Proposed Placing and Notice of EGM

RNS Number : 5749E

Target Healthcare REIT Limited

11 February 2015

 



NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION, DIRECTLY OR INDIRECTLY, TO THE UNITED STATES, AUSTRALIA, CANADA, SOUTH AFRICA, JAPAN OR ANY MEMBER STATE OF THE EEA (OTHER THAN THE UNITED KINGDOM) OR TO ANY NATIONAL, RESIDENT OR CITIZEN OF THE UNITED STATES, AUSTRALIA, CANADA, SOUTH AFRICA, JAPAN OR ANY MEMBER STATE OF THE EEA (OTHER THAN THE UNITED KINGDOM)

This announcement is an advertisement and does not constitute a prospectus and investors must only subscribe for or purchase any shares referred to in this announcement on the basis of information contained in the prospectus issued by Target Healthcare REIT Limited on 5 September 2014, as supplemented on 7 January 2015 and to be further supplemented in due course (the "Prospectus") and not in reliance on this announcement. When made generally available, copies of the Prospectus may, subject to any applicable law, be obtained from the registered office of the Company. This announcement does not constitute and may not be construed as, an offer to sell or an invitation to purchase, investments of any description, a recommendation regarding the issue or the provision of investment advice by any party. No information set out in this announcement or referred to in other written or oral form is intended to form the basis of any contract of sale, investment decision or any decision to purchase shares in the Company.

TARGET HEALTHCARE REIT LIMITED

("Target" or the "Company")

PROPOSED PLACING AND NOTICE OF EXTRAORDINARY GENERAL MEETING

The Board of Directors of Target (the ''Board'') is pleased to announce a proposed placing of up to 25,000,000 ordinary shares of no par value in the Company ("New Shares") in accordance with the terms and conditions of the Placing Programme established under the prospectus issued on 5 September 2014, as supplemented (the "Placing").

Over the last six months, the Company has raised gross proceeds of £22.3 million and has fully utilised these proceeds through the acquisition of five purpose-built care homes for gross consideration of £25.8 million. The Company has identified a further pipeline of income accretive investment opportunities with an investment value of over £100 million with an average net initial yield in excess of 7.0%. Target intends to use its Placing Programme to grow its equity base in a disciplined manner. Hence, this Placing will be capped at a fixed amount that matches the cost of the near term pipeline opportunities.

The Placing will be non pre-emptive with the price per New Share to be determined at the close of the book building process which is expected to be on 3 March 2015. The Company, in consultation with Oriel Securities Limited ("Oriel"), will determine the price of the New Shares based on the level of demand from potential investors, with the price expected to be set in the range of 100 to 104 pence per New Share. In any event, the New Shares will be issued at a price which represents a premium to the most recent Net Asset Value ("NAV") per Ordinary Share and will therefore be NAV accretive to existing shareholders.

Background

Target listed on the London Stock Exchange's Main Market on 7 March 2013 with an investment remit to focus on a diversified portfolio of modern, purpose built care homes that are let to quality tenants who demonstrate strong operational capabilities and a strong care ethos.

Target's care homes typically benefit from favourable local dynamics and long leases at sustainable rental levels. These leases are structured to include annual rental uplifts (RPI linked or fixed) and cure rights. Target has built a portfolio of quality assets in the right locations with the services and facilities that suit its tenants' needs. This is set against a background of an increasing UK population, a shift in how society cares for its elderly and the provision of this care, as well as an insufficient new supply of ensuite, fit-for-purpose rooms.

As at 31 December 2014, the Company together with its subsidiaries (collectively referred to throughout this announcement as the "Group") owned 27 care home assets valued at £135.6 million and had a NAV of 95.5 pence per Ordinary Share. As announced on 27 January 2015, the Group has since made an acquisition of a further care home in Norfolk ("Iceni House") for a total consideration of approximately £4.5 million. The portfolio is diversified, both geographically and by income stream, with 7 operators across the portfolio as at 31 December 2014, and a further operator added as part of the Iceni House acquisition.

The Group has a conservative gearing policy with debt of £27 million at 31 December 2014 reflecting a loan to value ratio of 19.9%.

Target seeks to provide its shareholders with an attractive level of income with its last quarterly dividend being 1.53 pence per Ordinary Share, reflecting an annualised dividend yield, based on the closing share price at 10 February 2015, of 6.0%. The dividends paid by the Company have been fully covered during periods when the Company has been fully invested and Target will seek to only execute transactions which are expected to assist in maintaining a fully covered dividend.

