Fundraising, Acquisition, Waiver & Notice of GM

RNS Number : 0305C

Helios Underwriting Plc

13 June 2019

 

THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF IRELAND, THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL

Neither this Announcement nor any part of it constitutes an offer to sell, or the solicitation of an offer to buy, subscribe or acquire new ordinary shares in the capital of the Company in any jurisdiction in which such an offer or solicitation is unlawful or would impose any unfulfilled registration, publication or approval requirements on the Company and/or Shore Capital and Corporate Limited.

13 June 2019

Helios Underwriting PLC

("Helios" or the "Company")

Placing and Open Offer to raise up to £3.05 million,

Proposed Acquisition of the entire issued share capital of Nameco (No. 1113) Limited,

Waiver of Rule 9 of the City Code on Takeover and Mergers and

Notice of General Meeting

Fundraising

Helios is pleased to announce that it has conditionally raised approximately £1.15 million (before expenses) by way of a placing of 895,313 new Ordinary Shares at a price of £1.28 per share. In addition, the Company intends to raise up to a further, approximately, £1.9 million by way of an Open Offer to existing shareholders on the basis of 1 Open Offer Share for every 10 Existing Ordinary Shares. Each of the Placing and the Open Offer are conditional, amongst other things, upon the relevant shareholder authorities being granted at the Company's forthcoming General Meeting.

Each of the Directors (other than Nigel Hanbury) have participated, directly or indirectly, in the Placing to a total of approximately £90,000. Will Roseff, a substantial shareholder, has also participated in the Placing to the amount of £800,000.  The Directors have undertaken not to participate in the Open Offer.

Helios intends to use the net proceeds of the Placing and the Open Offer to strengthen its balance sheet and provide readily available funds to acquire further limited liability vehicles that participate in syndicates at Lloyd's when attractive opportunities arise.

Settlement and Admission to trading on AIM is expected to occur on or about 17 July 2019.

Attention is also drawn to Appendix I to this Announcement entitled "Risk Factors".

Proposed Acquisition

The Company has also entered into a conditional agreement to acquire the entire issued share capital of Nameco (No. 1113) Limited, which is ultimately beneficially owned by Nigel Hanbury, in consideration for £2,036,184, to be satisfied by the allotment and issue of the Consideration Shares to Nigel Hanbury at Completion.

HIPCC Reorganisation

Nigel Hanbury is currently the indirect 51 per cent. shareholder of HIPCC, with the remaining 49 per cent. being indirectly held by Hampden.  HIPCC provides a number of reinsurance services to the Group, including certain quota share reinsurance products, which have been developed for the Group.  The Company and Nigel Hanbury recognise that these related party arrangements can be viewed as a potential conflict of interest and, accordingly, have taken steps to remove that perceived conflict through the HIPCC Reorganisation. 

Rule 9 Waiver

Aspects of the Placing and the issue of the Consideration Shares, inter alia, give rise to certain considerations under the City Code.  In aggregate, the members of the Concert Party are interested in shares which carry 30.13 per cent. of the Company's voting rights.  As the members of the Concert Party are interested in shares which, in the aggregate, carry not less than 30 per cent. of the voting rights of the Company, but do not hold shares carrying more than 50 per cent. of the voting rights of the Company, the acquisition by any member of the Concert Party of an interest in any other shares which increases the percentage of shares carrying voting rights in which such member is interested as a result of the Whitewash Proposals would ordinarily result in the members of the Concert Party having to make a mandatory offer under Rule 9 of the City Code. 

Pursuant to the City Code, the Panel may waive the requirement for a general offer to be made in accordance with Rule 9 if, amongst other things, the Independent Shareholders pass an ordinary resolution on a poll approving such a waiver.  Accordingly, the Directors are also proposing the Whitewash Resolution to seek the necessary Shareholder approval. 

The Circular detailing the Open Offer and convening the General Meeting to, inter alia, seek the required shareholder authorities, together with (in the case of Qualifying Non-CREST Shareholders) the Application Form in respect of the Open Offer, is expected to be sent to Shareholders on or about 19 June 2019.

This announcement contains inside information which is disclosed in accordance with the Market Abuse Regulation (596/2014).  Upon the publication of this Announcement via a Regulatory Information Service, this information is considered to be in the public domain.

-Ends-

For further information, please contact:

Helios

Nigel Hanbury - Chief Executive                                     07787 530 404/ [e-mail]

Arthur Manners - Finance Director                                 07754 965917

Shore Capital                                                                020 7601 6100

Robert Finlay

David Coaten

Buchanan                                                                     020 7466 5000

Helen Tarbet

Henry Wilson

Hannah Ratcliff                                                                                    

Each of Shore Capital and Corporate Limited and Shore Capital Stockbrokers Limited respectively are acting exclusively for the Company and no-one else in connection with the Placing and Admission and will not regard itself as owing duties under the rules and regulations of the Financial Conduct Authority to any other person or regard any other persons as its client.

The distribution of this Announcement and the Placing of the Placing Shares in certain jurisdictions may be restricted by law. No action has been taken by the Company or Shore Capital that would permit an offering of such shares or possession or distribution of this Announcement or any other offering or publicity material relating to such shares in any jurisdiction where action for that purpose is required. Persons into whose possession this Announcement comes are required by the Company and Shore Capital to inform themselves about, and to observe, such restrictions.

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.   The Placing Shares are being offered to a limited number of specifically invited persons only and will not be offered in such a way as to require a prospectus in the UK or in any other jurisdiction.  This Announcement contains no offer to the public within the meaning of section 102B FSMA or otherwise. 
 

ADDITIONAL INFORMATION

1.         Introduction

The Company has grown successfully by implementing its strategy of consolidating Lloyd's nameco's to build a fund of Lloyd's underwriting capacity.  In order to continue that growth strategy, the Company intends to carry out the Fundraising, the Acquisition and the HIPCC Reorganisation, further details of which are set out below.

The Company today announces that it has conditionally raised gross proceeds of approximately £1.15 million (before expenses) pursuant to the Placing.  In addition, the Company intends to raise up to a further, approximately, £1.9 million by way of an Open Offer to existing shareholders, on the basis of 1 Open Offer Share for every 10 Existing Ordinary Shares, at an issue price of £1.28 per share.

The Issue Price represents a discount of approximately 7 per cent. to the Closing Price of £1.375 per Ordinary Share on 12 June 2019. Application will be made to the London Stock Exchange for the New Ordinary Shares to be admitted to trading on AIM. Settlement and Admission to trading on AIM is expected to occur on or about 17 July 2019.

