Subscription and Waiver

RNS Number : 1702X

OKYO Pharma Limited

26 April 2019

 

THIS ANNOUNCEMENT (INCLUDING THE APPENDICES HERETO) AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, OR INTO ANY JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL. THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT CONSTITUTE AN OFFER OR AN INVITATION TO ACQUIRE OR DISPOSE OF ANY SECURITIES. YOUR ATTENTION IS ALSO DRAWN TO THE IMPORTANT NOTICES AT THE END OF THIS ANNOUNCEMENT. 

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

26 April 2019

OKYO Pharma Limited
(Incorporated and registered in Guernsey with registered number 65220) 

Subscription of 36,363,636 new Ordinary Shares at a price of 1.1 pence per share to raise gross proceeds of £400,000

Proposed Approval of Waiver of the obligations under Rule 9 of the Takeover Code

and

Notice of General Meeting

OKYO Pharma Limited (LSE:OKYO) ("OKYO" or the "Company") today announces that:

·      it has conditionally raised gross proceeds of £400,000 by way of a cash Subscription by Panetta for 36,363,636 Subscription Shares at the Subscription Price, such that Panetta will increase its holding from 47.91 per cent. of the Existing Issued Share Capital to 51.29 per cent. of the Enlarged Issued Share Capital immediately following completion of the Subscription;

·      the Subscription Shares will represent approximately 6.94 per cent. of the Existing Issued Share Capital and 6.48 per cent. of the Enlarged Issued Share Capital. The Subscription Price of 1.1 pence represents a discount of approximately 12 per cent. to the Closing Price of 1.25 pence per Ordinary Share and a premium of 10 per cent. to the closing bid price on 25 April 2019, being the last trading day immediately preceding the date of the Subscription Agreement. When issued, the Subscription Shares will be fully paid and will rank pari passu in all respects with the Existing Ordinary Shares, including the right to receive all dividends and other distributions declared, made or paid after the date of issue;

·      the Subscription Shares are to be issued with New Subscription Warrants attached on a one for one basis at an exercise price of 1.35 pence each. The New Subscription Warrants are exercisable at any time and for a period of 5 years from date of issue.  Accordingly 36,363,636 New Subscription Warrants will be issued in connection with the Subscription;

·      it intends to use the net proceeds of the Subscription towards (i) the completion of the IND-enabling studies in order for the Company to make the IND submission for the Chemerin technology by the first quarter of 2020, and (ii) the associated costs relating to the estimated completion of the pre-clinical studies of BAM-8 by the second quarter of 2019, which would provide a basis for further IND enabling studies;

·      the Subscription is not being underwritten and is conditional (amongst other things) upon the passing of a resolution to approve a Waiver, which has been granted by the Takeover Panel, of certain obligations that would otherwise arise on Panetta in connection with the Subscription pursuant to Rule 9 of the Takeover Code. Shareholder approval of the Whitewash Resolution will be sought at a general meeting of the Company to  be held at 10:00 a.m. on 20 May 2019 at the offices of Cooley (UK) LLP, Dashwood, 69 Old Broad Street, London EC2M 1QS;

·      the Company's circular to Shareholders, which is expected to be posted to Shareholders on the date of this announcement along with a Form of Proxy to vote at a General Meeting expected to be convened for 20 May 2019 (the "Circular");

·      applications will be made to the FCA and the London Stock Exchange, respectively, for the Subscription Shares to be admitted to Standard Listing and to trading on the Main Market. Subject to certain conditions, it is expected that Admission will become effective and that dealings in respect of such Subscription Shares will commence at 8:00 a.m. on 21 May 2019; and

·      following the issue of the Subscription Shares, the Company's issued share capital will consist of 560,471,919 Ordinary Shares, with voting rights. This figure may be used by shareholders in the Company as the denominator for the calculation by which they will determine if they are required to notify their interest in, or a change to their interest in, the share capital of the Company under the FCA's DTRs.  The Company does not hold any Ordinary Shares in treasury.

