Acquisition and Proposed Placing

RNS Number : 6340D

Lekoil Limited

27 October 2015

 



THIS ANNOUNCEMENT IS NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION IN WHOLE OR IN PART DIRECTLY OR INDIRECTLY IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION WHERE IT WOULD BE UNLAWFUL TO DO SO. OTHER RESTRICTIONS ARE APPLICABLE. PLEASE SEE THE IMPORTANT NOTICE AT THE END OF THE ANNOUNCEMENT 

27 October 2015

Lekoil Limited

("Lekoil" or the "Company")

Acquisition of Interest in OPL 325, Offshore Nigeria

Proposed Placing of New Ordinary Shares to raise up to US$40 million (approximately £26 million) 

Lekoil (AIM: LEK), the oil and gas exploration and production company with a focus on Nigeria and West Africa, is pleased to announce the acquisition of an indirect controlling interest in OPL 325, (located to the south of OPL 310 in the Dahomey Basin) offshore Nigeria, for an initial consideration of US$16.08 million, with other payments due at developmental milestones totalling US$24.12 million (the "OPL 325 Acquisition").  Lekoil considers that the OPL 325 Acquisition is consistent with its continuing strategy to assemble a balanced portfolio of oil and gas interests, including near term production (Otakikpo), appraisal (OPL 310) and high impact exploration assets in known basin (OPL 325).

The OPL 325 Acquisition will be financed out of a combination of the Company's existing financial resources and a placing of new ordinary shares in the Company to raise up to US$40 million before expenses which will be launched immediately following publication of this announcement (the "Placing"). The proceeds of the Placing will also be applied to other corporate uses, as described below.

Highlights

OPL 325 Acquisition

·      Lekoil Exploration and Production Nigeria Limited ("LEPNL") has acquired 88.57 per cent. of Ashbert Oil and Gas Limited ("Ashbert"), the operator of OPL 325, therefore receiving an entitlement to 62 per cent. of the equity of OPL 325

·      US$ 16.08 million signature bonus (the "Signature Bonus")  paid to the Nigerian Department of Petroleum Resources ("DPR")

o  Further amounts totalling US$24.12 million will be payable in instalments of $12.06 million each upon OML conversion (after discovery)  and on commencement of production

·      Exploration licence located to the south of  OPL 310, within the offshore  Dahomey basin wrench zone that straddles the western Niger Delta

·      OPL 325 was identified by the Company's proprietary Dahomey Basin study, which had earlier highlighted OPL 310

·      The Company has completed preliminary interpretation of existing 3D seismic on the licence.

·      Estimated in October 2015 (by Lumina Geophysical) "Lumina" to contain STOIIP of 5.7 billion barrels (P50) in several large prospects with associated channel complexes.

Placing

·      Placing to raise up to US$40 million (approximately £26 million) as part of Lekoil's overall funding strategy, discussions with commercial and financial institutions and debt providers progressing.

Corporate Update

OPL 310 Discussions

·      Advanced discussions continue with the administrator of Afren for the potential acquisition of its subsidiary which holds a 22.86 per cent. participating interest  and 40 per cent. economic interest in OPL 310 - if successfully concluded, the consideration will be met from existing financial resources and from the proceeds of the Placing

Otakikpo

·      First oil from Otakikpo-002 well flowed on 5 September 2015 and produced at a peak rate of 5,703 bopd for a period of 24 hours, significantly ahead of expectations.

Commenting, Lekan Akinyanmi, Lekoil's CEO, said, 

"The acquisition of an interest in OPL 325, nearby and on trend to our existing interest in OPL 310, represents an excellent low cost opportunity to extend our footprint in the overlooked but prospective Dahomey Basin in Nigeria.  It is precisely in line with our stated strategy to create a balanced portfolio of assets. With the completion of these acquisitions Lekoil will have acquired a substantial resource base in the Dahomey Basin. Our focus will now shift to de-risking these assets and crystallizing value for our investors. We consider the acquisition price to be very attractive and look forward working with our partners to unlock the significant value in this asset."

The OPL 325 Acquisition

Lekoil has entered into an agreement to acquire, via Lekoil Exploration and Production Nigeria limited ("LEPNL"), 88.57 per cent. of the issued share capital of Ashbert Limited, which is the operator of, and holds a 70 per cent. cumulative working interest in, the Production Sharing Contract of the OPL 325 licence  (the PSC)  (the "OPL 325 Acquisition Agreement").  Other OPL 325 licence partners are National Petroleum Development Company Ltd ("NPDC") (20 per cent. working interest) and Local Content Vehicle (10 per cent. net working interest).

The OPL 325 licence area, located in the offshore Dahomey Basin within the wrench zone that straddles the western Niger Delta, is a promising exploration licence located 50km to the south of OPL 310.  Lekoil has had access to 3D seismic data over 740km² and is encouraged by the results and its interpretation of the analysis.  Preliminary review of the prospects, based on an independent study by Lumina, prepared for Lekoil, suggests oil in place volumes of up to 5.7 billion barrels with an estimated 2 billion barrels recoverable based on analogues.  The Company has commenced detailed processing of existing 3D seismic data.

In connection with the agreement, Lekoil has entered into a Loan Agreement with Ashbert pursuant to which it has agreed to lend Ashbert an aggregate amount of US$40.2 to enable Ashbert to pay a US$16.08 million signature bonus to the DPR and further amounts totaling US$ 24.12 million which will be payable in equal instalments upon: the conversion of the OPL to an OML and upon first commercial production. 

In addition to the consideration described above, Lekoil will pay Ashbert Shareholders the following amounts:

·      A nominal amount for the 88.57 per cent. stake acquired in Ashbert;

·      US$0.5 million per year until the earliest of the date of first commercial production and the fifth anniversary of the date of the acquisition;

·      $0.24 million on DPR's confirmation of payment of the first signature bonus

·      US$0.95 million in total upon the signing of a Joint Operating Agreement and a Production Sharing Agreement in relation to OPL 325 as reimbursement of back-costs;

Lekoil is expected to retain control of operatorship on execution of definitive agreements and will lead the negotiation of the Production Sharing Contract terms.  In the short to medium term the Company expects to undertake the interpretation of exploration data, and subsequently leverage key strategic partnerships to develop the asset.

Corporate Update

Update on OPL 310 discussions

Lekoil continues to be in advanced discussions with the administrator of Afren regarding the potential acquisition of its subsidiary which holds a 22.86 per cent. participating interest and 40 per cent. economic interest in OPL 310 (the "Proposed Acquisition").  Should the Proposed Acquisition be successfully concluded, the Company intends to meet the considerations from its existing financial resources and from the proceeds of the Placing.

Otakikpo Marginal Field development

On 17 May 2014 Lekoil acquired a 40 per cent. economic interest in Otakikpo from Green Energy International Limited,, becoming the project's technical and financial partner. Since the acquisition Lekoil has undertaken a comprehensive review of surface and subsurface data progressed with development Phase 1. Phase 1 comprises the recompletions of the Otakikpo-002 and Otakikpo-003 wells with the installation of an Early Production Facility of 12,000 bopd capacity and export via shuttle tanker. First oil from Otakikpo-002 well flowed to surface on 5 September 2015, and over 24 hours produced at a peak rate of 5,703 bopd, significantly ahead of expectations.

