operational hydroelectric assets;
• will provide long-term visibility on earnings and cash flow generation;
• will add SIMEC GHR’s highly regarded and experienced management team who have a best-in-class operational and development reputation;
• will provide a platform for further growth by the establishment of a leading hydroelectric platform of scale providing opportunities for the Company to pursue both organic growth and complementary bolt-on acquisitions;
• will enable the Company to benefit from synergies across its tidal and hydro businesses in project development, delivery and operation; and
• illustrates the benefits and inherent value to the Company of its access to the GFG Alliance’s pipeline of renewable power assets and the support of SIMEC.
• A further announcement will be made on the closing of the Placing and the PrimaryBid Offer which is expected to occur tomorrow.

Tim Cornelius, CEO of SIMEC Atlantis Energy Limited commented:

“We are very much looking forward to bringing Green Highland Renewables into the SIMEC Atlantis sustainable generation portfolio. The support of our shareholders on this capital raise helps us towards completion of the acquisition of this unique portfolio of Scottish hydro assets. The GHR team are world class developers of renewable energy projects and they share our vision of growing a portfolio of high quality sustainable energy assets.  Completion of this acquisition together with our portfolio of hydro, tidal power and waste-to-energy projects across Scotland and Wales, would make us an important player in the United Kingdom’s endeavours to decarbonise responsibly whilst at the same time creating domestic employment opportunities and attracting inward investment.”

Enquiries:

Cantor Fitzgerald Europe +44 (0) 20 7894 7000
(Nominated Adviser, Joint Broker and sole Bookrunner to the Company)
Rick Thompson
Richard Salmond
David Porter

JP. Morgan Cazenove  +44 (0) 20 7742 4000

(Adviser and Joint Broker to the Company)
James Deal
Michael Wentworth Stanley

SIMEC Atlantis Energy Limited  Via FTI Consulting
Tim Cornelius, Chief Executive Officer
Andrew Dagley, Chief Financial Officer

FTI Consulting +44 (0) 20 3727 1000
(PR Adviser to the Company)
Ben Brewerton
Alex Beagley
James Styles
Molly Stewart

Evercore Partners International LLP  +44 (0) 20 7653 6000
(Financial Adviser to the Company)
Marcus Thompson
John Mason

Notes to Editors

SIMEC Atlantis Energy

Atlantis is a global developer, owner and operator of sustainable energy projects with a diverse portfolio of more than 1,000MW in various stages of development. This includes a 77 per cent. stake in the world’s largest tidal stream power project, MeyGen, and the conversion of the 220MW Uskmouth Power Station.

In 2017 Atlantis entered into a strategic partnership with SIMEC, a member of the GFG Alliance, to convert the Uskmouth Power Station to use an end-of-waste energy pellet as fuel. The plant is expected to enter commercial operations in 2021 and will sell its power to GFG Alliance companies under two 20-year power purchase agreements. A successful conversion will tackle the pressing issue of non-recyclable waste in the UK and will form the blue-print for other large-scale conversion projects across the globe.

The Acquisition is a further step towards the transformation of Atlantis into a diversified energy company of scale, owning development and generating assets across the sustainable energy spectrum in Europe, Asia and Australia, complementing its existing UK pipeline.

https://www.saerenewables.com/

Market Abuse Regulation

The information contained within this announcement is inside information as stipulated under MAR. Upon the publication of this announcement, this inside information is now considered to be in the public domain. The person responsible for arranging for the release of this announcement on behalf of SIMEC Atlantis Energy is Tim Cornelius, Chief Executive Officer of SIMEC Atlantis Energy.

Important Notice

This announcement does not constitute, or form part of, a prospectus relating to the Company, nor does it constitute or contain any invitation or offer to any person, or any public offer, to subscribe for, purchase or otherwise acquire any shares in the Company or advise persons to do so in any jurisdiction, nor shall it, or any part of it form the basis of or be relied on in connection with any contract or as an inducement to enter into any contract or commitment with the Company.

This announcement, including the Appendix, and the information contained herein, is restricted and is not for publication, distribution or release, directly or indirectly, in whole or in part, in or into or from the United States, (including its territories and possessions, any States of the United States and the District of Columbia) (collectively, the “United States”), Canada, Australia, Japan or the Republic of South Africa or in or into or from any other jurisdiction where to do so might constitute a violation of the relevant laws or regulations of such jurisdiction. The Placing Shares have not been and will not be registered under the US Securities Act of 1933, as amended (the “US Securities Act”), or under any applicable securities laws of any state or other jurisdiction of the United States, and may not be offered, sold, resold or transferred or delivered, directly or indirectly, in or into or from the United States absent registration under the US Securities Act or except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act. No public offering of the Placing Shares is being made in the United States. The Placing Shares are being offered and sold outside the United States in “offshore transactions”, as defined in, and in compliance with, Regulation S under the US Securities Act (“Regulation S”). Persons receiving this announcement (including custodians, nominees and trustees) must not forward, distribute, mail or otherwise transmit it in or into the United States or use the United States mails, directly or indirectly, in connection with the Placing. This announcement does not constitute or form part of an offer to sell or issue or a solicitation of an offer to buy, subscribe for or otherwise acquire any securities in any jurisdiction including, without limitation, the Restricted Jurisdictions or any other jurisdiction in which such offer or solicitation would be unlawful. This announcement and the information contained in it is not for publication or distribution, directly or indirectly, to persons in a Restricted Jurisdiction unless permitted pursuant to an exemption under the relevant local law or regulation in any such jurisdiction.

No action has been taken by the Company, the Bookrunner or any of their respective directors, officers, partners, agents, employees or affiliates that would permit an offer of the Placing Shares or possession or distribution of this announcement or any other publicity material relating to such Placing Shares in any jurisdiction where action for that purpose is required. Persons receiving this announcement are required to inform themselves about and to observe any restrictions contained in this announcement.

This announcement is directed only at persons whose ordinary activities involve them in acquiring, holding, managing and disposing of investments (as principal or agent) for the purposes of their business and who have professional experience in matters relating to investments and: (A) if in a member state of the European Economic Area persons who are (unless otherwise agreed with the Bookrunner) “qualified investors”, as defined in article 2.1(e) of the Prospectus Directive (Directive 2003/71/EC), as amended, (B) if in the United Kingdom, persons who (i) have professional experience in matters relating to investments who fall within the definition of “investment professionals” in article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the “FPO”) or fall within the definition of “high net worth companies, unincorporated associations etc” in article 49(2)(a) to (d) of the FPO and (ii) are “qualified investors” as defined in section 86 of the Financial Services and Markets Act 2000, as amended or (C) persons to whom it may otherwise lawfully be communicated (each, a “Relevant Person”). No other person should act on or rely on this announcement and persons distributing this announcement must satisfy themselves that it is lawful to do so.

This announcement must not be acted on or relied on by persons who are not Relevant Persons. Any investment or investment activity to which this announcement or the Placing relates is available only to Relevant Persons and will be engaged in only with Relevant Persons. As regards all persons other than Relevant Persons, the details of the Placing set out in this announcement are for information purposes only.

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

Certain statements in this announcement are forward-looking statements which are based on the Company’s expectations, intentions and projections regarding its future performance, anticipated events or trends and other matters that are not historical facts. These forward-looking statements, which may use words such as “aim”, “anticipate”, “believe”, “could”, “intend”, “estimate”, “expect” and words of similar meaning, include all matters that are not historical facts. These forward-looking statements involve risks, assumptions and uncertainties that could cause the actual results of operations, financial condition, liquidity and dividend policy and the development of the industries in which the Group will operate to differ materially from the impression created by the forward-looking statements. These statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Given those risks and uncertainties, prospective investors are cautioned not to place undue reliance on forward-looking statements. Forward-looking statements speak only as of the date of such statements and, except as required by the Financial Conduct Authority, the London Stock Exchange or applicable law, the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

Any indication in this announcement of the price at which the Company’s shares have been bought or sold in the past cannot be relied upon as a guide to future performance. Persons needing advice should consult an independent financial adviser. No statement in this announcement is intended to be a profit forecast and no statement in this announcement should be interpreted to mean that earnings per share of the Company for the current or future financial years would necessarily match or exceed the historical published earnings per share of the Company.

Evercore Partners International LLP, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting as financial adviser exclusively to the Company and no one else in connection with the matters described in this announcement. Evercore will not regard any person other than the Company (whether or not a recipient of this announcement) as its client in relation to the matters described in the announcement and will not be responsible to any person other than the Company for providing the protections afforded to its clients or for providing advice in respect of such matters to any person other than the Company. Apart from the responsibilities and liabilities, if any, which may be imposed on it by the Financial Services and Markets Act 2000 or the regulatory regime established thereunder, or under the regulatory regime of any jurisdiction where exclusion of liability under the relevant regulatory regime would be illegal, void or unenforceable, neither Evercore nor any of its subsidiaries, branches or affiliates owes or accepts any responsibility whatsoever (whether direct or indirect, whether in contract or in tort, under statute or otherwise) and makes no representation or warranty, express or implied, for the contents of this announcement, including its accuracy, fairness, sufficiency, completeness or verification or for any other statement made or purported to be made by it, or on their behalf, in connection with the matters described in this announcement, and nothing in this announcement is, or shall be relied upon as, a promise or representation in this respect, whether as to the past or the future. Evercore and any of its subsidiaries, branches or affiliates accordingly disclaims to the fullest extent permitted by law all and any responsibility and liability whether arising in tort, contract or otherwise (save as referred to above) which they might otherwise have in respect of this announcement or any such statement contained therein.

Cantor Fitzgerald Europe, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting solely as nominated adviser, broker and bookrunner exclusively to the Company and no one else in connection with the matters described in this announcement. Cantor Fitzgerald Europe will not regard any person other than the Company (whether or not a recipient of this announcement) as its client in relation to the matters described in this announcement and will not be responsible to any person other than the Company for providing the protections afforded to its clients or for providing advice in respect of such matters to any person other than the Company. Neither Cantor Fitzgerald Europe nor any of its affiliates or agents have authorised the contents of any part of this announcement. Apart from the responsibilities and liabilities, if any, which may be imposed on Cantor Fitzgerald Europe by FSMA or the regulatory regime established thereunder, Cantor Fitzgerald Europe and its affiliates and agents accept no responsibility whatsoever, and makes no representation or warranty, express or implied, as to the contents of this announcement including its accuracy, completeness or verification or for any other statement made or purported to be made by it, or on behalf of it, the Company or any other person, in connection with the Company and the contents of this announcement, whether as to the past or the future. Cantor Fitzgerald Europe and its affiliates and agents accordingly disclaim all and any liability whatsoever, whether arising in tort, contract or otherwise (save as referred to above), which it might otherwise have in respect of the contents of this announcement or any such statement.

