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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Gulf Marine Services Plc | LSE:GMS | London | Ordinary Share | GB00BJVWTM27 | ORD 2P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| -0.10 | -0.41% | 24.00 | 24.10 | 24.40 | 24.10 | 24.00 | 24.00 | 858,679 | 11:21:14 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Ship Building And Repairing | 133.16M | 25.33M | 0.0249 | 9.64 | 243.94M |
From Apr 2021 to Apr 2024
TIDMGMS
RNS Number : 2392B
Gulf Marine Services PLC
09 June 2021
THIS ANNOUNCEMENT (INCLUDING THE APPICES) AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM THE UNITED STATES, AUSTRALIA, CANADA, THE REPUBLIC OF SOUTH AFRICA OR JAPAN OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL. PLEASE SEE THE IMPORTANT NOTICES AT THE OF THIS ANNOUNCEMENT.
THIS ANNOUNCEMENT IS AN ADVERTISEMENT AND DOES NOT CONSTITUTE A PROSPECTUS OR PROSPECTUS EXEMPTED DOCUMENT. NOTHING HEREIN SHALL BE CONSTRUED AS ANY OFFER, INVITATION OR RECOMMATION TO PURCHASE, SELL OR SUBSCRIBE FOR ANY SECURITIES IN ANY JURISDICTION AND NEITHER THE ISSUE OF INFORMATION NOR ANYTHING CONTAINED HEREIN SHALL FORM THE BASIS OF OR BE RELIED UPON IN CONNECTION WITH, OR ACT AS AN INDUCEMENT TO ENTER INTO, ANY INVESTMENT ACTIVITY.
ANY DECISION TO PURCHASE, SUBSCRIBE FOR, OTHERWISE ACQUIRE, SELL OR OTHERWISE DISPOSE OF SECURITIES MENTIONED HEREIN MUST BE MADE ONLY ON THE BASIS OF THE INFORMATION CONTAINED IN AND INCORPORATED BY REFERENCE INTO THE PROSPECTUS.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF REGULATION (EU) NO 596/2014 AS IT FORMS PART OF DOMESTIC LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018.
9 June 2021
Gulf Marine Services plc
Proposed Placing and Open Offer to raise GBP20.0 million
Introduction
Gulf Marine Services plc (LSE: GMS)("GMS", the "Company" or, together with its subsidiary undertakings, the "Group") is today pleased to announce a proposed capital raising (the "Capital Raising"), comprising:
(i) a placing (the "Placing") of 370,706,162 new ordinary shares of 2 pence each ("Ordinary Shares") in the capital of the Company (the "New Ordinary Shares") at a price of 3 pence per New Ordinary Share (the "Issue Price"), subject to a right of recall to satisfy valid applications by Qualifying Shareholders pursuant to the Open Offer (as defined below) (the "Placing Shares"); and
(ii) an open offer pursuant to which Qualifying Shareholders will be given the opportunity to subscribe for an aggregate of 665,926,795 New Ordinary Shares (the "Open Offer Shares") at the Issue Price through an open offer (the "Open Offer").
Seafox International Limited ("Seafox"), Mazrui Investments LLC ("Mazrui") and a third existing institutional investor in the Company (together with Seafox and Mazrui, the "Committed Shareholders"), who hold, in aggregate, 44.33 per cent. of the existing Ordinary Shares currently in issue, have irrevocably undertaken to take up their respective entitlements under the Open Offer in full in respect of, in aggregate, 295,220,633 New Ordinary Shares (the "Committed Shares").
The Placing has been fully underwritten by Panmure Gordon (UK) Limited ("Panmure Gordon") on the terms and subject to the conditions set out in the Placing Agreement (as defined below).
As the nominal value of each of the existing Ordinary Shares (the "Existing Ordinary Shares") is 10 pence, in order to provide flexibility to the Company on the price at which new Ordinary Shares can be issued, the share capital will be reorganised (the "Reorganisation"). Immediately prior to the Capital Raising taking effect, each of the Existing Ordinary Shares will be sub-divided and re-designated into one new Ordinary Share with a nominal value of 2 pence, and one deferred share with a nominal value of 8 pence ("Deferred Shares"). All of the Deferred Shares will be subject to a right of repurchase by the Company for an aggregate sum of GBP1 following Admission, and the board of the Company intends to effect such repurchase in due course. The Reorganisation will take effect on Admission, and will not affect the number of ordinary shares in issue. Each Ordinary Share with a nominal value of 2 pence will carry the same rights and represent the same proportionate interest in the Company that currently apply to the Existing Ordinary Shares.
Panmure Gordon is acting as sole sponsor, sole global co-ordinator and joint bookrunner in connection with the Placing and will commence a bookbuilding process (the "Bookbuilding Process") in respect of the Placing immediately following the publication of this Announcement. Emirates NBD Capital Limited ("ENBD" and together with Panmure Gordon, the "Joint Bookrunners") is acting as regional joint bookrunner in the Middle East in connection with the Placing.
Details of the results of the Placing will be announced as soon as practicable after the close of the Bookbuilding Process.
Highlights
Hot Features
Premium
-- Placing to raise up to GBP11.1 million (before expenses) through the issue of up to 370,706,162 Placing Shares at
the Issue Price. The Placing Shares are being placed subject to a right of recall to satisfy Open Offer
Entitlements taken up by Qualifying Shareholders.
-- Seafox, Mazrui and a third existing institutional investor in the Company, who hold, respectively, 29.99, 13.33
and 1.01 per cent. of the Existing Ordinary Shares, have irrevocably undertaken to take up their respective
entitlements under the Open Offer in full and those shares are therefore not subject to the Placing or
underwritten. Seafox and Mazrui have also irrevocably undertaken to vote in favour of the Resolutions.
-- The offer period for acceptances by Qualifying Shareholders under the Open Offer will commence on 10 June 2021
and end on 24 June 2021.
-- The net proceeds of the Capital Raising will be used to reduce the Company's indebtedness. The Board believes
that the terms of the Revised Debt Terms create a positive platform on which the future development and growth of
the business can be based.
-- The New Ordinary Shares will, when issued, represent 65.5 per cent. of the enlarged issued ordinary share capital
of the Company.
-- The Issue Price represents a discount of approximately 51.6 per cent. to the closing middle market price of 6.2
pence per Ordinary Share on 8 June 2021, being the latest practicable date prior to the publication of this
Announcement.
-- The timing for the close of the Bookbuilding Process and the allocation of the Placing Shares will be determined
together by the Joint Bookrunners and the Company.
-- The Capital Raising is conditional upon the approval by the Company's shareholders at a General Meeting to be
held on 25 June 2021 (the "General Meeting"). The Capital Raising is conditional and dependent upon, inter alia,
all the resolutions to be proposed at the General Meeting (the "Resolutions") being passed.
-- The Placing is subject to the terms and conditions set out in appendix III ("Appendix III") to this announcement
(which forms part of this announcement, such announcement, appendix I to this announcement ("Appendix I", and
together with Appendix II, Appendix III and the other appendices to this announcement, the "Appendices") and the
Appendices, together being this "Announcement").
Details of the Placing
The Placing is subject to the terms and conditions set out in Appendix III.
The Joint Bookrunners will commence the Bookbuilding Process, and the book will open, immediately following the publication of this Announcement.
The timing of the closing of the Bookbuilding Process and allocations are at the absolute discretion of the Joint Bookrunners and the Company. Details of the results of the Placing will be announced as soon as practicable after the close of the Bookbuilding Process.
The New Ordinary Shares, when issued, will be fully paid and will rank pari passu in all respects with the other Ordinary Shares in issue on Admission, including the right to receive all dividends and other distributions declared, made or paid after the date of issue. The issue of the New Ordinary Shares will represent an increase of approximately 90.0 per cent. of the existing issued ordinary share capital of the Company.
Admission, settlement and CREST
Applications will be made to: (i) the Financial Conduct Authority (the "FCA") for admission of the existing ordinary share capital of the Company following the Reorganisation and the New Ordinary Shares arising from the Capital Raising to the premium listing segment of the Official List and (ii) London Stock Exchange plc (the "London Stock Exchange") for admission of the New Ordinary Shares to trading on its main market for listed securities (together, "Admission").
The ISIN for the Ordinary Shares from Admission will be GB00BJVWTM27 and the ticker will remain unchanged as GMS.
Settlement for the New Ordinary Shares and Admission are expected to take place on 8.00 a.m. on 28 June 2021. The Capital Raising is conditional upon, among other things, the Resolutions being duly passed by the shareholders of the Company at the General Meeting, upon Admission becoming effective and the placing agreement between the Company and Panmure Gordon (the "Placing Agreement") and the engagement letter between the Company and ENBD (the "ENBD Engagement Letter") not being terminated in accordance with their respective terms. Following Admission, the Company will have 1,016,414,582 Ordinary Shares in issue.
A combined circular and prospectus (the "Prospectus") containing, amongst other things, the full details of the Capital Raising and the notice of the General Meeting is expected to be published and posted by the Company later today. Set out below in Appendix I and Appendix II is some further information regarding the Company and the Capital Raising which will be contained within the Prospectus.
Appendix III sets out further information relating to the Bookbuilding Process and the terms and conditions of the Placing. Persons who have chosen to participate in the Placing, by making an oral, electronic or written offer to acquire New Ordinary Shares, will be deemed to have read and understood this Announcement in its entirety (including the Appendices) and to be making such offer on the terms and subject to the conditions herein, and to be providing the representations, warranties, agreements, acknowledgements and undertakings contained in Appendix III.
Capitalised terms used but not otherwise defined in the text of this Announcement are defined in appendix IV to this Announcement. Certain key risk factors relating to the Company are set out in appendix V to this Announcement.
The person responsible for arranging the release of this Announcement on behalf of the Company is Mansour Al Alami, Executive Chairman of the Company.
Commenting, Mansour Al Alami, Executive Chairman of GMS, said:
"The fundraise announced today represents a further stepping stone in the resetting of the GMS story. It is encouraging to have the support and commitment from key shareholders in being able to deliver on this. With reduced debt and much improved terms, the Company will be well placed to benefit from the improving market cycle in oil & gas in the Middle East and renewables in Europe and the potential for increases in day rates as the market continues to tighten. This will build on the significant progress made to-date, which includes a much-reduced costs base, a strengthening of the order book and far better levels of vessel utilisation. These achievements are reflected in the performance of the Company in 2021, with trading and operations in-line with the business plan".
Enquiries:
Gulf Marine Services plc +44 (0)20 7603 1515 Mansour Al Alami (Executive Chairman) Panmure Gordon (UK) Limited - Sponsor and Joint Bookrunner +44 (0)20 7886 2500 Dominic Morley John Prior Nicholas Harland Hugh Rich ENBD Capital - Regional Joint Bookrunner +9714 303 2800 Prasad Chari Celicourt Communications - public relations adviser +44 (0)20 8434 2754 Mark Antelme Philip Dennis
This Announcement should be read in its entirety. In particular, you should read and understand the information provided in the "Important Notices" section of this Announcement.
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
2021
Record Date for Open Offer 7 June
Announcement of the Capital Raising(1)(2)(3) 9 June
Publication and posting of the Prospectus (including 9 June
the Notice of the General Meeting), the Form
of Proxy and the Application Forms (to Qualifying
Non-CREST Shareholders only)
Ex-Entitlement Date for the Open Offer 9 June
Open Offer Entitlements and Excess Open Offer 10 June
Entitlements enabled in CREST and credited to
stock accounts of Qualifying CREST Shareholders
in CREST
Recommended latest time for requesting withdrawal 18 June
of Open Offer Entitlements and Excess Open Offer
Entitlements from CREST(4)
Latest time and date for depositing Open Offer 21 June
Entitlements and Excess Open Offer Entitlements
into CREST(5)
Latest time and date for splitting of Application 22 June
Forms (to satisfy bona fide market claims only)
Latest time and date for electronic proxy appointments 11.00 a.m. on
or receipt of Forms of Proxy 23 June
Latest time and date for receipt of completed 11.00 a.m. on
Application Forms and payment in full under 24 June
the Open Offer or settlement of relevant CREST
instructions (as appropriate)
General Meeting 25 June
Capital Reorganisation Record Date 25 June
Announcement of the Results of General Meeting 25 June
and Capital Raising
Admission of, and dealings commence in, the 28 June
New Ordinary Shares
CREST members' accounts credited in respect 28 June
of New Ordinary Shares in uncertificated form
Expected despatch of definitive share certificates By 9 July
for New Ordinary Shares in certificated form
Notes:
(1) The times and dates set out in this expected timetable and mentioned in this Announcement the Application Form and in any other document issued in connection with the Capital Raising are subject to change by the Company with the agreement of, in certain instances, Panmure Gordon, in which event details of the new times and dates will be notified to the FCA, the London Stock Exchange and, where appropriate, to Shareholders.
(2) References to times in this Announcement are to London time unless otherwise indicated.
(3) The ability to participate in the Placing and Open Offer is subject to certain restrictions relating to Shareholders with registered addresses outside the United Kingdom
(4) If your Open Offer Entitlements and Excess Open Offer Entitlements are in CREST and you wish to convert them to certificated form.
(5) If your Open Offer Entitlements and Excess Open Offer Entitlements are represented by an Application Form and you wish to convert them to uncertificated form.
IMPORTANT NOTICES
MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THIS ANNOUNCEMENT (INCLUDING THE APPICES) AND THE TERMS AND CONDITIONS SET OUT HEREIN (TOGETHER, THIS "ANNOUNCEMENT") ARE DIRECTED ONLY AT PERSONS WHOSE ORDINARY ACTIVITIES INVOLVE THEM IN ACQUIRING, HOLDING, MANAGING AND DISPOSING OF INVESTMENTS (AS PRINCIPAL OR AGENT) FOR THE PURPOSES OF THEIR BUSINESS AND WHO HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS AND ARE: (1) IF IN A MEMBER STATE OF THE EUROPEAN ECONOMIC AREA ("EEA"), QUALIFIED INVESTORS AS DEFINED IN ARTICLE 2(e) OF REGULATION (EU) 2017/1129 (THE "EU PROSPECTUS REGULATION"); (2) IF IN THE UNITED KINGDOM, QUALIFIED INVESTORS AS DEFINED IN ARTICLE 2(e) OF REGULATION (EU) 2017/1129 AS IT FORMS PART OF THE UNITED KINGDOM DOMESTIC LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018 (THE "UK PROSPECTUS REGULATION"); WHO (A) FALL WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005, AS AMED (THE "ORDER") (INVESTMENT PROFESSIONALS) OR (B) FALL WITHIN ARTICLE 49(2)(a) TO (d) (HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC.) OF THE ORDER; AND (3) OTHERWISE, PERSONS TO WHOM IT IS OTHERWISE LAWFUL TO COMMUNICATE IT TO (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS").
THIS ANNOUNCEMENT AND THE INFORMATION IN IT MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. PERSONS DISTRIBUTING THIS ANNOUNCEMENT MUST SATISFY THEMSELVES THAT IT IS LAWFUL TO DO SO. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS ANNOUNCEMENT RELATES IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. THIS ANNOUNCEMENT DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN THE COMPANY.
THE NEW ORDINARY SHARES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMED (THE "SECURITIES ACT") OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR JURISDICTION OF THE UNITED STATES, AND MAY NOT BE OFFERED, SOLD OR TRANSFERRED, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES (INCLUDING ITS TERRITORIES AND POSSESSIONS, ANY STATE OF THE UNITED STATES AND THE DISTRICT OF COLUMBIA) (THE "UNITED STATES" OR THE "US") EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN COMPLIANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES. THE NEW ORDINARY SHARES ARE BEING OFFERED AND SOLD ONLY OUTSIDE OF THE UNITED STATES IN "OFFSHORE TRANSACTIONS" WITHIN THE MEANING OF, AND IN ACCORDANCE WITH, REGULATION S UNDER THE SECURITIES ACT AND OTHERWISE IN ACCORDANCE WITH APPLICABLE LAWS. NO PUBLIC OFFERING OF THE NEW ORDINARY SHARES IS BEING MADE IN THE UNITED STATES OR ELSEWHERE.
UAE EXEMPT OFFER NOTICE
This announcement has not been reviewed or approved by any regulatory authority, including the Central Bank of the United Arab Emirates (the "UAE"), Emirates Securities and Commodities Authority or any regulatory authority in any free zones established and operating in the territory of the UAE.
The announcement does not constitute, and is not intended to constitute, a public offer of securities in the UAE or any free zones established and operating in the territory of the UAE and accordingly should not be construed as such. Any securities in any offering referred to in this announcement are only being offered to a limited number of qualified investors in the UAE who are willing and able to conduct an independent investigation of the risks involved in an investment in such securities. This announcement is for the use of the named addressee only and should not be given or shown to any other person (other than employees, agents or consultants in connection with the addressee's consideration thereof).
ADGM EXEMPT OFFER NOTICE
This announcement is for distribution only to persons who (a) are outside the Abu Dhabi Global Market, or (b) are Authorised Persons or Recognised Bodies (as such terms are defined in the ADGM Financial Services and Markets Regulations 2015 (" FSMR" )), or (c) are persons to whom an invitation or inducement to engage in investment activity (within the meaning of section 18 of the FSMR) in connection with the issue or sale of any securities may otherwise lawfully be communicated or caused to be communicated (all such persons together being referred to as "relevant persons" for the purposes of this paragraph). This announcement is directed only at relevant persons and must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this announcement relates is available only to relevant persons and will be engaged in only with relevant persons.
This announcement relates to an Exempt Offer in accordance with the Market Rules of the ADGM Financial Services Regulatory Authority (" FSRA" ). This announcement is intended for distribution only to persons of a type specified in the Market Rules of the ADGM. It must not be delivered to, or relied on by, any other person. The FSRA has no responsibility for reviewing or verifying any prospectus or other documents in connection with this Offering. The FSRA has not approved this announcement or any other associated documents nor taken steps to verify the information set out in this announcement, and has no responsibility for it nor any offering memorandum. The securities to which this announcement relates may be illiquid and/or subject to restrictions on their resale. Prospective purchasers of the securities offered should conduct their own due diligence on the securities. If you do not understand the contents of this announcement you should consult an authorized financial advisor.
DIFC EXEMPT OFFER NOTICE
This announcement is for distribution only to persons who (a) are outside the Dubai International Financial Centre, or (b) are persons who meet the Professional Client criteria set out in Rule 2.3.4 of the DFSA Conduct of Business Module (all such persons together being referred to as " relevant persons" for the purposes of this paragraph). This announcement is directed only at relevant persons and must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this announcement relates is available only to relevant persons and will be engaged in only with relevant persons.
This announcement is intended to provide information about investments and investment services which are not subject to any form of regulation or approval by the Dubai Financial Services Authority (" DFSA "). This announcement relates to an Exempt Offer of securities in accordance with the Offered Securities Rules of the DIFC Financial Services Authority (" DFSA" ). This announcement is intended for distribution only to persons of a type specified in the Offered Securities Rules of the DFSA. It must not be delivered to, or relied on by, any other person. The DFSA has no responsibility for reviewing or verifying any prospectus or other documents in connection with this CAPITAL RAISING. Accordingly, the DFSA has not approved this announcement or any other associated documents nor taken steps to verify the information set out in this announcement, and has no responsibility for it nor any offering memorandum. The securities to which this announcement relates may be illiquid and/or subject to restrictions on their resale. Prospective purchasers of the securities offered should conduct their own due diligence on the securities. If you do not understand the contents of this announcement you should consult an authorized financial advisor.
NOTICE TO INVESTORS IN THE KINGDOM OF SAUDI ARABIA
This announcement may not be distributed in the Kingdom of Saudi Arabia ("Saudi Arabia" or the "KSA"), except to such persons as are permitted under the Rules on the Offer of Securities and Continuing Obligations (the "Saudi Regulations") issued by the Board of the Capital Market Authority (the "Capital Market Authority") pursuant to resolution number 3-123-2017, dated 27 December 2017, based on the Capital Market Law issued by Royal Decree No. M/30 dated 2/6/1424H (as amended by Resolution of the Board of the Capital Market Authority number 1-104-2019 dated 30 September 2019G (the "2019 Saudi Regulations"), and Resolution of the Board of the Capital Market Authority number 1-7-2021 dated 14 January 2021G (the "2021 Saudi Regulations"), noting that certain provisions of the 2021 Saudi Regulations only come into force on 1 January 2022G).
The Capital Market Authority does not make any representation as to the accuracy or completeness of this announcement, and expressly disclaims any liability whatsoever for any loss arising from, or incurred in reliance upon, any part of this announcement. Prospective purchasers of the securities offered hereby should conduct their own due diligence on the accuracy of the information relating to the securities. If a prospective purchaser does not understand the contents of this announcement, he or she should consult an authorised financial adviser.
The New Ordinary Shares and the Open Offer Entitlements must not be advertised, offered or sold and no memorandum, information circular, brochure or any similar document has or will be distributed, directly or indirectly, to any person in Saudi Arabia other than to Sophisticated Investors within the meaning of Article 9 of the 2019 Saudi Regulations.
The Capital Raising in Saudi Arabia shall not, therefore, constitute a "public offer" pursuant to the Saudi Regulations. Prospective investors are informed that Article 15 of the 2019 Saudi Regulations (and Article 14 of the 2021 Saudi Regulations) places restrictions on secondary market activity with respect to the Shares. Any resale or other transfer, or attempted resale or other transfer, made other than in compliance with the Saudi Regulations shall not be recognised.
