Proposed placing

RNS Number : 7611F

Target Healthcare REIT Limited

16 November 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 for information purposes only and shall not constitute an offer to sell or issue or the solicitation of an offer to buy, subscribe for or otherwise acquire any ordinary shares of Target Healthcare REIT Limited in any jurisdiction in which any such offer or solicitation would be unlawful.

TARGET HEALTHCARE REIT LIMITED

("Target" or the "Company", together with its subsidiaries, the "Group")

PROPOSED PLACING

The Board of Directors of Target (the ''Board'') is pleased to announce a proposal to issue up to 15,652,803 ordinary shares in the Company (the "New Ordinary Shares"), representing 9.99% of the Company's existing issued share capital, by way of a placing.

In the event that the number of New Ordinary Shares applied for under the placing exceeds 15,652,803 the Company may, at its own discretion, decide to sell some or all of the existing Ordinary Shares that it currently holds in treasury (the "Treasury Shares") to satisfy this extra demand (the New Ordinary Shares and the Treasury Shares being together the "Placing Shares" and the placing of such shares being the "Placing").

The Company, in consultation with Stifel Nicolaus Europe Limited ("Stifel"), will determine the price at which the Placing Shares will be acquired by Placees pursuant to the Placing based on the level of demand from potential investors, with the price expected to be set in the range of 103 to 106 pence per Placing Share.

In any event, the price of the Placing Shares  will be a price which represents a premium to the last published Net Asset Value ("NAV") per Ordinary Share (currently 99.2 pence per share), and will therefore be NAV accretive to existing shareholders.

The Placing will be non pre-emptive with the price per Placing Share to be determined at the close of the book building process which is expected to be on 19 November 2015.

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 30 September 2015, the Group owned 28 care home assets valued at £145.8 million and had a NAV of 99.2 pence per Ordinary Share.

As announced on 8 October 2015 and 13 November 2015, the Group has completed an acquisition of a further care home in Kingston-Upon-Hull for a total consideration of approximately £6.2 million and an acquisition of two purpose-built care homes on Tyneside for approximately £12.8 million since the Company last raised new capital in March 2015.

The portfolio is diversified, both geographically and by income stream, with 10 different operators, all of which have an established track record in providing high quality care.

The Group has a conservative gearing policy with debt of £31.5 million as at 30 September 2015 reflecting a loan to value ratio of 21.6% (excluding the effect of cash held).

Target seeks to provide its shareholders with an attractive level of income and has recently declared a dividend for the quarter ended 30 September 2015 of 1.545 pence per Ordinary Share, reflecting an annualised dividend of 6.18 pence per share and a dividend yield, based on the closing share price at 13 November 2015, of 5.6%. 

Use of Proceeds

The Group continues to be acquisitive, focusing on its strategy of acquiring high quality assets with favourable local dynamics and sustainable rental levels. In addition to the £19 million of recent acquisitions, the Group expects by the end of 2015 to complete on £6 million of care home assets where terms have already been agreed. In addition, the Group has identified and agreed terms on a further £14 million of assets and it hopes to finish its due diligence and complete on the majority of these assets in early 2016.

A further pipeline of opportunities estimated at in excess of £40 million has been identified and is being actively evaluated although currently no terms have been agreed on these assets.

The Group has a clear view on its investment pipeline and although there is no certainty that it will be able to complete on all the investment opportunities mentioned, it also continues to see a number of other attractive opportunities in the market. The Group has cash reserves available for investment of approximately £6.3 million with near term investment opportunities and commitments totalling £33.1 million. The Group remains cognisant of the need to ensure it has the operational flexibility to complete on its attractive investment opportunities, whilst also minimising the impact of cash drag on its returns.

In light of the market opportunities it is currently seeing, the Company intends 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 Board believes that the Placing will have the following benefits to existing shareholders and the Company:

·      additional capital will enable the Company to take advantage of its current investment opportunities 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 investment 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 around 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 should be spread will reduce the Company's ongoing costs per Ordinary Share; and

·      further diversification of the shareholder register should enhance liquidity in the Ordinary Shares.

Terms of the Placing and Placing

Pursuant to the Placing, the Company is proposing to issue up to 15,652,803 New Ordinary Shares representing 9.99% of the Company's existing issued share capital.

In the event that the number of shares applied for under the Placing exceeds 15,652,803 the Company may, at its own discretion, decide to sell some or all of the 14,229,822 shares that it currently holds in Treasury to satisfy this extra demand. Any shares sold out of Treasury will be sold at the same price as the shares issued in the Placing and will only be issued at a premium to the prevailing NAV per Ordinary Share and above 99.5 pence per Ordinary Share, which represents the price at which the Company acquired the shares into Treasury. 