In September 2014, the Company initiated a Placing Programme and subsequently raised gross proceeds of £17.4 million through a placing and offer for subscription, and a further £4.9 million through a subsequent placing in November 2014.

Use of Proceeds

Target has a demonstrable track record of deploying its capital successfully. The net proceeds of the placing and offer for subscription, and the subsequent placing under the Placing Programme, have been fully utilised to enhance the portfolio through the targeted acquisition of five care homes at net initial yields all in excess of 7%.

The Investment Manager, having already appraised in excess of 500 assets, has identified a pipeline of attractive opportunities with an investment value of over £100 million at an average net initial yield in excess of 7%.

The Company now intends to take advantage of the market opportunities it is currently seeing to raise additional funds to grow the portfolio in an efficient manner, further diversifying the asset base while limiting the impact of cash drag on the Company's returns.

Benefits of the Placing

The Placing Programme was structured to enable the Company to raise additional capital when appropriate opportunities are identified in the market, whilst minimising the impact of cash drag on the Company's returns.

The Board believes that the Placing will have the following benefits to Shareholders and the Company:

·     providing additional capital will enable the Company to take advantage of current investment opportunities in the market and make further investments in accordance with the Company's investment policy and within its appraisal criteria;

·     as the Company is actively considering a number of specific property opportunities, the Placing will assist in matching the capital requirements of the Company to the investment opportunities identified;

·      the average net initial yield on the identified pipeline opportunities is expected to be in excess of 7%. The new investments should therefore enhance the Company's income focus as well as providing further asset and income diversification for shareholders;

·     providing a larger equity base over which the fixed costs of the Company may be spread, thereby reducing the Company's ongoing costs per Ordinary Share; and

·     further diversification of the Shareholder register, potentially enhancing liquidity in the Ordinary Shares.

Terms of the Placing

The Company is proposing to issue up to 25,000,000 New Shares. The Placing is being made pursuant to the terms and conditions of the Placing Programme set out in the Appendix of this announcement and in the supplementary prospectus expected to be published shortly.

The Placing is expected to close at 1.00 p.m. (London time) on 3 March 2015, but may close earlier (or later) at the absolute discretion of the Company, in consultation with Oriel, which is acting in its role as Placing Agent for the Company.

The Placing will be non pre-emptive with the price per New Share to be determined at the close of the book building process which is expected to be on 3 March 2014. The Company, in consultation with Oriel, will determine the price of the New Shares based on the level of demand from potential investors with the price expected to be set in the range of 100 to 104 pence per New Share. In any event, the New Shares will be issued at a premium to the most recent NAV per Ordinary Share and will therefore be NAV accretive to existing shareholders.

The New Shares will, when issued, rank in full for all dividends or other distributions declared, made or paid after Admission and in all other respects will rank pari passu with the existing Ordinary Shares, including for the Company's next quarterly dividend, which is expected to be paid in May 2015. For the avoidance of doubt, the New Shares will not qualify for the dividend declared on 5 February 2015 in respect of the period from 1 October 2014 to 31 December 2014.

Participation in the Placing will be available only to persons falling within Articles 49(2)(a) to (d) or 19(5) of the Financial Services and Markets Act 2000 (Financial Promotions) Order 2005.

In the event that the number of New Shares applied for under the Placing exceeds 25,000,000, it may be necessary to scale back applications under the Placing. In such event, New Shares will be allocated at the discretion of the Company in consultation with the Oriel.

The Placing is not being underwritten.

Dickson Minto, W.S. will be acting as the Company's sponsor in respect of the Placing.

Applications will be made to the FCA for admission of the New Shares to the premium segment of the Official List and to trading on the London Stock Exchange's main market for listed securities (''Admission''). It is expected that Admission will become effective and that unconditional dealings in the New Shares will commence at 8.00 a.m. (London time) on, or around, 6 March 2015.

The New Shares will be issued in registered form and may be held in uncertificated form. The New Shares allocated will be issued to Placees through the CREST system unless otherwise stated. The New Shares will be eligible for settlement through CREST with effect from Admission.

Malcolm Naish, Chairman of Target, said:

"We have grown our asset base significantly since 2013 and see a strong pipeline of further, high calibre acquisitions over the coming year. We have been particularly pleased with the Group's performance, with the existing portfolio delivering strong and sustainable rental returns and being well positioned to provide capital growth to the Company."

