Chamberlin PLC Placing, Subscription and Trading Update (5641T)

TIDMCMH

RNS Number : 5641T

Chamberlin PLC

26 March 2021

THIS ANNOUNCEMENT (THE "ANNOUNCEMENT"), AND THE INFORMATION CONTAINED IN IT, IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION, DISTRIBUTION OR FORWARDING, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, NEW ZEALAND, THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER STATE OR JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION. PLEASE SEE THE IMPORTANT NOTICES AT THE OF THIS ANNOUNCEMENT.

THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT CONSTITUTE OR CONTAIN ANY INVITATION, SOLICITATION, RECOMMATION, OFFER OR ADVICE TO ANY PERSON TO SUBSCRIBE FOR, OTHERWISE ACQUIRE OR DISPOSE OF ANY SECURITIES IN CHAMBERLIN PLC OR ANY OTHER ENTITY IN ANY JURISDICTION. NEITHER THIS ANNOUNCEMENT NOR THE FACT OF ITS DISTRIBUTION SHALL FORM THE BASIS OF, OR BE RELIED ON IN CONNECTION WITH, ANY INVESTMENT DECISION IN RESPECT OF CHAMBERLIN PLC.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS STIPULATED UNDER THE MARKET ABUSE REGULATION (EU NO. 596/2014) AS IT FORMS PART OF UK DOMESTIC LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018 ("MAR").

26 March 2021

Chamberlin plc

("Chamberlin", the "Company" or the "Group")

Placing, Subscription and Trading Update

Chamberlin plc (AIM: CMH.L), the specialist castings and engineering group, is pleased to announce that it has conditionally raised approximately GBP3.5 million (before expenses), pursuant to a placing of 40,833,333 new Ordinary Shares of 0.1p each (the "Placing Shares") at a placing price of 6 pence per share (the "Placing Price") with institutional and other investors (the "Placing") and a subscription for 17,500,000 new Ordinary Shares at the Placing Price by Trevor Brown, Non-executive Director (the "Subscription"), (together with the Placing Shares, the "New Ordinary Shares").

Cenkos Securities plc ("Cenkos Securities") and Peterhouse Capital Limited ("Peterhouse") acted as joint bookrunners to the Placing ("Joint Bookrunners"). Peterhouse has been appointed as joint broker to the Company with immediate effect.

The Placing Price of 6 pence per New Ordinary Share represents a discount of 14.3 per cent. to the closing middle market price of 7 pence per Ordinary Share on 31 December 2020 (immediately prior to suspension of the Ordinary Shares from trading on AIM which took effect at 7.30 a.m. on 4 January 2021) and the same price at which the convertible loan note issued to Trevor Brown in February 2021 was converted.

Background to and reasons for the Placing and Subscription

For the reasons described in the announcement and circular to shareholders dated 19 February 2021, the Board has been rigorously investigating the possibility of new equity capital and alternative measures to ensure the Company's future.

After evaluating a number of alternative options with its advisers, the Company issued a GBP200,000 unsecured convertible loan note to Trevor Brown in February 2021 to provide immediate short term working capital, which was converted into 3,333,333 Ordinary Shares following Shareholder approval at the General Meeting held on 8 March 2021. On that same date, Trevor Brown was appointed to the Board of Chamberlin as a Non-executive Director.

The Board has continued to explore further funding possibilities since and the Company has now conditionally raised gross proceeds of approximately GBP3.5 million by way of the Placing and the Subscription. The primary purpose of the Placing and Subscription is to fund working capital and to meet Group restructuring costs.

As a result of the Placing and Subscription, the Board believe that they will be able to demonstrate to the Company's auditor (and creditors, including HSBC) that the Company is able to continue to trade on a going concern basis in order to be able to publish and file its annual audited accounts for the year end 31 March 2020 ("FY 2020 Accounts"), publish its interim results for the six months ended 30 September 2020 and apply for the suspension of trading of the Company's Ordinary Shares on AIM to be lifted by the London Stock Exchange. Further announcements in this regard will be made, as appropriate, however, there can be no guarantee any of these events will occur, given the Company is subject to such third parties' completing their own procedures and protocols.