The Placing is subject to the terms and conditions set out in the Appendix of this announcement.

The Placing is expected to close at 1.00 p.m. (London time) on 19 November 2015, but may close earlier (or later) at the absolute discretion of the Company, in consultation with Stifel, which is acting in its role as Placing Agent for the Company.

The Placing Shares will, when issued, or in the case of the Treasury Shares re-issued, rank in full for all dividends or other distributions declared, made or paid after the Admission Date 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 February 2016 representing the three month period from 1 October 2015 to 31 December 2015. For the avoidance of doubt, the Placing Shares will not qualify for the dividend declared on 5 November 2015 in respect of the period from 1 July 2015 to 30 September 2015.

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.

The Placing will be non pre-emptive with the price per Placing Share to be determined at the close of the book building process which is expected to be on 19 November 2015. It may be necessary to scale back applications under the Placing if the number of applications exceeds the number of Placing Shares available under the Placing. In such event, Placing Shares will be allocated at the discretion of the Company in consultation with Stifel.

The Placing is not being underwritten.

Dickson Minto, W.S. will be acting as the Company's sponsor in respect of the Placing. The Company has entered into a placing agreement with Stifel and Target Advisers LLP pursuant to which it has appointed Stifel to act as its placing agent in connection with the Placing and further potential sales of Treasury Shares prior to 31 December 2016.

The Placing Agreement contains certain market standard warranties and indemnities given by the Company and Target Advisers LLP in favour of Stifel and may be terminated in certain circumstances prior to admission of the New Ordinary Shares, including by reason of force majeure.

Applications will be made to the FCA for admission of the New Ordinary 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 Placing Shares will commence at 8.00 a.m. (London time) on, or around, 25 November 2015 (the "Admission Date").

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

Malcolm Naish, Chairman of Target, said:

 "The Group continues to grow and we have identified a strong pipeline of quality acquisitions in our core regional mid-market. The Group's performance has been very pleasing, with the portfolio of care homes delivering strong results through a combination of trading performance and rental increases at individual assets. The weighted average unexpired lease term of 29.5 years as at 30 September 2015 and annual rental uplifts provide stability of returns to shareholders in the long-term. We look forward to continuing the sustainable growth we have achieved since launch."

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

"To date, we have invested over £162 million in modern, purpose built care homes in the UK and in the last eighteen months alone we have acquired a further 20 care homes for a total of £108.6 million, including costs. These are let to a diversified roster of carefully selected operators with a strong focus on resident care. Investing in the care home sector remains compelling, benefiting as it does from changing UK demographics and we will continue to make further acquisitions in line with our robust investment strategy. We are very encouraged by the range of future opportunities that we have identified at attractive yields, which will further add value in the portfolio."

Expected Timetable

Placing opens	16 November 2015
Latest time and date for receipt of Placing commitments	1.00 p.m. on 19 November 2015
Announcement of the results of the Placing	20 November  2015
Admission of the New Ordinary 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, 25 November 2015
Expected Settlement Date for the Treasury Shares	8.00 a.m. on, or around, 25 November 2015
Crediting of CREST stock accounts	25 November  2015
Share certificates dispatched  (where appropriate)	week commencing 30 November 2015  (or as soon as possible thereafter)

The Placing may close earlier (or later) than indicated above at the absolute discretion of the Company, in consultation with Stifel. 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 Placing Shares	JE00B95CGW71
SEDOL for the Placing Shares	B95CGW7

FOR FURTHER INFORMATION, PLEASE CONTACT:

Target Advisers LLP Kenneth MacKenzie, Managing Partner	01786 845 915
Stifel Nicolaus Europe Limited Mark Young / Roger Clarke / Neil Winward	020 7710 7600
Dickson Minto, W.S. Douglas Armstrong / Fiona Thompson	020 7649 6823
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).

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.

Stifel Nicolaus Europe 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 Stifel Nicolaus Europe 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 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 Stifel Nicolaus Europe 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 Stifel Nicolaus Europe 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 Stifel Nicolaus Europe 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

1.               Introduction

1.1             Each Placee which confirms its agreement (whether orally or in writing) to Stifel Nicolaus Europe Limited ("Stifel") to subscribe for New Ordinary Shares or to purchase Treasury Shares under the Placing will be bound by these terms and conditions and will be deemed to have accepted them.