Kenneth Mackenzie, Managing Partner of Target Advisers LLP, said: 

"To date, we have invested £142.7 million in modern, purpose built care homes in the UK. These are let to selected, high quality operators with a strong focus on resident care. The additional funds raised will facilitate further acquisitions, in line with our robust investment strategy, as we look to continue to grow Target Healthcare REIT. The Group benefits from changing UK demographics with higher numbers of over 85 year olds, raising demand for acute elderly healthcare. We have identified a strong pipeline of future acquisition opportunities with attractive yields, which will bring further value to our shareholders."

Expected Timetable

Extraordinary General Meeting	11.00 a.m. on 27 February 2015
Latest time and date for receipt of Placing commitments	1.00 p.m. on 3 March 2015
Announcement of the results of the Placing	4 March 2015
Admission of the New Shares to the Official List and to trading on the London Stock Exchange's main market for listed securities	8.00 a.m. on, or around, 6 March 2015
Crediting of CREST stock accounts	6 March 2015
Share certificates dispatched  (where appropriate)	week commencing 16 March 2015 (or as soon as possible thereafter)
Placing Programme closes and last date for issue or sale of New Ordinary Shares under the Placing Programme	4 September 2015

The Placing may close earlier (or later) than indicated above at the absolute discretion of the Company, in consultation with Oriel. In such event, the Company will notify investors by the publication of a notice through a Regulatory Information Service.

Dealing codes

Ticker	THRL
ISIN for the New Shares	JE00B95CGW71
SEDOL for the New Shares	B95CGW7

Capitalised terms used but not defined in this announcement will have the same meaning as set out in the prospectus published on 5 September 2014, as amended and supplemented. Copies of that prospectus, the supplementary prospectus published on 7 January 2015 and any future supplementary prospectuses will be available at www.hemscott.com/nsm.do and on the Company's website at www.targethealthcarereit.co.uk.

Notice of an EGM

An Extraordinary General Meeting ("EGM") of the Shareholders of Target will be held at the offices of Dickson Minto W.S., 20 Primrose Street, London EC2A 2EW at 11.00 a.m. on 27 February 2015 in order to approve certain resolutions relating to the Placing Programme.

Copies of the Notice of EGM will be posted to shareholders in due course.

Transactions in a Close Period - Listing Rule 15.5.1(4)

In accordance with Listing Rule 15.5.1(4), the Company confirms that it is satisfied that all inside information which the Directors and the Company may have in the period leading up to the announcement of its half yearly results to the period 31 December 2014 has previously been and will continue to be notified via a Regulatory Information Service and, therefore, the dealings referred to in Listing Rule 15.5.1(3) are permitted.

The Company and persons discharging managerial responsibilities for the Company are therefore exempt during the close period from the provisions of the Model Code in respect of dealings in the Company's own securities. If, in the period leading up to the announcement of the half yearly results, the Directors, the Company or any person discharging managerial responsibilities come into possession of any inside information, this will be notified via a Regulatory Information Service before any such transactions are undertaken.

The close period to which this notification relates is in respect of the half yearly results for the period to 31 December 2014.

FOR FURTHER INFORMATION, PLEASE CONTACT:

Target Advisers LLP Kenneth MacKenzie, Managing Partner	01786 406 455
Oriel Securities Limited Mark Young / Roger Clarke / Neil Winward	020 7710 7600
Quill PR Fiona Harris / Sam Emery	020 7466 5058 / 020 7466 5056

Important Information

The content of this announcement, which has been prepared by and is the sole responsibility of Target Healthcare REIT Limited, has been approved by Target Advisers LLP solely for the purposes of section 21(2)(b) of the Financial Services and Markets Act 2000 (as amended).

This announcement is an advertisement and does not constitute a prospectus and investors must only subscribe for or purchase any shares referred to in this announcement on the basis of information contained in the Prospectus published by Target Healthcare REIT Limited as supplemented in due course and not in reliance on this announcement. When made generally available, copies of the Prospectus may, subject to any applicable law, be obtained from the registered offices of the Company at Ordnance House, 31 Pier Road, St. Helier, Jersey JE4 8PW. This announcement does not constitute and may not be construed as, an offer to sell or an invitation to purchase, investments of any description, a recommendation regarding the issue or the provision of investment advice by any party. No information set out in this announcement or referred to in other written or oral form is intended to form the basis of any contract of sale, investment decision or any decision to purchase shares in the Company.

