Initial Issue and Share Issuance Programme

RNS Number : 4066C

Sequoia Economic Infra Inc Fd Ld

10 February 2020

 

THIS ANNOUNCEMENT IS NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM THE UNITED STATES, CANADA, AUSTRALIA, NEW ZEALAND, JAPAN OR THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH SUCH PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.

10 February 2020

Sequoia Economic Infrastructure Income Fund Limited ("SEQI" or the "Company")

Initial Issue targeting £250 million and Share Issuance Programme

Further to the announcement on 20 January 2020, the Board of Directors of SEQI (the "Board"), the specialist investor in economic infrastructure debt, is pleased to announce a proposed partially pre-emptive issue of Ordinary Shares seeking to raise £250 million of gross proceeds before expenses (the "Gross Issue Proceeds"), equivalent to up to 223,214,285 new ordinary shares of no par value (the "New Ordinary Shares"). The Board have determined that the New Ordinary Shares will be issued at a price of 112.0 pence per New Ordinary Share (the "Issue Price") (the "Initial Issue").

The Board recognises the importance of pre-emption rights to Ordinary Shareholders. Accordingly, 184,908,574 New Ordinary Shares are being initially offered to Qualifying Shareholders by way of the Open Offer pursuant to which they will be entitled to apply for 2 New Ordinary Shares for every 15 existing Ordinary Shares held at 6.00 p.m. on 6 February 2020 (the "Record Date"). The balance of the New Ordinary Shares, together with any New Ordinary Shares not taken up by Qualifying Shareholders under the Open Offer, will be made available under the Placing and/or Offer for Subscription of New Ordinary Shares.

The Company intends to use the proceeds raised from the Initial Issue (less expenses) (the "Net Issue Proceeds") to repay the drawn commitments under its £280 million Revolving Credit Facility ("RCF"). As at 31 December 2019, the Group had outstanding drawings on its RCF of £224 million and cash of £56.8 million, resulting in net leverage of £167.2 million. In addition, the Company had undrawn commitments on existing investments collectively valued at £92.7 million.  Any Net Issue Proceeds raised in excess of the amount drawn or committed under its RCF are expected to be deployed into the Company's near term pipeline of in excess of £380 million of investment opportunities, in accordance with the Company's Investment Policy.

The Company has also proposed to implement a share issuance programme for up to a maximum of 300,000,000 additional Ordinary Shares (the "Share Issuance Programme") excluding the target amount of shares available under the Initial Issue. The Share Issuance Programme is being created to provide the Company with flexibility should it wish to raise further capital over the next 12 months to either repay any future drawn down funds under the RCF or to directly invest in new investment opportunities.

Robert Jennings, Chairman of SEQI commented:

"The fundraise announced builds on a successful period over the current financial year. The Board is encouraged by the Net Asset Value per share progression and by the quality and depth of our investment pipeline. In May last year the Board were able to increase our dividend reflecting our Net Asset Value per share at that time. If current trends continue, we will again review our target payout early in the coming financial year. This is appreciably sooner than we had previously expected."

The Company expects to publish a prospectus (the "Prospectus") in connection with the Initial Issue and the Share Issuance Programme shortly. Unless otherwise defined, the terms used in this Announcement shall have the same meaning as set out in the Prospectus.

Jefferies International Limited ("Jefferies") is acting as sole sponsor, financial adviser and bookrunner to the Company.

The Initial Issue and Share Issuance Programme

The Initial Issue is being implemented by way of an Open Offer, Placing and Offer for Subscription. The target size of the Initial Issue is £250 million before expenses. The target number of New Ordinary Shares to be issued pursuant to the Initial Issue is 223,214,285 at the Issue Price of 112 pence per New Ordinary Share. The Issue Price of 112 pence represents a premium of approximately 5.3 per cent. to the unaudited NAV per Ordinary Share as at 31 December 2019 of 106.32 pence and a discount of approximately 5.6 per cent. to the closing price of 118.6 pence per existing ordinary share on 17 January 2020, the latest practicable date prior to the Company's announcement of a possible equity raise. The Company expects to release its unaudited NAV per Ordinary Share for the month ending 31 January 2020 on or around 14 February 2020.

