Northbridge Industrial Services PLC Placing and Open Offer (4539V)

TIDMNBI

RNS Number : 4539V

Northbridge Industrial Services PLC

18 April 2016

18 April 2016

Northbridge Industrial Services Plc

Proposed Placing and Open Offer

Northbridge Industrial Services Plc, the industrial services and rental company, today announces a proposed placing of Ordinary Shares to raise between GBP4.0 million and GBP4.5 million at a price of 75p by way of an accelerated book-building process. In addition, a further GBP1.1 million is expected to be raised by way of an underwritten Open Offer to existing shareholders on the basis of 2 New Ordinary Shares for every 25 Existing Ordinary Shares held by shareholders as at 5.30 p.m. on 15 April 2016.

The Directors of Northbridge have indicated that they, together with their associated funds, intend to participate in the Placing and in the Open Offer to a total of approximately GBP1.1 million.

Early indications of interest from institutional investors have shown strong support for the Placing.

The Placing will consist of 1.8 million Ordinary Shares being placed firm and up to a further 4.2 million Ordinary Shares being placed subject to shareholder approval being obtained at a general meeting of shareholders, which will be allocated proportionately to Placees. The general meeting is expected to be convened for 5 May 2016. Settlement and admission to trading on AIM of the First Placing Shares is expected to occur on 20 April 2016 and in respect of the Second Placing Shares on 6 May 2016.

The accelerated book-building process is being carried out by Stockdale Securities Limited acting as bookrunner in relation to the Placing. The identity of Placees and the basis of the allocations are at the discretion of Stockdale. The number of Placing Shares will be agreed by Northbridge with Stockdale at the close of the book-building process. Details of the number of Placing Shares will be announced as soon as practicable after the close of the book-building process, which is expected to occur later today.

Appendix I to this announcement (which forms part of this announcement) sets out the terms and conditions of the Placing. Attention is also drawn to Appendix II to this announcement entitled "Risk Factors".

Conditionally upon the accelerated book-building process raising a minimum of GBP4 million and subject to the fulfillment of certain other conditions, Stockdale has underwritten the Open Offer up to approximately GBP840,000. The Directors have each irrevocably agreed to take up their Basic Entitlements in the Open Offer to raise approximately GBP264,500 being the balance of the Ordinary Shares available under the Open Offer.

The Directors intend to use the proceeds of the Placing and the Open Offer to:

   --      strengthen the balance sheet to support growth going forward; 

-- make the deferred consideration payments for TOT and TOTL ("Tasman New Zealand") when they are due;

-- benefit from any new opportunities that arise in relation to supporting hire fleet development and master service agreements; and

   --      make ongoing covenant compliance more comfortable over future periods. 

A circular detailing the Placing and Open Offer and convening the necessary general meeting will be sent to Shareholders as soon as practicable.

Today Northbridge also separately announced preliminary results for the year ended 31 December 2015.

-Ends-

For further information

Northbridge Industrial Services Plc 01283 531645

Eric Hook, Chief Executive Officer

   Stockdale Securities Limited (Bookrunner, Nominated Adviser and Broker)   020 7601 6100 

Robert Finlay / Antonio Bossi / Henry Willcocks

Buchanan 020 7466 5000

Charles Ryland / Stephanie Watson

About Northbridge:

Northbridge Industrial Services plc hires and sells specialist industrial equipment. With offices or agents in the UK, USA, Dubai, Belgium, Germany, France, Australia, New Zealand, Singapore, China, Brazil and South Korea, Northbridge has a global customer base. This includes utility companies, the oil and gas sector, shipping, banking, mining, construction and the public sector. The product range includes loadbanks, transformers and oil tools. Northbridge was admitted to AIM in 2006 since when it has grown by providing a high level of service, responsiveness and flexibility to customers. It has grown by the acquisition of companies in the UK, Dubai, Australia, Belgium, New Zealand and Singapore and through investing further in those acquired companies to make them more successful. Northbridge continues to seek suitable businesses for acquisition across the world.

   1.       Introduction 

The Company today announces a proposed Placing to raise between GBP4.0 million and GBP4.5 million (before expenses) together with an Open Offer to raise up to approximately GBP1.1 million (before expenses), in each case through the issue of New Ordinary Shares at an issue price of 75 pence per New Ordinary Share.

The Placing Price represents a discount of approximately 12 per cent. to the Closing Price on 15 April 2016. Application will be made to the London Stock Exchange for the New Ordinary Shares to be admitted to trading on AIM.

The Placing will consist of 1.8 million Ordinary Shares being placed firm and up to a further 4.2 million Ordinary Shares being placed subject to shareholder approval being obtained at a general meeting of shareholders, which will be allocated proportionately to Placees. The general meeting is expected to be convened for 5 May 2016. Settlement and admission to trading on AIM of the First Placing Shares is expected to occur on 20 April 2016 and in respect of the Second Placing Shares on 6 May 2016.

The accelerated book-building process is being carried out by Stockdale Securities Limited acting as bookrunner (the "Bookrunner") in relation to the Placing. The identity of Placees and the basis of the allocations are at the discretion of Stockdale. The number of Placing Shares will be agreed by Northbridge with Stockdale at the close of the book-building process. Details of the number of Placing Shares will be announced as soon as practicable after the close of the book-building process, which is expected to occur later today. Conditionally upon the accelerated book-building process raising a minimum of GBP4 million and subject to the fulfillment of certain other conditions, Stockdale has underwritten the Open Offer up to approximately GBP840,000. The Directors have each irrevocably agreed to take up their Basic Entitlements in the Open Offer to raise approximately GBP264,500 being the balance of the Ordinary Shares available under the Open Offer.

   2.       Overview of Northbridge 

Northbridge hires and sells specialist electrical testing and oil & gas equipment to a worldwide customer base. This includes companies in the marine, natural resources, power reliability, data storage and utility sectors.

In particular, revenue is generated from the sale and rental of loadbanks and packaged transformers and drilling tools for the oil, gas and geothermal sectors.

Northbridge operates from hubs in the UK, Belgium, the UAE, Singapore, Australia and New Zealand.

   3.       Background to and reasons for the Placing and the Open Offer and use of proceeds 

The oil price collapse has had a significant impact on Northbridge in the last 12 months. In response to this, Northbridge has consolidated its business by taking (amongst others) the following measures:

   --      Exiting all non-core activities; 
   --      Cutting capital expenditure; and 
   --      Severely reducing headcount. 

These measures mean that Northbridge is now in a much improved position to withstand the current weakness of the oil services industry.

In September 2014, Northbridge announced the acquisition of TOT and TOTL ("Tasman New Zealand"). The share purchase agreement under which these companies were acquired required Northbridge to pay the Vendor an aggregate deferred consideration of NZ$ 9 million (approximately GBP4.4 million), the total of which was to be paid by January 2016. The Vendor and the Group entered into a deed of variation to the share purchase agreement amending payment of such deferred consideration, in particular in relation to the amount and the timing of such deferred consideration payments, which were thereby spread over a longer period. This has helped to smooth the Group's cash flow.

Over the course of last year, the Directors also renegotiated the terms of the Group's debt finance arrangements in order to ensure compliance with its financial covenants.

The Directors intend to use the proceeds of the Placing and the Open Offer to:

   --      Strengthen the balance sheet to support growth going forward; 
   --      make the deferred consideration payments for TOT and TOTL when they are due; 

-- benefit from any new opportunities that arise in relation to supporting hire fleet development and master service agreements; and

   --      make ongoing covenant compliance more comfortable over future periods. 
   4.       Current trading and outlook 

This morning, Northbridge announced its results for the year ended 31 December 2015: revenue for the period was GBP34.1 million resulting in a loss before tax and exceptional items of GBP1.4 million. The announcement also included the following outlook statement:

"The price of crude oil continued to fall from the start of 2016 and reached a nine year low in January. This led to further cut backs in investment from oil majors and oil services companies. We in turn have instigated further cost savings in order to reduce the impact on Northbridge.

(MORE TO FOLLOW) Dow Jones Newswires

April 18, 2016 02:01 ET (06:01 GMT)

Despite a small rebound during March, the oil price is unlikely to recover materially until supply and demand are back in balance. The market's overwhelming assumption now is that a recovery is unlikely to happen before 2017.

In preparation for an expected further year of low rental volumes and the consequential effect on our cash flow and profits, the Board has decided not to propose a final dividend for 2015 and will raise further equity via a Placing and Open Offer also announced this morning. The funds raised will be used to strengthen the business going forward, make the deferred payment for Tasman New Zealand when due, and support hire fleet development as the need arises. It will have the additional benefit of making bank covenant compliance easier over future periods.

Both the core businesses of Crestchic and Tasman have good sustainable growth opportunities in the future when their markets recover to more normal dynamics. Over the last 12 months we have made very substantial cost savings in our operational overheads but these have been done without compromising our ability to benefit from a future up turn.

This has been the most difficult period in our 10 years of trading and we would like to thank all our staff, both past and present, for their contribution and support."