About OKYO

OKYO is a UK biotechnology company that focuses on the discovery and development of novel molecules to treat inflammatory eye diseases and chronic pain. In addition to OKYO-0101, the Company is also developing OKYO-0201 for ocular and chronic pain.

End

Enquiries:

OKYO Pharma Limited	Willy Simon	[phone]
Stockdale Securities Limited (Broker)	Andy Crossley Antonio Bossi David Coaten	[phone]

For further information, please visit the Company's website at www.okyopharma.com.
 

IMPORTANT NOTICES

The person responsible for arranging for the release of this announcement on behalf of the Company is Willy Simon, Executive Chairman.

This announcement does not constitute an offer to sell or the solicitation of an offer to buy the securities, nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of such jurisdiction.

Stockdale, which is authorised and regulated in the United Kingdom by the FCA, is acting as broker to the Company in connection with the matters disclosed in the Circular and this announcement and is not acting for any other person (including a recipient of the Circular or this announcement) or otherwise responsible to any person for providing the protections afforded to clients of Stockdale or for advising any other person in respect of any transaction, matter or arrangement referred to in the Circular and this announcement. No representation or warranty, express or implied, is made by Stockdale, for the accuracy of any information or opinions contained in the Circular and this announcement or for the omission of any material information, for which it is not responsible.

The Circular and this announcement contains (or may contain) certain "forward-looking statements" with respect to the Company and certain of its goals and expectations relating to its future financial condition and performance which involve a number of risks and uncertainties. The forward-looking statements contained herein include statements about the expected effects or potential outcomes of the Waiver, the Whitewash Resolution, the Subscription, and other statements other than in relation to historical facts. No forward-looking statement is a guarantee of future performance and actual results could differ materially from those contained in any forward-looking statements. All statements, other than statements of historical facts, contained in the Circular and this announcement, including statements regarding the Company's future financial position, business strategy and plans, business model and approach and objectives of management for future operations, are forward-looking statements. Generally, the forward-looking statements in the Circular and this announcement use words such as "aim", "anticipate", "target", "expect", "estimate", "plan", "goal", "believe", "will", "may", "could", "should", "future", "intend" "opportunity, "potential", "project", "seek" and other words having a similar meaning.

By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances, including, but not limited to, economic and business conditions, the effects of changes in interest rates and foreign exchange rates, changes in legislation, changes in consumer habits and other factors outside the control of the Company, that may cause actual results, performance or achievements to be materially different from any results, performance or achievements expressed or implied by such forward-looking statements.

All forward-looking statements contained in the Circular and this announcement are based upon information available to the Directors at the date of the Circular and this announcement and the posting or receipt of the Circular and this announcement shall not give rise to any implication that there has been no change in the facts set forth herein since such date. Investors are urged to read both the Circular and this announcement in their entirety carefully before making an investment decision. The forward-looking statements in the Circular and this announcement are based on the relevant Directors' beliefs and assumptions and information only as of the date of the Circular and this announcement, and the forward-looking events discussed in the Circular and this announcement might not occur. Therefore, investors should not place any reliance on any forward-looking statements. Except as required by the FCA, the Takeover Panel, the London Stock Exchange or applicable law, the Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company's expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based unless required to do so by applicable law.

APPENDIX 1

Expected timetable of principal events

Publication of the Circular and this announcement and posting of the Form of Proxy to Shareholders	26 April 2019
Latest time and date for receipt of completed Forms of Proxy to be valid at the General Meeting	10:00 a.m. on 16 May 2019
Record time and date for voting at General Meeting	6:30 p.m. on 16 May 2019
General Meeting	10:00 a.m. on 20 May 2019
Announcement of result of General Meeting	20 May 2019
Admission of Subscription Shares effective	8:00 a.m. on 21 May 2019

Notes:

1.          Each of these times and dates are indicative only and are subject to change. Dates set after the General Meeting assume that the General Meeting is not adjourned and that the Whitewash Resolution is passed. If any of these times and/or dates change, the revised times and/or dates will be notified by the Company to Shareholders by announcement through a Regulatory Information Service (and posted on the Company's website).