Shares issued pursuant to the Placing and the Open Offer will rank for the Company's 2018 final dividend of 1.5p per share together with its special dividend of 1.5p per share, making a total of 3p per share ("Dividends"), subject to being admitted to trading on AIM prior to 19 July 2019 and subject to shareholder approval of the Dividends at the Company's annual general meeting.

Shareholder approval will be sought in respect of the authorities required to implement the Fundraising at the General Meeting.

2.         Background to and reasons for the Acquisition and Fundraising and use of proceeds

Helios' strategy is to build a fund of Lloyd's underwriting capacity through the acquisition and consolidation of acquired limited liability vehicles. Quota share reinsurance is utilised to reduce the exposure of the portfolio and assist in the financing of acquisitions.

This strategy has increased the portfolio from £12.9 million at the start of the 2013 underwriting year to £53.7 million currently. During that period, the Company has acquired 36 companies for a total consideration of £38.9 million.

There are approximately 1,700 limited liability vehicles which are Lloyd's members, with an estimated £2.0 billion of capacity and the Board believes there has been a change in sentiment amongst owners of smaller such limited liability vehicles as rising costs, regulatory pressures and requirements to fund recent losses on the Lloyd's market have all been causing concerns for an aged investor base. Accordingly, the Board expects a good flow of such companies to come onto the market for sale. As at 29 May 2019, there were approximately 17 such vehicles currently for sale, with an aggregate value of £7.8 million.

Helios will look to continue to exploit the available acquisition opportunities to grow its portfolio at attractive prices and to continue its participation in the better managed syndicates by building strategic stakes, which are difficult and expensive to replicate.

The Acquisition is in line with the Company's strategy to increase its underwriting capacity, but also enables Nigel Hanbury to continue to invest in the Company's share capital, within the context of the Fundraising.

The Company has conditionally raised gross proceeds of £1.15 million through the Placing, and is seeking to raise up to a further, approximately, £1.9 million pursuant to the Open Offer, in order to provide additional funding to continue to expand its portfolio of capacity that participates on syndicates at Lloyds.

The net proceeds of the Fundraising will strengthen the balance sheet and provide readily available funds to expand the capacity portfolio by acquiring further limited liability vehicles.

3.         Information on Nameco 1113

Nameco 1113 is a limited liability member of Lloyd's and the Acquisition represents an opportunity for Helios to continue to build its participations on the better syndicates at Lloyd's.  The 2019 underwriting capacity of Nameco 1113 is £1,994,276. The capacity acquired together with the capacity retained by Helios is as follows:

	Year of Account
	2016	2017	2018	2019
	£m	£m	£m	£m
Retained	1.0	1.8	2.00	2.0
Reinsured	1.8	-	-	-
Total Capacity	2.8	1.8	2.0	2.0

Nameco 1113 participates in a spread of Lloyd's syndicates that broadly matches the existing portfolio of Helios.  However, Nameco 1113 has a significant participation of approximately £499,275 in Lloyds' Syndicate 1176, which following Completion, would increase Helios' participation in that syndicate to£1,448,810 for the 2019 year of account.  Syndicate 1176 insures against nuclear risk and liability, including physical damage loss and business interruption to civil nuclear power stations, as well as risk and liability in the wider nuclear fuel cycle.  This syndicate participation represents 2.6 per cent. of the enlarged capacity portfolio.

Nameco 1113 entered into quota share reinsurance arrangements in respect of 64 per cent. of its portfolio for the 2016 underwriting year.  Helios intends to reinsure 70 per cent. of the 2019 underwriting year in line with its stated strategy of reducing "on-risk" exposures.   In the year ended 31 December 2017, Nameco 1113 made a loss before tax of £335,669 on gross premiums written of £1.7 million.  Nameco 1113 has cash and near-cash of approximately £1.2 million, of which approximately £700,000 is expected to be released as free cash following the re-financing using quota share reinsurance. The Humphrey valuation of Nameco 1113 adjusted for deferred tax provisions is approximately £2.3 million and the consideration being paid is £2,036,184, a 13 per cent. discount to the adjusted valuation. The Consideration Shares issued pursuant to the Acquisition will rank for the Dividends, subject to being admitted to trading on AIM prior to the record date of the close of business on 19 July 2019 and subject to the requisite shareholder approval of the Dividends at the Company's annual general meeting.

Forecasts in respect of Nameco 1113's 2017 and 2018 open years of account are set out below:

Year of account	Nameco 1113 syndicate capacity (£'000)	Forecast of syndicate profit (as at 28 May 2019)
		Result / Mid-point (£'000)
2017	1,796	4.42%
2018	2,035	2.27%

Source: Syndicate data and Helios analysis (before quota share and early release)

The Acquisition constitutes a related party transaction for the purpose of the AIM Rules.

4.         HIPCC Reorganisation

Nigel Hanbury is currently the indirect 51 per cent. shareholder of HIPCC, with the remaining 49 per cent. being indirectly held by Hampden.  HIPCC provides a number of reinsurance services to the Group, including certain quota share reinsurance products, which have been developed for the Group.  The Company and Nigel Hanbury recognise that these related party arrangements can be viewed as a potential conflict of interest and, accordingly, have taken steps to remove that perceived conflict through the HIPCC Reorganisation. 

Pursuant to the HIPCC Framework Agreement, Upperton, the Company and other relevant parties have agreed to amend certain of the Group's arrangements with HIPCC starting from the 2020 underwriting year.  The HIPCC Reorganisation will have the effect of removing the economic benefit that Nigel Hanbury (through Upperton) would otherwise receive in respect of the Group's arrangements with HIPCC, in return for a one-off cash payment of £100,000.

Pursuant to the HIPCC Framework Agreement, an amount equal to the profits derived by HIPCC from the Group's arrangements with it, in any relevant underwriting year, is to be paid to Helios.  An amount equal to 49 per cent. of those profits (together with an amount equal to certain tax liabilities that would be payable by Hampden solely as a result of this arrangement) are then paid to Hampden, in order to ensure that it is not disadvantaged by the HIPCC Reorganisation.  The HIPCC Framework Agreement is to be effective from the 2020 Lloyd's years of account, until the earlier of Nigel Hanbury ceases to be a director of the Company, or the end of the year of account in which Nigel Hanbury ceases to have any direct or indirect, legal or beneficial, interest in the share capital and voting rights of HIPCC.