   5.       Details of the Open Offer 

The Board considers it important that Qualifying Shareholders have the opportunity to participate in the fundraising, and the Directors have concluded that the Open Offer is the most suitable option available to the Company and its Shareholders.

Pursuant to the Open Offer, Qualifying Shareholders will be given the opportunity to subscribe at the Placing Price for

2 Open Offer Shares for every 25 Existing Ordinary Shares

held on the Record Date. The Open Offer is expected to include an excess entitlement facility to enable Qualifying Shareholders to apply for shares over and above their basic entitlement to the extent that valid acceptances are not received in respect of all of the Ordinary Shares under the Open Offer

The Open Offer will raise gross proceeds of up to approximately GBP1.1 million, assuming full take-up. Conditionally upon the accelerated book-building process raising a minimum of GBP4 million and subject to the fulfillment of certain other conditions, Stockdale has underwritten the Open Offer up to approximately GBP840,000. The Directors have each irrevocably agreed to take up their Basic Entitlements in the Open Offer to raise approximately GBP264,500 being the balance of the Ordinary Shares available under the Open Offer.

The Open Offer will be conditional, inter alia, on the passing of the relevant resolutions at the general meeting expected to be convened for 5 May 2016.

Application for Admission

Application has been made to the London Stock Exchange for the First Placing Shares to be admitted to trading on AIM and dealings on AIM are expected to commence, at 8.00 a.m. on 20 April 2016 (or such later time and/or date as may be agreed between the Company and Stockdale).

Application will be made to the London Stock Exchange for the New Ordinary Shares (other than the First Placing Shares) to be admitted to trading on AIM. Admission of New Ordinary Shares (other than the First Placing Shares) is expected to take place, and dealings on AIM are expected to commence, at 8.00 a.m. on 6 May 2016 (or such later time and/or date as may be agreed between the Company and Stockdale). No temporary documents of title will be issued.

The New Ordinary Shares will, following Second Admission, rank pari passu in all respects with the Existing Ordinary Shares in issue at the date of this announcement and will carry the right to receive all dividends and distributions declared, made or paid on or in respect of the Ordinary Shares after Second Admission.

In issuing this announcement and structuring the Placing and the Open Offer in this manner, the Company is relying on the exemption from issuing a prospectus in section 85(5) and paragraph 9 of Schedule 11A of FSMA and on paragraph 43 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended).

   6.       Effect of the Placing and the Open Offer 

Upon completion of the Placing and the Open Offer, the New Ordinary Shares will represent approximately 29 per cent. of the Enlarged Share Capital (assuming the Placing and the Open Offer are subscribed in full).

   7.       The Placing and Underwritten Open Offer Agreement 

Stockdale has entered into the Placing and Underwritten Open Offer Agreement with the Company whereby Stockdale has agreed, as agent for and on behalf of the Company, to use its reasonable endeavours to procure subscribers for the Placing Shares at the Placing Price conditionally upon, inter alia:

(a) the Placing and Underwritten Open Offer Agreement becoming unconditional and not being terminated by Stockdale in accordance with its terms;

(b) Admission of the First Placing Shares becoming effective by not later than 8.00 a.m. on 20 April 2016 (or such later time and/or date as Stockdale and the Company may agree, but not later than 8.00 a.m. on 31 May 2016); and

(c) Admission of the Second Placing Shares becoming effective by not later than 8.00 a.m. on 6 May 2016 (or such later time and/or date as Stockdale and the Company may agree, but not later than 8.00 a.m. on 31 May 2016).

Stockdale may in its absolute discretion waive the conditions referred to above, other than that relating to Admission.

Under the Placing and Open Offer Agreement, certain warranties have been given by the Company to Stockdale concerning, inter alia, the accuracy of the Announcements and the presentation to potential investors (together, the "Placing Documents"), the affairs of the Company and certain taxation and other matters, and certain indemnities have been given by the Company in relation to Stockdale's involvement in the Placing and Admission.

The Placing and Underwritten Open Offer Agreement will be capable of being terminated by Stockdale at its absolute discretion at any time before Second Admission, if inter alia, (i) any statement in the Placing Documents has become untrue, inaccurate or misleading or matters have arisen which would, if the Placing Documents were issued at that time constitute an omission from them; or (ii) there has been a breach of any of the warranties in the Placing and Open Offer Agreement; or (iii) there has occurred certain events, as specified in the Placing and Underwritten Open Offer Agreement (a "Specified Event") which would render any of the warranties to be materially untrue or incorrect, and certain other force majeure events which in the reasonable opinion of Stockdale is or will or is likely to have an adverse effect on the financial or trading position or the business or prospects of the Company and its subsidiaries which is material in the context of the Group as a whole or which renders the Placing impracticable or inadvisable..

For the avoidance of doubt, Stockdale is not underwriting the Placing

   8.       Related party transaction 

The Directors of the Company, being Peter Harris, Non-executive Chairman, Eric Hook, Chief Executive, Ian Gardner, Regional Managing Director, Ash Mehta, Non-executive Director and Michael Dodson, Non-executive Director, along with Western Selection, of which David Marshall, Non-executive Director of the Company, is Non-executive Chairman, have proposed to participate in the Placing for an aggregate amount of 1,100,033 New Ordinary Shares (approximately GBP825,000 at the Placing Price) and to take up their Basic Entitlement in the Open Offer for an aggregate amount of 352,741 Open Offer Shares (approximately GBP264,500 at the Placing Price). The Directors' participation in the Placing and Open Offer constitutes a related party transaction under the AIM Rules for Companies. In the absence of independent Directors, Stockdale Securities, the Company's nominated adviser, considers the terms of the Directors' participation in the Placing and Open Offer to be fair and reasonable insofar as Shareholders are concerned.

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

 
                                                          2016 
 Record Date for entitlement to participate       5:30 p.m. on 
  in the Open Offer                                   15 April 
 Announcement of the Placing and the                  18 April 
  Open Offer 
 Despatch of the Circular, the Form                   19 April 
  of Proxy and, to certain Qualifying 
  Non-CREST Shareholders, the Application 
  Form 
 Expected ex-entitlement date for the                 19 April 
  Open Offer 
 Basic Entitlements and Excess CREST                  20 April 
  Open Offer Entitlements credited to 
  CREST stock accounts of Qualifying 
  CREST Shareholders 
 Admission of the First Placing Shares                20 April 
  to trading on AIM 
 Recommended latest time and date for             4:30 p.m. on 
  requesting withdrawal of Basic Entitlements         27 April 
  and Excess CREST Open Offer Entitlements 
  from CREST 
 Latest time for depositing Basic Entitlements    3:00 p.m. on 
  and Excess CREST Open Offer Entitlements            28 April 
  into CREST 
 
 Latest time and date for splitting               3.00 p.m. on 
  Application Forms                                   29 April 
 
 Latest time and date for receipt of             11:00 a.m. on 
  Forms of Proxy for the General Meeting                 3 May 
 Latest time and date for receipt of             11:00 a.m. on 
  completed Application Forms and payment                4 May 
  in full under the Open Offer or settlement 
  of relevant CREST instruction (as 
  appropriate) 
 General Meeting                                 11:00 a.m. on 
                                                         5 May 
 Result of Open Offer announced                          5 May 
 Admission of the Second Placing Shares           8:00 a.m. on 
  and Open Offer Shares to trading on                    6 May 
  AIM 

(MORE TO FOLLOW) Dow Jones Newswires

April 18, 2016 02:01 ET (06:01 GMT)

 New Ordinary Shares in uncertificated                   6 May 
  form expected to be credited to accounts 
  in CREST (uncertificated holders only) 
 Expected despatch of definitive share               By 14 May 
  certificates for the New Ordinary 
  Shares (certificated holders only) 
 

Notes:

(1) The ability to participate in the Open Offer is subject to certain restrictions relating to Qualifying Shareholders with registered addresses or located or resident in countries outside the UK (particularly the Excluded Overseas Shareholders). Subject to certain exceptions, Application Forms will not be despatched to, and Open Offer Entitlements will not be credited to the stock accounts in CREST of Shareholders with registered addresses in any of the Restricted Jurisdictions.

(2) Each of the times and dates set out in the above timetable and mentioned in this announcement is subject to change by the Company (with the agreement of Stockdale Securities Limited), in which event details of the new times and dates will be notified to the London Stock Exchange and the Company will make an appropriate announcement to a Regulatory Information Service.

   (3)        References to times in this announcement are to London times unless otherwise stated. 

(4) Different deadlines and procedures for applications may apply in certain cases. For example, if you hold your Ordinary Shares through a CREST member or other nominee, that person may set an earlier date for application and payment than the dates noted above.

(5) Assumes the passing of certain resolutions at the Company's general meeting expected to be convened for 5 May 2016.

APPENDIX I

Terms and Conditions of Placing ("Terms and Conditions")

NORTHBRIDGE INDUSTRIAL SERVICES PLC

Conditional placing by Stockdale Securities Limited of up to 6.0m New Ordinary Shares of 10p each in the Company at a price of 75p per share to raise between GBP4.0 - 4.5 million for the Company.