The information contained in this announcement is given at the date of its publication (unless otherwise marked) and is subject to updating, revision and amendment from time to time.

Oriel Securities Limited, which is authorised and regulated by the Financial Conduct Authority, is acting only for the Company in connection with the matters described in this announcement and is not acting for or advising any other person, or treating any other person as its client, in relation thereto and will not be responsible for providing the regulatory protection afforded to clients of Oriel Securities Limited or advice to any other person in relation to the matters contained herein.

This announcement may include statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "anticipates", "expects", "intends", "may", "will" or "should" or, in each case, their negative or other variations or comparable terminology. All statements other than statements of historical facts included in this announcement, including, without limitation, those regarding the Company's financial position, strategy, plans, proposed acquisitions and objectives, are forward-looking statements.

Forward-looking statements are subject to risks and uncertainties and, accordingly, the Company's actual future financial results and operational performance may differ materially from the results and performance expressed in, or implied by, the statements. These factors include but are not limited to those described in the Prospectus. These forward-looking statements speak only as at the date of this announcement and cannot be relied upon as a guide to future performance. The Company, Target Advisers LLP and Oriel Securities Limited expressly disclaim any obligation or undertaking to update or revise any forward-looking statements contained herein to reflect actual results or any change in the assumptions, conditions or circumstances on which any such statements are based unless required to do so by the Financial Services and Markets Act 2000, the Prospectus Rules of the Financial Conduct Authority or other applicable laws, regulations or rules.

None of the Company, Target Advisers LLP or Oriel Securities Limited, or any of their respective affiliates, accepts any responsibility or liability whatsoever for or makes any representation or warranty, express or implied, as to this announcement, including 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 associated companies, 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, Target Advisers LLP and Oriel Securities Limited, and their respective affiliates, accordingly disclaim all and any liability whether arising in tort, contract or otherwise which they might otherwise have in respect of this announcement or its contents or otherwise arising in connection therewith.

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

MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THIS ANNOUNCEMENT (INCLUDING THE APPENDIX) AND THE TERMS AND CONDITIONS SET OUT HEREIN ARE FOR INFORMATION PURPOSES ONLY AND ARE DIRECTED ONLY AT PERSONS WHOSE ORDINARY ACTIVITIES INVOLVE THEM IN ACQUIRING, HOLDING, MANAGING AND DISPOSING OF INVESTMENTS (AS PRINCIPAL OR AGENT) FOR THE PURPOSES OF THEIR BUSINESS AND WHO HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS AND ARE IN THE UNITED KINGDOM, QUALIFIED INVESTORS WHO ARE PERSONS WHO (I) HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS FALLING WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 (THE "ORDER"); (II) ARE PERSONS FALLING WITHIN ARTICLE 49(2)(A) TO (D) ("HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC") OF THE ORDER; OR (III) ARE PERSONS TO WHOM IT MAY OTHERWISE BE LAWFULLY COMMUNICATED; (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS"). THIS ANNOUNCEMENT (INCLUDING THE APPENDIX) AND THE TERMS AND CONDITIONS SET OUT HEREIN MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. PERSONS DISTRIBUTING THIS ANNOUNCEMENT MUST SATISFY THEMSELVES THAT IT IS LAWFUL TO DO SO. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS ANNOUNCEMENT (INCLUDING THIS APPENDIX) AND THE TERMS AND CONDITIONS SET OUT HEREIN RELATES IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. THIS ANNOUNCEMENT IS NOT AN OFFER TO SELL OR ISSUE OR THE SOLICITATION OF AN OFFER TO BUY OR ACQUIRE SECURITIES IN THE UNITED STATES. THE SECURITIES REFERRED TO HEREIN HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR JURISDICTION OF THE UNITED STATES, AND MAY NOT BE OFFERED, SOLD OR TRANSFERRED, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES ABSENT REGISTRATION UNDER THE SECURITIES ACT OR AN AVAILABLE EXEMPTION FROM, OR AS PART OF A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. NO PUBLIC OFFERING OF SECURITIES IS BEING MADE IN THE UNITED STATES OR ELSEWHERE.

EACH PLACEE SHOULD CONSULT WITH ITS OWN ADVISORS AS TO LEGAL, TAX, BUSINESS AND RELATED ASPECTS OF A PURCHASE OF NEW SHARES.

