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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Mercantile Ports & Logistics Limited | LSE:MPL | London | Ordinary Share | GG00BKSH7R87 | ORD NPV |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 1.80 | 1.70 | 1.90 | 1.80 | 1.80 | 1.80 | 100,629 | 08:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2021 to Apr 2024
TIDMMPL
RNS Number : 2252J
Mercantile Ports & Logistics Ltd
19 August 2021
THIS ANNOUNCEMENT WAS DEEMED BY THE COMPANY TO CONTAIN INSIDE INFORMATION AS STIPULATED UNDER THE MARKET ABUSE REGULATION (EU) NO. 596/2014 ("MAR") AS IT FORMS PART OF UK DOMESTIC LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018. WITH THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.
19 August 2021
Mercantile Ports & Logistics Limited
("MPL" or the "Company")
Proposed Placing and Subscription to raise minimum GBP9.5 million by way of accelerated bookbuild
PrimaryBid Offer
at a price of 0.45 pence per share
Share Consolidation
and
Notice of Extraordinary General Meeting
Mercantile Ports & Logistics Limited, which is operating and developing out its port and logistics facility in Navi Mumbai, Maharashtra, India, is pleased to announce a proposed Placing by way of an accelerated bookbuild to raise a minimum of GBP9.5 million (before expenses) via the Subscription and a conditional placing of new Ordinary Shares ("Placing Shares") at the issue price of 0.45 pence per share ("Issue Price") to new and existing institutional investors (the "Placing"). Proceeds from the Placing and Subscription will help fund the servicing of new and existing contracts, the construction of further storage facilities, debt servicing and general working capital purposes. Under the Subscription, Hunch Ventures has agreed to subscribe an aggregate amount of 767,622,222 new Ordinary Shares at the Placing Price ("Subscription Shares"), equivalent to GBP3,454,300 (the "Subscription"). Additionally, the Company has entered into an unsecured loan facility with Hunch Ventures of up to GBP4.4 million, to provide additional headroom.
Furthermore, the Company is seeking to raise additional funds via PrimaryBid (the "PrimaryBid Offer" and together with the Placing, the "Fundraise") in order to provide other investors who may not have taken part in the Placing, with an opportunity to participate in the Fundraising.
Cenkos Securities plc is acting as lead manager in relation to the Placing.
Transaction Highlights
-- The Company is conducting a conditional Placing and Subscription to raise a minimum of GBP9.5 million via the placing of the Placing Shares and Subscription Shares at the Issue Price.
-- The Placing is to be conducted by way of an accelerated bookbuild process which will commence immediately following this Announcement and will be subject to the terms and conditions set out in Appendix I to this Announcement.
-- Proposing to raise additional capital via the PrimaryBid Offer, which shall remain open until 8:00pm on 19 August 2021.
-- The net proceeds of the Transaction will be used to fund the servicing of new and existing contracts, the construction of further storage facilities, debt servicing and general working capital purposes.
-- Unsecured loan facility of GBP4.4 million entered into between Hunch Ventures and the Company, to provide additional headroom for the Company's operations.
-- Completion of the Fundraising is conditional, inter alia, upon Shareholder approval at the General Meeting to be held on or around 9 September 2021.
-- The Issue Price represents a discount of approximately 18.1 per cent. to the closing mid-market price of 0.55 pence on 18 August 2021, being the latest practicable date before this Announcement.
-- Proposed Share Consolidation of every 100 Existing Ordinary Shares of nil par value each into 1 New Consolidated Ordinary Share of nil par value each in the capital of the Company.
A circular, containing further details of the Fundraising, Share Consolidation and notice of the General Meeting to be held at 11.00 a.m. on 9 September 2021 to, inter alia, approve the resolutions required to implement the Fundraising and Share Consolidation, is expected to be published and despatched to Shareholders on 20 August 2021 (the "Circular"). Set out below in Appendix I is an adapted extract from the draft Circular that is proposed to be sent to Shareholders after the closure of the Bookbuild. Following its publication, the Shareholder Circular will be available on the Group's website at https://www.mercpl.com/article/investor-relations/shareholder-circulars/9 .
Jeremy Warner-Allen, Chairman of Mercantile, said:
"I have been delighted with the support shown from our institutional shareholders in supporting the Company in this fundraise. Particular thanks is given to Hunch Ventures for their continuing support in our vision for the facility and their presence as a strategic shareholder. In addition to Hunch's significant investment in the Company, the provision of a GBP4.4 million unsecured loan underscores the confidence they have in our team at MPL and the opportunities available to the Company as the facility becomes operational.
I would also like to take this opportunity to thank the employees and those involved with MPL, particularly in India, which has suffered especially during the COVID-19 pandemic. The safety of our staff and stakeholders is paramount and I believe MPL will come through this a stronger entity."
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For further information, please visit www.mercpl.com or contact:
Enquiries:
MPL Jay Mehta
C/O Newgate Communications
+44 (0)20 3757 6880
Cenkos Securities plc (Nominated Stephen Keys
Adviser and Joint Broker)
+44 (0)20 7397 8900
Zeus Capital Limited (Joint Broker) Daniel Harris/Andrew Jones/James
Hornigold
+44 (0)203 829 5000
Newgate Communications (Financial Adam Lloyd/Isabelle Smurfit
PR)
+44 (0)20 3757 6880
Expected Timetable of Principal Events
Announcement of the Placing, PrimaryBid Offer 4.35 p.m. 19 August
and Subscription, publication and posting 2021
of this document
Announcement of the Result of the Placing 20 August 2021
and PrimaryBid Offer
Publication and posting of the Circular 20 August 2021
Latest time and date for receipt of completed 11:00 a.m. on 7 September
Forms of Proxy to be valid at the General 2021
Meeting
General Meeting 11:00 a.m. on 9 September
2021
Announcement of result of General Meeting 9 September 2021
Admission and commencement of dealings in 8.00 a.m. on 10 September
the New Ordinary Shares on AIM 2021
New Ordinary Shares credited to CREST members' 10 September 2021
accounts
Record Date for the Consolidation 6.00 p.m. on 10 September
2021
Consolidation becomes effective 8.00 a.m. on 13 September
2021
Admission and commencement of dealings in 8.00 a.m. on 13 September
New Consolidated Ordinary Shares on AIM 2021
Despatch of definitive share certificates within 10 business
in certificated form, in respect of the placing, days of Admission
PrimaryBid Offer, Subscription and, if applicable,
the Share Consolidation
Notes:
References to times in this Announcement are to London time unless otherwise stated.
The times and dates set out in the expected timetable of principal events above and mentioned throughout this Announcement may be adjusted by the Company in which event the Company will make an appropriate announcement to a Regulatory Information Service giving details of any revised dates and the details of the new times and dates will be notified to the London Stock Exchange and, where appropriate, Members. Members may not receive any further written communication.
IMPORTANT NOTICE
This Announcement, and the information contained herein is not for release, publication or distribution, directly or indirectly, in whole or in part, in or into or from the United States, Canada, Australia (save to professional investors and sophisticated investors), Japan or the Republic of South Africa, or any other jurisdiction where to do so might constitute a violation of the relevant laws or regulations of such jurisdiction (the "Restricted Jurisdictions").
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 into the United States. The Placing Shares 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, expect pursuant to an applicable exemption from registration. No public offering of Placing Shares is being made in the United States.
This Announcement does not constitute or form part of an offer to sell or issue or a solicitation of an offer to buy, subscribe for or otherwise acquire any securities in any jurisdiction including, without limitation, the Restricted Jurisdictions or any other jurisdiction in which such offer or solicitation would be unlawful. This Announcement and the information contained in it is not for publication or distribution, directly or indirectly, to persons in a Restricted Jurisdiction, unless permitted pursuant to an exemption under the relevant local law or regulation in any such jurisdiction.
No action has been taken by the Company or the Bookrunners or any of their respective directors, officers, partners, agents, employees or affiliates that would permit an offer of the Placing Shares or possession or distribution of this Announcement or any other publicity material relating to such Placing Shares in any jurisdiction where action for that purpose is required. Persons receiving this Announcement are required to inform themselves about and to observe any restrictions contained in this Announcement.
This Announcement is directed only at: (a) persons in member states of the European Economic area who are "qualified investors", as defined in article 2 (e) of the Regulation (EU) 2017/1129 (the "Prospectus Regulation"), (b) if in the United Kingdom, persons who (i) have professional experience in matters relating to investments who fall within the definition of "investment professionals" in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") or fall within the definition of "high net worth companies, unincorporated associations etc." in Article 49(2)(a) to (d) of the FPO and (ii) are "qualified investors" as defined in section 86 of the Financial Services and Markets Act 2000, as amended ("FSMA") or (c) persons to whom it may otherwise lawfully be communicated (each, a "Relevant Person"). No other person should act on or rely on this Announcement and persons distributing this Announcement must satisfy themselves that it is lawful to do so. By accepting the terms of this announcement, investors represent and agree that they are a Relevant Person.
This Announcement must not be acted on or relied on by persons who are not Relevant Persons. Any investment or investment activity to which this Announcement or the Placing relate is available only to Relevant Persons and will be engaged in only with Relevant Persons. As regards all persons other than Relevant Persons, the details of the Placing set out in this Announcement are for information purposes only.
Persons (including, without limitation, nominees and trustees) who have a contractual or other legal obligation to forward a copy of this Announcement should seek appropriate advice before taking any action.
This Announcement is not being distributed by, nor has it been approved for the purposes of section 21 of FSMA by the Bookrunners or any other person authorised under FSMA. This Announcement is being distributed and communicated to persons in the United Kingdom only in circumstances in which section 21(1) of FSMA does not apply.
No prospectus or offering document will be made available in connection with the matters contained in this Announcement and no such prospectus is required (in accordance with the Prospectus Regulation) to be published.
Certain statements in this Announcement are forward-looking statements which are based on the Company's expectations, intentions and projections regarding its future performance, anticipated events or trends and other matters that are not historical facts. These forward-looking statements, which may use words such as "aim", "anticipate", "believe", "could", "intend", "estimate", "expect" and words of similar meaning, include all matters that are not historical facts. These forward-looking statements involve risks, assumptions and uncertainties that could cause the actual results of operations, financial condition, liquidity and dividend policy and the development of the industries in which the Group's businesses operate to differ materially from the impression created by the forward-looking statements. These statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Given those risks and uncertainties, prospective investors are cautioned not to place undue reliance on forward-looking statements. Forward-looking statements speak only as of the date of such statements and, except as required by the UK Financial Conduct Authority ("FCA"), the London Stock Exchange or applicable law, the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
Any indication in this Announcement of the price at which the Company's shares have been bought or sold in the past cannot be relied upon as a guide to future performance. Persons needing advice should consult an independent financial adviser. No statement in this Announcement is intended to be a profit forecast and no statement in this Announcement should be interpreted to mean that earnings per share of the Company for the current or future financial years would necessarily match or exceed the historical published earnings per share of the Group.
Cenkos Securities plc and Zeus Capital Limited, each of which are authorised and regulated in the United Kingdom by the FCA, are acting for the Company and for no one else in connection with the Placing and will not be responsible to anyone other than the Company for providing the protections afforded to clients of Cenkos or for providing advice in relation to the Placing, 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 or on behalf of the Company, Cenkos, or by their affiliates or their respective agents, directors, officers and employees 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.
The Placing Shares to be issued pursuant to the Placing will not be admitted to trading on any stock exchange other than to trading on AIM.
The Appendix to this Announcement sets out the terms and conditions of the Placing. By participating in the Placing, each person who is invited to and who chooses to participate in the Placing by making or accepting an oral and legally binding offer to acquire Placing Shares will be deemed to have read and understood this Announcement in its entirety and to be making such offer on the terms and subject to the conditions set out in this Announcement and to be providing the representations, warranties, undertakings and acknowledgements contained in the Appendix.