Otakikpo-002 has been temporarily suspended to allow completion and testing of the upper C6 zone following which an official well-test programme will commence. The Company expects to finalise the evacuation infrastructure during the official well test period and determine the optimal production rate that maximises value from the well. The Company is also in advanced stages of talks regarding debt financing required for the development of this asset.

Use of Proceeds from the Placing

As previously announced, at 31 August 2015 Lekoil had cash balances totalling approximately US$32.4 million.  The gross proceeds of the Placing are expected to be US$40 million (approximately £26 million).  The Company has also been progressing discussions with offtakers and debt providers for additional funding and it has recently received a number of term sheets which it is currently reviewing before concluding on the optimal route forward.

The Company has a number of near-term opportunities, summarised below, which the net proceeds of the placing, and funds outlined above, will enable it to progress.

A summary of the proposed use of funds is outlined below:

Proposed use of funds	US$ million
OPL 325 Acquisition	16
General corporate and W/C purposes	24
Total uses	40

Details of the Placing

The Placing is subject to the terms and conditions set out in the Appendix (which forms part of this announcement, such announcement and Appendix together being the "Announcement").  The bookbuilding process will commence with immediate effect.  The timing of the closing of the book, pricing and allocations are at the discretion of Mirabaud and BMO Capital Markets as brokers and the Company.  Details on the number of Placing Shares offered and the price at which they are offered will be determined following the completion of the bookbuilding process.

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

It is intended that the Placing will be conducted in two stages, with 37,000,000 First Placing Shares being placed using the Directors' existing authority to allot shares for cash on a non pre-emptive basis, as granted at Lekoil's most recent AGM, and the Second Placing Shares being placed conditionally upon, inter alia, the passing of the Resolutions at the Extraordinary General Meeting to be held on 16 November 2015. Application will be made for the First Placing Shares and the Second Placing Shares to be admitted to trading on AIM and it is currently expected that trading in the First Placing Shares and, subject to the passing of the Resolutions, the Second Placing Shares, will commence on 2 November 2015 and 18 November 2015 respectively.

Your attention is drawn to the detailed terms and conditions of the Placing described in the Appendix to this Announcement (and which forms part of this Announcement).

For further information, please visit www.lekoil.com or contact:

Lekoil Limited Hamilton Esi, Corporate Communications	[phone]
Strand Hanson Limited  (Financial & Nominated Adviser) James Harris / James Spinney / Ritchie Balmer	[phone]
Mirabaud Securities LLP (Joint Corporate Broker) Peter Krens / Edward Haig-Thomas	[phone] [phone]
BMO Capital Markets Limited (Joint Corporate Broker) Rupert Newall / Neil Haycock / Thomas Rider	[phone]
Ladenburg Thalmann & Co. Inc. (US Placing Agent) Jim Hansen / Barry Steiner	[phone] [phone]
Rand Merchant Bank Liz Williamson	[phone]
Tavistock (Financial PR) Simon Hudson / Ed Portman Merlin Marr-Johnson (in Cape Town)	[phone] [phone]

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 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 these 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 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. The information contained in this Announcement is subject to change without notice and neither the Company nor BMO Capital Markets nor Mirabaud assumes any responsibility or obligation to update publicly or review any of the forward-looking statements contained herein.

The past performance of the Company and its securities is not, and should not be relied on as, a guide to future performance of the Company and its securities.

The material in this Announcement is for informational purposes only and does not constitute an offer of securities for sale in the United States or any other jurisdiction in which such an offer or solicitation is unlawful.  The Company's securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the Securities Act), or the laws of any state, and may not be offered or sold within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state laws.  No public offering of securities will be made in the United States.

THIS ANNOUNCEMENT, INCLUDING THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM THE UNITED STATES, AUSTRALIA, CANADA,  JAPAN, THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH THE SAME WOULD BE UNLAWFUL. PERSONS INTO WHOSE POSSESSION THIS ANNOUNCEMENT (INCLUDING THE APPENDICES) COMES ARE REQUIRED BY THE COMPANY, MIRABAUD AND BMO CAPITAL MARKETS TO INFORM THEMSELVES ABOUT AND TO OBSERVE ANY SUCH RESTRICTIONS.

MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN ARE FOR INFORMATION PURPOSES ONLY AND ARE ONLY ADDRESSED TO AND DIRECTED ONLY AT: (A) PERSONS IN MEMBER STATES OF THE EUROPEAN ECONOMIC AREA WHO ARE QUALIFIED INVESTORS AS DEFINED IN SECTION 86(7) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000, AS AMENDED, ("QUALIFIED INVESTORS") BEING PERSONS FALLING WITHIN THE MEANING OF ARTICLE 2(1)(E) OF THE EU PROSPECTUS DIRECTIVE (WHICH MEANS DIRECTIVE 2003/71/EC, AS AMENDED, AND INCLUDES ANY RELEVANT IMPLEMENTING DIRECTIVE MEASURE IN ANY MEMBER STATE) (THE PROSPECTUS DIRECTIVE); AND (B) IN THE UNITED KINGDOM, TO QUALIFIED INVESTORS WHO ARE PERSONS WHO (I) HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS FALLING WITHIN ARTICLE 19 OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005, AS AMENDED (THE ORDER); (II) ARE PERSONS FALLING WITHIN ARTICLE 49(2)(A) TO (D) ("HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC") OF THE ORDER; OR (III) ARE PERSONS TO WHOM IT MAY OTHERWISE BE LAWFULLY COMMUNICATED (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS RELEVANT PERSONS). THE PLACING SHARES ARE ONLY AVAILABLE TO RELEVANT PERSONS. NEITHER THE ANNOUNCEMENT NOR THESE TERMS AND CONDITIONS MAY BE ACTED UPON BY PERSONS WHO ARE NOT RELEVANT PERSONS.  ANY RECIPIENT OF THIS ANNOUNCEMENT WHO IS NOT A RELEVANT PERSON SHOULD TAKE NO OTHER ACTION.

Each of BMO Capital Markets Limited, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, and Mirabaud Securities LLP, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting for the Company and no one else in connection with the Transaction and will not be responsible or liable to anyone other than the Company for providing the protections afforded to its respective clients.

Ladenburg Thalmann, a broker-dealer registered with and regulated by the U.S. Securities and Exchange Commission (the SEC) and the U.S. Financial Industry Regulatory Authority (FINRA), is acting as placement agent in the United States for the Placing Shares. Ladenburg Thalmann (i) was not requested to (and did not) verify or confirm any statement contained in the document relating to the past or future financial performance, financials, operations or activities of the Company or its affiliates, the Company's products or any market information; (ii) did not conduct any investigation with respect to such information; and (iii) cannot guarantee the accuracy of such information.

The distribution of this Announcement and the Placing in certain jurisdictions may be restricted by law.  No action has been taken by the Company, BMO Capital Markets or Mirabaud or by any of their respective affiliates or agents or brokers that would permit the Placing or possession or distribution of this Announcement or any other offering or publicity material relating to the Placing in any jurisdiction where action for that purpose is required.  Persons into whose possession this Announcement becomes available are required by the Company, BMO Capital Markets or Mirabaud to inform themselves about, and to observe, such restrictions.

Neither the content of websites referred to in this Announcement, nor any hyperlinks on such websites is incorporated in, or forms part of, this Announcement.

Terms and Conditions of the Placing

IMPORTANT INFORMATION FOR PLACEES ONLY REGARDING THE PLACING.