The HIPCC Reorganisation constitutes a related party transaction for the purpose of the AIM Rules.

5.         Trading Update

Helios provides a limited liability direct investment into the Lloyd's insurance market and is quoted on AIM (ticker: HUW). Helios trades within the Lloyd's insurance market and has a portfolio of syndicate capacity of £53.7 million for the 2019 year of account. The portfolio provides a good spread of classes of business being concentrated in property insurance and reinsurance.

On 31 May 2019, the Company announced its final results for the financial year ended 31 December 2018 which included the following: a 32 per cent. increase in the capacity portfolio from the six acquisitions of 2018 and a further acquisition in 2019; operating profit before goodwill, impairment and tax of £608,000 (2017: loss of £406,000); earnings per share of 3.14p (2017: loss of 4.75p): adjusted net asset value increased to £1.90 per share (2017: £1.60 per share); Helios retained capacity for 2019 open underwriting year of £15.8 million (2018 year of account: £12.3 million); and the catastrophe losses in 2018 of £5.2 million were reduced by reinsurance to £1.3 million.

The announcement also included the following outlook statement:

"Our strategy to build a fund of capacity on quality syndicates at Lloyd's continues to develop with the growth of the capacity portfolio by 32 per cent. in the year 2018.

The 2018 underwriting year was affected by the second year of catastrophe claims above the Lloyd's market long-term average. The losses in the year affected both the 2017 and 2018 underwriting years and have been fully recognised in these accounts so any improvement in the next two years will contribute to earnings. In addition, firmer market conditions should be reflected in the underwriting returns in the future.

The strategy of building a capacity portfolio of the better available syndicates at Lloyd's should allow Helios to maintain its outperformance of returns on capacity against the Lloyd's market. The recent soft underwriting conditions will distinguish the better managed syndicates which will deliver top quartile performance within the Lloyd's market which will reinforce the demand for these syndicates and assist in the recovery of the auction values. We anticipate more opportunities to acquire LLVs at attractive prices."

6.         Details of the Acquisition Agreement

Pursuant to the Acquisition Agreement, the Company has conditionally agreed to acquire the entire issued share capital of Nameco 1113 in consideration for £2,036,184, to be satisfied by the allotment and issue of the Consideration Shares to Nigel Hanbury at the Issue Price.

The Acquisition Agreement is conditional, amongst other things, upon:

(a)        the passing of the necessary shareholder resolutions at the General Meeting;

(b)        Lloyd's approval of the change of control of Nameco 1113 as a result of the Acquisition; and

(c)        Admission having occurred on 17 July 2019 (or such later time and date as may be agreed between Shore Capital and the Company pursuant to the Placing and Open Offer Agreement).

If the conditions set out above are not satisfied or waived by no later than 18 July 2019, the Acquisition Agreement will automatically terminate and cease to have any further force and effect, save in respect of any antecedent breaches.  Subject to the satisfaction of the conditions, Completion, and the issue of the Consideration Shares, is expected to occur at Admission.

The Acquisition Agreement contains customary warranties given by Nigel Hanbury to the Company in respect of, inter alia, Nameco 1113 and its operations.  Nigel Hanbury has also undertaken to indemnify the Company in respect of any liabilities for tax of Nameco 1113 arising in respect of, amongst other things, the 2016 and prior closed years of account and any costs, liabilities or losses arising from the enforcement of the existing security granted by Nameco 1113 to Lloyd's in relation to Nomina No. 084 LLP (which is ultimately controlled by Nigel Hanbury), pending the release of such security.  The liability of Nigel Hanbury pursuant to the warranties is subject to certain customary limitations, both as to the time in respect of which a claim may be made and the amount that may be recovered.  The Acquisition Agreement is subject to English law.

7.         Details of the Fundraising

Details of the Placing

The Company entered into the Placing and Open Offer Agreement, pursuant to which Shore Capital has agreed to use its reasonable endeavours to procure subscribers for new Ordinary Shares as agent for the Company, pursuant to the Placing, at the Issue Price. 

The Placing is conditional, inter alia, upon:

(a)      the passing of the necessary shareholder resolutions at the General Meeting;

(b)      the Placing and Open Offer Agreement becoming unconditional in all respects (save in respect of the condition in respect of Admission having occurred) and not having been terminated in accordance with its terms; and

(c)      Admission occurring by not later than 8.00 a.m. on 17 July 2019 (or such later time and/or date as the Company and Shore Capital may agree, not being later than 18 July 2019).

Accordingly, if any of such conditions are not satisfied or, if applicable, waived, the Placing will not proceed.  Shore Capital may in its absolute discretion waive the conditions referred to above, other than that relating to Admission.

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

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

For the avoidance of doubt, Shore Capital is not underwriting the Placing or the Open Offer.

Details of the Open Offer

The Open Offer provides an opportunity for all Qualifying Shareholders to participate in the fundraising by subscribing for their respective Open Offer Entitlements.  Pursuant to the Open Offer, Qualifying Shareholders will be given the opportunity to subscribe at the Issue Price for:

1 Open Offer Share for every 10 Existing Ordinary Shares

registered in the name of the relevant Qualifying Shareholder on the Record Date.

Qualifying Shareholders applying for their Open Offer Entitlements in full may also apply, under the Excess Application Facility, for Excess Shares in addition to their Open Offer Entitlements, should they wish. The Excess Application Facility will comprise Open Offer Shares that are not taken up by Qualifying Shareholders under the Open Offer pursuant to their Open Offer Entitlements. Applications under the Excess Application Facility will therefore only be satisfied to the extent that other Qualifying Shareholders do not apply for their Open Offer Entitlements in full. Qualifying Shareholders can apply for any number of Excess Shares under the Excess Application Facility, although if applications exceed the maximum number available, the applications will be scaled back on a pro rata basis or otherwise at the discretion of the Directors.

Assuming that the maximum number of Open Offer Shares are allotted and issued pursuant to the Open Offer, the Open Offer would raise gross proceeds of approximately £1.9 million. The Open Offer is not being underwritten.  The Open Offer Shares will rank for the Dividends, subject to the shares being admitted to trading on AIM prior to 19 July 2019 and subject to shareholder approval of the Dividends at the Company's annual general meeting.

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

The Open Offer is conditional, inter alia, upon the following:

(a)        the passing of the necessary shareholder resolutions at the General Meeting;

(b)        the Placing and Open Offer Agreement becoming unconditional in all respects (save in respect of the condition in respect of Admission having occurred) and not having been terminated in accordance with its terms; and

(c)        Admission occurring by not later than 8.00 a.m. on 17 July 2019 (or such later time and/or date as the Company and Shore Capital may agree, not being later than 18 July 2019).