THIS ANNOUNCEMENT (INCLUDING THE APPICES) AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM THE UNITED STATES, AUSTRALIA, CANADA, THE REPUBLIC OF SOUTH AFRICA OR JAPAN OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.
THIS ANNOUNCEMENT IS NOT FOR PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM THE UNITED STATES OF AMERICA. THIS ANNOUNCEMENT IS NOT AN OFFER OF SECURITIES FOR SALE OR SUBSCRIPTION INTO THE UNITED STATES. THE SECURITIES REFERRED TO HEREIN HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES, EXCEPT PURSUANT TO AN APPLICABLE EXEMPTION FROM REGISTRATION. NO PUBLIC OFFERING IS BEING MADE IN THE UNITED STATES.
The distribution of this Announcement and/or the Capital Raising and/or the issue of the New Ordinary Shares in certain jurisdictions may be restricted by law. No action has been taken by the Company, the Joint Bookrunners or any of their respective affiliates, agents, directors, officers, consultants, partners or employees ("Representatives") that would permit an offer of the New Ordinary Shares or possession or distribution of this Announcement or any other offering or publicity material relating to such New Ordinary Shares in any jurisdiction where action for that purpose is required. Persons into whose possession this Announcement comes are required by the Company and the Joint Bookrunners to inform themselves about and to observe any such restrictions.
This Announcement or any part of it is for information purposes only and does not constitute or form part of any offer to issue or sell, or the solicitation of an offer to acquire, purchase or subscribe for, any securities in the United States, Australia, Canada, the Republic of South Africa or Japan or any other jurisdiction in which the same would be unlawful. No public offering of the New Ordinary Shares is being made in any such jurisdiction.
The New Ordinary Shares have not been approved or disapproved by the US Securities and Exchange Commission, any state securities commission or other regulatory authority in the United States, nor have any of the foregoing authorities passed upon or endorsed the merits of the Capital Raising or the accuracy or adequacy of this Announcement. Any representation to the contrary is a criminal offence in the United States. The relevant clearances have not been, nor will they be, obtained from the securities commission of any province or territory of Canada, no prospectus has been lodged with, or registered by, the Australian Securities and Investments Commission or the Japanese Ministry of Finance; the relevant clearances have not been, and will not be, obtained from the South Africa Reserve Bank or any other applicable body in the Republic of South Africa in relation to the New Ordinary Shares; and the New Ordinary Shares have not been, nor will they be, registered under or offered in compliance with the securities laws of any state, province or territory of the United States, Australia, Canada, the Republic of South Africa or Japan. Accordingly, the New Ordinary Shares may not (unless an exemption under the relevant securities laws is applicable) be offered, sold, resold or delivered, directly or indirectly, in or into the United States, Australia, Canada, the Republic of South Africa or Japan or any other jurisdiction outside the United Kingdom.
Persons (including, without limitation, nominees and trustees) who have a contractual right or other legal obligations to forward a copy of this Announcement should seek appropriate advice before taking any such action.
By participating in the Bookbuilding Process and the Placing, each person who is invited to and who chooses to participate in the Placing (a "Placee") by making an oral, electronic or written and legally binding offer to acquire Placing Shares will be deemed to have read and understood this Announcement in its entirety, to be participating, making an offer and acquiring Placing Shares on the terms and conditions contained herein and to be providing the representations, warranties, indemnities, acknowledgements and undertakings contained in Appendix III. Members of the public are not eligible to take part in the Placing and no public offering of the Placing Shares is being or will be made.
This Announcement may contain, or may be deemed to contain, "forward-looking statements" with respect to certain of the Company's plans and its current goals and expectations relating to its future financial condition, performance, strategic initiatives, objectives and results. Forward-looking statements sometimes use words such as "aim", "anticipate", "target", "expect", "estimate", "intend", "plan", "goal", "believe", "seek", "may", "could", "outlook" or other words of similar meaning. By their nature, all forward-looking statements involve risk and uncertainty because they relate to future events and circumstances which are beyond the control of the Company, including amongst other things, United Kingdom domestic and global economic business conditions, market-related risks such as fluctuations in interest rates and exchange rates, the policies and actions of governmental and regulatory authorities, the effect of competition, inflation, deflation, the timing effect and other uncertainties of future acquisitions or combinations within relevant industries, the effect of tax and other legislation and other regulations in the jurisdictions in which the Company and its affiliates operate, the effect of volatility in the equity, capital and credit markets on the Company's profitability and ability to access capital and credit, a decline in the Company's credit ratings; the effect of operational risks; and the loss of key personnel. As a result, the actual future financial condition, performance and results of the Company may differ materially from the plans, goals and expectations set forth in any forward-looking statements. Any forward-looking statements made in this Announcement by or on behalf of the Company speak only as of the date they are made. Except as required by applicable law or regulation, the Company expressly disclaims any obligation or undertaking to publish any updates or revisions to any forward-looking statements contained in this Announcement to reflect any changes in the Company's expectations with regard thereto or any changes in events, conditions or circumstances on which any such statement is based.
Panmure Gordon is authorised and regulated by the FCA in the United Kingdom and is acting exclusively for the Company and no one else in connection with the Capital Raising, and Panmure Gordon will not be responsible to anyone (including any Placees) other than the Company for providing the protections afforded to its clients or for providing advice in relation to the Capital Raising or any other matters referred to in this Announcement.
No representation or warranty, express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by the Joint Bookrunners or by any of their Representatives as to, or in relation to, the accuracy or completeness of this Announcement or any other written or oral information made available to or publicly available to any interested party or its advisers, and any liability therefor is expressly disclaimed.
No statement in this Announcement is intended to be a profit forecast or estimate, and no statement in this Announcement should be interpreted to mean that earnings per share of the Company for the current or future financial years would necessarily match or exceed the historical published earnings per share of the Company.
This Announcement does not constitute a recommendation concerning any investor's options with respect to the Capital Raising. The price of shares and any income expected from them may go down as well as up and investors may not get back the full amount invested upon disposal of the shares. Past performance is no guide to future performance, and persons needing advice should consult an independent financial adviser.
The New Ordinary Shares to be issued pursuant to the Capital Raising will not be admitted to trading on any stock exchange other than the main market for listed securities of the London Stock Exchange.
Neither the content of the Company's website nor any website accessible by hyperlinks on the Company's website is incorporated in, or forms part of, this Announcement.
Information to Distributors
Solely for the purposes of the product governance requirements contained within Chapter 3 of the FCA Handbook Production Intervention and Product Governance Sourcebook (the "UK Product Governance Requirements"), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any "manufacturer" (for the purposes of the UK Product Governance Requirements) may otherwise have with respect thereto, the New Ordinary Shares have been subject to a product approval process, which has determined that such securities are: (i) compatible with an end target market of investors who meet the criteria of retail investors and investors who meet the criteria of professional clients and eligible counterparties, each as defined in paragraph 3 of the FCA Handbook Conduct of Business Sourcebook; and (ii) eligible for distribution through all distribution channels (the "Target Market Assessment"). Notwithstanding the Target Market Assessment, distributors (for the purposes of UK Product Governance Requirements) should note that: (a) the price of the New Ordinary Shares may decline and investors could lose all or part of their investment; (b) the New Ordinary Shares offer no guaranteed income and no capital protection; and (c) an investment in the New Ordinary Shares is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Placing. Furthermore, it is noted that, notwithstanding the Target Market Assessment, Panmure Gordon will only procure investors who meet the criteria of professional clients and eligible counterparties.
For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of Chapter 9A or 10A respectively of the FCA Handbook Conduct of Business Sourcebook; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the New Ordinary Shares.
Each distributor is responsible for undertaking its own target market assessment in respect of the New Ordinary Shares and determining appropriate distribution channels.
APPIX I - FURTHER INFORMATION REGARDING THE COMPANY AND THE CAPITAL RAISING
Introduction
In November 2020, a new Board was appointed, and Mansour Al Alami assumed the role of Interim Executive Chairman of the Company, this role being made permanent on 26 May 2021. A key focus since the new Board was appointed has been the renegotiation of the terms of the Company's debt facilities. The Executive Chairman is delighted to say that the Company successfully concluded negotiations with its lenders on 31 March 2021 (the "Revised Debt Terms"), on an improved structure, which is expected to see a substantial reduction in the cost of the facilities over the next two years, when compared to the arrangements approved by the previous board.
As well as greatly reducing the cost of borrowings, the Company has been granted an extension to the requirement to raise a minimum of U.S.$25 million (net) of new equity to 30 June 2021 and until the end of 2022 for new equity up to an aggregate total of U.S.$75 million (net) (including the amount raised previously). The equity proceeds from this first fundraise (U.S.$25 million net) will be used to reduce the Company's indebtedness as required under the terms of the new debt facilities and subject to raising U.S.$25 million (net of expenses), the Company will no longer be required to issue the First Tranche Warrants to its lenders on 1 July 2021 or be charged PIK interest on the loan facilities. Following the Capital Raising, the Company will have a U.S.$357.5 million term loan until 30 June 2025 and U.S.$50 million working capital facility until 30 June 2025.
Under the revised agreement, the rate of interest payable by the Company on its borrowings decreases from LIBOR +5 per cent. to LIBOR +3 per cent., retrospectively from the beginning of 2021, with the savings on interest payments being used to pay down our principal debt position, thereby increasing the speed at which the Company can deleverage the balance sheet. This reduced interest rate applies until the end of 2022, after which the existing ratchet will apply. In addition, further time has been granted to the Company to raise equity and (if required) issue warrants as required by the previous banking agreements.
Following Admission and the making of the prepayment of at least U.S.$25 million referred to above, the previously announced PIK structure will automatically cease to apply. If the second equity-raising and prepayment is achieved by the end of 2022, PIK interest will never accrue.
The net proceeds of the Capital Raising will be applied to reduce indebtedness under the Revised Debt Terms, to satisfy the First Equity Raise Condition.
Background to and reasons for the Capital Raising
Under the management of the previous board of directors, none of whom are now serving, the Company announced on 10 June 2020 that it had reached agreement with its syndicate of banks on heads of terms for the restructuring of its debt facilities. The agreement provided for renewed existing term loan facilities with an extended maturity to 30 June 2025, a new working capital facility to replace the existing working capital facilities, increased financial covenant headroom, the issue to the lending banks of warrants to subscribe for new Ordinary Shares which, if fully vested and exercised in full before their expiry in June 2025, could result in the banks owning up to a 20 per cent. minority interest in the outstanding shares of the Company and the payment of additional interest on a PIK basis.
It was agreed that the warrants would not be issued and additional PIK interest would not be chargeable if the Company completed an equity fund raising of at least U.S.$75 million (net) and made a prepayment of U.S.$75 million in respect of the debt outstanding under the agreements, in each case no later than 31 December 2020. It was also agreed that if the U.S.$75 million prepayment referred to above was not made and the Shareholder resolutions necessary to authorise the issuance of the warrants were not passed, in each case by 31 December 2020, the banks would be entitled to call a default under the agreements.
To allow this process time to conclude, the banks granted the Company relief under its existing bank facilities in the form of (i) the rollover of certain loans, (ii) the waiver of applicable financial covenant tests and (iii) the deferral of the principal payments due thereunder. At the same time, the Company made initial progress towards undertaking a share capital increase before the end of 2020, with the aim of raising at least U.S.$75 million of net proceeds.
Soon thereafter, Seafox announced that it had made a non-binding proposal to the Board regarding a possible cash offer for the entire issued and to be issued share capital of the Company. Seafox highlighted at the time that if the Company should be unable to secure sufficient equity investment and if the warrants were issued and/or PIK interest is incurred, this would severely depress returns for the Company's shareholders. On 28 May 2020 Seafox announced that it did not intend to make an offer for the Company pursuant to Rule 2.7 of the City Code on Takeovers and Mergers.
Over the next few months, the Company received requisitions from Seafox requiring that general meetings be convened to consider the resolutions to appoint additional directors to the Board and to remove other directors given, inter alia, Seafox did not believe the proposed bank deal was in the best interests of Shareholders. These resolutions were passed. At the same time, the Company prepared a circular to Shareholders to seek approval for the issue of the warrants referred to above. These resolutions were not passed.
On 31 December 2020, the Company announced that the banks had agreed to extend, until 31 January 2021, the obligations on the Company which it was otherwise required to have met by 31 December 2020, including in relation to the issue of warrants to the banks. The Company thereby avoided an event of default at the time. This extension was further extended and a new definitive agreement was announced with the Lenders on 1 April 2021.
The Board considers that the terms of the Revised Debt Terms are significantly better than those originally negotiated by the previous board members and represent a material uplift to the equity value attributable to Shareholders.
Key terms of the Revised Debt Terms
Under the Revised Debt Terms, the rate of interest payable by the Company on its term borrowings will decrease from LIBOR +5 per cent. to LIBOR +3 per cent., retrospectively from the beginning of 2021. The reduced interest rate will apply until the end of 2022. The same applies to the working capital loans, except the original margin on those loans was 4.75 per cent.
Additional time has been granted to the Company to raise equity. The previous PIK structure and deadlines for the issuance of warrants to the banks no longer apply; instead, providing the Company satisfies the First Equity Raise Condition and makes the Interim Prepayment no later than 30 June 2021, and satisfies the Second Equity Raise Condition to make the Minimum Prepayment no later than 31 December 2022, it will not be required to issue any Warrants nor will any PIK interest accrue. Any such proceeds raised will be used to reduce the Company's debt liabilities.
Details of the key terms of the Revised Debt Terms are as follows:
-- the cash interest margin is reduced from LIBOR +5 per cent. (+4.75 per cent. in the case of working capital loans) to LIBOR +2.75 per cent., retrospectively from the beginning of 2021. This reduced interest rate applies until the end of 2022, after which the existing ratchet will apply;
-- faster deleveraging of the balance sheet through the application towards principal repayment of the cash saved due to the reduced margin; and
-- the granting of longer periods to raise a minimum net amount of U.S.$75 million (to be applied towards prepayment of the loans) before triggering the issuance of warrants and accrual of PIK.
The Board believes that the terms of the Revised Debt Terms are on vastly improved terms to what was agreed in June last year. As a result, this creates a positive platform on which the future development and growth of the business can be based, allowing the Company to benefit from pick-up across its core markets.
Further, the revised structure provides the time needed to seek to complete the U.S.$75m equity raise, as well as review alternative options to optimise the capital structure, including a refinancing, by the end of 2022, should the Company be able to deleverage the balance sheet and improve its net debt to Adjusted EBITDA profile.
Operational improvements
A number of operational improvements with a particular focus on areas that improved the financial performance of the Company have been put in place recently. These include:
-- A cost reduction programme that has resulted in more than US $20 million of annualised cost savings being removed from the business since it commenced in 2019, with key areas of saving in the following areas:
-- Streamlining of organisational structure with the removal of excessive layers of management and support personnel;
-- Renegotiation of key supplier contracts to reduce cost and lock in pricing going forward;
-- Review of build-up of crew onboard vessels with the removal of unnecessary or redundant positions;
-- Closure of our operational office in Aberdeen, Scotland with operations now being run from our headquarters in Abu Dhabi, United Arab Emirates; and
-- Closure of our yard facilities in Mussafah and MINA Port, Abu Dhabi and relocation of our headquarters to a smaller office.
-- Relocation of two E Class vessels from the North Sea to MENA Region to capitalise on higher levels of current and future demand in our core markets within the MENA Region (UAE, Saudi Arabia and Qatar).
-- A temporary increase to crew rotations (the time a seafarer spends on board our vessel before going on leave) in order to overcome challenges presented as a direct result of the COVID-19 Pandemic where the rotating of crew offshore has been impacted as a result of border closures and quarantine requirements.
The Company continues to explore further opportunities to bring in more efficiencies to the business whilst ensuring that the continued delivery of safe and reliable operations are not compromised.
Management and board changes
On 10 November 2020, Rashed Al Jarwan Saeed Abdullah Khoory and Mansour Al Alami were appointed to the Board as Non- Executive Directors by resolutions passed by shareholders. The Board that day appointed Mansour Al Alami as Non-Executive Chairman and later that month as Interim Executive Chairman, made permanent on 26 May 2021. Sadly, Saeed Abdullah Khoory passed away in February this year. On 25 November, Hassan Heikal was appointed to the Board by a resolution passed by shareholders and was subsequently appointed as Deputy Chairman in February 2021. Also in February this year, Jyrki Koskelo was appointed by the Board as an additional Independent Non--Executive Director. GMS are also delighted to have appointed Lord St John of Bletso as Independent Non--Executive Director on 26 May 2021. The Company is currently searching for an additional Independent Non-Executive Director with the right skill sets to strengthen the board further and add greater diversity.
Earlier this year the Company also appointed both a Chief Financial Officer, Andy Robertson, and a Chief Operating Officer, Mark Harvey. Both individuals have been with the Company for several years and bring extensive industry knowledge and experience.
The new Board combines strong relationships with key clients and banks, in the MENA region, with a high level of industry knowledge. These strengths have already benefited the business, through the delivery of improved banking terms, and the Board believes they will also play a key role in helping the future direction and growth of the business.
Management and board changes
The Company is committed to, and recognises the value and importance of, high standards of corporate governance. As at the date of the Prospectus, the Company is in compliance with the provisions set out in the UK Corporate Governance Code, with the exceptions of provisions 9 and 20 as described in the table below and on page 42 of the Company's Annual Report and Accounts for 2020.
The table below shows the provisions of the Corporate Governance Code with which the Company was not in compliance during the periods specified below.
UK Corporate Governance Period of Reasons for non-compliance
Code Provision non- compliance
5. A designated From 10 November Transition period following complete
Director for 2020 to 6 Board change and selection of
engagement May 2021 an appropriate Director to fulfil
with the workforce. this role.
9. The roles of From 21 August Whilst holding the positions of
Chair and Chief 2019 both Executive Chairman and Chief
Executive should Executive is not recommended by
not be exercised the UK Corporate Governance Code,
by the same the Board has concluded that this
individual. continues to be appropriate for
the Company.
This recognises both the level
and pace of change necessary for
the Company and its relatively
small scale. The Board also believes
that Mr. Al Alami is the best
person to chair the Board and
lead the management of the business
for the foreseeable future, but
will continue to keep these arrangements
under review to ensure that they
operate satisfactorily.
20. Open advertising Following Mansour Al Alami, Rashed Al Jarwan,
and/or an external outcome of the late Saeed Mer Abdulla Khoory
search consultancy General Meeting were appointed Non-Executive Directors
should generally of 10 November following majority shareholder
be used for 2020 votes cast at the requisitioned
the appointment General Meeting of 10 November.
of the chair Hassan Heikal was similarly appointed
and non- executive on 25 November. Given extensive
directors. contacts already available, the
scale of the Company, the need
to minimise expense, the appointment
of Jyrki Koskelo and Lord St John
of Bletso by the Board followed
a search process though not through
open advertising or an external
search consultancy.
21. There should 2020 evaluation The 2019 evaluation was completed
be a formal review in 2020. Following the changes
and rigorous to the Board in November 2020,
annual evaluation the new Board intends to undertake
of the performance the next evaluation during 2021
of the Board, to allow meaningful assessment
its Committee, of the new Board to be made.
the Chair and
individual
Directors.
24. The Board should From 10 November Transition period following the
satisfy itself 2020 to 4 Board change and the procedure
that at least February required for the appointment of
one member 2021 Jyrki Koskelo, who has recent
has recent and relevant financial experience.
and relevant
financial experience.
Current trading and prospects in respect of the Group
The Board is confident that utilisation and revenues in 2021 and beyond will continue to grow, despite the challenges the Company continues to face as a result of the COVID-19 pandemic. GMS' confidence is based on the contracted backlog which, including options, stood at U.S.$199 million as at 6 May 2021, combined with an improved pipeline of opportunities, underpinned by the better financial structure now in place. The improved pipeline is aided by an uptick for demand for our services in our core markets, driven by an increase in activity by our key NOC and EPC customers as well as a pick up in offshore wind, where seven of our fleet can be deployed. The Company has also benefited from a decrease in vessel supply in our Middle Eastern markets, due to demand for vessels to service the growing offshore windfarm market, particularly in China.
These market dynamics also make us optimistic that the day rates for our fleet will improve in the short term.
Procedures are now in place to minimise COVID-19 related costs, while tenders, due to be announced in 2020, are likely to be awarded in 2021, as demand from the Company's key clients remains strong.
GMS began 2021 with a significant improvement to the secured utilisation position, over last year, which is encouraging and gives the Company added comfort for the year ahead. For example, on 14 April 2021 GMS announced two additional short-term contract wins for our larger E-Class vessels, with an EPC client in the MENA region and a Windfarm Developer in North West Europe. It is equally encouraging to have a number of contracts extended, demonstrating the strength of the relationships GMS has with its clients and their willingness to work with the Company going forward.
The Group's financial performance, to the end of March 2021, remains in line with business plan and an improvement from the same period last year. With over 91 per cent. of the 2021 business plan revenues already secured, 80 per cent. vessel utilisation already secured for 2021, together with an improvement on day rates on recent contract awards for the Group's larger E-Class vessels, the Board is confident of delivering further improved results.
