Prospectus Publication

RNS Number : 2507M

Picton Property Income Limited

13 September 2012

 



NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN OR INTO AUSTRALIA, CANADA, JAPAN, NEW ZEALAND, THE REPUBLIC OF SOUTH AFRICA OR THE UNITED STATES OF AMERICA OR TO US PERSONS.

THIS DOCUMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT CONSTITUTE AN OFFER OR INVITATION TO PURCHASE OR ACQUIRE ANY TRANSFERABLE SECURITIES (AS DEFINED IN SCHEDULE 11A OF THE FINANCIAL SERVICES AND MARKETS ACT 2000), NOR SHALL IT FORM THE BASIS OF ANY CONTRACT FOR THE SALE OF ANY INTEREST IN A TRANSFERABLE SECURITY OR A SOLICITATION, INDUCEMENT, ADVICE OR RECOMMENDATION TO EFFECT ANY TRANSACTION OF ANY KIND WHATSOEVER. POTENTIAL INVESTORS SHOULD READ THE RELEVANT PROSPECTUS (WHICH WILL BE PUBLISHED IN DUE COURSE FOLLOWING APPROVAL BY THE UK LISTING AUTHORITY) CAREFULLY BEFORE ANY INVESTMENT DECISION IS MADE.

Picton Property Income Limited

("Picton", or together with its subsidiaries, the "Group")

13 September 2012                               

Rollover Offer and Placing

Publication of Prospectus

Further to the announcement on 6 September 2012 of the proposal to issue up to 22 million new zero dividend preference shares ("2016 ZDP Shares") at 100 pence per share by way of a Rollover Offer and Placing (together the "Issue"), Picton today announces the publication of the Prospectus and the final terms of the Issue.

The Rollover Offer is being made available to all eligible holders of the Group's existing zero dividend preference shares ("2012 ZDP Shares") (being the zero dividend preference shares issued by IRET Securities Limited, a wholly owned subsidiary of Picton) on the Record Date who will have the opportunity to exchange their 2012 ZDP Shares for 2016 ZDP Shares based on the accrued capital entitlement at the rollover date. The Placing will provide new investors with an opportunity to invest in the 2016 ZDP Shares pursuant to the terms and conditions set out at the end of this announcement.

The gross redemption yield of the 2016 ZDP Shares ("2016 ZDP GRY") will be determined by way of a book-build reflecting orders received pursuant to the Issue. Potential investors will be asked to indicate the number of 2012 ZDP Shares they wish to roll forward via the Rollover Offer, or 2016 ZDP Shares they wish to acquire via the Placing, at different gross redemption yields ranging from 6.5% to 8.0% or at the Strike GRY. The Rollover and Placing orders will then be aggregated and the gross redemption yield set at a point where demand exceeds the minimum issue size of £20 million.

The Rollover Offer and the Placing are being proposed to assist Picton in meeting its obligation to finance the final capital entitlement on maturity of the 2012 ZDP Shares on 31 October 2012.

The Board believes the Issue will have the following advantages:

·      A number of holders of the existing 2012 ZDP Shares have indicated a desire to roll forward their existing holding and the Rollover Offer provides a tax efficient* opportunity for holders to roll forward into the 2016 ZDP Shares;

·      The Placing provides the opportunity for new investors to participate in the issue of the 2016 ZDP Shares;

·      On completion of the Issue, Picton will have completed its group refinancing exercise, with a balanced and staggered debt maturity profile of 4, 10, 15 and 20 years;

·      On completion of the Issue, the Group will be able to manage its debt position effectively and, over time, reduce its gearing level by optimising the timing of asset disposals, and, if appropriate, using any excess income, to purchase 2016 ZDP Shares in the market;

·      The amortisation profile on the senior debt is expected to improve the cover of the 2016 ZDP Shares over time; and

·      A 2016 ZDP Share issue will allow the Group to have lower levels of debt against which its senior debt LTV covenants are measured providing greater operational flexibility.

*The tax treatment of the Rollover Offer is dependent on the holder's tax status. For further information see paragraph 10 of Part 7 (General Information) of the Prospectus.