Ordinary Shares ISIN: GB00B0SPFW38 Ticker: NBI

IMPORTANT INFORMATION REGARDING THE PLACING FOR PLACEES ONLY

Eligible participants

Members of the public are not eligible to take part in the Placing. This Appendix and the terms and conditions set out herein are for information purposes only and are directed only at:

a) persons in member states of the European Economic Area who are 'qualified investors' as defined in section 86(7) of the Financial Services and Markets Act 2000, as amended, ("qualified investors") being persons falling within the meaning of article 2(1)(e) of the EU Prospectus Directive (which means directive 2003/71/EC, as amended from time to time, and includes any relevant implementing directive measure in any member state) (the "Prospectus Directive"); and

b) in the United Kingdom, qualified investors who are persons who (i) have professional experience in matters relating to investments falling within article 19(1) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order"); (ii) are persons falling within article 49(2)(a) to (d) (high net worth companies, unincorporated associations, etc) of the Order; or (iii) are persons to whom it may otherwise be lawfully communicated, (all such persons in (a) and (b) together being referred to as "relevant persons").

This Appendix and the terms and conditions set out herein must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this Appendix and the terms and conditions set out herein relates is available only to relevant persons and will be engaged in only with relevant persons. This Appendix does not itself constitute an offer for sale or subscription of any securities in the Company.

Book-building

Stockdale will today commence a book-building to determine demand for participation in the Placing by Placees (the "Bookbuild"). This Appendix gives details of the terms and conditions of, and the mechanics of participation in, the Placing. No commissions will be paid to placees ("Placees") or by Placees in respect of any Placing Shares.

Stockdale and Northbridge shall be entitled to effect the Placing by such alternative method to the Bookbuild as they may, in their sole discretion, determine.

Participation in, and principal terms of, the Placing

   1.   Stockdale is acting as bookrunner and agent of Northbridge. 

2. Participation in the Placing will only be available to persons who may lawfully be, and are, invited to participate by Stockdale. Stockdale is entitled to enter bids in the Bookbuild as principal.

3. The Bookbuild will establish the number of Placing Shares to be issued and will be agreed between Stockdale and Northbridge following completion of the Bookbuild. The Placing Price is 75p per Placing Share. The number of Placing Shares will be announced on a Regulatory Information Service following the completion of the Bookbuild.

4. For each Placee, the allocation of Placing Shares will be split proportionately as to approximately one-third to be admitted to trading on AIM at 8.00 a.m. (London time) on 20 April 2016 and two-thirds to be admitted to trading on AIM at 8.00 a.m. (London time) on 6 May 2016, with the Second Placing Shares subject to and conditional upon the passing of certain resolutions at the Company's general meeting expected to be convened for 5 May 2016.

5. To bid in the Bookbuild, Placees should communicate their bid by telephone to their usual sales contact at Stockdale. Each bid should state the number of Placing Shares which the prospective Placee wishes to subscribe for at the Placing Price. Bids may be scaled down by Stockdale on the basis referred to in paragraph 10 below.

6. The Bookbuild is expected to close no later than 12.30 p.m. (London time) on 18 April 2016 but may be closed earlier or later at the discretion of Stockdale. Stockdale may, in agreement with Northbridge, accept bids that are received after the Bookbuild has closed. Northbridge reserves the right (upon the agreement of Stockdale) to reduce or seek to increase the amount to be raised pursuant to the Placing, in its absolute discretion.

7. Each prospective Placee's allocation will be confirmed orally by Stockdale as agent of Northbridge following the close of the Bookbuild. That oral confirmation will constitute an irrevocable legally binding commitment upon that person (who will at that point become a Placee) in favour of Stockdale and Northbridge to subscribe for the number of Placing Shares allocated to it at the Placing Price on the terms and conditions set out in this Appendix and in accordance with Northbridge's articles of association. The oral confirmation will also confirm the split of the allocation between the First Placing and the Second Placing on the basis referred to in paragraph 4 above.

8. Each prospective Placee's allocation and commitment will be evidenced by a confirmation note issued to such Placee by Stockdale. The terms of this Appendix will be deemed incorporated in that confirmation note.

9. Each Placee will also have an immediate, separate, irrevocable and binding obligation, owed to Northbridge and Stockdale as agent of Northbridge, to pay Stockdale (or as it 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 Northbridge has agreed to allot and issue to that Placee.

10. Stockdale may choose to accept bids, either in whole or in part and may scale down any bids for this purpose on such basis as they may determine. Stockdale may also, notwithstanding paragraphs 5 and 6 above, (i) allocate Placing Shares after the time of any initial allocation to any person submitting a bid after that time and (ii) allocate Placing Shares after the Bookbuild has closed to any person submitting a bid after that time.

11. A bid in the Bookbuild will be made on the terms and subject to the conditions in this announcement and will be legally binding on the Placee on behalf of which it is made and except with the consent of Stockdale will not be capable of variation or revocation after the time at which it is submitted.

12. Irrespective of the time at which a Placee's allocation pursuant to the Placing is confirmed, settlement for all Placing Shares to be acquired pursuant to the Placing will be required to be made on the basis explained below under "CREST delivery - versus - payment".

13. All obligations under the Bookbuild and 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.

14. 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.

15. To the fullest extent permissible by law, Stockdale shall not have any liability to Placees (or to any other person whether acting on behalf of a Placee or otherwise). In particular, Stockdale shall not have any liability (including to the fullest extent permissible by law, any fiduciary duties) in respect of Stockdale's conduct of the Bookbuild or of such alternative method of effecting the Placing as Stockdale and Northbridge may agree.

Conditions of the Placing

The obligations of Stockdale under the Placing and Underwritten Open Offer Agreement are conditional on, amongst other things:

-- admission of the First Placing Shares taking place by 8.00 a.m. (London time) on 20 April 2016 (or such later time and/or date as Northbridge and Stockdale may otherwise agree, being no later than 31 May 2016);

-- in connection with the Second Placing Shares, the passing of Resolutions at the General Meeting of the Company to be convened for 5 May 2016;

(MORE TO FOLLOW) Dow Jones Newswires

April 18, 2016 02:01 ET (06:01 GMT)

-- admission of the Second Placing Shares taking place by 8.00 a.m. (London time) on 6 May 2016 (or such later time and/or date as Northbridge and Stockdale may otherwise agree, being no later than 31 May 2016); and

-- the Placing and Underwritten Open Offer Agreement becoming unconditional in all other respects.

If any of the conditions contained in the Placing and Underwritten Open Offer Agreement in relation to the First Placing are not fulfilled, or waived by Stockdale, by the respective time or date where specified (or such later time and/or date as Northbridge and Stockdale may agree), the First Placing will not proceed and if any of the conditions contained in the Placing and Underwritten Open Offer Agreement in relation to the Second Placing are not fulfilled, or waived by Stockdale, by the respective time or date where specified (or such later time and/or date as Northbridge and Stockdale may agree), the Second Placing will not proceed. In each case the Placee's rights and obligations hereunder in relation to the First Placing Shares and/or the Second Placing Shares (as the case may be) shall cease and terminate at such time and each Placee agrees that no claim can be made by the Placee in respect thereof.

Stockdale may, at its discretion and upon such terms as they think fit, waive compliance by Northbridge with the whole or any part of any of Northbridge's obligations in relation to the conditions in the Placing and Open Offer Agreement, save that the conditions in the Placing and Underwritten Open Offer Agreement relating to Admission taking place may not be waived. Any such extension or waiver will not affect Placees' commitments as set out in this announcement.

None of Stockdale, Northbridge or any other person shall have any liability to any Placee (or to any other person whether acting on behalf of a Placee or otherwise) in respect of any decision they may make as to whether or not to waive or to extend the time and / or the date for the satisfaction of any condition to the Placing nor for any decision they may make as to the satisfaction of any condition or in respect of the Placing generally, and by participating in the Placing each Placee agrees that any such decision is within the absolute discretion of Stockdale.

The Placing and Underwritten Open Offer Agreement may be terminated by Stockdale at any time prior to Second Admission in certain circumstances including, among other things, following a breach of the Placing and Underwritten Open Offer Agreement by the Company or the occurrence of certain force majeure events.

Upon such termination, the parties to the Placing and Underwritten Open Offer Agreement shall be released and discharged (except for any liability arising before or in relation to such termination) from their respective obligations under or pursuant to the Placing and Underwritten Open Offer Agreement subject to certain exceptions.

By participating in the Placing, Placees agree that the exercise by Stockdale of any right of termination or other discretion under the Placing and Underwritten Open Offer Agreement shall be within the absolute discretion of Stockdale and that they need not make any reference to Placees and that they shall have no liability to Placees whatsoever in connection with any such exercise or failure so to exercise.