Free float and shares in public hands
Following the acquisition of Ordinary Shares by Seafox in 2020, the percentage of the Company's share capital in public hands has dropped below the level ordinarily required under the Listing Rules. As at the Latest Practicable Date shares in public hands are currently calculated to be approximately 21.9 per cent., 3.1 percentage points below the level ordinarily required under the Listing Rules. A temporary modification has been granted by the FCA until 5 November 2021 to allow for the total number of shares in public hands to fall below the required threshold to a minimum of 21.9 per cent.
Should the number of Ordinary Shares held by the Company's major Shareholders increase further in due course, this will reduce the percentage of shares in public hands again, and perhaps below the level required. In such circumstances, the Company would seek a derogation from the FCA under the Listing Rules so the Company has time to seek to rectify the position again. No guarantees can be provided that the FCA would approve such a derogation request or on the conditions that may be imposed.
Details of the Open Offer
Subject to the terms and conditions to be set out in the Prospectus (and, in the case of Qualifying Non-CREST Shareholders, the Application Form), the Open Offer Shares will be offered for subscription to Qualifying Shareholders on the following basis: 19 Open Offer Shares at 3 pence per Open Offer Share for every 10 Existing Ordinary Shares held and registered in their name at the Record Date and so in proportion for any other numbers of Existing Ordinary Shares then held.
Qualifying Shareholders may apply for any whole number of Open Offer Shares up to their Open Offer Entitlements. Fractions of Open Offer Shares will not be allotted and each Qualifying Shareholder's Open Offer Entitlements will be rounded down to the nearest whole number. Any fractional entitlements to Open Offer Shares will be disregarded in calculating Qualifying Shareholders' Open Offer Entitlements and will be aggregated and made available under the Excess Application Facility. Applications by Qualifying Shareholders will be satisfied in full up to their Open Offer Entitlements.
Qualifying Shareholders may apply to subscribe for additional Open Offer Shares using the Excess Application Facility, should they wish.
The Excess Application Facility will comprise Open Offer Shares that are not taken up by Qualifying Shareholders under the Open Offer pursuant to their Open Offer Entitlements. Qualifying Shareholders' applications for additional Open Offer Shares will, therefore, be satisfied only to the extent that any fractional entitlements are aggregated and to the extent that applications by other Qualifying Shareholders are made for less than their pro rata Open Offer Entitlements.
If there is an over-subscription resulting from excess applications, excess applications shall be allocated on a pro rata basis to Qualifying Shareholders' excess applications.
Any Open Offer Shares which are not applied for under the Open Offer or the Excess Application Facility will be allocated to Placees at the Issue Price.
APPIX II - BUSINESS OVERVIEW OF THE GROUP
The Group is a leading provider of advanced SESVs, serving the offshore oil, gas and renewable energy sectors, with a focus on the MENA region and Northwest Europe. The Group's fleet of 13 SESVs is highly attractive to customers seeking to charter some of the most advanced, reliable and cost-efficient vessels to provide a wide range of services throughout the life-cycle of offshore oil, gas and renewable energy projects. The Group charters its SESVs to a high-quality customer base comprising NOCs, NIOCs, EPC contractors, OEMs and renewable energy companies operating in the MENA region and Europe.
The Group's fleet currently comprises three classes of vessels that serve a range of customers' needs. There are four E-Class vessels with an average age of eight years, three S-Class vehicles with an average age of five years and six K-Class vessels with an average age of 14 years.
The Group's SESV fleet supports its customers in a broad range of offshore oil and gas platform refurbishment and maintenance activities, well intervention work and offshore wind farm maintenance work. These activities are typically funded out of the operating budgets of the Group's customers. The Group's SESV fleet also supports its customers in respect of offshore oil and gas platform installation, modifications and decommissioning and offshore wind turbine installation. These activities are typically funded out of the capital expenditure budgets of the Group's customers.
The Group's revenue is generated by the day rates for each vessel that it charges pursuant to its charter contracts. For the year ended 31 December 2020, the Group had an average utilisation rate of 81 per cent., revenues of U.S.$102.5 million, Adjusted EBITDA of U.S.$50.4 million (increasing to U.S.$59.5 million when adding back heavy lift and COVID-19 costs) and an Adjusted EBITDA margin of 49 per cent. (increasing to 58 per cent. when adding back heavy lift and COVID-19 costs).
1.1 Strengths and Strategy
The Group's Competitive Strengths
The Group believes that it is well positioned to execute and achieve its strategies based on a number of competitive strengths.
(a) The Group has a technologically advanced modern flexible fleet
The Group's fleet of 13 technologically advanced SESVs is one of the most modern and sophisticated in the industry with average life expectancy of up to 40 years and with an average age of ten years, compared to an industry average of nearly 17 years in the MENA region and just over 10 years in Northwest Europe. The Group believes this is especially helpful in the tendering process as historically, in a market characterised by low utilisation rates across the industry, its customers are demonstrating a preference, and in some cases a requirement, for modern vessels that provide significant cost and operational efficiencies.
The Group's SESVs operate in a broader range of environmental conditions than older, lower specification SESVs or alternative vessels. The Group's SESVs have large deck space, high specification cranes, sophisticated jacking mechanisms to reduce the time taken to be in position and are equipped with facilities that accommodate 150 POB and can be further supplemented with offshore temporary accommodation models, supporting up to a total of 300 POB. The Group believes that through the combination of its modern technologically advanced fleet and its experienced and skilled crew and employees, its able to provide its customers safe and effective mobile offshore platforms. The Group believes this combination also allows it to advance its position as the preferred provider of SESVs for oil and gas customers performing well intervention services, topside maintenance and EOR.
The Group believes the technological capabilities of its SESVs also deliver greater operational efficiencies than alternative vessels, leading to significant time and cost savings for its customers from reduced fuel usage, the elimination of ancillary vessel hire for non-propelled vessels and reduced non-productive time. These cost benefits make the Group's SESVs attractive for its customers.
The Group continues to be at the forefront of technological innovation in SESVs and use the its extensive management knowledge and industry experience to expand its services to provide flexible, cost-effective, support solutions to its customers. Bespoke support solutions include the first cantilever system for a SESV and an innovative crew transfer tower that allows personnel transfers while the Group's SESV is jacked up. GMS Evolution, one of the Group's E-Class vessels which is fitted with the unique GMS cantilever, secured its first contract trialling this technology in 2020 for a NOC in the MENA region and was subsequently awarded a long- term contract from the same client that commenced in January 2021.
(b) A highly experienced international management team implementing an ambitious turnaround programme
Over the last two years, the entirety of the Board, with the exception of one of the senior management team, has been replaced. In that time period the Group has implemented an ambitious turnaround programme that has reduced costs, with more than U.S.$20 million of annualised savings implemented to date and improved fleet utilisation to levels not seen since 2016. The management team is committed to further strengthening the business to deliver shareholder value.
(c) Revenue visibility from a substantial contract backlog with high-quality, long-term customers
The Group maintains strong, well-established relationships with blue-chip customers, including NOCs, IOCs, EPC contractors and OEMs, in the MENA region and Northwest Europe. These contracts typically last six months to three plus years, depending on the activities and include option periods that have historically been extended. During 2020, the Company was awarded seven new contracts, with a combined charter period of 7 years (including contract extensions). The Group's secured backlog, including options, as at 31 December 2020 was U.S.$220.2 million, reflecting a 10.8 per cent. decrease in the secured backlog as at 31 December 2019 of U.S.$246.9 million. The Group's total backlog has an average contract duration of approximately 551 days.
Historically, the majority of the Group's SESV activity has been driven by well intervention and maintenance and refurbishment of oil and gas platform top sides as platform age significantly increases the amount of top side repair, maintenance and refurbishment work necessary for the platform to remain serviceable and compliant with relevant regulations. More recently, however, the Group is seeing increased demand from its oil and gas customers for its SESVs to support EOR programmes in mature fields, as these customers are increasingly focussed on enhancing recovery of their discovered reserves. These EOR programmes require extended periods of SESV availability to man topside module installation and modifications, work-over wells and tie back new wells. The Group believes that it is well-positioned to benefit from this trend because its fleet is suited to rapid, multi-move work programmes.
(d) A strong health, safety and environment culture and track record
The Group believes that it is a leader in HSE thanks to the commitment of the its senior management to developing, nurturing and sustaining a culture that targets "no harm to people or the environment". The Group's senior management provides strong demonstrable leadership and commitments towards HSE though participation in HSE meetings with staff and contractors, joint management inspection visits and HSE audits. As a result of this commitment, the Group achieved a total recordable injury rate and lost time injury rate of zero in 2018, which rose slightly to 0.29 and 0.19, respectively, in 2019, and decreased to nil and nil, respectively, in 2020. In absolute terms, these remain at a low level and the Group's safety record has surpassed the industry average since 2007.
The Group obtained and have maintained ISO accreditation (ISO 14001, 9001 and OHSAS 18001) since 2009, and several of the Group's vessels have a UK North Sea Safety Case. In addition, in 2017, it obtained a UK North Sea Safety Case for its innovative cantilever system (as a mobile offshore drilling unit). Furthermore, the Group's vessels GMS Endeavour and GMS Endurance have Dutch safety cases. In 2020, more than two million working hours were accumulated across its operations with no spills or unintended releases that cause damage to the environment.
(e) The Group has a highly skilled workforce
The Group has owned and operated SESVs for more than 35 years. The Group's multi-cultural workforce is recruited from more than 35 countries and has extensive experience in the global SESV sector. It retains critical specialist personnel in the fields of electrical, jacking, crane and dynamic positioning, and the Group's managers have extensive industry experience as naval architects, oil and gas specialists, marine engineers and master mariners. The Group's GMS Training Academy allows it to efficiently equip its newly recruited and experienced qualified mariners with the additional, highly specialised skills needed to operate the Group's SESVs. In 2017, the Group designed and developed the SESV Move and Positioning Course, delivered via a simulator, which has been adopted as an industry training standard and is being provided to operators of jack-up barges through third party international marine and offshore training providers. Further, the Group is committed to staff retention. During 2019, the Group's staff retention of full-time employees was 83 per cent. For the year ended 31 December 2020, the retention rate was 92 per cent. In addition to individual training programmes for its skilled crew members, the Group uses a robust competence management system to assess performance and retain its valuable employees.
During 2019 and 2020, internal communications increased both onshore and offshore via town hall meetings, regular updates and video communication from the executive Chairman to all offshore staff. In December 2019, the Company launched the first employee engagement survey.
1.2 The Group's Strategy
The Group's primary objective is to create long-term shareholder value through the delivery of modern, innovative and sustainable solutions to its customers in the offshore energy sector, maximising the advantages its operational flexibilities provide. In order to achieve this, the Group is focused on the strategic priorities set out below.
(a) Driving Revenue
The Group uses its expertise in technological innovation to continually enhance its fleet, offering new or improved offshore support solutions to anticipate its customers' operational requirements. The Group's advanced fleet capability makes it ideally placed to capitalise on a recovering market. The Group will continue to optimise the its fleet to ensure deployment matches demand, allowing it to maximise fleet utilisation through best in class operations. This strategy has proven to be effective. Vessel utilisation for 2020 was 81 per cent., and for 2021 utilisation secured by contract as of the date of this announcement is 80 per cent.
(b) In Country Value
Recent focus on improving local content from, in particular, the Group's NOC clients - preference given to contractors with the highest ICV
-- UAE - improvement in ICV score from 36 per cent. to 61 per cent. in the last three years. Contractors that meet the technical requirement of the tenders and that have the highest ICV score are given a price match opportunity against a lower bid from a company with a lower ICV score.
-- KSA - partnered through the Group's JV with established KSA business (Al Fouad Group). The IKTVA programme in place on all contracts awarded by Aramco where the supplier is required to meet pre-set levels of IKTVA score over the life of the contract - failure to do so can result in termination of the contract and denial of access to new tender opportunities.
-- Qatar - the Group's Qatar office opened in 2019, and recently it has been bidding NOC work through a strategic relationship agreement with Milaha. Contractors that meet the technical requirement of the tenders and that have the highest ICV score are given a price match opportunity against a lower bid from a company with a lower ICV score.
(c) Cost management
The Group is focused on delivering safe and cost-effective operations. The Group aims to generate continual cost efficiencies throughout the whole business and reduce its working capital requirements. The Group focuses on appropriately managing its costs and working capital, with due regard to the margins required to maximise liquidity.
During 2019, the Group embarked on a cost saving programme and since then have made significant progress in reducing its cost base. As at 31 December 2020, this programme had secured in excess of U.S.$20 million in annualised savings, significantly exceeding the original target of U.S.$6 million set in March 2019. These savings have been achieved through the delivery of further reductions in headcount, with a focus on eliminating senior management positions, the closure of offices and redundant facilities, and the reduction in costs of the supply chain through competitive tendering and contract renegotiation. The cost savings have allowed the Group to fund shift in strategy to maximise utilisation without impacting overall profitability, resulting in an Adjusted EBITDA margin (when adding back COVID costs and heavy lift costs) of 58 per cent. in 2020, which is an improvement of 10 percentage points from 2019. Going forward, the Group expects that its annual maintenance capex will be approximately U.S.$5 million across its fleet.
(d) Establish and operate within an appropriate financial framework
The Group's objective is to grow Shareholder value by maximising returns on capital, while meeting its customers' needs, which can change over time. In order to achieve this, it is seeking to establish an appropriate long-term sustainable capital structure, with reduced leverage, to meet the Group's strategy of generating long- term shareholder value. The Group will seek to achieve this in the first instance by using the net proceeds from the Capital Raising for debt reduction. Based on current bank facilities this will generate savings on interest through not only reduced debt but also lowering the cost of borrowing in 2021 and 2022, and, subject to raising a minimum of $75 million of new equity by 31 December 2022, removing PIK interest and warrants.
(e) Attract, develop and retain a talented workforce
The Group attracts and retains talented people with the right range of skills, expertise and potential in order to maintain an agile and diverse workforce that can safely deliver its flexible offshore support services. The Group provides bespoke training to key personnel and train its staff to the highest operational standards. The Group will continue to appropriately incentivise its people and to encourage their personal career development and progression within it.
(f) Business Activities
The Group owns and operate a modern, high specification fleet of 13 SESVs that provide customised, versatile, mobile, safe and stable offshore platforms for the Group's customers to support a broad range of activities throughout the lifecycle of shallow water offshore oil and gas and renewable energy assets.
The following tables set out the Group's revenue by geographic region for the three years ended 31 December 2018, 2019 and 2020.
Percentage Percentage Percentage
of Total of Total of Total
2020 (%) 2019 (%) 2018 (%)
UAE and Qatar 72.4 71.0 49.1 45.0 27.1 22.0
KSA 17.7 17.0 32.5 30.0 54.9 44.0
Northwest Europe 12.3 12.0 27.2 25.0 41.4 34.0
Total 102.5 100.0 108.8 100.0 123.4 100.0
Impact of COVID-19
The Group only had a minor impact resulting from the COVID-19 pandemic. The Group experienced less than 2 per cent. downtime as a result of COVID-19 related incidents onboard its vessels throughout the year, and no contracts were cancelled. The Group has seen some deferment of tender awards and contract commencement with clients most of which it expects to be awarded in 2021. Some operation changes, such as crew rotation being extended, were required. The utilisation for 2020 was the highest in the last three years, despite the pandemic.
(g) Oil and gas
Historically, the Group operates predominantly in the brownfield market within the offshore oil and gas sector. The brownfield market covers a broad range of repair and maintenance support services, including well and subsea maintenance services, for existing oil and gas fields as well as major improvements/overhauls of existing infrastructure. However, in recent years, the Group has earned an increasing proportion of its revenue from greenfield projects and other activities funded out of its customers' capital expenditure budgets. The greenfield market includes engineering, procurement and construction activities, installation and decommissioning, and, with respect to EOR activities, water injection and gas injection. The Group's vessel operations span the full lifecycle of an offshore oil or gas field.
(h) Offshore renewable energy
The Group has 10 years of history supporting renewables in the North Sea. The Group has fitted a landing system to Endeavour in 2018 to allow clients to deploy their work crews efficiently via crew transfer vessel without having to jack down the vessel.
As North Sea wind farms are increasingly being located further offshore, there is a growing requirement to accommodate the workforce close to the work site during both the construction and maintenance phases. The Group's SESVs are ideally suited, as they provide a stable platform on which its clients' personnel are accommodated and can remain on location throughout the entire project. The Group's vessels can also move rapidly between in-field locations, which helps to increase the efficiency of client personnel transfers. Windfarms are so large that the SESV can follow the work programme around minimising travel time between accommodation and work site.
During 2018, offshore renewable energy became a growth area, with revenue of U.S.$28.3 million in respect of installations comprising 23 per cent. of total revenue in that year with the trend continuing in 2019. However, due to the phasing of renewables work, growth in this sector declined in 2020. Nevertheless, the Directors are confident in the medium-term prospects for the renewables market in Northwest Europe, as the next round of wind farm developments move forward. In the meantime, given the flexible and adaptable nature of the Group's SESV fleet, at year end 2019 it relocated two E-Class vessels from the North Sea to the Middle East, given the higher levels of activity in the region. The decision to move the vessels to MENA is driven by a combination of increased demand in the region as well as a short-term lack of demand in Northwest Europe.
The Group's vessel operations support the full lifecycle of an offshore renewables project.
The Group's primary focus in the offshore renewable energy market is the provision of SESVs to support the construction of new windfarm developments by providing accommodation on site, and to provide lifting operations for smaller substations and topside modules. The Group's clients are seeing the benefit of "walk to work" and having accommodation in the area of construction resulting in significant uptime of their construction crews. In the case of foundation and turbine installation, vessels with significantly larger crane capacity than the Group's E-Class and S-Class vessels are usually required.
The Group's charter contracts in this market tend to be short (i.e., three to 12 months) or medium (i.e., one to three years) in term. The Group's E-Class vessels are well suited for newer windfarm developments that are being undertaken in deeper water and further offshore, as they provide a cost-effective method for customers to complete a majority of the project (without having to return to port), working together with larger, more expensive vessels to undertake turbine and foundation installation. Costs to the customer are reduced as the requirement to transport the client's workforce between disparate remote locations is minimal.
The Group believes its SESVs provide a competitive advantage over floating accommodation vessels, as fixed platform means that a client's personnel who generally are not seasoned seafarers benefit from enhanced living conditions during rest periods (i.e., better night sleep than they would get moving around the North Sea in a boat). As in the oil and gas market, the features of the Group's SESVs allow them to move quickly and efficiently between locations within a wind farm field without the need for tugs. As a result, the Group believes that it is well positioned to capitalise on the strong outlook for new installations.
The offshore renewable energy market is less mature than the oil and gas market and there is currently less demand for maintenance services as the infrastructure is, overall, relatively new. However, when a critical mass of installed capacity is reached, the Group expects that the demand for maintenance work on these assets will increase and, consequently, that long-term contracts will become more commonplace. Given the Group's experience providing long-term services to the oil and gas market with its fleet, it believes that it will be particularly well placed to capitalise on this maturing market profile as it develops and it intend to focus a significant portion of its offshore renewables marketing efforts on this area due to the long-term nature of these contracts.
1.3 The Group's Fleet
The Group currently operates a fleet of 13 high specification SESVs comprising four E-Class vessels, three S-Class vessels and six K-Class vessels. The following table sets out certain key characteristics of the Group's SESVs as at 31 December 2020.
Maximum
Accom-modation Main
Year Deck Maximum Maximum (POB) Crane Harsh Dynamic
Built area depth speed (2) Capacity environment Positioning
(m2) (m) (kts) (t)
E-Class Vessels
Endurance 2010 1,035 65 8 150 300 Yes DP2
Endeavour 2010 1,035 65 8 150 300 Yes DP2
Enterprise 2013 1,035 80 8 150 400 Yes DP2
Evolution
(1) 2016 920 80 8 150 200 Yes DP2
S-Class Vessels
Shamal 2015 800 55 6 150 150 Yes DP2
Scirocco 2015 800 55 7 150 150 Yes DP2
Sharqi 2016 800 55 7 150 150 Yes DP2
K-Class Vessels
Kamikaze 1995 600 45 4 150 36 N/A N/A
Kikuyu 2005 600 45 4 150 45 N/A N/A
Kawawa 2007 600 45 4 150 45 N/A N/A
Kudeta 2008 600 45 4 150 45 N/A N/A
Keloa 2009 600 45 4 150 45 N/A N/A
Pepper 2014 800 55 4.5 150 75 N/A N/A
Notes:
(1) The Group's cantilever system is installed on Evolution.
(2) Accommodation is the number of people each vessel can hold
under normal specifications.
The Group's SESV fleet is one of the most modern operating in the MENA region and in the world, with most of its SESVs having been delivered or refurbished over the past eleven years and having an expected future useful life of more than 25 years. As at 30 December 2020 an independent valuer valued the Group's fleet of SESVs at U.S.$500.5 million. The average age of the Group's SESV fleet is only ten years, which it believes positions it within the top tier of operators globally. Modern, and consequently more reliable and efficient, SESVs are in higher demand by the Group's customers. In addition, a young and modern fleet is becoming increasingly important as customers focus on safety and high-performance standards. For the year ended 31 December 2020, the average day rates for the Group's E-Class, S-Class and K-Class vessels were U.S.$29 thousand, U.S.$32 thousand and U.S.$20 thousand, respectively. The technical specifications of the Group's SESVs help it to achieve its utilisation rates, as in many instances the alternatives available to its customers are non-SESV vessels that are more expensive to operate because of the need for additional support vessels, longer jacking time and difficulty relocating in inclement weather, among other things. Lower day rates have led to improved utilisation (particularly in 2020). The Group has employed the strategy that some contribution is better than no contribution, so it accepted lower day rates to keep the vessels working in the short term. This was particularly the case in 2020 where two E-Class where employed on short term contracts that the smaller K-Class could have fulfilled had there been availability. Although secured day rates for 2021 have remained relatively flat on K-Class and S-Class, the Group has noticed an increase in day rates on E-Class of over 10 per cent. over 2020 average rates on contracts awarded in 2021.