If the conditions set out above are not satisfied or, if applicable, waived (where capable of waiver), the Open Offer will lapse; and any Open Offer Entitlements and Excess CREST Open Offer Entitlements admitted to CREST will, after that time and date, be disabled and application monies under the Open Offer will be refunded to the applicants, by cheque (at the applicant's risk) in the case of Qualifying Non-CREST Shareholders and by way of a CREST payment in the case of Qualifying CREST Shareholders, without interest, as soon as practicable thereafter.

Application for Admission

Application will be made to the London Stock Exchange for the New Ordinary Shares to be admitted to trading on AIM.  Admission of the New Ordinary Shares is expected to take place, and dealings on AIM are expected to commence, at 8.00 a.m. on 17 July 2019 (or such later times and/or dates as may be agreed between the Company and Shore Capital). No temporary documents of title will be issued. 

The New Ordinary Shares will, with effect from Admission, rank pari passu in all respects with the Existing Ordinary Shares and will carry the right to receive all dividends and distributions declared, made or paid on or in respect of the Ordinary Shares after Admission.

Accordingly, on the assumption that Admission takes place on 17 July 2019 as currently envisaged and resolutions 2 and 3 to be proposed at the Company's annual general meeting convened for 28 June 2019 are passed, the New Ordinary Shares would carry the rights to receive the dividends, of 3p per Ordinary Share in aggregate, proposed to be paid on 31 July 2019 to holders of Ordinary Shares registered at the close of business on 19 July 2019.

8.         Directors' and major Shareholder's interests and intentions in relation to the Fundraising

Each of the Directors (other than Nigel Hanbury) have, directly or indirectly, subscribed for Placing Shares pursuant to the Placing, for an aggregate subscription of approximately £90,000 at the Issue Price.  Pursuant to the Acquisition, Nigel Hanbury is to be allotted and issued the Consideration Shares.  The Directors have also undertaken not to participate in the Open Offer.

In addition, Will Roseff, a substantial shareholder who is interested in 25 per cent of the Company's current issued share capital, has also participated in the Placing subscribing for an amount of approximately £800,000 at the Issue Price.

9.         Waiver of Rule 9 of the City Code

Pursuant to the City Code, the Panel may waive the requirement for a general offer to be made in accordance with Rule 9 if, amongst other things, the shareholders of a company who are independent of the person who would otherwise be required to make an offer, and any person acting in concert with it, pass an ordinary resolution on a poll approving such a waiver.

Each of Nigel Hanbury, Hampden, Nicholas Wentworth-Stanley, Jeremy Evans, Sir Michael Oliver, Peter Nutting, Timothy Oliver, Susan Oliver, Charles Camroux-Oliver, James Camroux-Oliver and Alexa Pearmund are considered by the Panel to be acting in concert in respect of the Company and together are interested in shares which carry 30.13 per cent. of the Company's voting rights.  As the members of the Concert Party are interested in shares which, in the aggregate, carry not less than 30 per cent. of the voting rights of the Company, but do not hold shares carrying more than 50 per cent. of the voting rights of the Company, the acquisition by any member of the Concert Party of an interest in any other shares which increases the percentage of shares carrying voting rights in which such member is interested as a result of the Whitewash Proposals (including through an increase of the proportionate voting interests of any member as a result of a buyback of Ordinary Shares) would ordinarily result in the members of the Concert Party having to make a mandatory offer under Rule 9 of the City Code. 

The Panel has agreed, subject to the passing of the Whitewash Resolution by the Independent Shareholders on a poll at the General Meeting, to waive the obligation of the members of the Concert Party to make a mandatory offer for the Ordinary Shares not already owned by them which would otherwise arise following completion of the Whitewash Proposals. Accordingly, the Company will be proposing the Whitewash Resolution at the GM to seek the approval of Independent Shareholders to the Waiver.

10.        Related Party Transactions

As Nigel Hanbury is a director of, and substantial shareholder in, the Company, both the Acquisition and the HIPCC Reorganisation constitute related party transactions for the purpose of the AIM Rules.

The Independent Directors consider, having consulted with Shore Capital, the Company's nominated adviser, that the terms of the Acquisition and the HIPCC Reorganisation are fair and reasonable in so far as Shareholders are concerned.

 

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

	2019
Record Date for entitlement to participate in the Open Offer	6.00 p.m. on 12 June
Announcement of the Fundraising	13 June
Ex-entitlement date for the Open Offer	13 June
Despatch of the Circular, the form of proxy and, to certain Qualifying Non-CREST Shareholders, the Application Form	19 June
Open Offer Entitlements credited to CREST stock accounts of Qualifying CREST Shareholders	as soon as possible after 8.00 a.m. on 20 June
Recommended latest time and date for requesting withdrawal of Open Offer Entitlements from CREST	4.30 p.m. on 9 July
Latest time for depositing Open Offer Entitlements into CREST	3.00 p.m. on 10 July
Latest time and date for splitting Application Forms	3.00 p.m. on 11 July
Latest time and date for receipt of forms of proxy for the General Meeting	12 noon on 12 July
Latest time and date for receipt of completed Application Forms and payment in full under the Open Offer or settlement of relevant CREST instruction (as appropriate)	11.00 a.m. on 15 July
General Meeting	12 noon on 16 July
Result of the General Meeting and Open Offer announced	16 July
Admission of the New Ordinary Shares to trading on AIM	8.00 a.m. on 17 July
New Ordinary Shares in uncertificated form expected to be credited to accounts in CREST (uncertificated holders only)	17 July
Expected despatch of definitive share certificates for the New Ordinary Shares (certificated holders only)	Week commencing 29 July

Notes:

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

(2)    Each of the times and dates set out in the above timetable and mentioned in this Announcement is subject to change by the Company, in which event details of the new times and dates will be notified by an announcement through a Regulatory Information Service.

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

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

(5)    The timetable above assumes that the relevant Resolutions in the Notice of General Meeting are duly passed.

 

APPENDIX I

RISK FACTORS

The nature of the insurance underwriting business, the regulatory regime applicable to insurance and to corporate members of Lloyd's and the consequence of past years' underwriting losses at Lloyd's will give rise to a number of specific risk factors. The following list is not exhaustive but is intended to draw investors' attention to certain aspects of the risks involved.  Potential investors and Shareholders should carefully consider the risks described below before making a decision to invest in the Company.