Details of the Placing and Subscription

The Company has conditionally raised approximately GBP2.45 million (before expenses), pursuant to a placing of 40,833,333 Placing Shares at 6 pence per share with institutional and other investors.

The Placing has not been underwritten and is conditional, inter alia, upon:

a) the placing agreement between the Company and the Joint Bookrunners (the "Placing Agreement") becoming unconditional in all respects other than admission of the Placing Shares to trading on AIM becoming effective in accordance with the AIM Rules for Companies ("Admission") and not having been terminated in accordance with its terms; and

b) Admission of the Placing Shares occurring by not later than 8.00 a.m. on 29 March 2021 (or such later time and/or date as the Company and the Joint Bookrunners may agree, not being later than 8.00 a.m. on 16 April 2021).

Under the terms of the Placing Agreement, each of the Joint Bookrunners has agreed to use its reasonable endeavours to procure subscribers for the Placing Shares at the Placing Price. The Placing Agreement contains certain warranties and indemnities from the Company in favour of the Joint Bookrunners and either Joint Bookrunner may terminate the Placing Agreement in certain customary circumstances.

In addition to the Placing, the Company has conditionally raised approximately GBP1.05 million through a subscription for 17,500,000 New Ordinary Shares at the Placing Price by Trevor Brown, Non-executive Director.

Together, the total number of New Ordinary Shares to be issued pursuant to the Placing and Subscription, being 58,333,333 New Ordinary Shares, represent approximately 417 per cent. of the Company's existing issued share capital.

The New Ordinary Shares will, when issued, be credited as fully paid up and will be issued subject to the articles of association of the Company and rank pari passu in all respects with the Company's existing Ordinary Shares, including the right to receive all dividends and other distributions declared, made or paid on or in respect of the Ordinary Shares after the date of issue of the New Ordinary Shares, and will on issue be free of all claims, liens, charges, encumbrances and equities.

Application has been made to the London Stock Exchange for the Admission of the New Ordinary Shares to trading on AIM. It is expected that Admission will occur on or around 8.00 a.m. on 29 March 2021 (or such later time and/or date as the Joint Bookrunners may agree with the Company, being not later than 8.00 a.m. on 16 April 2021).

For the avoidance of doubt, the current suspension of trading of the existing Ordinary Shares on AIM will not be lifted by the London Stock Exchange as a result of Admission.

Following Admission, the total number of Ordinary Shares in the capital of the Company in issue will be 69,624,792 with each Ordinary Share carrying the right to one vote. There are no Ordinary Shares held in treasury and therefore the total number of voting rights in the Company is 69,624,792. The above figure may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the share capital of the Company under the Financial Conduct Authority's Disclosure Guidance and Transparency Rules.

Related Party Transaction

As at the date of this announcement, Trevor Brown holds 3,333,333 Ordinary Shares representing 29.5 per cent. of the Company's issued share capital and, following Admission, will hold 20,833,333 Ordinary Shares representing 29.9 per cent. of the enlarged issued share capital.

The Subscription by Trevor Brown, as a substantial shareholder (as defined in the AIM Rules for Companies) constitutes a related party transaction pursuant to AIM Rule 13. The Directors (other than Trevor Brown), having consulted with the Company's nominated adviser, Cenkos Securities, believe that the Subscription by Trevor Brown is fair and reasonable insofar as shareholders are concerned.

Historical Financial Information

Following discussions with the Company's auditors, the Board expect that upon completion of the Placing and Subscription, the auditors ought to be in a position to sign off the audit in order for the Company to publish the FY 2020 Accounts within the next few weeks. Once the FY 2020 Accounts have been audited and published the Board also anticipates that the interim accounts for the six months to 30 September 2020 will be published as soon as possible thereafter.