In connection with the Placing, the Bookrunner and any of its affiliates, acting as investors for their own accounts, may subscribe for or purchase Ordinary Shares in the Company and in that capacity may retain, purchase, sell, offer to sell or otherwise deal for their own accounts in such Ordinary Shares and other securities of the Company or related investments in connection with the Placing or otherwise. Accordingly, references to the Ordinary Shares being offered, subscribed, acquired, placed or otherwise dealt in should be read as including any offer to, or subscription, acquisition, placing or dealing by the Bookrunner and any of its affiliates acting as investors for their own accounts. In addition, the Bookrunner or its affiliates may enter into financing arrangements and swaps in connection with which it or its affiliates may from time to time acquire, hold or dispose of Ordinary Shares. The Bookrunner has no intention to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligations to do so.

The Placing Shares will not be admitted to trading on any stock exchange other than the AIM market of the London Stock Exchange.

The Appendix to this announcement (which forms part of this announcement) sets out the terms and conditions of the Placing. By participating in the Placing, each person who is invited to and who chooses to participate in the Placing by making or accepting an oral and legally binding offer to acquire Placing Shares will be deemed to have read and understood this announcement in its entirety (including the Appendix) and to be making such offer on the terms and subject to the conditions set out in this announcement and to be providing the representations, warranties, undertakings and acknowledgements contained in the Appendix.

Neither the content of the Company’s website (or any other website) nor the content of any website accessible from hyperlinks on the Company’s website (or any other website) is incorporated into, or forms part of, this announcement.

INFORMATION TO DISTRIBUTORS

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 (together, the “MiFID II Product Governance Requirements”), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any “manufacturer” (for the purposes of the MiFID II Product Governance Requirements) may otherwise have with respect thereto, the Placing Shares have been subject to a product approval process, which has determined that such securities 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, distributors 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, Cantor Fitzgerald Europe 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 group 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.

NOTWITHSTANDING ANYTHING IN THE FOREGOING, NO PUBLIC OFFERING OF THE PLACING SHARES IS BEING MADE BY ANY PERSON ANYWHERE AND THE COMPANY HAS NOT AUTHORISED OR CONSENTED TO ANY SUCH OFFERING IN RELATION TO THE PLACING SHARES.

Regulated Information Classification: Inside information

1. INTRODUCTION

On 23 November 2018, the Company announced that it had reached agreement to conditionally acquire GHR Acquisitions MidCo Limited from SIMEC GHR Acquisitions TopCo Limited a member of the GFG Alliance and an associate of the Company’s largest Shareholder, SIMEC UK Energy Holdings Limited. If the Acquisition is completed, SIMEC GHR will be the owner of an attractive portfolio of operational, cash generating, hydroelectric assets in Scotland which benefit from long-term renewable energy support. The Acquisition, if completed, will represent a further step towards the transformation of Atlantis into a diversified energy company of scale owning a broad spectrum of sustainable energy assets. The proposed Acquisition follows the Company’s acquisition of SIMEC Uskmouth Power Limited from SIMEC last year and illustrates the benefits and inherent value to the Company of its access to the GFG Alliance’s pipeline of renewable power assets.

The Company is now pleased to announce a proposed fundraising to conditionally raise up to £5 million (before expenses) by way of a placing of up to 31,250,000 new Ordinary Shares at a price of 16 pence per share. Details of the Placing are set out below and in the Appendix to this announcement. Cantor Fitzgerald Europe is acting as sole bookrunner in connection with the Placing. It is intended that the net proceeds of the Placing will be used to fund part of the payment to be made by the Buyer for the Acquisition of SIMEC GHR. If the Acquisition is not completed, the net proceeds of the Placing will be used for the Company’s general corporate purposes. The Placing is not conditional upon the Acquisition being completed. A further announcement will be made on the closing of the Placing, which is expected to occur tomorrow.

In addition to the Placing, the Company has made arrangements with PrimaryBid for retail and other investors to subscribe for Ordinary Shares through the PrimaryBid platform at the Placing Price. A further announcement relating to the PrimaryBid Offer will be made shortly after this announcement. The PrimaryBid Offer is expected to remain open until 9.00 p.m. on 28 March 2019, with the result of the PrimaryBid Offer being announced tomorrow at the same time as the Placing.  The funds from the PrimaryBid Offer will be used for the Group’s general corporate purposes.

The Placing Shares, the PrimaryBid Shares and the Consideration Shares will be issued pursuant to the authorities granted to the Directors at the Company’s annual general meeting held in 2018. Accordingly, neither the Placing nor the PrimaryBid Offer is subject to approval of the Company’s Shareholders.

Subject to all conditions to the Placing being satisfied, the Placing Shares and the PrimaryBid Shares will be admitted to trading on AIM. It is anticipated that Admission will take place on 4 April 2019.

2. DETAILS OF THE PLACING

The Company intends to raise up to £5 million (before expenses) pursuant to the Placing. The price per Placing Share is 16 pence.

The Placing will be conducted by Cantor Fitzgerald Europe in accordance with the terms and conditions set out in the Appendix to this announcement. The Placing is being conducted through an accelerated bookbuilding process which will commence immediately following this announcement in accordance with the terms and conditions set out in the Appendix to this announcement.

The bookbuilding process will determine demand for and participation in the Placing. The timing of the closing of the books is at the absolute discretion of the Bookrunner in consultation with the Company. The allocations will be determined by the Bookrunner in its absolute discretion following consultation with the Company and will be confirmed orally or by email by the Bookrunner following the close of the bookbuilding process.

The Placing Shares will not be offered generally to the Company’s existing shareholders on a pre-emptive basis. Participation in the Placing will be generally limited to certain qualifying institutional investors who are invited, and who choose, to participate. Certain of the Company’s existing significant shareholders have indicated their intention to participate in the Placing. The Placing Shares are not being made available to the public and, subject to certain limited exceptions, are not being offered or sold in, into or from the United States of America, Canada, Australia, Japan or the Republic of South Africa or any other jurisdiction where it would be unlawful to do so.

A further announcement in respect of the total number of Placing Shares to be issued and the aggregate proceeds to be raised through the Placing will be made as soon as is practicable, once these details have been finally determined. The Placing is not being underwritten.

Following Admission, the Placing Shares will be issued and allotted credited as fully paid and will rank pari passu with the Ordinary Shares as well as with the PrimaryBid Shares and the Consideration Shares (referred to below), including the right to receive all dividends and other distributions declared, made or paid on or in respect of such shares after the date of issue.

The Placing is conditional, inter alia, upon:

• the publication by the Company of, among other announcements, the results of the Placing by means of a Regulatory Information Service;
• the performance by the Company of its obligations under the Placing Agreement, to the extent that they fall to be performed prior to Admission;
• the Placing Agreement having become unconditional in all respects (save for the condition relating to Admission) and not having been terminated in accordance with its terms;
• Admission becoming effective at 8.00 a.m. on 4 April 2019 (or such later time and date as the Company and the Bookrunner may agree but not later than 12 April 2019).

The Placing is not conditional upon the Acquisition being completed.

If any of the conditions in the Placing Agreement are not satisfied, the Placing Shares will not be issued and all monies received from Placees will be returned to them (at the Placees’ risk and without interest) as soon as possible.

The Placing Agreement contains customary warranties given by the Company to the Bookrunner as to matters relating to the Company and its business and customary indemnities from the Company to the Bookrunner in respect of liabilities arising out of or in connection with the Placing and Admission. The Placing Agreement also contains customary rights of termination which could enable the Bookrunner to terminate the Placing in certain limited circumstances.

Application will be made to the London Stock Exchange for the Placing Shares (along with the PrimaryBid Shares and the Consideration Shares) to be admitted to trading on AIM. It is expected that Admission will take place and that trading in the Placing Shares (along with the PrimaryBid Shares and the Consideration Shares) will commence on or around 4 April 2019.

The terms and conditions of the Placing are set out in the Appendix to this announcement.

3. Use of proceeds of the Placing and THE PRIMARYBID OFFER

If the Acquisition is completed, the net proceeds of the Placing will be used to fund part of the payment to be made by the Buyer to complete the Acquisition of SIMEC GHR. If the Acquisition is not completed, the net proceeds of the Placing will be used for the Company’s general corporate purposes. The net proceeds of the PrimaryBid Offer will be used for the Company’s general corporate purposes.

4. Sale and Purchase Agreement Update

On 23 November 2018, Atlantis (through its wholly owned subsidiary, Atlantis Projects Pte Ltd, as the Buyer) and SIMEC GHR Acquisitions Topco Limited (as the Seller) signed a conditional Sale and Purchase Agreement to effect the Acquisition of SIMEC GHR. The Seller is a member of the GFG Alliance and an associate of the Company’s largest shareholder, SIMEC. On 28 March 2019 the parties amended the terms of the Sale and Purchase Agreement in certain respects, and in particular in relation to the consideration payable pursuant to the Acquisition.

The agreed enterprise value attributed to SIMEC GHR remains as being £124.7 million. The consideration for the Acquisition of the shares of SIMEC GHR will be an amount in cash equal to the agreed enterprise value of £124.7 million, less an amount to discharge the sums owing under the Outgoing Facilities Agreement and less various costs and expenses relating to the Reorganisation and less an amount equal to the value of the Consideration Shares at the Placing Price. The cash consideration payable for the shares of SIMEC GHR is expected to be approximately (and no less than) £10 million. In addition to the cash consideration (but included within the agreed enterprise value), Atlantis will issue the Consideration Shares to SIMEC. The Consideration Shares will be issued to SIMEC on completion of the Placing in consideration of the mutual covenants given in the Sale and Purchase Agreement, for the Seller agreeing to transfer the shares of SIMEC GHR to the Buyer and for incurring further costs and time in relation to the Acquisition. Accordingly, SIMEC will retain the Consideration Shares irrespective of whether the Acquisition is completed. Following the issue of the Consideration Shares, SIMEC will continue to be interested in 49.99% of the Company’s Enlarged Share Capital. The cash consideration for the Acquisition will only be paid on completion of the Acquisition.

In advance of completion of the Acquisition, it is proposed that the existing debt due under the Outgoing Facilities Agreements and various other costs and expenses will be refinanced, with the result that SIMEC GHR will be acquired by the Buyer with long term debt financing in place.  The Company and the Seller are working together to secure the balance of the required financing including debt with a syndicate of UK banks. A further announcement will be made by the Company in due course.

The discussions with the Bank Syndicate include the provision of approximately £90 million of long term financing, a further capex facility of £24.5 million and a revolving credit facility of £2.0 million. It is not anticipated that (if provided), such capex facility would be drawn at Completion, and the revolving credit facility (if provided), would only be expected to be drawn down to fund the payment of certain costs in connection with the Acquisition.

Completion of the Acquisition remains subject to a number of conditions precedent which remain to be satisfied including finalising the financing in connection with the Acquisition and the agreement of further legal documentation.  It is anticipated that in advance of Completion the Sale and Purchase Agreement will need to be further amended by the parties. Completion will only take place on the date on which the last of the conditions precedent to the Sale and Purchase Agreement (as amended) are fulfilled subject to a long stop date of 30 June 2019. It is currently anticipated that, assuming the conditions precedent are satisfied, Completion will take place towards the end of Q2 2019.