It should be noted that, as stated above, this list is not exhaustive and that other risk factors will apply to an investment in the Company. If any of the following risks actually occur, the Company's business, financial condition and/or results or future operations could be materially adversely affected. In such circumstances, the trading price of the New Ordinary Shares could decline and an investor may lose all or part of their investment. There can be no certainty that the Company will be able to implement successfully the strategy set out in this Announcement or the documents referred to in this Announcement. Additional risks and uncertainties not currently known to the Directors or which the Directors currently deem immaterial, may also have an adverse effect on the Company.

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

An investment in the Company may not be suitable for you. Investors are accordingly advised to consult an independent financial adviser duly authorised under FSMA, if you are resident in the United Kingdom, or if not, from an appropriately authorised independent financial adviser, who in each case specialises in advising upon the acquisition of shares and other securities before making a decision to invest.

Underwriting of insurance risks

The underwriting of insurance risks is, by its nature, a high-risk business, and returns can never be guaranteed. The Group's insurance business involves assuming the risk of loss from persons or organisations that are directly exposed to an underlying loss.  Insurance risk arises from this risk transfer due to inherent uncertainties about the occurrence, amount and timing of insurance liabilities. Underwriting risk comprises four elements: 

(a) Event risk - the risk that individual risk losses or catastrophes lead to claims that are higher than anticipated in plans and pricing;

(b) Cycle risk - the risk that business is written without full knowledge as to the (in)adequacy of rates, terms and conditions;

(c) Pricing risk - the risk that the level of expected loss is understated in the pricing process; and

(d) Expense risk - the risk that the allowance for expenses and inflation in pricing is inadequate.

It is inherent in the nature of underwriting businesses that it is difficult to forecast even short-term trends or returns in any single year.  Not only do the results from underwriting insurance change but investment income and capital appreciation, which form an important part of underwriting returns, are affected by interest rates, exchange rates, taxation changes and investment performance.

The past results of Lloyd's and of individual syndicates are a matter of historic record and may not be relied upon as a guide to future prospects.  Previously profitable business may subsequently be loss-making, the nature of business written may change, reserves created against future claims may prove to be inadequate, a syndicate's reinsurance programme may be ineffective and/or its reinsurers may fail. 

Claims asserted under certain insurance contracts may typically not be settled for more than one year from the date the contract becomes effective.  Such underwriting may involve a substantial degree of risk and may not show any return for a considerable period of time.  In fact, in some circumstances, the ultimate financial performance of a syndicate's year of account may not be determined for an extended period of time, which may inhibit the release of any underwriting profits.

As part of its overall risk mitigation and capital management strategy, the Group purchases quota share reinsurance to seek to mitigate its insurance risk. The Group's stop loss programme complements the Group's quota share reinsurance seeking to protect the Group's capital from adverse results from the portfolio of syndicate participations. However, the Group's reinsurance may not mitigate all these underwriting risks.

Unpredictable and multiple losses

The portfolio of the Group's syndicate participations expose it to losses arising out of unpredictable natural and other catastrophic events, such as hurricanes, windstorms, tsunamis, severe winter weather, earthquakes, floods, fires and explosions, as well as "man-made" disasters, such as acts of war, terrorism, piracy and political instability, the emergence of latent risks, changes in law and the interpretation of law or precedent (including in relation to the measurement of damages), as well as social and political changes, and fluctuations in the global investment markets and the capacity of the global insurance market.  The incidence and severity of catastrophes are inherently unpredictable and the Group's losses from such catastrophes could be substantial.   Although the Group attempts to manage its exposure to such events through the selection of the syndicates in which it participates, a single catastrophic event could affect multiple geographic zones and/or the frequency and/or severity of catastrophic events could exceed its estimates.

Each syndicate in which the Group participates will have its own risk profile and the Group participates in a range of syndicates in an attempt to balance such risks.  Nameco 1113 has a significant participation of approximately £500,000 in Lloyds' Syndicate 1176, which following Completion, would represent a 50 per cent. increase on Helios' existing participation in that syndicate of approximately £1,000,000 for the 2019 year of account.  Syndicate 1176 insures against nuclear risk and liability, including physical damage loss and business interruption to civil nuclear power stations, as well as risk and liability in the wider nuclear fuel cycle.  The largest values that the syndicate insures are normally nuclear power stations, although the syndicate also covers manufacturers of nuclear fuel and radioisotopes, their transport and ultimately their safe storage.  Whilst underwriting nuclear risk can be highly profitable it also carries a great deal of risk.  Accordingly, it should be noted that the Group will have an increased exposure to nuclear-related losses through its increased participation in Syndicate 1176 for the 2019 year of account and, should it wish to maintain such level of exposure, in subsequent years of account. 

Cyclicality of insurance business

The insurance and reinsurance business historically has been a cyclical industry with significant fluctuations in operating results due to competition, catastrophic events, general economic and social conditions and other factors.  This cyclicality has produced periods characterised by intense price competition due to excessive underwriting capacity (soft market conditions) as well as periods when shortages of capacity resulted in much more favourable premium levels (hard market conditions).  In addition, increases in the frequency and severity of losses suffered can significantly affect these cycles.  Accordingly, the performance of the Group's underwriting business is likely to be affected by this cyclicality to a certain extent, and there can be no guarantee that companies in the Group which are members of Lloyd's ("corporate members") will realise any profit from their underwriting business.  Underwriting returns would be impaired if the insurance pricing environment remained poor for a sustained period of time.

Funds at Lloyd's

The Group's corporate members are required to contribute funds of an approved form that are lodged and held in trust at Lloyd's as security for a member's underwriting activities, known as "funds at Lloyd's" ("FAL").  A member's funds at Lloyd's may contain only those assets that Lloyd's prescribes as acceptable assets, which include debt securities, bonds and other money and capital market instruments, shares, cash and cash equivalents, letters of credit and guarantees. 

On a bi-annual basis, in June and November of each year, there is a "coming into line" procedure whereby each member of Lloyd's is required to demonstrate that they have sufficient eligible assets to meet their current underwriting liabilities and to support future underwriting before they may underwrite for the next following year of account.

In addition, the Group's corporate members are also required to contribute funds to the Lloyd's central fund.  To the extent that Lloyd's suffers a material exposure in its asset base when compared with its liabilities, any members may at any such time as required by Lloyd's be called upon to invest further capital into Lloyd's portfolio of funds, including both as FAL and by way of a contribution to the central fund.  As a result, this may cause the Group to incur a material increase in its operating expenses and, as a result, a material adverse impact on its financial results and financial condition.