Agreement to subscribe Placing Shares

Conditional on:

-- First Admission taking place by 8.00 a.m. (London time) on 20 April 2016 (or such later time and/or date as Northbridge and Stockdale may otherwise agree, being no later than 31 May 2016);

-- Second Admission taking place by 8.00 a.m. (London time) on 6 May 2016 (or such later time and/or date as Northbridge and Stockdale may otherwise agree, being no later than 31 May 2016);

-- the Placing and Underwritten Open Offer Agreement becoming otherwise unconditional in all respects and not having been terminated on or before First Admission or Second Admission (or such later time and/or date, not being later than 31 May 2016 as Stockdale and the Company may agree); and

   --        Stockdale confirming to Placees their allocation of Placing Shares, 

a Placee agrees to become a member of the Company and agrees to subscribe for those Placing Shares allocated to it by Stockdale at the Placing Price, including the allocation between the First Placing and the Second Placing.

The Placing Shares allocated to a Placee will be split proportionately, as to approximately one-third in the First Placing and two-thirds in the Second Placing. If for any reason the First Placing proceeds but the Second Placing does not, Placees will have the amounts representing their allocation in the Second Placing returned to them (to the extent that such funds have already been paid by the Placee). To the fullest extent permitted by law, each Placee acknowledges and agrees severally, and not jointly nor jointly and severally, that it will not be entitled to exercise any remedy of rescission at any time. This does not affect any other rights the Placee may have.

Contract

Following oral acceptance of a firm Placing participation, Placees will receive a confirmation note following closing of the Bookbuild and prior to Admission of the First Placing Shares notifying them of the number of Placing Shares they will receive and the allocation between the First Placing and Second Placing, together with a request for such Placee's CREST participant details and contact details. Dealings in the First Placing Shares will not be permitted prior to First Admission. Dealings in the Second Placing Shares will not be permitted prior to Second Admission.

Oral acceptance of a Placing participation, on the terms and subject to the conditions of these Terms and Conditions and the Announcements (and subject to the Articles) will constitute a binding contract, inter alia, to subscribe for that Placing participation at the Placing Price.

Payment for Placing Shares

Each Placee must pay the Placing Price for the Placing Shares issued to the Placee in the manner and by such time as directed by Stockdale. If any Placee fails to pay as so directed and/or by the time required by Stockdale, the relevant Placee's application for Placing Shares may, at the discretion of Stockdale, be rejected.

Background

Shareholder authorities are already in place for the First Placing Shares but shareholder approval is required for the Company to issue the Second Placing Shares and the Company is shortly dispatching a Circular containing a notice of General Meeting at which resolutions will be put to shareholders to authorise the allotment of shares to fulfil the Placing.

It is expected First Admission will become effective and that dealings in the First Placing Shares on AIM will commence, at 8.00 a.m. on 20 April 2016 and that, subject to the passing of the resolutions at the General Meeting, Second Admission will become effective and that dealings in the Second Placing Shares on AIM will commence, at 8.00 a.m. on 6 May 2016.

Please note that all references to times and dates in these Terms and Conditions are references to UK time. Terms and expressions defined in the Announcements (unless expressly provided to the contrary) have the same meaning in these Terms and Conditions.

Placing and Open Offer Agreement

Stockdale as AIM nominated adviser and broker (as defined under the AIM Rules) to the Company, has entered into the Placing and Underwritten Open Offer Agreement with the Company whereby Stockdale has agreed, as agent for and on behalf of the Company, to use its reasonable endeavours to procure subscribers for the Placing Shares at the Placing Price conditionally upon, inter alia:

(a) the Placing and Underwritten Open Offer Agreement becoming unconditional and not being terminated by Stockdale in accordance with its terms;

(b) Admission of the First Placing Shares becoming effective by not later than 8.00 a.m. on 20 April 2016 (or such later time and/or date as Stockdale and the Company may agree, but not later than 8.00 a.m. on 31 May 2016); and

(c) Admission of the Second Placing Shares becoming effective by not later than 8.00 a.m. on 6 May 2016 (or such later time and/or date as Stockdale and the Company may agree, but not later than 8.00 a.m. on 31 May 2016).

Stockdale may in its absolute discretion waive the conditions referred to above, other than that relating to Admission.

Under the Placing and Open Offer Agreement, certain warranties have been given by the Company to Stockdale concerning, inter alia, the accuracy of the Announcements and the presentation to potential investors, the affairs of the Company and certain taxation and other matters, and certain indemnities have been given by the Company in relation to Stockdale's involvement in the Placing and Admission.

The Placing and Underwritten Open Offer Agreement will be capable of being terminated by Stockdale at its absolute discretion at any time before Second Admission, if inter alia, (i) any statement in the Placing Documents has become untrue, inaccurate or misleading or matters have arisen which would, if the Placing Documents were issued at that time constitute an omission from them; or (ii) there has been a breach of any of the warranties in the Placing and Open Offer Agreement; or (iii) there has occurred certain events, as specified in the Placing and Underwritten Open Offer Agreement (a "Specified Event") which would render any of the warranties to be materially untrue or incorrect, and certain other force majeure events which in the reasonable opinion of Stockdale is or will or is likely to have an adverse effect on the financial or trading position or the business or prospects of the Company and its subsidiaries which is material in the context of the Group as a whole or which renders the Placing impracticable or inadvisable.

For the avoidance of doubt, Stockdale is not underwriting the Placing.

Placing participation

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Each Placee which confirms its agreement to Stockdale (acting as agent on behalf of the Company) to purchase Placing Shares will be bound by these Terms and Conditions and will be deemed to have accepted them severally, and not jointly nor jointly and severally.

Placing Shares are subscribed on the terms and subject to the conditions and on the basis of these Terms and Conditions, the Announcements and the Articles. Placing Shares are subscribed at the Placing Price (free of commission) payable in cleared funds in full and in accordance with the settlement obligations set out below.

A Placee's participation in the Placing is conditional upon, inter alia, the Placing and Underwritten Open Offer Agreement becoming unconditional in all respects and not being terminated by Stockdale in accordance with its terms. In the event that the Placing and Underwritten Open Offer Agreement does not become unconditional in all respects or is terminated, the Placing will not proceed and all funds delivered by a Placee pursuant to these Terms and Conditions will be returned to the Placee at the Placee's risk, without interest.

No commissions are payable to Placees in respect of their participation in the Placing.

A Placee's Placing participation is expected to be free of stamp duty and stamp duty reserve tax in accordance with the paragraph entitled "Stamp Duty" below.

Dealings and Admission to trading on AIM

Application will be made to London Stock Exchange plc for all of the Placing Shares to be admitted to trading on AIM. Subject to the fulfilment of the conditions of the Placing and Open Offer Agreement, it is expected that Admission of the First Placing Shares will become effective and that dealings in the First Placing Shares are expected to commence at 8.00 a.m. on 20 April 2016 (or such later time and/or date as the Company and Stockdale may agree, not being later than 31 May 2016) and that Admission of the Second Placing Shares will become effective and that dealings in the Second Placing Shares are expected to commence at 8.00 a.m. on 6 May 2016 (or such later time and/or date as the Company and Stockdale may agree, not being later than 31 May 2016).

As applicable, it is expected that, in relation to a Placee's Placing participation, CREST accounts will be settled with Placing Shares on a delivery-versus-payment basis on 20 April 2016 in relation to the First Placing Shares and on 6 May 2016 in relation to the Second Placing Shares.

The Placing Shares will be issued fully paid and, when issued, will rank pari passu in all respects with the existing ordinary shares of the Company in issue immediately prior to Admission, and will rank in full for any dividends and other distributions declared, paid or made on the enlarged ordinary share capital of the Company after Admission.

Conditions and Termination

These Terms and Conditions, which are legally binding, confirm the Placing Price and the terms and conditions on which each Placee confirms its agreement to Stockdale on behalf of the Company to participate in the Placing.

Stockdale will have the right to terminate the Placing and Open Offer Agreement, exercisable at any time prior to Second Admission, in certain circumstances, including if any warranties given by the Company in the Placing and Underwritten Open Offer Agreement are untrue, inaccurate or misleading in any material respect or if a Specified Event occurs.

A Placee's rights and obligations under the Placing are not conditional (other than the allotment and issue of the Second Placing Shares are subject to the passing of certain resolutions at the General Meeting) and will not be capable of termination or rescission by a Placee in any circumstances, save in respect of fraud.

Each Placee severally, and not jointly nor jointly and severally, irrevocably confirms its agreement with Stockdale and the Company on the terms and subject to the conditions set out herein or therein and subject to the Announcements, the Placing and Underwritten Open Offer Agreement and the Articles, to subscribe for those Placing Shares allocated to it by Stockdale at the Placing Price and comply with these Terms and Conditions.

Each Placee's individual and separate agreement to subscribe for Placing Shares also constitutes an acknowledgment that its commitment has been made solely on the basis of the information contained in the Announcements and these Terms and Conditions and that accordingly none of the Company, its Directors, or any person acting on behalf of any of them shall have any liability to a Placee for any information or representation other than as is contained in the Announcements and these Terms and Conditions.

Each Placee's participation in the Placing is conditional upon, inter alia, the Placing and Underwritten Open Offer Agreement being executed and becoming or being declared unconditional in all respects and not being terminated by Stockdale in accordance with its terms.

Each Placee acknowledges that their allocation in the Placing will be split proportionately between the First Placing as to approximately one-third and the Second Placing as to two-thirds.

