Proposed placing to raise app

RNS Number : 3270U

Drax Group PLC

23 June 2009

 



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

23 June 2009

Drax Group plc

('Drax' or the 'Company')

Symbol:DRX

PROPOSED PLACING TO RAISE APPROXIMATELY £100 MILLION

Drax today announces that it is placing up to 25.5 million new ordinary shares (the 'Placing'), representing approximately 7.5 per cent of Drax's existing issued ordinary share capital. The Placing is being conducted through an accelerated bookbuild which will be launched immediately following this announcement.

The proposed Placing will raise approximately £100m and the proceeds will be used to pay down debt and help maintain Drax's investment grade debt rating. Drax believes the placing represents a sensible, prudent and cost-effective means of improving the resilience of its capital structure.

Drax has also brought forward its scheduled pre-close trading update from 30 June to today.  Drax's Half Year Results will be announced on 4 August.

Background to and reasons for the Placing

On 15 May 2009 Standard & Poor's ('S&P') announced in their credit rating report that they were downgrading Drax Finance's senior secured debt rating from BBB to BBB-, with negative outlook.  Drax remains disappointed with S&P's assessment of the increased business risk facing Drax post-2012, but is confident that the actions being proposed today help address their concerns.

Drax is fundamentally a highly cash generative business, supported by healthy dark green spreads and strong contracted positions for 2010 and beyond.  The ability and flexibility to trade as a merchant plant maximises value from the business and to this end the maintenance of an investment grade debt rating is important to the current trading strategy.   

Drax believes that the Placing is a prudent and measured action to protect the investment grade debt rating. It will improve the resilience of our capital structure and underpin the business model. The proceeds will be applied to a part prepayment of the current £370m term debt. The reduced level of term debt will be refinanced under terms whereby it will be fully repaid by December 2012, leaving only a working capital facility and letter of credit facility outstanding at that time.  

Drax's distribution policy is unchanged. For 2009, all excess cash from operations after meeting business requirements will be distributed via an appropriate interim and final year dividend. From 2010 Drax will target a pay-out of 50% of underlying earnings, adjusted for non-cash accounting items.  

Drax is committed to its longer term strategy of investing in dedicated biomass-fired power generation and reconfirms that any investment decision will be predicated on individual projects meeting strict investment criteria.  Drax continues to be on track to make an investment decision on the first plant before the end of 2010.  At the appropriate time, Drax will seek a financing solution which optimises returns for its shareholders, whilst protecting the investment grade rating on its existing corporate debt.

Dorothy Thompson, CEO of Drax, commented: 

'This action is a prudent and measured response to specific factors existing in our market at this time, which is at the low point of the cycle.  We are confident that the Placing announced today will improve the resilience of our capital structure and underpin the investment grade debt rating, which is important in maximising the value from Drax.  There is no change to our trading arrangements and we continue to progressively hedge our output in line with our trading strategy.

Drax has significant strategic value, generating 7% of the UK's electricity.  We will continue to deliver on our core competencies, driving value for our shareholders by maintaining leading performances in trading and operations.

Recent day-ahead dark green spreads have been trading at near historic lows but recover significantly from this winter.  We have already sold approximately 80% of our output for 2010 at higher average margins than for 2009.

We remain very confident in the long term prospects of our business.'

Details of the placing

Deutsche Bank AG, London Branch ('Deutsche Bank') is acting as sole bookrunner and placing agent of the Company in connection with the Placing. The Placing is being conducted through an accelerated bookbuild which will be launched immediately following this announcement.  

The number of new ordinary shares to be issued by the Company (the 'Placing Shares') and the price at which the Placing Shares are to be placed (the 'Placing Price') will be determined at the close of the bookbuild process and announced as soon as practicable thereafter. The bookbuild will open with immediate effect and is expected to close no later than 4:30 p.m. (London time) today but may be closed earlier or later at the discretion of Deutsche Bank.  

The Placing Shares will, when issued, be credited as fully paid and will rank equally in all respects with the existing ordinary shares of 1116/29 pence each in the capital of the Company ('Ordinary Shares'), including the right to receive all dividends and other distributions declared, made or paid in respect of such shares after the date of issue of the Placing Shares. Application will be made for the Placing Shares to be admitted to the Official List maintained by the UK Listing Authority and to be admitted to trading by the London Stock Exchange plc on its market for listed securities (together, 'Admission').

Settlement for Placing Shares issued pursuant to the Placing, as well as Admission, is expected to take place on 26 June 2009. 

The appendix to this announcement (which forms part of the announcement) (the 'Appendix') sets out the detailed terms and conditions of the Placing.

Persons who are invited to and who choose to participate in the Placing, by making an oral or written offer to acquire Placing Shares, will be deemed to have read and understood this announcement (including the Appendix) in its entirety and to be making such offer on the terms and conditions, and to be providing the representations, warranties, acknowledgements and undertakings contained in the Appendix.