APPENDIX

 TERMS AND CONDITIONS OF THE PLACING PROGRAMME

1.         Introduction

1.1.       Each Placee which confirms its agreement (whether orally or in writing) to Oriel to subscribe for New Shares under the Placing Programme will be bound by these terms and conditions and will be deemed to have accepted them.

1.2.       The Company and/or Oriel may require any Placee to agree to such further terms and/or conditions and/or give such additional warranties and/or representations as it (in its absolute discretion) sees fit and/or may require any such Placee to execute a separate placing letter (a "Placing Letter").

2.         Agreement to Subscribe for New Shares

Conditional on: (i) Admission under the Placing Programme occurring not later than 8.00 a.m. on such other dates as may be agreed between the Company, the Investment Manager and Oriel prior to the closing of each placing under the Placing Programme, not being later than 4 September 2015; (ii) the New Placing Agreement becoming otherwise unconditional in all respects and not having been terminated on or before the date of such Admission; and (iii) Oriel confirming to the Placees its allocation of New Shares, a Placee agrees to become a member of the Company and agrees to subscribe for those New Shares allocated to it by Oriel at the relevant Placing Programme Price under the Placing Programme. To the fullest extent permitted by law, each Placee acknowledges and agrees that it will not be entitled to exercise any remedy of rescission at any time. This does not affect any other rights the Placee may have.

3.         Payment for New Shares

3.1.       Each Placee must pay the relevant Placing Programme Price for the New Shares issued to the Placee in the manner and by the time directed by Oriel. If any Placee fails to pay as so directed and/or by the time required, the relevant Placee's application for New Shares shall be rejected. Liability for stamp duty and stamp duty reserve tax shall be as described in the Prospectus.

3.2.       In the event of any failure by any Placee to pay as so directed by Oriel, the relevant Placee shall be deemed to have appointed Oriel or any nominee of Oriel to use its reasonable endeavours to sell (in one or more transactions) any or all of the New Shares in respect of which payment shall not have been made as directed by Oriel and to indemnify Oriel on demand in respect of any liability for stamp duty and/or stamp duty reserve tax arising in respect of any such sale or sales.  A sale of all or any of such New Shares shall not release the relevant Placee from the obligation to make such payment for New Shares to the extent that Oriel or its nominee has failed to sell such New Shares at a consideration which after deduction of the expenses of such sale and payment of stamp duty and/or stamp duty reserve tax as aforementioned exceeds the Placing Programme Price.

4.         Representations and Warranties

By agreeing to subscribe for New Shares, each Placee which enters into a commitment to subscribe for New Shares will (for itself and any person(s) procured by it to subscribe for New Shares and any nominee(s) for any such person(s)) be deemed to agree, represent and warrant to each of the Company, the Investment Manager and Oriel that:

4.1.       the exercise by Oriel of any rights or discretion under the New Placing Agreement shall be within the absolute discretion of Oriel and Oriel need not have any reference to Placees and shall have no liability to the Placee whatsoever in connection with any decision to exercise or not to exercise any such right.  The Placee agrees that they have no rights against Oriel, the Company and any of their respective directors and employees under the New Placing Agreement pursuant to the Contracts (Rights of Third Parties) Act 1999;

4.2.       in agreeing to subscribe for New Shares under the Placing Programme, it is relying solely on this document, the Prospectus and any further supplementary prospectus issued by the Company and any subsequent Company announcement via an RIS and not on any other information given, or representation or statement made at any time, by any person concerning the Company or the Placing Programme. It agrees that none of the Company, the Investment Manager and Oriel, nor any of their respective officers, agents or employees, will have any liability for any other information or representation. It irrevocably and unconditionally waives any rights it may have in respect of any other information or representation;

4.3.       neither the Placee nor, as the case may be, their clients, expect Oriel to have any duties or responsibilities to the Placee similar or comparable to the duties of "best execution" and "suitability" imposed by The Conduct of Business Source Book contained in The Financial Conduct Authority's Handbook of Rules and Guidance, and that Oriel is not acting for the investor or their clients, and that Oriel will not be responsible to the Placee or their clients for providing the protections afforded to its customers;

4.4.       save in the event of fraud on the part of Oriel (and to the extent permitted by the Rules of the Financial Conduct Authority), neither Oriel, its ultimate holding company nor any direct or indirect subsidiary undertakings of that holding company, nor any of their respective directors and employees shall be liable to the Placee for any matter arising out of Oriel's role as placing agent or otherwise in connection with the Further Placing and that where any such liability nevertheless arises as a matter of law the Placee will immediately waive any claim against any of such persons which the Placee may have in respect thereof;