All of the Group's SESVs are based on four-leg designs that provide a significant advantage in terms of safety and stability to the more traditional three-leg jack-up design due to a high level of elevated stability and their ability to be jacked up and down quickly on location. When on location, the SESV legs are lowered down to the seabed before elevating the SESV to the desired operating height. The pre-load can be carried out as an integrated process during lifting, with a four-leg design providing significant time savings compared to three-leg operations, some of which can take up to 18 hours to pre-load. The four-leg design also allows more positioning flexibility and reduces seabed punch-through risk when in operation. The flexibility of a four-leg design also presents a significant cost advantage to the Group's customers, as moves within or between fields require less lead time and can be completed in windows of six to 12 hours in the event of adverse weather conditions as compared to 24 to 36 hours for three- leg vessels or up to three days for a non-propelled vessel. All of the Group's SESVs are self- propelled, which enables the vessels to carry loads from a shore base to an offshore location without the need for tugs or support vessels either in transit or to position the SESV in relation to an offshore installation. Consequently, they can be mobilised to site in a significantly shorter period of time than three-legged SESVs (typically six to 12 hours vs 36 hours). Large accommodation capacity and leg length between 69 metres and 104 metres, combined with a large deck space equipped with crane capacity, allows for multifunctional, flexible use serving a broad range of the Group's customers' offshore support needs, both in terms of operating areas and modes.
All the Group's SESVs are equipped with facilities that accommodate 150 POB and can be further supplemented with offshore temporary accommodation modules, supporting up to a total of 300 POB if required. The Group's SESVs have many advantages over pure accommodation barges, as they have greater flexibility to increase or decrease capacity and are self-propelled jack-up vessels that have low mobilisation and demobilisation costs. The Group's SESVs also offer greater crane capacity, larger deck loads and more deck space compared to pure accommodation barges. SESVs can either cater to specific accommodation requirements of personnel engaged in performing construction and maintenance or well servicing support, or alternatively serve as pure accommodation vessels.
Average daily operating expenditure (calculated as cost of sales less non-cash items, depreciation, amortisation and impairments divided by number of on hire days) is U.S.$10 thousand for the Group's E-Class vessels, U.S.$9 thousand for its S-Class vessels and U.S.$8 thousand for its K-Class vessels.
The Group's SESVs operate continuously with a marine crew of approximately 16 people (excluding catering staff) operating in two shifts. Crew rotation is per customer specification or in accordance with regional norms. All crew members are Standards of Training, Certification and Watchkeeping certified, with dynamic positioning qualifications and experience where required. The Group also provides crane operators, medical personnel and other services depending on contract specifications.
The Group carries out full maintenance inspections of its SESVs every five years as required by the ABS and carry out interim inspections every two-and-a-half years. Regular inspections and preventative maintenance enhance the performance and the health and safety record of its SESVs and have helped minimise unplanned off-hire time of its SESVs which over the last five years has averaged less than 1 per cent. The Group's SESVs allow for in-service maintenance to be performed while they are jacked-up, which minimises off-hire time for the SESV and non- productive time for the Group's customers. All of its SESVs are certified according to international safety standards under the International Safety Management Code, as per regulatory requirements. In addition, all of the Group's SESVs are certified by the ABS classification society, which is a recognised member of the International Association of Classification Societies certifying the SESVs as classed for international operations. Its E-Class vessels also have UK Safety Case certifications for oil and gas operations. Furthermore, its vessels GMS Endeavour and GMS Endurance have Dutch safety cases.
(a) E-Class vessels
The Group's four E-Class vessels have an average age of eight years. Three of its E-Class vessels are currently in the MENA region and one is in Northwest Europe. The Group's E-Class vessels are based on the Gusto NG2500X design, which offers higher technical and operational capabilities than its smaller SESVs. They are able to travel up to eight knots fully loaded from shore to the job location. Their DP2 systems, which utilise GPS and lasers, allow for fast and precise positioning at the customer's site. With a leg length ranging from 94.2 metres to 104 metres, its E-Class vessels are able to work in waters up to 80 metres deep (or up to 60 metres in harsh weather environments). This capability expands the range of operating environments (and accessible platforms) both within the MENA region, in particular Qatar, and Northwest Europe, as well as in other regions such as South East Asia and West Africa. The Group's E-Class vessels have a deck area of 1,035m2, and a crane capacity ranging from 200 tonnes to 400 tonnes, which further broadens the scope of work these vessels can address to include heavier oil and gas lifting operations. Its E-Class vessels are fully compliant with the latest MOU standard and meets all of the Society of Naval Architects and Marine Engineers requirements.
The Group's E-Class vessels are also capable of supporting its innovative cantilever system which is currently deployed on GMS Evolution. The key operational advantages of its cantilever technology include safer operations by eliminating lifting over live wellheads, a reduction in well-intervention time, and a radical improvement in transfer time compared to conventional rigs. These advantages consequently result in cost savings for the field operator. In addition to the usual marine crew of 16 people, the operation of its cantilever system, depending on exact client requirement requires on average an additional seven member crew.
In July 2020, the Group successfully completed its first well intervention work scope using this system. Under contract for a NOC client in the MENA region, this was the first occasion that the cantilever system has been used on a live well. The work scope involved a heavy coiled tubing well intervention, required multiple changes to bottom hole assembly, and was carried out in a third of the time that this operation would traditionally take. Additionally, movements between platforms were reduced to a tenth of the time taken by a conventional drilling rig, which is customarily used for intervention activities. Following its successful trail in 2020, the same client awarded a long term contract that commenced in January 2021.
In 2018, the Group also successfully fitted its innovative boat landing tower to one of its E-Class vessels operating at a wind farm. Its boat landing tower facilitates the movement of around 100 people two times per day to and from transfer vessels while its SESV remains jacked up.
Principal users of the Group's E-Class vessels include IOC, NOC, EPC and windfarm operators and contractors.
(b) S-Class vessels
The Group's three S-Class vessels have an average age of six years and are currently operating in the MENA region. The Group's S-Class vessels are based on the Gusto NG1800X design, which provides high reliability and flexibility, and offers higher technical and operational capabilities than its smaller SESVs. They are able to travel up to seven knots fully loaded from shore to the job location. Their DP2 systems, which utilise GPS and lasers, allow for fast and precise positioning at the customer's site. With a 75 metre leg length, the S-Class vessel is able to work in waters up to 55 metres deep. The Group's S-Class vessels have a deck area of 800m2, and a crane capacity of 150 tonnes, which further broadens the scope of work these vessels can address to include heavier oil and gas lifting operations.
Principal customers for the Group's S-Class vessels include NOCs, IOCs and EPCs.
(c) K-Class vessels
The Group's six K-Class vessels have an average age of 14 years. These vessels were developed and optimised for its core MENA region market, although it believes that they are also well suited for the West African and South East Asian markets. The Group's K-Class vessels are based on a proven Wartsila design and offer high reliability and flexibility in more benign waters. The Group's K-Class vessels are able to travel up to four knots fully loaded from shore to the job location. Most of the vessel's 67.9 metre leg length and consequent 45 metre water depth capacity (Pepper can operate in up to 55m water depth) allows access to the majority of platforms and structures in the MENA region (excluding Qatar and KSA), West Africa and South East Asia. Most of its K-Class vessels have a deck area of 600m2 (Pepper has a deck area of 800m2) and a crane capacity of 36 tonnes to 75 tonnes. Each K-Class vessel is fully compliant with the latest MOU standard.
Principal customers for the Group's K-Class vessels include NOCs, IOCs and EPCs.
1.4 Employment of the Group's SESV fleet
One of the key performance indicators for the Group's SESVs is their utilisation rate. The Group defines utilisation as the percentage of calendar days in a relevant period during which an SESV is under contract and in respect of which a customer is paying a day rate for the charter of the SESV.
The following table sets out utilisation and billable days for the Group's fleet, by vessel, for each of the years ended 31 December 2018, 2019 and 2020. For the relevant period, the Group's fleet includes its vessels (owned or leased, as the case may be).
Year ended 31 December
2020 2019 2018 Average 2018-220
Billable Percentage Billable Percentage Billable Percentage Billable Percentage
days Utilisation days Utilisation days Utilisation days Utilisation
(%) (%) (%) (%)
E-Class Vessels
Endurance 115 34 197 54 336 92 216 60
Endeavour 336 92 263 72 260 71 286 78
Enterprise 303 83 208 57 165 45 226 62
Evolution 182 50 78 21 198 93 153 55
E-Class
Vessels
Average 65 51 73 63
S-Class Vessels
Shamal 318 87 357 95 365 100 343 94
Scirocco 366 100 365 100 169 46 300 82
Sharqi 322 88 344 94 289 79 318 87
S-Class
Vessels
Average 92 96 75 88
K-Class Vessels
Kamikaze 360 98 4 1 342 11 134 37
Kikuyu 184 60 357 98 365 96 298 85
Kawawa 310 85 350 96 365 98 339 93
Kudeta 294 80 334 91 355 73 298 82
Keloa 316 86 217 59 365 100 299 82
Pepper 366 100 220 60 282 5 202 55
K-Class
Vessels
Average 86 68 64 72
Fleet Average 81 69 69 73
The average utilisation rate of the Group's fleet was 81 per cent. for the year ended 31 December 2020, an increase of 12 per cent. from the comparable period in 2019. This was mainly driven by a significant improvement in K-Class vessel utilisation to 86 per cent. for the year ended 31 December 2020, compared to 68 per cent. in the same period in 2019 and E-Class vessel utilisation which rose to 65 per cent. for the year ended 31 December 2020, compared to 51 per cent. in the same period in 2019, notwithstanding the fact that two of the four vessels were off hire for a total of six months, while being relocated from the North Sea to the Middle East. S-Class utilisation remained stable at 92 per cent. As of 31 December 2020, secured utilisation (including customer options to extend) for 2021 was 80 per cent, which reflects utilisation levels not seen since 2016.
The following table set out certain information regarding the Group's revenue by vessel class for the three years ended 31 December 2020, 2019 and 2018.
Percentage Percentage Percentage
Revenue of Total of Total of Total
2020 (%) 2019 (%) 2018 (%)
E-Class 29.4 29.0 36.0 33.0 52.1 42.0
S-Class 32.1 31.0 35.4 34.0 35.8 29.0
K-Class 41.0 40.0 37.3 33.0 35.4 29.0
Other - - - - - -
Total 102.5 100.0 108.7 100.0 123.3 100
Backlog
The Group considers its backlog position to be robust, notwithstanding the disruption caused by COVID-19 and drop in oil prices, which has pushed back some tender activity in the short term. As at 31 December 2020, the Group had a secured backlog of U.S.$220.2 million, of which U.S.$91.4 million was composed of customer extension options. The Group's secured backlog is down by U.S.$26.7 million (10.8 per cent.) compared to December 2019.
The Group typically seek to deploy its SESVs across a portfolio of contracts balanced between long and short- term contracts. The Group believes that this allows it to maximise its utilisation rates across the its fleet, maintain visibility over its short- to medium-term cash flows, and manage customer concentration risk and exposure to oil and gas sector cycles.
Eight new contract awards were announced in the year 2020 with a combined charter period of just under 7 years, including contract extensions. As of 31 December 2020, 9 vessels were on hire, with four of the fleet of 13 currently on long term contracts of 3 - 5 years.
The following table sets out a breakdown of the Group's backlog as at 31 December 2020. (US $ million) 2025 2024 2023 2022 2021 Total Firm Period - 0.2 6.6 29.4 92.6 128.8 Extension Option - 10.3 36.2 36.3 8.5 91.4 Total - 10.5 42.8 65.7 101.1 220.2
As at 31 December 2020, the average full term of the Group's contracts (including portions already completed at that date) was 2 years, including extension options. The Group continues to receive enquiries regarding vessel availability globally and believe that its current level of backlog is sustainable and capable of growing as the market recovers.
1.5 Customers
The Group charters its vessels to a blue-chip customer base, including NOCs, IOCs, EPC contractors and OEMs and offshore renewable energy companies. The Group has longstanding relationships with many of these customers, some of which go back more than 40 years.
The Group's customers are comprised of both the owners of the oil and gas or renewables assets that require construction and/or maintenance with the support of its vessels, and EPC contractors that have been hired by the owner to carry out these services. In the offshore renewables market, the Group's customers also include large energy/wind farm providers.
The Group has pre-qualified status with several key regional NOCs, including ADNOC, Saudi ARAMCO and Qatar Petroleum and their affiliates, which it believes presents a key competitive advantage over new market entrants that would be subject to a lengthy and complex qualification process in order to contract with these NOCs. Many of the Group's NOC customers also have additional certification requirements with which it must comply, both for the vessels and for the experience levels of the crew that operate them. In addition, its NOC customers often use EPC contractors to carry-out their activities and any particular charter may be directly with an EPC contractor. The Group has cultivated relationships with a range of EPC contractors in addition to international oil and gas companies to diversify its customer base and gain access to new markets. EPC work represented 25 per cent., 9 per cent., and 11 per cent. of revenue in 2018, 2019 and 2020, respectively.
In the MENA region, direct marketing to existing and potential NOCs and EPC contractors will continue to be the Group's primary method of business development. The Group take a similar approach in Northwest Europe, but also undertake marketing activities through brokers, which are often appointed by existing or potential customers.
The following tables set out the Group's revenue by geographic region for the three years ended 31 December 2018, 2019 and 2020.
Percentage Percentage Percentage
of Total of Total of Total
2020 (%) 2019 (%) 2018 (%)
KSA 17.7 17.0 32.5 30.0 54.9 44.0
UAE 53.4 52.0 35.7 33.0 17.3 14.0
Qatar 19.0 19.0 13.4 12.0 9.8 9.0
Total MENA (1) 90.2 88.0 81.6 75.0 81.9 66.0
Total Europe 12.3 12.0 27.2 25.0 41.4 34.0
Total 102.5 100.0 108.7 100.0 123.3 100.0
(1) NOCs are the predominant customer in the MENA region.
As shown in the table above, the majority of the Group's revenue during the periods under review was earned from customers located in the MENA region. The Group's revenue in the MENA region is from oil and gas services. In 2020 revenue generated in the MENA region accounted for 88 per cent. of its total revenue, compared to 75 per cent. in 2019. During 2020, nine of its ten vessel mobilisations were to new contracts in the Middle East. Within the MENA region, the Group has seen an increase in revenue from the UAE, which accounted for 52 per cent. of its total revenues and four of its 13 vessel mobilisations in 2020. In response to increased market activity within the region, in late 2019, the Group decided to relocate two of its E-Class vessels from Northwest Europe to MENA. Consequently, 12 of the Group's ten vessels are now based in the Middle East. The Group will continue to develop its client relationships in the MENA region, seeking both long-term and short-term charters to maximise levels of utilisation, while being mindful of appropriate operating margins.
Market conditions in Northwest Europe were challenging during 2019 and have continued this trend in 2020, although GMS utilisation in Northwest Europe was higher than the regional average. In 2020, revenue generated in Northwest Europe accounted for 12 per cent. of the Group's total revenue, compared to 25 per cent. in 2019. The decline in demand in Europe reflected the phasing of renewable work and a pause in oil and gas activity, as upstream customers reassessed their development plans. One vessel remains in the North Sea to meet anticipated future demand as the next phase of wind farm projects gather pace and is contracted through to middle of 2022.
The following table sets out the aggregate revenue earned from customers who individually account for more than 10 per cent. of the Group's revenue during the periods indicated.
Year ended 31 December
US $ million 2020 2019 2018
Aggregate revenue for
major customers 67.0 75.5 93.6
In the years ended 31 December 2018, 2019 and 2020, these customers were responsible for 76 per cent., 70 per cent., and 65 per cent. of the Group's revenue, respectively. During the periods under review, the number of customers individually accounting for more than ten per cent. of its revenues varied from period to period. In 2018, 2019 and 2020, there were five, three and three such customers, respectively.
1.6 Contracts
The Group charters its vessels under T/Cs. The Group secures T/Cs on either a short- (i.e., less than 12 months), medium (i.e., one to three years) or long-term basis (i.e., three to five years). Contract duration typically depends on the type of work required. Construction support, wind farm installation and accommodation contracts tend to run from three to 18 months, while maintenance support, EOR and well services contracts tend to run on multi- year contracts of typically between three and five years.
The Group obtains the majority of its T/Cs through competitive tender processes. Tender processes vary considerably by customer and project type. The Group's management team has significant experience in navigating tender processes, which it believes increases the likelihood of its success in winning contracts. The tender process begins when a customer issues a request for quotation or expression of interest. This request is typically sent to a number of vessel operators and requires an indication of pricing and availability of the vessel proposed to be used for the project, as well as other specifications, including the scope of work, the water depth and the POB capacity required. The customer then issues an invitation to tender for the project to a selection of vessel operators that responded, and which qualify to undertake the required work. Those vessel operators then submit detailed bids for the project, from which the customer will make a selection based upon certain criteria which would typically include availability, price and technical suitability. Bid submission to NOCs in MENA typically are assessed on any in country value requirements showing how the company is willing and committed to improve local content both historically and over the life of the charter. A limited number of the Group's customers require that it posts bid bonds when it tenders for the contract and, in certain cases, it is required to post performance bonds following the award of the contract.
T/Cs typically require that, in addition to the vessel itself, which includes any spare parts, maintenance and drydocking, the Group provides crew, insurance and hotel staff and food. The hotel staff and food are subcontracted through a third party. Operational risks of breakdown and repair of the SESV also remain with the Group. However, the execution risk of the work that is carried out on board by the client remains with them. Consumable items directly associated with the work such as fuel, fresh water, port charges and offshore logistics are also all borne by the customer. Under T/C contracts, the customer is required to provide fuel and necessary logistical support from helicopters and supply boats, and delays and/or losses resulting from adverse weather conditions also rest with the Group's customers. The Group's contracts follow the general principles of an international standard form time charter party, typically BIMCO Supply time 2005. The Group's NOC customers tend to have their own contract formats that it uses in its dealings with them.
As a general matter, the Group's NOC customers tend to have long-term contracts, with lower POB requirements and comparatively lower day rates. These contracts tend to be retendered on expiry, but, where the Group is successful in the retender, it sees little to no downtime for its vessels, which helps to offset the effect of comparatively lower day rates for long-term contracts, through improved utilisation, as compared to those contracts of a shorter duration. There is little or no mobilisation and demobilisation risk and frequent intrafield moves are often required. The Group's contracts with EPC customers tend to be short-term, with higher POB requirements. There is some mobilisation and demobilisation risk and intrafield movements tend to be less frequent. These characteristics are applicable in both the MENA region and Northwest Europe, although contract terms in Northwest Europe have typically been shorter. In addition, oil and gas customers in Northwest Europe tend to manage project costs and, consequently, contracting strategy differs to that of many of the Group's MENA customers. The Group's contracts contain liability and indemnity provisions that it believes are standard for the industry and in most cases stipulate that each party to the contract takes responsibility for their own property, personnel and any subcontractors they engage in the performance of the contract. Contracts also typically contain both "for cause" and "for convenience" termination provisions. For cause termination would require a major default by one of the parties. The Group only had one contract terminated for cause in the last 10 years. A termination for convenience clause is more common in NOC contracts and allows termination with a notice period of usually between 15 and 90 days. Termination for convenience is relatively rare (i.e., only two instances of this since March 2014 where day rates where significantly higher than market rates), but, when it occurs, the Group is paid the contractually agreed day rate for the term of the notice.
The Group's revenue is derived from its vessel operations and includes the daily rates it charges to charter the vessel, fees for hotel and catering services that are charged per person per day, and, in most cases, charges for the mobilisation and demobilisation of its vessels. The Group provide catering services through a third-party supplier with whom it has a long-term relationship. Mobilisation charges, where applicable, reflect the cost of making the vessel ready to go on hire (including any quarantine periods related to COVID-19) positioning the SESV to the new contract location, and in some cases, particularly shorter term contracts, the cost of any modifications or upgrades required to be made to perform under the new contract. Demobilisation charges, where applicable, include the cost of reinstating the SESV to the original condition at the end of the contract and repositioning. These are typically lump sum charges paid by the customer at the beginning and the end of the contract, respectively.
The substantial majority of the Group's contracts are negotiated with an extension option clause for a certain length and day rate term. The options are exercisable at the customer's discretion with usually between 30 and 180 days' notice, depending on the duration of the option period. If the Group's customer elects to extend the contract, the existing day rates typically continue to apply. In the MENA region, the Group's primary market, its NOC customers in most cases exercise their extension options rather than renegotiate a new chartering contract, given the complex internal approval process a new contract requires.
In 2020, the Group entered a first-time agreement to supply manpower services on board one of its vessels under time charter to a UAE NOC. In accordance with the terms of this agreement, the Group provides approximately 100 skilled tradesmen that supports its client's on-board maintenance work. The workforce is entirely under the control and direction of the client. The same client has included the provision of similar manpower services to be included in tenders that are currently in the market, which it perceives as a shift in strategy from the client as it looks to integrate additional, non-core, services into time charters with a view to benefit from efficiencies in time and cost by utilising the supply chain to provide these services.