For further information, please contact: 

Drax 

Chief Executive: Dorothy Thompson

Finance Director: Tony Quinlan

[phone]

Investor Relations: Andrew Koss

[phone]

Deutsche Bank AG, London Branch

Alan Brown

James Agnew

Ed Sankey

[phone]

Brunswick

Mike Harrison and Nick Claydon

[phone]

Website: www.draxgroup.plc.uk

This announcement, including the Appendix (together the 'Announcement'), and the information contained herein is not for publication, release or distribution, in whole or in part, directly or indirectly, in or into the United States, Australia, Canada, Japan or South Africa or any other jurisdiction in which such publication or distribution would be unlawful. This Announcement is for information purposes only and does not constitute an offer to sell or issue or the solicitation of an offer to buy or acquire shares in the capital of the Company in the United States, Australia, Canada, Japan or South Africa or any other jurisdiction in which such an offer or solicitation is unlawful.  

The shares in the Company referred to in this Announcement have not been and will not be registered under the United States Securities Act of 1933, as amended ('Securities Act') and may not be offered, sold or transferred, directly or indirectly, within the United States except pursuant to an available exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and the securities laws of any state or other jurisdiction of the United States. There will be no public offer of securities of the Company in the United Kingdom, the United States or elsewhere.

This Announcement has been issued by, and is the sole responsibility of, the Company. No representation or warranty express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by Deutsche Bank or by any of its affiliates or agents as to or in relation to the accuracy or completeness of this Announcement or any other written or oral information made available to or publicly available to any interested party or its advisers, and any liability therefore is expressly disclaimed.

Deutsche Bank is authorised under German Banking Law (competent authority: BaFin - Federal Financial Supervising Authority) and regulated by the Financial Services Authority for the conduct of UK business. Deutsche Bank is acting exclusively for the Company and no one else in connection with the Placing and the other matters referred to in this Announcement. Deutsche Bank will not be responsible to anyone other than the Company for providing the protections afforded to clients of Deutsche Bank nor for providing advice in connection with the Placing and the other matters referred to herein.

The distribution of this Announcement and the offering of the Placing Shares in certain jurisdictions may be restricted by law. No action has been taken by the Company or Deutsche Bank that would permit an offering of such shares or possession or distribution of this Announcement or any other offering or publicity material relating to such shares in any jurisdiction where action for that purpose is required. Persons into whose possession this Announcement comes are required by the Company and Deutsche Bank to inform themselves about, and to observe, such restrictions.

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 statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Given these 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 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. The information contained in this Announcement is subject to change without notice and neither the Company nor Deutsche Bank assumes any responsibility or obligation to update publicly or review any of the forward-looking statements contained herein.

Any indication in this Announcement of the price at which ordinary shares have been bought or sold in the past cannot be relied upon as a guide to future performance. No statement in this Announcement is intended to be a profit forecast and no statement in this Announcement should be interpreted to mean that earnings per share of the Company for the current or future financial years would necessarily match or exceed the historical published earnings per share of the Company.

The price of shares and the income from them may go down as well as up and investors may not get back the full amount invested on disposal of the shares.

The Placing Shares to be issued or sold pursuant to the Placing will not be admitted to trading on any stock exchange other than the London Stock Exchange. Neither the content of the Company's website nor any website accessible by hyperlinks on the Company's website is incorporated in, or forms part of, this Announcement.  

  APPENDIX: TERMS AND CONDITIONS OF THE PLACING

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

IMPORTANT INFORMATION ON THE PLACING FOR INVITED PLACEES ONLY

MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THIS ANNOUNCEMENT AND THE TERMS AND CONDITIONS SET OUT IN THIS APPENDIX ARE FOR INFORMATION PURPOSES ONLY AND ARE DIRECTED ONLY AT: (A) PERSONS WHO ARE QUALIFIED INVESTORS AS DEFINED IN SECTION 86(7) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000, AS AMENDED, BEING PERSONS FALLING WITHIN THE MEANING OF ARTICLE 2(1)(E) OF THE EU PROSPECTUS DIRECTIVE (WHICH MEANS DIRECTIVE 2003/71/EC AND INCLUDES ANY RELEVANT IMPLEMENTING DIRECTIVE MEASURE IN ANY MEMBER STATE) (THE 'PROSPECTUS DIRECTIVE'); AND (B) 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 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 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 APPENDIX DOES NOT ITSELF CONSTITUTE AN OFFER FOR THE SALE OR SUBSCRIPTION OF ANY SECURITIES IN THE COMPANY.

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

THIS ANNOUNCEMENT AND ANY OFFER IF MADE SUBSEQUENTLY IS ONLY ADDRESSED TO AND DIRECTED AT PERSONS IN MEMBER STATES OF THE EUROPEAN ECONOMIC AREA ('EEA') WHO ARE QUALIFIED INVESTORS WITHIN THE MEANING OF ARTICLE 2(1)(E) OF THE PROSPECTUS DIRECTIVE ('QUALIFIED INVESTORS').