The proposed Acquisition and the issue of the Consideration Shares is classified as a related party transaction under the AIM Rules for Companies since it involves a transaction with a related party of the Company, the Seller, which is an associate of SIMEC, a substantial shareholder of the Company (being the Company’s largest Shareholder which, as at the date of this document, owns approximately 49.99 percent of the Company’s issued Ordinary Share capital). The Independent Directors of Atlantis (comprising John Neill (Non-Executive Chairman), Tim Cornelius (Chief Executive Officer), Andrew Dagley (Chief Financial Officer), John Woodley (Non-Executive Director) and Ian Wakelin (Non-Executive Director)), having consulted the Company’s Nominated Adviser, Cantor Fitzgerald Europe, consider that the terms of the proposed Acquisition (including the issue of the Consideration Shares) are fair and reasonable insofar as the Company’s Shareholders are concerned.

5. Background to and reasons for the Acquisition

In June 2018, Atlantis completed the acquisition of SUP from SIMEC which was intended to be the first of a number of acquisitions to transform the Company into a diversified energy company of scale. In connection with the acquisition of SUP, the Company entered into a Relationship Agreement with SIMEC which, amongst other things, provided Atlantis with investment rights through a right of first offer to a pipeline of renewable power assets owned or subsequently acquired by the GFG Alliance of which both the Seller and SIMEC are members.

The Acquisition of SIMEC GHR, if completed, would be the first acquisition by Atlantis which the Board believes will illustrate the benefits and inherent value to the Company of its access to the GFG Alliance’s pipeline of renewable power assets as was envisaged by the Relationship Agreement. Specifically in the case of the acquisition of SIMEC GHR, the Company’s access to that pipeline of assets has facilitated the opportunity to acquire an attractive portfolio of operational, cash generating, hydroelectric assets benefitting from long-term renewable energy support.

The SIMEC GHR portfolio proposed to be acquired consists of 11 operational projects encompassing 15 schemes with a combined capacity of approximately 20MW (attributable to both SIMEC GHR and third party interests), one project under construction of approximately 2MW and one project at the development stage of approximately 5.9MW. Of the total capacity, including the assets under construction and development, SIMEC GHR has an interest in approximately 24.9MW of capacity, with the balance being attributable to third party interests under joint ventures in relation to three projects. 14 of the 15 operational schemes receive stable, regulated cash flows in the form of fixed RPI-linked FiT payments for generation for a period of 20 years from commissioning and, in addition, receive revenues for the export of the generated electricity. The 14 operational schemes receiving fixed RPI-linked FiT payments for generation currently receive an average generation tariff, when weighted for P50 generation, of £121.89 per MWh and are eligible to receive an RPI-linked export tariff for all electricity exported to the grid of 5.24p per kWh (real, 2018). Accordingly, the 14 FiT accredited operational schemes currently provide an average guaranteed revenue to SIMEC GHR of £174 per MWh. This compares favourably with the mutually exclusive ROC regime, under which ROC accredited hydroelectric projects in Scotland currently benefit from an effective guaranteed price of £48.78 per MWh (plus the wholesale price), and the capacity market regime, under which payments would be £1.93 per MWh (plus the wholesale price). Hydropower assets of this type typically achieve a premium to the average baseload wholesale electricity prices primarily because generation from hydropower assets is highest in wet conditions when electricity demand is higher.

The Board of Atlantis believes that, if completed, the Acquisition of SIMEC GHR will be an important milestone in the development of the Company and would provide it with the following key benefits:

• Immediate operating earnings and cash flow: SIMEC GHR is expected to provide an immediate and material contribution to the Company of earnings and cash flow generated by a sizeable portfolio of operational hydroelectric assets;
• Earnings accretion: on Completion, the Acquisition is expected to be immediately earnings accretive to the Company;
• Visible minimum contracted cash flows: SIMEC GHR provides long-term visibility on earnings and cash flow generation, with both being underpinned by attractive RPI-linked FiT payments for 20 years from the commissioning of each project;
• Upside from wholesale power prices: SIMEC GHR has historically benefited from upside linked to wholesale electricity prices whilst also being protected by FiT payments which ensure a minimum level of contracted earnings and cash flow;
• Stable cost base: The rent payable by SIMEC GHR under leases for the sites of 12 of the 13 projects is set at a fixed percentage of the revenue generated by that project;
• Experienced management: the Acquisition will allow the Company to supplement its existing management expertise with the addition of SIMEC GHR’s highly regarded and experienced management team who have a best-in-class operational and development reputation;
• In-house expertise: the Acquisition will enhance the existing skill base within the Company. The Directors believe that SIMEC GHR is a best-in-class operator of hydroelectric plants in the United Kingdom which allows it to generate ancillary income through the provision of operations and maintenance services to over 30 third party sites, and is also a leading developer of hydroelectric schemes in the United Kingdom, with its in-house team having successfully consented more than 60 projects since its formation in 2007;
• Platform for further growth: establishment of a leading hydroelectric platform of scale providing opportunities for the Company to pursue both organic growth and complementary bolt-on acquisitions;
• Opportunities for synergies and optimised generation: the Acquisition will enable the Company to benefit from synergies across its tidal and hydro businesses in project development, delivery and operation, as well as creating opportunities for optimising generation and selling aggregated power output on a portfolio basis which typically delivers improved terms for power generators; and
• Value of access to the GFG Alliance’s pipeline of renewable power assets and the support of SIMEC: the Acquisition illustrates the benefits and inherent value to the Company of its access to the GFG Alliance’s pipeline of renewable power assets as was envisaged by the Relationship Agreement. It also demonstrates the commitment of SIMEC as the Company’s largest Shareholder to supporting Atlantis in its aim of establishing itself as a diversified energy company of scale.

The Board of Atlantis believes that the Acquisition of SIMEC GHR, if completed, is fully aligned with the Company’s strategy. It accelerates the development of Atlantis and its aim to become a diversified energy company of scale and, in the process, provides a clear demonstration of the continued support that it receives from SIMEC as its largest Shareholder.

6. Background information on SIMEC GHR

SIMEC GHR is a United Kingdom based independent hydro developer, with a portfolio of operational, under construction and in development hydroelectric generation assets with a total capacity of approximately 27.9MW. SIMEC GHR also provides consultancy and operations and maintenance services to its own projects, its joint venture projects and hydroelectric projects owned by third parties.

Overview of the SIMEC GHR portfolio

The SIMEC GHR portfolio consists of 11 operating projects encompassing 15 schemes with a combined capacity of approximately 20MW (attributable to both SIMEC GHR and third party interests), one asset under construction of approximately 2MW and one asset at the development stage (comprising three schemes) of approximately 5.9MW. Of the total capacity, including the assets under construction and development, SIMEC GHR has an interest in approximately 24.9MW of capacity, with the balance being attributable to third party interests under joint ventures in relation to three projects. In addition, SIMEC GHR has a right to acquire the remaining 50.25 per cent. stakeholding in the 1.5MW Allt Garbh joint venture project that it does not already own with such right being exercisable until 1 October 2019, subject to certain conditions. Exercise of this right would increase the combined net capacity of the portfolio, including the assets under construction and development, attributable to SIMEC GHR’s interest in the portfolio to approximately 25.7MW.

The P50 weighted average load factor of the SIMEC GHR operating assets is approximately 50 per cent., based on gross annual electricity generation of approximately 87GWh, which consists of approximately 10GWh of P50 generation attributable to third party interests under joint venture projects, and net annual electricity generation attributable to SIMEC GHR’s interest in the portfolio of approximately 77GWh. Once the two projects under construction or development are also operational, and assuming the remaining 50.25 per cent. stake in the Allt Garbh joint venture project which SIMEC GHR does not already own is acquired, the P50 weighted average load factor for the SIMEC GHR operating assets reduces to approximately 47 per cent., based on gross annual electricity generation of approximately 114GWh, which consists of approximately 8GWh of P50 generation attributable to third party interests under joint venture projects, and net annual electricity generation attributable to SIMEC GHR’s interest in the portfolio of approximately 106GWh.

The operational assets have been assessed by the Company’s technical adviser, using availability data from one year of operations, as achieving an availability percentage, being the percentage of time during which the schemes are available to generate power, in excess of 99 per cent..

An overview of the SIMEC GHR portfolio is set out in Table 1 below. The assets are all located in the Scottish Highlands.

Table 1

Asset	Commissioning date	Gross capacity (MW)	SIMEC GHR ownership (%)	Capacity net to SIMEC GHR (MW)	Gross P50 generation (MWh)	Average load factor (%)	FiT (2018 p/kWh)
							Generation tariff	Export tariff
Operating
Keltneyburn	Apr-2010	2.0	100.0%	2.0	8,193	47%	14.07	5.24
Roroyere	Oct-2011	0.8	100.0%	0.8	1,922	28%	14.07	5.24
Achnacarry	Nov-2015	0.7 0.5 1.2	49.9%(1)	0.4 0.2 0.6	2,198 2,286 5,391	34% 52% 50%	14.07 18.00 14.07	5.24 5.24 5.24
Ceannacroc	Dec-2016	0.5 1.3	100.0%	0.5 1.3	1,881 4,350	43% 40%	15.39 12.02	5.24 5.24
Allt Mullardoch	Nov-2016	0.5	100.0%	0.5	1,743	40%	15.39	5.24
Allt Garbh	Jul-2017	1.5	49.8%	0.7	4,608	35%	10.69	5.24
Loch Eilde Mor #1	Jul-2017	2.0	100.0%	2.0	17,222	98%	10.69	5.24
Loch Eilde Mor #2	May-2017	3.0	100.0%	3.0	16,591	63%	–	–
Shenval	Jul-2017	0.5	100.0%	0.5	1,963	45%	13.68	5.24
Gleann Nam Fiadh	Jul-2017	2.0	100.0%	2.0	7,474	43%	10.69	5.24
Coulags	Aug-2017	1.5	100.0%	1.5	4,969	39%	10.69	5.24
Coiltie	Sep-2017	2.0	50.0%	1.0	6,009	34%	10.69	5.24
Total operating(2)		20.0		17.0	86,800	50%
Under construction
Nathrach(3)	Aug-2019e	2.0	100.0%	2.0	6,929	40%	6.48	5.24
In development
Glen Kinglass(4)	Nov-2020e	5.9	100.0%	5.9	20,160	39%	6.46	5.24
Total		27.9		24.9	113,889	47%

 

(1) The Achnacarry project is subject to a community benefit payment obligation such that, upon any dividends to shareholders being declared and paid, an additional payment must be made to the community group equivalent to that which the community group would have been entitled to upon declaration of the dividend had it held a 0.5 per cent. shareholding in the project.

(2) Totals may not equal the sum of the above values due to rounding

(3) The Nathrach project is pre-accredited only and as such the stated generation and export tariffs are subject to final accreditation. The gross P50 generation value represents the latest forecast.

