H1 Update and Proposed Placing

RNS Number : 0915I

Kenmare Resources PLC

19 July 2012

 



19 July 2012

THIS ANNOUNCEMENT INCLUDING THE APPENDIX AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA OR JAPAN OR ANY JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION IS UNLAWFUL

KENMARE RESOURCES PLC ANNOUNCES AN UPDATE ON PRODUCTION AND EXPANSION AT MOMA AND SUMMARY RESULTS FOR THE SIX MONTHS ENDED 30 JUNE, 2012 AND A PROPOSED PLACING OF 120,000,000 NEW ORDINARY SHARES AT STG32P PER SHARE

Kenmare Resources plc

("Kenmare" or "the Company")

Overview

Production	Q1 2012	Q2 2012
Heavy Mineral Concentrate ("HMC")	188,000 tonnes	198,200 tonnes
Ilmenite	132,700 tonnes	143,900 tonnes
Zircon	10,600 tonnes	13,000 tonnes

Shipments	H1 2011	H1 2012
Product Shipped	349,400 tonnes	321,500 tonnes

·       Initiatives previously announced to optimise product mix and maximise revenues are on course or completed,  including the first supplementary dry-mining operation (commissioned and successfully ramped up in H1 2012) and second supplementary dry-mining operation (commissioned on 9 July, 2012 with ramp up underway)

·       H2 expected to show a significant improvement over H1 production volumes given the actions taken. Full year 2012 production is forecast at 630,000 tonnes of ilmenite and 50,000 tonnes of zircon, of which approximately 20,000 tonnes will be a secondary zircon product

·       Revenue for H1 2012 of US$109 million (H1 2011: US$56 million) with operating costs in line with expectations. Debt payment scheduled in August, 2012 from existing cash resources

·       The market for ilmenite remained strong in H1 2012 and prices have now been agreed on the majority of the Company's ilmenite production for H2. Price increases have been predominantly realized on the six monthly contract price resets with no price reductions

·       Phase II Expansion is programmed for completion by the end of 2012, however expansion costs have increased to US$350 million as various cost items are finalised and reflecting recent dimensional inaccuracies in steel sections (strongbacks) supplied to site  and now largely resolved

·       Proposed non-pre-emptive placing of 120,000,000 new Ordinary Shares, representing approximately 5% of the Company's current issued share capital, at Stg32p per new Ordinary Share, with net proceeds to be applied primarily toward Phase II Expansion.  The balance of funds will be retained as contingency funding, to finance initial payments towards a new upgraded dredge and to advance initiatives on Phase III Expansion

Kenmare,  which operates the Moma Titanium Minerals Mine (the "Mine" or "Moma") in Mozambique,  announces today the following update on production at Moma, on the Company's continuing expansion at Moma and on overall performance in respect of the six months ended 30 June, 2012.

The Company also announces its intention to conduct a non pre-emptive cash placing of 120,000,000 new Ordinary Shares in the Company ("Placing Shares") to institutional investors (the "Placing"), which represents approximately 5% of the Company's current issued share capital. The Placing Price is Stg32p per new Ordinary Share.

Moma Update

Operations

In the second quarter of H1, production of HMC was 198,200 tonnes (Q1 2012: 188,000 tonnes), ilmenite production was 143,900 tonnes (Q1 2012: 132,700 tonnes) and zircon production was 13,000 tonnes (Q1 2012: 10,600 tonnes), of which 6,300 tonnes (Q1 2012: 4,800 tonnes) was a secondary zircon product.

H2 production is expected to show a significant improvement on H1 due to a number of factors.  On 9 July, 2012 the second supplementary dry-mining operation was commissioned and is being ramped up. This facility has a capacity of 1000 tph and combined with the first supplementary dry-mining operation, which was successfully ramped up in late H1 2012, gives a total of 2000 tph of supplementary feed to the Wet Concentrator Plant (WCP). The commissioning of these plants overcomes the difficulties associated with the dredging of clay rich ore experienced in H1, ensuring that sufficient ore supply is restored to the WCP and enabling the achievement of forecast production during the second half of the year across a range of ore body conditions. Additionally, weather conditions in H2 are typically more moderate than in H1, which is subject to the cyclone season, and this should facilitate an increase in production rates. Dredge mining conditions and throughput have also improved. While there will be some transitional interruptions to operations associated with Phase II commissioning and integration of expansion facilities to the main plant toward the end of this year, these are not expected to have a material impact on 2012 production. Overall full year 2012 production is forecast at 630,000 tonnes of ilmenite and 50,000 tonnes of zircon, of which approximately 20,000 tonnes will be a secondary zircon product.

Revenue for the half year was US$109 million (2011 H1: US$56 million) with operating costs also remaining in line with expectations. During H1, 18 ships (2011 H1: 17 ships) were loaded with 321,500 tonnes (2011 H1: 349,400 tonnes) of final products sold during the six months.

At 30 June, 2012 bank loans amounted to US$319.4 million (2011: US$346.2 million) and cash balances were US$35.0 (2011: US$178.4 million). Senior lender loan interest and principal repayment of US$16.2 million is scheduled for 1 August, 2012 and will be repaid from existing cash resources.

Markets

The market for ilmenite has remained strong through H1.  To date, prices have been agreed on the majority of Kenmare's ilmenite production for H2.  For contracts where the price has been agreed for six months and has been renegotiated in H1 as scheduled, price increases have predominantly been realised and no price reductions have occurred.  Substantially all of the projected production from the expanded facility in 2013 has already been committed to customers and there is considerable unsatisfied demand.  While some titanium feedstock producers have experienced significant reduction in demand in the high-grade feedstock market, the ilmenite market has not been affected in this way.  Demand remains high and prices are expected to continue to increase.