Persons who are invited to and who choose to participate in the Placing, by making an oral or written offer to acquire Placing Shares, will be deemed to have read and understood this Announcement in its entirety and to be making such offer on the terms and conditions, and to be providing the representations, warranties, acknowledgements and undertakings contained in this Appendix.  

Unless the context otherwise requires, terms defined in the Announcement shall have the same meaning in this Appendix.  

In this Appendix, unless the context otherwise requires, 'Placee' means a Relevant Person (including individuals, funds or others) by whom or on whose behalf a commitment to take up Placing Shares has been given. In particular each such Placee represents, warrants and acknowledges that:

1.    it is a Relevant Person (as defined above) and undertakes that it will acquire, hold, manage or dispose of any Placing Shares that are allocated to it for the purposes of its business; 

2.    in the case of a Relevant Person in a member state of the EEA which has implemented the Prospectus Directive (each a 'Relevant Member State') who acquires any Placing Shares pursuant to the Placing:

                   (a) it is a Qualified Investor; 

(b)     in the case of any Placing Shares acquired by it as a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive,

(i)    the Placing Shares acquired by it in the Placing have not been acquired on behalf of, nor have they been acquired with a view to their offer or resale to, persons in any Relevant Member State other than Qualified Investors or in circumstances in which the prior consent of Deutsche Bank has been given to each proposed offer or resale; or 

(ii)     where Placing Shares have been acquired by it on behalf of persons in any member state of the EEA other than Qualified Investors, the offer of those Placing Shares to it is not treated under the Prospectus Directive as having been made to such persons; and

3.    (a)(i) it is not in the United States and (ii) it is not acting for the account or benefit of a person in the United States, unless in the case of this clause (ii), it is acting with investment discretion for such person or, if such person is a corporation or partnership, the person agreeing to purchase the Placing Shares is an employee of such person authorised to make such purchase; (b) it is a dealer or other professional fiduciary in the United States acting on a discretionary basis for a non-US person (other than an estate or trust) in reliance on Regulation S; (c) it is otherwise acquiring the Placing Shares in an 'offshore transaction' meeting the requirements of Regulation S under the Securities Act; or (d) it is a 'qualified institutional buyer' (a 'QIB') (as defined in Rule 144A under the Securities Act) and it has duly executed an investor letter in a form provided to it and delivered the same to Deutsche Bank or its affiliates.

Save as expressly set out, this Announcement does not constitute an offer or invitation to underwrite, subscribe for or otherwise acquire or dispose of any securities or investment advice in any jurisdiction, including without limitation, the United Kingdom, the United States, Australia, Canada, Japan or South Africa. Past performance is no good guide to future performance. Persons needing advice should consult an independent financial advisor. This Announcement and the information contained herein are not for release, publication or distribution, in whole or in part, directly or indirectly, to persons in the United States, Australia, Canada, Japan or South Africa or in any other jurisdiction in which such publication or distribution would be unlawful. No public offer of securities of the Company is being made in the United Kingdom, the United States or elsewhere.

In particular, the Placing Shares referred to in this Announcement have not been and will not be registered under the Securities Act or with any securities regulatory authority of any State or other jurisdiction of the United States. The Placing Shares have not been approved or disapproved by the US Securities and Exchange Commission, any State securities commission or other regulatory authority in the United States, nor have any of the foregoing authorities passed upon or endorsed the merits of the Placing or the accuracy or adequacy of this Announcement. Any representation to the contrary is a criminal offence in the United States.

The Placing Shares may not be offered, sold or transferred within the United States except pursuant to an available exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and the securities laws of any state or other jurisdiction of the United States. The Placing Shares are being offered and sold outside the United States in accordance with Regulation S under the Securities Act. Any offering to be made in the United States will be made to a limited number of QIBs in reliance on an exemption from, or in a transaction not subject to, registration under the Securities Act.

The relevant clearances have not been, nor will they be, obtained from the securities commission of any province or territory of Canada; no prospectus has been lodged with or registered by, the Australian Securities and Investments Commission or the Japanese Ministry of Finance; and the Placing Shares have not been, nor will they be, registered under or offered in compliance with the securities laws of any state, province or territory of Australia, Canada, Japan or South Africa. Accordingly, the Placing Shares may not (unless an exemption under the relevant securities laws is applicable) be offered, sold, resold or delivered, directly or indirectly, in or into the United States, Australia, Canada, Japan or South Africa or any other jurisdiction outside the United Kingdom.

Persons (including, without limitation, nominees and trustees) who have a contractual or other legal obligation to forward a copy of the Announcement should seek appropriate advice before taking any action.

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

Details of the Placing Agreement and the Placing Shares

Deutsche Bank has entered into a placing agreement (the 'Placing Agreement') with the Company under which Deutsche Bank has, on the terms and subject to the conditions set out therein, agreed as placing agent for the Company to use its reasonable endeavours to procure Placees to take up the Placing Shares. 

The issue of the Placing Shares is to be effected by way of a cashbox placing.  