Changes implemented to the list of acceptable assets for purposes of FAL may also adversely impact the Group, as, the relevant Group companies would be required to post different assets, which may be more expensive to obtain and maintain or which may place an undue restriction on the Group's capital resources.  Lloyd's also has the power to reduce any corporate members' underwriting capacity or to prohibit a corporate member from underwriting. Any such event is likely to have a material adverse effect on the Group's reputation, financial condition and results of operations.

Withdrawal of FAL

Any of the Group's corporate members may find that assets of a greater value than the amount of that corporate member's underwriting commitment are at risk.  If the value of the FAL provided by the corporate member exceeds the amount required to be held as FAL by Lloyd's (including as a result of appreciation) and the losses of the corporate member in any year of account exceed the amount of such FAL, Lloyd's may take the whole of the FAL provided by that corporate member to meet the call.  Profits and capacity disposal proceeds that have not been released by Lloyd's may become intermingled with FAL, and be liable to be drawn down as FAL by Lloyd's.

Until the effective date of a corporate member's resignation from membership at Lloyd's, a corporate member will continue to be liable for its debts and obligations and, therefore, for the underwriting losses in respect of the years of account for which it made an underwriting commitment.  Where the balance of the FAL may fluctuate in value, a decrease in the FAL may reduce the level of a corporate member's capacity.

Although a corporate member is able to reduce the level of business written by it in any year of account or to cease underwriting, it will not be able to withdraw FAL, or funds forming part of its premiums trust funds, until permitted to do so by Lloyd's. Lloyd's imposes restrictions on the withdrawal of FAL in order to ensure that no funds are withdrawn without adequate provision being made for potential liabilities. 

In underwriting insurance risks, the assets of each corporate member in the Group, including potential profits and all of the FAL of each corporate member, will be exposed to the risk of underwriting losses.  In the worst case, all of a corporate member's assets (including all of its FAL, any pipeline profits, investment income and value attributed to its underwriting capacity) would be used to meet underwriting losses.

Performance of Syndicates

Investors should be aware that the categories of business written and the structure of a syndicate's reinsurance programme, and accordingly the risks and rewards arising from that syndicate, vary from syndicate to syndicate.  Even if Lloyd's makes an overall underwriting profit, individual syndicates or lines of business may show losses (for example due to the mix of business written by that syndicate), and other factors such as over-capacity can affect profit. 

As the Group's corporate members are under common control, the Group's corporate members may be exposed to each other's losses.  Lloyd's can require any Group corporate member which participates on a syndicate which makes a profit to pay out of its profits an amount equal to the undischarged obligations of a Group corporate member which has incurred an underwriting loss by virtue of participating on a syndicate which has made an underwriting loss.

Should a syndicate as constituted for a given year of account make a loss upon closure, or if a syndicate as constituted for a given year of account has funding difficulties, its managing agent may make a cash call on its members for the year of account concerned which, if not met promptly from other funds, can be satisfied by drawing down on the members' FAL.  Cash calls for "working capital" can also be made early in the year of account by the managing agent of a syndicate, for example to meet liquidity pressures.  There is no guarantee that the Company would have the funds needed to enable the relevant Group company to meet such liabilities in which case it may be necessary for the Company to raise additional capital via equity or debt.  Alternatively, it may be necessary to source FAL elsewhere, including from third party providers such as reinsurers, which may limit the relevant corporate member's ability to maintain the level of capacity in the relevant syndicate in the current or a subsequent year of account.  The cost of obtaining such FAL can impact the Group's profitability.  If a corporate member is unable to obtain replacement FAL, the reduced level of FAL will affect the underwriting portfolio, which will likely impact returns adversely.

Failure of loss limitation methods

Managing agents will seek to limit the exposure of their managed syndicates to insurance and reinsurance losses through a number of loss limitation methods, including internal risk management and security procedures, as well as through the purchase of outwards reinsurance protection.

Notwithstanding the risk mitigation and underwriting controls employed by syndicates, one or more catastrophic or other loss events or a greater frequency of losses than expected could result in claims that substantially exceed the expectations of the Group, and which could have a material adverse effect on the financial condition or results of operations of the Group or any member of the Group, possibly to the extent of eliminating the funds at Lloyd's supporting the underwriting of the Group's corporate members and any statutory surplus.

Reinsurance protection

As part of its overall risk mitigation and capital management strategy, the Group purchases stop loss and quota share reinsurance in respect of its corporate members, to seek to protect the Group's capital from losses from its syndicate portfolio. Market conditions beyond the Group's control determine the availability and cost of appropriate reinsurance and the receipt of future reinsurance recoveries. Additionally, a change in regulation could affect the availability or price of reinsurance.

Any significant changes in reinsurance pricing may result in the Group being forced to incur additional expenses for reinsurance, reducing its capacity on syndicates, having to obtain reinsurance on less favourable terms or not being able to or choosing not to obtain reinsurance thereby exposing the Group to increased retained risk.  Any of these could have a material adverse effect on the Group's financial condition and results of operations, as could the failure of a reinsurer (for example due to insolvency) from whom the Group has purchased reinsurance.

Capital requirements

Rules implementing the Solvency II Directive came into effect on 1 January 2016. Solvency II, and the rules which implement it, introduce a harmonised EU-wide insurance regulatory regime. In particular, they impose a risk-based capital regime, set out requirements for the governance, risk management and regulatory supervision of insurers and introduce certain disclosure and transparency requirements. Each syndicate's Solvency Capital Requirement ("SCR") under Solvency II is determined in accordance with the SCR standard formula and/or the syndicate's approved internal model.  It is a regulatory requirement that any such model captures all material risks that have been identified. However, it is subject to the limitations of all complex models and is subject to the accuracy, completeness and integrity of the data input into the model.  In addition, a standard formula is, by its very nature and design, a standardised calculation method, and is therefore not tailored to the individual risk profile of a specific undertaking. For this reason, in some cases, the standard formula might not reflect the risk profile of a specific undertaking and consequently the level of own funds it needs.  It is also necessary for estimates, assumptions and judgments to be made by the syndicate's management where data are incomplete or ambiguous. Accordingly, the SCR, as modelled by the syndicate's internal model or calculated pursuant to the standard formula, may not provide an accurate projection of the capital that the syndicate will, in fact, need in the future.