While the market for zircon has been subdued, Kenmare has continued to sell and ship all its production during H1, and prices have been agreed for shipments in early H2 at similar levels to H1.

Expansion

The Company remains focused on completing the Phase II Expansion (the "Expansion") on schedule with commissioning of the expansion plant scheduled to commence by the end of this year with subsequent ramp-up in operations to enable full production from the expanded facilities during 2013, to take advantage of the prevailing robust market. As previously advised, substantially all of the 2013 projected volume from Phase II has already been committed.

As significant progress in the implementation of the Expansion has been made, clarity on costs has also been further enhanced as various items have been finalized. The modifications to repair dimensional inaccuracies in structural steel sections set out below and the additional resources brought to site to enable completion by the end of this year has also impacted on costs.

The main focus of the Expansion is now on-site erection of plant and infrastructure. Design and drawing deliverables are now substantially complete. Fabrication of steel sections is 96% complete. Civil engineering is 95% complete. Construction of the Wet High Intensity Magnetic Separation (WHIMS) plant and the product store is 80% complete. All contractors have been mobilised to site and are operating under revised contract programmes. Commissioning of the Phase II WCP, which is scheduled to be the last major section of the project to be finished, is programmed to start in late December. However, site operations have recently been hampered by dimensional inaccuracies in structural steel sections (strongbacks) delivered to site. These inaccuracies have since been largely resolved on site to the satisfaction of Kenmare but with an associated impact on timetable. This has required a renewed focus on risk mitigation in respect of the remaining implementation in order to ensure efficient and scheduled commissioning. Accordingly Kenmare has now brought an additional erection contractor on site and has partially de-scoped the existing contractor. The rectification of the strongbacks errors, together with the time taken and the addition of a new contractor in order to recoup time lost and enable completion by the end of this year, have added to the capital costs.

The revised cost estimate (relative to the US$300 million estimated in the Preliminary Results), is US$350 million, which includes a US$10 million contingency. As explained below, the placing proceeds will be primarily applied to address this additional cost.

The Company continues to believe that the fundamentals of the Moma Mine remain strong in terms of market demand, robust pricing, resource and low cost production.  The Expansion is due to come online in a timely manner to take advantage of the positive market environment and, as it approaches completion, there is greater clarity as to the final outturn costs.

Background to the Placing - Use of Proceeds

The net proceeds from the Placing will be used, together with cash flow from operations as previously agreed with lenders, primarily to ensure that the Phase II Expansion is completed on schedule. Up to US$30 million of the net Placing proceeds is expected to be applied to meet the Expansion costs.

The balance of the funds raised will be retained as contingency funding or be used to finance initial payments associated with the procurement of a new upgraded dredge, comparable with the dredge which is being installed as part of Phase II, and to continue to progress the preliminary initiatives relating to the Phase III Expansion.

The Placing

The Placing is subject to the terms and conditions set out in the Appendix. RBC Europe Limited ("RBC") is acting as global co-ordinator in respect of the Placing.  Canaccord Genuity Limited ("Canaccord Genuity"), J&E Davy ("Davy"), Mirabaud Securities LLP ("Mirabaud") and RBC are acting as bookrunners in relation to the Placing (collectively the "Bookrunners") pursuant to a placing agreement entered into today between the Bookrunners and the Company ("Placing Agreement"). Davy is also acting as sponsor in respect of the Placing. The Bookrunners will commence a bookbuilding process in respect of the Placing ("Bookbuild"). The book will open with immediate effect. 

The price per Ordinary Share at which the Placing Shares are to be placed (the "Placing Price") is Stg32p, The timing of the closing of the book and allocations are at the discretion of the Bookrunners (subject to agreement with Kenmare). The Company intends to place 120,000,000 new Ordinary Shares, representing approximately 5% of the existing issued share capital of the Company. Details of the number of Placing Shares will be announced as soon as practicable after the close of the Bookbuild.

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

Application will be made for the Placing Shares to be admitted to the premium segment of the Official List of the Financial Services Authority and the Official List of the Irish Stock Exchange and to trading on the Main Market and the Main Securities Market for listed securities of the London Stock Exchange and the Irish Stock Exchange respectively. It is expected that Admission will take place at 8.00 am on 25 July 2012 (or such later date as may be agreed between the Company and the Bookrunners). The Placing is conditional upon, inter alia, Admission becoming effective. The Placing is also conditional on the Placing Agreement between the Company and the Bookrunners not being terminated.

By choosing to participate in the Placing and by making an oral or written and legally binding offer to acquire Placing Shares, investors will be deemed to have read and understood this Announcement (including the Appendix) in its entirety and to be making such offer on the terms and subject to the conditions contained herein and to be providing the representations, warranties, indemnities, acknowledgements, agreements and undertakings contained in the Appendix to this Announcement.

The Appendix to this Announcement (which forms part of this Announcement) sets out further information relating to the Bookbuild and the terms and conditions of the Placing.