The Issue

Picton ZDP Limited, a newly incorporated wholly owned subsidiary of Picton, is seeking to issue up to 22 million 2016 ZDP Shares by way of the Rollover Offer and the Placing. The issue price of the 2016 ZDP Shares will be 100 pence per share. Application will be made to the UKLA and the London Stock Exchange for the 2016 ZDP Shares to be admitted to a standard listing on the Official List and to trade on the London Stock Exchange's main market for listed securities.

The holders of the 2016 ZDP Shares will be entitled to receive a capital sum at the end of the four year term (the "2016 ZDP Share Repayment Date"). The capital sum per 2016 ZDP Share will be 100 pence increased at an equivalent annual rate equal to the 2016 ZDP Share gross redemption yield from the date of issue, compounding daily. The 2016 ZDP Shares will have no entitlement to any dividends or to participate in the revenue profits of the Group.

The gross redemption yield of the 2016 ZDP Shares will be determined by way of a book-build reflecting orders received pursuant to the Rollover Offer and Placing. Potential investors will be asked to indicate the number of 2012 ZDP Shares they wish to roll forward via the Rollover Offer, or 2016 ZDP shares they wish to acquire via the Placing, at different gross redemption yields ranging from 6.5% to 8.0% or at the Strike GRY. The Rollover Offer and Placing orders will then be aggregated and the gross redemption yield set at a point where demand exceeds the minimum issue size of £20 million.

The 2016 ZDP Share gross redemption yield will impact the final capital entitlement, final net asset cover, final debt cover and hurdle rate of the 2016 ZDP Shares and therefore the table below outlines this information at gross redemption yields between 6.5 per cent, and 8.0 per cent.

Gross Redemption Yield	6.50%	6.75%	7.00%	7.25%	7.50%	7.75%	8.00%
Final Capital Entitlement	128.65p	129.86p	131.08p	132.31p	133.55p	134.79p	136.05p
Hurdle Rate	(12.1%)	(12.1%)	(12.1%)	(12.1%)	(12.0%)	(12.0%)	(12.0%)
Estimated Final Net Asset Cover	7.17x	7.10x	7.03x	6.97x	6.90x	6.84x	6.77x
Estimated Final Debt Cover	1.73x	1.73x	1.73x	1.73x	1.73x	1.72x	1.72x

The illustrative statistics are calculated on the basis of the principal bases and assumptions set out in the Part 6 (Principal Bases and Assumptions) of the Prospectus.

Prospectus publication

The Prospectus has been approved by the UK Listing Authority. To view the full document, please place the following URL into the address bar of your browser:

http://www.rns-pdf.londonstockexchange.com/rns/2507M_1-2012-9-13.pdf

 

Copies of the Prospectus will shortly be available for inspection at the registered office of the Issuer at Trafalgar Court, Les Banques, St. Peter Port, Guernsey, GY1 4BZ.

A copy of the prospectus has also been submitted to the National Storage Mechanism  (which has replaced the UK Listing Authority's Document Viewing Facility) and will shortly be available for inspection at www.hemscott.com/nsm.do. 

Expected Timetable

Prospectus published	13 September 2012
Rollover Offer and Placing opens	13 September 2012
Record Date for the Rollover Offer	5.00 p.m. on 2 October 2012
Rollover Offer closes	5.00 p.m. on 2 October 2012
Placing closes	9 October 2012
Announcement of the results of the Issue	10 October 2012
Admission	15 October 2012

For further information:

Northern Trust International Fund Administration Services (Guernsey) Limited (Company Secretary)
Rachael Falla	Telephone: [phone]
Picton Capital Limited
Michael Morris	Telephone: [phone]
Oriel Securities Limited
Roger Clarke, Neil Langford, Tom Yeadon	Telephone: [phone]
Tavistock Communications
Jeremy Carey, James Verstringhe	Telephone: [phone]

IMPORTANT INFORMATION

This press release appears as a matter of record only and does not constitute an offer to sell or a solicitation of an offer to purchase any security.