If Placees do not provide any CREST details or if Placees provide insufficient CREST details for the delivery of Placing Shares to their CREST account, their Placing participation will be delivered in certificated form provided payment has been made in terms satisfactory to Stockdale and all other conditions in relation to the Placing have been satisfied or waived.

The right is reserved to issue Placing Shares in certificated form should Stockdale or the Company consider this to be necessary or desirable. This right is only likely to be exercised in normal circumstances in the event of any interruption, failure or breakdown of CREST or any part of CREST or on the part of the facilities and/or system operated by the Company's registrars in connection with CREST.

The person named for registration purposes (which term shall include the holder of the relevant CREST account) must be:

(a) the person procured by the Placee to subscribe for or acquire the relevant Placing Shares; or

   (b)      the Placee itself; or 
   (c)      a nominee of any such person, as the case may be. 

Settlement - CREST delivery-versus-payment

Settlement will be effected on a matching delivery-versus-payment basis within CREST from Stockdale's settlement agent's CREST account (LAMAY).

Contract

Following oral acceptance of a firm Placing participation, Placees will receive a confirmation note following closing of the Bookbuild and prior to Admission of the First Placing Shares notifying them of the number of Placing Shares they will receive and the allocation between the First Placing and Second Placing together with a request for the Placee's CREST participant details and contact details. Dealings in the Ordinary Shares issued pursuant to the First Placing will not be permitted prior to First Admission. Dealings in the Ordinary Shares issued pursuant to the Second Placing will not be permitted prior to Second Admission.

Oral acceptance of a Placing participation, on the terms and subject to the conditions of these Terms and Conditions and the Announcements (and subject to the Articles) will constitute a binding contract, inter alia, to subscribe for that Placing participation at the Placing Price.

Stamp Duty

Whilst Stockdale does not believe there to be any liability to stamp duty or stamp duty reserve tax in respect of the issue of Placing Shares, should any such stamp duty or stamp duty reserve tax be payable it will be entirely for the Placee's account and neither the Company nor Stockdale will have any liability in respect thereof.

Money Laundering

To ensure compliance with the Money Laundering Regulations 2007, the money laundering provisions of the Criminal Justice Act 1993, the Anti-Terrorism Crime and Security Act 2001 and the Proceeds of Crime Act 2002 (together with the provisions of the Money Laundering Sourcebook of the Financial Conduct Authority and the manual of guidance produced by the Joint Money Laundering Steering Group in relation to financial sector firms), all together "Relevant Anti-Money Laundering Procedures", Stockdale may, in its absolute discretion, require verification of a Placee's identity to the extent that the Placee has not already provided the same. Pending the provision to Stockdale of evidence of identity, Placing Shares may be retained and/or delivery may be delayed at Stockdale's absolute discretion. If within a reasonable time after a request for verification of identity Stockdale has not received evidence satisfactory to it, it may, at its absolute discretion terminate a Placing participation in which event the monies payable on acceptance of the subscription will, if paid, be returned without interest to the account of the drawee bank from which they were originally debited.

Alternatively, if Placing Shares have already been allotted to a Placee, Stockdale may (at its discretion) sell them on the Placee's behalf and hold the proceeds of sale (net of expenses) or an amount equal to the original payment (whichever is the lower) on trust for the Placee. In these circumstances neither Stockdale nor the Company shall (save in the event of fraud or wilful default) be responsible for, or have any liability for, any loss or damage arising as a result.

Representations and Warranties

Stockdale is acting exclusively for the Company and no-one else in connection with the Placing and Admission and will not regard itself as owing duties under the rules and regulations of the Financial Conduct Authority to any other person or regard any other persons as its client.

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By agreeing to subscribe for Placing Shares, each Placee which enters into a contract with Stockdale to subscribe for Placing Shares will (for itself and any person(s) procured by it to subscribe for Placing Shares and any nominee(s) for any such person(s)) be deemed to represent and warrant severally, and not jointly nor jointly and severally, to Stockdale and the Company that:

   --        it may lawfully acquire Placing Shares; 

-- it is subscribing for the Placing Shares for its own account, 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 to 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 is not acting on an execution only basis or under specific instructions to purchase the Placing Shares for the account of any third party;

-- it is not a national, citizen or resident of the USA, Canada, Australia, South Africa or Japan or any other jurisdiction in which this offer is or would be unlawful, and that it has not, and will not offer, sell, renounce or deliver as principal or agent, directly or indirectly, Placing Shares in, into or within the USA, Canada, Australia, South Africa or Japan or any other jurisdiction in, into or within which such action is or would be unlawful, or to or for the benefit of any person who is a citizen of, or taxpayer to, or is resident in any of those territories or to any person purchasing such shares with a view to their re-offer, sale or transfer in or into any such territory;

-- it is: if in the UK (i) a person who having professional experience in matters relating to investments, is deemed sufficiently expert or sufficiently substantial to understand the risks involved and as such falls within the definition of investment professionals as defined in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Order"), (ii) a high net worth company, partnership or the trustees of high value trusts or unincorporated associations as defined in Article 49(2)(a) to (d) of that Order, or (iii) it is a person who may lawfully receive these Terms and Conditions and the Announcements (each a "Relevant Person"); or a person who is a "Qualified Investor" within the meaning of the Prospectus Directive (Directive 2003/71/EC and amendments thereto, including Directive 2010/73/EU, to the extent implemented in the relevant member state of the EEA) and any implementing measure in each relevant member state of the European Economic Area. Any investment or investment activity to which these Terms and Conditions relate is only available to and will only be engaged in with (i) in the UK, Relevant Persons; and (ii) in any other member state of the EEA, Qualified Investors. Each Placee severally, and not jointly nor jointly and severally, represents and warrants that it is either a Relevant Person or a Qualified Investor;

-- it is entitled to subscribe for the Placing Shares comprised in its Placing participation under the laws of all relevant jurisdictions which apply to it, that it has fully observed and will fully observe such laws and has obtained all governmental and other consents which may be required thereunder and complied with all necessary formalities and it has paid any issue, transfer or other taxes due in connection with its acceptance in any jurisdiction and that it has not taken any action or omitted to take any action which will or may result in Stockdale or the Company or any of their respective directors, officers, agents, employees or advisers acting in breach of the legal and regulatory requirements of any jurisdiction in connection with the Placing or the Placee's acceptance of the Placing participation;

-- it has not relied on any information given or any representations or statements made at any time by any person in connection with the Placing, the Company, the Placing Shares or otherwise, other than the information contained in the Announcements and these Terms and Conditions and that in making its application under the Placing it will be relying solely on the information contained in the Announcements and these Terms and Conditions;

-- it does not expect Stockdale to have any duties or responsibilities towards it for providing protections afforded to Stockdale's clients under the rules set out in The Financial Conduct Authority Handbook (the "FCA Handbook") or under the regulatory system (as defined in the Glossary to the FCA Handbook) (the "Rules") or advising it with regard to the Placing Shares and that it is not a client of Stockdale as defined by the Rules. It agrees that any payment by it will not be treated as client money governed by the Rules;

-- any exercise by Stockdale of any right to terminate the Placing and Underwritten Open Offer Agreement shall be within Stockdale's absolute discretion in accordance with its terms and that Stockdale shall not have any liability to it whatsoever in relation to any decision to exercise or not to exercise such right;

-- it is in Stockdale's absolute discretion to agree to extend the time or waive the requirement for the satisfaction of all or any of the conditions of the Placing and Underwritten Open Offer Agreement in accordance with its terms and otherwise to adjust the timetable for implementation of the Placing and Stockdale shall have no liability or duty to Placees whatsoever in connection with such extension or waiver. All times and dates referred to in these Terms and Conditions or in the accompanying Announcements) are therefore subject to adjustment in accordance with that reservation;

-- it does not expect Stockdale to have any duty to it similar or comparable to the "best execution", "suitability" and "risk warning" rules in the Rules and that it is not relying on Stockdale to advise whether or not the Placing Shares are in any way a suitable investment for it;

-- it is not relying on any representations or warranties or agreements by Stockdale or the Company or by any director, employee or agent of Stockdale or the Company or any other person except as set out in the Announcements or these Terms and Conditions;

-- 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 Companies Act 2006 and Chapter 5 of the Disclosure and Transparency Rules made under the Financial Services and Markets Act 2000;

-- it is not (and is not applying on behalf of) a person who falls within the special charge to stamp duty reserve tax (broadly, persons or nominees or agents for persons, whose business is or includes using depository receipts or the provision of clearance services) nor who attracts a higher rate of stamp duty (including, without limitation, under section 67, 70, 93 or 96 of the Finance Act 1986);

-- it is liable for all and any stamp duty or stamp duty reserve tax and any related costs, fines, penalties and interest arising in respect of the delivery and settlement in respect of the Placing Shares comprised in its Placing participation;

-- these Terms and Conditions and any contract which may be entered into between a Placee and Stockdale pursuant hereto shall be, governed by and construed in accordance with the laws of England and that it submits to the exclusive jurisdiction of the English Courts as regards any claim, dispute or matter arising out of or relating to these Terms and Conditions or any such contract;

-- it has complied with its obligations under the Relevant Anti-Money Laundering Procedures and it acknowledges that it is a term of its Placing participation that, to ensure compliance with all the Relevant Anti-Money Laundering Procedures, Stockdale may, in its absolute discretion, require verification of a Placee's identity. Pending the provision to Stockdale of evidence of identity, definitive certificates for the Placing Shares may be retained at Stockdale's absolute discretion;

-- all notices, remittances and documents of title are sent to it or its agent at its own risk;

-- it acknowledges and agrees that Stockdale is entitled to exercise any of its rights under the Placing and Underwritten Open Offer Agreement or any other right in its absolute discretion without any liability to Placees; and

-- that it irrevocably appoints any director of Stockdale or the Company as its agent for the purpose of executing and delivering to the Company and/or its registrars any and all documents, and taking such other action, on its behalf necessary to enable it to be registered as the holder of any Placing Shares in its Placing participation.