Contacts

 For further information, please contact:

Kenmare Resources plc

Michael Carvill, Managing Director

Tel: [phone]

Mob: + 353 87 674 0110

Tony McCluskey, Financial Director                           Jacob Deysel, Operations Director

Tel: [phone]                                                         Tel: [phone]

Mob: + 353 87 674 0346                                                 Mob: [phone]

RBC Europe Limited                                                    J&E Davy

Matthew Coakes/Stephen Foss                                      Eugenée Mulhern/Anthony Farrell

Tel: [phone]                                                    Tel: + 353 1 679 7788

Canaccord Genuity Limited                                  Mirabaud Securities LLP

Rob Collins/Andrew Chubb                                            Rory Scott/Peter Krens

Tel: + 44 207 523 8000                                                   Tel: + 44 207 321 2508

Murray Consultants                                                    Tavistock Communication

Jim Milton/Jonathan McDade                                       Mike Bartlett/ Jos Simson

Tel: [phone]                                                        Tel: [phone]

Mob: [phone]                                                  Mob: [phone]

This Announcement (including the Appendix) contains certain "forward-looking statements" with respect to certain of the Company's plans and its current goals or expectations relating to its future financial condition and performance and which involve a number of risks and uncertainties. Forward looking statements are typically identified by the use of forward looking terminology such as 'aims', 'believes', 'expects', 'may', 'will', 'could', 'should', 'intends', 'estimates', 'plans', 'assumes' or 'anticipates' or the negative thereof or other words of similar meaning. Examples of such forward-looking statements include, among others, statements regarding the Company's business strategy, future plans, present or future events, or objectives for future operations that involve risks and uncertainties and are not historic fact. Such forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond the Company's control and all of which are based on the Company's current beliefs and expectations about future events. Such statements are based on current expectations and, by their nature, are subject to a number of risks and uncertainties that could cause actual results and performance to differ materially from any expected future results or performance expressed, or implied, by the forward-looking statement. No assurance can be given that such forward-looking statements results will be achieved. Factors that might cause forward-looking statements to differ materially from actual results include, among other things, the following: global economic conditions, economic conditions in the jurisdictions in which the Company operates, the effects of continued volatility in credit markets, exchange rate fluctuations and legislative, fiscal and regulatory developments. The forward-looking statements contained in this Announcement speak only as of the date of this Announcement and the Company assumes no obligation to, and does not intend to, update or revise publicly any of them whether as a result of new information, future events or otherwise, except to the extent required by the FSA, the London Stock Exchange, the Irish Stock Exchange, the Central Bank of Ireland or by applicable law, the Prospectus Regulations and the Prospectus Rules, the Listing Rules, the Market Abuse Regulations and the Market Abuse Rules, the Transparency Regulations and the Transparency Rules and the Disclosure and Transparency Rules.

Nothing in this Announcement (including the Appendix) is intended to be a profit estimate for any period or a forecast of future profits.  The financial information set out in this announcement is not an interim management statement nor is it a preliminary announcement of the interim results for the six months ended 30 June 2012. It is published for information purposes only and is not intended to be a complete statement of financial position.

Financial information set out in this Announcement, unless otherwise stated, is presented on a management basis and is not audited. The Company expects to publish its interim results in respect of the six months ended 30 June, 2012 on 22 August, 2012.

This Announcement (including the Appendix) and the information contained herein is not for release, publication or distribution, in whole or in part, directly or indirectly, in or into the United States (including its territories and possessions, any state of the United States and the District of Columbia), Australia, Canada, Japan or any other state or jurisdiction into which the same would be unlawful. This Announcement (including the Appendix) is for information purposes only and shall not constitute an offer to buy, sell, issue, or acquire, or the solicitation of an offer to buy, sell, issue, or acquire any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. Any failure to comply with these restrictions may constitute a violation of the securities laws of such jurisdictions.

This Announcement (including the Appendix) does not constitute or form part of any offer to issue or sell, or the solicitation of an offer to acquire, purchase or subscribe for, any securities in the United States, Australia, Canada or Japan or any other jurisdiction in which such offer, solicitation or sale would be unlawful. In particular, the Placing Shares have not been and will not be registered under the United States Securities Act of 1933, as amended (the "Securities Act") and may not be offered, sold or transferred, directly or indirectly, within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and the securities laws of any state or other jurisdiction of the United States. No public offering of the Placing Shares is being made in the United States, Australia, Canada or Japan.

This Announcement (including the Appendix) has been issued by and is the sole responsibility of the Company. 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 any of the Bookrunners 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 therefore is expressly disclaimed.

RBC Europe Limited (trading as 'RBC Capital Markets') which is authorised and regulated in the United Kingdom by the FSA, is acting for the Company and for no-one else in connection with the Bookbuild and the Placing and will not be responsible to any person other than the Company for providing the protections afforded to its clients or for providing advice to any other person in relation to the Placing or any other matter referred to in this Announcement (including the Appendix).

Davy which is authorised and regulated in Ireland by the Central Bank of Ireland, is acting for the Company and for no-one else in connection with the Bookbuild and the Placing and will not be responsible to any person other than the Company for providing the protections afforded to its clients or for providing advice to any other person in relation to the Placing or any other matter referred to in this Announcement (including the Appendix).

Canaccord Genuity which is authorised and regulated in the United Kingdom by the FSA, is acting for the Company and for no-one else in connection with the Bookbuild and the Placing and will not be responsible to any person other than the Company for providing the protections afforded to its clients or for providing advice to any other person in relation to the Placing or any other matter referred to in this Announcement (including the Appendix).

Mirabaud Securities which is authorised and regulated in the United Kingdom by the FSA, is acting for the Company and for no-one else in connection with the Bookbuild and the Placing and will not be responsible to any person other than the Company for providing the protections afforded to its clients or for providing advice to any other person in relation to the Placing or any other matter referred to in this Announcement (including the Appendix).

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

The Placing Shares to be issued pursuant to the Placing will not be admitted to trading on any stock exchanges other than the London Stock Exchange and the Irish 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.

