Placing, Subscription, Open Offer & Acquisitions

RNS Number : 8562D

Helios Underwriting Plc

02 November 2020

 

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, NEW ZEALAND, THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION WHERE TO DO SO MIGHT CONSTITUTE A VIOLATION OR BREACH OF ANY APPLICABLE LAW OR TO US PERSONS. PLEASE SEE THE IMPORTANT NOTICE AT THE END OF THIS ANNOUNCEMENT.

THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT (INCLUDING THE APPENDIX) IS DEEMED BY HELIOS UNDERWRITING PLC TO CONSTITUTE INSIDE INFORMATION AS STIPULATED UNDER THE  EU  MARKET ABUSE REGULATION (596/2014). UPON THE PUBLICATION OF THE ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS INFORMATION IS CONSIDERED TO BE IN THE PUBLIC DOMAIN.

THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT CONSTITUTE AN OFFER TO SELL OR ISSUE OR A SOLICITATION OF OFFERS TO BUY, SUBSCRIBE FOR OR OTHERWISE ACQUIRE ANY SECURITIES IN ANY JURISDICTION IN WHICH ANY SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL, INCLUDING THE UNITED STATES, AUSTRALIA, CANADA, JAPAN OR THE REPUBLIC OF SOUTH AFRICA. NEITHER THIS ANNOUNCEMENT NOR ANYTHING CONTAINED HEREIN SHALL FORM THE BASIS OF, OR BE RELIED UPON IN CONNECTION WITH, ANY SUCH OFFER, SOLICITATION OR COMMITMENT WHATSOEVER IN ANY SUCH JURISDICTION. THIS ANNOUNCEMENT SHOULD BE READ IN ITS ENTIRETY. IN PARTICULAR, YOU SHOULD READ AND UNDERSTAND THE INFORMATION PROVIDED IN THE APPENDIX. THE CONTENT OF THIS ANNOUNCEMENT HAS NOT BEEN APPROVED BY AN AUTHORISED PERSON WITHIN THE MEANING OF THE FINANCIAL SERVICES AND MARKETS ACT 2000, AS AMENDED. RELIANCE ON THIS ANNOUNCEMENT FOR THE PURPOSE OF ENGAGING IN ANY INVESTMENT ACTIVITY MAY EXPOSE AN INDIVIDUAL TO A SIGNIFICANT RISK OF LOSING ALL OF THE PROPERTY OR OTHER ASSETS INVESTED.

2 November 2020

Helios Underwriting plc

("Helios" or the "Company")

Proposals to raise approximately £20 million including

a Placing, Subscription, Open Offer and the acquisition of certain limited liability Lloyd's underwriting vehicles

Further to the Company's announcement of 7 October 2020 (the "Announcement"), Helios, the unique investment vehicle which acquires and consolidates underwriting capacity at Lloyd's, is pleased to announce proposals to raise approximately £20 million through the issue of up to 16,670,521 New Ordinary Shares pursuant to a Placing, Subscription, Open Offer and the acquisition of certain limited liability Lloyd's underwriting vehicles.

 Transaction Highlights

· Conditional Placing and conditional Subscription to raise, in aggregate, approximately £11.40 million through the issue of a total of 9,497,850 New Ordinary Shares to new and existing investors at £1.20 per share

·   Acquisition of four LLVs for a total consideration of approximately £9.32 million, comprising: approximately £2.37 million in cash, of which approximately £1.17 million will be retained by the Company to repay an intercompany loan, and approximately £6.95 million to be satisfied by the issue of 5,789,746 New Ordinary Shares

· New Ordinary Shares to be issued at £1.20 per New Ordinary Share which represents a premium of approximately 4 per cent. to the Company's Closing Price of £1.15 on 30 October 2020

· Proposal to raise a further £1.66 million by way of a conditional Open Offer subject to Shareholder approval

The above transaction highlights and the summary announcement below should be read in conjunction with the full appendix at the bottom of this announcement.

This announcement contains inside information and is disclosed in accordance with the Company's obligations under the Market Abuse Regulation (EU) No 596/2014.

Fundraising

The Company is pleased to announce that it has conditionally raised approximately £18.35 million at the Issue Price pursuant to the Placing and Subscription and in connection with the Acquisitions. In addition, the Company will be carrying out an Open Offer to raise gross proceeds of up to an additional £1.66 million, approximately.  The Open Offer provides Qualifying Shareholders with an opportunity to participate in the Fundraising at the Issue Price.

The Issue Price of £1.20 per New Ordinary Share represents an approximate 4 per cent premium to the Closing Price of £1.15 per Ordinary Share on the Latest Practicable Date.

Shareholder approval is being sought in respect of the authorities required to implement the Fundraising at the General Meeting, details of which are set out below.  The Fundraising is conditional, amongst other things, on the passing of the Resolutions by the Shareholders at the General Meeting.

Should Shareholders vote against the Resolutions, the Company will have to reduce its retained capacity below £21 million by increasing the quota cession to provide the necessary underwriting and working capital requirements. Shareholders would not then benefit from increased premium rates and a hardening market.

Proposed Acquisitions

The Company has entered into the Acquisition Agreements to acquire the entire issued share capitals of the following LLVs for a total consideration of approximately £9.32 million comprising: approximately £2.37 million in cash, of which approximately £1.17 million will be retained by the Company to repay a loan due to NJH by Upperton, which is 100% legally and beneficially owned by Nigel Hanbury, and approximately £6.95 million to be satisfied by the issue of the Consideration Shares:

	2020 Capacity, £	Total Consideration, £	Discount to Humphrey's Valuation
NJH	3,981,693	4,852,872	20%
L084	3,307,751	2,207,031	26%*
Nameco 510	1,087,690	657,091	26%
Nameco 544	1,411,844	1,603,471	15%
	9,788,924	9,320,465

*Adjusted for recent capacity purchases

As a result of Nigel Hanbury's indirect beneficial ownership of NJH, Nigel Hanbury's 40 per cent direct interest in L084 (members of his family have a direct interest in the remaining 60 per cent) and Arthur Manners' 50 per cent direct shareholding of Nameco 510 (members of his family have a direct shareholding in the remaining 50 per cent), these acquisitions constitute substantial property transactions for the purpose of section 190 of the Act and, accordingly, are subject (amongst other things) to Shareholder approval at the General Meeting. 

The NJH Acquisition, the L084 Acquisition and the Nameco 510 Acquisition also constitute related party transactions for the purpose of the AIM Rules and, as a result, a statement from Shore Capital, the Company's nominated adviser, as to the fairness and reasonableness of these Acquisitions insofar as Shareholders are concerned is required (see Appendix for further details).