THIS ANNOUNCEMENT, INCLUDING THIS APPENDIX (TOGETHER, THE "ANNOUNCEMENT") AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM THE UNITED STATES, CANADA, AUSTRALIA, JAPAN OR ANY JURISDICTION IN WHICH THE SAME WOULD BE UNLAWFUL. PERSONS INTO WHOSE POSSESSION THIS ANNOUNCEMENT COMES ARE REQUIRED BY THE COMPANY, MIRABAUD AND BMO TO INFORM THEMSELVES ABOUT AND TO OBSERVE ANY SUCH RESTRICTIONS.

THIS ANNOUNCEMENT DOES NOT ITSELF CONSTITUTE AN OFFER OR INVITATION TO UNDERWRITE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN THE COMPANY.

EACH PLACEE SHOULD CONSULT WITH ITS OWN ADVISERS AS TO LEGAL, TAX, BUSINESS AND RELATED ASPECTS OF A SUBSCRIPTION FOR THE PLACING SHARES.

Persons (including individuals, funds or otherwise) who have chosen to participate in the Placing, by making an oral or written offer to subscribe for Placing Shares will be deemed to have read and understood the Announcement, including this Appendix in its entirety and to be making such offer on the terms and conditions, and to be providing the representations, warranties, acknowledgements, and undertakings contained in this Appendix.

In this Appendix, unless the context otherwise requires, "Placee" means a Relevant Person (including individuals, funds or others) by whom or on whose behalf a commitment to subscribe for Placing Shares has been given. In particular, each such Placee represents, warrants and acknowledges that:

1.     it is a Relevant Person (as defined above) and undertakes that it will acquire, hold, manage or dispose of any Placing Shares that are allocated to it for the purposes of its business;

2.     in the case of any Placing Shares acquired by it as a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive, (i) the Placing Shares acquired by it in the Placing have not been acquired on behalf of, nor have they been acquired with a view to their offer or resale to, persons in any Member State of the European Economic Area which has implemented the Prospectus Directive other than Qualified Investors or in circumstances in which the prior consent of Mirabaud and BMO has been given to the offer or resale; or (ii) where Placing Shares have been acquired by it on behalf of persons in any member state of the EEA other than Qualified Investors, the offer of those Placing Shares to it is not treated under the Prospectus Directive as having been made to such persons;

3.     (a) (i) it is not in the United States and (ii) it is not acting for the account or benefit of a person in the United States, unless in the case of this clause (ii), it is acting with full investment discretion for such person or, if such person is a corporation or partnership, the person agreeing to purchase the Placing Shares is an employee of such person authorised to make such purchase; (b) it is a dealer or other professional fiduciary in the United States acting on a discretionary basis for a non-US person (other than an estate or trust) in reliance on Regulation S; (c) it is otherwise acquiring the Placing Shares in an "offshore transaction" meeting the requirements of Regulation S under the US Securities Act of 1933, as amended (the "Securities Act"); or (d) it is a "qualified institutional buyer" (a "QIB") (as defined in Rule 144A under the Securities Act) and it has duly executed an investor letter  in a form provided to it and delivered the same to Mirabaud and BMO or its affiliates;

4.     it is acquiring the Placing Shares for its own account or is acquiring the Placing Shares for an account with respect to which it exercises sole investment discretion and has the authority to make and does make the representations, warranties, indemnities, acknowledgements and agreements contained in this Announcement; and

5.     it understands (or, if acting for the account of another person, such person understands) the resale and transfer restrictions set out in this Appendix.

The Company, Mirabaud and BMO will rely upon the truth and accuracy of the foregoing representations, acknowledgements and agreements.

Details of the Placing

Mirabaud and BMO will today enter into an agreement with Lekoil (the "Placing Agreement") under which, subject to the conditions set out in that agreement, each of Mirabaud and BMO will agree to use its reasonable endeavours to procure subscribers for the Placing Shares at the placing price that is to be determined as set out below with certain institutional and other investors.

The Placing is conditional upon the Placing Agreement being entered into and becoming unconditional in all respects.

The Placing Shares will, when issued, rank pari passu in all respects with the existing issued Ordinary Shares, including the right to receive dividends and other distributions declared, made or paid following Admission.

Applications for admission to trading

Applications will be made to the London Stock Exchange for admission of both the First Placing Shares ("First Admission") and the Second Placing Shares ("Second Admission") to trading on AIM. It is expected that First Admission will become effective and that dealings in the First Placing Shares will commence on AIM at 8.00 a.m. on 2 November 2015 and that Second Admission will become effective and that dealings in the Second Placing Shares will commence on AIM at 8.00 a.m. on 18 November 2015.

Participation in, and principal terms of, the Placing

Mirabaud and BMO are arranging the Placing severally and not jointly or jointly and severally as agents for and on behalf of the Company. Participation in the Placing will only be available to Placees who may lawfully be, and are, invited to participate by Mirabaud and BMO.

The Placing Price and the number of Placing Shares to be issued will be agreed between Mirabaud, BMO and the Company following completion of a bookbuilding exercise by Mirabaud and BMO (the "Bookbuild"). The Placing Price and number of Placing Shares will be announced on a Regulatory Information Service following the completion of the Bookbuild.

Mirabaud and BMO will determine in their absolute discretion the extent of each Placee's participation in the Placing, which will not necessarily be the same for each Placee and this will be confirmed orally by Mirabaud and BMO as agents of the Company ("Confirmation"). No element of the Placing will be underwritten. Confirmation will constitute an irrevocable legally binding commitment upon that person (who will at that point become a Placee) to subscribe for the number of Placing Shares allocated to it at the Placing Price on the terms and conditions set out in this Appendix (a copy of the terms and conditions having been provided to the Placee prior to or at the same time as such oral confirmation) and in accordance with the Company's articles of association. For the avoidance of doubt, the Confirmation constitutes each Placee's irrevocable legally binding agreement, subject to the Placing Agreement not having been terminated, to pay the aggregate settlement amount for the Placing Shares to be subscribed for by that Placee regardless of the total number of Placing Shares (if any) subscribed for by any other investor(s).

Mirabaud and BMO reserve the right to scale back the number of Placing Shares to be subscribed by any Placee in the event of an oversubscription under the Placing. Mirabaud and BMO also reserve the right not to accept offers for Placing Shares or to accept such offers in part rather than in whole.

Each Placee will be required to pay to Mirabaud or BMO (as applicable), on the Company's behalf, the Placing Price for each Placing Share agreed to be acquired by it under the Placing in accordance with the terms set out herein. Each Placee's obligation to acquire and pay for Placing Shares under the Placing will be owed to Mirabaud or BMO and the Company. Each Placee has an immediate, separate, irrevocable and binding obligation, owed to Mirabaud or BMO, to pay to them (or as they may direct) in cleared funds an amount equal to the product of the Placing Price and the number of Placing Shares for which such Placee has agreed to subscribe. Each Placee will be deemed to have read and understood the Appendices in their entirety, to the participating in the Placing upon the terms and conditions contained in the Appendices, and to be providing the representations, warranties, agreements, acknowledgements and undertakings, in each case as contained in the Appendices. To the fullest extent permitted by law and applicable Financial Conduct Authority ("FCA") rules (the "FCA Rules"), (i) neither Mirabaud nor BMO, (ii) nor any of their respective directors, officers, employees or consultants, nor (iii) to the extent not contained within (i) or (ii), any person connected with Mirabaud or BMO as defined in the FCA Rules ((i), (ii) and (iii) being together "affiliates" and individually an "affiliate"), shall have any liability to Placees or to any person other than the Company in respect of the Placing.