4.5.       the content of this document and the Prospectus is exclusively the responsibility of the Company and its Board and apart from the liabilities and responsibilities, if any, which may be imposed on Oriel under any regulatory regime, neither Oriel nor any person acting on their behalf nor any of their affiliates makes any representation, express or implied, nor accepts any responsibility whatsoever for the contents of this document and the Prospectus nor for any other statement made or purported to be made by them or on its or their behalf in connection with the Company, the New Shares or the Issues;

4.6.       if the laws of any territory or jurisdiction outside the United Kingdom are applicable to its agreement to subscribe for New Shares under the Placing Programme, it warrants that it has complied with all such laws, obtained all governmental and other consents which may be required, complied with all requisite formalities and paid any issue, transfer or other taxes due in connection with its application in any territory and that it has not taken any action or omitted to take any action which will result in the Company, the Investment Manager or Oriel or any of their respective officers, agents or employees acting in breach of the regulatory or legal requirements, directly or indirectly, of any territory or jurisdiction outside the United Kingdom in connection with the Placing Programme;

4.7.       it does not have a registered address in, and is not a citizen, resident or national of, any jurisdiction in which it is unlawful to make or accept an offer of the New Shares and it is not acting on a non-discretionary basis for any such person;

4.8.       it agrees that, having had the opportunity to read this document and the Prospectus, it shall be deemed to have had notice of all information and representations contained in this document and the Prospectus, that it is acquiring New Shares solely on the basis of this document and the Prospectus and no other information and that in accepting a participation in the Placing Programme it has had access to all information it believes necessary or appropriate in connection with its decision to subscribe for New Shares;

4.9.       it acknowledges that no person is authorised in connection with the Placing Programme to give any information or make any representation other than as contained in this document and, if given or made, any information or representation must not be relied upon as having been authorised by Oriel, the Company or the Investment Manager;

4.10.     it is not applying as, nor is it applying as nominee or agent for, a person who is or may be liable to notify and account for tax under the Stamp Duty Reserve Tax Regulations 1986 at any of the increased rates referred to in section 67, 70, 93 or 96 (depository receipts and clearance services) of the Finance Act 1986;

4.11.     the Placee is not a national, resident of or a corporation, partnership or other entity organised under the laws of the United States, Canada, Australia, Japan or any member state of the EEA (other than the United Kingdom) and that the Placee will not offer, sell, renounce, transfer or deliver directly or indirectly any of the New Shares into the United States, Canada, Australia, Japan or any member state of the EEA (other than the United Kingdom) or any other jurisdiction where to do so would be in breach of any applicable law and/or regulation or to or for the benefit of any person resident in the United States, Canada, Australia, Japan or any member state of the EEA (other than the United Kingdom) or any other jurisdiction where to do so would be in breach of any applicable law and/or regulation (an ''Excluded Territory'');

4.12.     the Placee acknowledges that the New Shares have not been and will not be registered under the United States Securities Act of 1933, as amended, and the relevant exemptions are not being obtained from the Securities Commission of any province of Canada and that the same are not being offered for sale and may not be, directly or indirectly, offered, sold, transferred or delivered in any Excluded Territory;

4.13.     if it is receiving the offer in circumstances under which the laws or regulations of a jurisdiction other than the United Kingdom would apply, that it is a person to whom the New Shares may be lawfully offered under that other jurisdiction's laws and regulations and that it has fully observed such laws, obtained all governmental and other consents which may be required thereunder or otherwise and complied with all necessary formalities;

4.14.     if it is outside the United Kingdom, neither this document nor any other offering, marketing or other material in connection with the Placing Programme constitutes an invitation, offer or promotion to, or arrangement with, it or any person whom it is procuring to subscribe for New Shares pursuant to the Placing Programme unless, in the relevant territory, such offer, invitation or other course of conduct could lawfully be made to it or such person and such documents or materials could lawfully be provided to it or such person and New Shares could lawfully be distributed to and subscribed and held by it or such person without compliance with any unfulfilled approval, registration or other regulatory or legal requirements;