2.           Unless otherwise stated, all of the times in the Circular and this announcement refer to London time.

3.          Certain of the principal events in the above expected timetable are conditional upon the passing of the Whitewash Resolution.

Subscription statistics

Subscription Price per Subscription Share	1.1 pence
Number of Existing Ordinary Shares in issue prior to the Subscription	524,108,283
Number of Subscription Shares	36,363,636
Number of New Subscription Warranties	36,363,636
Number of Ordinary Shares in issue following the Subscription	560,471,919
Subscription Shares as a percentage of Enlarged Issued Share Capital	6.48%
Gross proceeds of the Subscription	£400,000
Estimated net proceeds of the Subscription	Approximately £375,000
Market capitalisation of the Company at the Subscription Price following the Subscription	Approximately £6,165,191

Action to be taken

The action to be taken by Independent Shareholders in respect of the General Meeting is set out on page 13 of the Circular. Whether or not you intend to attend the General Meeting, you are urged to complete the accompanying Form of Proxy and return it in accordance with the instructions printed thereon as soon as possible, but in any event so as to be received by post or, during normal business hours only, by hand, by the Registrar, Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol BS99 6ZY by no later than 10:00 a.m. on 16 May 2019. The completion and return of a Form of Proxy will not prevent you from attending and voting at the General Meeting in person should you wish to do so.
 

APPENDIX 2
EXTRACT FROM CIRCULAR

The following is an extract from the Circular. The following information is subject to change. Capitalised terms in this announcement are defined as set out at the end of this announcement. References in this extract from the Circular to "this document" are to the "Circular".

26 April 2019

To the holders of Ordinary Shares (and, for information purposes only, to holders of options or warrants in respect of Ordinary Shares)

Subscription of 36,363,636 new Ordinary Shares at a price of 1.1 pence per share to raise gross proceeds of £400,000

Proposed Approval of Waiver of the obligations under Rule 9 of the Takeover Code

and

Notice of General Meeting

Dear Shareholder,

I am writing in connection with a proposed subscription to raise gross proceeds of £400,000 in new equity capital by way of the Subscription and to seek your approval of a Waiver of certain obligations under the Takeover Code which would otherwise apply to certain Shareholders, in respect of both the proposed Subscription and pursuant to the future exercise of certain options that were granted in 2018 (prior to the Company being subject to the Takeover Code).

Introduction

The Company announced today that it had conditionally raised gross proceeds of £400,000 by way of a cash Subscription by Panetta for 36,363,636 Subscription Shares at the Subscription Price, such that Panetta will increase its holding from 47.91 per cent. of the Existing Issued Share Capital to 51.29 per cent. of the Enlarged Issued Share Capital immediately following completion of the Subscription.

Panetta is owned by a trust in which Gabriele Cerrone has a life interest. Panetta and Mr Cerrone are also significant shareholders in Tiziana Life Sciences plc (with aggregate interests of 47.05% of the issued share capital of that company), a company whose shares are admitted to trading on AIM with a market capitalisation of approximately £103 million and of which Mr Cerrone is executive Chairman and a major shareholder.  Dr Kunwar Shailubhai is the chief executive officer of Tiziana Life Sciences plc and Tiziano Lazzaretti is the chief financial officer of Tiziana Life Sciences plc.  Due to these business relationships and associations, Panetta, Mr Cerrone, Dr Kunwar Shailubhai and Mr Lazzaretti are considered to be acting in concert and together they constitute the Panetta Concert Party.  Further information on the members of the Panetta Concert Party are set out in Part IV of this document.