The Placing Price (as defined below) will be determined following completion of the Bookbuild (as defined below) as set out in this Announcement and the Placing Agreement.

The Placing Shares will, when issued, be credited as fully paid and will rank pari passu in all respects with the existing issued ordinary shares of 11 16/29 pence per share in the capital of the Company (the 'Ordinary Shares'), including the right to receive all dividends and other distributions declared, made or paid in respect of such shares after the date of issue of the Placing Shares. 

The allotment and issue of the Placing Shares will be made by the Company to Placees procured by Deutsche Bank (acting as agent of the Company) in consideration for the transfer to the Company of certain shares in a Jersey incorporated subsidiary of the Company ('NewCo') by Deutsche Bank.

The Company, subject to certain exceptions, has agreed not to allot, issue or grant any rights in respect of any of its Ordinary Shares in the period from the date of this Announcement until 180 days after Admission without Deutsche Bank's prior consent.

Application for listing and admission to trading

Application will be made to the Financial Services Authority (the 'FSA') for admission of the Placing Shares to the Official List of the UK Listing Authority (the 'Official List') and to London Stock Exchange plc for admission to trading of the Placing Shares on its main market for listed securities (together, 'Admission'). It is expected that Admission will become effective on or around 26 June 2009 and that dealings in the Placing Shares will commence at that time.

Bookbuild

Deutsche Bank will today commence the bookbuilding process in respect to the Placing (the 'Bookbuild') to determine demand for participation in the Placing by Placees. This Appendix gives details of the terms and conditions of, and the mechanics of participation in, the Placing. No commissions will be paid to Placees or by Placees in respect of any Placing Shares.  

Deutsche Bank and the Company shall be entitled to effect the Placing by such alternative method to the Bookbuild as they may, in their sole discretion, determine.  

Participation in, and principal terms of, the Placing

1.    Deutsche Bank (whether through itself or any of its affiliates) is arranging the Placing as sole bookrunner and placing agent of the Company.

2.    Participation in the Placing will only be available to persons who may lawfully be, and are, invited to participate by Deutsche Bank. Deutsche Bank and its affiliates are entitled to enter bids in the Bookbuild as principal.

3.    The Bookbuild will establish a single price payable to Deutsche Bank by all Placees whose bids are successful (the 'Placing Price'). The Placing Price and the aggregate proceeds to be raised through the Placing will be agreed between Deutsche Bank and the Company following completion of the Bookbuild and any discount to the market price of the Ordinary Shares will be determined in accordance with the Listing Rules of the FSA. The Placing Price will be announced on a Regulatory Information Service following the completion of the Bookbuild (the 'Pricing Announcement').

4.    To bid in the Bookbuild, Placees should communicate their bid by telephone to their usual sales contact at Deutsche Bank. Each bid should state the number of Placing Shares which the prospective Placee wishes to acquire at either the Placing Price which is ultimately established by the Company and Deutsche Bank or at prices up to a price limit specified in its bid. Bids may be scaled down by Deutsche Bank on the basis referred to paragraph 8 below. 

5.    The Bookbuild is expected to close no later than 4:30 p.m. (London time) on 23 June 2009 but may be closed earlier or later at the discretion of Deutsche Bank. Deutsche Bank may, in agreement with the Company, accept bids that are received after the Bookbuild has closed.  

6.    Each Placee's allocation will be confirmed to Placees orally by Deutsche Bank following the close of the Bookbuild, and a trade confirmation will be dispatched as soon as possible thereafter. Deutsche Bank's oral confirmation to such Placee will constitute an irrevocable legally binding commitment upon such person (who will at that point become a Placee) in favour of Deutsche Bank and the Company, under which it agrees to acquire the number of Placing Shares allocated to it at the Placing Price on the terms and conditions set out in this Appendix and in accordance with the Company's Memorandum and Articles of Association.

7.    The Company will make a further announcement following the close of the Bookbuild detailing the number of Placing Shares to be issued and the price at which Placing Shares have been placed.

8.    Subject to paragraphs 4 and 5 above, Deutsche Bank may choose to accept bids, either in whole or in part, on the basis of allocations determined at its discretion (in agreement with the Company) and may scale down any bids for this purpose on such basis as it may determine. Deutsche Bank may also, notwithstanding paragraphs 4 and 5 above, subject to the prior consent of the Company (a) allocate Placing Shares after the time of any initial allocation to any person submitting a bid after that time and (b) allocate Placing Shares after the Bookbuild has closed to any person submitting a bid after that time. The Company reserves the right to reduce or seek to increase the amount to be raised pursuant to the Placing. 

9.    A bid in the Bookbuild will be made on the terms and subject to the conditions in this Appendix and will be legally binding on the Placee on behalf of which it is made and except with Deutsche Bank's consent will not be capable of variation or revocation after the time at which it is submitted. Each Placee will also have an immediate, separate, irrevocable and binding obligation, owed to Deutsche Bank, to pay it (or as it may direct) in cleared funds an amount equal to the product of the Placing Price and the number of Placing Shares such Placee has agreed to acquire. Each Placee's obligations will be owed to Deutsche Bank.