1.7 Procurement and suppliers
The Group maintains long-term relationships with the its high-quality core suppliers through the initial sourcing of components and often through ongoing maintenance agreements for the Group's SESVs. The Group's key suppliers include Rolls Royce, Hydralift, BLM, Kongsberg, Gusto MSC and Wartsila. The Group believes that the length and depth of its relationships with its key suppliers are critical as they allow it to benefit from substantial economies of scale in the procurement of goods and services such as equipment parts and subcontracting work, which strengthens the viability of its low-cost model. Relationships with suppliers and subcontractors also provide the Group with market intelligence on technologies which are sought after by end-users. The Group's supplier relationships also allow quick turnaround of any urgent and unscheduled maintenance work or order changes.
Supplier concentration risk is mitigated by the diversity of components required in the maintenance of the Group's modern, young fleet, which results in it having to source equipment for its vessels from a diverse pool of suppliers. While the Group has a preference to use the same group of major providers for each vessel, which results in lower inventory of critical spares, a tendering process is used to ensure that suppliers remain competitive on price. When tendering for major vessel components, the main factors the Group considers in awarding contracts are quality, price and delivery schedule.
1.8 Competition
The Group competes with operators of marine offshore service vessels in the MENA region and Northwest Europe to provide support services to customers in the oil and gas and offshore renewable energy markets, respectively. During the periods under review, the Group has faced increasing competition as other market participants have increased the supply of SESVs in the markets in which it operates. Average utilisation remained constant throughout 2019 at 69 per cent. (2018: 69 per cent.). Utilisation in 2020 increased to 81 per cent., which was mainly driven by a significant improvement in the utilisation of K-Class vessels and E-Class vessels.
Given existing market conditions, where the Group's customers are able to express a preference as to vessel specifications due to lower levels of utilisation across the industry, it expects that no new tonnage is likely to enter the market in the medium term and. nearly all previously available stock in shipyards is destined for China windfarms. The Group's S-Class and E-Class vessels will, therefore, are unlikely to face increasing competition in the future from new vessels coming into the industry which may have lower costs of capital. Nevertheless, the Group believes that its E-Class vessels offer customers higher technical specifications than most of its competitors' new and existing vessels and it is able to offer them at competitive day rates. The Group believes this is especially helpful in the tendering process as increasingly its customers are demonstrating a preference, and in some cases a requirement, for modern vessels that provide significant cost and operational efficiencies. The Group regards its primary competitors to be Seajacks, Jack-Up Barge BV, Seafox, Zakher Marine, and Navtech.
1.9 Property
The Group leases the property on which offices are located in International Tower, Abu Dhabi pursuant to a three- year lease. The Group also leases small regional offices in Khobar (Saudi Arabia) and Doha (Qatar).
1.10 Insurance
The Group carries insurance that the Group believes is common in its industry and sufficient to cover the principal risks of damage to its business. The Group's coverage includes hull and machinery coverage and its fleet is insured for market value or book value if higher. The Group also has third party liability cover for the Group's vessels. In addition, it has several other standard insurance policies in place covering workmen's compensation, employers' liability and property insurance, among other things. In common with other companies in the Group's industry, and due to high cost and limited cover, it does not carry business interruption insurance to compensate it for lost revenue in the event that one of the its vessels is damaged.
1.11 Health and Safety and Environment
The Group places a high priority on managing the risks inherent in the industry in which it operates, and it is committed to compliance with the highest national and international HSE standards. The Group employs an integrated management system covering the quality, health, safety and environmental principles and objectives of its business, which is implemented throughout all offshore and onshore operations and aims to provide innovative and sustainable solutions to monitor its HSE performance and continuously improve the necessary safeguards to protect its employees and minimise its impact on the environment. This system complies with the internationally recognised ISO standards, including ISO 9001, ISO 14001 and OHSAS 18001, and has received all local environmental certifications. The Group has UK North Sea Safety Case to operate its four E-Class vessels.
(a) Health and safety
Health and safety is a key priority for the Group in both the its onshore and offshore operations. Over the years, the Group has implemented robust health and safety reporting policies to maximise preventative maintenance and risk management. The Group's integrated health management system is accredited by the ABS. Health and safety records are often considered by its customers when assessing bids for tenders and it regards its historical performance in this area as a competitive advantage. For the year ended 31 December 2018, the Group had zero lost time incidents (meaning an injury that requires more than three days off work) and the Group's total recordable injury rate was zero. In 2019, the Group's total recordable injury rate was 0.29 and its lost time injury rate was 0.19 (in each case, per 200,000 man hours). In 2020, the lost time injury rate returned to zero. There were no serious near misses or high potential incidents during any of the periods under review.
(b) Environment
The Group is committed to conducting its business in a manner that protects the environment and preserves the areas in which it operates. Key areas of focus for the Group's environmental policy include the prevention of pollution incidents in the context of its offshore and onshore operations. The Group has taken measures to reduce its emissions such as changing its refrigerant usage across all of its vessels and reducing its office and facilities footprint. All the Group's vessels are already configured to run on low sulphur marine diesel. The Group completes on a regular basis a detailed environmental impact assessment for its operations to identify weak areas in its environmental management. The Group has also invested significant resources over recent years in carrying out an environmental campaign to increase the awareness of its employees and contractors and promote positive behaviour towards the environment. During the periods under review, there were no environmental incidents across its operations.
While many of the Group's customers in the oil and gas industry use its vessels to support activities that are inherently hazardous, its liability for environmental damage resulting from an incident with one of its vessels is limited. The Group's contracts typically contain "knock-for-knock" provisions which restrict its liability to damage to its own vessels and personnel.
(c) Employees
The Group employed an international workforce of 532 full-time employees as at 31 December 2020. Approximately 10 per cent. of its employees are onshore-based, primarily employed at its headquarters in Abu Dhabi. They cover all areas of operation, including vessel operations, commercial and business development, technical and, finance, human resources, procurement, HSE and IT, and provide support to the whole fleet. The remaining 90 per cent. of its employees comprise offshore crew. They man the vessels and are responsible for the day-to-day operations of the fleet. In addition, the Group has a small team based in Qatar and KSA, which provides on-the-ground support to its marine activities in those markets.
APPIX III - TERMS AND CONDITIONS OF THE PLACING
IMPORTANT INFORMATION FOR INVITED PLACEES ONLY REGARDING THE PLACING.
MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING OF NEW ORDINARY SHARES (THE "PLACING") IN GULF MARINE SERVICES PLC (THE "COMPANY") SUBJECT TO A RIGHT OF RECALL IN RESPECT OF VALID APPLICATIONS BY QUALIFYING SHAREHOLDERS PURSUANT TO THE OPEN OFFER (THE "OPEN OFFER", AND TOGETHER WITH THE PLACING, THE "CAPITAL RAISING"). THIS ANNOUNCEMENT (INCLUDING THIS APPIX III) AND THE TERMS AND CONDITIONS SET OUT HEREIN (TOGETHER, THIS "ANNOUNCEMENT") ARE DIRECTED ONLY AT PERSONS WHOSE ORDINARY ACTIVITIES INVOLVE THEM IN ACQUIRING, HOLDING, MANAGING AND DISPOSING OF INVESTMENTS (AS PRINCIPAL OR AGENT) FOR THE PURPOSES OF THEIR BUSINESS AND WHO HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS AND ARE: (1) IF IN A MEMBER STATE OF THE EUROPEAN ECONOMIC AREA ("EEA"), QUALIFIED INVESTORS AS DEFINED IN ARTICLE 2(e) OF REGULATION (EU) 2017/1129 (THE "EU PROSPECTUS REGULATION"); (2) IF IN THE UNITED KINGDOM, QUALIFIED INVESTORS AS DEFINED IN ARTICLE 2(e) OF REGULATION (EU) 2017/1129 AS IT FORMS PART OF THE UNITED KINGDOM DOMESTIC LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018 (THE "EUWA") (THE "UK PROSPECTUS REGULATION"); WHO (A) FALL WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005, AS AMED (THE "ORDER") (INVESTMENT PROFESSIONALS) OR (B) FALL WITHIN ARTICLE 49(2)(a) TO (d) (HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC.) OF THE ORDER; AND (3) OTHERWISE, PERSONS TO WHOM IT IS OTHERWISE LAWFUL TO COMMUNICATE IT TO (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS").
THIS ANNOUNCEMENT AND THE INFORMATION IN IT MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. PERSONS DISTRIBUTING THIS ANNOUNCEMENT MUST SATISFY THEMSELVES THAT IT IS LAWFUL TO DO SO. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS ANNOUNCEMENT RELATES IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. THIS ANNOUNCEMENT DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN THE COMPANY.
THE NEW ORDINARY SHARES TO BE OFFERED IN CONNECTION WITH THE CAPITAL RAISING (THE "NEW ORDINARY SHARES") HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMED (THE "SECURITIES ACT") OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR JURISDICTION OF THE UNITED STATES, AND MAY NOT BE OFFERED, SOLD OR TRANSFERRED, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN COMPLIANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES. THE NEW ORDINARY SHARES ARE BEING OFFERED AND SOLD ONLY OUTSIDE THE UNITED STATES IN "OFFSHORE TRANSACTIONS" WITHIN THE MEANING OF, AND IN ACCORDANCE WITH, REGULATION S UNDER THE SECURITIES ACT AND OTHERWISE IN ACCORDANCE WITH APPLICABLE LAWS. NO PUBLIC OFFERING OF THE NEW ORDINARY SHARES IS BEING MADE IN THE UNITED STATES OR ELSEWHERE.
UAE EXEMPT OFFER NOTICE
This announcement has not been reviewed or approved by any regulatory authority, including the Central Bank of the United Arab Emirates (the " UAE" ), Emirates Securities and Commodities Authority or any regulatory authority in any free zones established and operating in the territory of the UAE.
The announcement does not constitute, and is not intended to constitute, a public offer of securities in the UAE or any free zones established and operating in the territory of the UAE and accordingly should not be construed as such. Any securities in any offering referred to in this announcement are only being offered to a limited number of qualified investors in the UAE who are willing and able to conduct an independent investigation of the risks involved in an investment in such securities. This announcement is for the use of the named addressee only and should not be given or shown to any other person (other than employees, agents or consultants in connection with the addressee's consideration thereof).
ADGM EXEMPT OFFER NOTICE
This announcement is for distribution only to persons who (a) are outside the Abu Dhabi Global Market, or (b) are Authorised Persons or Recognised Bodies (as such terms are defined in the ADGM Financial Services and Markets Regulations 2015 (" FSMR" )), or (c) are persons to whom an invitation or inducement to engage in investment activity (within the meaning of section 18 of the FSMR) in connection with the issue or sale of any securities may otherwise lawfully be communicated or caused to be communicated (all such persons together being referred to as "relevant persons" for the purposes of this paragraph). This announcement is directed only at relevant persons and must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this announcement relates is available only to relevant persons and will be engaged in only with relevant persons.
This announcement relates to an Exempt Offer in accordance with the Market Rules of the ADGM Financial Services Regulatory Authority (" FSRA" ). This announcement is intended for distribution only to persons of a type specified in the Market Rules of the ADGM. It must not be delivered to, or relied on by, any other person. The FSRA has no responsibility for reviewing or verifying any prospectus or other documents in connection with this Offering. The FSRA has not approved this announcement or any other associated documents nor taken steps to verify the information set out in this announcement, and has no responsibility for it nor any offering memorandum. The securities to which this announcement relates may be illiquid and/or subject to restrictions on their resale. Prospective purchasers of the securities offered should conduct their own due diligence on the securities. If you do not understand the contents of this announcement you should consult an authorized financial advisor.
DIFC EXEMPT OFFER NOTICE
This announcement is for distribution only to persons who (a) are outside the Dubai International Financial Centre, or (b) are persons who meet the Professional Client criteria set out in Rule 2.3.4 of the DFSA Conduct of Business Module (all such persons together being referred to as " relevant persons" for the purposes of this paragraph). This announcement is directed only at relevant persons and must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this announcement relates is available only to relevant persons and will be engaged in only with relevant persons.
This announcement is intended to provide information about investments and investment services which are not subject to any form of regulation or approval by the Dubai Financial Services Authority (" DFSA" ). This announcement relates to an Exempt Offer of securities in accordance with the Offered Securities Rules of the DIFC Financial Services Authority (" DFSA" ). This announcement is intended for distribution only to persons of a type specified in the Offered Securities Rules of the DFSA. It must not be delivered to, or relied on by, any other person. The DFSA has no responsibility for reviewing or verifying any prospectus or other documents in connection with this CAPITAL RAISING. Accordingly, the DFSA has not approved this announcement or any other associated documents nor taken steps to verify the information set out in this announcement, and has no responsibility for it nor any offering memorandum. The securities to which this announcement relates may be illiquid and/or subject to restrictions on their resale. Prospective purchasers of the securities offered should conduct their own due diligence on the securities. If you do not understand the contents of this announcement you should consult an authorized financial advisor.
NOTICE TO INVESTORS IN THE KINGDOM OF SAUDI ARABIA
This announcement may not be distributed in the Kingdom of Saudi Arabia ("Saudi Arabia" or the "KSA"), except to such persons as are permitted under the Rules on the Offer of Securities and Continuing Obligations (the "Saudi Regulations") issued by the Board of the Capital Market Authority (the "Capital Market Authority") pursuant to resolution number 3-123-2017, dated 27 December 2017, based on the Capital Market Law issued by Royal Decree No. M/30 dated 2/6/1424H (as amended by Resolution of the Board of the Capital Market Authority number 1-104-2019 dated 30 September 2019G (the "2019 Saudi Regulations"), and Resolution of the Board of the Capital Market Authority number 1-7-2021 dated 14 January 2021G (the "2021 Saudi Regulations"), noting that certain provisions of the 2021 Saudi Regulations only come into force on 1 January 2022G).
The Capital Market Authority does not make any representation as to the accuracy or completeness of this announcement, and expressly disclaims any liability whatsoever for any loss arising from, or incurred in reliance upon, any part of this announcement. Prospective purchasers of the securities offered hereby should conduct their own due diligence on the accuracy of the information relating to the securities. If a prospective purchaser does not understand the contents of this announcement, he or she should consult an authorised financial adviser.
The New Ordinary Shares and the Open Offer Entitlements must not be advertised, offered or sold and no memorandum, information circular, brochure or any similar document has or will be distributed, directly or indirectly, to any person in Saudi Arabia other than to Sophisticated Investors within the meaning of Article 9 of the 2019 Saudi Regulations.
The Capital Raising in Saudi Arabia shall not, therefore, constitute a "public offer" pursuant to the Saudi Regulations. Prospective investors are informed that Article 15 of the 2019 Saudi Regulations (and Article 14 of the 2021 Saudi Regulations) places restrictions on secondary market activity with respect to the Shares. Any resale or other transfer, or attempted resale or other transfer, made other than in compliance with the Saudi Regulations shall not be recognised.
THIS ANNOUNCEMENT (INCLUDING THIS APPIX III) AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM THE UNITED STATES, AUSTRALIA, CANADA, THE REPUBLIC OF SOUTH AFRICA OR JAPAN OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.
THIS ANNOUNCEMENT IS NOT FOR PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES OF AMERICA. THIS ANNOUNCEMENT IS NOT AN OFFER OF SECURITIES FOR SALE OR SUBSCRIPTION INTO THE UNITED STATES. THE SECURITIES REFERRED TO HEREIN HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES, EXCEPT PURSUANT TO AN APPLICABLE EXEMPTION FROM REGISTRATION. NO PUBLIC OFFERING IS BEING MADE IN THE UNITED STATES.
Unless otherwise defined herein, capitalised terms shall have the meaning given to them in this Announcement.
In connection with the Capital Raising and Admission, the final approved combined circular and prospectus (the "Prospectus") prepared by, and relating to, the Company is expected to be dated on 9 June 2021. The Prospectus will, subject to the approval by the FCA, be published on the Company's website and made available to Placees and will be despatched by the Company to its Shareholders (other than those who have elected or have deemed to have elected to receive soft copy, e-mail notifications or postal notifications of the publication of documents). The Prospectus is not expected to be approved and published prior to Placees entering into a legally binding commitment in respect of the Placing with Panmure Gordon (UK) Limited ("Panmure Gordon"), as agent, as well as Emirates NBD Capital Limited ("ENBD" and together with Panmure Gordon, the "Joint Bookrunners"), for and on behalf of the Company. As such, any commitments made under the Placing will be on the basis of this Announcement and any information publicly announced through a Regulatory Information Service by or on behalf of the Company on or prior to the date of this Announcement (the "Publicly Available Information") and subject to any further terms set out in the contract note or electronic trade confirmation to be sent to individual Placees.
The Placing will consist of an offer of 370,706,162 new ordinary shares of 2 pence each ("Ordinary Shares") in the capital of the Company by way of a placing with institutional investors subject to a right of recall to satisfy valid acceptances by Qualifying Shareholders pursuant to the Open Offer (the "Placing Shares"). If a person indicates to the Joint Bookrunners that it wishes to participate in the Placing by making an oral or written offer to acquire Placing Shares pursuant to the terms of the Placing (each such person, a "Placee"), such person will be deemed: (i) to have read and understood in their entirety this Appendix III and the Announcement; (ii) to be participating and making such offer on the terms and conditions contained in this Appendix III; and (iii) to be providing the representations, warranties, indemnities, agreements, undertakings, acknowledgements and confirmations contained in these terms and conditions in this Appendix III.
The distribution of this Announcement and/or the Capital Raising and/or the issue of the New Ordinary Shares in certain jurisdictions may be restricted by law. No action has been taken by the Company, the Joint Bookrunners or any of their Representatives that would permit an offer of the New Ordinary Shares or possession or distribution of this Announcement or any other offering or publicity material relating to such New Ordinary Shares in any jurisdiction where action for that purpose is required. Persons into whose possession this Announcement comes are required by the Company and the Joint Bookrunners to inform themselves about and to observe any such restrictions.
This Announcement or any part of it is for information purposes only and does not constitute or form part of any offer to issue or sell, or the solicitation of an offer to acquire, purchase or subscribe for, any securities in the United States (including its territories and possessions, any state of the United States and the District of Columbia), Australia, Canada, the Republic of South Africa or Japan or any other jurisdiction in which the same would be unlawful. No public offering of the New Ordinary Shares is being made in any such jurisdiction.
The New Ordinary Shares have not been approved or disapproved by the US Securities and Exchange Commission, any state securities commission or other regulatory authority in the United States, nor have any of the foregoing authorities passed upon or endorsed the merits of the Capital Raising or the accuracy or adequacy of this Announcement. Any representation to the contrary is a criminal offence in the United States. The relevant clearances have not been, nor will they be, obtained from the securities commission of any province or territory of Canada, no prospectus has been lodged with, or registered by, the Australian Securities and Investments Commission or the Japanese Ministry of Finance; the relevant clearances have not been, and will not be, obtained from the South Africa Reserve Bank or any other applicable body in the Republic of South Africa in relation to the New Ordinary Shares and the New Ordinary Shares have not been, nor will they be, registered under or offered in compliance with the securities laws of any state, province or territory of the United States, Australia, Canada, the Republic of South Africa or Japan. Accordingly, the New Ordinary Shares may not (unless an exemption under the relevant securities laws is applicable) be offered, sold, resold or delivered, directly or indirectly, in or into the United States, Australia, Canada, the Republic of South Africa or Japan or any other jurisdiction outside the United Kingdom.
Persons (including, without limitation, nominees and trustees) who have a contractual right or other legal obligations to forward a copy of this Announcement should seek appropriate advice before taking any such action.
This Announcement should be read in its entirety. In particular, you should read and understand the information provided in the "Important Notices" section of this Announcement.
By participating in the Bookbuilding Process and the Placing, each Placee will be deemed to have read and understood this Announcement in its entirety, to be participating, making an offer and acquiring Placing Shares on the terms and conditions contained herein and to be providing the representations, warranties, indemnities, acknowledgements and undertakings contained in this Appendix III.
EACH PLACEE SHOULD CONSULT WITH ITS OWN ADVISERS AS TO LEGAL, REGULATORY, TAX, BUSINESS AND RELATED ASPECTS OF A SUBSCRIPTION FOR THE PLACING SHARES.