Members of the public are not eligible to take part in the Placing and no public offering of Placing Shares is being or will be made.
Neither the content of the Company's website (or any other website) nor the content of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this Announcement.
Notice to distributors
Solely for the purposes of the product governance requirements contained within: (a) EU Directive 2014/65/EU on markets in financial instruments, as amended ("MiFID II"); (b) Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593 supplementing MiFID II; and (c) local implementing measures (together, the "MiFID II Product Governance Requirements"), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any "manufacturer" (for the purposes of the MiFID II Product Governance Requirements) may otherwise have with respect thereto, the Placing Shares have been subject to a product approval process, which has determined that such securities are: (i) compatible with an end target market of retail investors and investors who meet the criteria of professional clients and eligible counterparties, each as defined in MiFID II; and (ii) eligible for distribution through all distribution channels as are permitted by MiFID II (the "Target Market Assessment").
Notwithstanding the Target Market Assessment, distributors should note that: the price of the Placing Shares may decline and investors could lose all or part of their investment; the Placing Shares offer no guaranteed income and no capital protection; and an investment in the Placing Shares is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom.
The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Placing. Furthermore, it is noted that, notwithstanding the Target Market, Assessment, Cenkos are only procuring 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 of appropriateness for the purposes of MiFID II; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the Placing Shares. Each distributor is responsible for undertaking its own target market assessment in respect of the Placing Shares and determining appropriate distribution channels.
APPIX I - EXTRACTS FROM THE CIRCULAR
1. Introduction
The Company has announced a conditional Placing, PrimaryBid offer and Subscription to raise up a minimum of GBP9.5 million before expenses by the issue of 2,111,111,112 New Ordinary Shares at the Offer Price of 0.45 pence per New Ordinary Share.
The Placing will raise GBP6.05 million (before expenses) by the issue by the Company of 1,343,488,890 New Ordinary Shares at the Offer Price. In addition, in order to provide investors who have not taken part in the Placing with an opportunity to participate in the Transaction, the Company has appointed PrimaryBid to enable the PrimaryBid Offer, giving investors the opportunity to subscribe at the Offer Price.
Furthermore, Hunch Ventures, the Company's India-based strategic investor, has agreed to subscribe for, and the Company has agreed to issue, 767,622,222 New Ordinary Shares at the Offer Price on Admission, representing gross subscription proceeds of GBP GBP3.45 million on such terms as are further described at paragraph 4 of this document.
The Company is also carrying out the Consolidation to reduce the number of Ordinary Shares in issue by a factor of 100. The Company currently has 1,905,022,123 Existing Ordinary Shares in issue. This is a significant number of shares for a Company with a market capitalisation of approximately GBP10 million (as at 18 August 2021, being the latest practicable date prior to the publication of this document). The Board considers that the effect of the Consolidation will be to improve market liquidity by reducing the volatility and spread of the Company's Ordinary Shares and make trading in the Company's shares more attractive to a broader range of institutional investors.
The receipt of the Transaction proceeds is conditional, inter alia, upon Shareholders approving Resolutions 1 and 3 at the General Meeting that will grant to the Directors the authority to issue the New Ordinary Shares and the power to dis-apply pre-emption rights set out in the articles of incorporation of the Company in respect of the New Ordinary Shares and Admission. The Resolutions are contained in the Notice of General Meeting at the end of the Circular. Admission of the New Ordinary Shares to trading on AIM is expected to occur no later than 8.00 a.m. on 10 September 2021 or such later time and/or date as Cenkos Securities, Zeus Capital and the Company may agree (not being later than 8:30 a.m. on 30 September 2021). The Placing is not underwritten.
Based on the closing middle market price of 0.55 pence per Existing Ordinary Share on 18 August 2021 (being the last practicable date before publication of this document) the Offer Price is at an implied discount of 18.1 per cent.
The purpose of this document is to explain the background to and reasons for the Transaction, the use of proceeds, the details of the Transaction and to recommend that you vote in favour of the Resolutions.
2. Current status of the Project
The Company is pleased with the progress it has made and the fact that its facility at Karanja Creek near Navi Mumbai, India has been operational and generating revenue for some time. The Facility's general cargo jetty is receiving vessels and the separate bulk berth, which handles non-clean cargo is complete. Over 100 acres of land have been reclaimed and being used for the numerous customers with whom the Company has contracted.
With all customs and other approvals in place and, given the unique location of the Facility, there has been significant interest from potential customers in using the Facility. The Company was delighted to secure the four year contract with the Tata Projects and Daewoo Engineering Joint Venture, which is constructing the Mumbai Trans Harbour Link and the Directors are pleased with the performance under this contract. In addition, numerous other contracts have been signed, meaning that the Facility has contracted revenue of GBP8.2 million for next year, with contracts worth several million pounds more being in the pipeline. These contracts cover a range of cargos including iron ore, fly ash, cement, coal and edible oils.
As well as the Trans Harbour Link, a number of significant infrastructure projects are taking place in the region. Each of these projects will require enormous quantities of steel, cement and other materials, and the Directors expect the Facility to play a part in the logistics for the construction of some of these projects. The relationship with the Tata Projects Daewoo Joint Venture was, the Directors believe, a landmark contract and they remain confident that similar contracts will follow.
As referenced previously, Company continues to be delighted with the support that it has received from the MMB. Whilst the Directors' focus continues to be on completing the build out and filling the Facility to 200 acres, the permission remains to extend the Facility to 400 acres, with 2,000 metres of sea frontage, which the Directors intend to pursue when aligned with capacity requirements.
In June this year, as well as stating that the Company expected volumes to increase during the rest of this year and beyond, which remains the case, the Company announced that it had restructured its debt facility after an extensive due diligence process conducted by its banking consortium. The INR 475.57 Crores debt (approximately GBP46.2 million) is now at a much reduced interest rate and the Board considered this event to be a clear endorsement of the Company's strategy and recognition of the status and viability of the Facility. MPL has a strong and supportive, India based shareholder in Hunch Ventures and, with there having been discussion with other parties, the Company is confident that it would have access to additional debt should that be required in the future.
3. Background and Reasons for the Transaction
As previously reported, and like many companies around the world, MPL's performance has been impacted by COVID-19. Whilst progress was made in securing contracts, travel and other restrictions in India meant that access to the site for potential customers was limited and, at times, impossible. This was the principal reason for the Company's performance being behind the Board's plan, leading to the requirement for the Transaction. The net proceed of the Transaction are required to fund servicing of new and existing contracts, the construction of further storage facilities, debt servicing and general working capital purposes.
4. Subscription
Hunch Ventures has agreed to subscribe for the Subscription Shares at the Placing Price per Subscription Share. The aggregate subscription price payable by Hunch Ventures in respect of the Subscription Shares amounts to GBP3,454,300 (the "Subscription Price").
The payment of the Subscription Price by Hunch Ventures must be made on or before 31 December 2021 as such payment requires the consent of the Reserve Bank of India. Pending such payment Hunch Ventures is required under the terms of the Subscription Agreement to procure by no later than two Business Days prior to the Admission of the Subscription Shares the Bank Guarantee for the amount of the Subscription Price. The Bank Guarantee must be in a form acceptable to the Company and Cenkos Securities and must be capable of being called upon by the Company or its subsidiary in India on or after the date of such Admission.
The Subscription is conditional on:
(a) the passing of Resolutions 1 and 3 at the General Meeting;
(b) Admission of the New Ordinary Shares becoming effective by no later than 8.00a.m. on 10 September 2021 or such later date as the Company, Cenkos and Hunch Ventures may agree in writing; and
(c) the provision of the Bank Guarantee pursuant to the provisions of the Subscription Agreement.
If any of the conditions are not satisfied, the Subscription Shares will not be issued to Hunch Ventures (or any member of Hunch Ventures' group of companies as Hunch Ventures may direct).
The Subscription Shares are not subject to clawback. The Subscription is not being underwritten.
The Subscription Shares will be issued free of all liens, charges and encumbrances and will, when issued and fully paid, rank pari passu in all respects with the Existing Ordinary Shares, including the right to receive all dividends and other distributions declared, made or paid after the date of their issue.
Application will be made to the London Stock Exchange for the admission of the Subscription Shares to trading on AIM. It is expected that Admission will occur and that dealings will commence at 8.00 a.m. on 10 September 2021, at which time it is also expected that the Subscription Shares will be enabled for settlement in CREST.
The Subscription Shares will comprise approximately 19.1 per cent. of the Enlarged Share Capital.
Subscription Agreement
Pursuant to the terms of the Subscription Agreement, Hunch Ventures has agreed to subscribe for the Subscription Shares at the Placing Price per Subscription Share.
The Subscription Agreement contains, inter alia, warranties given by both Hunch Ventures and the Company, namely relating to their respective authority and capacity to enter into the Subscription Agreement.
Furthermore, given that, following the issue of the Subscription Shares, Hunch Ventures will hold approximately 29.9 per cent. of the Enlarged Share Capital, the Subscription Agreement also governs the relationship between the Company and Hunch Ventures by, inter alia, providing that:
(a) Hunch Ventures shall have the right to appoint two Directors for so long as it holds more than 15 per cent. of the voting rights of the Company's issued share capital from time to time and the right to appoint one Director for so long as it holds more than 10 per cent. but less than 15 per cent. of the voting rights of the Company's issued share capital from time to time;
(b) for a two year period from Admission, Hunch Ventures and its group of companies undertake not to be engaged in any competing business of the Company in India;
(c) all transactions between Hunch Ventures and the Group shall be undertaken on an arms' length basis;
(d) Hunch Ventures agrees not to dispose of any Subscription Shares without the prior consent of the Company and Cenkos Securities during the 12 month period following Admission, except in certain customary exceptions; and
(e) Hunch Ventures agrees to dispose of any Subscription Shares via Cenkos Securities during the 36 month period following Admission so as to ensure an orderly market in the Enlarged Share Capital.
The Subscription Agreement and the obligations thereunder will cease to have effect on the earlier of: (i) the New Ordinary Shares ceasing to be traded on AIM; or (ii) Hunch Ventures ceasing to hold at least 5 per cent. of the voting rights of Company's issued share capital from time to time.
The Subscription Agreement provides that the Subscription Shares may be issued to Hunch Ventures or any member of Hunch Ventures' group of companies. The obligations thereunder will also apply to the member of Hunch Ventures' group of companies to whom the Subscription Shares are issued.
5. Unsecured Loan Facility
In addition to the Subscription, Hunch Ventures on 19 August 2021 entered into an unsecured loan of up to GBP 4.4 million (equivalent to 45,00,00,000 (Indian Rupees Forty Five Crores Only)) with the Company's India subsidiary, KTLPL, for the purposes of KTLPL's business operations (the "Loan"). The Loan can be drawn down in one or more tranches between 1 September 2021 and 31 December 2022 and is repayable by 1 September 2023. Interest is payable on the Loan at a rate of 8 per cent. per annum.
6. Market and Macroeconomic Dynamics
Indian Macroeconomic Environment
The World Bank reduced its India's GDP forecast to 8.3% for FY22, as against its earlier estimate of 10.1%. It has further projected India's growth to be 7.5% in 2022. Recovery being hampered by an unprecedented second wave of the Covid-19, the largest outbreak in the world since the beginning of the deadly pandemic.
The World Bank, in its latest issue of Global Economic Prospects released here, noted that in India, an enormous second Covid-19 wave could undermine the sharper-than-expected rebound in activity seen during FY21, especially in services. In 2020, India's economy is estimated to have contracted by 7.3%.
Indian Shipping and Port Industry
India's economic strength is placing substantial stress on its port and logistics infrastructure, an aspect in which India lags behind its counterparts (ranked 44th globally in World Bank 'International Logistics Ranking' 2018).
During FY20, cargo traffic at major ports in the country was reported at 704 million tonnes. India's vast coast line (c7,500km) and inland water ways (c14,500km) offer substantial opportunities for domestic cargo transportation. Karanja is well positioned both in location and berth size to accommodate ships used for domestic cargo transportation.