The Subscription Shares are to be issued with New Subscription Warrants attached on a one for one basis at an exercise price of 1.35 pence each.  The New Subscription Warrants are exercisable at any time and for a period of 5 years from date of issue.  Accordingly 36,363,636 New Subscription Warrants will be issued in connection with the Subscription.  If the New Subscription Warrants and Concert Party Options were to be exercised in full, this would increase the Panetta Concert Party's holding to 55.56% (as further detailed below).  Absent a Waiver being passed on a poll at a general meeting of Independent Shareholders at a general meeting, this increase in the shareholding of the Panetta Concert Party through a threshold provided for in Rule 9 of the Takeover Code would trigger an obligation for the Panetta Concert Party to make a mandatory general offer under Rule 9 to all Independent Shareholders.

The Board currently has sufficient existing authorities to allot shares and disapply pre-emption rights for the purposes of the Subscription; such authorities were obtained at the Company's Annual General Meeting held on 6 September 2018, and accordingly the Board will not be seeking authorities from the Independent Shareholders at the General Meeting.

Background to and reasons for the Waiver and the Subscription

The Company intends to use the net proceeds of the Subscription towards (i) the completion of the IND-enabling studies in order for the Company to make the IND submission for the Chemerin technology by the first quarter of 2020, and (ii) the associated costs relating to the estimated completion of the pre-clinical studies of BAM-8 by the second quarter of 2019, which would provide a basis for further IND enabling studies.

The Subscription Shares will represent approximately 6.94 per cent. of the Existing Issued Share Capital and 6.48 per cent. of the Enlarged Issued Share Capital. The Subscription Price of 1.1 pence represents a discount of approximately 12 per cent. to the Closing Price of 1.25 pence per Ordinary Share and a premium of 10 per cent. to the closing bid price on 25 April 2019, being the last trading day immediately preceding the date of the Subscription Agreement. When issued, the Subscription Shares will be fully paid and will rank pari passu in all respects with the Existing Ordinary Shares, including the right to receive all dividends and other distributions declared, made or paid after the date of issue.  Applications will be made to the FCA and the London Stock Exchange, respectively, for the Subscription Shares to be admitted to Standard Listing and to trading on the Main Market. Subject to certain conditions, it is expected that Admission will become effective and that dealings in respect of such Subscription Shares will commence at 8:00 a.m. on 21 May 2019.

Takeover Code

The issue of the Subscription Shares and/or any exercise of the New Subscription Warrants and/or the Concert Party Options give rise to certain considerations under the Takeover Code. Brief details of the Takeover Panel, the Takeover Code and the protections they afford are given below. The Board intend to take this opportunity to seek Shareholder approval for a waiver of the obligation to make a general offer which would otherwise arise under Rule 9 of the Takeover Code in respect of the issue of the Subscription Shares, any exercise of the New Subscription Warrants and any exercise of the Concert Party Options.

The Takeover Code is issued and administered by the Takeover Panel. The Takeover Code applies to all takeover and merger transactions, however effected, where the offeree company is, inter alia, a listed or unlisted public company resident in the United Kingdom (and to certain categories of private limited companies).

As formerly a British Virgin Islands company, the Company was not historically subject to the Takeover Code and equivalent shareholder protections were not contained in the Company's constitution. Upon migration to Guernsey on 3 July 2018 and, following admission to Standard Listing and to trading on the Main Market, the Company became subject to the Takeover Code and therefore Shareholders are now entitled to the protections afforded by the Takeover Code.

Under Rule 9, any person who acquires an interest in shares, whether by a series of transactions over a period of time or not, which, taken together with any interest in shares held or acquired by persons acting in concert (as defined in the Takeover Code) with him, in aggregate carry 30 per cent. or more of the voting rights of a company, that person is normally required by the Takeover Panel to make a mandatory general offer to all of the remaining shareholders to acquire their shares.