In particular, each such Placee represents, warrants, undertakes, agrees and acknowledges (amongst other things) to the Joint Bookrunners and the Company that:
1. it is a Relevant Person and undertakes that it will acquire, hold, manage or dispose of any Placing Shares that are allocated to it for the purposes of its business;
2. in the case of a Relevant Person in the United Kingdom who acquires any Placing Shares pursuant to the Placing:
(a) it is a Qualified Investor within the meaning of Article 2(e) of the UK Prospectus Regulation; and
(b) in the case of any Placing Shares acquired by it as a financial intermediary, as that term is used in Article 5(1) of the UK Prospectus Regulation:
(i) the Placing Shares acquired by it in the Placing have not been acquired on behalf of, nor have they been acquired with a view to their offer or resale to, persons in the United Kingdom other than Qualified Investors or in circumstances in which the prior consent of Panmure Gordon been given to the offer or resale; or
(ii) where Placing Shares have been acquired by it on behalf of persons in the United Kingdom other than Qualified Investors, the offer of those Placing Shares to it is not treated under the UK Prospectus Regulation as having been made to such persons; and
3. in the case of a Relevant Person in a member state of the EEA (each a "Relevant State") who acquires any Placing Shares pursuant to the Placing:
(a) it is a Qualified Investor within the meaning of Article 2(e) of the EU Prospectus Regulation; and
(b) in the case of any Placing Shares acquired by it as a financial intermediary, as that term is used in Article 5(1) of the EU Prospectus Regulation:
(i) the Placing Shares acquired by it in the Placing have not been acquired on behalf of, nor have they been acquired with a view to their offer or resale to, persons in a Relevant State other than Qualified Investors or in circumstances in which the prior consent of Panmure Gordon been given to the offer or resale; or
(ii) where Placing Shares have been acquired by it on behalf of persons in a Relevant State other than Qualified Investors, the offer of those Placing Shares to it is not treated under the EU Prospectus Regulation as having been made to such persons; and
4. in the case of a person in the Dubai International Financial Centre who acquires any Placing Shares pursuant to the Placing:
(a) it is it is a "Professional Client" as defined in the DIFC Conduct of Business Module, other than natural persons; and
(b) it acknowledges that it is acquiring the Placing Shares in the context of an offering that qualifies as a private placement under DIFC law;
5. in the case of a person in the Abu Dhabi Global Market who acquires any Placing Shares pursuant to the Placing:
(a) it is it is a "Professional Client" as defined in the ADGM Conduct of Business Rulebook, other than natural persons; and
(b) it acknowledges that it is acquiring the Placing Shares in the context of an offering that qualifies as a private placement under ADGM law;
6. in the case of a person in the Kingdom of Saudi Arabia:
(a) it is it is a "Sophisticated Investor" as defined in the Capital Market Law issued by Royal Decree No. M/30 dated 2/6/1424H (as amended by Resolution of the Board of the Capital Market Authority number 1-104-2019 dated 30 September 2019G); and
(b) it acknowledges that it is acquiring the Placing Shares in the context of an offering that qualifies as a private placement under the KSA rules;
7. it is acquiring the Placing Shares for its own account or is acquiring the Placing Shares for an account with respect to which it exercises sole investment discretion and has the authority to make and does make the representations, warranties, indemnities, acknowledgements, undertakings and agreements contained in this Announcement; and
8. it understands (or if acting for the account of another person, such person has confirmed that such person understands) the resale and transfer restrictions set out in this Appendix III; and
9. except as otherwise permitted by the Company and subject to any available exemptions from applicable securities laws, it (and any account referred to in paragraph 8 above) is outside of the United States acquiring the Placing Shares in offshore transactions as defined in and in accordance with Regulation S under the Securities Act; and
10. the Company and the Joint Bookrunners will rely upon the truth and accuracy of the foregoing representations, warranties, acknowledgements and agreements.
Each Placee, by participating in the Placing, agrees that the content of this Announcement is exclusively the responsibility of the Company and confirms that it has neither received nor relied on any information (other than the information in this Announcement or the Publicly Available Information), representation, warranty or statement made by or on behalf of the Joint Bookrunners or the Company or any other person and none of the Joint Bookrunners, the Company nor any other person acting on such person's behalf nor any of their respective Representatives has or shall have any liability for any Placee's decision to participate in the Placing based on any other information, representation, warranty or statement. Each Placee acknowledges and agrees that it has relied on its own investigation of the business, financial or other position of the Company in accepting a participation in the Placing. No Placee should consider any information in this Announcement to be legal, tax or business advice. Nothing in this paragraph shall exclude the liability of any person for fraudulent misrepresentation.
Details of the Placing Agreement and the Placing Shares
Panmure Gordon has today entered into a placing agreement (the "Placing Agreement") and ENBD has today entered into an engagement letter (the "ENBD Engagement Letter"), with the Company under which, on the terms and subject to the conditions set out in the Placing Agreement and the ENBD Engagement Letter, Panmure Gordon and ENBD, as agents for and on behalf of the Company, have agreed to use their reasonable endeavours to procure Placees for the Placing Shares. Placees for Placing Shares are subject to a right of recall to satisfy valid applications by Qualifying Shareholders under the Open Offer. The Placing is being fully underwritten by Panmure Gordon on the terms and subject to the conditions set out in the Placing Agreement.
Applications for listing and admission to trading
Applications will be made to: (i) the FCA for admission of the New Ordinary Shares to the premium listing segment of the Official List and (ii) London Stock Exchange plc (the "London Stock Exchange") for admission of the New Ordinary Shares to trading on its main market for listed securities (together, "Admission").
Application will also be made to Euroclear UK & Ireland Limited for the entitlements to the Open Offer Shares (the "Open Offer Entitlements") to be admitted as separate participating securities within CREST. Subject to the conditions of the Placing Agreement being satisfied, it is expected that Admission of the New Ordinary Shares will become effective on 28 June 2021 and that dealings in the New Ordinary Shares will commence at the same time.
The New Ordinary Shares to be issued under the Capital Raising will, when issued and fully paid, be identical to, and rank pari passu in all respects with, the existing Ordinary Shares in issue including the right to receive all dividends and other distributions declared, made or paid on the Ordinary Shares by reference to a record date on or after Admission.
The Capital Raising is conditional, amongst other things, upon:
1. the Prospectus being approved pursuant to the Prospectus Regulation Rules and the FSMA by the FCA as soon as practicable on 9 June 2021;
2. the Resolutions having been duly passed (without amendment) at the General Meeting;
3. Admission having become effective at or before 8.00 a.m. on 28 June 2021 or such later date as Panmure Gordon may agree being no later than 8.00 a.m. on 29 June 2021; and
4. the Placing Agreement and the ENBD Engagement Letter having become unconditional in all respects and not having been terminated by the relevant Joint Bookrunner in accordance with its terms prior to Admission.
The full terms and conditions of the Open Offer will be contained in the Prospectus. The Prospectus is expected to be approved by the FCA under section 87A of the FSMA and made available to the public in accordance with Rule 3.2 of the Prospectus Regulation Rules made under Part VI of the FSMA.
The Bookbuilding Process
The Joint Bookrunners will commence the Bookbuilding Process to determine demand for participation in the Placing by Placees immediately following the publication of this Announcement. This Appendix III gives details of the terms and conditions of, and the mechanics of participation in, the Placing. No commissions will be paid to Placees or by Placees in respect of any Placing Shares.
The Joint Bookrunners and the Company shall be entitled to effect the Placing by such alternative method to the Bookbuilding Process as they may, in their sole discretion, determine.
Principal terms of the Bookbuilding Process and the Placing
1. The Joint Bookrunners are acting as bookrunners to the Placing, as agent for and on behalf of the Company.
2. Participation in the Placing will only be available to persons who may lawfully be, and are, invited by the Joint Bookrunners to participate. The Joint Bookrunners and any of their affiliates are entitled to enter bids in the Bookbuilding Process.
3. The price per Placing Share (the "Issue Price") is fixed at 3 pence and is payable to the Joint Bookrunners (as agents for the Company) by all Placees whose bids are successful. The number of Placing Shares will be agreed between the Joint Bookrunners and the Company following completion of the Bookbuilding Process. The number of Placing Shares will be announced by the Company (the "Placing Results Announcement") following the completion of the Bookbuilding Process and the entry into the Results Agreement by the Company and Panmure Gordon.
4. To bid in the Bookbuilding Process, Placees should communicate their bid by telephone or email to their usual sales contact at the Joint Bookrunners. Each bid should state the number of Ordinary Shares which a Placee wishes to acquire at the Issue Price. Bids may be scaled down by the Joint Bookrunners on the basis referred to in paragraph 9 below. The Joint Bookrunners are arranging the Placing as agents of the Company.
5. The Bookbuilding Process is expected to close no later than 5.00 p.m. on 9 June 2021 but may be closed earlier or later subject to the agreement of the Joint Bookrunners and the Company. The Joint Bookrunners may, in agreement with the Company, accept bids that are received after the Bookbuilding Process has closed. The Company reserves the right (upon agreement of the Joint Bookrunners) to reduce or seek to increase the amount to be raised pursuant to the Placing, in its discretion.
6. Each Placee's allocation will be determined by the Joint Bookrunners in their discretion following consultation with the Company and will be confirmed to Placees either orally or by email by the Joint Bookrunners. The Joint Bookrunners may choose to accept bids, either in whole or in part, on the basis of allocations determined at its absolute discretion, in consultation with the Company, and may scale down any bids for this purpose on the basis referred to in paragraph 9 below.
7. The Company will release the Placing Results Announcement following the close of the Bookbuilding Process detailing the aggregate number of the Placing Shares to be issued.
8. Each Placee's allocation and commitment will be evidenced by a contract note or electronic trade confirmation issued to such Placee by the Joint Bookrunners. The terms of this Appendix III will be deemed incorporated in that contract note or electronic trade confirmation.
9. Subject to paragraphs 4, 5 and 6 above, the Joint Bookrunners may choose to accept bids, either in whole or in part, on the basis of allocations determined at their discretion and may scale down any bids for this purpose on such basis as they may determine or be directed. The Joint Bookrunners may also, notwithstanding paragraphs 4, 5 and 6 above, subject to the prior consent of the Company:
(a) allocate Placing Shares after the time of any initial allocation to any person submitting a bid after that time; and
(b) allocate Placing Shares after the Bookbuilding Process has closed to any person submitting a bid after that time.
10. Each Placee's allocation and commitment to acquire Placing Shares (subject to recall) so allocated will be made on the terms and subject to the conditions in this Appendix III and the Announcement and will be legally binding on the Placee on behalf of which it is made and except with the Joint Bookrunners' consent will not be capable of variation or revocation after the time at which it is submitted. Each Placee will have an immediate, separate, irrevocable and binding obligation, owed to the Joint Bookrunners (as agents for the Company), to pay to them (or as they may direct) in cleared funds an amount equal to the product of the Issue Price and, once apportioned after recall (in accordance with the procedure described in the paragraph entitled "Placing Procedure" below), the Placing Shares, which such Placee has agreed to acquire and the Company has agreed to allot and issue to that Placee.
11. Except as required by law or regulation, no press release or other announcement will be made the Joint Bookrunners or the Company using the name of any Placee (or its agent), in its capacity as Placee (or agent), other than with such Placee's prior written consent.
12. Irrespective of the time at which a Placee's allocation(s) pursuant to the Placing is/are confirmed, settlement for all Placing Shares to be acquired pursuant to the Placing will be required to be made at the same time, on the basis explained below under "Registration and Settlement".
13. All obligations under the Bookbuilding Process 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 under "Termination of the Placing".
14. By participating in the Bookbuilding Process, 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 and applicable FCA rules, neither: (a) either Joint Bookrunner;
(b) any of its affiliates, agents, directors, officers, consultants, partners or employees; nor
(c) to the extent not contained within (a) or (b), any person connected with the relevant Joint Bookrunner as defined in the FSMA ((b) and (c) being together "affiliates" and individually an "affiliate" of the Joint Bookrunner);
shall have any liability (including to the extent permissible by law, any fiduciary duties) to Placees or to any other person whether acting on behalf of a Placee or otherwise. In particular, neither Joint Bookrunner nor any of its affiliates shall have any liability (including, to the extent permissible by law, any fiduciary duties) in respect of the Joint Bookrunner's conduct of the Bookbuilding Process or of such alternative method of effecting the Placing as the Joint Bookrunners and the Company may agree.
Registration and Settlement
If Placees are allocated any Placing Shares in the Placing they will be sent a contract note or electronic trade confirmation which will confirm the number of Placing Shares allocated to them, the Issue Price and the aggregate amount owed by them to the Joint Bookrunners.
Each Placee will be deemed to agree that it will do all things necessary to ensure that delivery and payment is completed as directed by the Joint Bookrunners in accordance with either the standing CREST or certificated settlement instructions which they have in place with the relevant Joint Bookrunner.
Settlement of transactions in the Placing Shares (ISIN: GB00BJVWTM27) following Admission will take place within the CREST system, subject to certain exceptions. Settlement through CREST will be on a T+1 basis unless otherwise notified by Panmure Gordon and is expected to occur on 28 June 2021 (the "Settlement Date") in accordance with the contract notes or electronic trade confirmations. Settlement will be on a delivery versus payment basis. However, in the event of any difficulties or delays in the admission of the Placing Shares to CREST or the use of CREST in relation to the Placing, the Company and Panmure Gordon may agree that the Placing Shares should be issued in certificated form. Panmure Gordon reserves the right to require settlement for the Placing Shares, and to deliver the Placing Shares to Placees, by such other means as it deems necessary if delivery or settlement to Placees is not practicable within the CREST system or would not be consistent with regulatory requirements in the jurisdiction in which a Placee is located.
Interest is chargeable daily on payments not received from Placees on the due date in accordance with the arrangements set out above, in respect of either CREST or certificated deliveries, at the rate of 2 percentage points above the prevailing base rate of Barclays Bank PLC as determined by Panmure Gordon.
Each Placee is deemed to agree that, if it does not comply with these obligations, the Joint Bookrunners may sell any or all of the Placing Shares allocated to that Placee on their behalf and retain from the proceeds, for the Joint Bookrunners' own account and benefit, an amount equal to the aggregate amount owed by the Placee plus any interest due. The relevant Placee will, however, remain liable for any shortfall below the Issue Price. By communicating a bid for Placing Shares, such Placee confers on the Joint Bookrunners all such authorities and powers necessary to carry out such sale and agrees to ratify and confirm all actions which the Joint Bookrunners lawfully take in pursuance of such sale.
If Placing Shares are to be delivered to a custodian or settlement agent, Placees must ensure that, upon receipt, the conditional contract note or the electronic trade confirmation is copied and delivered immediately to the relevant person within that organisation. Insofar as Placing Shares are registered in a Placee's name or that of its nominee or in the name of any person for whom a Placee is contracting as agent or that of a nominee for such person, such Placing Shares should, subject as provided below, be so registered free from any liability to United Kingdom stamp duty or stamp duty reserve tax. If there are any circumstances in which any United Kingdom stamp duty or stamp duty reserve tax or other similar taxes or duties (including any interest and penalties relating thereto) is payable in respect of the allocation, allotment, issue, sale, transfer or delivery of the Placing Shares (or, for the avoidance of doubt, if any stamp duty or stamp duty reserve tax is payable in connection with any subsequent transfer or agreement to transfer Placing Shares), the Company shall not be responsible for payment thereof. Placees will not be entitled to receive any fee or commission in connection with the Placing.
Conditions of the Placing
The Placing is conditional upon the Placing Agreement becoming unconditional and not having been terminated in accordance with its terms.
The obligations of Panmure Gordon under the Placing Agreement, and the Placing, are conditional upon, inter alia:
(a) the Prospectus being approved pursuant to the Prospectus Regulation Rules and the FSMA by the FCA as soon as practicable on 9 June 2021;
(b) the Resolutions having been duly passed (without amendment) at the General Meeting;
(c) none of the representations, warranties and undertakings on the part of the Company contained in the Placing Agreement being untrue, inaccurate or misleading at each significant time (being. 4.45 p.m. on the date on which the Results Agreement is signed, the date of the Prospectus, the date of any supplementary prospectus published prior to Admission and Admission or such other time as is notified to the Company by Panmure Gordon or Admission), by reference to the facts and circumstances then subsisting;
(d) the Company complying with its obligations under the Placing Agreement to the extent that they fall to be performed on or before Admission;
(e) the Company and Panmure Gordon agreeing the final number of Placing Shares and executing the Results Agreement no later than 4.45 p.m. on the date of this Announcement (or such later time and/or date as Panmure Gordon may agree with the Company);
(f) the Company having allotted, subject only to Admission, the New Ordinary Shares in accordance with the Placing Agreement;
(g) no event requiring the publication of a supplementary prospectus pursuant to the Prospectus Regulation Rules arising between the time of publication of the Prospectus and Admission and no supplementary prospectus being published by or on behalf of the Company before Admission; and
(h) Admission having become effective at or before 8.00 a.m. on 28 June 2021 or such later date as Panmure Gordon may agree being no later than 8.00 a.m. on 29 June 2021,
(all conditions to the obligations Panmure Gordon included in the Placing Agreement being together, the "conditions").
If any of the conditions are not fulfilled or, where permitted, waived by Panmure Gordon in accordance with the Placing Agreement within the stated time periods (or such later time and/or date as the Panmure Gordon may decide), or the Placing Agreement is terminated in accordance with its terms, the Placing will lapse and the Placee's rights and obligations shall cease and terminate at such time and each Placee agrees that no claim can be made by or on behalf of the Placee (or any person on whose behalf the Placee is acting) in respect thereof.
By participating in the Bookbuilding Process, each Placee agrees that its rights and obligations cease and terminate only in the circumstances described above and under "Termination of the Placing" below and will not be capable of rescission or termination by it.
Panmure Gordon may, in its absolute discretion and upon such terms as it thinks fit, waive fulfilment of all or any of the conditions in whole or in part, or extend the time provided for fulfilment of one or more conditions, save that certain conditions including the condition relating to Admission referred to in paragraph (h) above may not be waived. Any such extension or waiver will not affect Placees' commitments as set out in this Appendix III.
Panmure Gordon may terminate the Placing Agreement in certain circumstances, details of which are set out below.
Neither Panmure Gordon nor any of its affiliates nor the Company shall have any liability to any Placee (or to any other person whether acting on behalf of a Placee or otherwise) in respect of any decision any of them may make as to whether or not to waive or to extend the time and/or date for the satisfaction of any condition to the Placing nor for any decision any of them 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 Panmure Gordon.
Termination of the Placing
Panmure Gordon may, in its absolute discretion, by notice to the Company, terminate the Placing Agreement at any time up to Admission if, amongst other things, in opinion of Panmure Gordon:
(a) there has been a breach of the warranties given to it; (b) there has been a material adverse change;
(c) any material statement contained in this Announcement, the Prospectus, the Placing Results Announcement or any other document or announcement issued or published by or on behalf of the Company in connection with the Capital Raising is or has become or has been discovered to be untrue or inaccurate in any material respect or misleading; or
(d) there has been a force majeure event.
If the Placing Agreement is terminated in accordance with its terms, the rights and obligations of each Placee in respect of the Placing as described in this Announcement shall cease and terminate at such time and no claim can be made by any Placee in respect thereof.
By participating in the Bookbuilding Process, each Placee agrees with the Company and Panmure Gordon that the exercise by the Company or Panmure Gordon of any right of termination or any other right or other discretion under the Placing Agreement shall be within the absolute discretion of the Company or Panmure Gordon or for agreement between the Company and Panmure Gordon (as the case may be) and that neither the Company nor Panmure Gordon need make any reference to such Placee and that none of the Company, Panmure Gordon nor any of their respective Representatives shall have any liability to such Placee (or to any other person whether acting on behalf of a Placee or otherwise) whatsoever in connection with any such exercise. Each Placee further agrees that they will have no rights against Panmure Gordon, the Company or any of their respective directors or employees under the Placing Agreement pursuant to the Contracts (Rights of Third Parties) Act 1999 (as amended).
By participating in the Placing, each Placee agrees that its rights and obligations terminate only in the circumstances described above and under the "Conditions of the Placing" section above and will not be capable of rescission or termination by it after the issue by Panmure Gordon of a contract note or electronic trade confirmation confirming each Placee's allocation and commitment in the Placing.
Placing Procedure
Placees shall subscribe for the Placing Shares to be issued pursuant to the Placing and any allocation of the Placing Shares (subject to recall) to be issued pursuant to the Placing will be notified to them on or 9 June 2021 (or such other time and/or date as the Company and the Joint Bookrunners may agree).
Placees will be called upon to subscribe for, and shall subscribe for, the Placing Shares only to the extent that valid applications and payment in full by Qualifying Shareholders (other than the Committed Shareholders) under the Open Offer are not received by 11.00 a.m. on 24 June 2021 or if applications have otherwise not been deemed to be valid in accordance with the terms set out in the Prospectus and the Application Form. Placees will be called upon to subscribe for, and shall subscribe for, the number of Placing Shares comprised in their allocation multiplied by the proportion of Open Offer Shares (minus the Committed Shares) which are not taken up or deemed to have been taken up in accordance with the terms set out in the Prospectus and the Application Form.
Payment in full for any Placing Shares so allocated in respect of the Placing at the Issue Price must be made by no later than 28 June 2021. The Joint Bookrunners will notify Placees if any of the dates in these terms and conditions should change, including as a result of delay in the posting of the Prospectus, the Application Form or the crediting of the Open Offer Entitlements in CREST or the production of a supplementary prospectus or otherwise.