The Company has a flexible and adaptive business plan to optimise the deployment of the net proceeds from the equity raise to finance the additional capital required to fund the increase in the capacity from pre-emptions, to increase the retained capacity by Helios, and to participate in capacity auctions. In addition, Helios can participate in quality syndicates where the management team has established relationships outside of the auction process.

An application will be made to the London Stock Exchange for the admission of the New Ordinary Shares to trading on AIM. It is expected that Admission will occur and that dealings will commence at 8.00 a.m. on 27 November 2020, at which time it is also expected that the New Ordinary Shares will be enabled for settlement in CREST.

Nigel Hanbury, Chief Executive of Helios, commented :

"I am pleased to announce a successful fundraising and the proposed acquisitions. The fundraising will enable us to take advantage of the hardening market in order to fund the increase in capacity from pre-emptions, to increase the Company's retained capacity by an expected 137 per cent to £50 million for the 2021 year of account, and to participate in capacity auctions.  

"On behalf of the Board I wish to thank our investors, new and existing, for their support. We now look forward to working with our new colleagues and partners to execute our strategy, which we are confident will be value enhancing for shareholders."

For further information, please contact:

Helios Underwriting plc

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

Arthur Manners - Chief Financial Officer                                                07754 965 917

Shore Capital (Nomad and Broker)

Robert Finlay                                                                                               020 7408 4080

David Coaten 

Henry Willcocks

Willis Re Securities (Financial Adviser)

Quentin Perrot                                                                                           07535 476 665

Alastair Rodger

Buchanan

Helen Tarbet / Henry Wilson / George Beale                                      07872 604 453

                                                                                                                    020 7466 5111

About Helios

Helios provides a limited liability direct investment into the Lloyd's insurance market and is quoted on the London Stock Exchange's AIM market (ticker: HUW). Helios trades within the Lloyd's insurance market writing approximately £70m of capacity for the 2020 account. The portfolio provides a good spread of business being concentrated in property insurance and reinsurance. For further information please visit www.huwplc.com.

APPENDIX

A circular containing details of the transaction will be posted later today to Shareholders along with a Form of Proxy to vote at a general meeting of the Company, to be held at 12 noon on 26 November 2020 at Hill Ash Farm, West Harting, Petersfield, Hampshire, GU31 5NY, and an Application Form to be used by Qualifying Non-CREST Shareholders in connection with the Open Offer. A copy of the Circular will be available on the Company's website at www.huwplc.com shortly. Capitalised terms in this announcement are defined as set out at the end of this announcement. Extracts from the circular can be found below.

1.  Introduction

The Company has grown successfully by implementing its current strategy of consolidating Lloyd's namecos to build a fund of Lloyd's underwriting capacity.  In order to take advantage of attractive opportunities for growth and shareholder value enhancement, the Company intends to carry out the Fundraising and the Acquisitions, further details of which are set out below.

Fundraising

The Company announced on 2 November 2020 that it had conditionally raised approximately £18.35 million at the Issue Price pursuant to the Placing and Subscription and in connection with the Acquisitions and would be carrying out an Open Offer to raise additional gross proceeds of up to approximately £ 1.66 million.  The Open Offer provides Qualifying Shareholders with an opportunity to participate in the Fundraising at the Issue Price.

The Issue Price of £1.20 per New Ordinary Share represents an approximate 4 per cent premium to the Closing Price of £1.15 per Ordinary Share on the Latest Practicable Date.

Shareholder approval is being sought in respect of the authorities required to implement the Fundraising at the General Meeting, details of which are set out in paragraph 10 below.  The Fundraising is conditional, amongst other things, on the passing of the Resolutions by the Shareholders at the General Meeting.

Should Shareholders vote against the Resolutions, the Company will have to reduce its retained capacity below £21 million by increasing the quota cession to provide the necessary underwriting and working capital requirements.  Shareholders would not then benefit from increased premium rates and a hardening market.

Proposed Acquisitions

The Company (or a wholly owned subsidiary) has entered into the Acquisition Agreements to acquire the entire issued share capitals of the following LLVs for a total consideration of approximately £9.32 million comprising, approximately £2.37 million in cash, of which approximately £1.17 million will be retained by the Company to repay an intercompany loan, and approximately £6.95 million to be satisfied by the issue of the Consideration Shares:

	2020 Capacity, £	Total Consideration, £	Discount to Humphrey's Valuation
NJH	3,981,693	4,852,872	20%
L084	3,307,751	2,207,031	26%*
Nameco 510	1,087,690	657,091	26%
Nameco 544	1,411,844	1,603,471	15%
	9,788,924	9,320,465

*Adjusted for recent capacity purchases

As a result of Nigel Hanbury's indirect beneficial ownership of NJH, Nigel Hanbury's 40 per cent direct interest in L084 (members of his family have a direct interest in the remaining 60 per cent) and Arthur Manners' 50 per cent direct shareholding of Nameco 510 (members of his family have a direct shareholding in the remaining 50 per cent), these acquisitions constitute substantial property transactions for the purpose of section 190 of the Act and, accordingly, are subject (amongst other things) to Shareholder approval at the General Meeting. 

The NJH Acquisition, the L084 Acquisition and the Nameco 510 Acquisition also constitute related party transactions for the purpose of the AIM Rules and, as a result, a statement from the Independent Directors and Shore Capital, the Company's nominated adviser, as to the fairness and reasonableness of these Acquisitions insofar as Shareholders are concerned is required (see below for further details).

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

Through the unique experience of the management team, Helios has built over time a diversified portfolio of insurance risk with top performing syndicates, making it accessible via an investment in publicly quoted shares. The management has significant holdings in the Company, ensuring a strong alignment of interest with Shareholders.

Helios' strategy to date has been to build a fund of Lloyd's underwriting capacity through the acquisition and consolidation of acquired limited liability vehicles.  The Company gives Shareholders access to a diversified portfolio of (re)insurance risk which has substantially outperformed the broader Lloyd's market. The business model allows for a significant increase in the Company's scale without having a meaningful impact on its cost base. Quota share reinsurance is utilised to reduce the exposure of the portfolio and assist in the financing of the required underwriting capital.

This strategy is expected to increase the capacity portfolio from £12.9 million at the start of the 2013 underwriting year to over £100 million for the 2021 underwriting year, including £9.8 million of capacity in respect of the Acquisitions. 