APPENDIX: TERMS AND CONDITIONS OF THE PLACING

TERMS AND CONDITIONS - IMPORTANT INFORMATION FOR PLACEES ONLY REGARDING THE PLACING

Details of the Placing

The Bookrunners have today entered into the Placing Agreement under which, subject to the conditions set out therein, the Bookrunners have agreed to use reasonable endeavours to procure subscribers for the Placing Shares at the Placing Price.

The Placing is conditional upon the Placing Agreement becoming unconditional in all respects, including, inter alia, Admission occurring not later than 8.00 a.m. (London time) on 25 July, 2012  (or such later date as may be agreed between the Company and the Bookrunners).  The Placing Shares will, when issued, be subject to the Articles of Association of the Company, be credited as fully paid and will rank pari passu in all respects with the Ordinary Shares then in issue including the right to receive all dividends and other distributions declared, made or paid in respect of such Ordinary Shares after the date of the Placing Agreement.

As part of the Placing, the Company has agreed that it will not, for a period of 30 days after the date of this Announcement, enter into, or incur any obligation to make, any commitment or agreement, or put itself in a position where it is obliged to announce that any commitment or agreement may be entered into or made, which in either case is outside of the ordinary course of the Company's business and which is or might be material in the context of the Placing, without the prior written approval of the Bookrunners.

Application for Admission

Application will be made for the Placing Shares to be admitted to the premium segment of the Official List of the Financial Services Authority and the Official List of the Irish Stock Exchange and to trading on the Main Market and the Main Securities Market for listed securities of the London Stock Exchange and the Irish Stock Exchange respectively. It is expected that Admission will take place at 8.00 am on 25 July 2012 (or such later date as may be agreed between the Company and the Bookrunners).

Participation in, and principal terms of, the Placing

1. Each of Canaccord Genuity, Davy, Mirabaud and RBC is acting as bookrunner and broker and agent of the Company.

2. Participation in the Placing will only be available to persons who may lawfully be, and are, invited to participate by the Bookrunners. The Bookrunners and their affiliates are each entitled to participate in the Placing as principal.

3. Each prospective Placee's Placing Participation will be determined by the Bookrunners and the Company in their sole discretion and confirmed orally and/or via written correspondence by the Bookrunners as agent of the Company. That oral and/or written confirmation constitutes an irrevocable legally binding commitment upon that person (who will at that point become a Placee) to subscribe for the number of Placing Shares allocated to it at the Placing Price on the terms and conditions set out in this Appendix and in accordance with the Company's articles of association.

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

5. Each Placee also has an immediate, separate, irrevocable and binding obligation, owed to the Bookrunners as agents of the Company, to pay in cleared funds immediately on the settlement date in accordance with the requirements set out below under "Registration and Settlement", an amount equal to the product of the Placing Price and the number of Placing Shares such Placee has agreed to subscribe and the Company has agreed to allot and issue to that Placee, conditional upon Admission becoming effective.

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

7. Completion of the Placing will be subject to the fulfilment of the conditions referred to below under "Conditions of the Placing" and to the Placing not being terminated on the basis referred to below under "Termination of the Placing Agreement". In the event that the Placing Agreement does not become unconditional in any respect or is terminated, the Placing will not proceed and all funds delivered by you to the Bookrunners in respect of the Placee's Placing Participation will be returned to the Placee at the risk of the Placee without interest.

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

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

Conditions of the Placing

The Placing Agreement is conditional on, inter alia:

(a) the Company certifying immediately prior to Admission that (i) save as previously notified to the Bookrunners, none of the warranties and representations contained in the Placing Agreement was untrue, or inaccurate in any material respect at the date of the Placing Agreement or has at any time from that date become untrue, or inaccurate in any material respect, and (ii) it has complied in full with or performed its obligations under the Placing Agreement which fall  to be performed prior to Admission;

(b) the Company allotting, subject only to Admission, the Placing Shares in accordance with the Placing Agreement; and

(c) Admission taking place not later than 8.00 a.m. (London time) on 25 July, 2012 or such later date as the Company and the Bookrunners may otherwise agree (not being later than 8.00 a.m. on 17 August, 2012).

If (i) any of the conditions contained in the Placing Agreement have not been fulfilled or waived by the Bookrunners by the respective time or date where specified (or such later time or date as the Company and the Bookrunners may agree), (ii) any of such conditions becomes incapable of being satisfied or (iii) the Placing Agreement is terminated, the Placing will lapse and the Placee's rights and obligations hereunder in relation to the Placing Shares shall cease and terminate at such time and each Placee agrees that no claim can be made by the Placee in respect thereof.

The Bookrunners may, in their absolute discretion and upon such terms as they think fit, waive fulfilment, in whole or in part, of any or all of the conditions in the Placing Agreement other than that relating to Admission (to the extent permitted by law or regulations) by giving notice in writing to the Company.  Any such waiver will not affect Placees' commitments as set out in this announcement.

None of the Bookrunners, the Company or any other person shall have any liability to any Placee (or to any other person whether acting on behalf of a Placee or otherwise) in respect of any decision they may make as to whether or not to waive or to extend the time and/or the date for the satisfaction of any condition to the Placing nor for any decision they may make as to the satisfaction of any condition or in respect of the Placing generally and by participating in the Placing each Placee agrees that any such decision is within the absolute discretion of the Bookrunners and the Company.