Irrespective of the time at which a Placee's participation in the Placing is confirmed, settlement for all Placing Shares to be acquired pursuant to the Placing will be required to be made at the same time, on the basis explained below under 'Registration and Settlement'.

Completion of the Placing will be subject to the fulfilment of the conditions referred to below under 'Conditions of the Placing' and to the Placing not being terminated on the basis referred to below under 'Termination of the Placing Agreement'. In the event that the Placing Agreement is not entered into or does not otherwise become unconditional in any respect or, after having been entered into, is terminated, the Placing will not proceed and all funds delivered by the Placee to Mirabaud or BMO in respect of the Placee's participation will be returned to the Placee at the Placee's risk without interest.

By participating in the Placing, each Placee agrees that its rights and obligations in respect of the Placing will terminate only in the circumstances described below and will not otherwise be capable of rescission or termination by the Placee.

By participating in the Placing, each Placee is deemed to have read and understood this Announcement, including the Appendices, in its entirety and to be making such offer on the terms and conditions, and to be providing the representations, warranties, acknowledgements, and undertakings contained in the Appendices.

To the fullest extent permissible by law, neither the Company, Mirabaud, BMO nor any of their affiliates shall have any liability to Placees (or to any other person whether acting on behalf of a Placee or otherwise). In particular, neither Mirabaud, nor BMO nor any of their affiliates shall have any liability (including to the extent permissible by law, any fiduciary duties) in respect of Mirabaud's or BMO's conduct of the Bookbuild or of such alternative method of effecting the Placing as Mirabaud, BMO the Company may agree.

Conditions of the Placing

The obligations of Mirabaud and BMO under the Placing Agreement in respect of the First Placing Shares are conditional on, amongst other things:

(a)    the Company having complied with its obligations under the Placing Agreement (to the extent that such obligations fall to be performed prior to First Admission); and

(b)    First Admission having occurred not later than 8.00 a.m. 2 November 2015 or such later date as the Company, Mirabaud and BMO may agree, but in any event not later than 8.00 a.m. on 18 November 2015.

The obligations of Mirabaud and BMO under the Placing Agreement in respect of the Second Placing Shares are conditional on, amongst other things:

(a)    the Company having complied with its obligations under the Placing Agreement (to the extent that such obligations fall to be performed prior to Second Admission);

(b)    First Admission having become effective;

(c)     the passing of the Resolutions at the Extraordinary General Meeting of the Company being held on or about 16 November 2015; and

(d)    Second Admission having occurred not later than 8.00 a.m. on 18 November 2015 or such later date as the Company, Mirabaud and BMO  may agree, but in any event not later than 8.00 a.m. on 30 November 2015.

If (i) any of the conditions contained in the Placing Agreement in relation to the First Placing Shares are not fulfilled or waived by Mirabaud and BMO by the respective time or date where specified, (ii) any of such conditions becomes incapable of being fulfilled or (iii) the Placing Agreement is terminated in the circumstances specified below, the Placing will not proceed and the Placee's rights and obligations hereunder in relation to the First 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.

If (i) any of the conditions contained in the Placing Agreement in relation to the Second Placing Shares are not fulfilled or waived by Mirabaud or BMO by the respective time or date where specified, (ii) any of such conditions becomes incapable of being fulfilled or (iii) the Placing Agreement is terminated in the circumstances specified below, the placing of the Second Placing Shares will not proceed and the Placee's rights and obligations hereunder in relation to the Second 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.

Each of Mirabaud and BMO, at its discretion and upon such terms as it thinks fit, may waive compliance by the Company 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 Mirabaud, BMO and the Company or any other person shall have any liability to any Placee (or to any other person whether acting on behalf of a Placee or otherwise) in respect of any decision they may make as to whether or not to waive or to extend the time and/or the date for the satisfaction of any condition to the Placing nor for any decision they may make as to the satisfaction of any condition or in respect of the Placing generally, and by participating in the Placing each Placee agrees that any such decision is within the absolute discretion of Mirabaud and BMO.

Termination of the Placing Agreement

Each of Mirabaud and BMO is entitled (but after, where practicable, having consulted with the Company) at any time before Admission, to terminate the Placing Agreement in relation to its obligations in respect of the Placing Shares (save to the extent already performed) by giving notice to the Company if, amongst other things:

(a)    the Company fails, in any material respect, to comply with any of its obligations under the Placing Agreement; or

(b)    it comes to the notice of Mirabaud or BMO that any statement contained in the Circular, the investor presentation (the "Presentation") issued in connection with the Placing or any announcement issued in connection with the Placing was untrue, incorrect or misleading at the date of such Presentation or such announcement or has become untrue, incorrect or misleading in each case in any respect which Mirabaud or BMO (acting reasonably) considers to be material in the context of the Placing or that any matter which Mirabaud or BMO considers to be material in the context of the Placing has arisen which would, if the Placing were made at that time, constitute a material omission therefrom; or

(c)     any of the warranties given by the Company in the Placing Agreement has ceased to be true and accurate in any respect which Mirabaud or BMO (acting reasonably) considers to be material in the context of the Placing by reference to the facts subsisting at the time when notice to terminate is given; or

(d)    there happens, develops or comes into effect: i) a general moratorium on commercial banking activities in London declared by the relevant authorities or a material disruption in commercial banking or securities settlement or clearance services in the United Kingdom; or ii) the outbreak or escalation of hostilities or acts of terrorism involving the United Kingdom or any other relevant jurisdiction the laws or regulations of which apply to a member of the Group or the Group's assets ("Relevant Jurisdiction") or the declaration by the United Kingdom or any other Relevant Jurisdiction of a national emergency or war or any other occurrence of any kind which in any such case (by itself or together with any other such occurrence) in the reasonable opinion of Mirabaud or BMO is likely to materially and adversely affect the market's position or prospects of the Group taken as a whole; or iii) any other crisis of international or national effect or any change in any currency exchange rates or controls or in any financial, political, economic or market conditions or in market sentiment which, in any such case, in the reasonable opinion of Mirabaud or BMO is materially adverse to the Placing.

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

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

No prospectus

No offering document, prospectus or admission document has been or will be submitted to be approved by the FCA or submitted to the London Stock Exchange in relation to the Placing and Placees' commitments will be made solely on the basis of the information contained in this Announcement (including the Appendices) released by the Company today, and subject to the further terms set forth in the 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 (including the Appendices) 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, Mirabaud, BMO or any other person and none of Mirabaud nor BMO nor the Company nor any other person will be liable for any Placee's decision to participate in the Placing based on any other information, representation, warranty or statement which the Placees may have obtained or received. 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 shall exclude the liability of any person for fraudulent misrepresentation.

Registration and settlement

Settlement of transactions in the Placing Shares through DIs following Admission will take place within the system administered by Euroclear UK & Ireland Limited ("CREST"), subject to certain exceptions. The Company reserves the right to require settlement for and delivery of the Placing Shares (or a portion thereof) to Placees in certificated form if, in the opinion of Mirabaud or BMO, delivery or settlement is not possible or practicable within the CREST system or would not be consistent with the regulatory requirements in the Placee's jurisdiction.

Participation in the Placing is only available to persons who are invited to participate in it by Mirabaud or BMO.

A Placee's commitment to acquire a fixed number of Placing Shares under the Placing will be agreed orally with Mirabaud or BMO. Such agreement will constitute a legally binding commitment on such Placee's part to acquire that number of Placing Shares at the Placing Price on the terms and conditions set out or referred to in the Appendices and subject to the Company's Articles of Association.