(4) The Glen Kinglass project is not yet pre-accredited, the stated generation tariff reflects the expected price and the export tariff remains subject to full scheme accreditation. The gross P50 generation value represents the latest forecast.

Portfolio development

Two of the SIMEC GHR assets (Roroyere and Keltneyburn) were purchased by SIMEC GHR once they were already operational. Development and construction of all of the other assets was managed by SIMEC GHR’s in-house development and construction management teams. The development team at SIMEC GHR, which will also be acquired as part of the Acquisition, has the in-house capability to take a project from initial feasibility through environmental appraisal, securing licences and financial modelling to final design, working closely with local communities and other stakeholders throughout the process. SIMEC GHR typically enters into fixed price contracts with third-party civil engineering contractors to build each project. SIMEC GHR has long-term and established relationships with a number of leading civil engineering and electrical contractors. The portfolio employs technology from four established turbine manufacturers: Kössler, Gilkes, Newmills and Canyon.

Each project comprises a water intake system, a pressure pipeline, a powerhouse with a turbine, generator and control equipment, a tailrace and an outfall pipe (to return water from the turbine to the watercourse), electrical and metering systems, access tracks and monitoring and communication systems.

The Company intends to continue to develop and construct the Nathrach assets, which are currently being constructed on land owned by a member of the GFG Alliance, and the Glen Kinglass assets which are expected to be commissioned in Q3 2019 and Q4 2020 respectively, and to be connected to the grid for full export in Q3 2019 and Q4 2021 respectively. SIMEC GHR has, to date, invested £4.2 million of its £6 million construction budget for the Nathrach asset, and £0.7 million of its estimated £17.6 million construction budget for the Glen Kinglass assets, including in connection with the submission of planning applications in May 2018.

Offtake arrangements

The 11 operational SIMEC GHR projects are made up of 15 schemes, of which 14 are accredited under the UK Government’s FiT subsidy regime which delivers stable, regulated cash flows by providing 20 years of subsidy support for each project and an RPI linked minimum power price. Under the FiT regime, accredited assets receive an individual, RPI-linked generation tariff for all electricity produced. The average generation tariff received by the 14 operational schemes, when weighted for P50 generation, is £121.89 per MWh. The projects are also eligible to receive a 5.24p/kWh (real, 2018) RPI-linked export tariff for all electricity exported to the grid. Accordingly, the 14 FiT accredited operational schemes currently provide an average guaranteed revenue to SIMEC GHR of £174 per MWh and will continue to do so until 2030 with tariffs to be adjusted in line with RPI. The projects can, on an annual basis, elect either to receive the export tariff or to sell their electricity independently via a power purchase agreement and receive the prevailing wholesale power price, if higher. This means that the export tariff effectively provides a guaranteed minimum “floor” price to each project. All operating projects are currently selling power to the grid under fixed-price 12-month power purchase agreements which currently deliver an average fixed price for export, when weighted for P50 generation and assuming constant generation throughout the year, of £57.40 per MW/h. The Nathrach project, which is currently in construction, is pre-accredited for the FiT and the same pre-accreditation will be sought for the Glen Kinglass schemes once the necessary conditions, including award of planning permission, have been met. The Company intends to apply for pre-accreditation for the Glen Kinglass project, which comprises three schemes, in March 2019, prior to the FiT subsidy regime closing to new applications on 1 April 2019, and expects to be receive a generation tariff for each scheme of 6.46p/kWh.

The SIMEC GHR portfolio currently consists of 11 operational projects and has limited exposure to any single asset or location. Mainly due to the historical correlation between electricity generation across the portfolio and periods of high electricity demand in the United Kingdom (e.g. during periods of wetter weather).

Consultancy and operations and maintenance capabilities

SIMEC GHR has an established operational team which undertakes all operations and maintenance activities and provides consultancy services across the SIMEC GHR portfolio.

SIMEC GHR also provides consultancy and operations and maintenance services to third-party projects. SIMEC GHR currently has contracts with 34 third-party sites representing 21MW of capacity. These contracts contributed revenue of approximately £0.8 million in the 12 months to 30 September 2018. Given the potential for the consultancy and operations and maintenance business to realise operating efficiencies by servicing more densely located projects, SIMEC GHR management sees the addition of further contracts as an attractive growth opportunity for SIMEC GHR and forecasts revenues from these contracts with third parties to increase to £1.5 million for 2019, comprising £0.9 million in revenue from the provision of operations and maintenance services and £0.6 million in consultancy revenues. SIMEC GHR management has identified, and is in active discussions with, third-parties with the intention of increasing SIMEC GHR’s market share in the Scottish Highlands and is currently targeting the addition of a further 15 to 20 schemes over the medium term.

Further information about SIMEC GHR

SIMEC GHR is an English company with its head office in Perth and an operations and management office in Dingwall. It has been developing hydroelectric schemes since 2007, from initial concept through to consent, construction, commissioning and generation. SIMEC GHR employs 21 people who provide in-house capabilities across planning, development, civil, mechanical and electrical engineering, as well as operations and maintenance. Since 2007, SIMEC GHR has consented more than 60 projects with total capacity of approximately 37MW.

7. Update and CURRENT TRADING AND PROSPECTS IN RELATION TO THE COMPANY

Tidal energy business

As at the date of this announcement, the Group has a development pipeline of UK tidal power projects with an aggregate capacity of approximately 600MW. The Group’s primary operating asset is the 6MW MeyGen tidal stream energy project in northern Scotland. This project, the largest of its kind in the world, has generated over 13GWh of clean electricity from the wholly predictable tides of the Pentland Firth. The MeyGen project is accredited under the Renewables Obligation (Scotland) Order 2009 and receives five Renewables Obligation Certificates (ROCs) per megawatt hour of generation, boosting revenues from power sales by approximately £250 per megawatt hour.

The first 6MW of the MeyGen project consists of four turbines and achieves capacity factors of approximately 40 per cent., producing gross average annual generation of 21GWh. With an improved understanding of the site and the performance of the turbines, the Company announced last year that it now intends to reconfigure the project to add two new turbines, supplied by the Group, within the existing ROC accredited envelope and upgrade one of the existing turbines. This is expected to boost yields by up to 40 per cent. relative to current levels whilst maintaining the total installed capacity at 6MW. The new turbines and upgraded turbine will be connected via a subsea hub to a single subsea export cable to demonstrate an improved system architecture which lowers the project infrastructure cost to allow for a reduction in the cost of energy from larger scale arrays, including the further build out of the MeyGen site to its currently consented capacity of 86MW and ultimately to the full site capacity of 398MW, and from the expansion into neighbouring sites in the Pentland Firth. The Group’s Turbine and Engineering Services division is expected to be awarded a contract for the engineering, procurement, construction and installation of the two new turbines with a budget in excess of £20 million. The development is expected to benefit from additional revenue support in the form of the European Commission’s NER300 scheme, which has awarded €16.8 million of funding support to MeyGen, payable at a rate of €267/MWh. The total capital funding requirement for the development is expected to be approximately £27 million. The Company also intends to compete in 2019 CfD auctions for up to 80MW of capacity.

8. update and current trading and prospects in relation to SUP

SIMEC Uskmouth Power

In addition to the 20 year fuel supply agreement and the two 20 year power purchase agreements for power offtake from Uskmouth Power Station, each of which was entered into in connection with the Company’s acquisition of SUP, SUP has awarded contracts to progress the engineering and consenting works necessary to implement the conversion of Uskmouth Power Station from a coal-fired power station to a 220MW facility intended to run entirely on waste derived energy pellets. SUP has awarded a contract for the environmental planning and permitting work to RPS Group, who will carry out the works necessary for both the conversion of the power station and the construction of the neighbouring fuel production facility which is to be developed, owned and operated by a joint venture between a member of the Liberty House group of companies, part of the GFG Alliance, and Dutch recycling group N+P Group BV. The joint venture has awarded a subsidiary of the Company a contract for management services in relation to the planning and permitting in relation to the fuel production facility.

On 6 November 2018, the Company also announced that the front end engineering and design contract for the project had been awarded to a consortium of WSP UK Limited and RJM Corporation Technical Services Limited. Under the FEED contract, the consortium will deliver the final design specification for the plant which will enable the Company to award the engineering, procurement and construction contract to facilitate financial close on the project. The total size of the FEED contract is £4.9 million. The FEED phase is expected to be completed by the end of 2019 and will be followed by the negotiation of the EPC contract with appropriate contractors and project financing for the estimated £185 million cost of the conversion works being secured.

Equitix Heads of Terms

On 20 November 2018, the Company announced that it had signed a heads of terms to sell a 25 per cent. shareholding in SUP for £32.9 million to Equitix on achieving financial close for the conversion project. Subject to fulfilment of certain conditions, Equitix would also contribute 25 per cent. of certain of the remaining budgeted development costs to achieve financial close. Equitix would also be expected to contribute 25 per cent. of the part of the conversion costs to be funded by SUP’s shareholders.

The sale is conditional on Equitix completing its confirmatory due diligence on SUP and agreeing satisfactory transaction documentation. Final approval of Equitix’s investment committee is also required prior to completion of the transaction.

9. Group strategy

The strategy for Atlantis is to become a diversified energy company of scale owning high quality cash generative operational assets and a strong portfolio of greenfield development assets across the sustainable energy spectrum. The Directors continue to believe that this strategy is capable of delivering material value to Shareholders through the combination of operating assets with long-term contractually-secured cash flows and development assets that hold the potential for value crystallisation as they are brought into operation. The wider platform will provide access to a diversified range of assets as well as in-house operational and development skills across a number of renewable generation technologies that will ensure that the Group is not reliant on one particular geography, renewable technology, regulatory regime or market dynamic. Given the wider platform is expected to generate regular news flow and value crystallisation events over the lifecycle of these assets, the Directors believe that Atlantis’s public markets listing will provide the most appropriate way for Shareholders to benefit from the realisation of value from this strategy.

The proposed acquisition of SIMEC GHR is consistent with this strategy by adding a portfolio of renewable hydroelectric assets of significant scale which will provide long-term contracted cash flows and provide technology diversification whilst also enhancing the Group’s in-house development and operational capabilities.

Atlantis is a leading project developer in the tidal power sector and this will continue to be an important part of the Group’s business in the future. Atlantis has an existing portfolio of tidal stream and barrage projects including the flagship MeyGen project and the Wyre Project as well as international opportunities in Europe and Asia, including the recently announced joint venture with the Development Agency for Normandy pursuant to which it is currently proposed that the Company will hold a 24 per cent. stake in a joint venture vehicle that will be established with the intention of developing a tidal stream project in Raz Blanchard, Normandy, with the remainder of the joint venture being held by Normandie Participations and Efinor with stakes of 65 per cent. and 11 per cent. respectively.