4.15.     it acknowledges that neither Oriel nor any of its respective affiliates nor any person acting on its behalf is making any recommendations to it, advising it regarding the suitability of any transactions it may enter into in connection with the Placing Programme or providing any advice in relation to the Placing Programme and participation in the Placing Programme is on the basis that it is not and will not be a client of Oriel or any of its affiliates and that Oriel and any of its affiliates do not have any duties or responsibilities to it for providing protection afforded to their respective clients or for providing advice in relation to the Placing Programme nor in respect of any representations, warranties, undertaking or indemnities contained in the Placing Letter;

4.16.     it acknowledges that where it is subscribing for New Shares for one or more managed, discretionary or advisory accounts, it is authorised in writing for each such account: (i) to subscribe for the New Shares for each such account; (ii) to make on each such account's behalf the representations, warranties and agreements set out in this document; and (iii) to receive on behalf of each such account any documentation relating to the Placing Programme in the form provided by the Company and/or Oriel. It agrees that the provision of this paragraph shall survive any resale of the New Shares by or on behalf of any such account;

4.17.     it irrevocably appoints any Director and any director of Oriel to be its agent and on its behalf (without any obligation or duty to do so), to sign, execute and deliver any documents and do all acts, matters and things as may be necessary for, or incidental to, its subscription for all or any of the New Shares for which it has given a commitment under the Placing Programme, in the event of its own failure to do so;

4.18.     it accepts that if the Placing Programme does not proceed or the conditions to the New Placing Agreement are not satisfied or the New Shares for which valid application are received and accepted are not admitted to listing and trading on the Official List and the Main Market (respectively) for any reason whatsoever then none of the Company, the Investment Manager, Oriel or any of their affiliates, nor persons controlling, controlled by or under common control with any of them nor any of their respective employees, agents, officers, members, stockholders, partners or representatives, shall have any liability whatsoever to it or any other person;

4.19.     in connection with its participation in the Placing Programme it has observed all relevant legislation and regulations, in particular (but without limitation) those relating to money laundering and countering terrorist financing and that its application is only made on the basis that it accepts full responsibility for any requirement to identify and verify the identity of its clients and other persons in respect of whom it has applied;

4.20.     it is a person:

(i)         subject to the Money Laundering Regulations 2007 in force in the United Kingdom; or

(ii)         subject to the Money Laundering Directive (2005/60/EC of the European Parliament and of the EC Council of 26 October 2005 on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing); or

(iii)        acting in the course of a business in relation to which an overseas regulatory authority exercises regulatory functions and is based or incorporated in, or formed under the law of, a county  in which there are in force provisions at least equivalent to those required by the Money Laundering Directive;

4.21.     it is aware of, has complied with and will comply with its obligations in connection with money laundering under the Proceeds of Crime Act 2002;

4.22.     Oriel and the Company (and any agent on their behalf) are entitled to exercise any of their rights under the New Placing Agreement or any other right in their absolute discretion without any liability whatsoever to them (or any agent acting on their behalf);

4.23.     the representations, undertakings and warranties contained in this document are irrevocable. It acknowledges that Oriel, the Company and their respective affiliates will rely upon the truth and accuracy of the foregoing representations and warranties and it agrees that if any of the representations or warranties made or deemed to have been made by its subscription of the New Shares are no longer accurate, it shall promptly notify Oriel and the Company;

4.24.     where it or any person acting on behalf of it is dealing with Oriel, any money held in an account with Oriel on behalf of it and/or any person acting on behalf of it will not be treated as client money within the meaning of the relevant rules and regulations of the FCA which therefore will not require Oriel to segregate such money, as that money will be held by Oriel under a banking relationship and not as trustee;

4.25.     any of its clients, whether or not identified to Oriel or any of their affiliates or agents, will remain its sole responsibility and will not become clients of Oriel or any of its affiliates or agents for the purposes of the rules of the FCA or for the purposes of any other statutory or regulatory provision;

4.26.     it accepts that the allocation of New Shares shall be determined by Oriel (in consultation with the Company and the Investment Manager) in their absolute discretion and that such persons may scale down any commitments for this purpose on such basis as they may determine;

4.27.     the Placee is a person of a kind described in paragraph 5 of Article 19 or paragraph 2 of Article 49 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005; and

4.28.     time shall be of the essence as regards its obligations to settle payment for the New Shares and to comply with its other obligations under the Placing Programme.

5.         Supply and Disclosure of Information

If Oriel, the Company or any of their agents request any information in connection with a Placee's agreement to subscribe for New Shares under the Placing Programme or to comply with any relevant legislation, such Placee must promptly disclose it to them.