The New Ordinary Shares issued pursuant to the Initial Issue will rank pari passu in all respects with the existing Ordinary Shares. For the avoidance of doubt, the new Ordinary Shares will be entitled to the interim quarterly dividend for the period ending 31 March 2020, expected to be announced in April 2020, after the closing of the Initial Issue.

The Directors recognise the importance of pre-emption rights to Ordinary Shareholders. Accordingly, a substantial proportion of the New Ordinary Shares are being initially offered to Qualifying Shareholders by way of the Open Offer pursuant to which they will be entitled to apply for 2 New Ordinary Shares for every 15 existing Ordinary Shares held on the Record Date (being up to 184,908,574 New Ordinary Shares).

The balance of the New Ordinary Shares (being 38,305,711 New Ordinary Shares), together with any New Ordinary Shares not taken up by Qualifying Shareholders under the Open Offer (including under the Excess Application Facility), may be made available, at the discretion of the Directors, under the Placing and/or Offer for Subscription of New Ordinary Shares.

Under the Share Issuance Programme, the Company proposes to have the ability to issue up to a further 300,000,000 Ordinary Shares in the future. However, the Board may increase the size of the Initial Issue by up to a maximum of 44,642,857 additional New Ordinary Shares if they, in consultation with Jefferies and the Investment Adviser, believe there is sufficient investor demand and assets available suitable for investment. Where the size of the Initial Issue is increased above 223,214,285 New Ordinary Shares, the maximum aggregate number of Ordinary Shares available for issuance under the Share Issuance Programme will be reduced by the amount of such increase, subject to a maximum of 44,642,867 Ordinary Shares. Any future issues under the Share Issuance Programme are dependent on the Company's pipeline of investment opportunities and accordingly there is no certainty that there will be any future issues of shares under the Share Issuance Programme before its expiry.

The Directors intend that any material issue under the Share Issuance Programme shall include a material pre-emptive element consistent with the approach in respect of the Initial Issue.

Pipeline and financing of opportunities

The Investment Adviser has identified potential near-term investments available for purchase, with a total value in excess of £380 million that meet the Investment Policy. In addition, the Investment Adviser expects to see a steady stream of further investment opportunities in the near term. Of the Investment Adviser's total pipeline of opportunities totaling in excess of £1.0 billion, approximately 43 per cent. of the opportunities are senior secured debt instruments and 78 per cent. are floating rate debt instruments. Approximately 41 per cent. of the pipeline consists of opportunities in the US and 20 per cent. of the opportunities are in the UK. The Company will invest any Net Issue Proceeds, after repayment of the RCF, in accordance with the Company's Investment Policy.

The acquisition of these potential investments is subject, among other things, to the approval of the Directors, and the Investment Adviser completing satisfactory due diligence in relation to such potential investments, and any such acquisitions will be subject to agreement having been reached between the Investment Adviser and the relevant counterparty as to the terms of such acquisitions.

If the Net Issue Proceeds are less than the current amount drawn under the RCF, or following deployment of all Net Issue Proceeds, the Company expects to re-draw funds under the RCF to invest in these pipeline opportunities or new opportunities that become available. Further details of the Company's portfolio and pipeline can be found in the Company's Prospectus once published.

Benefits of the Initial Issue

The Board believes that proceeding with the Issue will have the following benefits:

·      Providing the Company with the funds to repay the RCF which will allow the Company to re-draw funds under the RCF as and when investment opportunities arise without incurring cash drag;

·      Allowing the Company, following repayment of the RCF, to invest further capital in the Company's identified pipeline opportunities which should enable the Group to further diversify its Existing Portfolio;

·      Creating the potential to enhance the NAV per Ordinary Share of the existing Ordinary Shares through the issuance of New Ordinary Shares at a premium to NAV per Ordinary Share, after the related costs have been deducted;

·      Spreading the Company's fixed running costs across a wider base of shareholders, and benefiting from the reducing scale of charges for the Investment Adviser, thereby reducing the total expense ratio;

·      Increasing the size of the Company which should help make the Company more attractive to a wider base of investors and improving market liquidity in the Ordinary Shares; and

·      Increasing the size of the Company which should help make the Company more attractive to a wider base of borrowers and improve the Company's pipeline of opportunities.