For the last four years (2017-2020), the insurance market has generally underperformed due to a poor rating environment and significant market losses from natural catastrophes and now Covid-19 related exposures. Currently the rating environment in Lloyd's and the general (re)insurance market is improving. Since 1 January 2018, the premium rates charged by those supported syndicates have increased by approximately 28 per cent, thereby improving underwriting margins and the prospects of profitable underwriting. The increase in premium rates and hardening market is expected to provide new opportunities for Shareholders.  For example, certain supported syndicates are offering pre-emption capacity that is able to be taken up by Helios for no consideration, aside from the respective required increase of Funds at Lloyd's.  In this regard, preliminary indications show an overall increase in capacity from pre-emptions of £12 million for the enlarged Helios portfolio, an increase of £2.5 million from the previously announced figure of £9.5 million on 25 September 2020.

In addition, the Company currently cedes 70 per cent of its current portfolio to reinsurers in 2020, equating to approximately £49 million.  Due to the improving market conditions, the Board is considering the possibility of retaining a larger proportion of any additional capacity underwritten, so that average capacity reinsured will remain at approximately £50 million going forward.  It is expected that the Helios retained capacity will increase by 137 per cent to £50 million for the 2021 year of account and the additional capital required will be funded partly by the additional capital raised and by using underwriting capital provided by excess of loss reinsurers:

	2020 £m	2021 Expected £m	% Increase
Helios retained capacity at 1st January	21.1	50.0	137%
Helios total capacity at 1st January	69.1	100.0	45%

Given these attractive opportunities for growth and shareholder value enhancement, the Company proposes to raise, in aggregate, up to approximately £20 million through the issue of 6,372,850 new Ordinary Shares pursuant to the Placing, 3,125,000 new Ordinary Shares pursuant to the Subscription, up to 1,382,925 new Ordinary Shares pursuant to the Open Offer and 5,789,746 new Ordinary Shares Pursuant to the Acquisitions, with each new Ordinary Shares being issued at the Issue Price. The Company has a flexible and adaptable business plan to optimise the deployment of the net proceeds from the equity raise to finance the additional capital required to fund the increase in the capacity from pre-emptions, to increase the retained capacity by Helios, and to participate in capacity auctions. In addition, Helios can participate in quality syndicates where the management team has established relationships outside of the auction process.

The Acquisitions are in line with the Company's strategy to increase the portfolio capacity, but also enables Nigel Hanbury and Arthur Manners to continue to invest in the Company's share capital, within the context of the Fundraising and further aligns their interest with Shareholders. Following the sales of NJH, L084 and Nameco 510, Nigel Hanbury and Arthur Manners will no longer have a personal interest in limited liability Lloyd's vehicles outside of their interest in the Company.

The Company's expenses in respect of the Fundraising and Acquisition are estimated to be approximately £600k.

3.  Further Information on the Acquisitions

NJH

NJH is a limited liability member of Lloyd's.  The 2020 underwriting capacity of N J Hanbury is £3,981,639. NJH has funds available for underwriting of approximately £3.6 million. The aggregate consideration of £4,852,872 being paid for the shares in NJH, comprising 3,066,752 New Ordinary Shares and £1.17 million in cash, is a 20% discount to the Humphrey valuation of approximately £6.1 million.  On completion, the £1.17 million cash element of the consideration will not be distributed to the sellers of NJH, but instead will be retained by Helios to repay a loan due to NJH by Upperton, which is 100% legally and beneficially owned by Nigel Hanbury.  NJH made profits of £319,890 in its last financial year.

L084

L084 is a limited liability member of Lloyd's.  The 2020 underwriting capacity of L084 is £3,307,751.  L084 has funds available for underwriting of approximately £1.6 million.  The consideration of £2,207,031 being paid for the membership interest of L084, through the issue of 1,839,193 New Ordinary Shares, is a 26% discount to the L084 adjusted* Humphrey valuation of approximately £2.98 million.  L084 made profits of £191,383 in its last financial year.

Nameco 510

Nameco 510 is a limited liability member of Lloyd's.  The 2020 underwriting capacity of Nameco 510 is £1,087,690. Nameco 510 has funds available for underwriting of approximately £0.3 million. The consideration of £657,091 being paid for the shares in Nameco 510, through the issue of 547,576 New Ordinary Shares, is a 26% discount to the Humphrey valuation of approximately £0.9 million.  Nameco 510 made profits of £71,872 in its last financial year.

Nameco 544

Nameco 544 is a limited liability member of Lloyd's.  The 2020 underwriting capacity of Nameco 544 is £1,411,844.  Nameco 544 has   funds available for underwriting of approximately £1.4 million.  The consideration of £1,603,471 being paid for the shares in Nameco 544, through the issue of 336,225 New Ordinary Shares, is a 15% discount to the Nameco 544 Humphrey valuation of approximately £1.9 million.   Nameco 544 made profits of £103,343 in its last financial year.

The Acquisitions are conditional upon, among other things, the passing, without amendment, of the Resolutions and approval of the change of control by Lloyd's.

The capacity portfolios of all these acquisitions will complement the existing portfolio and limited changes will be made to the acquired syndicate participations to maximise the capital efficiency of the enlarged portfolio.

*Adjusted for recent capacity purchases

4.  Trading Update

Helios provides a limited liability direct investment into the Lloyd's insurance market and is quoted on AIM (ticker: HUW). There was a significant increase in profitability during 2019 as the value of the capacity fund increased during the year and the Company acquired a number of LLV's at below fair value, giving rise to negative goodwill being recognised in the profit and loss account. Helios trades within the Lloyd's insurance market and has a portfolio syndicate capacity of £70 million for the 2020 year of account. The portfolio provides a good spread of classes of business being concentrated in property insurance and reinsurance. The top seven holdings comprise 76 per cent of the 2020 portfolio as at 10 September 2020.

On 25 September 2020, the Company announced its interim results for the six months ended 30 June 2020 which included the following statements:

· "Operating loss before impairment is £108,000 (30 June 2019 - a profit of £753,000).

· Reduction in underwriting profits from the syndicate participations reflects the losses recognised from the Covid-19 pandemic in this period.

· The cumulative premium rate increase achieved by underwriters since 1 January 2018 is 28%, which together with greater discipline encouraged by the Franchise Board at Lloyd's, has improved the prospects for profitable underwriting.

· The Adjusted Net Asset Value per share is £2.07 per share (31 December 2019 - £2.06 per share)."

"The underwriting result has been impacted by the losses arising from the Covid-19 pandemic.  Losses of £5m (7% of capacity) have been reserved for Covid-19 by the supported syndicates as at 30 June 2020, of which 85% attaches to the 2019 year.  The quota share reinsurers share £3.5m of this loss so the impact on the underwriting profits was £1.5m.  The disputes over business interruption coverage are largely outside Lloyd's and are not expected to impact the portfolio.  The mid point forecast for the 2019 year of account as at 30 June 2020 is a loss of 1.6%, having reserved the Covid-19 losses that have been incurred.  We have a stop loss reinsurance protection for the 2019 year on which we do not expect to have to make a claim.