10.    Except as required by law or regulation, no press release or other announcement will be made by Deutsche Bank or the Company using the name of any Placee (or its agent), in its capacity as Placee (or agent), other than with such Placee's prior written consent.

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

12.    All obligations under the Bookbuild and Placing will be subject to fulfilment or (where applicable) waiver of, amongst others, the conditions referred to below under 'Conditions of the Placing' and to the Placing not being terminated on the basis referred to below under 'Right to terminate under the Placing Agreement'.  

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

14.    To the fullest extent permissible by law, none of the Company, Deutsche Bank or any of their respective affiliates shall have any liability to Placees (or to any other person whether acting on behalf of a Placee or otherwise). In particular, none of the Company, Deutsche Bank or any of their respective affiliates shall have any liability (including to the fullest extent permissible by law, any fiduciary duties) in respect of Deutsche Bank's conduct of the Bookbuild or of such alternative method of effecting the Placing as Deutsche Bank and the Company may agree.

Conditions of the Placing

The Placing is conditional upon the Placing Agreement becoming unconditional and not having been terminated in accordance with its terms. Deutsche Bank's obligations under the Placing Agreement are conditional on, inter alia:

(a)    none of the warranties contained in the Placing Agreement being untrue, inaccurate or misleading as at the date of the Placing Agreement and the date of Admission as though they had been given and made on such dates (by reference to the facts and circumstances existing at such dates); 

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

(c)    Admission taking place not later than 8.00 a.m. on 26 June 2009 or such later date as the Company and Deutsche Bank may otherwise agree but not being later than 3.00 p.m. on 3 July 2009.

If (i) any of the conditions contained in the Placing Agreement is not fulfilled or (where applicable) waived by Deutsche Bank in accordance with the Placing Agreement within the stated time periods (or such later time and/or date as may be agreed between the Company and Deutsche Bank), or (ii) the Placing Agreement is terminated in accordance with its terms (see below), the Placing will lapse and the Placees' rights and obligations hereunder in relation to the Placing Shares shall cease and terminate at such time and each Placee agrees that no claim can be made by or on behalf of the Placee (or any person on whose behalf the Placee is acting) in respect thereof. By participating in the Bookbuild, each Placee agrees that its rights and obligations cease and terminate only in the circumstances described above and under 'Right to terminate under the Placing Agreement' below and will not be capable of rescission or termination by it after oral confirmation by Deutsche Bank following the close of the Bookbuild.

Deutsche Bank may, at its discretion and upon such terms as it determines, waive compliance with, or extend the time and/or date for fulfilment by the Company of, the whole or any part of any of the Company's obligations in relation to the conditions in the Placing Agreement save that certain conditions, including the above conditions relating to Admission taking place and the Company's allotment of the Placing Shares, may not be waived. Any such extension or waiver will not affect Placees' commitments as set out in this Announcement.

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

Right to terminate under the Placing Agreement

Deutsche Bank is entitled, at any time before Admission, to terminate the Placing Agreement in accordance with the terms of the Placing Agreement in certain circumstances, including a breach of the warranties given to Deutsche Bank in the Placing Agreement or the occurrence of a force majeure event. 

By participating in the Placing, Placees agree that the exercise by Deutsche Bank of any right of termination or other right or discretion under the Placing Agreement shall be within the absolute discretion of Deutsche Bank and that it need not make any reference to Placees and that it shall have no liability to Placees whatsoever in connection with any such exercise.

No prospectus

No offering document or prospectus has been or will be submitted to be approved by the FSA in relation to the Placing and Placees' commitments will be made solely on the basis of the information contained in this Announcement and any information previously published by the Company prior to the date of this Announcement by notification to a Regulatory Information Service. Each Placee, by accepting a participation in the Placing, agrees that the content of this Announcement is exclusively the responsibility of the Company and confirms that it has neither received nor relied on any other information, representation, warranty, or statement made by or on behalf of the Company or Deutsche Bank or any other person and neither Deutsche Bank nor the Company nor any other person will be liable for any Placee's decision to participate in the Placing based on any other information, representation, warranty or statement which the Placees may have obtained or received. Each Placee acknowledges and agrees that it has relied on its own investigation of the business, financial or other position of the Company in accepting a participation in the Placing. Nothing in this paragraph shall exclude the liability of any person for fraudulent misrepresentation.

Registration and settlement

Settlement of transactions in the Placing Shares (ISIN: GB00B1VNSX38) following Admission will take place within the CREST system, subject to certain exceptions. Deutsche Bank reserves the right to require settlement for and delivery of the Placing Shares to Placees by such other means that it deems necessary if delivery or settlement is not possible or practicable within the CREST system within the timetable set out in this Announcement or would not be consistent with the regulatory requirements in the Placee's jurisdiction.