Termination of the Placing Agreement

The Bookrunners are entitled, at any time before Admission, to terminate the Placing Agreement by giving notice to the Company if, inter alia:

(a) it comes to their knowledge that any of the warranties given by the Company in the Placing Agreement are untrue or inaccurate in any material respect;

(b) the Company fails in any material respect to comply with its obligations under the Placing Agreement;

(c) it comes to their knowledge that any statement in this Announcement or certain related material is incorrect or has become untrue, incorrect or misleading in any material respect as a result of a new matter or change or that a new matter has arisen or a change has taken place which would if this Announcement or the related material were published at that time constitute a material omission from such documents;

(d) it comes to their notice that there has been a material adverse change in (or any development or event involving a prospective material adverse change in) the financial or trading position and/or prospects of the Group;  or

(e) there has been (i) a suspension of trading in securities generally on the London Stock Exchange or the Irish Stock Exchange, (ii) a declaration of a banking moratorium in London or Dublin or any material disruption to commercial banking or securities settlement or clearance services in the UK or Ireland, (iii) any incident of terrorism or outbreak or escalation of hostilities or any declaration in or by the UK or Ireland of a national emergency, war or any other calamity or crisis; or (iv) a change in the national or international, financial, economic, political, regulatory or market conditions, in each case, which in the opinion of the Bookrunners acting in good faith is likely materially and adversely to affect the financial position or the business or the prospects of the Group or which renders the Placing impracticable or inadvisable.

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

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

No Prospectus

No offering document or prospectus has been or will be submitted to be approved by the Central Bank of Ireland (or other authority) or the FSA in relation to the Placing and Placees' commitments will be made solely on the basis of the information contained in this Announcement (including the Appendix).

Each Placee, by accepting a participation in the Placing, agrees that the content of this Announcement (including the Appendix) is exclusively the responsibility of the Company and confirms that it has neither received nor relied on any other information, representation, warranty, or statement made by or on behalf of the Company or the Bookrunners or any other person (including but not limited to the presentational materials given by the Company in connection with presentations in connection with the Placing) and neither the Company nor the Bookrunners nor any other person will be liable for any Placee's decision to participate in the Placing based on any other information, representation, warranty or statement which the Placees may have obtained or received. Each Placee acknowledges and agrees that it has relied on its own investigation of the business, financial or other position of the Company in accepting a participation in the Placing. Nothing in this paragraph shall exclude the liability of any person for fraudulent misrepresentation.

Registration and Settlement

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

Each Placee allocated Placing Shares in the Placing will be sent a contract note stating the number of Placing Shares to be allocated to it. Each such Placee agrees that it will do all things necessary to ensure that delivery and payment is completed in accordance with the standing CREST or certificated settlement instructions that it has in place with the Bookrunners as set out below.

CREST participant ID of RBC:	388
CREST participant ID of Davy:	189
CREST participant ID of Canaccord Genuity:	805
CREST participant ID of Mirabaud	834
Trade date:	20 July, 2012
Settlement date:	25 July, 2012
ISIN code for the Placing Shares:	IE0004879486
SEDOL code for the Placing Shares:	0487948
Deadline for input instructions into CREST:	3:00 p.m. (UK time) on 24 July, 2012

The Company will deliver such Placing Shares to a CREST account operated by the relevant Bookrunner as agent for the Company and that Bookrunner will enter its delivery (DEL) instruction into the CREST system. The input to CREST by a Placee of a matching or acceptance instruction will then allow delivery of the relevant Placing Shares to that Placee against payment.

It is expected that settlement will be on 25July, 2012 on a T + 3 basis in accordance with the instructions given to the Bookrunner.

Interest is chargeable daily on payments not received from Placees on the due date in accordance with the arrangements set out above at the rate of two percentage points above three month US Dollar LIBOR as determined by the Bookrunner.

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

If Placing Shares are to be delivered to a custodian or settlement agent, Placees should ensure that the trade confirmation is copied and delivered immediately to the relevant person within that organisation. Insofar as Placing Shares are registered in a Placee's name or that of its nominee or in the name of any person for whom a Placee is contracting as agent or that of a nominee for such person, such Placing Shares should, subject as provided below, be so registered free from any liability to Irish or UK stamp duty or UK stamp duty reserve tax. Placees will not be entitled to receive any fee or commission in connection with the Placing.

Representations and Warranties

By participating in the Placing each Placee (and any person acting on such Placee's behalf):

1. Represents and warrants that it has read this Announcement, including the Appendix, in its entirety;

2. Confirms that the exercise by the Bookrunners of any right of termination or any right of waiver exercisable by the Bookrunners contained in the Placing Agreement including, without limitation, the right to terminate the Placing Agreement, is within the absolute discretion of the Bookrunners and the Bookrunners will not have any liability to any Placee whatsoever in connection with any decision to exercise or not exercise any such rights;

3. Acknowledges that if (i) any of the conditions in the Placing Agreement are not satisfied (or, where relevant, waived), or (ii) the Placing Agreement is terminated or (iii) the Placing Agreement does not otherwise become unconditional in all respects, the Placing will lapse and its rights and obligations hereunder shall cease and determine at such time and no claim shall be made by any Placee in respect thereof;

4. Acknowledges that no offering document or prospectus has been, or will be, prepared in connection with the placing of the Placing Shares and represents and warrants that it has not received a prospectus or other offering document in connection therewith;

5. Acknowledges that the Ordinary Shares are (and the Placing Shares will be) listed on the Main Securities Market and the Main Market, and the Company is therefore required to publish certain business and financial information in accordance with the rules and practices of the Main Securities Market and the Main Market and applicable legislation, and that it is able to obtain or access such information without undue difficulty, and is able to obtain access to such information or comparable information concerning any other Main Securities Market listed or Main Market listed company, without undue difficulty;