The cost per tonne per kilometer of moving cargo by sea or inland waterway routes can be 60 to 80% lower than by road or rail. However, India's maritime logistics sector is under-utilised when compared to its road and railway logistics sectors.
Despite the under-utilisation of ports as a transportation method, India's Major Ports continue to be heavily congested. This results in inefficiencies, an average turnaround time, being the time in which a vessel can be loaded or discharged of cargo, of 4.5 days compared to only 1 day and 1.2 days in China and the United States respectively, which the Indian government fears could hamper India's potential for wider economic growth.
According to the Ministry of Shipping, around 95% of India's trading by volume and 70% by value is done through maritime transport. In November 2020, the Prime Minister, Mr. Narendra Modi renamed the Ministry of Shipping as the Ministry of Ports, Shipping and Waterways.
India has 12 major and 205 notified minor and intermediate ports. Under the National Perspective Plan for Sagarmala, six new mega ports will be developed in the country. The Indian ports and shipping industry play a vital role in sustaining growth in the country's trade and commerce. India is the sixteenth-largest maritime country in the world with a coastline of about 7,517 kms. The Indian Government plays an important role in supporting the ports sector. It has allowed Foreign Direct Investment (FDI) of up to 100% under the automatic route for port and harbour construction and maintenance projects. It has also facilitated a 10-year tax holiday to enterprises that develop, maintain and operate ports, inland waterways and inland ports.
The Directors believe that this further validates the Group's investment in the Facility to date and represents opportunities now that the Facility is fully operational.
JNPT is located twelve nautical miles via sea and 8 km via road from Karanja. The proximity of the Facility to JNPT is a key factor that the Directors believe will contribute to the Company's success. JNPT is India's largest container handler by volume and is the primary gateway for container shipments in India. JNPT accounts for approximately 50%. of India's container traffic. Congestion issues have been a recent problem at JNPT, with poor evacuation infrastructure leading to high levels of congestions and resulting in an inability to grow volumes through the port. The Directors believe that the Facility can play an important role in relieving congestion at JNPT.
The JNPT port facility is expected to have further expansion, and the Directors' expect that the continued expansion of JNPT will represent significant opportunities for the Company. In particular, the Directors believe that the Company will benefit from the Karanja facility being able to:
-- offer coastal movement of cargos, servicing end users along the industrialised west coast of India
-- ease congestion issues in the road network around Mumbai and JNPT.
The Directors continue to believe that the Facility will have limited direct competition from surrounding Minor Ports due to the Facility's proximity JNPT and that the Facility will also benefit from the proposed closure of Mumbai Port, which is planned to be developed as prime real estate.
Increasing investment and cargo traffic point towards a healthy outlook for the Indian ports sector. Providers of services such as operation and maintenance (O&M), pilotage and harbouring and marine assets such as barges and dredgers are benefiting from these investments. The capacity addition at ports is expected to grow at a CAGR of 5-6% till 2022, thereby adding 275-325 MT of capacity.
Domestic waterways have found to be a cost-effective and environmentally sustainable mode of freight transportation. The government aims to operationalise 23 waterways by 2030. As part of the Sagarmala project, more than 574 projects worth 6 lakh crore (US$ 82 bn) have been planned for implementation between 2015 and 2035.
In Maritime India Summit 2021, the Ministry of Ports, Shipping and Waterways identified a total of 400 projects worth 2.25 lakh crore (US$ 31 bn) investment potential.
India's cargo traffic handled by ports is expected to reach 1,695 million metric tonnes by 2021-22 according to a report by the National Transport Development Policy Committee
7. The Placing and Primary Bid Offer
Details of the Placing
The Company is proposing to raise additional capital via the PrimaryBid Offer, which shall remain open until 8:00pm on 19 August 2021.
The Placing is conditional, inter alia, upon:
(a) the passing of Resolutions 1 and 3 at the General Meeting ;
(b) each of the Placing Agreement and the Subscription Agreement becoming or being declared unconditional in all respects and not having been terminated in accordance with its terms prior to Admission;
(c) Admission of the New Ordinary Shares becoming effective by no later than 8.00 a.m. on 10 September 2021 or such later time and/or date (being no later than 8.30 a.m. on 30 September 2021) as Cenkos Securities and the Company may agree.
If any of the conditions are not satisfied, the Placing Shares will not be issued and all monies received from the Placees will be returned to the Placees (at the Placees' risk and without interest) as soon as possible thereafter.
The Placing Shares are not subject to clawback. The Placing is not being underwritten.
The Placing Shares will be issued free of all liens, charges and encumbrances and will, when issued and fully paid, rank pari passu in all respects with the Existing Ordinary Shares, including the right to receive all dividends and other distributions declared, made or paid after the date of their issue.
Application will be made to the London Stock Exchange for the admission of the Placing Shares to trading on AIM. It is expected that Admission will occur and that dealings will commence at 8.00 a.m. on 10 September 2021 at which time it is also expected that the Placing Shares will be enabled for settlement in CREST.
Use of net proceeds
The net proceeds of the Placing are expected to be approximately GBP8.9 million and it is proposed that such proceeds shall be used as follows:
-- business development and servicing of new and existing contracts; -- debt servicing; and -- for general working capital purposes.
Further funds are raised via the Subscription and the PrimaryBid Offer will be used for the same purposes as above.
Details of the PrimaryBid Offer
The PrimaryBid Offer allowed investors to participate in the Fundraising by subscribing for New Ordinary Shares at the Issue Price via PrimaryBid.com
The New Ordinary Shares issued pursuant to the PrimaryBid Offer will be free of all liens, charges and encumbrances and will, when issued and fully paid, rank pari passu, in all respects with the Existing Ordinary Shares including the right to receive dividends and other distributions declared following Admission.
A further announcement was made by the Company on 19 August 2021 regarding further details of the PrimaryBid Offer and how investors may participate in the Fundraise.
The Company is relying on an available exemption against the need to publish a prospectus approved by the UK Listing Authority.
The PrimaryBid Offer was not underwritten and will close at 8.00 p.m. on 19 August 2021.
8. The Consolidation
As at 18 August 2021 (being the latest practicable date prior to the publication of the Circular), the Company had 1,905,022,123 Existing Ordinary Shares in issue, having a mid-market price per Existing Ordinary Share as at the close of business on such date of 0.55 pence. The Board believes that the Consolidation is necessary in order to increase the marketability of the Company's Ordinary Shares through the creation of a higher trading price per Ordinary Share.
The Consolidation will consist of the following steps:
-- a consolidation of every 100 Existing Ordinary Shares in to one New Ordinary Share; and -- the redemption of all fractional entitlements arising on the Consolidation.
Your board considers that the distribution of any amount of less than GBP1 per Shareholder would be nullified by the administrative costs of making such a distribution. Accordingly, the Board proposes pursuant to the Resolutions that any amount of less than GBP1 that would otherwise be paid to a Shareholder pursuant to the redemption of fractional entitlements will instead be donated to charity. For the avoidance of doubt the Company is only responsible for dealing with fractions arising on registered shareholdings. For Shareholders whose shares are held in the nominee accounts of stockbrokers, intermediaries or other nominees, the effect of the Consolidation on their individual shareholdings will be administered by the stockbroker, intermediary or nominee in whose account the relevant shares are held and it will be that person's responsibility to deal with fractions arising within their customer accounts, and not the Company's responsibility.
9. Related Party Transactions
M&G Investment Management ("M&G") is a substantial Shareholder in the Company and consequently is considered to be a related party of the Company pursuant to Rule 13 of the AIM Rules for Companies . M&G is subscribing for 316,444,444 Placing Shares under the Placing. This subscription by M&G constitutes a related party transaction for the purposes of the AIM Rules for Companies . In the absence of any independent directors for the purposes of opining on the fairness of the terms of the transaction, Cenkos Securities considers that that the participation in the Placing by M&G is fair and reasonable insofar as the Shareholders are concerned.
The Directors have agreed to subscribe for a combined total of 36,666,666 Placing Shares, equivalent to GBP165,000. The commitment from the directors constitute a related party transaction for the purposes of the AIM Rules for Companies. In the absence of any independent directors for the purposes of opining on the fairness of the terms of the transaction, Cenkos Securities considers that that the participation in the Transaction by the directors is fair and reasonable insofar as the Shareholders are concerned.
Director Number of shares to Total price/GBP
be subscribed in the
Placing
Jeremy Warner Allen 11,111,111 50,000
---------------------- ----------------
Howard Flight 8,888,889 40,000
---------------------- ----------------
Jay Mehta 11,111,111 50,000
---------------------- ----------------
John Fitzgerald 5,555,555 25,000
---------------------- ----------------
TOTAL 36,666,666 165,000
---------------------- ----------------
The Subscription Agreement between Hunch Ventures and the Company described in section 4 and the Hunch Loan described in section 5, are related party transactions for the purposes of the AIM Rules for Companies. In the absence of any independent directors for the purposes of opining on the fairness of the terms of the Loan, Cenkos Securities considers that that the terms of the Loan are fair and reasonable insofar as the Shareholders are concerned.
10. General Meeting
The Directors do not currently have authority to issue all of the New Ordinary Shares and, accordingly, the Board is seeking the approval of Shareholders to issue the New Ordinary Shares at the General Meeting. The Board is also seeking the approval of Shareholders for the Consolidation.
A notice convening the General Meeting, which is to be held at registered office of the Company at 1st Floor, Tudor House, Le Bordage, St Peter Port, Guernsey GY1 at 11.00 am on 9 September 2021, is set out at the end of this document. At the General Meeting, the Resolutions will be proposed t o approve the Consolidation, authorise the Directors to issue relevant securities pursuant to the Placing, PrimaryBid Offer and Subscription, and to issue such relevant securities on a non-pre-emptive basis.
The authorities to be granted pursuant to Resolutions 1 and 3 shall expire on whichever is the earlier of the conclusion of the General Meeting of the Company to be held in 2021 or the date falling six months from the date of the passing of the Resolutions (unless renewed, varied or revoked by the Company prior to or on that date) and shall be in addition to any existing Directors' authorities to issue relevant securities and dis-apply statutory pre-emption rights
The Resolutions proposed will facilitate the completion of the Transaction. The Company will receive 0.45p per New Ordinary Share, which the Directors consider to be a fair and reasonable amount per share on the basis that the closing market price on 18 August 2021 was 0.55p per Existing Ordinary Share.
11. Risks
In additional to the principal risks facing the Group that were set out in the Group's most recent Annual Report and Accounts, now that the Facility is operational, the Company is exposed to the normal risks associated with being an operational company, including around achieving new customer and revenue targets, margins and customer retention.
12. Action to be taken in respect of the General Meeting
Shareholders will not receive a form of proxy for the General Meeting. Instead you will find instructions in the section entitled "Notes" in the Notice of Meeting to enable you to vote electronically and how to register to do so. To register, you will need your Investor Code, which can be found on your share certificate.
Shareholders may request a paper form of proxy from our Registrar, Link Market Services, if they do not have access to the internet. Proxy votes should be submitted as early as possible and in any event by no later than 11.00 a.m. on 7 September 2021 (or, in the case of an adjournment, no later than 48 hours (excluding non-working days) before the time fixed for holding of the adjourned meeting).
The completion and return of a form of proxy will not preclude you from attending and voting in person at the General Meeting, or any adjournment thereof, should you wish to do so.
13. Recommendation
The Directors believe that the Transaction and the passing of the Resolutions are in the best interests of the Company and Shareholders, taken as a whole. Accordingly, the Directors unanimously recommend that Shareholders vote in favour of the Resolutions, as they intend to do in respect of their own holdings of Ordinary Shares, totalling 586,158,030 Existing Ordinary Shares, being approximately 30.8 per cent. of the Existing Ordinary Shares.