Atlantis intends to continue to make acquisitions of high quality renewable assets and businesses active in the renewable sector leveraging both its relationship with the GFG Alliance as well as other independently sourced opportunities. In addition, Atlantis will continue to implement organic growth opportunities such as the build out of the MeyGen project and the joint venture with the Development Agency for Normandy as announced by the Company last year.

10. summary historic financial information on simec ghr

Set out below is a summary of the consolidated financial results of SIMEC GHR for the nine months ended 30 June 2018 and the consolidated financial results of the Seller for the two preceding financial years ended 30 September 2017 and 30 September 2016. The consolidated financial statements of SIMEC GHR and the Seller are prepared under UK GAAP. As SIMEC GHR has not historically prepared consolidated accounts, the 2017 and 2016 consolidated financial results figures below are provided in respect of the Seller (rather than SIMEC GHR).

	9 months ended 30 June	Year ended 30 September
	2018	2017	2016
	SIMEC GHR	Seller	Seller
	(audited)	(unaudited)	(unaudited)
	£’000	£’000	£’000
Revenue	6,609	5,744	4,821
Cost of sales	(2,985)	(2,338)	(1,961)
Gross profit	3,623	3,406	2,860
Administrative expenses	989	(2,551)	(4,478)
Exceptional administrative expenses	707	(366)	(357)
Other operating income	56	29	14
Operating profit/(loss)	1,983	518	(1,960)
Share of joint venture profits	19	(96)	(316)
Finance costs	(3,524)	(6,225)	(6,764)
Taxation	(156)	(152)	(1,770)
Net profit/(loss) for the period	(1,678)	(5,955)	(10,811)
Total assets	53,125	53,752	42,683
Total liabilities	80,527	77,604	53,244

 

11. Projected future Revenue of SIMEC GHR

Set out below, and for illustrative purposes only, is a summary of projected revenue of SIMEC GHR for 2019, 2020 and 2021 based on management estimates. The projected revenue assumes that the Nathrach and Glen Kinglass projects are completed in accordance with the current timetable and within budget and that the remaining 50.25 per cent. stake in the Allt Garbh joint venture project which SIMEC GHR does not already own is acquired in July 2019.

	Year ended 31 December
	2019	2020	2021
Revenue (£,000)	14,220	15,645	18,909
Annual growth in revenue		10.0%	20.9%
EBITDA (£,000)	10,722	11,780	14,463
Illustrative EBITDA margin	75.4%	75.3%	76.5%
Annual growth in EBITDA		9.9%	22.8%

 

12. Timetable, Admission and dealings

Application will be made to the London Stock Exchange for the Placing Shares, the PrimaryBid Shares and the Consideration Shares to be admitted to trading on AIM. It is expected that Admission will take place and that trading in the Placing Shares, the PrimaryBid Shares and the Consideration Shares will commence on AIM on or about 4 April 2019. Completion of the Acquisition will not take place until the last of the conditions under the Sale and Purchase Agreement (as it is expected to be amended), have been satisfied.  Accordingly, Completion is not expected to occur until towards the end of Q2 2019.

13. Market Abuse Regulation

Market soundings, as defined in MAR, were taken in respect of the Placing, with the result that certain persons became aware of inside information, as permitted by MAR. That inside information is set out in this announcement and has been disclosed as soon as possible in accordance with paragraph 7 of article 17 of MAR. Therefore, those persons that received inside information in a market sounding are no longer in possession of inside information relating to the Company and its securities.

Definitions and glossary

The following definitions apply throughout this announcement unless the context requires otherwise:

“Acquisition”	the proposed acquisition by Atlantis Projects, a wholly owned subsidiary of the Company, of the entire issued share capital of SIMEC GHR on the terms and subject to the conditions of the Sale and Purchase Agreement
“Admission”	the admission of the Placing Shares, the PrimaryBid Shares and the Consideration Shares to trading on AIM becoming effective in accordance with the AIM Rules
“AIM”	AIM, a market of the London Stock Exchange
“AIM Rules”	the AIM Rules for Companies and the AIM Rules for Nominated Advisers, as applicable
“AIM Rules for Companies”	the rules for AIM companies published by the London Stock Exchange, as amended or re-issued from time to time
“AIM Rules for Nominated Advisers”	the rules for nominated advisers to AIM companies published by the London Stock Exchange, as amended or re-issued from time to time
“Articles of Association”	the articles of association of the Company, as amended from time to time
“Bank Syndicate”	a syndicate of major UK banks
“Board”	the board of directors of the Company as constituted from time to time
“Bookrunner”	Cantor Fitzgerald Europe
“Buyer” or “Atlantis Projects”	Atlantis Projects Pte. Ltd, a company incorporated in the Republic of Singapore
“Cantor Fitzgerald Europe”	Cantor Fitzgerald Europe, acting as nominated adviser and broker to the Company and sole bookrunner in relation to the Placing
“certificated” or “certificated form”	the description of a share or other security which is not in uncertificated form (that is, not in CREST)
“Company” or “Atlantis” or “SIMEC Atlantis Energy”	SIMEC Atlantis Energy Limited, a company incorporated in the Republic of Singapore
“Completion”	completion of the Acquisition
“Consideration Shares”	the new Ordinary Shares to be issued by the Company to SIMEC as consideration for the mutual covenants given in the Sale and Purchase Agreement and the Seller agreeing to transfer the shares of SIMEC GHR to the Buyer, being such number as will result in SIMEC retaining an interest in 49.99 per cent of the Enlarged Share Capital
“CREST”	the computerised settlement system, facilitating the paperless settlement of trades and the holding of uncertificated shares administered by Euroclear UK & Ireland Limited, the operator of CREST
“Depositary”	Link Market Services Trustees Limited (No. 02729260) of The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU
“Depositary Interests”	dematerialised interests representing underlying Ordinary Shares in the ratio of 1:1, that can be settled electronically through and held in CREST, as issued by the Depositary or its nominees who hold the underlying securities on trust
“Directors”	the current directors of the Company including the Independent Directors and the SIMEC Nominated Directors
“Enlarged Share Capital”	the enlarged share capital of the Company upon Admission, comprising the Ordinary Shares in issue at the date of Admission, the Placing Shares, the PrimaryBid Shares and the Consideration Shares
“EU”	the European Union
“Evercore”	Evercore Partners International LLP, acting as financial adviser to the Company
“Financial Conduct Authority” or “FCA”	the Financial Conduct Authority of the United Kingdom
“FSMA”	the UK Financial Services and Markets Act 2000 (as amended) including any regulations made pursuant thereto
“GFG Alliance”	the alliance between Parduman Gupta and Sanjeev Gupta and each of their associated companies
“Group”	the Company and its subsidiary undertakings as at the date of this document
“Independent Directors”	the current directors of the Company other than the SIMEC Nominated Directors, such Independent Directors of the Company comprising John Neill (Non-Executive Chairman), Tim Cornelius (Chief Executive Officer), Andrew Dagley (Chief Financial Officer), John Woodley (Non-Executive Director) and Ian Wakelin (Non-Executive Director)
“London Stock Exchange”	London Stock Exchange plc
“Ordinary Shares”	the ordinary shares of no par value in the capital of the Company
“Outgoing Facilities Agreements”	the facilities agreements entered into between Wyelands and certain companies indirectly controlled by the Seller on or around 27 September 2018
“Placee”	a person subscribing for Placing Shares under the Placing at the Placing Price
“Placing”	the proposed placing of up to 31,250,000 new Ordinary Shares at the Placing Price pursuant to the Placing Agreement
“Placing Agreement”	the conditional agreement between Cantor Fitzgerald Europe and the Company dated 28 March 2019
“Placing Price”	16 pence per Placing Share and PrimaryBid Share (as the case may be)
“Placing Shares”	up to 31,250,000 new Ordinary Shares to be issued (whether in certificated form or represented by Depositary Interests) by the Company to Placees pursuant to the Placing Agreement
“PrimaryBid”	PrimaryBid Limited (registered number 08092575) which is authorised and regulated by the FCA with register number 779021
“PrimaryBid Offer”	the offer of PrimaryBid Shares made to retail and other investors on the PrimaryBid platform
“PrimaryBid Shares”	new Ordinary Shares to be issued in connection with the PrimaryBid Offer
“Prospectus Directive”	Directive 2003/71/EC (and amendments thereto including 2010 PD Amending Directive), including any relevant amending implementing measures in each member state of the European Economic Area that has implemented Directive 2003/71/EC
“Prospectus Rules”	the rules published by the FCA under FSMA governing the publication of a prospectus, as derived from the Prospectus Directive
“Regulatory Information Service”	a regulatory information service authorised by the London Stock Exchange to receive, process and disseminate information in respect of AIM quoted companies
“Relationship Agreement”	the relationship agreement between the Company and SIMEC dated 21 May 2018 in respect of the Company
“Reorganisation”	a corporate reorganisation of SIMEC GHR to take place immediately prior to Completion
“Restricted Jurisdiction(s)”	any non-EEA jurisdiction where local laws or regulations may result in a significant risk of civil, regulatory or criminal sanction if information concerning the matters described in this announcement including the Placing and the Acquisition is sent or made available to persons in that jurisdiction
“Sale and Purchase Agreement”	the conditional agreement between the Buyer, the Seller and SIMEC Group dated 23 November 2018 in relation to the Acquisition as amended by a further agreement dated 28 March 2019
“Seller”	SIMEC GHR Acquisitions TopCo Limited, a company incorporated in the United Kingdom
“Shareholders”	holders of Ordinary Shares from time to time
“SIMEC”	SIMEC UK Energy Holdings Limited, a company incorporated in the British Virgin Islands with company number 1801240
“SIMEC Green Highland Renewables” or “SIMEC GHR”	SIMEC GHR Acquisitions MidCo Limited, a company incorporated in the United Kingdom (which shall, where the context requires, include its subsidiaries at Completion)
“SIMEC Group”	SIMEC Group Limited, a company incorporated in Hong Kong with company number 1651874
“SIMEC Nominated Directors”	the current directors of the Company nominated by SIMEC, such SIMEC Nominated Directors comprising Mark Elborne (Non-Executive Director and SIMEC nominee) and Jay Hambro (Non-Executive Director and SIMEC nominee)
“SUP” or “SIMEC Uskmouth Power”	SIMEC Uskmouth Power Limited, a company incorporated in the United Kingdom with company number 05104786
“UK Listing Authority” or “UKLA”	the FCA acting in its capacity as the competent authority for the purposes of Part VI of FSMA
“uncertificated” or “uncertificated form”	recorded on the relevant register of the share or security concerned as being held in uncertificated form in CREST and title to which may be transferred by means of CREST
“United Kingdom” or “UK”	the United Kingdom of Great Britain and Northern Ireland
“United States” or “United States of America” or “US”	the United States of America, its territories and possessions, any state of the United States of America and the District of Columbia and all other areas subject to its jurisdiction
“US Securities Act”	the United States Securities Acts of 1933, as amended, and the rules and regulations promulgated thereunder
“Uskmouth Power Station”	the power station owned by SUP at Uskmouth in South Wales
“Wyelands”	Wyelands Bank Plc a member of the GFG Alliance