Following the close of the Bookbuild, each Placee allocated Placing Shares in the Placing will be sent a trade confirmation in accordance with the standing arrangements in place with Mirabaud and/or BMO, stating the number of First Placing Shares and Second Placing Shares allocated to it at the Placing Price, the aggregate amount owed by such Placee to Mirabaud and/or BMO and settlement instructions. 

Each Placee agrees that it will do all things necessary to ensure that delivery and payment is completed in accordance with the standing CREST or certificated settlement instructions that it has in place with Mirabaud or BMO. Settlement should be through Mirabaud against CREST ID: 834, account designation: CLEARING or, as the case may be, through BMO against CREST ID: BIMAY, account designation: TRADING. For the avoidance of doubt, Placing allocations will be booked with a trade date of 28 October 2015 and settlement date of 2 November 2015 for the First Placing Shares and a settlement date of 18 November 2015 for the Second Placing Shares.

The Company will deliver DIs in respect of the Placing Shares to the CREST accounts operated by Mirabaud or BMO as agents for the Company and Mirabaud or BMO will enter their delivery (DEL) instruction into the CREST system. The input to CREST by a Placee of a matching or acceptance instruction will then allow delivery of DIs in respect of the relevant Placing Shares to that Placee against payment. The DIs will be held as nominee for the relevant Placee.

It is expected that settlement will take place on 2 November 2015 for the First Placing Shares and 18 November 2015 for the Second Placing Shares, on a delivery versus payment basis.

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 Mirabaud or BMO.

Each Placee is deemed to agree that, if it does not comply with these obligations, the Company may sell any or all of the Placing Shares allocated to that Placee on such Placee's behalf and retain from the proceeds, for the Company's account and benefit, an amount equal to the aggregate amount owed by the Placee plus any interest due. The relevant Placee will, however, remain liable for any shortfall below the aggregate amount owed by it and may be required to bear any stamp duty or stamp duty reserve tax (together with any interest or penalties) which may arise upon the sale of such Placing Shares on such Placee's behalf.

If Placing Shares or DIs are to be delivered to a custodian or settlement agent, Placees should ensure that the trade confirmation is copied and delivered immediately to the relevant person within that organisation. Insofar as Placing Shares or DIs 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. Placees will not be entitled to receive any fee or commission in connection with the Placing.

Representations and warranties

By participating in the Placing, each Placee (and any person acting on such Placee's behalf) acknowledges, undertakes, represents, warrants and agrees (as the case may be) with each of BMO and Mirabaud (in their capacity as joint brokers and agents of the Company) and the Company, in each case as a fundamental term of their application for Placing Shares, the following:

That it:

1.      represents and warrants that it has read this Announcement, including the Appendix, in its entirety and that its acquisition of Placing Shares is subject to and based upon all the terms, conditions, representations, warranties, acknowledgements, agreements and undertakings and other information contained herein and undertakes not to redistribute or duplicate this Announcement;

2.      acknowledges that it has received this Announcement solely for its use and has not redistributed or duplicated it;

3.      acknowledges and agrees that no offering document, prospectus or admission document has been or will be prepared in connection with the Placing and represents and warrants that it has not received a prospectus, admission document or other offering document in connection with the Placing or the Placing Shares;

4.      acknowledges that its participation in the Placing shall also be subject to the provisions of the Placing Agreement and the memorandum and articles of association of the Company in force both before and immediately after Admission;

5.      acknowledges that the ordinary shares in the capital of the Company are admitted to trading on AIM, and the Company is therefore required to publish certain business and financial information in accordance with the rules and practices of AIM (collectively, the "Exchange Information"), which includes a description of the nature of the Company's business and the Company's most recent balance sheet and profit and loss account and that it is able to obtain or access such Exchange Information without undue difficulty and is able to obtain access to such information or comparable information concerning any other publicly traded company without undue difficulty;

6.      acknowledges that none of Mirabaud, nor BMO nor the Company nor any of their respective affiliates or any person acting on behalf of any of them has provided, and will not provide, it with any material regarding the Placing Shares or the Company other than this Announcement; nor has it requested any of Mirabaud, BMO, the Company, any of their respective affiliates or any person acting on behalf of any of them to provide it with any such information;

7.      acknowledges that the content of this Announcement is exclusively the responsibility of the Company and that neither Mirabaud, nor BMO nor any person acting on their behalf has or shall have any liability for any information, representation or statement contained in this Announcement or any information previously published by or on behalf of the Company and will not be liable for any Placee's decision to participate in the Placing based on any information, representation or statement contained in this Announcement or otherwise. Each Placee further represents, warrants and agrees that the only information on which it is entitled to rely and on which such Placee has relied in committing itself to subscribe for the Placing Shares is contained in this Announcement and any information previously published by the Company by notification to a Regulatory Information Service, 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 Mirabaud, BMO or the Company or their respective affiliates and none of Mirabaud nor BMO nor the Company nor their respective affiliates 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 on its own investigation of the business, financial or other position of the Company in deciding to participate in the Placing;

8.      represents and warrants that it has neither received nor relied on any inside information (as defined in section 118C of the Financial Services and Markets Act 2000, as amended ("FSMA")) concerning the Company in accepting this invitation to participate in the Placing;

9.      acknowledges that none of Mirabaud nor BMO nor any person acting on their behalf nor any of their respective affiliates has or shall have any liability for 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;

10.    represents and warrants that it has complied with its obligations under the Criminal Justice Act 1993, section 118 of FSMA and in connection with money laundering and terrorist financing under the Proceeds of Crime Act 2002, the Terrorism Act 2000 (as amended), the Terrorism Act 2006 and the Money Laundering Regulations 2007 (the "Regulations") and any related or similar rules, regulations or guidelines, issued, administered or enforced by any government agency having jurisdiction in respect thereof (the "Regulations") and the Money Laundering Sourcebook of the FCA (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;

11.    if a financial intermediary, as that term is used in Article 3(2) of EU Directive 2003/71/EC, as amended (the "Prospectus Directive") (including any relevant implementing measure in any member state), represents and warrants that the Placing Shares subscribed for by it in the Placing will not be acquired on a non-discretionary basis on behalf of, nor will they be acquired with a view to their offer or resale to, persons in a member state of the European Economic Area which has implemented the Prospectus Directive other than to qualified investors, or in circumstances in which the prior consent of Mirabaud or BMO has been given to the proposed offer or resale;

12.    represents and warrants that it has not offered or sold and will not offer or sell any Placing Shares to persons in the United Kingdom, except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their business or otherwise in circumstances which have not resulted and which will not result in an offer to the public in the United Kingdom within the meaning of section 85(1) of FSMA;

13.    represents and warrants that it has not offered or sold and will not offer or sell any Placing Shares to persons in the European Economic Area prior to Admission except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their business or otherwise in circumstances which have not resulted in and which will not result in an offer to the public in any member state of the European Economic Area within the meaning of the Prospectus Directive;

14.    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;

15.    represents and warrants that it has complied and will comply with all applicable provisions of FSMA with respect to anything done by it in relation to the Placing Shares in, from or otherwise involving, the United Kingdom;

16.    represents and warrants that it is a person falling within Article 19(5) and/or Article 49(2)(a) to (d) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended, or is a person to whom this Announcement may otherwise be lawfully communicated;

17.    acknowledges that any offer of Placing Shares may only be directed at persons in member states of the European Economic Area who are "qualified investors" within the meaning of Article 2(1)(e) of the Prospectus Directive and represents and agrees that it is such a qualified investor;

18.    represents and warrants that it and any person acting on its behalf is entitled to subscribe for Placing Shares under the laws of all relevant jurisdictions which apply to it and that it has all necessary capacity and has obtained all necessary consents and authorities 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, and that its subscription of the Placing Shares will be in compliance with applicable laws and regulations in the jurisdiction of its residence, the residence of the Company, or otherwise.