6.         Data Protection Act 1998 and the Data Protection (Jersey) Law 2005

6.1.       Pursuant to the Data Protection Act 1998 (the "DP Act") the Company and/or the Registrar, may hold personal data (as defined in the DP Act) relating to past and present Shareholders. Such personal data held is used by the Registrar to maintain the register of Shareholders and mailing lists and this may include sharing such data with third parties in one or more of the countries mentioned below when: (a) effecting the payment of dividends and other distributions to Shareholders; and (b) filing returns of Shareholders and their respective transactions in Ordinary Shares with statutory bodies and regulatory authorities. Personal data may be retained on record for a period exceeding six years after it is no longer used.

6.2.       Pursuant to the Data Protection (Jersey) Law 2001 (the "DP Law") the Company and/or the Registrar may hold personal data (as defined in the DP Law) relating to past and present Shareholders. Such personal data held is used by the Registrar to maintain the register of Shareholders and mailing lists and this may include sharing data with third parties in one or more countries mentioned below when (a) effecting the payment of dividends and other distributions to Shareholders (if any); and (b) filing returns of shareholders and their respective transactions in Ordinary Shares with statutory bodies and regulatory authorities. Personal data may be retained on record for a period not exceeding 10 years after it is no longer used.

The "countries" referred to above could be any country, in particular but not limited to those in the European Economic Area of the European Union and any of their respective dependant territories and Argentina, Australia, Brazil, Canada, China, Hong Kong, India, Japan, New Zealand, Singapore, South Africa, Switzerland, Taiwan and the United States of America.

6.3        By becoming registered as a holder of Ordinary Shares a person becomes a data subject (as defined in the DP Act or the DP Law) and is deemed to have consented to the processing by the Company or its Registrar or Administrator of any personal data relating to them in the manner described above.

7.         Miscellaneous

7.1.       The rights and remedies of Oriel and the Company under these terms and conditions are in addition to any rights and remedies which would otherwise be available to each of them and the exercise or partial exercise of one will not prevent the exercise of others.

7.2.       On application, if a Placee is a discretionary fund manager, that Placee may be asked to disclose in writing or orally the jurisdiction in which its funds are managed or owned. If a Placee is an individual, that Placee may be asked to disclose his nationality. All documents provided in connection with the Placing Programme will be sent at the Placee's risk. They may be returned by post to such Placee at the address notified by such Placee.

7.3.       Each Placee agrees to be bound by the Articles (as amended from time to time) once the New Shares, which the Placee has agreed to subscribe for pursuant to the Placing Programme, have been acquired by the Placee. The contract to subscribe for New Shares under the Placing Programme and the appointments and authorities mentioned in this prospectus will be governed by, and construed in accordance with, the laws of England and Wales. For the exclusive benefit of the Company and Oriel, each Placee irrevocably submits to the jurisdiction of the courts of England and Wales and waives any objection to proceedings in any such court on the ground of venue or on the ground that proceedings have been brought in an inconvenient forum. This does not prevent an action being taken against Placee in any other jurisdiction.

7.4.       In the case of a joint agreement to subscribe for New Shares under the Placing Programme, references to a ''Placee'' in these terms and conditions are to each of the Placees who are a party to that joint agreement and their liability is joint and several.

7.5.       Oriel and the Company expressly reserve the right to modify the Placing Programme (including, without limitation, their timetable and settlement) at any time before allocations are determined.

7.6.       The Placing Programme is subject to the satisfaction of the conditions contained in the New Placing Agreement and the New Placing Agreement not having been terminated. Further details of the terms of the New Placing Agreement are contained in the "Additional Information of the Group" section of this document.

7.7.       Monies received from applicants pursuant to the further Issues will be held in accordance with the terms and conditions of any announcement issued by the Company in relation to that Issue until such time as the New Placing Agreement becomes unconditional in all respects in relation to that Issue. If the New Placing Agreement does not become unconditional in all respects in relation to that Issue by the time specified in such announcement, application monies will be returned without interest at the risk of the applicant.

7.8.       Save where the context requires otherwise, terms used in these terms and conditions of the Placing Programme bear the same meaning as where used in this document.

8.         Selling Restrictions

8.1.       Before Admission becomes effective, Placees may only offer or sell any New Shares in the United Kingdom:

(i)         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

(ii)         otherwise in circumstances which will not result in an offer to the public in the United Kingdom within the meaning of the FSMA.

 

END

 

 

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