The Placing, Subscription and PrimaryBid Offer are conditional, inter alia, upon the passing of Resolutions 1 and 3 at the General Meeting. Shareholders should be aware that if the Resolutions are not approved at the General Meeting, the Placing, Subscription and PrimaryBid Offer will not proceed.
Definitions
The following definitions apply throughout this document, unless the context requires otherwise:
"Admission" the admission of the New Ordinary Shares
and/or the admission of the New Consolidated
Ordinary Shares (as the context requires)
to trading on AIM in accordance with
the AIM Rules for Companies
"AIM" the AIM market operated by London Stock
Exchange
"AIM Rules for Companies" the AIM Rules for Companies and guidance
notes as published by London Stock Exchange
from time to time
"Bank Guarantee " the bank guarantee for the Subscription
Price which is to be procured by Hunch
pursuant to the provisions of the Subscription
Agreement
"Board" or "Directors" the directors of the Company as at the
date of this document
"CAGR" compounded annual growth rate
"Cenkos Securities" Cenkos Securities plc
"Company" Mercantile Ports & Logistics Limited
"Consolidation" the proposed consolidation of the Company's
ordinary share capital pursuant to which
every 100 Existing Ordinary Shares and
New Ordinary Shares will be consolidated
into 1 New Consolidated Ordinary Share
pursuant to Resolution 2 as set out in
the Notice of General Meeting
"CREST" the relevant system (as defined in the
CREST Regulations) in respect of which
Euroclear is the operator (as defined
in the CREST Regulations)
"CREST member" a person who has been admitted to CREST
as a system-member (as defined in the
CREST Manual)
"CREST Regulations" the Uncertificated Securities Regulations
2001 (SI 2001/3755) (as amended)
"CREST sponsor" a CREST participant admitted to CREST
as a CREST sponsor
"CREST sponsored member" a CREST member admitted to CREST as a
sponsored member
"Enlarged Share Capital" the entire issued share capital of the
Company following completion of the Placing,
PrimaryBid Offer and Subscription on
Admission, assuming the Placing and PrimaryBid
Offer are each fully subscribed, that
all of the Subscription Shares are issued
and including [--] New Ordinary Shares
to be subscribed for by Cenkos Securities
out of part of the commission payable
to them by the Company under the Placing
Agreement
"Euroclear" Euroclear UK & Ireland Limited
"Existing Ordinary Shares" the 1,905,022,123 Ordinary Shares in
issue on the date of this document
"Fractional Entitlement" a fractional entitlement to a New Ordinary
Share arising on the Consolidation
"Facility" the completed Logistics Park and Multi-purpose
Terminal
"FCA" the Financial Conduct Authority of the
UK
"Form of Proxy" the form of proxy for use in relation
to the General Meeting enclosed with
this document
"FSMA" Financial Services and Markets Act 2000
(as amended)
"GDP" gross domestic product
"General Meeting" the Extraordinary General Meeting of
the Company, convened for 11.00 a.m.
on [9] September 2021 or at any adjournment
thereof, notice of which is set out at
the end of this document
"Group" the Company and its subsidiaries
"Hunch Ventures" Hunch Ventures and Investment Private
Limited, a company incorporated in India,
with company registration number 289161
and whose registered office is at 5 Ground
Floor, Plot No. 09 Copia Corporate Suites,
Jasola New Delhi, South Delhi DL 110044,
India
"India" the Republic of India
"JNPT" Jawaharlal Nehru Port Trust
"Karanja" the Project Land
"KTLPL" Karanja Terminal and Logistics Private
Limited, a company incorporated under
the provisions of the Companies Act ,1956
of India, having its registered office
at Hermes Atrium, Office No. 411, 04(th)
Floor, A-Wing, Plot No. 57, Sector No.
11, CBD, Belapur, Navi Mumbai, Thane
- 400614, and being a subsidiary of the
Company
"Logistics Park" the logistics park being developed by
the Group on the Project Land
"London Stock Exchange" the London Stock Exchange plc
"Major Port" each of the 12 ports located in India
designated as 'Major Ports' by India's
Ministry of Shipping
"Minor Port" any port located in India which is not
a Major Port
"MMB" Maharashtra Maritime Board
"Mumbai Trans-Harbour the proposed 22 kilometre freeway grade
Link" road bridge connecting Mumbai with Navi
Mumbai, its satellite city
"New Consolidated Ordinary the [--] new consolidated ordinary shares
Shares" of no par value each in the capital of
the Company following the Consolidation
"New Ordinary Shares" the [--] new ordinary shares of no par
value each in the capital of the Company
to be issued pursuant to the Placing,
Subscription and PrimaryBid Offer
"Notice of General Meeting" the notice convening the General Meeting
as set out at the end of this document
"Offer Price" 0.45 pence per New Ordinary Share
"Ordinary Shares" ordinary shares of no par value each
in the capital of the Company
"Overseas Shareholders" a Shareholder with a registered address
outside the United Kingdom or who is
a citizen of, or incorporated, registered
or otherwise resident in, a country outside
the United Kingdom
"Placees" subscribers for Placing Shares
"Placing" the placing by the Company of the Placing
Shares with certain institutional and
other investors pursuant to the Placing
Agreement
"Placing Agreement" the agreement entered into between the
Company, Cenkos Securities and Zeus Capital
in respect of the Placing dated [19]
August 2021, as described in this document
"Placing Shares" the [--] New Ordinary Shares the subject
of the Placing
"Project Land" the c.1.62 Mn SQM (approximately 400
acres) of land with a sea frontage of
approximately 2,000 metres at Karanja
Creek, Chanje Village, Taluka Uran, District
Raigad, Maharashtra, India as described
in the Deed of Lease
"PrimaryBid Offer" the offer of New Ordinary Shares to be
issued pursuant to the PrimaryBid Offer
at the Offer Price
"PrimaryBid Shares" the [--] New Ordinary Shares to be issued
pursuant to the PrimaryBid Offer at the
Offer Price
"Registrars" Link Market Services (Guernsey) Limited
"Regulatory Information has the meaning given in the AIM Rules
Service" for Companies
"Resolutions" the ordinary and special resolutions
to be proposed at the General Meeting,
as set out in the Notice of the General
Meeting
"Rupees" or "Rs" Indian Rupees, the legal currency of
India
"Securities Act" US Securities Act of 1933 (as amended)
"Share Consolidation" the proposed consolidation of the Company's
ordinary share capital pursuant to which
every 100 Existing Ordinary Shares and
New Ordinary Shares will be consolidated
into 1 New Consolidated Ordinary Share
pursuant to Resolution 2 as set out in
the Notice of General Meeting
"Shareholders" the holders of Existing Ordinary Shares
"Subscription" the subscription for Subscription Shares
pursuant to the terms of the Subscription
Agreement
"Subscription Agreement" the subscription and relationship agreement
entered into on or around [19] August
2021 between Hunch Ventures, the Company
and Cenkos Securities in respect of both
the Subscription and the relationship
between the Company and Hunch Ventures
following Admission
"Subscription Price" GBP3,454,300, being the aggregate subscription
price payable in respect of the Subscription
Shares at the Offer Price
"Subscription Shares" the aggregate of 767,622,222 New Ordinary
Shares to be issued by the Company under
the terms of the Subscription Agreement
"Transaction" the Placing, the PrimaryBid Offer, the
Subscription and the Consolidation
"United Kingdom" or "UK" the United Kingdom of Great Britain and
Northern Ireland
"United States", "United the United States of America, its territories
States of America" or and possessions, any State of the United "US" States, and the District of Columbia "Zeus Capital" Zeus Capital Limited
APPIX II - TERMS AND CONDITIONS OF THE PLACING
The terms and conditions contained in this Announcement, including this Appendix (together the "Announcement") (the "Terms and Conditions") and the information comprising this Announcement are restricted and are not for publication, release or distribution, in whole or in part, directly or indirectly, in or into the United States, Canada, Australia, New Zealand, the Republic of South Africa, or Japan, or any other state or jurisdiction in which such release, publication or distribution would be unlawful. The Terms and Conditions and the information contained herein is not intended to and does not contain or constitute an offer of, or the solicitation of an offer to buy or subscribe for, securities to any person in the United States, Canada, Australia, New Zealand, the Republic of South Africa or Japan, or any other state or jurisdiction in which such an offer would be unlawful.
Important information for invited Placees only regarding the Placing
Members of the public are not eligible to take part in the Placing. This Announcement and the Terms and Conditions set out in this Announcement are for information purposes only and are directed only at persons in Member States who are "qualified investors" in such Member State within the meaning of Article 2(e) of the EU Prospectus Regulation or the United Kingdom within the meaning of the UK Prospectus Regulation ("Qualified Investors"). In addition, in the United Kingdom, this Announcement and the Terms and Conditions are directed only at (i) Qualified Investors who have professional experience in matters relating to investments falling within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO"), and/or (ii) Qualified Investors who are high net worth companies, unincorporated associations or other bodies within the meaning of Article 49(2)(a) to (d) of the FPO; and/or (iii) persons to whom it may otherwise be lawfully communicated (each a "Relevant Person"). No other person should act or rely on this Announcement and persons distributing this Announcement must satisfy themselves that it is lawful to do so. By accepting the Terms and Conditions each Placee represents and agrees that it is a Relevant Person. This Announcement and the Terms and Conditions set out herein must not be acted on or relied on by persons who are not Relevant Persons. Any investment or investment activity to which this Announcement and the Terms and Conditions set out herein relate 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 Placing Shares have not been and will not be registered under the US Securities Act or under the applicable securities laws of any state or other jurisdiction of the United States, and may not be offered, sold, taken up, resold, transferred or delivered, directly or indirectly within, into or in the United States, except pursuant to an applicable exemption from the registration requirements of the US Securities Act and in compliance with the securities laws of any relevant state or other jurisdiction of the United States. There will be no public offer of the Placing Shares in the United States. The Placing Shares are being offered and sold only outside the United States in "offshore transactions" as defined in, and in accordance with Regulation S of the US Securities Act ("Regulation S").
The Placing 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 Placing or the accuracy or the adequacy of this Announcement. Any representation to the contrary is a criminal offence in the United States.
This Announcement does not constitute an offer to sell or issue, or the solicitation of an offer to buy or subscribe for, securities in any jurisdiction in which such offer or solicitation is unlawful and, in particular, is not for publication or distribution in or into the United States, Canada, Australia, New Zealand, the Republic of South Africa or Japan, nor in any country or territory where to do so may contravene local securities laws or regulations. The distribution of this Announcement (or any part of it or any information contained within it) in other jurisdictions may be restricted by law and therefore persons into whose possession this Announcement (or any part of it or any information contained within it) comes should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities law of any such jurisdictions. The Ordinary Shares have not been and will not be registered under the US Securities Act nor under the applicable securities laws of any state of the United States or any province or territory of Canada, Australia, New Zealand, the Republic of South Africa or Japan. Accordingly, the Shares may not be offered or sold directly or indirectly in or into or from the United States, Canada, Australia, New Zealand, the Republic of South Africa or Japan or to any resident of the United States, Canada, Australia, New Zealand, the Republic of South Africa or Japan. No public offering of securities is being made in the United States. The Shares have not been approved or disapproved by the US Securities and Exchange Commission, any state securities commission or any other regulatory authority in the United States, nor have any of the foregoing authorities passed upon or endorsed the accuracy or adequacy of this Announcement. Any representation to the contrary is a criminal offence in the United States.
Each Placee should consult with its own advisers as to legal, tax, business, financial and related aspects of a purchase of and/or subscription for the Placing Shares.