Rule 9 further provides that, inter alia, where any person who, together with persons acting in concert with him or her, is interested in shares which in aggregate carry not less than 30 per cent. of the voting rights of such a company but does not hold shares carrying more than 50 per cent. of such voting rights of a company which is subject to the Takeover Code, and such person, or any person or persons acting in concert with him or her, acquires an additional interest in shares which increases the percentage of shares carrying voting rights in which he or she is interested, then such person is normally required to make a mandatory general offer to all the holders of any class of equity share capital or other class of transferable securities carrying voting rights of that company to acquire the balance of their interests in the company.

An offer under Rule 9 must be in cash or be accompanied by a cash alternative and at the highest price paid by the person required to make the offer, or any person acting in concert with him, for any interest in shares of the company acquired during the 12 months prior to the announcement of the offer.

Rule 9 further provides, inter alia, that where any person who, together with persons acting in concert with him, holds over 50 per cent. of the voting rights of a company and acquires an interest in shares which carry additional voting rights, then they will not normally be required to make a mandatory general offer to the other shareholders to acquire their shares. However, the Takeover Panel may deem an obligation to make an offer to have arisen on the acquisition by a single member of a concert party of an interest in shares sufficient to increase his individual holding to 30 per cent. or more of a company's voting rights or, if he already holds more than 30 per cent. but less than 50 per cent. an acquisition which increases his shareholdings in that company.

Under the Takeover Code, a concert party arises where persons acting together pursuant to an agreement or understanding (whether formal or informal), co-operate to obtain or consolidate control, or to frustrate the successful outcome of an offer for a company, subject to the Takeover Code. Control means an interest, or interests, in shares carrying, in aggregate, 30 per cent. or more of the voting rights of a company, irrespective of whether such interest or interests give de facto control. The members of the Concert Party are deemed to be acting in concert for the purposes of the Takeover Code.

Waiver and Whitewash Resolution

Under Note 1 of the Notes on the Dispensations from Rule 9, when the issue of new securities would otherwise result in an obligation to make a mandatory general offer under Rule 9, the Takeover Panel may grant a waiver of that obligation if, inter alia, the shareholders of a company who are independent of the person who would otherwise be required to make a mandatory general offer, and any person acting in concert with him or her, pass an ordinary resolution on a poll at a general meeting approving the proposals giving rise to the obligation to make a mandatory general offer under Rule 9 and the waiver of it by the Takeover Panel.

The Takeover Panel has agreed, subject to the passing of the Whitewash Resolution by the Independent Shareholders on a poll at the General Meeting, to waive the obligation of the Concert Party, collectively and/or individually, to make a mandatory general offer for the Ordinary Shares not already owned by it or persons connected with it as would otherwise arise following completion of (i) the issue and allotment of the Subscription Shares, or (ii) in the event of the exercise of the Concert Party Options or (iii) any exercise of the New Subscription Warrants. Accordingly, the Independent Directors propose that the Independent Shareholders waive the obligation on the Panetta Concert Party to make a mandatory general offer under Rule 9, which would otherwise arise in the event of (i) the issue and allotment of the Subscription Shares, (ii) the exercise of the Concert Party Options; and (iii) any exercise of the New Subscription Warrants. 

To be passed, the Whitewash Resolution will require a simple majority of the votes cast on a poll vote. As the Waiver must be approved by the Independent Shareholders, the members of the Panetta Concert Party are not able to vote on the Whitewash Resolution. As at the Latest Practicable Date, Panetta, being a member of the Concert Party, held a 47.91 per cent. interest in the Existing Issued Share Capital.

You should note that if the Subscription completes, Panetta will hold 51.29 per cent. of the voting rights of the Company (or 54.0 per cent. of the voting rights of the Company if Panetta exercised the New Subscription Warrants in full and no other person subscribed for any further shares or exercised any warrants or options). In these circumstances, as long as the Panetta Concert Party holds more than 50 per cent. of the voting rights of the Company, individual members of the Panetta Concert Party will be allowed to increase their holdings subject to Note 4 of Rule 9.1.  For so long as Panetta holds more than 50 per cent. of the voting rights of the Company, Panetta may accordingly increase its interest in shares without incurring any obligation under Rule 9 to make a mandatory general offer, although other individual members of the Panetta Concert Party (i.e. Dr Shailubhai and/or Mr Lazzaretti) will not be able to increase their percentage interests in shares through or between a Rule 9 threshold without Takeover Panel consent. In the event that the Whitewash Resolution is approved at the General Meeting, the Panetta Concert Party will not be restricted from making an offer for the Company.