The above confirmations, acknowledgements and agreements will survive completion of the Placing. Stockdale shall be entitled to exercise any of its rights under the Placing and Underwritten Open Offer Agreement or any other right in its absolute discretion without any liability to Placees including, without limitation, the extension of any time limit, waiver in full or in part of any condition or term in the Placing and Underwritten Open Offer Agreement or the termination of the Placing and Underwritten Open Offer Agreement if any condition therein has not been satisfied.

To the extent that a Placee fails to pay Stockdale the subscription monies relating to its participation in the Placing in accordance with the settlement arrangements set out above, then Stockdale shall be entitled to:

   (a)      delete its name from the list of Placees; or 

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(b) notify the Placee that its Placing participation will remain on such list but will be sold by Stockdale on its behalf and Stockdale shall proceed immediately to sell such shares at such price as Stockdale may determine (which may be less than the Placing Price), in which event the sale proceeds received, net of costs of sale (including any taxes) shall be paid to Stockdale. To the extent that such net proceeds are less than the aggregate Placing Price in relation to its final Placing participation, a Placee shall continue to be liable for such difference and Stockdale may demand and seek payment of the same from it. By a Placee's acceptance of these Terms and Conditions, it hereby appoints Stockdale as its agent to sign all documents required to give effect to this paragraph.

Neither the Announcements nor these Terms and Conditions constitute an offer to sell, or the solicitation of an offer to buy, Placing Shares in any jurisdiction in which such an offer or solicitation is unlawful. The Placing Shares have not been and will not be registered or qualified for sale under the securities laws of the USA or any of its states or possessions, Canada, Australia, South Africa or Japan. Accordingly, the Placing Shares may not be offered or sold, directly or indirectly, in, into or within the USA or to US Persons (as defined below) or within or to persons in or resident in or citizens of, or taxpayers to, the USA, Canada, Australia, South Africa or Japan or any other jurisdiction in or into which such actions are or would be unlawful, and neither the Announcements nor these Terms and Conditions may be distributed in or into or within the USA, Canada, Australia, South Africa or Japan or any other jurisdiction in which such distribution is or would be unlawful, except in the case of the USA, pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act of 1933, as amended. By making an oral confirmation of a firm Placing participation, a Placee confirms, represents and warrants severally, and not jointly nor jointly and severally, that it is not a US Person or a person resident in Canada, Australia, South Africa or Japan or any other jurisdiction in which this offer is or would be unlawful, and it is not acquiring Placing Shares on behalf of, or with a view to re-sale directly or indirectly to any US Person or a person resident in Canada, Australia, South Africa or Japan or any other jurisdiction in which such actions are or would be unlawful, or to any other person whom it has reason to believe is purchasing or subscribing for such Placing Shares for the purposes of such re-offer or re-sale. "US Person" means a citizen or resident of the USA, a citizen or partnership or other entity created or organised in or under the laws of the USA or any sub-division thereof or therein and any estate or trustee which is subject to US federal income taxation regardless of its source.

Any decision in connection with any proposed purchase of Placing Shares must be made solely on the basis of the information contained in the Announcements and these Terms and Conditions. Any presentation materials supplied to Placees were for their own information and may not be reproduced, further distributed to any other person or published, in whole or in part, for any purposes whatsoever. In particular, they must not be distributed to any person with an address in the USA, its territories or possessions, or Canada, Australia, South Africa or Japan or to any national or resident of the USA, Canada, Australia, South Africa and Japan or any corporation, partnership, or other entity created or authorised under the laws of the USA, Canada, Australia, South Africa and Japan. Any such distribution could result in a violation of the laws of the USA, Canada, Australia, South Africa or Japan.

Any presentation and accompanying materials distributed by the Company were directed solely at persons who are either Relevant Persons and/or Qualified Investors and it is not intended that they should be acted upon in any way and nor should they be disclosed in any way to any person who is not a Relevant Person or a Qualified Investor.

No offering document, prospectus or admission document has been or will be submitted to be approved by the FCA or submitted to the London Stock Exchange in relation to the Placing and Placees' commitments will be made solely on the basis of the information contained in this announcement (including the Appendices) released by Northbridge today and any information previously published by the Company by notification to a Regulatory Information Service, and subject to the further terms set forth in the contract note to be provided to individual prospective Placees.

Any forward looking statements, including any projections, contained in any presentation and presentation materials are for the internal planning purposes of the Company and its senior management only, have not been commented or reported on by the Company's auditors and accordingly may not necessarily be on a basis that is consistent with the Company's accounting policies. Actual results may differ substantially from figures used for planning purposes only and, accordingly, any such forward looking statements or projections should not be relied on in any manner whatsoever.

Stockdale confirms that, in relation to the arrangements referred to herein, it is acting in the provision of corporate finance services to the Company for its own account, within the meaning of the Rules, and Stockdale is an authorised person for the purposes of the Financial Services and Markets Act 2000 (as amended).

Stockdale is acting as broker and bookrunner to the Company in relation to the Placing and Admission. Stockdale will receive a fee and a commission in relation to its services to the Company in the Placing. As stated above, a Placee will not be treated as a client of Stockdale in respect of transactions entered into under these Terms and Conditions. The value of shares and the income derived therefrom may go down as well as up. Past performance of investments is not a guarantee of future returns. An investment will be made on the basis of the contents of these Terms and Conditions and the Announcements.

All times and dates in these Terms and Conditions and the Announcements may be subject to amendment. Stockdale shall notify Placees of any changes.

APPENDIX II

RISK FACTORS

Potential investors should carefully consider the risks described below before making a decision to invest in Northbridge. This Appendix II contains what the Directors of Northbridge believe to be the principal risk factors associated with an investment in Northbridge. It should be noted that this list is not exhaustive and that other risk factors will apply to an investment in Northbridge. If any of the following risks actually occur, Northbridge's business, financial condition and/or results or future operations could be materially adversely affected. In such circumstances, the trading price of the New Ordinary Shares could decline and an investor may lose all or part of their investment. There can be no certainty that Northbridge will be able to implement successfully the strategy set out in this announcement or documents referred to in this announcement. Additional risks and uncertainties not currently known to the Directors or which the Directors currently deem immaterial, may also have an adverse effect on Northbridge.

This announcement contains forward looking statements that involve risks and uncertainties. Northbridge's actual results could differ materially from those anticipated in the forward looking statements as a result of many factors, including the risks faced by Northbridge which are described below and elsewhere in this announcement. Prospective investors should carefully consider the other information in this announcement. The risks listed below do not necessarily comprise all the risks associated with an investment in Northbridge.

An investment in Northbridge may not be suitable for all recipients of this announcement. Investors are accordingly advised to consult an independent financial adviser duly authorised under FSMA and who specialises in advising upon the acquisition of shares and other securities before making a decision to invest.

Northbridge hires and sells specialist electrical testing and oil & gas equipment to a worldwide customer base. This includes companies in the marine, natural resources, power reliability, data storage and utility sectors.

In particular, revenue is generated from the sale and rental of loadbanks and packaged transformers and drilling tools for the oil, gas and geothermal sectors.

Northbridge operates from hubs in the UK, Belgium, the UAE, Singapore, Australia and New Zealand.

As with any business in this sector, there are risks and uncertainties relevant to the Group's business. Certain of these risk factors affect the majority of businesses, some are common to businesses in the oil and gas industry, and others are more specific to the Group.

   1.       Principal risks and uncertainties relating to the Group 
   1.1.    Limited operating profitability and banking covenants 

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For the year ended 31 December 2015, Northbridge reported an adjusted loss before tax of GBP1.4 million and an unadjusted loss before tax of GBP8.6 million. Whilst Northbridge has historically generated profits and has been able to pay dividends to shareholders, there is no guarantee that it will be able to return to those historical levels of profitability or to be profitable in the future. Northbridge's banking facilities are subject to a number of covenants including covenants based on certain ratios of profitability vs. the level of debt outstanding. Whilst these covenants were reset in December 2015, there is no guarantee that Northbridge will be able to meet these covenants going forward, particularly if it continues to be loss making or if its current level of cash generation were to deteriorate. Should Northbridge be unable to meet its banking covenants in the future, this might constitute an event of default under the banking facilities which might result in a request by Northbridge's lenders to return all the outstanding debt and therefore have a detrimental effect on Northbridge's ability to continue as a going concern.