The current turmoil is taking place against a backdrop of the greatest positive momentum the Directors have seen in both insurance and reinsurance pricing for many years.  The improvement in underwriting conditions is now accelerating following catastrophic losses in 2017, 2018 and 2019.  Cumulative rate increases since 1 January 2018 are 28%.  We have been advised of further pre-emptions of approximately £9.5m from our supported syndicates to take advantage of improved market conditions."

"A window of opportunity has been opened which is exciting for Helios:

· Our strategy of building a portfolio of syndicate capacity continues to rely on the flow of LLVs for sale at reasonable prices.

· The pre-emptions, if fully taken up, will increase the portfolio by approximately 13%.

· There is an opportunity to increase the capacity retained by Helios shareholders by reducing the quota share cession".

The pro forma net asset value per share following the capital raise at Completion is expected to be £ 1.55 per share, assuming the full take up of the Open Offer.

5.  Details of the Acquisition Agreements

Pursuant to the Acquisition Agreements, the Company (or a wholly owned subsidiary) has conditionally agreed to acquire the entire issued share capitals of NJH, L084, Nameco 510 and Nameco 544 on the financial terms summarised above.

The Acquisition Agreements are on substantially similar terms and are conditional, amongst other things, upon:

a)  the passing, without amendment, of the Resolutions at the General Meeting;

b)  Lloyd's approval of the change of control; and

c)  Admission having occurred by no later than 8.00 a.m. on 27 November 2020 (or such later time and/or date as the Company and Shore Capital may agree, not being later than 16 December 2020).

If the conditions set out above are not satisfied or waived by no later than 16 December 2020, the Acquisition Agreements 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 is expected to occur and the Consideration Shares are expected to be issued at Admission.

The Acquisition Agreements contain customary warranties given by the sellers to the Company.  The sellers have also undertaken to indemnify the Company in respect of any liabilities for tax of the target companies arising in respect of, amongst other things, prior closed years of account.  The liability of the sellers pursuant to the warranties and indemnities 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 Agreements are subject to English law.

6.  Details of the Fundraising

  Details of the Placing

The Company has conditionally raised approximately £7,647,420 (before expenses) through a placing of 6,372,850 New Ordinary Shares at £1.20 per share.

The Placing has not been underwritten and is conditional, inter alia, upon:

a)  the passing, without amendment, of the 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 27 November 2020 (or such later time and/or date as the Company and Shore Capital may agree, not being later than 16 December 2020).

Accordingly, if any of such conditions are not satisfied or, if applicable, waived, the Placing will not proceed.

Details of the Subscription

The Company has conditionally raised approximately £ 3,750,000 (before expenses) through the issue/a placing of 3,125,000 new Ordinary Shares at £1.20 per share, pursuant to the Subscription.

The Subscription has not been underwritten and is conditional, inter alia, upon:

(a) the passing, without amendment, of the Resolutions at the General Meeting;

(b) Admission occurring by not later than 8.00 a.m. on 27 November 2020 (or such later time and/or date as the Company and Shore Capital may agree, not being later than 16 December 2020).

Accordingly, if any such conditions are not satisfied or, if applicable, waived, the Subscription will not proceed.

The Company has agreed with an associate of Acadia Insurance Investments LLC (one of the Subscribers) that it may participate in the quota share of the capacity portfolio providing underwriting capital of £875,000 for a minimum two year period.

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 for 1 Open Offer Share for every 13 Existing Ordinary Shares held 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 as described below.

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 £1,659,510.  The Open Offer is not being underwritten.

The Issue Price represents a premium of approximately 4 per cent to the Closing Price of £1.15 per Ordinary Share on the Latest Practicable Date.

Open Offer Entitlements

Qualifying Shareholders are invited, on and subject to the terms and conditions of the Open Offer, to apply for any number of Open Offer Shares up to their Open Offer Entitlement at the Issue Price.  Qualifying Shareholders have an Open Offer Entitlement of:

1 Open Offer Share for every 13 Existing Ordinary Shares

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

Entitlements under the Open Offer will be rounded down to the nearest whole number and any fractional entitlements to Open Offer Shares will be disregarded in calculating Open Offer Entitlements.

The aggregate number of Open Offer Shares available for subscription pursuant to the Open Offer will not exceed 1,382,925 Open Offer Shares.

Qualifying Shareholders who apply for any or all of their Open Offer Entitlement will be allocated with the number of Open Offer Shares validly applied for, subject to the Open Offer becoming unconditional.

To the extent that valid applications are not received in respect of Open Offer Shares under the Open Offer, such Open Offer Shares may be allocated to Qualifying Shareholders to meet any valid applications under the Excess Application Facility.

Excess Application Facility

Qualifying Shareholders who have taken up their Open Offer Entitlement in full may apply to subscribe for Excess Shares using the Excess Application Facility, should they wish.  Qualifying Non-CREST Shareholders wishing to apply to subscribe for Excess Shares, may do so by completing the relevant sections on the Application Form.  Qualifying CREST Shareholders who wish to apply to subscribe for more than their Open Offer Entitlements will have Excess CREST Open Offer Entitlements credited to their stock account in CREST and should refer to paragraph 4.2 of Part II of this document for information on how to apply for Excess Shares pursuant to the Excess Application Facility.

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.  Excess monies in respect of applications which are not met in full will be returned to the applicant (at the applicant's risk) without interest as soon as practicable thereafter by way of cheque or CREST payment, as appropriate.

Application procedure under the Open Offer

Qualifying Shareholders may apply for any whole number of Open Offer Shares, subject to the limit of their Open Offer Entitlement.  Qualifying Shareholders who have taken up their Open Offer Entitlement in full may also apply to subscribe for Excess Shares using the Excess Application Facility.  The Open Offer Entitlement, in the case of Qualifying Non-CREST Shareholders, is equal to the number of Open Offer Entitlements as shown in Box 4 on their Application Form or, in the case of Qualifying CREST Shareholders, is equal to the number of Open Offer Entitlements standing to the credit of their stock account in CREST.

Qualifying Shareholders with holdings of Existing Ordinary Shares in both certificated and uncertificated form will be treated as having separate holdings for the purpose of calculating their Open Offer Entitlements.  Qualifying CREST Shareholders will receive a credit to their appropriate stock accounts in CREST in respect of their Open Offer Entitlement as soon as practicable after 8.00 a.m. on 3 November 2020.