The Lloyd's market

The Group relies on the efficient functioning of the Lloyd's market. If, for whatever reason, the Group's corporate members were to be restricted or otherwise unable to write insurance through the Lloyd's market, it could have a material adverse effect on the Group's business and results of operations.  In particular, any damage to the brand or reputation of Lloyd's, whether such damage is caused by financial mismanagement, fraudulent activity or otherwise, or any loss of any international licences in relation to insurance or reinsurance business may have a material adverse effect on the ability of the Group's corporate members to participate in new business and/or the Group's reputation. In addition, any increase in tax levies imposed on Lloyd's participants in the relevant jurisdictions around the world in which they offer insurance or reinsurance or any challenge to the amount of tax paid by such Lloyd's participants may result in the Group's corporate members incurring a higher tax charge.

The PRA is the prudential regulator for Lloyd's and has responsibility for promoting the financial security and soundness of Lloyd's and its members. Lloyd's is required by the PRA to establish and maintain appropriate controls over the risks affecting the funds of members which it holds centrally and to assess the capital needs of each member operating on its market, in order to satisfy an annual solvency test for the PRA.  Were the PRA to impose more stringent requirements on Lloyd's this may result in higher capital requirements or a restriction on trading activities for its members, including entities within the Group. If Lloyd's fails to satisfy its solvency test in any year, the PRA may require Lloyd's to cease trading and/or its members to cease or reduce their underwriting exposure, which may result in a material adverse effect to the reputation, financial condition and results of operations of the Group or any of its corporate members.

The past years have seen considerable changes at Lloyd's, particularly in the composition and character of its capital base.  It is likely that continuing change will remain a feature of the Lloyd's capital base for the foreseeable future. 

Lloyd's has recently undertaken a performance review, and prevented certain syndicates writing further business.  If Lloyd's continues this process, any of the syndicates on which the Group's corporate members participate could be prevented from writing future business, which could impact the returns of the relevant corporate members.

Future changes at Lloyd's might involve alterations to the present annual venture basis of participating in syndicates, which could have fundamental implications for both Lloyd's and participation at Lloyd's through the Group's corporate members. 

Regulatory powers and changes in regulation

Certain rights or actions of Lloyd's corporate members are subject to the prior written consent of Lloyd's.  Lloyd's has wide discretionary powers in regulating Lloyd's corporate members and their underwriting at Lloyd's.  Exercise of certain of these powers could affect the results of the underwriting business of the Group's corporate members. 

The regulation of insurance in the UK is frequently subjected to substantial reviews and consultations on changes.  It is possible that significant changes in regulation both within and outside the Lloyd's market will occur.  Any current or future regulatory changes may have an adverse impact on the Group's corporate members, and subsequently affect the Group's profitability.

Value of capacity

The Board attributes a value to the Group's portfolio of syndicate capacity in determining the adjusted net asset value per Ordinary Share.  This value of the capacity is based on the weighted average price of the capacity traded in the Lloyd's capacity auctions which is dependent on the demand for capacity in these auctions.  If the weighted average prices for syndicate capacity reduce significantly, it is likely that adjusted net asset value per Ordinary Share will reduce and that the Board will have to impair the value of the capacity held on the Group's balance sheet.  This may have a material adverse effect on the financial results of the Group.

 