Each Placee will be deemed to have read and understood this Announcement in its entirety and to be making such offer on these terms and conditions, and to be providing the representations, warranties, acknowledgements and undertakings, contained in these terms and conditions. In particular each such Placee represents, warrants and acknowledges to each of the Company and the Brokers that:
(a) it is a Relevant Person (as defined above) and undertakes that it will purchase and/or subscribe for, hold, manage or dispose of any Placing Shares that are allocated to it for the purposes of its business;
(b) it is acquiring the Placing Shares for its own account or acquiring the Placing Shares for an account with respect to which it has sole investment discretion and has the authority to make, and does make the representations, warranties, indemnities, acknowledgments, undertakings and agreements contained in this Announcement;
(c) in the case of any Placing Shares subscribed for by it as a financial intermediary as that term is used in Article 5 of the EU Prospectus Regulation or the UK Prospectus Regulation (as applicable), any Placing Shares purchased and/or subscribed for by it in the Placing will not be subscribed for and/or purchased on a non-discretionary basis on behalf of, nor will they be subscribed for and/or purchased with a view to their offer or resale to, persons in a Member State or the United Kingdom (as applicable) other than Qualified Investors, or in circumstances which may give rise to an offer of securities to the public other than an offer or resale in the United Kingdom or in a Member State to Qualified Investors, or in circumstances in which the prior consent of the Brokers has been given to each such proposed offer or resale; and
(d) 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 Announcement; and
(e) it is not a US Person (as defined in, and in accordance with Regulation S) and it, and any accounts it represents, (i) is, or at the time the Placing Shares are acquired will be, outside the United States and is not acquiring the Placing Shares for the account or benefit of any US Person (as defined in, and in accordance with Regulation S) or any other person located in the United States, (ii) is acquiring the Placing Shares in an "offshore transaction" (as defined in, and in accordance with Regulation S) and (iii) will not offer or sell, directly or indirectly, any of the Placing Shares except in an "offshore transaction" as defined in, and in accordance with Regulation S or in the United States pursuant to an exemption from, or in a transaction not subject to, the registration requirements under the US Securities Act.
Persons (including, without limitation, nominees and trustees) who have a contractual or other legal obligation to forward a copy of this Announcement, of which these terms and conditions form part, should seek appropriate advice before taking any action.
Neither Cenkos Securities plc ("Cenkos Securities") or Zeus Capital Limited ("Zeus Capital", and Cenkos Securities and Zeus Capital being referred to together as the "Brokers") nor any of their affiliates, agents, directors, officers or employees, make any representation to any Placees regarding an investment in the Placing Shares.
Introduction
Each of Cenkos Securities and Zeus Capital, as applicable, may require a Placee to agree to such further terms and/or conditions and/or give such additional warranties and/or representations and/or undertakings as it (in its absolute discretion) sees fit and/or may require any such Placee to execute a separate placing letter (for the purposes of this Announcement, a "Placing Letter"). The terms of this Announcement will, where applicable, be deemed to be incorporated into that Placing Letter.
Details of the Placing
The Brokers have entered into the Placing Agreement with the Company, under which the Brokers have agreed, on the terms and subject to the conditions set out therein, and undertaken to use their reasonable endeavours to procure, as the Company's agents for the purpose of the Placing, subscribers for the Placing Shares at the Placing Price.
The Placing is conditional upon, amongst other things, Admission becoming effective and the Placing Agreement not being terminated in accordance with its terms, as detailed further below.
The Placing Shares are and will be credited as fully paid and will rank pari passu in all respects with the existing issued Ordinary Shares, including the right to receive all dividends and other distributions (if any) declared, made or paid on or in respect of the Ordinary Shares after the date of issue of the Placing Shares to the relevant Placees.
Application for admission to trading
The Application has been or will be made to the London Stock Exchange for Admission of the Placing Shares .
The Placing is conditional and is subject to, inter alia, Shareholder approval at the General Meeting. Should the conditions not be satisfied, Admission will not occur.
The Placing Shares will not be admitted to trading on any stock exchange other than AIM.
No Prospectus
No offering document or prospectus has been or will be submitted to be approved by the FCA or submitted to the London Stock Exchange in relation to the Proposals and no such prospectus is required (in accordance with the UK Prospectus Regulation and/or the EU Prospectus Regulation) to be published and Placees' commitments will be made solely on the basis of the information contained in this Announcement released by the Company today and subject to the further terms set forth in the trade confirmation or contract note to be provided to individual prospective Placees.
Each Placee, by accepting a participation in the Placing, agrees that the content of this Announcement and all other publicly available information previously or simultaneously published by the Company by notification to a Regulatory Information Service or otherwise filed by the Company is exclusively the responsibility of the Company and confirms that it has neither received nor relied on any other information, representation, warranty, or statement made by or on behalf of the Company, Cenkos Securities or Zeus Capital, or any other person and none of the Company, Cenkos Securities or Zeus Capital, or any of their respective affiliates will be liable for any Placee's decision to participate in the Placing based on any other information, representation, warranty or statement which the Placees may have obtained or received. Each Placee acknowledges and agrees that it has relied on its own investigation of the business, financial or other position of the Company in accepting a participation in the Placing. Nothing in this paragraph should exclude or limit the liability of any person for fraudulent misrepresentation by that person.
Bookbuild
The Brokers will today commence the bookbuilding process in respect of the Placing (the "Bookbuild") to determine both demand by Placees for participation in the Placing. No commissions will be paid to Placees or by Placees in respect of any Placing Shares.
The Brokers and the Company shall be entitled to effect the Placing by such alternative method to the Bookbuild as they may, in their absolute discretion, determine.
Participation in, and principal terms of, the Placing
1. Each of Cenkos Securities or Zeus Capital, (whether through itself or any of its affiliates) is arranging the Placing as placing agent and broker of the Company for the purpose of each using its reasonable endeavours to procure Placees at the Placing Price for the Placing Shares.
2. Participation in the Placing will only be available to persons who may lawfully be, and are, invited to participate by either Cenkos Securities and Zeus Capital. Cenkos Securities and Zeus Capital, and/or their respective affiliates may participate in the Placing as principals (and are each entitled to enter bids as principal in the Bookbuild).
3. The Bookbuild will establish the number of Placing Shares to be issued and will be agreed between the Brokers and the Company following completion of the Bookbuild in respect of the Placing Shares and will be recorded in a term sheet entered into between them (the "Term Sheet"). The number of Placing Shares and to be issued and the Placing Price will be announced on a Regulatory News Service following completion of the Bookbuild.
4. To bid in the Bookbuild, Placees should communicate their bid by telephone or in writing to their usual sales contact at either of the Brokers. Each bid should state the number of Placing Shares for which the prospective Placee wishes to subscribe. Bids may be scaled down by the Brokers on the basis referred to in paragraph 13 below.
5. A bid in the Bookbuild will be made on the terms and subject to the conditions in this Announcement and will be legally binding on the Placee on behalf of which it is made and except with the Brokers' consent will not be capable of variation or revocation after the time at which it is submitted. Each Placee will also have an immediate, separate, irrevocable and binding obligation, owed to the Company and the Brokers, to pay to them (or as the Brokers may direct) in cleared funds an amount equal to the product of the Placing Price and the number of Placing Shares that such Placee has agreed to subscribe for and the Company has agreed to allot and issue to that Placee. Each prospective Placee's obligations will be owed to the Company and the Brokers.
6. The Bookbuild in respect of the Placing is expected to close no later than 7.00 a.m. on 20 August 2021, but the Bookbuild may be closed earlier or later at the discretion of the Brokers and the Company. The Brokers may, in agreement with the Company, accept bids, either in whole or in part, that are received after the Bookbuild has closed.
7. This Announcement 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.
8. Each Placee's commitment will be made solely on the basis of the information set out in Announcement . By participating in the Placing, Placees will be deemed to have read and understood these Terms and Conditions and the rest of this Announcement in its entirety and to be participating and making an offer for the Placing Shares on these terms and conditions. Each Placee will be deemed to have read and understood these Terms and Conditions in their entirety and to be making such offer on the Terms and Conditions and to be providing the representations, warranties and acknowledgements and undertakings contained in these Terms and Conditions.
9. The Placing Price will be a fixed price of 0.45 pence per Placing Share.
10. An offer for Placing Shares, which has been communicated by a prospective Placee to Cenkos Securities or Zeus Capital , shall not be capable of withdrawal or revocation without the consent of Cenkos Securities or Zeus Capital (as applicable).
11. Each Placee's allocation will be confirmed to Placees orally or in writing by Cenkos Securities or Zeus Capital as soon as practicable following the close of the Bookbuild. The terms of this Announcement will be deemed incorporated by reference therein. The oral or written confirmation to such Placee will constitute an irrevocable legally binding commitment upon such person (who will at that point become a Placee) in favour of Cenkos Securities or Zeus Capital (as applicable), and the Company, under which it agrees to subscribe for and/or acquire the number of Placing Shares allocated to it at the Placing Price on the terms and conditions set out in this Announcement and in accordance with the Company's articles of association. Except as required by law or regulation, no press release or other announcement will be made Cenkos Securities, Zeus Capital, 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. Each Placee will have an immediate, separate, irrevocable and binding obligation, owed to Cenkos Securities or Zeus Capital (as agent for the Company), as applicable, to pay in cleared funds immediately on the settlement date, in accordance with the registration and settlement requirements set out below, an amount equal to the product of the Placing Price and the number of Placing Shares such Placee has agreed to take up.
13. The Brokers may choose to accept bids, either in whole or in part, on the basis of allocations determined in agreement with the Company and may scale down any bids for this purpose on such basis as they may determine. The Brokers may also, notwithstanding paragraphs 4 and 5 above, and subject to prior agreement with the Company, allocate Placing Shares after the time of any initial allocation to any person submitting a bid after that time The Company reserves the right (upon agreement with the Brokers) to reduce or seek to increase the amount to be raised pursuant to the Placing at its discretion.
14. Irrespective of the time at which a Placee's allocation pursuant to the Placing is confirmed, settlement for all Placing Shares under the Placing will be required to be made at the times and on the basis explained below under "Registration and Settlement".
15. All obligations under the Bookbuild and Placing will be subject to fulfilment or (where applicable) waiver of, amongst other things, the conditions referred to below under "Conditions of the Placing" and to the Placing Agreement not being terminated on the basis referred to below under "Right to terminate under the Placing Agreement".
16. By participating in the Bookbuild, each Placee will agree that its rights and obligations in respect of the Placing will terminate only in the circumstances described below and will not be capable of rescission or termination by the Placee.
17. To the fullest extent permissible by law, none of the Company, Cenkos Securities or Zeus Capital, or any of their respective affiliates shall have any liability to Placees (or to any other person whether acting on behalf of a Placee or otherwise) under these terms and conditions. In particular, none of the Company, Cenkos Securities and Zeus Capital, or any of their respective affiliates shall have any liability (including to the fullest extent permissible by law, any fiduciary duties) in respect of Cenkos Securities and/or Zeus Capital's conduct of the Bookbuild. Each Placee acknowledges and agrees that the Company is responsible for the allotment of the Placing Shares to the Placees, and neither Cenkos Securities or Zeus Capital, shall have any liability to Placees for the failure of the Company to fulfil those obligations.
18. Cenkos Securities and Zeus Capital shall, following consultation with, and on approval of such allocations by, the Company, be entitled to allocate Placing Shares at their respective discretions to Placees in respect of their allocations of Placing Shares.
Conditions of the Placing
The Brokers' obligations under the Placing Agreement are conditional on, inter alia:
(a) the Company procuring that the Circular and the Form of Proxy are sent to each Shareholder who is entitled to receive notice of the General Meeting subject to such exceptions as are permitted by the Companies Act and the Company's articles of association;
(b) Resolutions 1 and 3 at the General Meeting having been duly passed by the requisite majority;
(c) the Company allotting, subject only to Admission, the Placing Shares and the Subscription Shares in accordance with the Placing Agreement; and
(d) Admission of the Placing Shares taking place not later than 8.00 a.m. on 10 September 2021 (or such later date as the Company and the Brokers may agree being not later than 8.30 a.m. on 30 September 2021).