Benefits of the Share Issuance Programme

Under the Share Issuance Programme, the Company proposes to have the ability to issue up to an additional 300,000,000 Ordinary Shares in the future (less up to a maximum of 44,642,857 Ordinary Shares if these Ordinary Shares have been allocated as New Ordinary Shares under the Initial Issue as detailed above) in tranches.

Under the Share Issuance Programme the Company will have the flexibility to issue further shares through any of a placing, open offer and offer for subscription, or any combination of them. The Directors intend that any material issue under the Share Issuance Programme would include a material pre-emptive element consistent with their approach in respect of the Initial Issue.

The Directors believe that instituting the Share Issuance Programme will:

·      Enable the Company to raise additional capital quickly through an equity issuance, in order to i) repay the RCF when it becomes fully or substantially drawn and/or ii) invest in opportunities identified in the future;

·      Create the potential to enhance the NAV per Ordinary Share of existing Ordinary Shares through new share issuance at a premium to NAV per Ordinary Share, after the related costs have been deducted;

·      Grow the Company, thereby spreading operating costs over a larger capital base, and benefiting from the reducing scale of charges for the Investment Adviser, which should reduce the total expense ratio; and

·      Partially satisfy market demand from time to time for Ordinary Shares and improve liquidity in the market for the Ordinary Shares.

Dividend Policy

In the absence of any significant restricting factors, the Board currently expects to pay dividends totalling 6.25p per Ordinary Share per annum which has been in effect from the quarter ended 30 June 2019, having increased from 6.00p per Ordinary Share.

To the extent that the Company's NAV per Ordinary Share continues to increase in the near term, the Directors will consider whether it is appropriate to increase the dividend. A further announcement will be made if any changes to the Company's dividend policy are made. No changes to the Company's existing dividend policy are expected to be made ahead of the closing of the Initial Issue.

The Company pays dividends on a quarterly basis.  

Extraordinary General Meeting ("EGM")

The proposals in the Prospectus are conditional on, amongst other things, the approval of Resolutions 1 and 2 by Shareholders at the EGM. A separate circular (the "Circular") is expected to be published shortly which includes a notice of the EGM to be held at 2.00 p.m. on 25 February 2020 at Sarnia House, Le Truchot, St Peter Port, Guernsey, GY1 1GR. At the EGM the Company will seek the approvals necessary from Shareholders for the Initial Issue and the Share Issuance Programme to proceed. In particular, Shareholders will be asked to approve:

·      the disapplication of pre-emption rights in respect of up to 223,214,285 Ordinary Shares for the purposes of the Initial Issue ("Resolution 1"); and

·      the disapplication of pre-emption rights in respect of up to 300,000,000 Ordinary Shares for the purposes of the Share Issuance Programme ("Resolution 2").

The proposed Initial Issue is conditional upon, amongst other things, the Company obtaining Shareholders' approval of Resolution 1. The proposed Share Issuance Programme is conditional upon, amongst other things, the Company obtaining Shareholders' approval of both Resolution 1 and Resolution 2.

In order to have the flexibility to offer scrip dividends and in compliance with the Companies Law and the Listing Rules, the Board is also seeking Shareholder approval to authorise the Board to offer a scrip dividend to Shareholders for dividends declared or paid prior to the annual general meeting for the Company to be held in 2022 ("Resolution 3").

Further details about any scrip dividend will be provided to Shareholders at such time as the Board may elect to offer a scrip dividend alternative to Shareholders.

The Board believes that the Resolutions are in the best interests of the Company and its Shareholders as a whole and recommends that Shareholders vote in favour of the Resolutions at the EGM.