The FY 2020 Accounts and the interim results for the six months to 30 September 2020 are expected to include the following extracted financial information:

 
                                   12 months      12 months       6 months 
                                          to             to             to 
                                 31 Mar 2019    31 Mar 2020    30 Sep 2020 
                                     GBP'000        GBP'000        GBP'000 
                                   (Audited)    (Unaudited)    (Unaudited) 
 Revenue                              32,958         26,143         11,044 
 Underlying EBITDA                       459          (198)            232 
 Underlying operating profit         (1,010)        (1,094)          (212) 
 Finance costs                           499            310             99 
 Underlying profit before 
  tax                                (1,509)        (1,404)          (311) 
 Non-recurring costs                   3,448            909            106 

 Profit before tax                   (4,957)        (2,313)          (417) 
 
 
                                   As at          As at          As at 
                             31 Mar 2019    31 Mar 2020    30 Sep 2020 
                                 GBP'000        GBP'000        GBP'000 
                               (Audited)    (Unaudited)    (Unaudited) 
 Non current assets                8,965          8,161          7,769 
 Current assets                    9,045          9,128          7,516 
                           -------------  -------------  ------------- 
 Total assets                     18,010         17,289         15,285 
 Current liabilities               7,283         10,509          9,201 
 Non current liabilities           3,219          2,276          2,198 
 Pension scheme deficit            2,640          1,959          2,442 
                           -------------  -------------  ------------- 
 Total liabilities                13,142         14,744         13,841 
                           -------------  -------------  ------------- 
 Net assets                        4,868          2,545          1,444 
                           -------------  -------------  ------------- 
 

Trading Update and Outlook

Sales for the 11 months to 28 February 2021 were GBP20.6 million (unaudited) (2020: GBP23.9 million) and the Group was loss making over the period. Sales in the five months to 28 February 2021 were GBP9.5 million (2020: GBP11.1 million).

Sales at both Russell Ductile Castings ("RDC") and Petrel in the 11 months to 28 February 2021 were up approximately 2 per cent. on the prior year. Sales at RDC and Petrel combined for the five months to 28 February 2021 were GBP3.8 million (2020: GBP3.3 million), up 14 per cent. The outlook for both RDC and Petrel is encouraging and recent sales growth is expected to continue.

As previously announced, Chamberlin and Hill (including its associated machine shop) have experienced material adverse trading, particularly in the second half, and sales in the five months to 28 February 2021 were GBP5.7 million (2020: GBP7.8 million). This decrease reflects the progressive reduction in purchases from the historical principal customer BorgWarner. The prospects for utilisation of the Chamberlin and Hill machine shop remain unclear and the Board is continuing to review options in light of the continued reduction in purchases and the prevailing market conditions.

Meanwhile the prospects for growth at the Chamberlin and Hill Foundry are encouraging. The casting of automotive turbocharger housings remains a dominant market for Chamberlin and demand across the sector remains stable. The capacity demands of BorgWarner previously left Chamberlin unable to supply prospective new, non-automotive customers, however, the Company is now able to exploit these new higher margin market opportunities.

The Company is continuing with the cost reduction programme referred to in the announcement of 21 January 2021 and further measures are planned. Overall, the headcount at 28 February 2021 was 239 and the restructuring programme plans to reduce the headcount to 138. The Board estimates that the annualised reduction in employment cost arising from the restructuring should not be less than GBP3.4 million.

Proforma unaudited net debt, defined as net debt plus deferred VAT/PAYE, and excluding the net proceeds of the Placing and Subscription, was GBP4.8 million at 31 March 2020, GBP4.9 million at 30 September 2020 and GBP5.5 million at 28 February 2021.

Keith Butler-Wheelhouse, Chairman of Chamberlin, said:

"We are delighted with the support shown by our existing and new shareholders through this fundraise which places Chamberlin on a sounder financial footing. Management are confident that sales at Chamberlin will stabilise in the first half of the new financial year and will then grow from the post BorgWarner low, with the growth gathering pace in the second half. The Board expects growth from all business units and a return to profitability and cash generation post our restructuring."

This Announcement is released by Chamberlin plc and contains inside information for the purposes of Article 7 of MAR, and is disclosed in accordance with the Company's obligations under Article 17 of MAR.

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 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.