Representations, warranties and further terms
By submitting a bid in the Bookbuilding Process, each Placee (and any person acting on such Placee's behalf) irrevocably confirms, represents, warrants, acknowledges and agrees (for itself and for any such prospective Placee) with the Company and each Joint Bookrunner (in its capacity as joint bookrunner and placing agent of the Company in respect of the Placing) that (save where the Joint Bookrunners expressly agree in writing to the contrary):
1. it has read and understood this Announcement in its entirety and that its acquisition of the Placing Shares is subject to and based upon all the terms, conditions, representations, warranties, indemnities, acknowledgements, agreements and undertakings and other information contained in the Announcement (and in particular, and without limitation, you acknowledge that your participation in the Placing is subject to a right of recall to satisfy valid acceptances under the terms of the Open Offer) and that it has not relied on, and will not rely on, any information given or any representations, warranties or statements made at any time by any person in connection with Admission, the Placing, the Company, the New Ordinary Shares or otherwise, other than the information contained in this Announcement and the Publicly Available Information;
2. you acknowledge that your agreement to subscribe for the number of Placing Shares comprised in your participation in the Placing is not to be made pursuant to the Prospectus but is made pursuant to these terms and conditions in this Appendix III;
3. you confirm that if you duly apply and subscribe (on the terms set out in the Prospectus) for Open Offer Shares to which you are entitled, such application and subscription shall extend to an irrevocable undertaking to subscribe for such number of New Ordinary Shares at the Issue Price following expiry of the Open Offer in the event that, as a result of your default or otherwise, you have failed to fulfil your obligation to apply and subscribe for all those Open Offer Shares to which you are entitled;
4. the Ordinary Shares are admitted to trading on the main market for listed securities of the London Stock Exchange, and that the Company is therefore required to publish certain business and financial information in accordance with the rules and practices of the London Stock Exchange and/or the FCA and the Market Abuse Regulation (EU Regulation No. 596/2014 as it forms part of United Kingdom domestic law by virtue of EUWA (the "UK MAR")), which includes a description of the nature of the Company's business and the Company's most recent balance sheet and profit and loss account and that it is able to obtain or access such information without undue difficulty, and is able to obtain access to such information or comparable information concerning any other publicly traded company, without undue difficulty;
5. it has made its own assessment of the Placing Shares and has relied on its own investigation of the business, financial or other position of the Company in accepting a participation in the Placing and neither the Joint Bookrunners nor the Company nor any of their respective Representatives nor any person acting on behalf of any of them has provided, and will not provide, it with any material regarding the Placing Shares or the Company or any other person other than the information in this Announcement or the Publicly Available Information; nor has it requested the Joint Bookrunners, the Company, any of their respective Representatives or any person acting on behalf of any of them to provide it with any such information;
6. neither Joint Bookrunner nor any person acting on behalf of it nor any of its Representatives has or shall have any liability for any Publicly Available Information, or any representation relating to the Company, provided that nothing in this paragraph excludes the liability of any person for fraudulent misrepresentation made by that person;
7.
(a) the only information on which it is entitled to rely on and on which it has relied in committing to acquire the Placing Shares is contained in this Announcement and the Publicly Available Information, such information being all that it deems necessary to make an investment decision in respect of the Placing Shares and it has made its own assessment of the Company, the Placing Shares and the terms of the Placing based on the information in this Announcement and the Publicly Available Information;
(b) neither Joint Bookrunner, nor the Company (nor any of their respective Representatives) have made any representation or warranty to it, express or implied, with respect to the Company, the Placing or the Placing Shares or the accuracy, completeness or adequacy of the Publicly Available Information, nor will it provide any material or information regarding the Company, the Placing or the Placing Shares;
(c) it has conducted its own investigation of the Company, the Placing (including its terms and conditions) and the Placing Shares, satisfied itself that the information is still current and relied on that investigation for the purposes of its decision to participate in the Placing; and
(d) it has not relied on any investigation that either Joint Bookrunner or any person acting on its behalf may have conducted with respect to the Company, the Placing or the Placing Shares;
8. the content of this Announcement and the Publicly Available Information has been prepared by and is exclusively the responsibility of the Company and that neither Joint Bookrunner nor any persons acting on its behalf is responsible for or has or shall have any liability for any information, representation, warranty or statement relating to the Company contained in this Announcement or the Publicly Available Information nor will they be liable for any Placee's decision to participate in the Placing based on any information, representation, warranty or statement contained in this Announcement, the Publicly Available Information or otherwise. Nothing in this Appendix III shall exclude any liability of any person for fraudulent misrepresentation;
9. neither it nor the beneficial owner of the Placing Shares is, nor will, at the time the Placing Shares are acquired, either of them be at resident of the United States, Australia, Canada, the Republic of South Africa or Japan;
10. the Placing Shares have not been registered or otherwise qualified, and will not be registered or otherwise qualified, for offer and sale nor will a prospectus be cleared or approved in respect of any of the Placing Shares under the securities laws of the United States, or any state or other jurisdiction of the United States, Australia, Canada, the Republic of South Africa or Japan and, subject to certain exceptions, may not be offered, sold, taken up, renounced or delivered or transferred, directly or indirectly, within the United States, Australia, Canada, the Republic of South Africa or Japan or in any country or jurisdiction where any such action for that purpose is required;
11. it may be asked to disclose in writing or orally to the Joint Bookrunners: (i) if he or she is an individual, his or her nationality; or (ii) if he or she is a discretionary fund manager, the jurisdiction in which the funds are managed or owned;
12. it has the funds available to pay for the Placing Shares for which it has agreed to acquire and acknowledges and agrees that it will pay the total subscription amount in accordance with the terms of this Announcement on the due time and date set out herein, failing which the relevant Placing Shares may be placed with other Placees or sold at such price as the Joint Bookrunners determine;
13. it and/or each person on whose behalf it is participating:
(a) is entitled to acquire Placing Shares pursuant to the Placing under the laws and regulations of all relevant jurisdictions;
(b) has fully observed such laws and regulations;
(c) has capacity and authority and is entitled to enter into and perform its obligations as an acquirer of Placing Shares and will honour such obligations; and
(d) has obtained all necessary consents and authorities (including, without limitation, in the case of a person acting on behalf of a Placee, all necessary consents and authorities to agree to the terms set out or referred to in this Appendix III) under those laws or otherwise and complied with all necessary formalities to enable it to enter into the transactions contemplated hereby and to perform its obligations in relation thereto and, in particular, if it is a pension fund or investment company it is aware of and acknowledges it is required to comply with all applicable laws and regulations with respect to its acquisition of Placing Shares;
14. it is not, and any person who it is acting on behalf of is not, and at the time the Placing Shares are acquired will not be, a resident of, or with an address in, or subject to the laws of, the United States, Australia, Canada, the Republic of South Africa or Japan, and it acknowledges and agrees that the Placing Shares have not been and will not be registered or otherwise qualified under the securities legislation of the United States, Australia, Canada, the Republic of South Africa or Japan and may not be offered, sold, or acquired, directly or indirectly, within those jurisdictions;
15. it and the beneficial owner of the Placing Shares is, and at the time the Placing Shares are acquired will be, outside the United States and acquiring the Placing Shares in an "offshore transaction" as defined in, and in accordance with, Regulation S under the Securities Act;
16. it understands that the Placing Shares have not been, and will not be, registered under the Securities Act and may not be offered, sold or resold in or into or from the United States except pursuant to an effective registration under the Securities Act, or pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in accordance with applicable state securities laws;
17. it (and any account for which it is purchasing) is not acquiring the Placing Shares with a view to any offer, sale or distribution thereof within the meaning of the Securities Act;
18. it understands that:
(a) no representation is made as to the availability of the exemption provided by Rule 144 of the Securities Act for resales or transfers of Placing Shares; and
(b) it will not deposit the Placing Shares in an unrestricted depositary receipt programme in the United States (as defined in the Securities Act);
19. it will not offer, sell, transfer, pledge or otherwise dispose of any Placing Shares except:
(a) in an offshore transaction in accordance with Rules 903 or 904 of Regulation S under the Securities Act; or
(b) pursuant to another exemption from registration under the Securities Act, if available,
and in each case in accordance with all applicable securities laws of the states of the United States and other jurisdictions;
20. no representation has been made as to the availability of the exemption provided by Rule 144, Rule 144A or any other exemption under the Securities Act for the reoffer, resale, pledge or transfer of the Placing Shares;
21. it understands that the Placing Shares are expected to be issued to it through CREST but may be issued to it in certificated, definitive form and acknowledges and agrees that the Placing Shares may, to the extent they are delivered in certificated form, bear a legend to the following effect unless agreed otherwise with the Company:
"THESE SECURITIES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMED (THE "SECURITIES ACT"), OR UNDER THE APPLICABLE SECURITIES LAWS OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES, AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (B) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT OR (C) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES. NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THE FOREGOING, THE SECURITIES MAY NOT BE DEPOSITED INTO ANY UNRESTRICTED DEPOSITARY RECEIPT FACILITY IN RESPECT OF THE COMPANY'S SECURITIES ESTABLISHED OR MAINTAINED BY A DEPOSITARY BANK. EACH HOLDER, BY ITS ACCEPTANCE OF THESE SHARES, REPRESENTS THAT IT UNDERSTANDS AND AGREES TO THE FOREGOING RESTRICTIONS.";
22. it is not taking up the Placing Shares as a result of any "directed selling efforts" (as such term is defined in Regulation S under the Securities Act);
23. it understands that there may be certain consequences under United States and other tax laws resulting from an investment in the Placing and it has made such investigation and has consulted its own independent advisers or otherwise has satisfied itself concerning, without limitation, the effects of United States federal, state and local income tax laws and foreign tax laws generally;
24. it will not distribute, forward, transfer or otherwise transmit this Announcement or any part of it, or any other presentational or other materials concerning the Placing in or into or from the United States (including electronic copies thereof) to any person, and it has not distributed, forwarded, transferred or otherwise transmitted any such materials to any person;
25. none of the Joint Bookrunners, the Company nor any of their respective Representatives nor any person acting on behalf of any of them is making any recommendations to it or advising it regarding the suitability of any transactions it may enter into in connection with the Placing and that participation in the Placing is on the basis that it is not and will not be a client of the Joint Bookrunners and that neither Joint Bookrunner has any duties or responsibilities to it for providing the protections afforded to its clients or for providing advice in relation to the Placing nor in respect of any representations, warranties, undertakings or indemnities contained in the Placing Agreement nor for the exercise or performance of any of its rights and obligations thereunder including any rights to waive or vary any conditions or exercise any termination right;
26. it will make payment to the relevant Joint Bookrunner for the Placing Shares allocated to it in accordance with the terms and conditions of this Announcement on the due times and dates set out in this Announcement, failing which the relevant Placing Shares may be placed with others on such terms as the Joint Bookrunners determine in their absolute discretion without liability to the Placee and it will remain liable for any shortfall below the net proceeds of such sale and the placing proceeds of such Placing Shares;
27. its allocation (if any) of Placing Shares will represent a maximum number of Placing Shares which it will be entitled, and required, to subscribe for, and that the Company may call upon it to subscribe for a lower number of Placing Shares (if any), but in no event in aggregate more than the aforementioned maximum;
28. no action has been or will be taken by any of the Company, the Joint Bookrunners or any person acting on behalf of the Company or the Joint Bookrunners that would, or is intended to, permit a public offer of the Placing Shares in the United States or in any country or jurisdiction where any such action for that purpose is required;
29. the person who it specifies for registration as holder of the Placing Shares will be: (a) the Placee; or (b) a nominee of the Placee, as the case may be,
and that the Joint Bookrunners and the Company will not be responsible for any liability to stamp duty or stamp duty reserve tax resulting from a failure to observe this requirement. Each Placee and any person acting on behalf of such Placee agrees to acquire Placing Shares pursuant to the Placing and agrees to indemnify the Company and the Joint Bookrunners in respect of the same on the basis that the Placing Shares will be allotted to a CREST stock account of the relevant Joint Bookrunner or transferred to a CREST stock account of the relevant Joint Bookrunner who will hold them as nominee on behalf of the Placee until settlement in accordance with its standing settlement instructions with it;
30. the allocation, allotment, issue and delivery to it, or the person specified by it for registration as holder, of Placing Shares will not give rise to a stamp duty or stamp duty reserve tax liability under (or at a rate determined under) any of sections 67, 70, 93 or 96 of the Finance Act 1986 (depository receipts and clearance services) and that it is not participating in the Placing as nominee or agent for any person or persons to whom the allocation, allotment, issue or delivery of Placing Shares would give rise to such a liability;
31. if it is within the United Kingdom, it and any person acting on its behalf (if within the United Kingdom) falls within Article 19(5) and/or 49(2) of the Order and undertakes that it will acquire, hold, manage and (if applicable) dispose of any Placing Shares that are allocated to it for the purposes of its business only;
32. it has not offered or sold and will not offer or sell any Placing Shares to persons in the United Kingdom or a Relevant State prior to the expiry of a period of six months from Admission except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their business or otherwise in circumstances which have not resulted and which will not result in an offer to the public in the United Kingdom within the meaning of section 85(1) of the FSMA or within the meaning of the UK Prospectus Regulation, or an offer to the public in any member state of the EEA within the meaning of the EU Prospectus Regulation;
33. if it is within the United Kingdom, it is a Qualified Investor as defined in Article 2(e) of the UK Prospectus Regulation and if it is within a Relevant State, it is a Qualified Investor as defined in Article 2(e) of the EU Prospectus Regulation;
34. it has only communicated or caused to be communicated and it will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of the FSMA) relating to Placing Shares in circumstances in which section 21(1) of the FSMA does not require approval of the communication by an authorised person and it acknowledges and agrees that this Announcement has not been approved by either Joint Bookrunner in its capacity as an authorised person under section 21 of the FSMA and it may not therefore be subject to the controls which would apply if it was made or approved as financial promotion by an authorised person;
35. it has complied and it will comply with all applicable laws with respect to anything done by it or on its behalf in relation to the Placing Shares (including all relevant provisions of the FSMA and the UK MAR in respect of anything done in, from or otherwise involving the United Kingdom);
36. if it is a financial intermediary, as that term is used in Article 5(1) of the UK Prospectus Regulation, the Placing Shares acquired by it in the Placing will not be acquired on a non-discretionary basis on behalf of, nor will they be acquired with a view to their offer or resale to, persons in the United Kingdom other than Qualified Investors, or in circumstances in which the express prior written consent of Panmure Gordon has been given to each proposed offer or resale;
37. if it has received any inside information (for the purposes of the UK MAR and section 56 of the Criminal Justice Act 1993 or other applicable law) about the Company in advance of the Placing, it has not:
(a) dealt (or attempted to deal) in the securities of the Company or cancelled or amended a dealing in the securities of the Company;
(b) encouraged, recommended or induced another person to deal in the securities of the Company or to cancel or amend an order concerning the Company's securities; or
(c) unlawfully disclosed such information to any person, prior to the information being made publicly available;
38. if it is a person in the Dubai International Financial Centre who acquires any Placing Shares pursuant to the Placing:
(a) it is it is a "Professional Client" as defined in the DIFC Conduct of Business Module, other than natural persons; and
(b) it acknowledges that it is acquiring the Placing Shares in the context of an offering that qualifies as a private placement under DIFC law;
39. if it is a person in the Abu Dhabi Global Market who acquires any Placing Shares pursuant to the Placing:
(a) it is it is a "Professional Client" as defined in the ADGM Conduct of Business Rulebook, other than natural persons; and
(b) it acknowledges that it is acquiring the Placing Shares in the context of an offering that qualifies as a private placement under ADGM law;
40. if it is a person in the Kingdom of Saudi Arabia,
(a) it is it is a "Sophisticated Investor" as defined in the Capital Market Law issued by Royal Decree No. M/30 dated 2/6/1424H (as amended by Resolution of the Board of the Capital Market Authority number 1-104-2019 dated 30 September 2019G); and
(b) it acknowledges that it is acquiring the Placing Shares in the context of an offering that qualifies as a private placement under the KSA rules;
41. Either Joint Bookrunner and its affiliates, acting as an investor for its or their own account(s), may bid or subscribe for and/or purchase Placing Shares and, in that capacity, may retain, purchase, offer to sell or otherwise deal for its or their own account(s) in the Placing Shares, any other securities of the Company or other related investments in connection with the Placing or otherwise. Accordingly, references in this Announcement to the Placing Shares being offered, subscribed, acquired or otherwise dealt with should be read as including any offer to, or subscription, acquisition or dealing by, either Joint Bookrunner and/or any of its affiliates acting as an investor for its or their own account(s). Neither the Joint Bookrunners nor the Company intend to disclose the extent of any such investment or transaction otherwise than in accordance with any legal or regulatory obligation to do so;
42. it:
(a) has complied with its obligations in connection with money laundering and terrorist financing under the Proceeds of Crime Act 2002 (as amended), the Terrorism Act 2000 (as amended), the Terrorism Act 2006, the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (as amended) and all related or similar rules, regulations or guidelines, issued, administered or enforced by any government agency having jurisdiction in respect thereof and the Money Laundering Sourcebook of the FCA (together, the "Money Laundering Regulations");
(b) is not a person:
(i) with whom transactions are prohibited under the US Foreign Corrupt Practices Act of 1977 or any economic sanction programmes administered by, or regulations promulgated by, the Office of Foreign Assets Control of the U.S. Department of the Treasury;
(ii) named on the Consolidated List of Financial Sanctions Targets maintained by HM Treasury of the United Kingdom; or
(iii) subject to financial sanctions imposed pursuant to a regulation of the European Union or a regulation adopted by the United Nations or other applicable law,
(together with the Money Laundering Regulations, the "Regulations") and if making payment on behalf of a third party, that satisfactory evidence has been obtained and recorded by it to verify the identity of the third party as required by the Regulations and has obtained all governmental and other consents (if any) which may be required for the purpose of, or as a consequence of, such purchase, and it will provide promptly to the Joint Bookrunners such evidence, if any, as to the identity or location or legal status of any person which it may request from it in connection with the Placing (for the purpose of complying with the Regulations or ascertaining the nationality of any person or the jurisdiction(s) to which any person is subject or otherwise) in the form and manner requested by the Joint Bookrunners on the basis that any failure by it to do so may result in the number of Placing Shares that are to be acquired by it or at its direction pursuant to the Placing being reduced to such number, or to nil, as the Joint Bookrunners may decide at their sole discretion;
43. in order to ensure compliance with the Regulations, each Joint Bookrunner (for itself and as agent on behalf of the Company) or the Company's registrars may, in their absolute discretion, require verification of its identity. Pending the provision to the Joint Bookrunners or the Company's registrars, as applicable, of evidence of identity, definitive certificates in respect of the Placing Shares may be retained at the Joint Bookrunners absolute discretion or, where appropriate, delivery of the Placing Shares to it in uncertificated form may be delayed at the Joint Bookrunners or the Company's registrars', as the case may be, absolute discretion. If within a reasonable time after a request for verification of identity either Joint Bookrunner (for itself and as agent on behalf of the Company) or the Company's registrars have not received evidence satisfactory to them, either Joint Bookrunner and/or the Company may, at its absolute discretion, terminate its commitment in respect of the Placing, in which event the monies payable on acceptance of allotment will, if already paid, be returned without interest to the account of the drawee's bank from which they were originally debited;
44. it acknowledges that its commitment to acquire Placing Shares on the terms set out in this Announcement and in the contract note or through the electronic trade confirmation will continue notwithstanding any amendment that may in future be made to the terms and conditions of the Placing and that Placees will have no right to be consulted or require that their consent be obtained with respect to the Company's or the Joint Bookrunners' conduct of the Placing;
45. it has knowledge and experience in financial, business and international investment matters as is required to evaluate the merits and risks of acquiring the Placing Shares. It further acknowledges that it is experienced in investing in securities of this nature and is aware that it may be required to bear, and is able to bear, the economic risk of, and is able to sustain, a complete loss in connection with the Placing. It has relied upon its own examination and due diligence of the Company and its affiliates taken as a whole, and the terms of the Placing, including the merits and risks involved;
46. it irrevocably appoints any duly authorised officer of either Joint Bookrunner as its agent for the purpose of executing and delivering to the Company and/or its registrars any documents on its behalf necessary to enable it to be registered as the holder of any of the Placing Shares for which it agrees to acquire upon the terms of this Announcement;
47. the Company, the Joint Bookrunners and others (including each of their respective Representatives) will rely upon the truth and accuracy of the foregoing representations, warranties, acknowledgements and agreements, which are given to each Joint Bookrunner on its own behalf and on behalf of the Company and are irrevocable;
48. it is acting as principal only in respect of the Placing or, if it is acquiring the Placing Shares as a fiduciary or agent for one or more investor accounts, it:
(a) is duly authorised to do so and it has full power and authority to make, and does make, the foregoing representations, warranties, acknowledgements, agreements and undertakings on behalf of each such accounts; and
(b) will remain liable to the Company and the Joint Bookrunners for the performance of all its obligations as a Placee in respect of the Placing (regardless of the fact that it is acting for another person);
49. time is of the essence as regards its obligations under this Appendix III;
50. any document that is to be sent to it in connection with the Placing will be sent at its risk and may be sent to it at any address provided by it to the Joint Bookrunners;
51. the Placing Shares will be issued subject to the terms and conditions of this Appendix III; and
52. the terms and conditions contained in this Appendix III and all documents into which this Appendix III is incorporated by reference or otherwise validly forms a part and/or any agreements entered into pursuant to these terms and conditions and all agreements to acquire Placing Shares pursuant to the Bookbuilding Process and/or the Placing and all non-contractual or other obligations arising out of or in connection with them, will be governed by and construed in accordance with English law and it submits to the exclusive jurisdiction of the English courts in relation to any claim, dispute or matter arising out of such contract (including any dispute regarding the existence, validity or termination or such contract or relating to any non-contractual or other obligation arising out of or in connection with such contract), except that enforcement proceedings in respect of the obligation to make payment for the Placing Shares (together with interest chargeable thereon) may be taken by the Company or the Joint Bookrunners in any jurisdiction in which the relevant Placee is incorporated or in which any of its securities have a quotation on a recognised stock exchange.