 

The following technical terms apply throughout this announcement unless the context requires otherwise:

“EPC”	engineering, procurement and construction
“FEED”	front end engineering and design
“FiT”	feed in tariff
“GWh”	gigawatt hour
“MW”	megawatts
“MWh”	megawatt hour
“P50”	50 per cent. probability of output exceeding estimate
“RPI”	retail price index

 

APPENDIX

TERMS AND CONDITIONS OF THE PLACING

MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING AND NO PUBLIC OFFERING OF PLACING SHARES IS BEING OR WILL BE MADE. THIS ANNOUNCEMENT AND THE TERMS AND CONDITIONS SET OUT AND REFERRED TO IN IT ARE DIRECTED ONLY AT PERSONS SELECTED BY THE BOOKRUNNER WHO ARE (A) PERSONS IN MEMBER STATES OF THE EUROPEAN ECONOMIC AREA WHO ARE “QUALIFIED INVESTORS”, AS DEFINED IN ARTICLE 2.1(E) OF THE PROSPECTUS DIRECTIVE, AS AMENDED; OR (B) IF IN THE UNITED KINGDOM, PERSONS WHO (I) HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS WHO FALL WITHIN THE DEFINITION OF “INVESTMENT PROFESSIONALS” IN ARTICLE 19(5) OF THE FPO OR WHO OTHERWISE FALL WITHIN THE DEFINITION OF “HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS ETC” IN ARTICLE 49(2)(A) TO (D) OF THE FPO AND (II) ARE “QUALIFIED INVESTORS” AS DEFINED IN SECTION 86 OF FSMA OR (C) PERSONS TO WHOM IT MAY OTHERWISE LAWFULLY BE COMMUNICATED (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS “RELEVANT PERSONS”). THIS ANNOUNCEMENT AND THE TERMS AND CONDITIONS SET OUT HEREIN MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. DISTRIBUTION OF THIS ANNOUNCEMENT IN CERTAIN JURISDICTIONS MAY BE RESTRICTED OR PROHIBITED BY LAW. PERSONS DISTRIBUTING THIS ANNOUNCEMENT MUST SATISFY THEMSELVES THAT IT IS LAWFUL TO DO SO.

The Placing Shares have not been and will not be registered under the US Securities Act or under the securities laws of any state or other jurisdiction of the United States and may not be offered, sold, resold, transferred or delivered, directly or indirectly, in or into the United States absent registration except pursuant to an exemption from or in a transaction not subject to the registration requirements of the US Securities Act. No public offering of the Placing Shares is being made in the United States. The Placing Shares are being offered and sold outside the United States in “offshore transactions”, as defined in, and in compliance with, Regulation S. Persons receiving this announcement (including custodians, nominees and trustees) must not forward, distribute, mail or otherwise transmit it in or into the United States or use the United States mails, directly or indirectly, in connection with the Placing.

This announcement does not constitute or form part of an offer to sell or issue or a solicitation of an offer to buy or subscribe for or otherwise acquire any securities in any jurisdiction in which such offer or solicitation is or may be unlawful including, without limitation, the Restricted Jurisdictions. This announcement and the information contained in it is not for publication or distribution, directly or indirectly, to persons in a Restricted Jurisdiction unless permitted pursuant to an exemption under the relevant local law or regulation in any such jurisdiction.

No action has been taken by the Company, the Bookrunner, or any of their respective directors, officers, partners, agents, employees or affiliates that would permit an offer of the Placing Shares or possession or distribution of this announcement or any other publicity material relating to such Placing Shares in any jurisdiction where action for that purpose is required. Persons receiving this announcement are required to inform themselves about and to observe any restrictions contained in this announcement.

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

Any indication in this announcement of the price at which the Company’s Ordinary Shares have been bought or sold in the past cannot be relied upon as a guide to future performance. Persons needing advice should consult an independent financial adviser. No statement in this announcement is intended to be a profit forecast and no statement in this announcement should be interpreted to mean that earnings per share of the Company for the current or future financial years would necessarily match or exceed the historical published earnings per share of the Company.

By participating in the Placing, each Placee by making or accepting an oral offer to subscribe and/or purchase Placing Shares is deemed to have read and understood this announcement in its entirety (including this Appendix) and to be providing the representations, warranties, indemnities, undertakings, agreements and acknowledgements contained in this Appendix.

Upon being notified of its allocation of Placing Shares, a Placee shall be contractually committed to acquire the number of Placing Shares allocated to it at the Placing Price and, to the fullest extent permitted by law, will be deemed to have agreed not to exercise any rights to rescind or terminate or otherwise withdraw from such commitment.

EACH PLACEE SHOULD CONSULT WITH ITS OWN ADVISERS AS TO LEGAL, REGULATORY, TAX, BUSINESS AND RELATED ASPECTS OF AN ACQUISITION OF PLACING SHARES.

Details of the Placing Agreement and the Placing Shares

The Company has today entered into the Placing Agreement with the Bookrunner. Pursuant to the Placing Agreement, the Bookrunner has, subject to the terms set out in such agreement, agreed to use its reasonable endeavours, as agent of the Company, to procure Placees for the Placing Shares. The Bookrunner will today commence an accelerated bookbuilding process in respect of the Placing (the “Bookbuild”) to determine demand for participation in the Placing by Placees at the Placing Price. This Appendix gives details of the terms and conditions of, and the mechanics for participation in, the Placing. No commissions will be paid to Placees in respect of any Placing Shares.

It is expected that the Placing will raise up to £5 million in gross proceeds at the Placing Price with up to 31,250,000 Placing Shares expected to be placed. The Placing is not being underwritten by Cantor Fitzgerald Europe or any other person. The number of Placing Shares will be determined following completion of the Bookbuild as set out in this announcement.

The Placing Shares will, when issued, be subject to the Articles of Association of the Company, be credited as fully paid and rank pari passu in all respects with each other and with the existing Ordinary Shares in the capital of the Company as well as the PrimaryBid Shares and the Consideration Shares, including the right to receive all dividends and other distributions declared, made or paid in respect of such shares after the date of issue.

The Placing Shares will be issued free of any encumbrance, lien or other security interest.

Application for Admission

Application will be made to the London Stock Exchange for admission of the Placing Shares to trading on AIM becoming effective in accordance with the AIM Rules for Companies. Admission is expected to become effective on or around 4 April 2019 (or such later date as the Bookrunner may agree with the Company, not being later than 5.00 p.m. on 12 April 2019) and dealings in the Placing Shares will commence on the same day.

Participation in, and principal terms of the Placing

1. The Bookrunner is acting as agent of and exclusively for the Company in connection with the Placing on the terms and subject to the conditions of the Placing Agreement. Accordingly, Cantor Fitzgerald is acting for no one else in connection with the matters referred to in this announcement and it will not be responsible to anyone other than the Company for providing protections afforded to customers of Cantor Fitzgerald or for providing any advice in relation to the matters described in this announcement.
2. Participation in the Bookbuild will only be available to persons who may lawfully be, and are, invited by the Bookrunner to participate. The Bookrunner and any of its affiliates are entitled to enter bids in the Bookbuild as principal.
3. The price per Placing Share is a price of 16 pence and is payable to the Bookrunner (as agent for the Company) by all Placees. The Bookbuild will establish the number of Placing Shares to be issued at the Placing Price, which will be agreed between the Bookrunner and the Company following completion of the Bookbuild.
4. The timing of the closing of the Bookbuild will be determined by the Bookrunner in its absolute discretion and shall then be announced on a Regulatory Information Service as soon as is practicable following completion of the Bookbuild.
5. To bid in the Bookbuild, prospective Placees should communicate their bid by telephone to their usual sales contact at Cantor Fitzgerald Europe. Each bid should state the number of Placing Shares which the prospective Placee wishes to subscribe for. Bids may be scaled down by the Bookrunner on the basis referred to in paragraph 10
6. The Bookbuild is expected to close no later than 12 noon tomorrow but may be closed earlier or later at the discretion of the Bookrunner. The Bookrunner may, in agreement with the Company, accept bids that are received after the Bookbuild has closed. The Company reserves the right to reduce or seek to increase the amount to be raised pursuant to the Placing, in its absolute discretion.
7. Each Placee’s allocation will be determined by the Bookrunner in its absolute discretion following consultation with the Company.
8. Each Placee’s allocation will be confirmed to Placees orally, or by email, by the Bookrunner following the close of the Bookbuild and a trade confirmation or contract note will be dispatched as soon as possible thereafter. The Bookrunner’s oral or emailed confirmation will give rise to an irrevocable, legally binding commitment by that person (who at that point becomes a Placee), in favour of the Bookrunner and the Company, under which it agrees to acquire by subscription the number of Placing Shares allocated to it at the Placing Price and otherwise on the terms and subject to the conditions set out in this Appendix and in accordance with the Company’s Articles of Association.
9. The Company will make a further announcement following the close of the Bookbuild detailing the number of Placing Shares to be issued.
10. Subject to paragraphs 4 and 5 above, the Bookrunner may choose to accept bids, either in whole or in part, on the basis of allocations determined at its discretion (in agreement with the Company) and may scale down any bids for this purpose on such basis as it may determine. The Bookrunner may also, notwithstanding paragraphs 4 and 5 above, but subject to the prior consent of the Company, allocate the Placing Shares after the time of any initial allocation to any person submitting a bid after time.
11. Each Placee’s allocation and commitment to subscribe for Placing Shares will be made on the terms and subject to the conditions in this Appendix and will be legally binding on the Placee on behalf of which it is made and except with the Bookrunner’s consent will not be capable of variation or revocation after the time at which it is submitted.
12. Each Placee will have an immediate, separate, irrevocable and binding obligation, owed to the Bookrunner as agent for the Company, to pay to the Bookrunner (or as the Bookrunner may direct) in cleared funds an amount equal to the product of the Placing Price and the number of Placing Shares such Placee has agreed to subscribe and the Company has agreed to allot and issue to that Placee.
13. Except as required by law or regulation, no press release or other announcement will be made by the Bookrunner 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.
14. Irrespective of the time at which the Placee’s allocation(s) pursuant to the Placing is/are confirmed, settlement for all Placing Shares to be acquired pursuant to the Placing will be required to be made at the same time on the basis explained below under “Registration and Settlement”.
15. All obligations under the Placing will be subject to fulfilment of the conditions referred to below under “Conditions of the Placing” and to the Placing not being terminated on the basis referred to below under “Rights to terminate the Placing”.
16. By participating in the Bookbuild, 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.
17. To the fullest extent permissible by law, neither: (a) the Bookrunner (b) any of its affiliates, agents, directors, officers, consultants or employees nor (c) to the extent not contained within (a) or (b) any person connected with the Bookrunner as defined in FSMA ((b) and (c) being together “Affiliates” and individually an “Affiliate” of the Bookrunner) shall have any liability (including to the extent permissible by law, any fiduciary duties) to Placees or to any other person whether acting on behalf of a Placee or otherwise. In particular neither the Bookrunner nor any of its affiliates shall have any liability (including, to the extent permissible by law, any fiduciary duties) in respect of the Bookrunner’s conduct of the Placing or of such alternative method of effecting the Placing as the Bookrunner and the Company may agree.