Application will be made for the Open Offer Entitlements and Excess CREST Open Offer Entitlements to be admitted to CREST, which will be enabled for settlement in CREST as soon as practicable after 8.00 a.m. on 3 November 2020.  Qualifying CREST Shareholders should note that, although the Open Offer Entitlements will be admitted to CREST and be enabled for settlement, applications in respect of entitlements under the Open Offer may only be made by the Qualifying Shareholder originally entitled or by a person entitled by virtue of a bona fide market claim raised by Euroclear's Claims Processing Unit.

Qualifying Non-CREST Shareholders should note that their Application Form is not a negotiable document and cannot be traded.

Further information on the Open Offer and the terms and conditions on which it is made, including the procedure for application and payment, are set out in Part II of this document and, where relevant, on the Application Form.

Conditionality

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

a)  the passing, without amendment, of the 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 27 November 2020 (or such later time and/or date as the Company and Shore Capital may agree, not being later than 16 December 2020).

If the conditions set out above are not satisfied or 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.

Placing and Open Offer Agreement

The Company has entered into a placing and open offer agreement with Shore Capital dated 2 November 2020, pursuant to which, Shore Capital agreed, inter alia, to use its reasonable endeavours to procure subscribers for new Ordinary Shares as agent for the Company at the Issue Price per share. 

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 27 November 2020 (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.

Important notice

Qualifying Shareholders should note that the Open Offer is not a rights issue.  Qualifying Shareholders should be aware that in the Open Offer, unlike with a rights issue, any Open Offer Shares not applied for by Qualifying Shareholders under their Open Offer Entitlements will not be sold in the market on behalf of, or placed for the benefit of Qualifying Shareholders who do not apply under the Open Offer.  To the extent that valid acceptances are not received in respect of all of the Open Offer Shares under the Open Offer, unallocated Open Offer Shares will be made available to other Qualifying Shareholders, provided they have taken up their Open Offer Entitlements in full, pursuant to the Excess Application Facility.

Qualifying Shareholders are being invited to participate in the Open Offer and Qualifying Non-CREST Shareholders will have received an Application Form with this document.

Any Qualifying Shareholder who has sold or transferred all or part of his registered holding(s) of Existing Ordinary Shares prior to the date on which the Ordinary Shares were marked 'ex-entitlement' is advised to consult his stockbroker, bank or other agent through or to whom the sale or transfer was effected as soon as possible since the invitation to apply for Open Offer Shares under the Open Offer may be a benefit which may be claimed from him by the purchasers under the rules of the London Stock Exchange.

7.  Effect of the Fundraising and Acquisitions

Immediately following Admission, the New Ordinary Shares would together represent approximately 48.1 per cent of the Enlarged Share Capital (assuming the Open Offer is subscribed in full).

8.  Directors' interests

The interests (all of which are beneficial unless stated otherwise) of the Directors, and their respective immediate families and of persons connected with them (within the meaning of section 252 of the Act) in the Existing Ordinary Shares as at the Latest Practicable Date and as they are expected to be following Admission (assuming that the Placing Shares are issued, the maximum number of Open Offer Shares are issued, none of the Directors participate in the Open Offer and Completion occurs) are as follows:

	At the Latest Practicable Date		Immediately following Admission
Name	Number of Ordinary Shares	Percentage o f Existing Ordinary Shares		Number of Ordinary Shares	Percentage of Enlarged Share Capital
Michael Cunningham	78,698	0.4%		78,698	0.23%
Nigel Hanbury*	4,327,640	24.1%		9,233,585	26.65%
Arthur Manners**	362,292	2.0%		909,868	2.63%
Andrew Christie	31,096	0.2%		31,096	0.09%
Jeremy Evans	66,483	0.4%		66,483	0.19%
Edward Fitzalan-Howard	372,864	2.1%		372,864	1.08%

* 300,000 of Nigel Hanbury's shares are jointly owned in accordance with the Company's Joint Share Ownership Plan, as detailed in the announcement made by the Company on 14 December 2017. Includes members of his family.

** 200,000 of Arthur Manner's shares are jointly owned in accordance with the Company's Joint Share Ownership Plan, as detailed in the announcement made by the Company on 14 December 2017. Includes members of his family.

9.  Related Party Transactions

As Nigel Hanbury is a director of, and substantial shareholder in, the Company, and as Arthur Manners is a director of the Company, the NJH Acquisition, L084 Acquisition and the Nameco 510 Acquisition 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 NJH Acquisition, the L084 Acquisition and the Nameco 510 Acquisition are fair and reasonable insofar as Shareholders are concerned.

In addition, as a result of Nigel Hanbury's indirect beneficial ownership of NJH, his 40% direct interest in L084 and Arthur Manners' 50% direct shareholding of Nameco 510, these acquisitions constitute substantial property transactions for the purpose of section 190 of the Act and, accordingly, are subject (amongst other things) to Shareholder approval at the General Meeting. The remaining 60% of L084 is owned by members of Nigel Hanbury's family.  The remaining 50% of Nameco 510 is owned by members of Arthur Manners' family.

10. General Meeting

The General Meeting, notice of which is set out at the end of this document, is to be held at 12 noon on 26 November 2020 at Hill Ash Farm, West Harting, Petersfield, Hampshire, GU31 5NY.  This is due to the need to observe the UK Government's current guidance on social distancing and in light of the recently enacted laws restricting individuals' ability to meet with others to help prevent the spread of Covid-19.  Mindful of the new measures and the challenges this presents, the Board will ensure a quorum is present and regrettably no additional Shareholders will be able to attend the General Meeting.  This is essential to ensure the General Meeting's proper conduct and safe operation.  At present, the Company's articles of association do not permit general meetings to be held virtually via video link.

The General Meeting is being held for the purpose of considering and, if thought fit, passing the Resolutions set out in full in the Notice of General Meeting, as summarised below:

· Resolution 1 is an ordinary resolution to approve the acquisition by the Company of NJH (being a company connected with Nigel Hanbury, a director of the Company) as a substantial property transaction in accordance with the Act.  Given that the purchase price in respect of the NJH Acquisition is to be satisfied by the allotment and issue of Consideration Shares, Resolution 1 is conditional on the passing of Resolutions 4 and 5.

· Resolution 2 is an ordinary resolution to approve the acquisition by the Company (through its wholly owned subsidiary Helios UTG) of L084 (being a LLP in which Nigel Hanbury, a director of the Company, and member of his family have an interest) as a substantial property transaction in accordance with the Act.  Given that the purchase price in respect of the L084 Acquisition is to be satisfied by the allotment and issue of Consideration Shares, Resolution 2 is conditional on the passing of Resolutions 4 and 5.