Expected Timetable

Open Offer
Record Date for entitlements to participate in the Open Offer	6.00 p.m. on 6 February 2020
Ex-entitlement date for the Open Offer	8.00 a.m. on 10 February 2020
Open Offer opens	8.00 a.m. on 11 February 2020
Basic Entitlements and Excess CREST Open Offer Entitlements credited to CREST stock accounts (Qualifying Shareholders only)	As soon as practicable after 8.00 a.m. on 11 February 2020
Recommended latest time for requesting withdrawal of Basic Entitlements and Excess CREST Open Offer Entitlements from CREST (i.e, if your Basic Entitlements and Excess Open Offer Entitlements are in CREST and you wish to convert them to certificated form)	4.30 p.m. on 20 February 2020
Latest time and date for depositing Basic Entitlements and Excess CREST Open Offer Entitlements into CREST	3.00 p.m. on 21 February 2020
Latest time and date for splitting Open Offer Application Forms (to satisfy bona fide market claims only)	3.00 p.m. on 24 February 2020
Latest time and date for receipt of completed Open Offer Application Forms and payment in full under the Open Offer or settlement of relevant CREST instructions (as appropriate)	11.00 a.m. on 26 February 2020
Placing and Offer for Subscription
Placing and Offer for Subscription open	10 February 2020
Latest time and date for receipt of completed Offer for Subscription Application Forms and payment in full under the Offer for Subscription	11.00 a.m. on 26 February 2020
Latest time and date for receipt of placing commitments under the Placing	11.00 a.m. on 27 February 2020
The Share Issuance Programme
Share Issuance Programme opens	10 February 2020
Publication of Share Issuance Programme Price in respect of each issuance of Ordinary Shares	On announcement of each subsequent issue pursuant to the Share Issuance Programme
Admission and crediting of CREST accounts in respect of each issuance of Ordinary Shares	8.00 a.m. on each day Ordinary Shares are issued
Last date for Ordinary Shares to be issued pursuant to the Share Issuance Programme	9 February 2021
Other key dates
Results of the Initial Issue announced	28 February 2020
Initial Admission of the New Ordinary Shares to the Official List and commencement of dealings on the London Stock Exchange	8.00 a.m. on 3 March 2020
CREST accounts credited in respect of New Ordinary Shares issued pursuant to the Initial Issue to be held in uncertificated form	On or around 3 March 2020
Dispatch of definitive share certificates in respect of New Ordinary Shares (where applicable) issued pursuant to the Initial Issue	On or around 10 March 2020

EGM Expected Timetable  

Publication of the Prospectus and Circular	10 February 2020
Latest time and date for receipt of Forms of Proxy	2.00 p.m. on 21 February 2020
EGM	2.00 p.m. on 25 February 2020

The dates and times specified above are subject to change. In particular, the Directors may (with the prior approval of Jefferies) bring forward or postpone the closing time and date for the Initial Issue. In the event that a date or time is changed, the Company will notify persons who have applied for New Ordinary Shares pursuant to the Initial Issue or Ordinary Shares pursuant to the Share Issuance Programme of changes to the timetable either by post, by electronic mail or by the publication of a notice through a Regulatory Information Service. References to times are to London times unless otherwise stated.

Admission to trading

Application will be made to the UK Listing Authority and the London Stock Exchange for all of the New Ordinary Shares issued pursuant to the Initial Issue to be admitted to the premium segment of the Official List and to trading on the Main Market. It is expected that the results of the Initial Issue will be announced through a Regulatory Information Service on or around 28 February 2020 and it is expected that Initial Admission will become effective and that dealings for normal settlement in the Ordinary Shares will commence at 8.00 a.m. on or around 3 March 2020.

Further details

The ticker for the New Ordinary Shares is SEQI. The ISIN for the New Ordinary Shares is GG00BV54HY67 and the SEDOL is BV54HY6. The ISIN of the Basic Entitlements is GG00BJN6TJ92 and the SEDOL is BJN6TJ9. The ISIN for the Excess CREST Open Offer Entitlement is GG00BJN6TH78 and the SEDOL is BJN6TH7.