Conditions of the Placing

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

The obligations of the Bookrunner under the Placing Agreement are conditional, inter alia, on:

1. the publication by the Company of, among other announcements, the results of the Placing by means of a Regulatory Information Service;
2. the performance by the Company of its obligations under the Placing Agreement, to the extent that they fall to be performed prior to Admission;
3. the Placing Agreement having become unconditional in all respects (save for the condition relating to Admission) and not having been terminated in accordance with its terms; and
4. Admission becoming effective at 8.00 a.m. on 4 April 2019 or such later time and date as the Company and the Bookrunner may agree (but in any event not later than 5.00 p.m. on 12 April 2019).

If (a) any of the conditions are not fulfilled (or to the extent permitted under the Placing Agreement waived by the Bookrunner) by the relevant time or date specified in the Placing Agreement, or (b) the Placing Agreement is terminated in the circumstances specified below, the Placing will lapse. Accordingly each Placee’s rights and obligations hereunder shall cease and determine at such time and no claim may be made by a Placee in respect thereof. Neither the Company, nor the Bookrunner nor any of its Affiliates shall have any liability to any Placees (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 in the Placing Agreement or to terminate the Placing Agreement.

The Bookrunner may waive compliance by the Company with certain of the conditions in the Placing Agreement. Any such extension or waiver under the Placing Agreement will not affect Placees’ commitments as set out in this announcement.

By participating in the Placing, each Placee agrees that its rights and obligations hereunder terminate only in the circumstances described below under “Rights to terminate the Placing” and will not be capable of rescission or termination by the Placee.

Rights to terminate the Placing

The Bookrunner may in its absolute discretion (but acting in good faith) at any time before Admission, terminate its obligations under the Placing Agreement by giving notice to the Company if inter alia the Bookrunner becomes aware that:

1. any of the warranties given by the Company in the Placing Agreement was untrue, inaccurate or misleading when given or deemed given;
2. the Company is in material breach of its obligations under applicable law or regulations;
3. there has occurred an event or omission which materially and adversely affects the financial position and/or prospects of the Group; or
4. there is an event of force majeure (as set out in the Placing Agreement) which in the judgement of the Bookrunner (acting in good faith) will be likely to prejudice the success of the Placing, dealings in Ordinary Shares in the secondary market, or which makes it, in the judgment of the Bookrunner (acting in good faith) impracticable or inadvisable to proceed with the Placing.

The rights and obligations of the Placees will not be subject to termination by Placees at any time or in any circumstance. By participating in the Placing, each Placee agrees with the Bookrunner that the exercise by the Bookrunner of any right of termination or other discretion under the Placing Agreement shall be within the absolute discretion of the Bookrunner (acting in good faith) and that the Bookrunner will not need to make any reference to the Placees in this regard and that to the fullest extent permitted by law the Bookrunner shall not have any liability whatsoever to the Placees in connection with any such exercise.

This announcement

The Placing Shares are being offered to a limited number of specifically invited persons only and have not been nor will be offered in such a way as to require the publication of a prospectus in the United Kingdom or in any other jurisdiction. No prospectus has been or will be submitted to be approved by the FCA 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 any information publicly announced through a Regulatory Information Service by or on behalf of the Company on or prior to the date of this announcement. Each Placee, by accepting a participation in the Placing, agrees that the contents of this announcement are exclusively the responsibility of the Company and confirms that it has neither received nor relied on any other information, representation, warranty, or statement made by or on behalf of the Company or the Bookrunner or any other person and neither the Bookrunner 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 and, if given or made, such information, representation, warranty or statement must not be relied upon as having been authorised by the Bookrunner, the Company, or their respective officers, directors, employees or agents. 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. Neither the Company nor the Bookrunner are making any undertaking or warranty to any Placee regarding the legality of an investment in the Placing Shares by such Placee under any legal, investment or similar laws or regulations. Each Placee should not consider any information in this announcement to be legal, tax or business advice. Each Placee should consult its own solicitor, tax adviser and financial adviser for independent legal, tax and financial advice regarding an investment in the Placing Shares. 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 SG9999011118) following Admission will take place within the CREST system, subject to certain exceptions. It is expected that settlement will be on 4 April 2019. The Bookrunner reserves the right to require settlement for and delivery of the Placing Shares to Placees by such other means that it deems necessary, if delivery or settlement is not possible or practicable within the CREST system within the timetable set out in this announcement or would not be consistent with the regulatory requirements in the Placee’s jurisdiction.

Each Placee will be deemed to agree that it will do all things necessary to ensure that delivery and payment is completed as directed by the Bookrunner in accordance with the standing CREST settlement instructions which they have in place with the Bookrunner.

Each Placee allocated Placing Shares in the Placing will be sent a trade confirmation or contract note in accordance with the standing arrangements with the Bookrunner stating the number of Placing Shares allocated to it, the Placing Price, the aggregate amount owed by such Placee to the Bookrunner (in GBP) and settlement instructions.

A Placee’s entitlement to receive any Placing Shares under the Placing will be conditional on the Bookrunner’s receipt of payment in full for such Placing Shares by the relevant time to be stated in the written confirmation referred to above, or by such later time and date as the Bookrunner and the Company may in their absolute discretion determine, or otherwise in accordance with that confirmation’s terms.

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 the base rate of Barclays Bank Plc.

Each Placee is deemed to agree that if it does not comply with these obligations in relation to the Placing Shares: (i) the Company may release itself (if it decides in its absolute discretion to do so) and will be released from all obligations it may have to issue any such Placing Shares to such Placee or at its direction which are then unissued; (ii) the Company may exercise all rights of lien, forfeiture and set-off over and in respect of any Placing Shares to the fullest extent permitted under the Articles of Association of the Company or otherwise by law and to the extent that such Placee then has any interest in or rights in respect of any Placing Shares; (iii) the Company or the Bookrunner may sell (and both of them is irrevocably authorised by such Placee to do so) all or any Placing Shares on such Placee’s behalf and then retain from the proceeds, for the account and benefit of the Company or, where applicable, the Bookrunner (a) any amount up to the total amount due to it as, or in respect of, subscription monies, or as interest on such monies, for any Placing Shares, (b) any amount required to cover any stamp duty or stamp duty reserve tax (together with any interest or penalties) arising on the sale of such Placing Shares on such Placee’s behalf, and (c) any amount required to cover dealing costs and/or commissions necessarily or reasonably incurred by it in respect of such sale; and (iv) such Placee shall remain liable to the Company (and to the Bookrunner as applicable) for the full amount of any losses and of any costs which it may suffer or incur as a result of it (a) not receiving payment in full for such Placing Shares by the required time, and/or (b) the sale of any such Placing Shares to any other person at whatever price and on whatever terms actually obtained for such sale by or for it.

If Placing Shares are to be delivered to a custodian or settlement agent, the Placee should ensure that the trade confirmation or contract note is copied and delivered immediately to the relevant person within that organisation.

Insofar as Placing Shares are registered in the Placee’s name or that of its nominee or in the name of any person for whom the Placee is contracting as agent or that of a nominee for such person, such Placing Shares will, subject as provided below, be so registered free from any liability to stamp duty or stamp duty reserve tax. If there are any circumstances in which any other stamp duty or stamp duty reserve tax is payable in respect of the issue or sale of the Placing Shares, neither the Bookrunner nor the Company shall be responsible for the payment thereof. Placees will not be entitled to receive any fee or commission in connection with the Placing.

Representations, Warranties and Indemnities

By 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 Bookrunner (for themselves and on behalf of the Company):