The Placing Agreement contains certain warranties and representations from the Company and an indemnity from the Company for the benefit of the the Brokers. The Placing Agreement contains certain conditions to be satisfied (or, where permitted, waived or extended in writing by the Brokers) on or prior to Admission, including there having been no material adverse change, the warranties being true and accurate and not misleading (in the opinion of the Brokers) and the performance by the Company of its obligations under the Placing Agreement.
None of the Company, the Directors, and the Brokers owes any fiduciary duty to any Placee in respect of the representations, warranties, undertakings or indemnities in the Placing Agreement.
If: (i) any of the conditions contained in the Placing Agreement, including those described above, are not fulfilled or waived by the Brokers by the time or date where specified (or such later time or date as the Company, Cenkos Securities and Zeus Capital may agree), or (ii) the Placing Agreement is terminated as described below, the Placing will lapse and the Placees' rights and obligations hereunder in relation to the Placing Shares shall cease and terminate at such time and each Placee agrees that no claim can be made by the Placee in respect thereof.
The Brokers may, in their respective absolute discretion, waive, or extend the period for compliance with the whole or any part of any of the Company's obligations in relation to the conditions in the Placing Agreement. Any such extension or waiver will not affect Placees' commitments as set out in this Announcement.
None of the Brokers nor the Company (as the case may be) shall have any liability to any Placee (or to any other person whether acting on behalf of a Placee or otherwise) in respect of any decision they may make as to whether or not to waive or to extend the time and/or date for the satisfaction of any condition to the Placing nor for any decision they may make as to the satisfaction of any condition or in respect of the Placing generally and by participating in the Placing each Placee agrees that any such decision is within the respective absolute discretions of the Brokers.
Right to terminate under the Placing Agreement
The Brokers may, jointly or separately, in their respective absolute discretions, at any time before Admission terminate the Placing Agreement by giving notice to the Company and/or the other as the case may be, in certain circumstances, including, inter alia:
(a) in the opinion of any of Cenkos Securities and/or Zeus Capital (acting in good faith), the warranties given by the Company to Cenkos Securities and Zeus Capital are not true and accurate or have become misleading (or would not be true and accurate or would be misleading if they were repeated at any time before Admission) by reference to the facts subsisting at the time when the notice referred to above is given; or
(b) in the opinion of any of Cenkos Securities and/or Zeus Capital (acting in good faith), that any statement made by the Company contained in the Placing Documents has become or been discovered to be untrue, inaccurate or misleading in any material respect or that there has been a material omission therefrom
(c) in the opinion of any of Cenkos Securities and/or Zeus Capital (acting in good faith), the Company fails to comply with any of its obligations under the Placing Agreement and that failure is material in the context of the Proposals; or
(d) in the opinion of any of the Cenkos Securities and/or Zeus Capital (acting in good faith), there has been a development or event (or any development or event involving a prospective change of which the Company is, or might reasonably be expected to be, aware) which will or is likely to have a material adverse effect on the operations, condition (financial, operational, legal or otherwise), prospects, management, results of operations, financial position, business or general affairs of the Company or the Group, or the Enlarged Group respectively, whether or not foreseeable and whether or not arising in the ordinary course of business;
(e) there has been a change in national or international financial, political, economic or stock market conditions (primary or secondary); an incident of terrorism, outbreak or escalation of hostilities, war, declaration of martial law or any other calamity or crisis (including any material worsening in, or material escalation in the response to, the COVID-19 pandemic); a suspension or limitation in trading of securities generally on any stock exchange or minimum or maximum prices for trading have been fixed or a maximum range for prices has been required by any stock exchange or by order of any regulatory or governmental authority; any change in currency exchange rates or exchange controls or a disruption of settlement systems or clearance services or a material disruption in commercial banking, any declaration of a banking moratorium, or any adverse change or prospective adverse change of tax affecting the Shares or the allotment, issue, delivery of transfer thereof; which taken solely or together with any other matter set out herein, would be likely in the opinion of either of the Cenkos Securities and/or Zeus Capital (acting in good faith) to materially prejudice the success of the Placing; or
(f) if either Hunch Ventures and Investment Private Limited, the Company and/or Cenkos Securities terminates or rescinds the Subscription Agreement made between them, as applicable.
The rights and obligations of the Placees shall terminate only in the circumstances described in these Terms and Conditions and in the Placing Agreement and will not be subject to termination by the Placee or any prospective Placee at any time or in any circumstances. By participating in the Placing, Placees agree that the exercise by either Cenkos Securities and/or Zeus Capital of any right of termination or other discretion under the Placing Agreement shall be within the absolute discretion of either Cenkos Securities and/or Zeus Capital, and that it need not make any reference to Placees and that it shall have no liability to Placees whatsoever in connection with any such exercise or decision not to exercise. Placees will have no rights against, Cenkos Securities and/or Zeus Capital , the Company, nor any of their respective af liates, directors or employees under the Placing Agreement pursuant to the Contracts (Rights of Third Parties) Act 1999 (as amended).
Registration and settlement
Settlement of transactions in the Placing Shares (ISIN: GG00B53M7D91) following Admission will take place within CREST. Each Placee allocated Placing Shares in the Placing will be sent a trade confirmation or contract note stating the number of Placing Shares allocated to it at the Placing Price, the aggregate amount owed by such Placee to Cenkos Securities and Zeus Capital (as agent for the Company), as applicable, and settlement instructions. Each Placee agrees that it will do all things necessary to ensure that delivery and payment is completed in accordance with either the CREST or certificated settlement instructions that it has in place with Cenkos Securities and Zeus Capital (as applicable).
The expected date of settlement in respect of the Placing Shares will be communicated to you by Cenkos Securities or Zeus Capital (as the case may be) and settlement will be in accordance with the instructions set out in the trade confirmation.
Interest is chargeable daily on payments not received from Placees on the due date in accordance with the arrangements set out above at the rate of two percentage points above LIBOR as determined by Cenkos Securities and/or Zeus Capital.
Each Placee is deemed to agree that, if it does not comply with these obligations, Cenkos Securities or Zeus Capital may sell any or all of the Placing Shares allocated to that Placee on such Placee's behalf and retain from the proceeds, for Cenkos Securities' or Zeus Capital's account and benefit (as agent for the Company) as applicable, an amount equal to the aggregate amount owed by the Placee plus any interest due. The relevant Placee will, however, remain liable and shall indemnify Cenkos Securities or Zeus Capital (as agent for the Company) as applicable, on demand for any shortfall below the aggregate amount owed by it and may be required to bear any stamp duty or stamp duty reserve tax or securities transfer tax (together with any interest or penalties) which may arise upon the sale of such Placing Shares on such Placee's behalf. By communicating a bid for Placing Shares to Cenkos Securities or Zeus Capital, each Placee confers on Cenkos Securities and Zeus Capital all such authorities and powers necessary to carry out any such sale and agrees to ratify and confirm all actions which Cenkos Securities and/or Zeus Capital lawfully takes in pursuance of such sale.
If Placing Shares are to be delivered to a custodian or settlement agent, Placees should ensure that the trade confirmation or contract note is copied and delivered immediately to the relevant person within that organisation.
Insofar as Placing Shares are registered in a Placee's name or that of its nominee or in the name of any person for whom a Placee is contracting as agent or that of a nominee for such person, such Placing Shares should, subject as provided below, be so registered free from any liability to UK stamp duty or stamp duty reserve tax or securities transfer tax. Placees will not be entitled to receive any fee or commission in connection with the Placing.
Representations, warranties and further terms
By participating in the Placing each Placee (and any person acting on such Placee's behalf) irrevocably makes the following representations, warranties, acknowledgements, agreements and undertakings (as the case may be) to the Company, the Brokers, namely that, each Placee (and any person acting on such Placee's behalf):
1. represents and warrants that it has read and understood this Announcement, including this Announcement, in its entirety and that its subscription for and/or purchase of Placing Shares is subject to and based upon all the terms, conditions, representations, warranties, acknowledgements, agreements and undertakings and other information contained in this Announcement and herein and not in reliance on any information given or any representations, warranties or statements made at any time by any person in connection with Admission, the Company, the Placing, the Acquisition or otherwise, other than the information contained in this Announcement, and undertakes not to redistribute or duplicate this Announcement or any part of it;
2. acknowledges that the content of this Announcement and, when published, the Circular is exclusively the responsibility of the Company, and that none of Cenkos Securities or Zeus Capital, nor their respective affiliates or any person acting on either of their behalves has or shall have any liability for any information, representation or statement contained in this Announcement and, when published, the Circular or any information previously or concurrently published by or on behalf of the Company, and will not be liable for any Placee's decision to participate in the Placing based on any information, representation or statement contained in this Announcement and, when published, the Circular or otherwise. Each Placee further represents, warrants and agrees that the only information on which it is entitled to rely and on which such Placee has relied in committing itself to acquire the Placing Shares is contained in this Announcement, such information being all that it deems necessary to make an investment decision in respect of the Placing Shares and that it has neither received nor relied on any other information given or representations, warranties or statements made by the Brokers, the Company, or any of their respective directors, officers or employees or any person acting on behalf of any of them, or, if received, it has not relied upon any such information, representations, warranties or statements (including any management presentation that may have been received by any prospective Placee or any material prepared by the research department of either the Cenkos Securities or Zeus Capital (the views of such research departments not representing and being independent from those of the Company and the respective corporate finance departments of Cenkos Securities and Zeus Capital and not being attributable to the same)), and neither Cenkos Securities and Zeus Capital, nor the Company will be liable for any Placee's decision to accept an invitation to participate in the Placing based on any other information, representation, warranty or statement. Each Placee further acknowledges and agrees that it has relied solely on its own investigation of the business, financial or other position of the Company in deciding to participate in the Placing and it will not rely on any investigation that Cenkos Securities and/or Zeus Capital, their affiliates or any other person acting on its or their behalf has or may have conducted;
3. acknowledges that none of the Brokers, the Company nor any of their respective affiliates or any person acting on behalf of any of them has provided it, and will not provide it, with any material regarding the Placing Shares or the Company other than this Announcement; nor has it requested any of Cenkos Securities, Zeus Capital, the Company, their respective affiliates or any person acting on behalf of any of them to provide it with any such information and acknowledge that they have read and understood this Announcement;
4. acknowledges that no offering document or prospectus has been or will be prepared in connection with the Placing and it has not received and will not receive a prospectus or other offering document in connection with the Placing;
5. represents and warrants that it has neither received nor relied on any confidential price sensitive information concerning the Company in accepting this invitation to participate in the Placing;
6. acknowledges that neither Cenkos Securities nor Zeus Capital has any duties or responsibilities to it, or its clients, similar or comparable to the duties of "best execution" and "suitability" imposed by the Conduct of Business Sourcebook in the FCA's Handbook of Rules and Guidance and that neither Cenkos Securities nor Zeus Capital is acting for them or their clients and that each of Cenkos Securities and Zeus Capital will not be responsible for providing protections to it or its clients;
7. has the funds available to pay in full for the Placing Shares for which it has agreed to subscribe and/or purchase and that it will pay the total amount due by it in accordance with the terms set out in this Announcement and, as applicable, as set out in the trade settlement or the contract note on the due time and date;
8. acknowledges that Cenkos Securities, Zeus Capital nor any of their affiliates or any person acting on behalf of either Cenkos Securities or Zeus Capital or any such affiliate has or shall have any liability for this Announcement and, when published, the Admission Document, any publicly available or filed information or any representation relating to the Company, provided that nothing in this paragraph excludes the liability of any person for fraudulent misrepresentation made by that person;
9. acknowledges that none of Cenkos Securities, Zeus Capital, the ultimate holding company of either Cenkos Securities or Zeus Capital nor any direct or indirect subsidiary undertakings of such holding company, nor any of their respective directors and employees shall be liable to Placees for any matter arising out of Cenkos Securities' and Zeus Capitals role as placing agent (where applicable) or otherwise in connection with the Placing and that where any such liability nevertheless arises as a matter of law each Placee will immediately waive any claim against any of such persons which it may have in respect thereof;
10. understands, and each account it represents has been advised that (i) the Placing Shares have not been and will not be registered under the US Securities Act or under the securities laws of any state or other jurisdiction of the United States and are being offered in a transaction not involving any public offering in the United States, (ii) the Placing Shares are being offered and sold pursuant to Regulation S under the US Securities Act or in a transaction exempt from or not subject to the registration requirements under the US Securities Act; and (iii) the Placing Shares may not be reoffered, resold, pledged or otherwise transferred except in accordance with Regulation S under the US Securities Act or pursuant to an exemption from or in a transaction not subject to the registration requirements under the US Securities Act;
11. represents and warrants that it is not a US Person (as defined in, and in accordance with Regulation S) and that it, and any accounts it represents, (i) is, or at the time the Placing Shares are acquired will be, outside the United States and is not acquiring the Placing Shares for the account or benefit of any US Person or any other person located in the United States, (ii) is acquiring the Placing Shares in an "offshore transaction" (as defined in, and in accordance with Regulation S) and (iii) will not offer or sell, directly or indirectly, any of the Placing Shares except in an "offshore transaction" as defined in, and in accordance with Regulation S or in the United States pursuant to an exemption from, or in a transaction not subject to, the registration requirements under the US Securities Act;
12. will not distribute, forward, transfer or otherwise transmit this Announcement and, when published, the Admission Document, any information contained within it or any other materials concerning the Placing (including any electronic copies thereof), in or into the United States;