A copy of the Prospectus, when published, will be submitted to the National Storage Mechanism and will shortly thereafter be available for inspection at: www.morningstar.co.uk/uk/nsm as well as on the Company's website at http://www.seqifund.com/downloads. Full details of the Terms and Conditions of the Placing, Open Offer and the Offer for Subscription will be made available in the Company's Prospectus.

The information contained in this announcement may constitute inside information. The person responsible for the release of this announcement on behalf of the Company is Praxis Fund Services Limited.

LEI: 2138006OW12FQHJ6PX91

For further information:
Sequoia Investment Management Company	[phone]
Steve Cook Dolf Kohnhorst Randall Sandstrom Greg Taylor
Jefferies International Limited	[phone]
Gary Gould Stuart Klein
Tulchan Communications (Financial PR)	[phone]
Martin Pengelley Elizabeth Snow Deborah Roney
Praxis Fund Services Limited (Company Secretary)	[phone]
Matt Falla Katrina Rowe

About Sequoia Economic Infrastructure Income Fund Limited

The Company is a Guernsey registered closed-ended investment company that seeks to provide investors with regular, sustained, long-term distributions and capital appreciation from a diversified portfolio of senior and subordinated economic infrastructure debt investments. The Company is advised by Sequoia Investment Management Company Limited.

LEI: 2138006OW12FQHJ6PX91

Important Notices

This announcement is an advertisement and does not constitute a prospectus relating to the Company and does not constitute, or form part of, any offer or invitation to sell or issue, or an invitation to purchase investments of any description, or any solicitation of any offer to subscribe for, any securities in the Company in any jurisdiction nor shall it, or any part of it, or the fact of its distribution, form the basis of, or be relied on in connection with or act as any inducements to enter into, any contract therefor. Copies of the Prospectus to be published by the Company will be available from http://www.seqifund.com. A copy of the Registration Document is currently available from http://www.seqifund.com.

Recipients of this announcement who are considering acquiring New Ordinary Shares are reminded that any such acquisition must be made only on the basis of the information contained in the Prospectus (or any supplementary prospectus) which may be different from the information contained in this announcement and must not be made in reliance on this announcement. The subscription for New Ordinary Shares is subject to specific legal or regulatory restrictions in certain jurisdictions. Persons distributing this announcement must satisfy themselves that it is lawful to do so.  The Company assumes no responsibility in the event that there is a violation by any person of such restrictions.

This announcement does not constitute and may not constitute and may not be construed as a recommendation regarding the issue or the provision of investment advice by any party. No information set out in this announcement is intended to form the basis of any contract of sale, investment decision or any decision to purchase securities. Potential investors should consult a professional advisor as to the suitability of an investment in the securities for the person concerned.

The value of Ordinary Shares and the income from them is not guaranteed and can fall as well as rise due to stock market and currency movements. When you sell your investment you may get back less than you originally invested. Figures refer to past performance and past performance is not a reliable indicator of future results. Returns may increase or decrease as a result of currency fluctuations. Capital is at risk and investors need to understand the risks of investing. Please refer to the Prospectus for further information, in particular the "Risk Factors" sections set out in both the Securities Note and the Registration Document.

Neither this announcement nor the information contained herein is for release, publication or distribution, directly or indirectly, in, into or from the United States, Canada, Australia, New Zealand, Japan or the Republic of South Africa or any other jurisdiction where to do so might constitute a violation of the relevant laws or regulations of such jurisdiction. The securities referred to herein have not been and will not be registered under the relevant securities laws of any such excluded territory.

This announcement is not for publication or distribution, directly or indirectly, in or into the United States. This announcement does not contain, constitute or form part of an offer for sale of, resale of, transfer of or delivery of or the solicitation of an offer to purchase directly or indirectly, securities in the United States or to, or for the account or benefit of a U.S. person (as defined in Regulation S under the Securities Act). The securities referred to herein have not been, and will not, be registered under the Securities Act or any other applicable securities laws, or with any securities regulatory authority, of any state or other jurisdiction of the United States, and may not be offered, sold, resold, transferred or delivered, directly or indirectly, in or into the United States or to, or for the account or benefit of, any U.S. person absent registration or an applicable exemption from the registration requirements of the Securities Act. There will be no public offering of the Company's securities in the United States.