Each Placee allocated Placing Shares in the Placing will be sent a trade confirmation in accordance with the standing arrangements in place with Deutsche Bank stating the number of Placing Shares allocated to it at the Placing Price, the aggregate amount owed by such Placee to Deutsche Bank and settlement instructions. Each Placee agrees that it will do all things necessary to ensure that delivery and payment is completed in accordance with either the standing CREST or certificated settlement instructions that it has in place with Deutsche Bank.

It is expected that settlement will be on 26 June 2009 on a T+3 basis in accordance with the instructions set out in the trade confirmation. 

Interest is chargeable daily on payments not received from Placees on the due date in accordance with the arrangements set out above at the rate of two percentage points above the London Interbank Offered Rate as determined by Deutsche Bank.

Each Placee is deemed to agree that, if it does not comply with these obligations, Deutsche Bank may sell any or all of the Placing Shares allocated to that Placee on such Placee's behalf and retain from the proceeds, for Deutsche Bank's account and benefit, an amount equal to the aggregate amount owed by the Placee plus any interest due. The relevant Placee will, however, remain liable for any shortfall below the aggregate amount owed by it and may be required to bear any stamp duty or stamp duty reserve tax (together with any interest or penalties) which may arise upon the sale of such Placing Shares on such Placee's behalf. By communicating a bid for Placing Shares, each Placee confers on Deutsche Bank all such authorities and powers necessary to carry out any such sale and agrees to ratify and confirm all actions which Deutsche Bank lawfully takes in pursuance of such sale.

If Placing Shares are to be delivered to a custodian or settlement agent, Placees should ensure that the trade confirmation is copied and delivered immediately to the relevant person within that organisation.

Insofar as Placing Shares are registered in a Placee's name or that of its nominee or in the name of any person for whom a Placee is contracting as agent or that of a nominee for such person, such Placing Shares should, subject as provided below, be so registered free from any liability to UK stamp duty or stamp duty reserve tax.

Representations, warranties and further terms

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

1. represents and warrants that it has read this Announcement, including the Appendix, in its entirety and that its purchase of the Placing Shares is subject to and based upon all the terms, conditions, representations, warranties, acknowledgements, agreements and undertakings and other information contained herein and undertakes not to redistribute them;

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

3. acknowledges that none of Deutsche Bank, the Company, any of their respective affiliates or any person acting on behalf of any of them has provided, and will not provide it, with any material regarding the Placing, the Placing Shares or the Company other than this Announcement; nor has it requested any of Deutsche Bank, the Company, any of their affiliates or any person acting on behalf of any of them to provide it with any such information;

4. acknowledges that the content of this Announcement is exclusively the responsibility of the Company and that none of Deutsche Bank, its affiliates or any person acting on Deutsche Bank's behalf has or shall have any liability for any information, representation or statement contained in this Announcement or any information previously published by or on behalf of the Company and will not be liable for any Placee's decision to participate in the Placing based on any information, representation or statement contained in this Announcement or otherwise. Each Placee further represents, warrants and agrees that the only information on which it is entitled to rely and on which such Placee has relied in committing itself to acquire the Placing Shares is contained in this Announcement and any information previously published by the Company by notification to a Regulatory Information Service, such information being all that it deems necessary to make an investment decision in respect of the Placing Shares and that it has neither received nor relied on any other information given or representations, warranties or statements made by any of Deutsche Bank or the Company and neither Deutsche Bank nor the Company will be liable for any Placee's decision to accept an invitation to participate in the Placing based on any other information, representation, warranty or statement, provided that nothing in this paragraph excludes the liability of any person for fraudulent misrepresentation made by that person. Each Placee further acknowledges and agrees that it has relied on its own investigation of the business, financial or other position of the Company in deciding to participate in the Placing;

5. acknowledges that neither Deutsche Bank nor any person acting on behalf of it nor any of its affiliates has or shall have any liability for any publicly available or filed information or any information, representation, warranty or statement relating to the Company contained therein or otherwise, provided that nothing in this paragraph excludes the liability of any person for fraudulent misrepresentation made by that person;

6. acknowledges that any sales in the United States will be to QIBs in reliance on an exemption from, or in a transaction not subject to registration under the Securities Act and that any sales outside the United States are being made in 'offshore transactions' (as defined in Regulation S under the Securities Act) in accordance with Regulation S under the Securities Act;

7. if the Placing Shares were offered to it in the United States, represents and warrants that in making its investment decision, (a) it has consulted its own independent advisers or otherwise has satisfied itself concerning, without limitation, the effects of United States federal, state and local income tax laws and foreign tax laws generally and the United States Employee Retirement Income Security Act of 1974, the United States Investment Company Act of 1940, as amended, and the Securities Act, (b) it has received all information (including the business, financial condition, prospects, creditworthiness, status and affairs of the Company) concerning the Company, the Placing and the Placing Shares that it believes is necessary or appropriate in order to make an investment decision in respect of the Company and the Placing Shares, (c) it has extensive knowledge and experience in financial and business matters and it is aware and understands that an investment in the Placing Shares involves a considerable degree of risk and no US federal or state or non-US agency has made any finding or determination as to the fairness for investment or any recommendation or endorsement of the Placing Shares, and (d) it and any accounts for which it is acting are able to bear the economic risk of an investment in the Placing Shares, are able to sustain a complete loss of the investment in the Placing Shares and have no need for liquidity with respect to its investment in the Placing Shares;