For the avoidance of doubt, the Waiver only applies in respect of increases in shareholdings of the Concert Party resulting from (i) the issue and allotment of the Subscription Shares, or (ii) the exercise of the Concert Party Options, or (iii) the exercise of the New Subscription Warrants.

Independent Advice

The Takeover Code requires the Independent Directors to obtain competent independent advice regarding the merits of the transaction which is the subject of the Whitewash Resolution, the controlling position which it will create, and the effect which it will have on the Shareholders generally.

Stockdale has provided formal advice to the Independent Directors regarding the Waiver and the Subscription in providing such advice, Stockdale has taken into account the Independent Directors' commercial assessments.

Intentions of the Panetta Concert Party regarding the Company's business

The members of the Panetta Concert Party support the strategic goal and use of proceeds as described in this Part I, respectively. The Panetta Concert Party believes that there will be mutual benefit in the successful implementation of that strategy. Panetta itself does not intend to be involved in the day-to-day management or operation of the Company's business.

Pursuant to the Relationship Agreement, further details of which are contained in this Part I, Panetta has given certain undertakings to the Company to ensure that the Board and the Company can operate on an independent basis.

Relationship Agreement

The Company entered into the Relationship Agreement with Panetta on 6 July 2018. The purpose of the Relationship Agreement is to ensure that the Company operates independently of Panetta. The Relationship Agreement provides that all transactions and dealings between the Company and Panetta take place on arm's length commercial terms and shall be subject to the approval of the independent Directors.

Conditional upon the approval of the Whitewash Resolution Panetta has agreed that the Relationship Agreement will be amended to provide that Panetta will not, whist it holds in excess of 29.9 per cent of the voting rights in the Company, subscribe for further Ordinary Shares at a discount of greater than 10 per cent. to the prevailing mid-market price in the event of any future fundraise unless that fundraise is open (so far as is legally practicable) to all other shareholders.

General Meeting

Set out at the end of this document is a notice convening the General Meeting of the Company to be held at to be held at the offices of Cooley (UK) LLP at Dashwood, 69 Old Broad Street, London EC2M 1QS on 20 May 2019 at 10:00 a.m., at which the Whitewash Resolution will be proposed. Please note that the summary and explanation set out below is not the full text of the Whitewash Resolution and Independent Shareholders should read the full text of the Whitewash Resolution as set out in the Notice of General Meeting before returning their Forms of Proxy.

The Subscription and the issue of the New Subscription Warrants and Waiver will not proceed if the Whitewash Resolution is not passed by the Independent Shareholders. The Whitewash Resolution will be proposed as an ordinary resolution (to be taken on a poll of the Independent Shareholders voting in person and by proxy) and seeks the approval of the Independent Shareholders to waive the obligation on the Panetta Concert Party which would otherwise arise under Rule 9 as a result of (i) the issue and allotment of the Subscription Shares, or (ii) the exercise of the Concert Party Options, or (iii) any exercise of the New Subscription Warrants.

Save in respect of the allotment and issue of the Subscription Shares and the issue of the New Subscription Warrants, the grant of options to employees under employee share plans or other similar incentive arrangements and pursuant to any exercise of the Concert Party Options and any other existing options in respect of Ordinary Shares, the Board has no current intention to allot shares, or rights to subscribe or convert into shares, in the capital of the Company.