1. that it has read and understood this announcement, including the Appendix, in its entirety and that its subscription for Placing Shares is subject to and based upon all the terms, conditions, representations, warranties, indemnities, acknowledgements, agreements and undertakings and other information contained herein and undertakes not to redistribute or duplicate this announcement;
2. that its obligations are irrevocable and legally binding and shall not be capable of rescission or termination by it in any circumstances;
3. that the exercise by Cantor Fitzgerald Europe of any right or discretion under the Placing Agreement shall be within the absolute discretion of Cantor Fitzgerald Europe and Cantor Fitzgerald Europe need not have any reference to it and shall have no liability to it whatsoever in connection with any decision to exercise or not to exercise any such right and each Placee agrees that it has no rights against Cantor Fitzgerald Europe or the Company, or any of their respective officers, directors or employees, under the Placing Agreement pursuant to the Contracts (Rights of Third Parties Act) 1999;
4. that these terms and conditions represent the whole and only agreement between it, the Bookrunner and the Company in relation to its participation in the Placing and supersedes any previous agreement between any of such parties in relation to such participation. Accordingly, each Placee, in accepting its participation in the Placing, is not relying on any information or representation or warranty in relation to the Company or any of its subsidiaries or any of the Placing Shares other than as contained in this announcement. Each Placee agrees that neither the Company nor the Bookrunner nor any of their respective officers, directors or employees will have any liability for any such other information, representation or warranty, express or implied;
5. that in the case of any Placing Shares acquired by it as a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive, (i) the Placing Shares acquired by it in the Placing have not been acquired on behalf of, nor have they been acquired with a view to their offer or resale to, persons in any Member State of the European Economic Area which has implemented the Prospectus Directive other than Qualified Investors or in circumstances in which the prior consent of the Bookrunner has been given to the offer or resale; or (ii) where Placing Shares have been acquired by it on behalf of persons in any member state of the EEA other than Qualified Investors, the offer of those Placing Shares to it is not treated under the Prospectus Directive as having been made to such persons;
6. that neither it nor, as the case may be, its clients expect the Bookrunner to have any duties or responsibilities to such persons similar or comparable to the duties of “best execution” and “suitability” imposed by the FCA’s Conduct of Business Sourcebook, and that the Bookrunner is not acting for it or its clients, and that the Bookrunner will not be responsible for providing the protections afforded to customers of the Bookrunner or for providing advice in respect of the transactions described herein;
7. that it is: (i) unless otherwise agreed in writing with the Bookrunner, located outside the United States and is not a US person as defined in Regulation S and is subscribing for the Placing Shares only in “offshore transactions” as defined in and pursuant to Regulation S, and (ii) it is not subscribing for Placing Shares as a result of any “directed selling efforts” as defined in Regulation S or by means of any form of “general solicitation” or “general advertising” as such terms are defined in Regulation D under the US Securities Act;
8. that the Placing Shares have not been and will not be registered under the US Securities Act, or under the securities legislation of, or with any securities regulatory authority of, any state or other jurisdiction of the United States and that, subject to certain exceptions, the Placing Shares may not be offered, sold, pledged, resold, transferred, delivered or distributed into or within the United States;
9. that, unless specifically agreed with the Bookrunner, it is not and was not acting on a non-discretionary basis for the account or benefit of a person located within the United States at the time the undertaking to subscribe for Placing Shares was given and it is not acquiring Placing Shares with a view to the offer, sale, resale, transfer, delivery or distribution, directly or indirectly, of any Placing Shares into the United States and it will not reoffer, resell, pledge or otherwise transfer the Placing Shares except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act and otherwise in accordance with any applicable securities laws of any state or jurisdiction of the United States;
10. that it is not a national or resident of Canada, Australia, the Republic of South Africa or Japan or a corporation, partnership or other entity organised under the laws of Canada, Australia, the Republic of South Africa or Japan and that it will not offer, sell, renounce, transfer or deliver, directly or indirectly, any of the Placing Shares in Canada, Australia, the Republic of South Africa or Japan or to or for the benefit of any person resident in Canada, Australia, the Republic of South Africa or Japan and each Placee acknowledges that the relevant exemptions are not being obtained from the Securities Commission of any province of Canada, that no document has been or will be lodged with, filed with or registered by the Australian Securities and Investments Commission or Japanese Ministry of Finance and that the Placing Shares are not being offered for sale and may not be, directly or indirectly, offered, sold, transferred or delivered in or into Canada, Australia, the Republic South Africa or Japan;
11. that it does not have a registered address in, and is not a citizen, resident or national of, any jurisdiction in which it is unlawful to make or accept an offer of the Placing Shares and it is not acting on a non-discretionary basis for any such person;
12. that it has not, directly or indirectly, distributed, forwarded, transferred or otherwise transmitted, and will not, directly or indirectly, distribute, forward, transfer or otherwise transmit, any presentation or offering materials concerning the Placing or the Placing Shares to any persons within the United States or to any US persons (as that term is defined in Regulation S);
13. that it is entitled to subscribe for Placing Shares under the laws of all relevant jurisdictions which apply to it and that it has fully observed such laws and obtained all governmental and other consents which may be required thereunder or otherwise and complied with all necessary formalities and that it has not taken any action which will or may result in the Company or the Bookrunner or any of their respective directors, officers, employees or agents acting in breach of any regulatory or legal requirements of any territory in connection with the Placing or its acceptance;
14. that it has obtained all necessary consents and authorities to enable it to give its commitment to subscribe for the Placing Shares and to perform its subscription obligations;
15. that where it is acquiring Placing Shares for one or more managed accounts, it is authorised in writing by each managed account: (a) to acquire the Placing Shares for each managed account; (b) to make on its behalf the representations, warranties, acknowledgements, undertakings and agreements in this Appendix and the announcement of which it forms part; and (c) to receive on its behalf any investment letter relating to the Placing in the form provided to it by the Bookrunner;
16. that it is a Relevant Person (as defined above) 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;
17. that it is either: (a) a person of a kind described in paragraph 5 of Article 19 (persons having professional experience in matters relating to investments and who are investment professionals) of the FPO; or (b) a person of a kind described in paragraph 2 of Article 49 (high net worth companies, unincorporated associations, partnerships or trusts or their respective directors, officers or employees) of the FPO; or (c) a person to whom it is otherwise lawful for this announcement to be communicated and in the case of (a) and (b) undertakes that it will acquire, hold, manage or dispose of any Placing Shares that are allocated to it for the purposes of its business;
18. that, unless otherwise agreed by the Bookrunner, it is a qualified investor (as defined in section 86(7) of the FSMA;
19. that, unless otherwise agreed by the Bookrunner, it is a “professional client” or an “eligible counterparty” within the meaning of Chapter 3 of the FCA’s Conduct of Business Sourcebook and it is purchasing Placing Shares for investment only and not with a view to resale or distribution;
20. 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 FSMA) relating to the Placing Shares in circumstances in which section 21(1) of FSMA does not require approval of the communication by an authorised person;
21. that any money held in an account with the Bookrunner on its behalf and/or any person acting on its behalf will not be treated as client money within the meaning of the rules and regulations of the FCA. Each Placee further acknowledges that the money will not be subject to the protections conferred by the FCA’s client money rules. As a consequence, this money will not be segregated from the Bookrunner’s money in accordance with such client money rules and will be used by the Bookrunner in the course of its own business and each Placee will rank only as a general creditor of the Bookrunner;
22. that it will (or will procure that its nominee will) if applicable, make notification to the Company of the interest in its ordinary shares in accordance with the Articles of Association of the Company;
23. that it is not, and it is not acting on behalf of, a person falling within subsections (6), (7) or (8) of sections 67 or 70 respectively or subsections (2) and (3) of section 93 or subsection (1) of section 96 of the Finance Act 1986;
24. that it is not relying on any representations or warranties or agreements by the Company, the Bookrunner or by any of their respective directors, employees or agents or any other person except as set out in the express terms of this Appendix;
25. it acknowledges that the contents of this announcement, including the Appendix, is exclusively the responsibility of the Company, and that neither Cantor Fitzgerald not any of its affiliates or any person acting on behalf of any of them has or shall have any liability for any information, representation or statement contained in this announcement or any information previously or concurrently published by or on behalf of the Company, 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 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 and any information publicly announced through a Regulatory Information Service by or on behalf of the Company on or prior to the date of this announcement, 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 either Cantor Fitzgerald or the Company, or, if received, it has not relied upon any such information, representations, warranties or statements (including any management presentation that may have been received by any prospective Placee) and neither Cantor Fitzgerald 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 has relied solely on its own investigation of the business, financial or other position of the Company in deciding to participate in the Placing and it will not rely on any investigation that Cantor Fitzgerald, its affiliates or any person acting on behalf of any of them has or may have conducted;
26. that it will not deal or cause or permit any other person to deal in all or any of the Placing Shares which it is subscribing for under the Placing unless and until Admission becomes effective;
27. that it appoints irrevocably any director of the Bookrunner as its agent for the purpose of executing and delivering to the Company and/or its registrars any document on its behalf necessary to enable it to be registered as the holder of the Placing Shares;
28. that, as far as it is aware it is not acting in concert (within the meaning given in the Singapore Code on Takeovers and Mergers issued by the Monetary Authority of Singapore) with any other person in relation to the Company;
29. that this announcement does not constitute a securities recommendation or financial product advice and that neither the Bookrunner nor the Company has considered its particular objectives, financial situation and needs;
30. that it 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;
31. that it will indemnify and hold the Company and the Bookrunner 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 further agrees that the Company and the Bookrunner will rely on the truth and accuracy of the confirmations, warranties, acknowledgements and undertakings herein and, if any of the foregoing is or becomes no longer true or accurate, the Placee shall promptly notify the Bookrunner, and the Company. All confirmations, warranties, acknowledgements and undertakings given by the Placee, pursuant to this announcement (including this Appendix) are given to the Bookrunner for itself and on behalf of the Company and will survive completion of the Placing and Admission;
32. that time shall be of the essence as regards obligations pursuant to this Appendix;
33. that it is responsible for obtaining any legal, tax and other advice that it deems necessary for the execution, delivery and performance of its obligations in accepting the terms and conditions of the Placing, and that it is not relying on the Company or the Bookrunner to provide any legal, tax or other advice to it;
34. that all dates and times in this announcement (including this Appendix) may be subject to amendment and that Cantor Fitzgerald Europe shall notify it of such amendments;
35. that (i) it has complied with its obligations under the Criminal Justice Act 1993, Part VIII of FSMA and MAR, (ii) in connection with money laundering and terrorist financing, it has complied with its obligations under the Proceeds of Crime Act 2002 (as amended), the Terrorism Act 2000 (as amended), the Terrorism Act 2006 and the Money Laundering Regulations 2007 and (iii) it is not a person: (a) with whom transactions are prohibited under the Foreign Corrupt Practices Act of 1977 or any economic sanction programmes administered by, or regulations promulgated by, the Office of Foreign Assets Control of the U.S. Department of the Treasury; (b) named on the Consolidated List of Financial Sanctions Targets maintained by HM Treasury of the United Kingdom; or (c) subject to financial sanctions imposed pursuant to a regulation of the European Union or a regulation adopted by the United Nations (together, the “Regulations”); and, if making payment on behalf of a third party, that satisfactory evidence has been obtained and recorded by it to verify the identity of the third party as required by the Regulations and 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 Bookrunner such evidence, if any, as to the identity or location or legal status of any person which the Bookrunner 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) in the form and manner requested by the Bookrunner 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 Bookrunner may decide in its absolute discretion;
36. that if it has received any inside information (as defined in MAR) about the Company in advance of the Placing, it acknowledges that is has received such information within the market soundings regime provided for under Article II of MAR and associated delegated legislation and it has not disclosed or dealt on the basis of that information prior to it being made publicly available;
37. that it will not make any offer to the public of those Placing Shares to be subscribed by it for the purposes of the Prospectus Rules made by the FCA pursuant to Commission Regulation (EC) No. 809/2004;
38. that it will not distribute any document relating to the Placing Shares and it will be acquiring the Placing Shares for its own account as principal or for a discretionary account or accounts (as to which it has the authority to make the statements set out herein) for investment purposes only and it does not have any contract, understanding or arrangement with any person to sell, pledge, transfer or grant a participation therein to such person or any third person with respect of any Placing Shares; save that if it is a private client stockbroker or fund manager it confirms that in purchasing the Placing Shares it is acting under the terms of one or more discretionary mandates granted to it by private clients and it is not acting on an execution only basis or under specific instructions to purchase the Placing Shares for the account of any third party;
39. that it acknowledges that these terms and conditions and any agreements entered into by it pursuant to these terms and conditions shall be governed by and construed in accordance with the laws of England and Wales 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 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 the Bookrunner 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;
40. that any documents sent to Placees will be sent at the Placees’ risk. They may be sent by post to such Placees at an address notified to Cantor Fitzgerald Europe;
41. that the Bookrunner owes no fiduciary or other duties to any Placee in respect of any representations, warranties, undertakings or indemnities in the Placing Agreement; and
42. that the Bookrunner or any of its respective affiliates may, at their absolute discretion, agree to become a Placee in respect of some or all of the Placing Shares.

The Company, the Bookrunner and their respective affiliates will rely upon the truth and accuracy of each of the foregoing representations, warranties, acknowledgements and undertakings which are given to the Bookrunner for itself and on behalf of the Company and are irrevocable.

The provisions of this Appendix may be waived, varied or modified as regards specific Placees or on a general basis by the Bookrunner.

Each Placee, and any person acting on behalf of the Placee, acknowledges that Cantor Fitzgerald does not owe any fiduciary or other duties to any Placee in respect of any representations, warranties, undertakings or indemnities in the Placing Agreement.

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 Bookrunner 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, allotment, 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 Bookrunner in the event that any of the Company and/or the Bookrunner 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 Bookrunner 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 United Kingdom 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.

All times and dates in this announcement (including this Appendix) may be subject to amendment. The Bookrunner shall notify the Placees and any person acting on behalf of the Placees of any changes.