6. Acknowledges that neither the Bookrunner nor the Company nor any of their affiliates nor any person acting on behalf of any of them has provided, and will not provide it, with any material regarding the Placing Shares or the Company or any other person other than the information contained in this Announcement; nor has it requested the Bookrunner or the Company or any of their affiliates or any person acting on behalf of any of them to provide it with any additional information;

7. Acknowledges that (i) it is not and, if different, the beneficial owner of the Placing Shares is not, and at the time the Placing Shares are acquired will not be, a resident of Australia, Canada or Japan, and (ii) that the Placing Shares have not been and will not be registered under the securities legislation of the United States, Australia, Canada or Japan and, subject to certain exceptions, may not be offered, sold, taken up, renounced or delivered or transferred, directly or indirectly, in or into those jurisdictions;

8. Acknowledges that the content of this Announcement is exclusively the responsibility of the Company and that neither the Bookrunners nor any person acting on their behalf has or shall have any liability for any information, representation or statement contained in this Announcement or any information previously published by or on behalf of the Company and will not be liable for any Placee's decision to participate in the Placing based on any information, representation or statement contained in this Announcement or otherwise. Each Placee further represents,warrants and agrees that the only information on which it is entitled to rely and on which such Placee has relied in committing itself to subscribe for the Placing Shares is contained in this Announcement and any information previously published by the Company by notification to a Regulatory Information Service, such information being all that it deems necessary to make an investment decision in respect of the Placing Shares and that it has neither received nor relied on any other information given or representations, warranties or statements made by the Bookrunners or the Company and neither the Bookrunners nor the Company will be liable for any Placee's decision to accept an invitation to participate in the Placing based on any other information, representation, warranty or statement. Each Placee further acknowledges and agrees that it has relied on its own investigation of the business, financial or other position of the Company in deciding to participate in the Placing;

9. Represents and warrants that neither it, nor the person specified by it for registration as a holder of Placing Shares is, or is acting as nominee or agent for, and that the Placing Shares will not be allotted to, a person who is or may be liable to stamp duty or stamp duty reserve tax under any of sections 67, 70, 93 and 96 of the UK Finance Act 1986 (depositary receipts and clearance services);

10. Represents and warrants that it has complied with its obligations in connection with money laundering and terrorist financing under the Regulations and, if making payment on behalf of a third party, that satisfactory evidence has been obtained and recorded by it to verify the identity of the third party as required by the Regulations. If within a reasonable time after a request for verification of identity the Bookrunner has not received such satisfactory evidence, the Bookrunner may, in its absolute discretion, terminate the Placee's Placing Participation in which event all funds delivered by the Placee to the Bookrunner will be returned without interest to the account of the drawee bank or CREST account from which they were originally debited;

11. If a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive, represents and warrants that the Placing Shares purchased by it in the Placing will not be acquired on a non-discretionary basis on behalf of, nor will they be acquired with a view to their offer or resale to, persons in a member state of the European Economic Area which has implemented the Prospectus Directive other than to qualified investors, or in circumstances in which the prior consent of the Bookrunners has been given to the proposed offer or resale;

12. Represents and warrants that it has not offered or sold and, prior to the expiry of a period of 6 months from Admission, will not offer or sell any Placing Shares to persons in the United Kingdom, except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their business or otherwise in circumstances which have not resulted and which will not result in an offer to the public in the United Kingdom within the meaning of section 85(1) of FSMA, or to persons in Ireland, except in circumstances which have not resulted and which will not result in an offer to the public in Ireland within the meaning of Regulation 12 of the Prospectus (Directive 2003/71/EC) Regulations 2005 of Ireland (as amended);

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

14. Represents and warrants that it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of FSMA) relating to the Placing Shares in circumstances in which section 21(1) of FSMA does not require approval of the communication by an authorised person;

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

16. Represents and warrants that it is a "qualified investor" within the meaning of the Prospectus Directive (including any relevant implementing measure in any member state);

17. Represents and warrants that it and any person acting on its behalf is entitled to subscribe for and purchase the Placing Shares under the laws of all relevant jurisdictions which would apply to it, and that it and any person acting on its behalf is in compliance with applicable laws in the jurisdiction of its residence, the residence of the Company, or otherwise;

18. Acknowledges that the Placing Shares have not been and will not be registered under the Securities Act and further acknowledges that the Placing Shares are being offered and sold  only (i) outside the United States pursuant to Regulation S under the Securities Act in an "offshore transaction" (as such term is defined in Regulation S under the Securities Act) or (ii) in the United States only to limited number of QIBs, pursuant to an exemption from registration under the Securities Act in a transaction not involving any public offering;

19. Represents and warrants that it is (and any such account for which it is acting is) either (i) a QIB, or purchasing Placing Shares on behalf of a QIB, in either case who has executed and returned a US Investor Letter; or (ii) outside the United States and is acquiring the Placing Shares in an "offshore transaction", as defined in and in accordance with, Regulation S under the Securities Act;

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

21. Acknowledges that its allocation (if any) of Placing Shares will represent a maximum number of Placing Shares which it will be entitled, and required, to subscribe for, and that the Company may call upon it to subscribe for a lower number of Placing Shares (if any), but in no event in aggregate more than the aforementioned maximum;

22. Acknowledges that neither the Bookrunners, nor any of their respective affiliates, nor any person acting on behalf of the Bookrunners, is making any recommendations to it, advising it regarding the suitability of any transactions it may enter into in connection with the Placing and that participation in the Placing is on the basis that it is not and will not be a client of the Bookrunners and that the Bookrunner have no duties or responsibilities to it for providing the protections afforded to their clients or customers or for providing advice in relation to the Placing nor in respect of any representations, warranties, undertakings or indemnities contained in the Placing Agreement nor for the exercise or performance of any of its rights and obligations thereunder including any rights to waive or vary any conditions or exercise any termination right;