DEFINITIONS

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

Act	the Companies Act 2006;
Acquisition	the proposed acquisition by the Company of the entire issued share capital of Nameco 1113 from Nigel Hanbury, in accordance with the terms and conditions of the Acquisition Agreement;
Acquisition Agreement	the conditional agreement dated 12 June 2019 for the acquisition by the Company of the entire issued share capital of Nameco 1113 from Nigel Hanbury;
Admission	admission of the New Ordinary Shares to trading on AIM and such admission becoming effective in accordance with the AIM Rules;
AIM	the AIM market operated by the London Stock Exchange;
AIM Rules	the rules of AIM as set out in the publication entitled 'AIM Rules for Companies' published by the London Stock Exchange from time to time;
Announcement	this announcement (including the appendices to this announcement)
Application Form	the application form to be used by Qualifying Non-CREST Shareholders in connection with the Open Offer;
Artex	Artex Risk Solutions (Guernsey) Limited of PO Box 230, Heritage Hall, Le Marchant Street, St Peter Port, Guernsey GY1 4JH, the manager of HIPCC;
Board or Directors	the board of directors of the Company;
certificated or in certificated form	the description of a share or other security which is not in uncertificated form (that is not in CREST);
Circular	the circular in respect of the Open Offer, expected to be posted to Shareholders on or about 19 June 2019;
City Code	the City Code on Takeovers and Mergers;
Closing Price	the closing middle market quotation of an Ordinary Share as published by the London Stock Exchange;
Company or Helios	Helios Underwriting PLC a company incorporated in England and Wales with registered number 05892671 and having its registered office at 5th Floor 40 Gracechurch Street, London, United Kingdom, EC3V 0BT;
Completion	completion of the Acquisition in accordance with the terms and conditions of the Acquisition Agreement;
Concert Party	the concert party in respect of the Company for the purpose of the City Code, comprising Nigel Hanbury, Hampden, Nicholas Wentworth-Stanley, Jeremy Evans, Sir Michael Oliver, Peter Nutting, Timothy Oliver, Susan Oliver, Charles Camroux-Oliver, James Camroux-Oliver and Alexa Pearmund and any affiliated person(s) (as defined in the City Code) of any of them and "members of the Concert Party" shall be construed accordingly;
Consideration Shares	the 1,590,769 new Ordinary Shares to be allotted and issued to Nigel Hanbury at the Issue Price pursuant to the Acquisition Agreement;
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 by Euroclear as a system member (as defined in the CREST Regulations);
CREST participant	a person who is, in relation to CREST, a system participant (as defined in the CREST Regulations);
CREST Regulations	the Uncertificated Securities Regulations 2001, as amended;
EU	the European Union;
Euroclear	Euroclear UK & Ireland Limited;
Excess Application Facility	the arrangement pursuant to which Qualifying Shareholders may apply for Open Offer Shares in excess of their Open Offer Entitlement provided they have agreed to take up their Open Offer Entitlement in full;
Excess CREST Open Offer Entitlements	in respect of each Qualifying CREST Shareholder, the entitlement (in addition to its Open Offer Entitlement) to apply for Excess Shares, credited to its stock account in CREST pursuant to the Excess Application Facility, which is conditional on such Qualifying CREST Shareholder agreeing to take up its Open Offer Entitlement in full;
Excess Shares	the Open Offer Shares which Qualifying Shareholders may apply for under the Excess Application Facility;
Excluded Overseas Shareholders	other than as agreed by the Company and Shore Capital or as permitted by applicable law and regulation, Shareholders who are located or have registered addresses in a Restricted Jurisdiction;
Existing Ordinary Shares	the 14,848,462 Ordinary Shares in as at the date of this Announcement (excluding the 255,778 Ordinary Shares held in treasury and which do not carry voting rights);
FCA	the Financial Conduct Authority;
FSMA	the UK Financial Services and Markets Act 2000, as amended;
Fundraising	the Placing and the Open Offer;
General Meeting or GM	the General Meeting of the Company, notice of which is to be set out in the Circular, and including any adjournment(s) thereof;
Group	the Company and its subsidiary undertakings at the date of this announcement (as defined in sections 1159 and 1160 of the Act);
Hampden	Hampden Capital plc, a public limited company, incorporated in England and Wales with registered number 04174389 and with its registered office address at 5th Floor, 40 Gracechurch Street, London, EC3V 0BT;
HIPCC	H I PCC Limited, a company incorporated in Guernsey with registered number 42407 and with its registered office address at PO Box 230 Heritage Hall Le Marchant Street St Peter Port Guernsey GY1 4JH;
HIPCC Framework Agreement	the agreement between, amongst others, Upperton, HIPCC, Hampden, Artex and the Company to effect the HIPCC Reorganisation dated 12 June 2019;
HIPCC Reorganisation	the amendments to the Group's re-insurance arrangements with HIPCC incepting from the 2020 underwriting year, which have the effect of removing the economic benefit that Nigel Hanbury (through Upperton) would otherwise receive in respect of such policies as a 51 per cent. indirect shareholder of HIPCC;
Independent Directors	the Directors, other than Nigel Hanbury and Jeremy Evans;
Independent Shareholders	the Shareholders, other than the members of the Concert Party;
Issue Price	£1.28 per New Ordinary Share;
Lloyd's	the Society and Corporation of Lloyd's, commonly referred to as Lloyd's of London;
London Stock Exchange	London Stock Exchange plc;
Maximum Potential Buyback	the acquisition by the Company of the maximum number of Ordinary Shares, in one or a series of transactions, by way of market purchases pursuant to the Shareholder authority to be sought at the GM, assuming that no Ordinary Shares are acquired by the Company from members of the Concert Party;
Nameco 1113	Nameco (No. 1113) Limited, a private limited company, incorporated in England and Wales with registered number 08668280 and with its registered office address at 5th Floor, 40 Gracechurch Street, London, EC3V 0BT;
New Ordinary Shares	the Placing Shares, the Open Offer Shares and the Consideration Shares;
Open Offer	the conditional invitation by the Company to Qualifying Shareholders to apply to subscribe for Open Offer Shares at the Issue Price, including pursuant to the Excess Application Facility, on the terms and subject to the conditions to be set out in the Circular in respect of the Open Offer and in the case of Qualifying Non-CREST Shareholders only, the Application Form;
Open Offer Entitlements	the entitlements for Qualifying Shareholders to subscribe for Open Offer Shares under the Open Offer calculated on the basis of 1 Open Offer Share for every 10 Existing Ordinary Shares held by that Qualifying Shareholder as at the Record Date;
Open Offer Shares	the 1,484,846 new Ordinary Shares to be offered to Qualifying Shareholders under the Open Offer;
Ordinary Shares	ordinary shares of 10 pence each in the capital of the Company;
Panel	the Panel on Takeovers and Mergers;
Placing and Open Offer Agreement	the placing and open offer agreement dated 12 June 2019 between the Company and Shore Capital;
Placing Shares	the new Ordinary Shares to be issued by the Company under the Placing;
Placing	the conditional placing of Placing Shares at the Issue Price by Shore Capital, as agent for the Company, in accordance with the Placing and Open Offer Agreement;
Qualifying CREST Shareholders	Qualifying Shareholders holding Existing Ordinary Shares in a CREST account;
Qualifying Non-CREST Shareholders	Qualifying Shareholders holding Existing Ordinary Shares in certificated form;
Qualifying Shareholders	holders of Existing Ordinary Shares on the register of members of the Company at the Record Date with the exception (subject to certain exceptions) of Excluded Overseas Shareholders;
Record Date	6.00 p.m. on 12 June 2019 being the latest time by which transfers of Existing Ordinary Shares must be received for registration by the Company in order to allow transferees to be recognised as Qualifying Shareholders;
Regulatory Information Service	has the meaning given in the AIM Rules;
Restricted Jurisdictions	each of Australia, Canada, Japan, the Republic of Ireland, the Republic of South Africa and the United States (including its territories and possessions) and any other jurisdiction where the extension or availability of the Open Offer, or the taking of any other action in connection therewith, would breach any applicable law or regulation or require the Company to take any action to make the Open Offer available to Shareholders in such jurisdiction;
Shareholders	holders of Existing Ordinary Shares;
Shore Capital	Shore Capital and Corporate Limited (the Company's nominated adviser) and/or Shore Capital Stockbrokers Limited (the Company's broker), as the context requires;
uncertificated	recorded on a register of securities maintained by Euroclear in accordance with the CREST Regulations as being in uncertificated form in CREST and title to which, by virtue of the CREST Regulations, may be transferred by means of CREST;
UK or United Kingdom	the United Kingdom of England, Scotland, Wales and Northern Ireland;
Upperton	Upperton Holdings Limited, a company incorporated in England and Wales with registered number 03838601 (being a company wholly owned by Nigel Hanbury);
United States	the United States of America, its territories and possessions, any state of the United States of America and the District of Columbia;
Waiver	the waiver granted by the Panel, conditional upon the passing of the Whitewash Resolution, of the obligation under Rule 9 to make a mandatory cash offer for the Ordinary Shares not already owned by it that would otherwise arise on any member of the Concert Party as a result of the Whitewash Proposals;
Whitewash Proposals	the participation by Jeremy Evans (a member of the Concert Party) in the Placing; the allotment and issue of the Consideration Shares (on the assumption that the maximum number of Open Offer Shares are issued) to Nigel Hanbury pursuant to the Acquisition and the Maximum Potential Buyback;
Whitewash Resolution	the resolution to approve the Waiver to be set out in the Notice of GM; and
£ or pounds sterling	pounds sterling, the legal currency of the United Kingdom.

 

END

 

 

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