   1.2.    Drilling activity levels and energy market volatility 

A large portion of Northbridge's activities are directly, e.g. in the oil tools segment, or indirectly, e.g. in the supply of loadbanks to the shipbuilding sector, connected to the oil and gas industry. The current depressed oil prices have led to the postponement of a number of exploration and development projects in the oil and gas industry resulting in a significantly reduced drilling activity which has negatively impacted Northbridge's recent financial performance. There is no guarantee that the oil price will recover to the levels seen in 2014 or that it will not fall further from its current depressed levels and this might continue to have a negative effect on Northbridge's financial performance.

   1.3.    Dependence on key executives and personnel 

The Group's development and prospects are dependent upon the continued services and performance of its executive Directors, senior management and other key personnel. The loss of the services of any of the executive Directors, senior management or key personnel or a substantial number of talented employees, could cause disruption or the loss of experience, skills or customer relationships of such personnel, which could have a material adverse effect on the Group's business, financial condition and results of operations until a suitable replacement is found.

   1.4.    Litigation Risk 

Legal proceedings, with or without merit, may arise from time to time in the course of the Group's business.

The Directors cannot preclude litigation being brought against any member of the Group (whether with or without merit) and any litigation brought against any member of the Group could be expensive, time consuming and have an adverse effect on the financial condition, results or operations of the Group. The Group's business may be adversely affected if the Group and/or its employees or agents are found not to have met the appropriate standard of care or exercised their discretion or authority in a prudent or appropriate manner in accordance with accepted standards.

   1.5.    Currency exchange rate fluctuations and overseas activities 

The Group conducts certain parts of its business overseas in currencies other than sterling and as such its financial performance is subject to the effects of fluctuations in foreign exchange rates.

Foreign revenues are also subject to special risks that may disrupt markets, including the risk of war, terrorism, civil disturbances, embargo and government activities. Revenue generating activities in certain foreign countries may require prior governmental approval in the form of an export licence and otherwise be subject to tariffs and import/export restrictions. There can be no assurance that the Group will not experience difficulties in connection with future foreign revenues and, in particular, adverse effects from foreign currency fluctuations.

Conducting business in most countries will require the Group to become familiar with and to comply with foreign laws, rules, regulations and customs. Further, risks are inherent in international operations, including the following:

(a) customer agreements may be difficult to enforce and receivables difficult to collect through a foreign country's legal system;

   (b)      foreign customers may have longer payment cycles; 

(c) foreign countries may tax foreign income and tax rates in certain foreign countries may exceed those of the United Kingdom and foreign earnings may be subject to withholding requirements or the imposition of tariffs, exchange controls or other restrictions; and

(d) general economic conditions in the countries in which the Group seeks to trade could have an adverse effect on the Group earnings from operations in those countries.

   1.6.    Subsidiary jurisdictions 

The Group has subsidiary companies in the United Arab Emirates, Singapore, Belgium, France, Australia and New Zealand. As such, the Group is subject to the laws and jurisdiction of those countries for the transactions undertaken by the subsidiary companies.

   2.       Risks relating to the Ordinary Shares 
   2.1.    The market of the Ordinary Shares may fluctuate significantly 

The market price of the Ordinary Shares may, in addition to being affected by Northbridge's actual or forecast operating results, fluctuate significantly as a result of factors beyond Northbridge's control, including among others:

(a) changes in securities analysts' recommendations or the failure to meet the expectations of securities analysts;

(b) changes in the performance of the oil and gas industry as a whole and of Northbridge's competitors; and

   (c)      fluctuations in stock market prices and volumes, and general market volatility. 
   2.2.    Future need for access to capital 

Any additional equity financing may be dilutive to Shareholders, and debt financing, if available, may involve restrictions in financing and operating activities. In addition, there can be no assurance that the Group will be able to raise additional funds when needed or that such funds will be available on terms favourable to it. If the Group is unable to obtain additional financing as needed it may be required to reduce the scope of its operations or anticipated expansion or to cease trading.

   2.3.    Investment in publicly quoted securities 

Investment in securities traded on AIM is perceived to involve a higher degree of risk and be less liquid than investment in companies whose securities are listed on the "Official List" in the UK and traded on the London Stock Exchange's main market for listed securities. An investment in Ordinary Shares traded on AIM may be difficult to realise. Admission to AIM does not guarantee that there will be a liquid market for New Ordinary Shares. An active public market for New Ordinary Shares may not develop or be sustained after Admission and the market price of the Ordinary Shares may fall below the Issue Price. Prospective investors should be aware that the value of the Ordinary Shares may go down as well as up and that the market price of the Ordinary Shares may not reflect the underlying value of Northbridge. Investors may therefore realise less than, or lose all of, their investment.

   2.4.    Potentially volatile share price and liquidity 

The share price of companies quoted on AIM can be highly volatile and shareholdings illiquid. The price at which the Ordinary Shares are quoted and the price at which investors may realise their investment in Northbridge may be influenced by a significant number of factors, some specific to Northbridge and its operations and some which affect quoted companies generally. These factors could include the performance of Northbridge, large purchases or sales of Ordinary Shares, legislative changes and general, economic, political or regulatory conditions.

APPENDIX III

DEFINITIONS

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

 
 Act                        the Companies Act 2006; 
 Admission                  admission of the New Ordinary 
                             Shares to trading on AIM and 
                             such admission becoming effective 
                             in accordance with the AIM Rules 
                             (comprising of the First Admission 
                             and Second Admission); 
 AIM                        the AIM market operated by the 
                             London Stock Exchange; 
 AIM Rules for Companies    the rules of AIM as set out 
                             in the publication entitled 
                             'AIM Rules for Companies' published 
                             by the London Stock Exchange 
                             from time to time; 
 Announcements              together this announcement and 
                             the announcement of preliminary 
                             results for the year to 31 December 
                             2015 which was released this 
                             morning 
 Application Form           the application form accompanying 
                             this announcement to be used 
                             by Qualifying Non-CREST Shareholders 
                             in connection with the Open 
                             Offer; 
 Articles                   the articles of association 
                             of the Company 
 Basic Entitlement          the Open Offer Shares which 
                             a Qualifying Shareholder is 
                             entitled to subscribe for under 
                             the Open Offer calculated on 
                             the basis of 2 Open Offer Shares 
                             for every 25 Existing Ordinary 
                             Shares held by that Qualifying 