1.2             The Company and/or Stifel 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.               Definitions

2.1             In these terms and conditions the following words and expressions shall have the meanings given to them below:

2.1.1               "Admission" means the admission of the New Ordinary Shares to the premium segment of the Official List of the FCA and to trading on the main market for listed securities operated by London Stock Exchange plc;

2.1.2               "EEA" means European Economic Area of the European Union;

2.1.3               "Ordinary Shares" means the ordinary shares of no par value in the capital of the Company;

2.1.4               "New Ordinary Shares" the up to 15,652,803 Ordinary Shares to be allotted and issued by the Company for cash pursuant to the Placing;

2.1.5               "Placee" means a person who has entered into an irrevocable placing commitment procured by Stifel, as agent for the Company, to participate in the Placing;

2.1.6               "Placing" means the placing of Placing Shares in accordance with this announcement which is expected to close on 19 November 2015 (or such other date as the Placing Agent and the Company may agree);

2.1.7               "Placing Agreement" means the placing agreement entered into between the Company, Stifel and the Investment Manager dated 16 November 2015;

2.1.8               "Placing Price" means the price which is expected to be set in the range of 103  to 106  pence per Placing Share as agreed between the Company and Stifel following the book building process;

2.1.9               "Placing Shares" means the New Ordinary Shares and the Treasury Shares issued or sold for cash pursuant to the Placing as the context may require;

2.1.10             "Investment Manager" means Target Advisers LLP; and

2.1.11             "Treasury Shares" means the up to 14,229,822 existing Ordinary Shares to be sold pursuant to the Placing.

3.               Agreement to Subscribe for New Ordinary Shares OR TO PURCHASE TREASURY SHARES

Conditional on: (i) Admission of the New Ordinary Shares to be issued pursuant to the Placing occurring not later than 8.00 a.m. on 25 November 2015 or other date as may be agreed between the Company, the Investment Manager and Stifel prior to the closing of the Placing, not being later than 31 December 2015; (ii) the Placing Agreement becoming otherwise unconditional in all respects and not having been terminated on or before the date of such Admission; and (iii) Stifel confirming to the Placees its allocation of Placing Shares (irrespective of whether such Placing Shares are New Ordinary Shares or Treasury Shares) a Placee agrees to become a member of the Company and agrees to acquire those Placing Shares allocated to it by Stifel at the Placing Price under the Placing. 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.

4.               Payment for Placing Shares

4.1             Each Placee must pay the Placing Price for the Placing Shares acquired by the Placee in the manner and by the time directed by Stifel. If any Placee fails to pay as so directed and/or by the time required, the relevant Placee's application for Placing Shares shall be rejected.

4.2             In the event of any failure by any Placee to pay as so directed by Stifel, the relevant Placee shall be deemed to have appointed Stifel or any nominee of Stifel to use its reasonable endeavours to sell (in one or more transactions) any or all of the Placing Shares in respect of which payment shall not have been made as directed by Stifel and to indemnify Stifel 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 Placing Shares shall not release the relevant Placee from the obligation to make such payment for Placing Shares to the extent that Stifel or its nominee has failed to sell such Placing Shares at a consideration which after deduction of the expenses of such sale exceed the Placing Price.

5.               Representations and Warranties

By agreeing to acquire Placing Shares, each Placee which enters into a commitment to acquire Placing Shares will (for itself and any person(s) procured by it to subscribe for Placing 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 Stifel that:

5.1             the exercise by Stifel of any rights or discretion under the Placing Agreement shall be within the absolute discretion of Stifel and Stifel 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 Stifel, the Company and any of their respective directors and employees under the Placing Agreement pursuant to the Contracts (Rights of Third Parties) Act 1999;

5.2             in agreeing to acquire Placing Shares under the Placing, it is relying solely on this announcement 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. It agrees that none of the Company, the Investment Manager and Stifel, 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;

5.3             neither the Placee nor, as the case may be, their clients, expect Stifel 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 Stifel is not acting for the investor or their clients, and that Stifel will not be responsible to the Placee or their clients for providing the protections afforded to its customers;

5.4             save in the event of fraud on the part of Stifel (and to the extent permitted by the Rules of the Financial Conduct Authority), neither Stifel, 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 Stifel's role as placing agent or otherwise in connection with the 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;

5.5             the content of this announcement is exclusively the responsibility of the Company and its Board and apart from the liabilities and responsibilities, if any, which may be imposed on Stifel under any regulatory regime, neither Stifel 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 announcement 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 Placing Shares or the Placing;