23. Undertakes that the person whom it specifies for registration as holder of the Placing Shares will be (i) itself or (ii) its nominee, as the case may be. Neither the Bookrunner nor the Company will be responsible for any liability to stamp duty or stamp duty reserve tax resulting from a failure to observe this requirement. Each Placee and any person acting on behalf of such Placee agrees to participate in the Placing and it agrees to indemnify the Company and the Bookrunners in respect of the same on the basis that the Placing Shares will be allotted to the CREST stock account of the relevant Bookrunner who will hold them as nominee on behalf of such Placee until settlement in accordance with its standing settlement instructions;

24. Acknowledges that these terms and conditions and any agreements entered into by it pursuant to these terms and conditions and any non-contractual obligations arising out of or in connection with such agreements shall be governed by and construed in accordance with the laws of England and Wales and it submits (on behalf of itself and on behalf of any person on whose behalf it is acting) to the exclusive jurisdiction of the English courts as regards any claim, dispute or matter arising out of any such contract, except that enforcement proceedings in respect of the obligation to make payment for the Placing Shares (together with any interest chargeable thereon) may be taken by the Company or the Bookrunner in any jurisdiction in which the relevant Placee is incorporated or in which any of its securities have a quotation on a recognised stock exchange;

25. Agrees that the Company and the Bookrunner and their respective affiliates and others will rely upon the truth and accuracy of the foregoing representations, warranties, acknowledgements and undertakings which are given to the Bookrunners on their own behalf and on behalf of the Company and are irrevocable;

26. Agrees to indemnify and hold the Company and the Bookrunner and their respective affiliates harmless from any and all costs, claims, liabilities and expenses (including legal fees and expenses) arising out of or in connection with any breach of the representations, warranties, acknowledgements, agreements and undertakings in this Appendix and further agrees that the provisions of this Appendix shall survive after completion of the Placing;

27. Acknowledges that its commitment to subscribe Placing Shares on the terms set out herein will continue notwithstanding any amendment that may in future be made to the terms of the Placing and that Placees will have no right to be consulted or require that their consent be obtained with respect to the Company's conduct of the Placing. The foregoing representations, warranties and confirmations are given for the benefit of the Company and the Bookrunners. The agreement to settle a Placee's subscription (and/or the subscription of a person for whom such Placee is contracting as agent) free of stamp duty and stamp duty reserve tax depends on the settlement relating only to the subscription by it and/or such person direct from the Company for the Placing Shares in question. Such agreement assumes, and is based on a warranty from each Placee, that neither it, nor the person specified by it for registration as holder, of Placing Shares is, or is acting as nominee or agent for, and that the Placing Shares will not be allotted to, a person who is or may be liable to stamp duty or stamp duty reserve tax under any of sections 67, 70, 93 and 96 of the UK Finance Act 1986 (depositary receipts and clearance services). If there are any such arrangements, or the settlement relates to any other dealing in the Placing Shares, stamp duty or stamp duty reserve tax may be payable. In that event the Placee agrees that it shall be responsible for such stamp duty or stamp duty reserve tax, and neither the Company nor the Bookrunners shall be responsible for such stamp duty or stamp duty reserve tax. If this is the case, each Placee should seek its own advice and notify the Bookrunners accordingly;

28. Acknowledges that no action has been or will be taken by any of the Company, the Bookrunners or any person acting on behalf of the Company or the Bookrunners that would, or is intended to, permit a public offer of the Placing Shares in any country or jurisdiction where any such action for that purpose is required; and

29. Acknowledges that it has knowledge and experience in financial, business and international investment matters as is required to evaluate the merits and risks of subscribing for the Placing Shares. It further acknowledges that it is experienced in investing in securities of this nature and is aware that it may be required to bear, and is able to bear, the economic risk of, and are able to sustain a complete loss in connection with the Placing. It has relied upon its own examination and due diligence of the Company and its associates taken as a whole, and the terms of the Placing, including the merits and risks involved.

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

Each Placee and any person acting on behalf of each Placee acknowledges and agrees that the Bookrunner or any of their affiliates may, at their absolute discretion, agree to become a Placee in respect of some or all of the Placing Shares. Each Placee acknowledges and is aware that the Bookrunners are receiving a fee in connection with their role in respect of the Placing as detailed in the Placing Agreement. Further details are available on request.

When a Placee or person acting on behalf of the Placee is dealing with a Bookrunner, any money held in an account with a Bookrunner on behalf of the Placee and/or any person acting on behalf of the Placee will not be treated as client money within the meaning of the rules and regulations of the FSA made under FSMA. The Placee acknowledges that the money will not be subject to the protections conferred by the client money rules; as a consequence, this money will not be segregated from the relevant Bookrunner's  money in accordance with the client money rules and will be used by such Bookrunner in the course of its own business; and the Placee will rank only as a general creditor of such. All times and dates in this announcement may be subject to amendment. The Bookrunners shall notify the Placees and any person acting on behalf of the Placees of any changes.

Past performance is no guide to future performance and persons needing advice should consult an independent financial adviser.