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                             Shareholder as at the Record 
                             Date; 
 Business Day               any day (excluding Saturdays 
                             and Sundays) on which banks 
                             are open in London for normal 
                             banking business and the London 
                             Stock Exchange is open for trading; 
 certificated or            the description of a share or 
  in certificated            other security which is not 
  form                       in uncertificated form (that 
                             is not in CREST); 
 Circular                   the circular expected to be 
                             posted to Shareholders on 19 
                             April 2016; 
 Closing Price              the closing middle market quotation 
                             of an Ordinary Share as published 
                             by the London Stock Exchange; 
 Company or Northbridge     Northbridge Industrial Services 
                             Plc a company incorporated in 
                             England and Wales with registered 
                             number 05326580 and having its 
                             registered office at Second 
                             Avenue, Centrum 100, Burton 
                             on Trent, DE14 2WF; 
 CREST                      the relevant system (as defined 
                             in the CREST Regulations) in 
                             respect of which Euroclear is 
                             the Operator (as defined in 
                             the CREST Regulations); 
 CREST Manual               the compendium of documents 
                             entitled "CREST Manual" issued 
                             by Euroclear from time to time 
                             and comprising the CREST Reference 
                             Manual, the CREST Central Counterparty 
                             Service Manual, the CREST International 
                             Manual, the CREST Rules (including 
                             CREST Rule 8), the CCSS Operations 
                             Manual and the CREST Glossary 
                             of Terms; 
 CREST member               a person who has been admitted 
                             by Euroclear as a system member 
                             (as defined in the CREST Regulations); 
 CREST participant          a person who is, in relation 
                             to CREST, a system participant 
                             (as defined in the CREST Regulations); 
 CREST Proxy Instruction    the appropriate CREST message 
                             made to appoint a proxy, properly 
                             authenticated in accordance 
                             with Euroclear's specifications; 
 CREST Regulations          the Uncertificated Securities 
                             Regulations 2001; 
 CREST sponsor              a CREST participant admitted 
                             to CREST as a CREST sponsor; 
 CREST sponsored            a CREST member admitted to CREST 
  member                     as a sponsored member; 
 Enlarged Share             the issued share capital of 
  Capital                    the Company immediately following 
                             the Second Admission, assuming 
                             the Placing Shares and the maximum 
                             number of Open Offer Shares 
                             are allotted; 
 EU                         the European Union; 
 Euroclear                  Euroclear UK & Ireland Limited; 
 Excess Applications        applications pursuant to the 
                             Excess Application Facility; 
 Excess Application         the mechanism whereby a Qualifying 
  Facility                   Shareholder, who has taken up 
                             his Basic Entitlement in full, 
                             can apply for Excess Shares 
                             up to an amount equal to the 
                             total number of Open Offer Shares 
                             available under the Open Offer 
                             less an amount equal to a Qualifying 
                             Shareholder's Basic Entitlement, 
                             subject always to the 29.9 per 
                             cent. Aggregate Limit, as more 
                             fully set out in Part II of 
                             this announcement; 
 Excess CREST Open          in respect of each Qualifying 
  Offer Entitlements         CREST Shareholder who has taken 
                             up his Basic Entitlement in 
                             full, the entitlement to apply 
                             for Open Offer Shares in addition 
                             to his Basic Entitlement credited 
                             to his stock account in CREST, 
                             pursuant to the Excess Application 
                             Facility, which may be subject 
                             to scaling back in accordance 
                             with the provisions of this 
                             announcement; 
 Excess Shares              Open Offer Shares which are 
                             not taken up by Qualifying Shareholders 
                             pursuant to their Basic Entitlement 
                             and which are offered to Qualifying 
                             Shareholders under the Excess 
                             Application Facility; 
 Excluded Overseas          other than as agreed by the 
  Shareholders               Company and Stockdale or as 
                             permitted by applicable law, 
                             Shareholders who are located 
                             or have registered addresses 
                             in a Restricted Jurisdiction; 
 Existing Issued            the issued share capital of 
  Share Capital              the Company as at the Latest 
                             Practicable Date; 
 Existing Ordinary          the 18,425,558 Ordinary Shares 
  Shares                     in issue (excluding Ordinary 
                             Shares held in treasury) as 
                             at the Record Date; 
 FCA                        the Financial Conduct Authority; 
 First Admission            admission to trading on AIM 
                             of those New Ordinary Shares 
                             in connection with the Placing 
                             that fall within the Permitted 
                             Allotment and such admission 
                             becoming effective in accordance 
                             with the AIM Rules; 
 First Placing Shares       means 1,800,000 New Ordinary 
                             Shares in the capital of the 
                             Company admitted to trading 
                             on AIM on First Admission; 
 Form of Proxy              the form of proxy accompanying 
                             this Circular relating to the 
                             General Meeting; 
 FSMA                       the UK Financial Services and 
                             Markets Act 2000, as amended; 
 General Meeting            the general meeting of the Company 
  or GM                      to be convened for 5 May 2016 
                             and including any adjournment(s) 
                             thereof; 
 Group                      the Company and its subsidiary 
                             undertakings at the date of 
                             this announcement (as defined 
                             in sections 1159 and 1160 of 
                             the Act); 
 Issue Price                75 pence per New Ordinary Share; 
 Latest Practicable         means 15 April 2016, being the 
  Date                       latest practicable date prior 
                             to publication of this announcement; 
 London Stock Exchange      London Stock Exchange plc; 
 Money Laundering           Money Laundering Regulations 
  Regulations                2007 (as amended and supplemented 
                             from time to time); 
 New Ordinary Shares        up to 7,474,044 new Ordinary 
                             Shares to be issued by the Company 
                             pursuant to the Placing and 
                             the Open Offer; 
 Notice of General          the notice of General Meeting, 
  Meeting                    set out at the end of the Circular; 
 Open Offer                 the conditional invitation by 
                             the Company to Qualifying Shareholders 
                             to apply to subscribe for Open 
                             Offer Shares at the Issue Price 
                             on the terms and subject to 
                             the conditions set out in the 
                             Circular and in the case of 
                             the Qualifying Non-CREST Shareholders 
                             only, the Application Form; 
 Open Offer Entitlements    an entitlement to subscribe 
                             for Open Offer Shares, allocated 
                             to a Qualifying Shareholder 
                             under the Open Offer (and, for 
                             the avoidance of doubt, references 
                             to Open Offer Entitlements include 
                             Basic Entitlements and Excess 
                             CREST Open Offer Entitlements); 
 Open Offer Shares          the 1,474,044 New Ordinary Shares 
                             to be offered to Qualifying 
                             Shareholders under the Open 
                             Offer; 
 Overseas Shareholders      Shareholders with registered 
                             addresses outside the UK or 

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                             who are citizens of, incorporated 
                             in, registered in or otherwise 
                             resident in, countries outside 
                             the UK; 
 Ordinary Shares            ordinary shares of 10 pence 
                             each in the capital of the Company; 
 Participant ID             the identification code or membership 
                             number used in CREST to identify 
                             a particular CREST member or 
                             other CREST participant; 
 Permitted Allotment        the allotment of 1,800,000 shares 
                             allotted for cash, on a non 
                             pre-emptive basis, as permitted 
                             by section 570 of the Act and 
                             a special resolution passed 
                             by the members of the Company 
                             at the last Annual General Meeting 
                             held on 28 May 2015; 
 Placees                    the persons who have agreed 
                             to subscribe for the Placing 
                             Shares; 
 Placing Shares             the up to 6,000,000 New Ordinary 
                             Shares to be issued by the Company 
                             under the Placing; 
 Placing                    the placing of the Placing Shares 
                             with the Placees pursuant to 
                             the Placing and Underwritten 
                             Open Offer Agreement; 
 Placing and Underwritten   the agreement dated 18 April 
  Open Offer Agreement       2016 between the Company and 
                             Stockdale Securities Limited 
                             relating to the Placing and 
                             the Open Offer; 
 Prospectus Rules           the Prospectus Rules published 
                             by the FCA; 
 Qualifying CREST           Qualifying Shareholders whose 
  Shareholders               Existing Ordinary Shares on 
                             the register of members of the 
                             Company on the Record Date are 
                             in uncertificated form; 
 Qualifying Non-CREST       Qualifying Shareholders whose 
  Shareholders               Existing Ordinary Shares on 
                             the register of members of the 
                             Company on the Record Date are 
                             held in certificated form; 
 Qualifying Shareholders    holders of Existing Ordinary 
                             Shares on the register of members 
                             of the Company at the Record 
                             Date with the exception (subject 
                             to certain exceptions) of Excluded 
                             Overseas Shareholders; 
 Record Date                5.30 p.m. on 15 April 2016; 
 Registrars or Receiving    Capita Asset Services, a trading 
  Agent or Capita            name of Capita Registrars Limited; 
  Asset Services 
 Regulatory Information     has the meaning given in the 
  Service                    AIM Rules for Companies; 
 Resolutions                the resolutions to be proposed 
                             at the General Meeting which 
                             are set out in full in the Notice 
                             of General Meeting; 
 Restricted Jurisdictions   each of Canada, Australia, South 
                             Africa, Japan and the United 
                             States; 
 Second Admission           admission to trading on AIM 
                             of those New Ordinary Shares 
                             that are subject to the passing 
                             of the Resolutions set out in 
                             the Notice of General Meeting, 
                             and such admission becoming 
                             effective in accordance with 
                             the AIM Rules; 
 Second Placing             Up to 5,674,044 Ordinary Shares, 
  Shares                     being the Placing Shares other 
                             than the First Placing Shares; 
 Shareholders               holders of Existing Ordinary 
                             Shares; 
 Stockdale                  Stockdale Securities Limited, 
                             a company incorporated in England 
                             and Wales with registered number 
                             00762818 and having its registered 
                             office at Beaufort House, 15 
                             St. Botolph Street, London, 
                             EC3A 7BB; 
 TOT                        Tasman Oil Tools Limited a subsidiary 
                             of Northbridge Industrial Services 
                             NZ Holdings Limited; 
 TOTL                       Tasman Oil Tools Leasing Limited 
                             a subsidiary of Northbridge 
                             Industrial Services NZ Holdings 
                             Limited; 
 uncertificated             recorded on a register of securities 
                             maintained by Euroclear in accordance 
                             with the CREST Regulations as 
                             being in uncertificated form 
                             in CREST and title to which, 
                             by virtue of the CREST Regulations, 
                             may be transferred by means 
                             of CREST; 
 UK or United Kingdom       the United Kingdom of England, 
                             Scotland, Wales and Northern 
                             Ireland; 
 US or United States        the United States of America, 
                             its territories and possessions, 
                             any state of the United States 
                             of America and the District 
                             of Columbia; 
 US Securities Act          the US Securities Act of 1933, 
                             as amended; 
 USE                        unmatched stock event; 
 Vendor                     Mutijuva Limited, a company 
                             incorporated in New Zealand, 
                             and the vendor of TOT and TOTL; 
 GBP or sterling            sterling, the legal currency 
  pounds                     of the United Kingdom; and 
 29.9 per cent.             the restriction on the number 
  Aggregate Limit            of Open Offer Shares that each 
                             Qualifying Shareholder may receive 
                             under the Open Offer on the 
                             basis that no Qualifying Shareholder 
                             shall be entitled to receive 
                             in excess of such number of 
                             Open Offer Shares as would bring 
                             its aggregate interest in the 
                             Company to more than 29.9 per 
                             cent. of the Enlarged Share 
                             Capital. 
 

This information is provided by RNS

The company news service from the London Stock Exchange

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