For the purposes of MAR, Article 2 of Commission Implementing Regulation (EU) 2016/1055 and the UK version of such implementing regulation, the person responsible for arranging for the release of this Announcement on behalf of the Company is Neil Davies, Finance Director.

Enquiries:

 
Chamberlin plc                               T: 01922 707100 
 Kevin Nolan, Chief Executive 
 Neil Davies, Finance Director 
 
Cenkos Securities plc (Nominated Adviser     T: 020 7397 8900 
 and Joint Broker) 
 Russell Cook 
 Katy Birkin 
Peterhouse Capital Limited (Joint Broker)    T: 020 7469 0930 
 Heena Karani 
 Duncan Vasey 
 

NOTIFICATION AND PUBLIC DISCLOSURE OF TRANSACTIONS BY PERSONS DISCHARGING MANAGERIAL RESPONSIBILITIES AND PERSONS CLOSELY ASSOCIATED WITH THEM

 
 1     Details of the person discharging managerial responsibilities 
        / person closely associated 
 a)    Name                                      Trevor Brown 
      ----------------------------------------  -------------------------------- 
 2     Reason for the notification 
      -------------------------------------------------------------------------- 
 a)    Position/status                           Non-executive Director 
      ----------------------------------------  -------------------------------- 
 b)    Initial notification/Amendment            Initial Notification 
      ----------------------------------------  -------------------------------- 
 3     Details of the issuer, emission allowance market participant, 
        auction platform, auctioneer or auction monitor 
      -------------------------------------------------------------------------- 
 a)    Name                                      Chamberlin plc 
      ----------------------------------------  -------------------------------- 
 b)    LEI                                       213800OS2SK73PPFO761 
      ----------------------------------------  -------------------------------- 
 4     Details of the transaction(s): section to be repeated for 
        (i) each type of instrument; (ii) each type of transaction; 
        (iii) each date; and (iv) each place where transactions 
        have been conducted 
      -------------------------------------------------------------------------- 
 a)    Description of the financial              Ordinary shares of 0.1p each 
        instrument, type of instrument 
      ----------------------------------------  -------------------------------- 
       Identification code                       GB0001870228 
      ----------------------------------------  -------------------------------- 
 b)    Nature of the transaction                 Purchase of Ordinary Shares 
                                                  pursuant to Subscription 
      ----------------------------------------  -------------------------------- 
 c)    Price(s) and volumes(s)                   Price(s)        Volume(s) 
      ----------------------------------------  --------------  ---------------- 
   GBP0.06                                                       17,500,000 
  ------------------------------------------------------------  ---------------- 
 d)    Aggregated information                    N/A (single transaction) 
      ----------------------------------------  -------------------------------- 
  Aggregated volume                         N/A (single transaction) 
 ----------------------------------------  ------------------------------------- 
  Price                                     N/A (single transaction) 
 ----------------------------------------  ------------------------------------- 
 e)    Date of the transaction                   26 March 2021 
      ----------------------------------------  -------------------------------- 
 f)    Place of the transaction                  Outside of a trading venue 
      ----------------------------------------  -------------------------------- 
 

IMPORTANT NOTICES

Neither this Announcement, nor any copy of it, may be taken or transmitted, published or distributed, directly or indirectly, in whole or in part, in or into the United States, Australia, Canada, Japan, New Zealand or the Republic of South Africa or to any persons in any of those jurisdictions or any other jurisdiction where to do so would constitute a violation of the relevant securities laws of such jurisdiction (each, a "Restricted Jurisdiction"). This Announcement is for information purposes only and neither it, nor the information contained in it, shall constitute an offer to sell or issue, or the solicitation of an offer to buy, acquire or subscribe for any shares in the capital of the Company in the United States, Australia, Canada, Japan, New Zealand or the Republic of South Africa or any other state or jurisdiction in which such offer or solicitation is not authorised or to any person to whom it is unlawful to make such offer or solicitation. Any failure to comply with these restrictions may constitute a violation of securities laws of such jurisdictions.