Actions to be taken

Whether or not you propose to attend the General Meeting in person, you are urged to complete, sign and return your Form of Proxy in accordance with the instructions printed thereon as soon as possible, but in any event so as to be received, by post or, during normal business hours only, by hand, by the Registrar, Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol BS99 6ZY by no later than 10:00 a.m. on 16 May 2019 (or, in the case of an adjournment of the General Meeting, not later than 48 hours before the time fixed for the holding of the adjourned meeting (excluding any part of a day that is not a Business Day)). If you are posting your completed Form of Proxy in the UK, you may do so using the reply-paid card printed on the reverse of the Form of Proxy.

Appointing a proxy in accordance with the instructions set out above will enable your vote to be counted at the General Meeting in the event of your absence.

The completion and return of the Form of Proxy will not prevent you from attending and voting at the General Meeting, or any adjournment thereof, in person should you wish to do so.

Recommendation

The Independent Directors, who have been so advised by Stockdale consider the terms of the proposed Subscription, the exercise of the Concert Party Options, and the Waiver, to be fair and reasonable and in the best interests of Independent Shareholders and of the Company as a whole. In providing its advice to the Independent Directors, Stockdale has taken into account the Independent Directors' commercial assessments.

Accordingly, the Independent Directors recommend that the Independent Shareholders vote in favour of the Whitewash Resolution at the General Meeting as they intend to do in respect of their entire holdings which amount to interests in 307,100 Ordinary Shares, representing approximately 0.06 per cent. of the Existing Issued Share Capital.

Yours faithfully,
 

Willy Simon

Executive Chairman

Definitions

The following definitions apply throughout this document, including the accompanying Form of Proxy, unless the context requires otherwise:

"Admission"	admission of the Subscription Shares to trading on the Main Market
"AIM"	AIM, a market operated by the London Stock Exchange
"Board" or "Directors"	directors of the Company whose names are set out on page 7 of this document
"Business Day"	a day not being a Saturday, Sunday or public holiday in England on which clearing banks are open for business in the City of London
"Closing Price"	closing mid-market quotation of the Existing Ordinary Shares, as derived from the Daily Official List of the London Stock Exchange
"Concert Party Options"	the 17,500,000 share options to acquire the Ordinary Shares held by Dr. Kunwar Shailubhai and Tiziano Lazzaretti who are members of the Panetta Concert Party
"Companies Act"	Companies Act 2006
"Company"	OKYO Pharma Limited, a company registered and incorporated in Guernsey
"CREST"	paperless settlement system operated by Euroclear enabling securities to be evidenced otherwise then by certificates and transferred otherwise then by written instruments
"Disclosure Guidance and Transparency Rules" or "DTRs"	disclosure guidance and transparency rules made by the FCA under FSMA
"EU"	European Union
"Euroclear"	Euroclear UK & Ireland Limited
"Enlarged Issued Share Capital"	Existing Ordinary Shares in issue as at the Latest Practicable Date, plus the Subscription Shares
"Existing Issued Share Capital"	Existing Ordinary Shares in issue as at the Latest Practicable Date
"Existing Ordinary Shares"	524,108,283 Ordinary Shares in issue as at the Latest Practicable Date
"FCA"	UK Financial Conduct Authority in its capacity as the competent authority for the purposes of Part VI of FSMA
"Form of Proxy"	form of proxy for use by Shareholders in connection with the General Meeting and accompanying this document
"FSMA"	Financial Services and Markets Act 2000
"General Meeting"	general meeting of the Company to be held at the offices of Cooley (UK) LLP, Dashwood, 69 Old Broad Street, London EC2M 1QS at 10:00 a.m. on 20 May 2019, or any adjournment thereof
"Group"	Company and its subsidiaries and subsidiary undertakings from time to time
"Independent Directors"	the Directors, excluding Dr. Kunwar Shailubhai who is unable to vote on the Whitewash Resolution by virtue of being a member of the Panetta Concert Party
"Independent Shareholders"	existing Shareholders other than the members of the Concert Party
"Latest Practicable Date"	25 April 2019, the latest practicable date prior to the date of this document
"Listing Rules"	listing rules made by the FCA under FSMA
"London Stock Exchange"	London Stock Exchange plc
"Main Market"	main market for listed securities of the London Stock Exchange
"New Subscription Warrants"	means the 36,363,636 warrants to be issued to Panetta in connection with the Subscription, the terms of which are summarised in Part II of this document.
"Notice of General Meeting"	notice of the General Meeting set out at the end of this document
"Official List"	Official List of the FCA
"Ordinary Shares"	ordinary shares of no par value each in the capital of the Company
"Panetta"	Panetta Partners Limited
"Panetta Concert Party"	Concert party for the purposes of the Takeover Code, Panetta, Gabriele Cerrone, Dr. Kunwar Shailubhai and Tiziano Lazzaretti
"Premium Listing"	premium listing under Chapter 6 of the Listing Rules
"Public Record"	information which is in the public domain and which includes, without limitation, all information accessed on www.londonstockexchange.com and all information available on Company's website on www.okyopharma.com
"Registrar"	Computershare Investor Services PLC, registrars to the Company
"Relationship Agreement"	relationship agreement between the Company and Panetta dated 6 July 2018; he purpose of the Relationship Agreement is to ensure that the Company operates independently of Panetta. The Relationship Agreement provides that all transactions and dealings between the Company and Panetta will take place on arm's length commercial terms and shall be subject to the approval of the Independent Directors. Panetta agrees that the Board shall comprise at least two Independent Directors at all times and Panetta will not exercise its voting rights to remove or replace any independent Director. Panetta also undertakes that it will not take any action which would have the effect of preventing the Company from complying with its obligations under the Listing Rules or the DTRs nor propose any Shareholder resolution that might be intended to circumvent the proper application of the Listing Rules
"Rule 9"	Rule 9 of the Takeover Code
"Shareholders"	holders of Existing Ordinary Shares
"Standard Listing"	listing on the standard segment of the Official List of the FCA under Chapter 14 of the Listing Rules
"Stockdale"	Stockdale Securities Limited, the Company's broker
"Subscription"	conditional subscription by Panetta of the Subscription Shares pursuant to the terms of the Subscription Agreement
"Subscription Agreement"	letter agreement dated 26 April 2019 entered into between the Subscriber and the Company in respect of the Subscription
"Subscription Price"	1.15p per share being the price at which the Subscription Shares are to be issued and allotted pursuant to the Subscription, being one pence per Subscription Share
"Subscription Shares"	36,363,636 new Ordinary Shares to be issued by the Company to Panetta pursuant to the Subscription
"Takeover Code"	City Code on Takeovers and Mergers
"Takeover Panel"	Panel on Takeovers and Mergers
"United States" or "US"	United States of America
"United Kingdom" or "UK"	United Kingdom of Great Britain and Northern Ireland
"Waiver"	waiver granted by the Takeover Panel (subject to the passing of the Whitewash Resolution) in respect of any obligation of the Panetta Concert Party (or any of its members) to make a mandatory general offer pursuant to Rule 9 as a result of (i) the issue and allotment of the Subscription Shares; (ii) the exercise of the Concert Party Options; or (iii) the exercise of the New Subscription Warrants
"Whitewash Resolution"	ordinary resolution of the Independent Shareholders concerning the Waiver to be proposed and held on a poll at the General Meeting and the waiver of it by the Takeover Panel and set out in the Notice of General Meeting
"£", "pounds sterling", "penny" or "pence"	UK pounds sterling, the lawful currency of the United Kingdom
"$" or "US$"	US dollars, the lawful currency of the United States

References to a ''company'' in this document shall be construed so as to include any company, corporation and/or other body corporate, wherever and however incorporated or established. All references to legislation in this document are to the legislation of England and Wales unless the contrary is indicated. Any reference to any provision of any legislation shall include any amendment, modification, re-enactment or extension thereof. Words importing the singular shall include the plural and vice versa, and words importing the masculine gender shall include the feminine or neutral gender.

 

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