The Company has not been and will not be registered under the US Investment Company Act of 1940, as amended (the "Investment Company Act"), and neither International Fund Management Limited nor Sequoia Investment Management Company Limited are registered as an investment adviser under the US Investment Advisers Act of 1940, as amended (the "Advisers Act"). Consequently, investors are not entitled to the benefits and protections of the Investment Company Act or the Advisers Act.

The securities described in this announcement have not been approved or disapproved by the US Securities and Exchange Commission, any state securities commission or any other regulatory authority in the United States, nor have any of the foregoing authorities passed upon or endorsed the merits of any offering of securities or the accuracy or adequacy of this document. Any representation to the contrary is a criminal offence in the United States.

The distribution of this document may also be restricted by law in other jurisdictions.

This announcement does not constitute or form part of, and should not be construed as, any offer or invitation to sell, or any solicitation of any offer to purchase or subscribe for any ordinary shares or any other securities nor shall it (or any part of it) or the fact of its distribution, form the basis of, or be relied on in connection with, any contract or investment decision whatsoever, in any jurisdiction. This announcement does not constitute a recommendation regarding any securities.

The distribution of this announcement may be restricted by law in certain jurisdictions and persons into whose possession any document or other information referred to herein comes should inform themselves about, and observe, any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

Subject to certain exceptions, the securities referred to herein may not be offered or sold in the United States, Canada, Australia, New Zealand, Japan or the Republic of South Africa or to, or for the account or benefit of, any national, resident or citizen of the United States, Canada, Australia, New Zealand, Japan or the Republic of South Africa. There will be no offer of the ordinary shares in the United States, Canada, Australia, New Zealand, Japan or the Republic of South Africa.

Certain statements in this announcement are forward-looking statements which are based on the Company's expectations, intentions and projections regarding its future performance, anticipated events or trends and other matters that are not historical facts. These forward-looking statements, which may use words such as "aim", "anticipate", "believe", "could", "intend", "estimate", "expect", and words of similar meaning, include all matters that are not historical facts. These forward-looking statements involve risks, assumptions and uncertainties that could cause the actual results of operations, financial condition, liquidity and dividend policy and the development of the industries, which the Company's businesses operate to differ materially from the impression created by forward-looking statements. These statements are not guarantees of future performance and are subject to known and uncertain risks, uncertainties and other factors that could cause actual results to differ material from those express or implied by such forward-looking statements. Given those risks and uncertainties, prospective investors are cautioned not to place undue reliance on forward-looking statements. Forward-looking statements speak only as of the date of such statements and, except as required by the Financial Conduct Authority, the London Stock Exchange or applicable law, the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

Jefferies International Limited ("Jefferies"), which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively for the Company and no-one else in connection with the potential equity issue. Jefferies will not regard any other person as its client in relation to the potential issue and will not be responsible to anyone other than the Company for providing the protections afforded to its clients, nor for providing advice in relation to the potential issue, the contents of this announcement or any transaction, arrangement or other matter referred to herein.

Neither Jefferies nor any of its directors, officers, employees, advisers, affiliates or agents accepts any responsibility or liability whatsoever for/or makes any representation or warranty, express or implied, as to the truth, accuracy or completeness of the information in this announcement (or whether any information has been omitted from the announcement) or any other information relating to the Company or its subsidiary, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available or for any loss howsoever arising from any use of the announcement or its contents or otherwise arising in connection therewith.

The Company is incorporated in Guernsey and has been registered as a registered closed-ended collective investment scheme under the Protection of Investors (Bailiwick of Guernsey) Law, 1987, as amended. It is suitable only for professional or experienced investors, or those who have taken appropriate professional advice.

You are wholly responsible for ensuring that all aspects of the Company are acceptable to you. Investment in listed funds may involve special risks that could lead to a loss of all or a substantial portion of such investment. Unless you fully understand and accept the nature of the Company and the potential risks inherent in it you should not invest in the Company.