8. acknowledges that it (a)(i) is not in the United States and (ii) is not acting for the account or benefit of a person in the United States, unless in the case of this clause (ii) it is acting with investment discretion for such person or, if such person is a corporation or partnership, the person agreeing to purchase the Placing Shares is an employee of such person authorised to make such purchase; (b) it is a dealer or other professional fiduciary in the United States acting on a discretionary basis for a non-US person (other than an estate or trust) in reliance on Regulation S under the Securities Act; (c) it is otherwise acquiring the Placing Shares in an 'offshore transaction' meeting the requirements of Regulation S under the Securities Act or (d) it is a QIB and has duly executed an investor letter in a form provided to it and delivered the same to Deutsche Bank or its affiliates;

9. acknowledges that it is acquiring the Placing Shares for its own account or for one or more accounts as to each of which it exercises sole investment discretion and each of which (if in the United States) is a QIB, for investment purposes and not with a view to any distribution or for resale in connection with, the distribution thereof in whole or in part, in the United States and that it has full power to make the acknowledgements, representations and agreements herein on behalf of each such account;

10. acknowledges that the Placing Shares have not been and will not be registered under the Securities Act or with any State or other jurisdiction of the United States, nor approved or disapproved by the US Securities and Exchange Commission, any State securities commission or other regulatory authority in the United States, and agrees not to reoffer, resell, pledge or otherwise transfer the Placing Shares except pursuant to an available exemption from, or in a transaction not subject to, the registration requirements of the Securities Act;

11. acknowledges that the Placing Shares offered and sold in the United States are 'restricted securities' within the meaning of Rule 144(a)(3) under the Securities Act and, so long as the Placing Shares are 'restricted securities', it will not deposit the Placing Shares into any unrestricted depositary receipt facility maintained by any depositary bank in respect of the Company's Ordinary Shares;

12. acknowledges and agrees that the Placing Shares will, to the extent they are delivered in certificated form, bear a legend to the following effect unless agreed otherwise with the Company:

'THE SHARES REPRESENTED HEREBY HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE 'SECURITIES ACT'), OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES, AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (B) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT OR (C) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES. EACH HOLDER, BY ITS ACCEPTANCE OF THESE SHARES, REPRESENTS THAT IT UNDERSTANDS AND AGREES TO THE FOREGOING RESTRICTIONS.';

13. acknowledges that no representation has been made as to the availability of any other exemption under the Securities Act for the reoffer, resale, pledge or transfer of the Placing Shares;

14. acknowledges that the Company is subject to ongoing reporting obligations in the United Kingdom and is therefore required to publish certain business and financial information in accordance with the rules and practices of the United Kingdom and relevant regulatory authorities in such jurisdiction (the 'Exchange Information'), which includes a description of the nature of the Company's business and the Company's most recent balance sheet and profit and loss account, and similar statements for preceding years, and that it has reviewed such Exchange Information as it has deemed necessary and that it is able to obtain or access the Exchange Information without undue difficulty and none of Deutsche Bank, the Company or any of their respective affiliates has made any representations to it, express or implied, with respect to the Company, the Placing and the Placing Shares or the accuracy, completeness or adequacy of the Exchange Information. It understands that the Exchange Information has been prepared in accordance with the UK format, style and context, which differs from US format, style and context. It acknowledges and agrees that it will not hold Deutsche Bank or any its affiliates responsible for any misstatements in or omissions from any publicly available information concerning the Company including (without limitation) the Exchange Information. Nothing in this paragraph shall exclude the liability of any person for fraudulent misrepresentation;

15. unless otherwise specifically agreed with Deutsche Bank, represents and warrants that it is, or at the time the Placing Shares are acquired that it will be, the beneficial owner of such Placing Shares, or that the beneficial owner of such Placing Shares is not a resident of Australia, Canada, Japan or South Africa;

16. represents and warrants that the issue to it, or the person specified by it for registration as holder, of Placing Shares will not give rise to a liability under any of sections 67, 70, 93 or 96 of the Finance Act 1986 (depositary receipts and clearance services), that it is not participating in the Placing as nominee or agent for any person or persons to whom the allocation, allotment, issue or delivery of Placing Shares would give rise to such a liability and that the Placing Shares are not being acquired in connection with arrangements to issue depositary receipts or to transfer Placing Shares into a clearance system;

17. represents and warrants that it has complied with its obligations in connection with money laundering and terrorist financing under the Proceeds of Crime Act 2002 (as amended), the Terrorism Act 2000 (as amended), the Terrorism Act 2006 and the Money Laundering Regulations 2007 (the 'Regulations') and, if making payment on behalf of a third party, that satisfactory evidence has been obtained and recorded by it to verify the identity of the third party as required by the Regulations;