Definitions

The following definitions apply throughout this Announcement:

Admission	the admission of the Placing Shares to the Official Lists becoming effective in accordance with the Listing Rules and the admission of the Placing Shares to trading on the Main Securities Market and the Main Market becoming effective in accordance with the Admission to Trading Rules of the Irish Stock Exchange and the Admission and Disclosure Standards of the London Stock Exchange respectively
Announcement	this announcement
Articles of Association	the articles of association of the Company
Bookbuild	the bookbuilding exercise undertaken by the Bookrunners
Bookrunners	together, Canaccord Genuity, Davy, Mirabaud and RBC
Business Day	a day not being a Saturday, a Sunday or public holiday on which banks are open for business in the City of London and Dublin
Companies Acts	the Companies Acts 1963 to 2012 of Ireland
CREST	the relevant system (as defined in the CREST Regulations) of which Euroclear UK & Ireland is the Operator (as defined in the CREST Regulations)
CREST Regulations	the Companies Act 1990 (Uncertificated Securities) Regulations 1996 of Ireland
Disclosure and Transparency Rules	the disclosure and transparency rules produced by the FSA under FSMA
Euroclear UK & Ireland	Euroclear UK & Ireland Limited, a company incorporated in England and Wales, being the Operator of CREST
FSA	The Financial Services Authority
FSMA	the Financial Services and Markets Act 2000
Group	The Company and its subsidiaries
holding company	means a holding company (as defined in section 155 of the Companies Act 1963 of Ireland) and in interpreting that section for the purposes of this Agreement, a company is to be treated as the holding company of another company even if its shares in the other company are registered in the name of (i) a nominee, or (ii) any party holding security over those shares, or that secured party's nominee
Irish Stock Exchange	the Irish Stock Exchange Limited
Issue Documents	this Announcement and the US Investor Letter
LIBOR	(a)          the British Bankers Association Interest Settlement Rate displayed on the appropriate page of the Reuters screen; or (b)          if no such rate is available, the arithmetic mean (rounded upwards to four decimal places) of the rates quoted by the Reference Banks to leading banks in the London interbank market, and in all cases, the rate will be established as at 11.00 a.m. on the date two Business Days prior to the start of the relevant period for the offering of deposits in US Dollars
Listing Rules	the listing rules of the Irish Stock Exchange and (where appropriate) the listing rules made by the UKLA in accordance with section 73A (2) of Part VI of FSMA (in each case as these rules may be amended from time to time)
London Stock Exchange	the London Stock Exchange plc
Official Lists	the official list of the Irish Stock Exchange and/or, as appropriate, the premium segment of the official list of the UK Listing Authority
Operator	the meaning given to it in the CREST Regulations
Main Market	the Main Market of the London Stock Exchange
Main Securities Market	the Main Securities Market of the Irish Stock Exchange, a regulated market for the purpose of the MiFID Regulations
Market Abuse Regulations and the Market Abuse Rules MiFID Regulations	the Market Abuse (Directive 2003/6/EC) Regulations 2005 of Ireland and the Market Abuse Rules issued by the Financial Regulator pursuant to Section 34 of the Investment Funds, Companies and Miscellaneous Provisions Act 2005 of Ireland the European Communities (Markets in Financial Instruments) Regulations 2007 of Ireland
Ordinary Shares	ordinary shares of €0.06 each in the capital of the Company
Placees	persons procured by the Bookrunners in accordance with the Placing Agreement to subscribe for Placing Shares pursuant to the Placing
Placing	the placing of the Placing Shares on the terms of the Issue Documents
Placing Agreement	the agreement entered into between the Bookrunners and the Company in connection with the Placing
Placing Price	Stg32p per Placing Share
Placing Participation	a Placee's allocation in the Bookbuild
Placing Shares	the 120,000,000 Ordinary Shares to be issued by the Company pursuant to the Placing
Prospectus Directive	the Directive of the European Parliament and of the Council of 4 November 2003 on the prospectus to be published when securities are offered to the public or admitted to trading (No 2003/71/EC) (as amended) (including any relevant implementing measure in any member states
Prospectus Regulations and the Prospectus Rules	the Prospectus (Directive 2003/71/EC) Regulations 2005 (as amended) of Ireland) and the Prospectus Rules issued by the Financial Regulator pursuant to section 51 of the Investment Funds, Companies and Miscellaneous Provisions Act 2005
QIBs	qualified institutional buyers as defined in Rule 144A under the Securities Act
Regulations	the Proceeds of Crime Act 2002, the Terrorism Act 2003 and the Money Laundering Regulations 2007 and the Criminal Justice Act 1994 and Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 of Ireland
Regulation S	Regulation S under the Securities Act
Regulatory Information Service	any of the regulatory information services set out on the list maintained by the Irish Stock Exchange
Securities Act	the US Securities Act of 1933 as amended
subsidiary	a subsidiary or a subsidiary undertaking (each as defined in the Companies Acts, and in interpreting those definitions for the purposes of this Agreement, a company is to be treated as a member of a subsidiary or a subsidiary undertaking as the case may be even if its shares are registered in the name of (i) a nominee, or (ii) any party holding security over those shares, or that secured party's nominee
Transparency Regulations and the Transparency Rules	the Transparency (Directive 2004/109/EC) Regulations 2007 of Ireland and the Transparency Rules of the Financial Regulator issued under section 22 of the Investments, Funds, Companies and Miscellaneous Provisions Act 2006 of Ireland
US Dollar	the lawful currency of the United States of America
US Investor Letter	the investor representation letter and attached confirmation sent by the Bookrunners to relevant Placees setting out the terms and conditions of the Placing, in the agreed form
UKLA	the United Kingdom Listing Authority, a division of the FSA, acting in its capacity as the competent authority for the purposes of Part VI of FSMA

 

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