19.    acknowledges and agrees that the Placing Shares have not been and will not be registered under the Securities Act or with any securities regulatory authority of any state or jurisdiction of the United States, or the relevant Canadian, Japanese, Australian, South African or Irish securities legislation and therefore the Placing Shares may not be offered, sold, transferred or delivered directly or indirectly into the United States, Canada, Japan, Australia, the Republic of South Africa or the Republic of Ireland or their respective territories and possessions, except subject to limited exemptions;

20.    warrants that it has complied with all relevant laws of all relevant territories, obtained all requisite governmental or other consents which may be required in connection with the Placing Shares, complied with all requisite formalities and that it has not taken any action or omitted to take any action which will or may result in Mirabaud, BMO, the Company or any of their respective directors, officers, agents, employees or advisers acting in breach of the legal or regulatory requirements of any territory in connection with the Placing;

21.    acknowledges and agrees that its purchase of Placing Shares does not trigger, in the jurisdiction in which it is resident or located: (i) any obligation to prepare or file a prospectus or similar document or any other report with respect to such purchase; (ii) any disclosure or reporting obligation of the Company; or (iii) any registration or other obligation on the part of the Company;

22.    undertakes that it (and any person acting on its behalf) will make payment for the Placing Shares allocated to it in accordance with this Announcement on the due time and date set out herein, failing which the relevant Placing Shares may be placed with other subscribers or sold as each of Mirabaud or BMO may in its discretion determine and without liability to such Placee;

23.    acknowledges that none of Mirabaud nor BMO nor any of their affiliates, nor any person acting on behalf of any of them, 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 a client of Mirabaud or BMO for the purposes of the Placing and that neither Mirabaud nor BMO has any duties or responsibilities to it for providing the protections afforded to its clients or for providing advice in relation to the Placing nor in respect of any representations, warranties, undertakings or indemnities contained in the Placing Agreement nor for the exercise or performance of any of its rights and obligations thereunder including any rights to waive or vary any conditions or exercise any termination right;

24.    undertakes that the person whom it specifies for registration as holder of the DIs will be (i) itself or (ii) its nominee, as the case may be. None of Mirabaud nor BMO 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, Mirabaud and BMO in respect of the same on the basis that the DIs will be allotted to the CREST stock accounts of Mirabaud or BMO who will hold them as nominee on behalf of such Placee until settlement in accordance with its standing settlement instructions;

25.    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 agreements shall be governed by and construed in accordance with the laws of England and Wales and it submits (on behalf of itself and on behalf of any person on whose behalf it is acting) to the exclusive jurisdiction of the English courts as regards any claim, dispute or matter arising out of any such contract, except that enforcement proceedings in respect of the obligation to make payment for the Placing Shares (together with any interest chargeable thereon) may be taken by the Company, Mirabaud or BMO 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;

26.    acknowledges that each of Mirabaud and BMO and their affiliates will rely upon the truth and accuracy of the representations, warranties and acknowledgements set forth herein and which are irrevocable and it irrevocably authorises each of Mirabaud and BMO to produce this Announcement, pursuant to, in connection with, or as may be required by any applicable law or regulation, administrative or legal proceeding or official inquiry with respect to the matters set forth herein;

27.    agrees to indemnify on an after tax basis and hold the Company, Mirabaud and BMO 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 the Appendices and further agrees that the provisions of the Appendices shall survive after completion of the Placing;

28.    represents and warrants that it will acquire any Placing Shares subscribed for by it for its account or for one or more accounts as to each of which it exercises sole investment discretion and it has full power to make the acknowledgements, representations and agreements herein on behalf of each such account;

29.    acknowledges that its commitment to subscribe for Placing Shares on the terms set out herein and in the relevant contract notes 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. The foregoing representations, warranties and confirmations are given for the benefit of the Company, Mirabaud and UBS. The agreement to settle a Placee's subscription (and/or the subscription of a person for whom such Placee is contracting as agent) free of stamp duty and stamp duty reserve tax depends on the settlement relating only to the subscription by it and/or such person direct from the Company for the Placing Shares in question. Such agreement assumes, and is based on a warranty from each  Placee, that neither it, nor the person specified by it for registration as holder, of Placing Shares is, or is acting as nominee or agent for, and that the Placing Shares will not be allotted to, a person who is or may be liable to stamp duty or stamp duty reserve tax under any of sections 67, 70, 93 and 96 of the Finance Act 1986 (depositary receipts and clearance services). If there are any such arrangements, or the settlement relates to any other dealing in the Placing Shares, stamp duty or stamp duty reserve tax may be payable. In that event the Placee agrees that it shall be responsible for such stamp duty or stamp duty reserve tax, and none of the Company, nor Mirabaud nor UBS shall be responsible for such stamp duty or stamp duty reserve tax. If this is the case, each Placee should seek its own advice and notify Mirabaud or UBS accordingly;

30.    understands that no action has been or will be taken by any of the Company, Mirabaud, BMO or any person acting on behalf of the Company, Mirabaud or BMO 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;

31.    in making any decision to subscribe for the Placing Shares, confirms that it has knowledge and experience in financial, business and international investment matters as is required to evaluate the merits and risks of subscribing for the Placing Shares. It further confirms that it is experienced in investing in securities of this nature in this sector and is aware that it may be required to bear, and is able to bear, the economic risk of, and is able to sustain a complete loss in connection with the Placing. It further confirms that it relied on 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;

32.    represents and warrants that it has (a) made its own assessment and satisfied itself concerning legal, regulatory, tax, business and financial considerations in connection herewith to the extent it deems necessary; (b) had access to review publicly available information concerning the Company that it considers necessary or appropriate and sufficient in making an investment decision; (c) reviewed such information as it believes is necessary or appropriate in connection with its subscription of the Placing Shares; and (d) made its investment decision based upon its own judgment, due diligence and analysis and not upon any view expressed or information provided by or on behalf of Mirabaud or BMO;

33.    understands and agrees that it may not rely on any investigation that Mirabaud or BMO or any person acting on their behalf may or may not have conducted with respect to the Company, or the Placing and neither Mirabaud nor BMO has made any representation to it, express or implied, with respect to the merits of the Placing, the subscription for the Placing Shares, or as to the condition, financial or otherwise, of the Company, or as to any other matter relating thereto, and nothing herein shall be construed as a recommendation to it to subscribe for the Placing Shares. It acknowledges and agrees that no information has been prepared by Mirabaud, BMO or the Company for the purposes of this Placing;

34.    accordingly it acknowledges and agrees that it will not hold Mirabaud or BMO or any of their affiliates or any person acting on their behalf responsible or liable for any misstatements in or omission from any publicly available information relating to the Company or information made available (whether in written or oral form) in presentations or as part of roadshow discussions with investors relating to the Company (the "Information") and that neither Mirabaud nor BMO nor any person acting on behalf of Mirabaud or BMO makes any representation or warranty, express or implied, as to the truth, accuracy or completeness of such Information or accepts any responsibility for any of such Information; and