13. acknowledges that the offer of the Placing Shares may involve tax consequences, and that the contents of this Announcement and, when published, the Circular do not contain tax advice or information. The Placee acknowledges that it must retain its own professional advisors to evaluate the tax, financial and any and all other consequences of an investment in the Placing Shares;
14. represents and warrants that it will notify any transferee to whom it subsequently reoffers, resells, pledges or otherwise transfers the Placing Shares of the foregoing restrictions on transfer and resale;
15. unless otherwise specifically agreed in writing with Cenkos Securities and/or Zeus Capital, represents and warrants that neither it nor the beneficial owner of such Placing Shares will be a resident of the United States, Canada, Australia, New Zealand, Japan or the Republic of South Africa or any other jurisdiction in which it is unlawful to make or accept an offer to acquire the Placing Shares;
16. acknowledges that the Placing Shares have not been and will not be registered under the securities legislation of the United States, Canada, Australia, New Zealand, Japan or the Republic of South Africa or any other jurisdiction in which it is unlawful to make or accept an offer to acquire the Placing Shares and, subject to certain exceptions, may not be offered, sold, taken up, renounced or delivered or transferred, directly or indirectly, within those jurisdictions;
17. represents and warrants that the issue or transfer to it, or the person specified by it for registration as holder, of Placing Shares will not give rise to a liability under any of sections 67, 70, 93 or 96 of the Finance Act 1986 (depositary receipts and clearance services) and that the Placing Shares are not being acquired in connection with arrangements to issue depositary receipts or to transfer Placing Shares into a clearance system;
18. represents and warrants that: (i) it has complied with its obligations under the Criminal Justice Act 1993 and MAR; (ii) in connection with money laundering and terrorist financing, it has complied with its obligations under the Proceeds of Crime Act 2002 (as amended), the Terrorism Act 2000 (as amended), the Terrorism Act 2006 and the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017; and (iii) it is not a person: (a) with whom transactions are prohibited under the Foreign Corrupt Practices Act of 1977 (as amended) or any economic sanction programmes administered by, or regulations promulgated by, the Office of Foreign Assets Control of the U.S. Department of the Treasury; (b) named on the Consolidated List of Financial Sanctions Targets maintained by HM Treasury of the United Kingdom; or (c) subject to financial sanctions imposed pursuant to a regulation of the European Union or a regulation adopted by the United Nations (together, the "Regulations"); and, if making payment on behalf of a third party, that satisfactory evidence has been obtained and recorded by it to verify the identity of the third party as required by the Regulations and has obtained all governmental and other consents (if any) which may be required for the purpose of, or as a consequence of, such purchase, and it will provide promptly to Cenkos Securities and/or Zeus Capital such evidence, if any, as to the identity or location or legal status of any person which Cenkos Securities and/or Zeus Capital may request from it in connection with the Placing (for the purpose of complying with such Regulations or ascertaining the nationality of any person or the jurisdiction(s) to which any person is subject or otherwise) in the form and manner requested by Cenkos Securities and/or Zeus Capital on the basis that any failure by it to do so may result in the number of Placing Shares that are to be purchased by it or at its direction pursuant to the Placing being reduced to such number, or to nil, as Cenkos Securities and/or Zeus Capital may decide in their sole discretion;
19. represents and warrants that it is acquiring the Placing Shares for its own account or acquiring the Placing Shares for an account with respect to which it has sole investment discretion and has the authority to make, and does make the representations, warranties, indemnities, acknowledgments, undertakings and agreements contained in this Announcement ;
20. if it is a financial intermediary, as that term is used in Article 5 of the Prospectus Regulation or the UK Prospectus Regulation (as applicable), represents and warrants that the Placing Shares subscribed for and/or purchased by it in the Placing will not be subscribed for and/or purchased 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 or in a Member State (as applicable) in circumstances which may give rise to an offer to the public other than an offer or resale in the United Kingdom or in a Member State to Qualified Investors, or in circumstances in which the prior consent of Cenkos Securities and/or Zeus Capital has been given to each such proposed offer or resale;
21. represents and warrants that it has not offered or sold and will not offer or sell any Placing Shares to persons prior to Admission except to persons whose ordinary activities involve them acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their business or otherwise in circumstances which have not resulted in, and which will not result in, an offer to the public in the United Kingdom, Switzerland or a Member State;
22. represents and warrants that it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of FSMA) relating to the Placing Shares in circumstances in which section 21(1) of FSMA does not require approval of the communication by an authorised person;
23. represents and warrants that it has complied and will comply with all applicable provisions of MAR with respect to anything done by it in relation to the Placing Shares in, from or otherwise involving, the United Kingdom or the European Economic Area (as applicable);
24. unless otherwise specifically agreed with Cenkos Securities and/or Zeus Capital in writing, represents and warrants that it is a Qualified Investor;
25. represents and warrants that it is a person: (i) who has professional experience in matters relating to investments falling within Article 19(1) of the FPO; or (ii) falling within Article 49(2)(A) to (D) ("High Net Worth Companies, Unincorporated Associations, etc.") of the FPO; or (iii) are persons to whom it may otherwise be lawfully communicated;
26. if the Placee is a natural person, such Placee is not under the age of majority (18 years of age in the United Kingdom) on the date of such Placee's agreement to subscribe for and/or purchase Placing Shares under the Placing and will not be any such person on the date that such subscription and/or purchase is accepted;
27. is aware of and acknowledges that it is required to comply with all applicable provisions of FSMA with respect to anything done by it in, from or otherwise involving, the United Kingdom;
28. represents and warrants that it and any person acting on its behalf is entitled to subscribe for and/or acquire the Placing Shares under the laws of all relevant jurisdictions and that it has all necessary capacity and has obtained all necessary consents and authorities and taken any other necessary actions to enable it to commit to this participation in the Placing and to perform its obligations in relation thereto (including, without limitation, in the case of any person on whose behalf it is acting, all necessary consents and authorities to agree to the terms set out or referred to in this Announcement) and will honour such obligations;
29. where it is subscribing for and/or acquiring Placing Shares for one or more managed accounts, represents and warrants that it is authorised in writing by each managed account: (a) to subscribe for and/or acquire the Placing Shares for each managed account; (b) to make on its behalf the representations, warranties, acknowledgements, undertakings and agreements in this Announcement, of which this Announcement forms part; and (c) to receive on its behalf any investment letter relating to the Placing in the form provided to it by Cenkos Securities and/or Zeus Capital;
30. undertakes that it (and any person acting on its behalf) will make payment to Cenkos Securities and/or Zeus Capital for the Placing Shares allocated to it in accordance with this Announcement, including this Announcement, on the due time and date as will be notified to it by Cenkos Securities and/or Zeus Capital, failing which the relevant Placing Shares may be placed with other parties or sold as Cenkos Securities and/or Zeus Capital (as the case may be) may in their sole discretion determine and without liability to such Placee and it will remain liable and will indemnify Cenkos Securities and/or Zeus Capital (as the case may be) on demand for any shortfall below the net proceeds of such sale and the placing proceeds of such Placing Shares and may be required to bear the liability for any stamp duty or stamp duty reserve tax or security transfer tax (together with any interest or penalties due pursuant to or referred to in these terms and conditions) which may arise upon the placing or sale of such Placee's Placing Shares on its behalf;
31. acknowledges that none of Cenkos Securities, Zeus Capital, any of their affiliates, or any person acting on behalf of either Cenkos Securities or Zeus Capital or any such affiliate, is making any recommendations to it, advising it regarding the suitability of any transactions it may enter into in connection with the Placing and that participation in the Placing is on the basis that it is not and will not be treated for these purposes as a client of Cenkos Securities and/or Zeus Capital and that neither Cenkos Securities nor Zeus Capital have any duties or responsibilities to it for providing the protections afforded to their clients or customers or for providing advice in relation to the Placing nor in respect of any representations, warranties, undertakings or indemnities contained in the Placing Agreement nor for the exercise or performance of any of their rights and obligations thereunder including any rights to waive or vary any conditions or exercise any termination right;
32. undertakes that the person whom it specifies for registration as holder of the Placing Shares will be (i) itself or (ii) its nominee, as the case may be. None of Cenkos Securities, Zeus Capital nor the Company will be responsible for any liability to stamp duty or stamp duty reserve tax resulting from a failure to observe this requirement. Each Placee and any person acting on behalf of such Placee agrees to participate in the Placing and it agrees to indemnify the Company, Cenkos Securities and Zeus Capital in respect of the same;
33. acknowledges that these terms and conditions and any agreements entered into by it pursuant to these terms and conditions and any non-contractual obligations arising out of or in connection with such agreement shall be governed by and construed in accordance with the laws of England and Wales and it submits (on behalf of itself and on behalf of any person on whose behalf it is acting) to the exclusive jurisdiction of the English courts as regards any claim, dispute or matter (including non-contractual matters) arising out of any such contract, except that enforcement proceedings in respect of the obligation to make payment for the Placing Shares (together with any interest chargeable thereon) may be taken by the Company, Cenkos Securities and/or Zeus Capital 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;
34. acknowledges that time shall be of the essence as regards to its obligations pursuant to this Announcement;
35. agrees that the Company, Cenkos Securities and/or Zeus Capital and their respective affiliates and others will rely upon the truth and accuracy of the foregoing representations, warranties, acknowledgements and undertakings which are given to Cenkos Securities and/or Zeus Capital on their own behalf and on behalf of the Company and are irrevocable and are irrevocably authorised to produce this Announcement and, when published, the Admission Document, or a copy thereof to any interested party in any administrative or legal proceeding or official inquiry with respect to the matters covered hereby;
36. agrees to indemnify on an on demand, after-tax basis and hold, the Company, Cenkos Securities and Zeus Capital and their respective affiliates harmless from any and all costs, claims, liabilities and expenses (including legal fees and expenses) arising out of or in connection with any breach of the representations, warranties, acknowledgements, agreements and undertakings in this Announcement and further agrees that the provisions of this Announcement shall survive after completion of the Placing;
37. acknowledges that no action has been or will be taken by any of the Company, Cenkos Securities, Zeus Capital or any person acting on behalf of the Company, Cenkos Securities or Zeus Capital that would, or is intended to, permit a public offer of the Placing Shares in any country or jurisdiction where any such action for that purpose is required;
38. acknowledges that it is an institution that has knowledge and experience in financial, business and international investment matters as is required to evaluate the merits and risks of subscribing for and/or acquiring the Placing Shares. It further acknowledges that it is experienced in investing in securities of this nature and in this sector and is aware that it may be required to bear, and it, and any accounts for which it may be acting, are able to bear, the economic risk of, and is able to sustain, a complete loss in connection with the Placing. It has relied upon its own examination and due diligence of the Company and its associates taken as a whole, and the terms of the Placing, including the merits and risks involved;
39. acknowledges that its commitment to subscribe for and/or purchase Placing Shares on the terms set out herein and in the trade confirmation or contract note will continue notwithstanding any amendment that may in future be made to the terms of the Placing and that Placees will have no right to be consulted or require that their consent be obtained with respect to the Company's conduct of the Placing;
40. acknowledges that Cenkos Securities and/or Zeus Capital or any of their affiliates acting as an investor for its own account may take up shares in the Company and in that capacity may retain, purchase or sell for its own account such shares and may offer or sell such shares other than in connection with the Placing;
41. represents and warrants that, if it is a pension fund or investment company, its subscription and/or purchase of Placing Shares is in full compliance with all applicable laws and regulation;
42. to the fullest extent permitted by law, it acknowledges and agrees to the disclaimers contained in the announcement, including this Announcement;
43. acknowledges that the allocation of Placing Shares (in respect of the Placing shall be determined by Cenkos Securities and Zeus Capital after consultation with, and the approval of the Company, Cenkos Securities and Zeus Capital may scale back any placing commitment on such basis as they, with the approval of the Company, may determine (which may not be the same for each Placee);
44. irrevocably appoints any Director and any director or duly authorised employee or agent of Cenkos Securities or Zeus Capital to be its agent and on its behalf (without any obligation or duty to do so), to sign, execute and deliver any documents and do all acts, matters and things as may be necessary for, or incidental to, its subscription for and/or purchase of all or any of the Placing Shares allocated to it in the event of its own failure to do so;
45. the Company reserves the right to make inquiries of any holder of the Placing Shares or interests therein at any time as to such person's status under the U.S. federal securities laws and to require any such person that has not satisfied the Company that holding by such person will not violate or require registration under the U.S. securities laws to transfer such Placing Shares or interests in accordance with the Articles (as amended from time to time);
46. if it is acting as a "distributor" (for the purposes of UK MiFIR Product Governance Requirements):
(1) it acknowledges that the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of Chapters 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 Placing Shares and each distributor is responsible for undertaking its own target market assessment in respect of the Placing Shares and determining appropriate distribution channels;
(2) notwithstanding any Target Market Assessment undertaken it confirms that, other than where it is providing an execution-only service to investors, it has satisfied itself as to the appropriate knowledge, experience, financial situation, risk tolerance and objectives and needs of the investors to whom it plans to distribute the Placing Shares and that it has considered the compatibility of the risk/reward profile of such Placing Shares with the end target market; and
(3) it acknowledges that the price of the Placing Shares may decline and investors could lose all or part of their investment; the Placing Shares offer no guaranteed income and no capital protection; and an investment in the Placing Shares is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom; and
47. the Company , Cenkos Securities and Zeus Capital will rely upon the truth and accuracy of the foregoing representations, warranties, undertakings and acknowledgements. The Placee agrees to indemnify on an on demand, after-tax basis and hold each of, the Company, Cenkos Securities and Zeus Capital and their respective affiliates harmless from any and all costs, claims, liabilities and expenses (including legal fees and expenses) arising out of any breach of the representations, warranties, undertakings, agreements and acknowledgements in this Announcement.