Further information in relation to the regulatory treatment of listed funds domiciled in Guernsey may be found on the website of the Guernsey Financial Services Commission at http://www.gfsc.gg/The-Commission/Pages/Home.aspx.

Information for Distributors

Solely for the purposes of the product governance requirements contained within: (a) EU Directive 2014/65/EU on markets in financial instruments, as amended ("MiFID II"); (b) Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593 supplementing MiFID II; and (c) local implementing measures (together, the "MiFID II Product Governance Requirements"), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any "manufacturer" (for the purposes of the Product Governance Requirements) may otherwise have with respect thereto, the Ordinary Shares have been subject to a product approval process, which has determined that such securities are: (i) compatible with an end target market of investors who meet the criteria of retail and professional clients and eligible counterparties, each as defined in MiFID II; and (ii) eligible for distribution through all distribution channels as are permitted by MiFID II (the "Target Market Assessment").

Notwithstanding the Target Market Assessment, distributors should note that: the price of the Ordinary Shares may decline and investors could lose all or part of their investment; the Ordinary Shares offer no guaranteed income and no capital protection; and an investment in Ordinary Shares is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Issue. Furthermore, it is noted that, notwithstanding the Target Market Assessment, Jefferies will only procure investors who meet the criteria of professional clients and eligible counterparties.

For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of MiFID II; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the New Ordinary Shares pursuant to the Issue.

Each distributor is responsible for undertaking its own Target Market Assessment in respect of the New Ordinary Shares and determining appropriate distribution channels.

Marketing disclosures pursuant to AIFMD (as defined below) 

The Company is an externally managed alternative investment fund and has appointed the Investment Manager (the "AIFM"), as its alternative investment fund manager

Pursuant to Article 23 of AIFMD and the Alternative Investment Fund Managers Regulations 2013 (No. 1173/2013) and the Investment Funds Sourcebook of the FCA (the "UK AIFMD Rules"), the AIFM is required to make available to persons in the European Union who are invited to and who choose to participate in the Issue, by making an oral or written offer to subscribe for New Ordinary Shares, including any individuals, funds or others on whose behalf a commitment to subscribe for New Ordinary Shares is given (the "Subscribers") certain information (the "Article 23 Disclosures"). For the purposes of the Issue, the AIFM has made the Article 23 Disclosures available to Subscribers in the 'Investor - Shareholder Information' section of the Company's website at: http://www.seqifund.com.

PRIIPS (as defined below)

In accordance with the Regulation (EU) No 1286/2014 of the European Parliament and of the Council of 26 November 2014 on key information documents for packaged retail and insurance-based investment products ("PRIIPs") and its implementing and delegated acts (the "PRIIPs Regulation"), the AIFM has prepared a key information document (the "KID") in respect of the Ordinary Shares. The KID is made available by the AIFM to "retail investors" prior to them making an investment decision in respect of the Ordinary Shares at http://www.seqifund.com.

If you are distributing Ordinary Shares, it is your responsibility to ensure that the KID is provided to any clients that are "retail clients". 

The Company is the only manufacturer of the Ordinary Shares for the purposes of the PRIIPs Regulation and neither Jefferies nor the AIFM are manufacturers for these purposes. Neither Jefferies nor the AIFM makes any representations, express or implied, or accepts any responsibility whatsoever for the contents of the KID prepared by the Company nor accepts any responsibility to update the contents of the KID in accordance with the PRIIPs Regulation, to undertake any review processes in relation thereto or to provide the KID to future distributors of Ordinary Shares. Both Jefferies and the AIFM and their respective affiliates accordingly disclaim all and any liability whether arising in tort or contract or otherwise which it or they might have in respect of the key information documents prepared by the Company. Investors should note that the procedure for calculating the risks, costs and potential returns in the KID are prescribed by laws. The figures in the KID may not reflect actual returns for the Company and anticipated performance returns cannot be guaranteed. 

 

END

 

 

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