· Resolution 3 is an ordinary resolution to approve the acquisition by the Company of Nameco 510 (being a company connected with Arthur Manners, a director of the Company) as a substantial property transaction in accordance with the Act.  Given that the purchase price in respect of the Nameco 510 Acquisition is to be satisfied in part by the allotment and issue of Consideration Shares, Resolution 3 is conditional on the passing of Resolution 4 and 5.

· Resolution 4 is an ordinary resolution to grant the Directors authority to allot the New Ordinary Shares for the purposes of the Acquisitions and the Fundraising.  Resolution 4 is conditional on the passing of Resolutions 1, 2 and 3.

· Resolution 5 is conditional on the passing of Resolution 4.  Resolution 5 is a special resolution which disapplies the statutory pre-emption rights in respect of the allotment of the New Ordinary Shares to be allotted pursuant to Resolution 4.

If any of the proposed Resolutions are not passed by Shareholders, the Fundraising and Acquisitions will not complete and the Company will have to reduce its retained capacity below £21 million by increasing the quota cession to provide the necessary underwriting and working capital. Therefore, Shareholders may not be able to take advantage of the increased premium rates and hardening market.

11. Recommendation

The Directors consider that all of the Resolutions are in the best interests of the Company and its Shareholders as a whole and recommend that Shareholders vote in favour of such Resolutions.

 

FUNDRAISING STATISTICS

Issue Price	£1.20
Entitlement of Qualifying Shareholders under the Open Offer	1 Open Offer Share for every 13 Existing Ordinary Shares
Existing Ordinary Shares1	17,978,028
Number of Placing Shares	6,372,850
Number of Subscription Shares	3,125,000
Number of Consideration Shares	5,789,746
Maximum number of Open Offer Shares to be issued by the Company pursuant to the Open Offer	1,382,925
Aggregate number of New Ordinary Shares to be issued pursuant to the Placing, Subscription, Acquisitions and Open Offer2	16,670,521
Maximum gross proceeds of the Placing, Subscription and Open Offer (including the value of the Consideration Shares)2	£20,004,625
Percentage of the Enlarged Share Capital represented by the New Ordinary Shares1,2	48.1%
Enlarged Share Capital1,2	34,648,549
ISIN of the Open Offer Entitlement	GB00BK80SX04
ISIN of the Excess CREST Open Offer Entitlement	GB00BK80T371

¹Excluding the 412,878 Ordinary Shares held in treasury and which do not carry voting rights.

²Assuming the maximum number of Open Offer Shares are issued pursuant to the Open Offer.

 

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

RecordDateforentitlementtoparticipateintheOpenOffer	6.00 p.m. on 30 October
Announcement oftheFundraising and Acquisitions	2 November
Ex-entitlement date for the Open Offer	8 a.m. on 2 November
Despatch of the Circular, the Form of Proxy and, to certain Qualifying Non-CREST Shareholders, the Application Form	2 November
Open Offer Entitlements and Excess CREST Open Offer Entitlements credited to CREST stock accounts of Qualifying CREST Shareholders	as soon as possible after 8.00 a.m. on 3 November
Recommended latest time and date for requesting withdrawal of Open Offer Entitlements and Excess CREST Open Offer Entitlements from CREST	4.30 p.m. on 18 November
Latest time for depositing Open Offer Entitlements and Excess CREST Open Offer Entitlements into CREST	3.00 p.m. on 19 November
Latest time and date for splitting Application Forms	3.00 p.m. on 20 November
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 23 November
Latest time and date for receipt of Forms of Proxy for the General Meeting	12 noon on 24 November
Announcement of results of Open Offer	26 November
General Meeting	12 noon on 26 November
Announcement of result of the General Meeting	26 November
Admission of the New Ordinary Shares to trading on AIM	8.00 a.m. on 27 November
New Ordinary Shares in uncertificated form expected to be credited to accounts in CREST (uncertificated holders only)	27 November
Expected despatch of definitive share certificates for the New Ordinary Shares (certificated holders only)	Week commencing 30 November

Notes:

(i)  References to times are to London time (unless otherwise stated).

(ii)  If any of the above times or dates should change, the revised times and/or dates will be notified by an announcement to an RIS.

(iii)  The timing of the events in the above timetable and in the rest of this announcement is indicative only.

 

DEFINITIONS

The following definitions apply throughout this announcement, unless the context requires otherwise or unless it is otherwise specifically provided:

Act	the Companies Act 2006;
Acquisitions	the NJH Acquisition, the L084 Acquisition, the Nameco 510 Acquisition and the Nameco 544 Acquisition, or any of them as the case may be;
Acquisition Agreements	NJH Acquisition Agreement, the L084 Acquisition Agreement, the Nameco 510 Acquisition Agreement and the Nameco 544 Acquisition Agreement, or any of them as the case may be;
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;
Application Form	the application form accompanying the Circular to be used by Qualifying Non-CREST Shareholders in connection with the Open Offer;
Board or Directors	the board of directors of the Company;
Business Day	any day (excluding Saturdays and Sundays) on which banks are open in London for normal banking business and the London Stock Exchange is open for trading;
certificated or 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 sent to shareholders dated 2 November 2020;
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 EC3V 0BT;
Completion	completion of the Acquisitions in accordance with the terms and conditions of the Acquisition Agreements;
Consideration Shares	the NJH Consideration Shares, the L084 Consideration Shares, the Nameco 510 Consideration Shares and the Nameco 544 Consideration Shares;
CREST	the relevant system (as defined in the CREST Regulations) in respect of which Euroclear is the Operator (as defined in the CREST Regulations);
CREST Manual	the compendium of documents entitled "CREST Manual" issued by Euroclear from time to time and comprising the CREST Reference Manual, the CREST Central Counterparty Service Manual, the CREST International Manual, the CREST Rules (including CREST Rule 8), the CCSS Operations Manual and the CREST Glossary of Terms;
CREST member	a person who has been admitted by Euroclear as a system member (as defined in the CREST Regulations);
CREST participant	a person who is, in relation to CREST, a system participant (as defined in the CREST Regulations);
CREST Proxy Instruction	the appropriate CREST message made to appoint a proxy, properly authenticated in accordance with Euroclear's specifications;
CREST Regulations	the Uncertificated Securities Regulations 2001, as amended;
CREST sponsor	a CREST participant admitted to CREST as a CREST sponsor;
CREST sponsored member	a CREST member admitted to CREST as a sponsored member;
Enlarged Share Capital	the issued share capital of the Company on Admission following completion of the Fundraising and the Acquisitions (excluding any Ordinary Shares held in treasury, which do not carry voting rights, and assuming the maximum number of Open Offer Shares are issued pursuant to the Open Offer);
Euroclear	Euroclear UK & Ireland Limited;
Excess Application Facility	the arrangement pursuant to which Qualifying Shareholders may apply for Open Offer Shares in addition to their Open Offer Entitlement provided they have agreed to take up their Open Offer Entitlement in full as set out in the Circular and, in the case of Qualifying Non-CREST Shareholders, the Application Form;
Excess CREST Open Offer Entitlements	in respect of each Qualifying CREST Shareholder, the entitlement set out in the Circular (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 as set out in the Circular;
Excluded Overseas Shareholders	other than as agreed by the Company and Shore Capital or as permitted by applicable law, Shareholders who are located, resident or have registered addresses in a Restricted Jurisdiction;
Existing Ordinary Shares	the 17,978,028 Ordinary Shares in issue as at the Latest Practicable Date (excluding the 412,878 Ordinary Shares held in treasury, which do not carry voting rights);
FCA	the Financial Conduct Authority;
Form of Proxy	the form of proxy accompanying the Circular relating to the General Meeting;
FSMA	the UK Financial Services and Markets Act 2000, as amended;
Fundraising	the Placing, the Subscription and the Open Offer;
General Meeting	the General Meeting of the Company, notice of which is set out at the end of the Circular, and including any adjournment(s) thereof;
Group	the Company and its subsidiaries, from time to time;
Helios UTG	Helios UTG Partner Limited, a private limited company, incorporated in England and Wales with registered number 08665213 and with its registered office address at 5th Floor, 40 Gracechurch Street, London EC3V 0BT;
Humphrey	Humphrey & Co, chartered accountants, independent valuers of the LLVs;
Independent Directors	the Directors other than Nigel Hanbury and Arthur Manners;
Issue Price	£1.20 per New Ordinary Share;
L084	Nomina No. 084 LLP, a limited liability partnership with registered number OC321872 with registered office at 5th Floor, 40 Gracechurch Street, London EC3V 0BT;
L084 Acquisition	the proposed acquisition by the Company (through its wholly owned subsidiary, Helios UTG) of the entire membership interest of L084 in accordance with the terms of the L084 Acquisition Agreement;
L084 Acquisition Agreement	the conditional agreement dated 30 October 2020 for the acquisition by the Company (through its wholly owned subsidiary, Helios UTG) of the entire membership interest of L084 from Nigel Hanbury and members of his family, further details of which are set out in the Chairman's letter in the Circular;
L084 Consideration Shares	the 1,839,193 new Ordinary Shares to be allotted and issued to Nigel Hanbury and members of his family at the Issue Price pursuant to the L084 Acquisition Agreement;
Latest Practicable Date	30 October 2020, being the latest practicable date prior to publication of this announcement;
Lloyd's	the Society and Corporation of Lloyd's, commonly referred to as Lloyd's of London;
LLV	a limited liability vehicle member of Lloyd's;
London Stock Exchange	London Stock Exchange plc;
Money Laundering Regulations	the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 and the Proceeds of Crime Act 2002;
NJH	N.J. Hanbury Limited, a private limited company, incorporated in England and Wales with registered number 03630946 and with its registered office address at 5th Floor, 40 Gracechurch Street, London EC3V 0BT;
NJH Acquisition	the proposed acquisition by the Company of the entire issued share capital of N J Hanbury from Upperton in accordance with the terms of the NJH Acquisition Agreement;
NJH Acquisition Agreement	the conditional agreement dated 30 October 2020 for the acquisition by the Company of the entire issued share capital of NJH from Upperton, which is 100% legally and beneficially owned by Nigel Hanbury, further details of which are set out in the Chairman's letter in the Circular;
NJH Consideration Shares	the 3,066,752 new Ordinary Shares to be allotted and issued to Upperton at the Issue Price pursuant to the N J Hanbury Acquisition Agreement;
Nameco 510	Nameco (No. 510) Limited, a private limited company, incorporated in England and Wales with registered number 04080285 and with its registered office address at 5th Floor, 40 Gracechurch Street, London EC3V 0BT;
Namco 510 Acquisition	the proposed acquisition by the Company of the entire issued share capital of Nameco 510 from Arthur Manners and members of his family in accordance with the terms of the Nameco 510 Acquisition Agreement;
Nameco 510 Acquisition Agreement	the conditional agreement dated 30 October 2020 for the acquisition by the Company of the entire issued share capital of Nameco 510 from Arthur Manners and members of his family, further details of which are set out in the Chairman's letter in the Circular;
Nameco 510 Consideration Shares	the 547,576 new Ordinary Shares to be allotted and issued to Arthur Manners and members of his family at the Issue Price pursuant to the Nameco 510 Acquisition Agreement;
Nameco 544	Nameco (No. 544) Limited, a private limited company, incorporated in England and Wales with registered number 04080204 and with its registered office address at 5th Floor, 40 Gracechurch Street, London EC3V 0BT;
Nameco 544 Acquisition	the proposed acquisition by the Company of the entire issued share capital of Nameco 544 from Peter Hildred Buxton in accordance with the terms of the Nameco 544 Acquisition Agreement;
Nameco 544 Acquisition Agreement	the conditional agreement dated 30 October 2020 for the acquisition by the Company of the entire issued share capital of Nameco 544 from Peter Hildred Buxton, further details of which are set out in the Chairman's letter in the Circular;
Nameco 544 Consideration Shares	the 336,225 new Ordinary Shares to be allotted and issued to Peter Hildred Buxton at the Issue Price pursuant to the Nameco 544 Acquisition Agreement;
New Ordinary Shares	the Placing Shares, the Subscription Shares, the Open Offer Shares and the Consideration Shares;
Notice of General Meeting	the notice of the general meeting of the Company, set out at the end of the Circular;
Open Offer	the conditional invitation by the Company to Qualifying Shareholders to apply to subscribe for Open Offer Shares at the Issue Price, including pursuant to the Excess Application Facility, on the terms and subject to the conditions set out in the Circular and in the case of the Qualifying Non-CREST Shareholders only, the Application Form;
Open Offer Entitlements	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 13 Existing Ordinary Share held by that Qualifying Shareholder as at the Record Date;
Open Offer Shares	the 1,382,925 New Ordinary Shares being made available to Qualifying Shareholders pursuant to the Open Offer;
Ordinary Shares	ordinary shares of 10 pence each in the capital of the Company;
Overseas Shareholders	Shareholders with registered addresses outside the UK or who are citizens of, incorporated in, registered in or otherwise resident in, countries outside the UK;
Participant ID	the identification code or membership number used in CREST to identify a particular CREST member or other CREST participant;
Placing	the conditional placing of Placing Shares at the Issue Price by Shore Capital, as agent for the Company, and in accordance with the Placing and Open Offer Agreement;
Placing and Open Offer Agreement	the placing and open offer agreement dated 2 November 2020 between the Company and Shore Capital;
Placing Shares	the 6,372,850 New Ordinary Shares to be issued by the Company under the Placing;
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 the Company at the Record Date with the exception (subject to certain exceptions) of Excluded Overseas Shareholders;
Record Date	6.00 p.m. on 30 October 2020 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;
Registrars or Receiving Agent	Neville Registrars Limited, Neville House, Steelpark Road, Halesowen, B62 8HD;
Regulatory Information Service	has the meaning given in the AIM Rules;
Resolutions	the resolutions to be proposed at the General Meeting, which are set out in full in the Notice of General Meeting;
Restricted Jurisdictions	each of Australia, Canada, Japan, the Republic of Ireland, the Republic of South Africa and the United States and any other jurisdiction where the extension or availability of the Open Offer 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 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;
SIPP	a self-invested personal pension;
Subscribers	the subscribers to the Subscription Shares pursuant to the Subscription Letters;
Subscription	the conditional direct subscription for Subscription Shares at the Issue Price by the Subscribers in accordance with the Subscription Letters;
Subscription Letters	the subscription letters dated on or about 30 October 2020 between the Company and the Subscribers;
Subscription Shares	the 3,125,000 New Ordinary Shares to be issued by the Company pursuant to the Subscription;
UK or United Kingdom	the United Kingdom of England, Scotland, Wales and Northern Ireland;
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;
Upperton	Upperton Holdings Limited, a private limited company, incorporated in England and Wales with registered number 03838601, with registered office address at Hill Ash Farm, West Harting, Petersfield, Hampshire GU31 5NY;
Willis Re Securities	Willis Towers Watson Securities Europe Limited; and
£	pounds sterling, the legal currency of the United Kingdom.