35.    if the Placing Shares were offered to it in the United States, represents and warrants that in making its investment decision, (i) it has consulted its own independent advisers or otherwise has satisfied itself concerning, without limitation, the effects of United States federal, state and local income tax laws and foreign tax laws generally and the US Employee Retirement Income Security Act of 1974, the US Investment Company Act of 1940 and the Securities Act, (ii) it has received all information (including the business, financial condition, prospects, creditworthiness, status and affairs of the Company, the Placing and the Placing Shares, as well as the opportunity to ask questions) concerning the Company, the Placing and the Placing Shares that it believes is necessary or appropriate in order to make an investment decision in respect of the Company and the Placing Shares, (iii) it is aware and understands that an investment in the Placing Shares involves a considerable degree of risk and no US federal or state or non-US agency has made any finding or determination as to the fairness for investment or any recommendation or endorsement of the Placing Shares, and (iv) it is able to bear the economic risk of an investment in the Placing Shares, is able to sustain a complete loss of the investment in the Placing Shares and has no need for liquidity with respect to its investment in the Placing Shares;

36.    understands that the Placing Shares have not been and will not be registered under the Securities Act or with any securities regulatory authority  of any state or other jurisdiction of the United States, and accordingly, may not be offered or sold or otherwise transferred in the United States except pursuant to a registration statement under the Securities Act or an exemption from the registration requirements of the Securities Act and, in connection with any such transfer, the Company shall be provided, as a condition to transfer, with a legal opinion of counsel, in form and by counsel reasonably satisfactory to the Company, that no such Securities Act registration is or will be required and with appropriate certifications by the transferee as to appropriate matters.

37.    it is not a Plan (which term includes (a) employee benefit plans that are subject to Section 406 of the US Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or plans, individual retirement accounts and other arrangements that are subject to Section 4975 of the US Internal Revenue Code of 1986, as amended (the "Code"), (b) plans, individual retirement accounts and other arrangements that are subject to provisions under applicable US federal, state, local or other laws or regulations that are substantially similar to Section 406 of the ERISA or Section 4975 of the Code ("Similar Laws") and (c) entities the underlying assets of which are considered to include "plan assets" of such plans, accounts and arrangements) and are not purchasing the Placing Shares on behalf of, or with the "plan assets" of, any Plan.

38.    it has read and understood the following regarding the Company's status as a passive foreign investment company ("PFIC") for US federal income tax purposes:

The Company may be considered a PFIC for US federal income tax purposes. If this is the case, any investor in the Company's Ordinary Shares deemed to be a "US holder" for US federal income tax purposes could be subject to material adverse US federal income tax consequences. Consequently, each such investor should consult its own tax advisor regarding the Company's possible PFIC status.

39.    if Placees are purchasing the Placing Shares outside the United States, each Placee (and any person acting on such Placee's behalf) agrees, represents and warrants as follows:

a.   it is aware that the Placing Shares are being offered outside the United States in reliance on Regulation S promulgated under the Securities Act;

b.   it is, at the time of the offer and acceptance of the Placing Shares, outside the United States for the purposes of Regulation S; and

c.   it did not purchase or otherwise acquire the Placing Shares based on or due to directed selling efforts (as defined in Rule 902 under the Securities Act), including based on an advertisement in a publication with a general circulation in the United States, nor has it seen or been aware of any activity that, to its knowledge, constitutes directed selling efforts in the United States.

40.    for Placees that are located in the United States, each such Placee (and any person acting on such Placee's behalf) agrees, represents and warrants as follows:

a.   it is "qualified institutional buyer" (a "QIB"), as defined in Rule 144A under the Securities Act, and (i) if acquiring the Placing Shares as a fiduciary or agent for one or more investor accounts, each owner of such account is a QIB, the Placee has full investment discretion with respect to each account, and has full power and authority to make the acknowledgements, representations and agreements contained herein on behalf of each owner of such account; and (ii) is acquiring the Placing Shares for its own account, or for the account of a QIB for which it has full investment discretion, in each case for investment purposes and not with a view to, or for offer or sale in connection with, any distribution (within the meaning of the United States securities laws) of such Placing Shares;

b.   it agrees that the Company may require a certification from it in support of any transfer, in form and substance satisfactory to the Company, and agrees that the Company, the registrar, CREST or any transfer agent may reasonably require additional evidence or documentation supporting compliance with applicable securities laws, and prior to any sale or transfer, the Company may require the delivery of such certifications, notifications, agreements and warranties and legal opinions of duly qualified counsel as it may reasonably require to confirm that the proposed sale or other transfer complies with the foregoing restrictions;

c.   it acknowledges that 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 US securities laws, and to require any such person that has not satisfied the Company that such person is holding appropriately under US securities laws to transfer such Placing Shares or interests therein immediately to the Company;

d.   it is purchasing the Placing Shares for its own account or for one or more investment accounts for which it is acting as a fiduciary or agent, in each case for investment only, and not with a view to or for sale or other transfer in connection with any distribution of the Placing Shares in any manner that would violate the Securities Act or otherwise cause the Company's assets to become subject to ERISA;

e.   it understands and acknowledges that neither the Company nor any of its respective affiliates, makes any representation as to the availability of any exemption under the Securities Act for the reoffer, resale, pledge or transfer of the Placing Shares;

f.    it agrees that the Placing Shares are "restricted securities" for US securities law purposes which may not be deposited into any unrestricted depositary facility established or maintained by a deposited bank. As such, it agrees not to offer or sell the Placing Shares to any person other than in compliance with the following restrictions which apply to all its Placing Shares and which shall be affixed in the form of a legend to any certificates of Placing Shares:

"THE SECURITIES REPRESENTED BY THIS CERTIFICATE (OR ITS PREDECESSOR) HAVE NOT BEEN REGISTERED UNDER THE US SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION IN THE UNITED STATES, AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD,  PLEDGED, HEDGED OR OTHERWISE TRANSFERRED, EXCEPT (A) IN AN OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR 904 OF REGULATION S UNDER THE SECURITIES ACT (AND IS NOT ACTING IN A PREARRANGED TRANSACTION RESULTING IN THE RESALE OF THESE SECURITIES INTO THE UNITED STATES); (B) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT; (C) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT; OR (D) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, SUBJECT, IN THE CASES OF CLAUSES (A), (B) AND (C), TO THE RIGHT OF THE ISSUER TO OBTAIN, IF THE ISSUER SO REQUESTS, AN OPINION, IN FORM AND SUBSTANCE AND FROM COUNSEL SATISFACTORY TO THE ISSUER AT THE EXPENSE OF THE HOLDER OF THIS CERTIFICATE, WHICH PROVIDES THAT SUCH OFFER, SALE, PLEDGE, HEDGE OR TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT AND ALL APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION.

EXCEPT AS OTHERWISE DETERMINED BY THE ISSUER, THE SECURITIES REPRESENTED BY THIS CERTIFICATE (OR ITS PREDECESSOR) MAY NOT BE DEMATERIALISED INTO CREST OR ANY OTHER PAPERLESS SYSTEM UNLESS THE PARTY REQUESTING SUCH DEMATERIALISATION FIRST OBTAINS A LETTER FROM THE TRANSFERREE STATING THAT SUCH TRANSFERREE IS NOT ACTING IN A PREARRANGED TRANSACTION RESULTING IN THE RESALE OF THESE SECURITIES INTO THE UNITED STATES OR MAKES SUCH OTHER REPRESENTATIONS REQUESTED BY THE ISSUER."