By participating in the Placing, each Placee (and any person acting on such Placee's behalf) agrees to indemnify and hold the Company, the Joint Bookrunners and each of their respective Representatives harmless from any and all costs, claims, liabilities and expenses (including legal fees and expenses) arising out of or in connection with any breach of the representations, warranties, acknowledgements, agreements and undertakings given by the Placee (and any person acting on such Placee's behalf) in this Appendix III or incurred by the Joint Bookrunners, the Company or each of their respective Representatives arising from the performance of the Placee's obligations as set out in this Announcement, and further agrees that the provisions of this Appendix III shall survive after the completion of the Placing.
The rights and remedies of the Joint Bookrunners and the Company under these terms and conditions are in addition to any rights and remedies which would otherwise be available to each of them and the exercise or partial exercise or partial exercise of one will not prevent the exercise of others.
The agreement to allot and issue Placing Shares to Placees (or the persons for whom Placees are contracting as agent) free of stamp duty and stamp duty reserve tax in the United Kingdom relates only to their allotment and issue to Placees, or such persons as they nominate as their agents, direct by the Company. Such agreement assumes that the Placing Shares are not being acquired in connection with arrangements to issue depositary receipts or to transfer the Placing Shares into a clearance service. If there are any such arrangements, or the settlement related to any other dealings in the Placing Shares, stamp duty or stamp duty reserve tax may be payable. In that event, the Placee agrees that it shall be responsible for such stamp duty or stamp duty reserve tax and neither the Company nor the Joint Bookrunners shall be responsible for such stamp duty or stamp duty reserve tax. If this is the case, each Placee should seek its own advice and they should notify the Joint Bookrunners accordingly. In addition, Placees should note that they will be liable for any capital duty, stamp duty and all other stamp, issue, securities, transfer, registration, documentary or other duties or taxes (including any interest, fines or penalties relating thereto) payable outside the United Kingdom by them or any other person on the acquisition by them of any Placing Shares or the agreement by them to acquire any Placing Shares and each Placee, or the Placee's nominee, in respect of whom (or in respect of the person for whom it is participating in the Placing as an agent or nominee) the allocation, allotment, issue or delivery of Placing Shares has given rise to such non-United Kingdom stamp, registration, documentary, transfer or similar taxes or duties undertakes to pay such taxes and duties, including any interest and penalties (if applicable), forthwith and to indemnify on an after-tax basis and to hold harmless the Company and the Joint Bookrunners in the event that either the Company and/or the Joint Bookrunners have incurred any such liability to such taxes or duties.
The representations, warranties, acknowledgements and undertakings contained in this Appendix III are given to each Joint Bookrunner for itself and on behalf of the Company and are irrevocable.
Panmure Gordon is authorised and regulated by the FCA in the United Kingdom and is acting exclusively for the Company and no one else in connection with the Capital Raising and Panmure Gordon will not be responsible to anyone (including any Placees) other than the Company for providing the protections afforded to its clients or for providing advice in relation to the Capital Raising or any other matters referred to in this Announcement.
Each Placee and any person acting on behalf of the Placee acknowledges that each Joint Bookrunner does not owe any fiduciary or other duties to any Placee in respect of any representations, warranties, undertakings, acknowledgements, agreements or indemnities in the Placing Agreement.
Each Placee and any person acting on behalf of the Placee acknowledges and agrees that each Joint Bookrunner may (at its absolute discretion) satisfy its obligations to procure Placees by itself agreeing to become a Placee in respect of some or all of the Placing Shares or by nominating any connected or associated person to do so.
When a Placee or any person acting on behalf of the Placee is dealing with Panmure Gordon, any money held in an account with Panmure Gordon on behalf of the Placee and/or any person acting on behalf of the Placee will not be treated as client money within the meaning of the relevant rules and regulations of the FCA made under the FSMA. Each Placee acknowledges that the money will not be subject to the protections conferred by the client money rules: as a consequence this money will not be segregated from Panmure Gordon's money in accordance with the client money rules and will be held by it under a banking relationship and not as trustee.
References to time in this Announcement are to London time, unless otherwise stated.
All times and dates in this Announcement may be subject to amendment. Placees will be notified of any changes.
No statement in this Announcement is intended to be a profit forecast or estimate, and no statement in this Announcement should be interpreted to mean that earnings per share of the Company for the current or future financial years would necessarily match or exceed the historical published earnings per share of the Company.
The price of shares and any income expected from them may go down as well as up and investors may not get back the full amount invested upon disposal of the shares. Past performance is no guide to future performance, and persons needing advice should consult an independent financial adviser.
The Placing Shares to be issued pursuant to the Placing will not be admitted to trading on any stock exchange other than the main market for listed securities of the London Stock Exchange.
Neither the content of the Company's website nor any website accessible by hyperlinks on the Company's website is incorporated in, or forms part of, this Announcement.
APPIX IV - DEFINITIONS
"Admission" admission of the New
Ordinary Shares
to the premium
listing segment of
the Of cial List and
to trading
on the London Stock
Exchange's main
market for listed
securities
"Adjusted EBITDA" earnings before
interest, taxes
and amortisation,
less exceptional
items (non- nance)
and amortisation
"Announcement" the announcement of
the Capital
Raising released by
the Company
through a Regulatory
Information
Service on 9 June
2021
"Application Form" the personalised
application form
on which the
Qualifying Non-CREST
Shareholders may
apply for New
Ordinary
Shares under the Open
Offer
"Board" or "Board of Directors" the board of
directors of the
Company
"Capital Raising" the Placing and Open
Offer
"Capital Reorganisation" means the proposed
subdivision of
each Existing
Ordinary Share into
one Ordinary Share of
2 pence each
and one Deferred
Share of 8 pence
each
"Capital Reorganisation means 6.00 p.m. on 25
Record Date" June 2021,
being the date
specified in the
Expected Timetable of
Principal
Events on which those
Shareholders
holding Existing
Ordinary Shares
shall be subject to
the terms of
the Capital
Reorganisation
"certi cated" or "in certi a share or other
cated form" security which
is not in uncerti
cated form (that
is, not in CREST)
"Chairman" means the Chairman of
the Company
"City Code" The City Code on
Takeovers and Mergers
"Committed Shares" the 295,220,633 New
Ordinary Shares
subject to
irrevocable
undertakings
to take up the Open
Offer in full
"Company" or "GMS" Gulf Marine Services
PLC
"Conditional Placees" any person who has
agreed to
conditionally
subscribe for Open
Offer Shares
(subject to clawback
in respect
of valid applications
for Open Offer
Shares by Qualifying
Shareholders
under the Open Offer)
pursuant to
the placing
"CREST" the CREST system (as
de ned in the
CREST Regulations)
"CREST Regulations" means the
Uncertificated
Securities
Regulations 2001 (SI
2001 No. 01/378),
as amended
"Decree" the UAE Federal Law
N. 26 of 2020
amending certain
provisions of the
UAE Commercial
Companies Law
"Deferred Shares" the deferred shares
of 8 pence each
in the capital of the
Company which
will be created as a
result of the
Capital
Reorganisation
"Directors" the Executive
Directors and
Non-Executive
Directors of the
Company
"EEA" the European Economic
Area
"EEA State" a member state of the
EEA
"Enlarged Share Capital" the ordinary issued
share capital
of the Company
immediately following
completion of the
Capital Raising
"EOR" enhanced oil recovery
"EPC" engineering,
procurement and
construction
"EU" European Union
"EU Prospectus Regulation" Regulation (EU)
2017/1129 of the
European Parliament
and of the Council
of 14 June 2017
"Euroclear" Euroclear & Ireland
Limited
"EUWA" the European Union
(Withdrawal)
Act 2018, as amended
"Excess Application Facility" the facility for
Qualifying
Shareholders
to apply for
additional Open Offer
Shares in excess of
their Open Offer
Entitlements
"Excess Open Offer Entitlements" in respect of each
Qualifying
Shareholder
who has taken up his
or her Open
Offer Entitlement in
full, the entitlement
(in addition to the
Open Offer
Entitlement)
to apply for
additional Open Offer
Shares, up to the
number of New
Ordinary Shares,
pursuant to the
Excess Application
Facility. In
all circumstances,
excess applications
shall be allocated on
a pro rata
basis to Qualifying
Shareholders'
excess applications
"Ex-Entitlement Date" the date on which the
New Ordinary
Shares are expected
to commence
trading
ex-entitlement, being
8.00
a.m. on 9 June 2021
"Existing Ordinary Shares" the existing ordinary
shares of
10 pence each in the
capital of
the Company
immediately prior to
the Capital Raising
"Facilities" the Term Loan
Facilities and
Working
Capital Facility
"FCA" the Financial Conduct
Authority
acting in its
capacity as the
competent
authority for the
purposes of Part
VI of the FSMA
"First Equity Raise Condition" means, pursuant to
the Revised Debt
Terms, the
requirement that the
Company raises equity
capital of
U.S.$25 million
(after expenses)
or more by 30 June
2021 in order
to make the Interim
Prepayment
"First Tranche Warrants" means 43,810,974
warrants, being
approximately 50 per
cent. of the
Warrants
"Forward-looking Statements" forward-looking
statements,
forecasts,
estimates,
projections and
opinions
"FSMA" the Financial
Services and Markets
Act 2000, as amended
"General Meeting" means the general
meeting of the
Company to be held at
2.00 p.m.
(UAE time) on 25 June
2021
"Group" the Company and its
subsidiary
undertakings
and, where the
context requires,
its associated
undertakings
"HSE" "HSE" Health, Safety and
Environment
"IOCs" international oil
companies
"Interim Prepayment" the requirement for
the Group to
use at least U.S.$25
million of
net proceeds from the
Capital Raising
(which must occur
before close of
business on 30 June
2021), subject
to certain
conditions, to prepay
at least U.S.$25
million of its
Term Loan Facilities,
pursuant to
the 2021 Common Terms
Agreement
"ISIN" International
Securities Identi
cation Number
"Issue Price" means 3 pence per New
Ordinary Shares
"KSA" Kingdom of Saudi
Arabia
"Lenders" the banks (Abu Dhabi
Commercial
Bank, Abu Dhabi
Islamic Bank, First
Abu Dhabi Bank, HSBC,
National Bank
of Kuwait, Bank ABC)
identified
in the 2021 Common
Terms Agreement
as the providers of
the Facilities
"Latest Practicable Date" 8 June 2021, being
the latest
practicable
date prior to this
announcement
"LIBOR" the London interbank
offer rate
"Listing Rules" the listing rules of
the FCA
"London Stock Exchange" London Stock Exchange
plc
"Main Market" the London Stock
Exchange's main
market for listed
securities
"Mazrui" Mazrui Investments
LLC
"MENA" Middle East and North
Africa
"MOU" Mobile Offshore Unit
"New Ordinary Shares" the new Ordinary
Shares which the
Company will allot
and issue pursuant
to the Placing and
Open Offer
"NOCs" national oil
companies
"Non-CREST Shareholders" Shareholders that
will not participate
in the Placing and
Open Offer through
CREST stock accounts
"Non-Executive Directors" the non-executive
directors of the
Company
"OEMs" original equipment
manufacturers
"Of cial List" the of cial list of
the FCA pursuant
to the FSMA
"Open Offer" the conditional
invitation to
Qualifying
Shareholders to
subscribe for the
Open Offer Shares at
the Issue Price
on the terms and
subject to the
conditions set out in
the Prospectus
and, in the case of
Qualifying Non-
CREST Shareholders
only, the Application
Form
"Open Offer Entitlements" entitlements to
subscribe for the
Open Offer Shares,
allocated to
a Qualifying
Shareholder pursuant
to the Open Offer
"Open Offer Shares" the 665,926,795 New
Ordinary Shares
to be issued pursuant
to the Placing
and Open Offer
"Order" means the Financial
Services and
Markets Act 2000
(Financial Promotion)
Order 2005
"Ordinary Shares" means the ordinary
shares of 10
pence each (and,
following the Capital
Reorganisation, 2
pence each) in
the capital of the
Company
"PIK" Payment-in-kind
"Placees" a Conditional Placee
"Placing" the conditional
placing of certain
of the Open Offer
Shares
"Placing Agreement" the placing agreement
dated 9 June
2021 and made between
the Company
and Panmure Gordon
"POB" people on board
"Prospectus" means the circular
and a prospectus
relating to the
Company for the
purpose of the
Capital Raising and
Admission
"Prospectus Regulation the prospectus
Rules" regulation rules
made by the FCA under
section 73A
of FSMA, as amended
from time to
time
"Qualified Investors" means a qualified
investor within
the meaning of
Article 2(e) of
Regulation
(EU) 2017/1129
"Qualifying CREST Shareholders" Qualifying
Shareholders holding
Ordinary Shares on
the register
of members of the
Company on the
Record Date which are
in uncertificated
form
52.1 " Qualifying
Qualifying Shareholders holding
Non-CREST Ordinary Shares on
Shareholders the register
" of members of the
Company on the
Record Date which are
in certi cated
form
"Qualifying Shareholders" Shareholders on the
register of
members of the
Company on the Record
Date with the
exclusion of persons
with a registered
address or located
or resident in an
Excluded Territory
"Record Date" 6.30 p.m. on 7 June
2021, being
the date specified in
the Expected
Timetable of
Principal Events on
which a Shareholder
must hold Ordinary
Shares to be a
Qualifying
Shareholder
"Regional Joint Bookrunner" Emirates NBD Capital
Limited
"Registrar", "Receiving Equiniti Limited,
Agent" or "Equiniti" whose registered
office is at Aspect
House, Spencer
Road, Lancing, West
Sussex BN99
6DA
"Regulation S" Regulation S under
the Securities
Act
"Regulatory Information any one of the
Service" regulatory
information
services authorised
by the FCA to
receive, process and
disseminate
regulatory
information from
listed
companies
"relevant persons" means Qualified
Investors and those
who fall within
Article 49(2)(a)
to (d) of the Order
"Resolutions" the Resolutions to be
proposed at
the General Meeting
"Revised Debt Terms" the negotiated debt
terms (including
in relation to the
Facilities) between
the Company and its
lenders on 31
March 2021 which are
principally
documented in the
2021 Common Terms
Agreement
"Seafox" Seafox International
Limited
"Second Equity Raise Condition" pursuant to the
Revised Debt Terms,
the requirement that
the Company
raises further equity
capital (in
addition to the First
Equity Raise
Condition), such that
the Company
has raised a total of
U.S.$75 million
or more (inclusive of
any amount
raised as part of the
First Equity
Raise Condition) by
31 December
2022 in order to make
the Minimum
Prepayment
"Securities Act" United States
Securities Act of
1933, as amended
"SESVs" self-elevating
support vessels
"Shareholders" holders of ordinary
shares in the
capital registered on
the register
of members of the
Company
"Sponsor" Panmure Gordon (UK)
Limited
"T/Cs" time charter
contracts
"Target Market Assessment" means the target
market assessment
under the UK MiFIR
Product Governance
Requirements
"Term Loan Facilities" the conventional and
Islamic term
credit facilities
made available
to the Group by the
Lenders in an
aggregate outstanding
amount of
U.S.$422.2 million as
at 1 April
2021
"UAE" United Arab Emirates
"UAE Commercial Companies the UAE Commercial
Law" Companies Law
No. 2 of 2015, as
amended
"UK Corporate Governance the UK Corporate
Code" Governance Code
issued by the
Financial Reporting
Council, as amended
from time to
time
"UK Market Abuse Regulation" the UK version of
Regulation (EU)
596/2014 on market
abuse and repealing
Directive 2003/6/EC
of the European
Parliament and of the
Council and
Commission Directives
2003/124/EC,
2003/125/EC and
2004/72/EC, which
is part of UK
domestic law by
virtue
of the EUWA
52.2 "UK means the product
MiFIR Product governance
Governance requirements
Requirements" under EUWA and the
FCA Handbook
Conduct of Business
Sourcebook
52.3 "UK the UK version of
Prospectus Regulation (EU)
Regulation" No 2017/1129 of the
European Parliament
and of the Council of
14 June 2017
on the prospectus to
be published
when securities are
offered to the
public or admitted to
trading on
a regulated market,
and repealing
Directive 2003/71/EC,
which is part
of UK domestic law by
virtue of
the EUWA
"uncerti cated" or "in recorded on the
uncerti cated form" register of members
as being held in
uncerti cated form
in CREST and title to
which, by
virtue of the CREST
Regulations,
may be transferred by
means of CREST
"United Kingdom" or "UK" the United Kingdom of
Great Britain
and Northern Ireland
"United States" or "US" the United States of
America, its
territories and
possessions, any
state of the United
States and the
District of Columbia
"Warrant Resolutions" together, the First
Resolution,
Fourth Resolution and
Fifth Resolution
to be proposed at the
General Meeting
"Warrant Shares" the Ordinary Shares
issued on exercise
of the Warrants
"Warrants" 87,621,947 warrants
issued, or to
be issued, by the
Company to the
Lenders over an
aggregate of
87,621,947
Ordinary Shares,
being 20 per cent.
of the entire issued
share capital
of the Company at the
Latest Practicable
Date (subject to such
Adjustment
as may be required
from time to
time to ensure that
the Lenders
hold 20 per cent. of
the Ordinary
Shares of the Company
then in issue,
on a fully diluted
basis)
"Working Capital Facility" the conventional and
Islamic U.S.$50
million working
capital facility
made available to the
Group by certain
of the Lenders,
consisting of a
bonding/guarantee
facility with
a cash sub-limit of
U.S.$25 million
APPIX V -- KEY RISKS
The Capital Raising and any investment in the Ordinary Shares are subject to a number of risks.
The following is not an exhaustive list or explanation of all risks which investors may face when making an investment in the Ordinary Shares and should be used as guidance only.
Risks relating to the Group's capital structure and debt facilities
-- The Group could face insolvency if the Resolutions are not passed, the Capital Raising does not proceed or the
First Equity Raise Condition is not satisfied
-- The Company could face an event of default under the Facilities if the Warrant Resolutions are not passed, to
allow the Company to issue the Warrant Shares to the Lenders on exercise of the Warrants
-- If the Capital Raising does not proceed and the First Equity Raise Condition is not met, the Company will be
obliged to issue the Warrants
-- The Revised Debt Terms requires the Company to raise additional equity finance
-- If the Capital Raising proceeds and the First Equity Raise Condition is satisfied, the Company would be required
to issue Warrants if the Second Equity Raise Condition is not satisfied
-- The Group currently has, and will continue to have, significant outstanding debt obligations
-- The Group may not be able to implement an appropriate capital structure and achieve its strategic objectives
Risks relating to the Group's business operations
-- The Group's future business performance depends on its ability to secure new contracts for its SESVs and on the
exercise by its customers of their extension options on existing contracts, which could be significantly impacted
by the state of the global oil and gas market, as well as the COVID-19 pandemic
-- The Group is dependent upon its relationships with a small number of customers
-- The Group faces competition from other service providers, and increased competition in periods of low oil prices
may adversely impact its contract terms
-- Demand for the Group's SESVs in the oil and gas and renewable energy sectors is primarily linked to the level of
operating and maintenance expenditure or capital expenditure in the oil and gas sector and level of construction
and maintenance activities in the renewable energy sector
-- The Group's ability to recruit, retain and develop qualified personnel is critical to its success and growth
-- The Group's backlog may not ultimately be realised
-- Some of the Group's SESV contracts may be terminated early by its customers
-- The Group's interests in certain Group companies are subject to arrangements with local partners and the loss of
their support could have a material adverse effect on its business
-- The Group's operating and maintenance costs will not necessarily fluctuate in proportion to changes in operating
revenues
-- The Group's operations are subject to extensive health, safety and environmental regulations
-- The Group's business involves numerous operating hazards
-- The Group is dependent on its IT, financial, accounting and other data processing information systems to conduct
its business
Risks relating to the macro-economic and regulatory environment
-- The Group is subject to the economic and political conditions of operating in the MENA region
-- The Group's business has been and will continue to be impacted by the COVID-19 pandemic
-- The UAE's key reforms to the UAE Commercial Companies Law is subject to further interpretation following the
expected promulgation of the list of activities with a strategic effect
-- The majority ownership interest of the Group's Abu Dhabi Operation is currently held through a nominee
arrangement, which conforms to established market practice in the UAE but does not comply with certain UAE
legislation
-- The Group is exposed to currency, foreign exchange and interest rate risks
-- The Group is exposed to risks relating to compliance with anti-bribery and anti-corruption regulations
-- The Group's insurance may not be adequate to cover its losses
-- Changes in tax laws or their application could have a material adverse effect on its business, financial
condition and results of operations
-- The Group is subject to uncertainty around the United Kingdom's departure from the European Union
Risks Relating to the Capital Raising and an investment in Ordinary Shares
-- The Group has a substantial shareholder
-- The Group currently does not meet the 25 per cent. in "public hands" threshold
-- The market price of the New Ordinary Shares could be subject to volatility
-- The market price for the Ordinary Shares may decline below the Issue Price and Shareholders may not be able to
sell Ordinary Shares at a favourable price after the Capital Raising
-- Inability to exercise pre-emption rights on any issue of shares
-- Shareholders outside the United Kingdom may not be able to acquire New Ordinary Shares in the Open Offer
-- A significant sale of Ordinary Shares may adversely impact the market price of the Ordinary Shares
-- Investors in the New Ordinary Shares may be subject to exchange rate risk
-- It may not be possible to effect service of process upon the Company or the Directors or enforce court judgments
against the Company or the Directors
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
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(END) Dow Jones Newswires
June 09, 2021 02:00 ET (06:00 GMT)
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