5.6             if the laws of any territory or jurisdiction outside the United Kingdom are applicable to its agreement to subscribe for Placing Shares under the Placing, 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 Stifel 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;

5.7             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 to purchase or subscribe for the Placing Shares and it is not acting on a non-discretionary basis for any such person;

5.8             it agrees that, having had the opportunity to read this announcement and the net asset value(s) announcement made by the Company on 3 November 2015, it shall be deemed to have had notice of all information and representations contained in this announcement, that it is acquiring Placing Shares solely on the basis of this announcement and no other information and that in accepting a participation in the Placing it has had access to all information it believes necessary or appropriate in connection with its decision to acquire for Placing Shares;

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

5.10           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; 

5.11           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 Placing 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'');

5.12           the Placee acknowledges that the Placing 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;

5.13           if it is receiving the offer to subscribe for or purchase the Placing Shares 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 Placing 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;

5.14           if it is outside the United Kingdom, neither this announcement nor any other offering, marketing or other material in connection with the Placing constitutes an invitation, offer or promotion to, or arrangement with, it or any person whom it is procuring to subscribe for or purchase Placing Shares pursuant to the Placing 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 Placing 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;

5.15           it acknowledges that neither Stifel 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 or providing any advice in relation to the Placing and participation in the Placing is on the basis that it is not and will not be a client of Stifel or any of its affiliates and that Stifel 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 nor in respect of any representations, warranties, undertaking or indemnities contained in any Placing Letter;

5.16           it acknowledges that where it is acquiring Placing Shares for one or more managed, discretionary or advisory accounts, it is authorised in writing for each such account: (i) to subscribe for or purchase the Placing Shares (as applicable) 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 in the form provided by the Company and/or Stifel. It agrees that the provision of this paragraph shall survive any resale of the Placing Shares by or on behalf of any such account;

5.17           it irrevocably appoints any Director and any director of Stifel 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 or purchase of all or any of the Placing Shares for which it has given a commitment under the Placing, in the event of its own failure to do so;

5.18           it accepts that if the Placing does not proceed or the conditions to the Placing Agreement are not satisfied or the New Ordinary 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, Stifel 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;

5.19           in connection with its participation in the Placing 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;

5.20           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;

5.21           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;

5.22           the representations, undertakings and warranties contained in this announcement are irrevocable. It acknowledges that Stifel, 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 Placing Shares are no longer accurate, it shall promptly notify Stifel and the Company;

5.23           where it or any person acting on behalf of it is dealing with Stifel, any money held in an account with Stifel 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 Stifel to segregate such money, as that money will be held by Stifel under a banking relationship and not as trustee;

5.24           any of its clients, whether or not identified to Stifel or any of their affiliates or agents, will remain its sole responsibility and will not become clients of Stifel 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;

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

5.26           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

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

6.               Settlement

Stifel may in its absolute discretion deliver New Ordinary Shares or Treasury Shares to Placees pursuant to the Placing. Placees will be notified by Stifel of the Placing Shares that they will receive pursuant to the Placing by delivery of a contract note or trade confirmation as appropriate.

7.               Supply and Disclosure of Information

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

8.               Data Protection Act 1998

8.1             Pursuant to the Data Protection Act 1998 (the "DP Act") the Company and/or the Company's registrar (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.

8.2             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 EEA 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.

8.3             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.

9.               Miscellaneous

9.1             The rights and remedies of Stifel 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.

9.2             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 will be sent at the Placee's risk. They may be returned by post to such Placee at the address notified by such Placee.

9.3             Each Placee agrees to be bound by the Company's articles of association (as amended from time to time) once the Placing Shares, which the Placee has agreed to acquire for pursuant to the Placing, have been acquired by the Placee. The contract to acquire for Placing Shares under the Placing and the appointments and authorities mentioned in this announcement will be governed by, and construed in accordance with, the laws of England and Wales. For the exclusive benefit of the Company and Stifel, 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.

9.4             In the case of a joint agreement to acquire for Placing Shares under the Placing, 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.

9.5             Stifel and the Company expressly reserve the right to modify the terms and conditions of the Placing (including, without limitation, the timetable and settlement arrangements) at any time before allocations are determined.

9.6             The Placing is subject to the satisfaction of the conditions contained in the Placing Agreement and the Placing Agreement not having been terminated.

10.             Selling Restrictions

10.1           Before Admission becomes effective, Placees may only offer or sell any Placing 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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