18. if a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive, represents and warrants that the Placing Shares purchased by it in the Placing will not be acquired on a non-discretionary basis on behalf of, nor will they be acquired with a view to their offer or resale to, persons in a member state of the EEA which has implemented the Prospectus Directive other than Qualified Investors, or in circumstances in which the prior consent of Deutsche Bank has been given to the offer or resale;

19. represents and warrants that it has not offered or sold and, prior to the expiry of a period of six months from Admission, will not offer or sell any Placing Shares to persons in the United Kingdom, except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their business or otherwise in circumstances which have not resulted and which will not result in an offer to the public in the United Kingdom within the meaning of section 85(1) of the Financial Services and Markets Act 2000 ('FSMA');

20. represents and warrants that it and any person acting on its behalf (a) falls within Article 19(5) and/or 49(2) of the Order and undertakes that it will acquire, hold, manage and (if applicable) dispose of any Placing Shares that are allocated to it for the purposes of its business only and (b) is a Qualified Investor as defined in section 86(7) of FSMA, being a person falling within Article 2.1(e)(i), (ii) or (iii) of the Prospectus Directive;

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

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

23. represents and warrants that it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it or on its behalf in relation to the Placing Shares in, from or otherwise involving, the United Kingdom;

24. represents and warrants that it and any person acting on its behalf is entitled to acquire the Placing Shares under the laws of all relevant jurisdictions and that it has all necessary capacity and has obtained all necessary consents and authorities to enable it to commit to this participation in the Placing and to perform its obligations in relation thereto (including, without limitation, in the case of any person on whose behalf it is acting, all necessary consents and authorities to agree to the terms set out or referred to in this Announcement) and will honour such obligations;

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

26. acknowledges that none of Deutsche Bank, any of its affiliates or any person acting on behalf of any of them is making any recommendations to it, advising it regarding the suitability of any transactions it may enter into in connection with the Placing and that participation in the Placing is on the basis that it is not and will not be a client of Deutsche Bank and that Deutsche Bank has no duties or responsibilities to it for providing the protections afforded to its clients or customers or for providing advice in relation to the Placing nor in respect of any representations, warranties, undertakings or indemnities contained in the Placing Agreement nor for the exercise or performance of any of its rights and obligations thereunder including any rights to waive or vary any conditions or exercise any termination right;

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

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

29.  acknowledges that the Company, Deutsche Bank and their respective affiliates and others will rely upon the truth and accuracy of the foregoing representations, warranties and acknowledgements which are given to Deutsche Bank on its own behalf and on behalf of the Company and are irrevocable; 

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

31. acknowledges that no action has been or will be taken by any of the Company, Deutsche Bank or any person acting on its or their behalf that would, or is intended to, permit a public offer of the Placing Shares in any country or jurisdiction where any action for that purpose is required; 

32. acknowledges that its commitment to acquire Placing Shares on the terms set out herein will continue notwithstanding any amendment that may in future be made to the terms and conditions of the Placing and that Placees will have no right to be consulted or require that their consent be obtained with respect to the Company's or Deutsche Bank's conduct of the Placing; and

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

The agreement to settle a Placee's acquisition of Placing Shares (and/or the acquisition by a person for whom such Placee is contracting as agent) free of stamp duty and stamp duty reserve tax depends on the settlement relating only to an acquisition by it and/or such person direct from the Company for the Placing Shares in question. Such agreement assumes that the Placing Shares are not being acquired in connection with arrangements to issue depositary receipts or to transfer the Placing Shares into a clearance service. If there are any such arrangements, or the settlement related to any other dealing in the Placing Shares, stamp duty or stamp duty reserve tax may be payable, for which neither the Company nor Deutsche Bank will be responsible. If this is the case, each Placee should seek its own advice and notify Deutsche Bank accordingly.

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

Each Placee, and any person acting on behalf of the Placee, acknowledges that Deutsche Bank does not owe any fiduciary or other duties to any Placee in respect of any representations, warranties, undertakings or indemnities in the Placing Agreement. 

Each Placee and any person acting on behalf of the Placee acknowledges and agrees that Deutsche Bank or any of its affiliates may, at its absolute discretion, agree to become a Placee in respect of some or all of the Placing Shares.

When a Placee or person acting on behalf of the Placee is dealing with Deutsche Bank, any money held in an account with Deutsche Bank on behalf of the Placee and/or any person acting on behalf of the Placee will not be treated as client money within the meaning of the rules and regulations of the FSA made under the FSMA. The Placee acknowledges that the money will not be subject to the protections conferred by the client money rules; as a consequence, this money will not be segregated from Deutsche Bank's money in accordance with the client money rules and will be used by Deutsche Bank in the course of its own business and the Placee will rank only as a general creditor of Deutsche Bank.

All times and dates in this Announcement may be subject to amendment. Deutsche Bank shall notify the Placees and any person acting on behalf of the Placees of any changes.

 

END

 

 

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