The Placing Shares have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"), or with any securities regulatory authority or under any securities laws of any state or other jurisdiction of the United States and may not be offered, sold, resold, pledged, transferred or delivered, directly or indirectly, in or into the United States except pursuant to an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in compliance with the securities laws of any state or other jurisdiction of the United States.

No action has been taken by the Company, the Joint Bookrunners or any of their respective directors, officers, partners, agents, employees, affiliates, advisors, consultants or, in the case of each of the Joint Bookrunners , persons connected with them as defined in the Financial Services and Markets Act 2000, as amended ("FSMA") (together, "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.

This Announcement has not been approved by the Financial Conduct Authority or the London Stock Exchange.

No offering document or prospectus will be made available in connection with the matters contained or referred to in this Announcement and no such offering document or prospectus is required to be published, in accordance with Regulation (EU) 2017/1129 (the "Prospectus Regulation") or Regulation (EU) 2017/1129, as amended and retained in UK law on 31 December 2020 by the European Union (Withdrawal) Act 2018 (the "EUWA") (the "UK Prospectus Regulation").

This Announcement is not being distributed by, nor has it been approved for the purposes of section 21 of FSMA by, a person authorised under FSMA. This Announcement is being distributed and communicated to persons in the United Kingdom only in circumstances in which section 21(1) of FSMA does not require approval of the communication by an authorised person.

This Announcement has been issued by, and is the sole responsibility of, the Company. No responsibility or liability is or will be accepted by, and no undertaking, representation or warranty or other assurance, express or implied, is or will be made or given by the Joint Bookrunners, or by any of their respective Affiliates as to, or in relation to, the accuracy, fairness or completeness of the information or opinions contained in this Announcement or any other written or oral information made available to or publicly available to any interested person or its advisers, and any liability therefore is expressly disclaimed. The information in this Announcement is subject to change.

None of the information in this Announcement has been independently verified or approved by the Joint Bookrunners or any of their respective Affiliates. Save for any responsibilities or liabilities, if any, imposed on the Joint Bookrunners by FSMA or by the regulatory regime established under it, no responsibility or liability whatsoever whether arising in tort, contract or otherwise, is accepted by the Joint Bookrunners or any of their Affiliates whatsoever for the contents of the information contained in this Announcement (including, but not limited to, any errors, omissions or inaccuracies in the information or any opinions) or for any other statement made or purported to be made by or on behalf of either of the Joint Bookrunners or any of their respective Affiliates in connection with the Company, the Placing Shares or the Placing or for any loss, cost or damage suffered or incurred howsoever arising, directly or indirectly, from any use of this Announcement or its contents or otherwise in connection with this Announcement or from any acts or omissions of the Company in relation to the Placing. The Joint Bookrunners and their respective Affiliates accordingly disclaim all and any responsibility and liability whatsoever, whether arising in tort, contract or otherwise (save as referred to above) in respect of any statements or other information contained in this Announcement and no representation or warranty, express or implied, is made by either of the Joint Bookrunners or any of their respective Affiliates as to the accuracy, completeness or sufficiency of the information contained in this Announcement.

Cenkos Securities plc, which is authorised and regulated in the United Kingdom by the FCA, is acting solely for the Company and no-one else in connection with the Placing and arrangements described in this Announcement and will not regard any other person (whether or not a recipient of this Announcement) as a client in relation to the Placing or the transactions and arrangements described in this Announcement. Cenkos Securities is not responsible to anyone other than the Company for providing the protections afforded to clients of Cenkos Securities or for providing advice in connection with the contents of this Announcement, the Placing or the transactions and arrangements described herein.

Peterhouse Capital Limited, which is authorised and regulated in the United Kingdom by the FCA, is acting solely for the Company and no-one else in connection with the Placing and arrangements described in this Announcement and will not regard any other person (whether or not a recipient of this Announcement) as a client in relation to the Placing or the transactions and arrangements described in this Announcement. Peterhouse is not responsible to anyone other than the Company for providing the protections afforded to clients of Peterhouse or for providing advice in connection with the contents of this Announcement, the Placing or the transactions and arrangements described herein.