 

IMPORTANT NOTICE

This announcement may contain "forward-looking statements" with respect to certain of the Company's plans and its current goals and expectations relating to its future financial condition, performance, strategic initiatives, objectives and results.  By their nature, all forward-looking statements involve risk and uncertainty because they relate to future events and circumstances which are beyond the control of the Company, including amongst other things, United Kingdom domestic and global economic business conditions, market-related risks such as fluctuations in interest rates and exchange rates, the policies and actions of governmental and regulatory authorities, the effect of competition, inflation, deflation, the timing effect and other uncertainties of future acquisitions or combinations within relevant industries, the effect of tax and other legislation and other regulations in the jurisdictions in which the Company and its affiliates operate, the effect of volatility in the equity, capital and credit markets on the Company's profitability and ability to access capital and credit, a decline in the Company's credit ratings, the effect of operational risks, and the loss of key personnel.  As a result, the actual future financial condition, performance and results of the Company may differ materially from the plans, goals and expectations set forth in any forward-looking statements. Any forward-looking statements made in this announcement by or on behalf of the Company speak only as of the date they are made.  Except as required by applicable law or regulation, the Company expressly disclaims any obligation or undertaking to publish any updates or revisions to any forward-looking statements contained in this announcement to reflect any changes in the Company's expectations with regard thereto or any changes in events, conditions or circumstances on which any such statement is based.

Solely for the purposes of the product governance requirements of Directive 2014/65/EU on markets in financial instruments, as amended ("MiFID II") and local implementing measures, and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any "manufacturer" (for the purposes of the Product Governance Requirements) may otherwise have with respect thereto, the Placing Shares have been subject to a product approval process, which has determined that such Placing Shares are: (i) compatible with an end target market of retail investors and investors who meet the criteria of professional clients and eligible counterparties, each as defined in MiFID II, and (ii) eligible for distribution through all distribution channels as are permitted by MiFID II ("Target Market Assessment").  Notwithstanding the Target Market Assessment, Distributors should note that: the price of New Ordinary Shares may decline and investors could lose all or part of their investment; New Ordinary Shares offer no guaranteed income and no capital protection; and an investment in New Ordinary Shares is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom.  The Target Market Assessment is without prejudice to any contractual, legal or regulatory selling restrictions in relation to the Fundraising.  For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of MiFID II, or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the New Ordinary Shares.

Shore Capital is authorised and regulated by the Financial Conduct Authority ("FCA") in the United Kingdom and is acting exclusively for the Company and no one else in connection with the Fundraising, and Shore Capital will not be responsible to anyone other than the Company for providing the protections afforded to its clients or for providing advice in relation to the Fundraising or any other matters referred to in this announcement.

Willis Re Securities is authorised and regulated by the Financial Conduct Authority ("FCA") in the United Kingdom and is acting exclusively for the Company and no one else in connection with the Fundraising, and Willis Re Securities will not be responsible to anyone other than the Company for providing the protections afforded to its clients or for providing advice in relation to the Fundraising or any other matters referred to in this announcement.

No representation or warranty, express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by the Company, Shore Capital or Willis Re Securities or by any of their affiliates or agents as to, or in relation to, the accuracy or completeness of this announcement or any other written or oral information made available to or publicly available to any interested party or its advisers, and any liability therefor is expressly disclaimed.

No statement in this announcement is intended to be a profit forecast or estimate, and no statement in this announcement should be interpreted to mean that earnings per share of the Company for the current or future financial years would necessarily match or exceed the historical published earnings per share of the Company.

The price of shares and any income expected from them may go down as well as up and investors may not get back the full amount invested upon disposal of the shares.  Past performance is no guide to future performance, and persons needing advice should consult an independent financial adviser.

No public offering of the New Ordinary Shares is being made in the United Kingdom or elsewhere. All offers of the New Ordinary Shares will be made pursuant to an exemption under the Prospectus Regulation (EU) 2017/1129, as amended from time to time, and includes any relevant implementing measure in any member state (the "Prospectus Regulation") from the requirement to produce a prospectus.

The Company has not been and will not be registered under the US Investment Company Act of 1940, as amended (the "Investment Company Act"). In addition, the Ordinary Shares have not been and will not be registered under the US Securities Act of 1933, as amended (the "Securities Act"), or under the securities laws of any state or other jurisdiction of the United States and may not be offered, sold, pledged or otherwise transferred, directly or indirectly, in or into the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in compliance with all applicable state securities laws and under circumstances that would not require the company to register under the Investment Company Act. There will be no public offer of Ordinary Shares in the United States.

The New Ordinary Shares to be issued or sold pursuant to the Fundraising will not be admitted to trading on any stock exchange other than the London Stock Exchange.

Neither the content of the Company's website nor any website accessible by hyperlinks on the Company's website is incorporated in, or forms part of, this announcement.

 

END

 

 

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