The representations, warranties, acknowledgments and undertakings contained in this Announcement are given to Cenkos Securities, Zeus Capital, the Company (as the case may be) and are irrevocable and shall not be capable of termination in any circumstances.
The agreement to settle a Placee's subscription and/or purchase (and/or the subscription and/or purchase of a person for whom such Placee is contracting as agent) free of stamp duty and stamp duty reserve tax depends on the settlement relating only to a subscription and/or purchase by it and/or such person direct from the Company for the Placing Shares in question. Such agreement assumes that the Placing Shares are not being subscribed for and/or 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 relates to any other subsequent dealing in the Placing Shares, stamp duty or stamp duty reserve tax may be payable, for which neither the Company, nor Cenkos Securities nor Zeus Capital will be responsible, and the Placee to whom (or on behalf of whom, or in respect of the person for whom it is participating in the Placing as an agent or nominee) the allocation, allotment, issue or delivery of Placing Shares has given rise to such UK stamp duty or stamp duty reserve tax undertakes to pay such UK stamp duty or stamp duty reserve tax forthwith and to indemnify on an on demand, after-tax basis and to hold harmless the Company, Cenkos Securities and Zeus Capital in the event that any of the Company, Cenkos Securities or Zeus Capital has incurred any such liability to UK stamp duty or stamp duty reserve tax. If this is the case, each Placee should seek its own advice and notify Cenkos Securities and/or Zeus Capital accordingly.
In addition, Placees should note that they will be liable for any stamp duty and all other stamp, issue, securities, transfer, registration, documentary or other duties or taxes (including any interest, fines or penalties relating thereto) payable outside the UK by them or any other person on the subscription and/or purchase by them of any Placing Shares or the agreement by them to subscribe for and/or purchase any Placing Shares.
Each Placee, and any person acting on behalf of the Placee, acknowledges that neither Cenkos Securities nor Zeus Capital owes any fiduciary or other duties to any Placee in respect of any representations, warranties, undertakings or indemnities in the Placing Agreement.
When a Placee or person acting on behalf of the Placee is dealing with Cenkos Securities or Zeus Capital, any money held in an account with Cenkos Securities and/or Zeus Capital on behalf of the Placee and/or any person acting on behalf of the Placee will not be treated as client money within the meaning of the rules and regulations of the FCA made under the FSMA. The Placee acknowledges that the money will not be subject to the protections conferred by the client money rules. As a consequence, this money will not be segregated from Cenkos Securities or Zeus Capital money in accordance with the client money rules and will be used by Cenkos Securities or Zeus Capital in the course of its own business and the Placee will rank only as a general creditor of Cenkos Securities or Zeus Capital.
All times and dates in this Circular may be subject to amendment. Cenkos Securities and/or Zeus Capital shall notify the Placees and any person acting on behalf of the Placees of any changes.
Past performance is no guide to future performance and persons needing advice should consult an independent financial adviser.
Supply and disclosure of information
If the Brokers or the Company or any of their agents request any information about a Placee's agreement to subscribe for and/or acquire Placing Shares under the Placing, such Placee must promptly disclose it to them and ensure that such information is complete and accurate in all respects.
Data protection
Each Placee acknowledges that it has been informed that, pursuant to GDPR the Company and/or the Registrar will, hold personal data (as defined in GDPR) relating to past and present Shareholders. Personal data will be retained on record for a period exceeding seven years after it is no longer used (subject to any limitations on retention periods set out in applicable law). The Registrar will process such personal data at all times in compliance with GDPR and shall only process for the purposes set out in the Company's privacy notice (the "Purposes") which is available for consultation on the Company's website at www.mercpl.com (the "Privacy Notice") which include to:
(a) process its personal data to the extent and in such manner as is necessary for the performance of its obligations under its respective service contracts, including as required by or in connection with the Placee's holding of Placing Shares, including processing personal data in connection with credit and anti-money laundering checks on it;
(b) communicate with it as necessary in connection with its affairs and generally in connection with its holding of Placing Shares;
(c) comply with the legal and regulatory obligations of the Company and/or the Registrar; and
(d) process its personal data for the Registrar's internal administration.
Where necessary to fulfil the Purposes, the Company will disclose personal data to:
(a) third parties located outside of the United Kingdom if necessary for the Registrar to perform its functions, or when it is within its legitimate interests, and in particular in connection with the holding of Placing Shares; or
(b) its affiliates, the Registrar and their respective associates, some of which may be located outside the United Kingdom.
Any sharing of personal data between parties will be carried out in compliance with the GDPR and as set out in the Privacy Notice.
Becoming registered as a holder of Placing Shares, a person becomes a data subject (as defined under GDPR). In providing the Registrar with information, the Placee hereby represents and warrants to the Company and the Registrar that: (i) it complies in all material aspects with its data controller obligations under GDPR, and in particular, it has notified any data subject of the Purposes for which personal data will be used and by which parties it will be used and it has provided a copy of the Privacy Notice; and (ii) where consent is legally competent and/or required under GDPR the Placee has obtained the consent of any data subject to the Company, the Registrar and their respective affiliates and group companies, holding and using their personal data for the Purposes (including the explicit consent of the data subjects for the processing of any sensitive personal data for the Purposes).
Each Placee acknowledges that by submitting personal data to the Registrar (acting for and on behalf of the Company) where the Placee is a natural person he or she has read and understood the terms of the Privacy Notice.
Each Placee acknowledges that by submitting personal data to the Registrar (acting for and on behalf of the Company) where the Placee is not a natural person it represents and warrants that:
(a) it has brought the Privacy Notice to the attention of any underlying data subjects on whose behalf or account the Placee may act or whose personal data will be disclosed to the Company as a result of the Placee agreeing to subscribe for and/or purchase Placing Shares; and
(b) the Placee has complied in all other respects with all applicable data protection legislation in respect of disclosure and provision of personal data to the Company.
Where the Placee acts for or on account of an underlying data subject or otherwise discloses the personal data of an underlying data subject, he/she/it shall, in respect of the personal data it processes in relation to or arising in relation to the Placing:
(a) comply with all applicable data protection legislation;
(b) take appropriate technical and organisational measures against unauthorised or unlawful processing of the personal data and against accidental loss or destruction of, or damage to the personal data;
(c) if required, agree with the Company and the Registrar, the responsibilities of each such entity as regards relevant data subjects' rights and notice requirements; and
(d) immediately on demand, fully indemnify each of the Company and the Registrar and keep them fully and effectively indemnified against all costs, demands, claims, expenses (including legal costs and disbursements on a full indemnity basis), losses (including indirect losses and loss of profits, business and reputation), actions, proceedings and liabilities of whatsoever nature arising from or incurred by the Company and/or the Registrar in connection with any failure by the Placee to comply with the provisions set out above.
Miscellaneous
The rights and remedies of the Brokers 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 of one will not prevent the exercise of others.
On application, if a Placee is an individual, that Placee may be asked to disclose in writing or orally his nationality. If a Placee is a discretionary fund manager, that Placee may be asked to disclose in writing or orally the jurisdiction in which its funds are managed or owned. All documents provided in connection with the Placing will be sent at the Placee's risk. They may be sent by post to such Placee at an address notified by such Placee to the Brokers .
Each Placee agrees to be bound by the Articles (as amended from time to time) once the Placing Shares which the Placee has agreed to subscribe for and/or acquire pursuant to the Placing have been acquired by the Placee. The contract to subscribe for and/or acquire Placing Shares under the Placing and the appointments and authorities mentioned in this Announcement will be governed by, and construed in accordance with, the laws of England and Wales. For the exclusive benefit of the the Brokers and the Company, each Placee irrevocably submits to the jurisdiction of the courts of England and Wales and waives any objection to proceedings in any such court on the ground of venue or on the ground that proceedings have been brought in an inconvenient forum. This does not prevent an action being taken against a Placee in any other jurisdiction.
In the case of a joint agreement to subscribe for and/or acquire Placing Shares under the Placing, references to a Placee in these terms and conditions are to each of the Placees who are a party to that joint agreement and their liability is joint and several.
The Brokers and the Company expressly reserve the right to modify the Placing (including, without limitation, its timetable and settlement) at any time before allocations are determined. The Placing is subject to the satisfaction of the conditions contained in the Placing Agreement and to the Placing Agreement not having been terminated.
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.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.
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(END) Dow Jones Newswires
August 19, 2021 11:35 ET (15:35 GMT)
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