Certain statements in this Announcement are forward-looking statements, which include all statements other than statements of historical fact and 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", "may", "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 Company's businesses 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 FCA, the London Stock Exchange or applicable law, the Company, the Joint Bookrunners and their respective Affiliates undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

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.

This Announcement does not identify or suggest, or purport to identify or suggest, the risks (direct or indirect) that may be associated with an investment in the Placing Shares. Any investment decision to buy Placing Shares in the Placing must be made solely on the basis of publicly available information, which has not been independently verified by the Joint Bookrunners. This Announcement is not intended to provide the basis for any decision in respect of the Company or other evaluation of any securities of the Company or any other entity and should not be considered as a recommendation that any investor should subscribe for, purchase, otherwise acquire, sell or otherwise dispose of any such securities. Recipients of this Announcement who are considering acquiring Placing Shares pursuant to the Placing are reminded that they should conduct their own investigation, evaluation and analysis of the business, data and property described in this Announcement. Any indication in this Announcement of the price at which the Ordinary Shares have been bought or sold in the past cannot be relied upon as a guide to future performance. The price and value of securities can go down as well as up.

The contents of this Announcement are not to be construed as legal, business, financial or tax advice. Each shareholder or prospective investor should consult with his or her or its own legal adviser, business adviser, financial adviser or tax adviser for legal, financial, business or tax advice.

In connection with the Placing, the Joint Bookrunners and any of their respective affiliates, acting as investors for their own account, may take up a portion of the Placing Shares in the Placing as a principal position and in that capacity may retain, purchase, sell, offer to sell for the own accounts or otherwise deal for their own account in such Placing Shares and other securities of the Company or related investments in connection with the Placing or otherwise. Accordingly, references to Placing Shares being offered, acquired, placed or otherwise dealt in should be read as including any issue or offer to, or acquisition, placing or dealing by, the Joint Bookrunners and any of their respective affiliates acting in such capacity. In addition, the Joint Bookrunners and any of their respective affiliates may enter into financing arrangements (including swaps, warrants or contracts for difference) with investors in connection with which the Joint Bookrunners and any of their respective affiliates may from time to time acquire, hold or dispose of shares. Neither of the Joint Bookrunners intend 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 to be issued pursuant to the Placing will not be admitted to trading on any stock exchange other than AIM.

Each prospective placee has been offered Placing Shares at the Placing Price and the Placing Shares have been conditionally subscribed by such placees pursuant to irrevocable placing letters issued by the Joint Bookrunners.

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.

UK Product Governance Requirements

Solely for the purposes of the product governance requirements contained within the FCA Handbook Product Intervention and Product Governance Sourcebook (the "UK Product Governance Rules"), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any 'manufacturer' (for the purposes of the UK Product Governance Rules) may otherwise have with respect thereto, the Placing Shares have been subject to a product approval process, which has determined that the Placing Shares are: (i) compatible with an end target market of (a) retail clients, as defined in point (8) of Article 2 of Regulation (EU) No 2017/565 as it forms part of domestic law by virtue of the EUWA, (b) investors who meet the criteria of professional clients as defined in Regulation (EU) No 600/2014 as it forms part of domestic law by virtue of the EUWA and (c) eligible counterparties as defined in the FCA Handbook Conduct of Business Sourcebook ("COBS"); and (ii) eligible for distribution through all distribution channels as are permitted by Directive 2014/65/EU (the "UK Target Market Assessment"). Notwithstanding the UK 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 UK 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 UK Target Market Assessment, the Joint Bookrunners will only procure investors who meet the criteria of professional clients and eligible counterparties. For the avoidance of doubt, the UK Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of COBS; 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.

EU Product Governance Requirements

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 the Placing Shares are: (i) compatible with an end target market of retail clients 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 "EU Target Market Assessment"). Notwithstanding the EU 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 EU 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 EU Target Market Assessment, the Joint Bookrunners will only procure investors who meet the criteria of professional clients and eligible counterparties.

For the avoidance of doubt, the EU 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.

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March 26, 2021 03:00 ET (07:00 GMT)