The Placee agrees, on its own behalf and on behalf of any accounts for which the Placee is acting, that if the Placee should offer, resell, pledge or otherwise transfer any Placing Shares, it will do so only (i) in an offshore transaction meeting the requirements of Rule 903 or 904 of Regulation S under the Securities Act (and not in a prearranged transaction resulting in the resale of such Placing Shares into the US), (ii) in a transaction meeting the requirements of Rule 144 under the Securities Act, (iii) in accordance with another exemption from the registration requirements of the Securities Act, or (iv) pursuant to an effective registration statement under the Securities Act, provided that the Placee notify the Company of such proposed transaction and that the Placee intends to make such sale in accordance with the terms of this paragraph, and that, such offer, resale, pledge or transfer must, and will, be made in accordance with any applicable securities laws of any US state or other jurisdiction of the US. The Placee understands and acknowledges that any offer, resale, pledge or transfer made other than in compliance with the restrictions contained in this paragraph may not be recognised by the Company;

g.   the DIs shall only be eligible for settlement through CREST if approved by the Company and if requested by the Company, the purchaser provides a signed letter addressed to the Company, containing certain representations regarding compliance with United States securities laws;

h.   it has not purchased the Placing Shares as a result of "general solicitation" or "general advertising" (within the meaning of Rule 502(c) under the Securities Act), including advertisements, articles, research reports, notices or other communications published  in any newspaper, magazine, on  a website or in or on any similar media, or broadcast over radio or television, or any seminar or meeting whose attendees have been invited by general solicitation or general advertising; and

i.    it will inform each purchaser who purchases the Placing Shares from it of the transfer restrictions stated herein and that if in the future such purchaser of Placing Shares decides to offer, resell, pledge, or otherwise transfer such Placing Shares, any offer, resale or transfer must be made in compliance with the Securities Act.

The foregoing representations, warranties and confirmations are given for the benefit of the Company, Mirabaud and BMO.

In addition, Placees should note that they will be liable for any stamp duty and all other stamp, issue, securities, transfer, registration, documentary or other duties or taxes (including any interest, fines or penalties relating thereto) payable outside the United Kingdom by them or any other person on the subscription by them of any Placing Shares or the agreement by them to subscribe for any Placing Shares.

Each Placee and any person acting on behalf of each Placee acknowledges and agrees that either Mirabaud or BMO, or any of their affiliates may, at their absolute discretion, agree to become a Placee in respect of some or all of the Placing Shares.

When a Placee or person acting on behalf of the Placee is dealing with Mirabaud or BMO, any money held in an account with Mirabaud or BMO 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 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 Mirabaud or BMO money in accordance with the client money rules and will be used by Mirabaud or BMO in the course of its own business; and the Placee will rank only as a general creditor of Mirabaud or BMO.

All times and dates in this Announcement may be subject to amendment. Mirabaud or BMO shall notify the Placees and any person acting on behalf of the Placees of any changes.

The past performance of the Company and its securities is not, and should not be relied on as, a guide to the future performance of the Company and its securities. Persons needing advice should consult an independent financial adviser.

Definitions

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

"Admission" admission of the First Placing Shares (First Admission) or the Second Placing Shares (Second Admission), as the case may be, to trading on AIM and such admission becoming effective in accordance with Rule 6 of the AIM Rules for Companies;

"AIM" the AIM market operated by the London Stock Exchange;

"AIM Rules for Companies" the London Stock Exchange's rules and guidance notes contained in its "AIM Rules for Companies" publication relating to companies whose securities are traded on AIM, as amended from time to time;

"Announcement" means this announcement (including the appendix to this announcement);

"Articles" the articles of association of the Company in force on the date hereof;

"BMO" BMO Capital Markets Limited of 95 Queen Victoria Street, London EC4V 4HG;

"Board" or "Directors" the directors of the Company, or any duly authorised committee thereof;

"Circular" the Shareholder circular to be published in connection with the Extraordinary General Meeting;

"Company" Lekoil Limited;

"CREST" the computerised settlement system (as defined in the CREST Regulations) operated by Euroclear which facilitates the transfer of title to shares in uncertificated form;

"CREST Regulations" the Uncertificated Securities Regulations 2001 (SI 2001/3755) including any enactment or subordinate legislation which amends or supersedes those regulations and any applicable rules made under those regulations or any such enactment or subordinate legislation for the time being in force; 

"DIs" the depositary interests representing Ordinary Shares which may be traded through CREST in uncertificated form;

"Euroclear" Euroclear UK & Ireland Limited, a company incorporated in England & Wales with registered number 02878738, being the operator of CREST;

"Extraordinary General Meeting" or "EGM" the extraordinary general meeting of the Company to be held on or about 16 November 2015;

"Firm Placing" the placing of the First Placing Shares at the Placing Price pursuant to the Placing Agreement;

"First Placing Shares" the 37,000,000 new Ordinary Shares to be issued pursuant to the Firm Placing or as the first tranche of the Placing;

"Form of Proxy" the form of proxy for use at the Extraordinary General Meeting;

"FCA" the Financial Conduct Authority in its capacity as the competent authority for the purposes of Part VI of FSMA;

"FSMA" the Financial Services and Markets Act 2000 (as amended);

"Group" the Company together with its subsidiaries from time to time;

"London Stock Exchange" London Stock Exchange plc;

"Mirabaud" Mirabaud Securities LLP of 33 Grosvenor Place, London SW1X 7HY;

"Ordinary Shares" the ordinary shares of US$0.00005 each in the share capital of the Company;

"Placing" the placing of the Placing Shares at the Placing Price pursuant to the terms of the Placing Agreement;

"Placing Agreement" the conditional agreement to be dated 27 October 2015 between (1) the Company, (2) Mirabaud and (3) BMO relating to the Placing, further details of which are set out in this Announcement;

"Placing Price" the price at which the Placing Shares are to be placed as will be agreed between the Company, Mirabaud and BMO;

"Placing Shares" the First Placing Shares and the Second Placing Shares to be issued by the Company and subscribed for pursuant to the Placing;

"Proposed Placing" the conditional placing of the Second Placing Shares at the Placing Price pursuant to the Placing Agreement;

"Regulation D" Regulation D as promulgated under the Securities Act;

"Regulation S" Regulation S as promulgated under the Securities Act;

"Resolutions" the resolutions in the notice of the Extraordinary General Meeting contained in the Circular;

"Second Placing Shares" the new Ordinary Shares to be issued pursuant to the Proposed Placing or as the second tranche of the Placing;

"Securities Act" the United States Securities Act of 1933, as amended;

"Shareholders" holders of Ordinary Shares, from time to time;

"UK" or "United Kingdom" the United Kingdom of Great Britain and Northern Ireland;

"uncertificated" or "in uncertificated form" recorded on the relevant register of the share or security concerned as being held in uncertificated form in CREST and title to which, by virtue of the CREST Regulations, may be transferred by means of CREST;

"US" the United States of America, its territories and possessions, any state of the United States of America and the district of Columbia and all other areas subject to its jurisdiction;

"US Person" bears the meaning ascribed to such term by Regulation S; and

"US$" the lawful currency of the US from time to time; and

"£" pounds sterling, the lawful currency of the UK from time to time.

-ends-

 

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