The distribution of this Announcement in certain jurisdictions may be restricted by law. No action has been taken by Picton, Picton ZDP Limited (the "Issuer") or Oriel Securities Limited ("Oriel") that would permit an offering of the 2016 ZDP 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 Picton, the Issuer and Oriel to inform themselves about, and to observe, such restrictions.

The information presented herein is not an offer for sale within the United States of any equity shares or other securities of Picton or the Issuer. Neither Picton nor the Issuer has been nor will it be registered under the US Investment Company Act of 1940, as amended (the "Investment Company Act"). In addition, the 2016 ZDP Shares have not been and will not be registered under the US Securities Act of 1933, as amended (the "Securities Act") or any other applicable law of the United States. Consequently, the 2016 ZDP Shares may not be offered or sold or otherwise transferred within the United States, or to, or for the account or benefit of, US Persons (as defined in Regulation S under the Securities Act), except pursuant to an exemption from the registration requirements of the Securities Act and under circumstances which will not require Picton or the Issuer to register under the Investment Company Act. No public offering of the 2016 ZDP Shares is being made in the United States. The 2016 ZDP Shares may only be resold or transferred in accordance with the restrictions set forth in the Prospectus and related subscription documents. This communication should not be distributed, forwarded, transferred, reproduced, or otherwise transmitted, directly or indirectly, to any persons within the United States or to any US Persons unless it is lawful to do so.

This Announcement has been approved for the purposes of section 21 of the Financial Services and Markets Act 2000 (as amended) by Picton Capital Limited which is authorised and regulated by the Financial Services Authority (FSA no. 551027). 

This Announcement is for information purposes only and does not constitute an invitation to subscribe for or otherwise acquire or dispose of securities in Picton or the Issuer in any jurisdiction. The information contained in this Announcement is for background purposes only and does not purport to be full or complete. No reliance may be placed for any purpose on the information contained in this Announcement or its accuracy or completeness, This announcement does not constitute or form part of any offer to issue or sell, or any solicitation of any offer to subscribe or purchase, any investments nor shall it (or the fact of its distribution) form the basis of, or be relied on in connection with, any contract therefor.

This announcement may include certain "forward-looking statements". These statements are based on the current expectations of Picton and the Issuer and are naturally subject to uncertainty and changes in certain circumstances. Forward-looking statements typically include statements containing words such as "intends", "expects", "anticipates", "targets", "plans", "estimates" and words of similar import. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There are various factors that could cause actual results and developments to differ materially from those expressed or implied by such forward-looking statements. These factors include, but are not limited to, changes in economic conditions, changes in the regulatory environment, fluctuations in value of real estate, interest and exchange rates, the outcome of litigation and government actions. Other unknown or unpredictable factors could cause actual results to differ materially from those in the forward-looking statements. Neither Picton nor the Issuer undertakes any obligation to update publicly or revise forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent legally required.

All investments are subject to risk. Past performance is no guarantee of future returns. The value of investments may fluctuate. Results achieved in the past are no guarantee of future results. This document is not intended to constitute legal, tax or accounting advice or investment recommendations. Prospective investors are advised to seek expert legal, financial, tax and other professional advice before making any investment decision. Statements contained in this document that are not historical facts are based on current expectations, estimates, projections, opinions and beliefs of Picton and the Issuer. Such statements involve known and unknown risks, uncertainties and other factors, and undue reliance should not be placed thereon. Additionally, this document contains "forward-looking statements". Actual events or results or the actual performance of Picton may differ materially from those reflected or contemplated in such targets or forward-looking statements.

Oriel Securities Limited is acting for Picton and the Issuer and no-one else in connection with the Issue and will not be responsible to anyone other than Picton and the Issuer for providing the protections afforded to customers of Oriel or for providing advice in relation to the Issue.

TERMS AND CONDITIONS OF THE PLACING

FOR INVITED PLACEES ONLY - IMPORTANT INFORMATION

1.                Eligible participants

Members of the public are not eligible to take part in the proposed placing (the "Placing") of up to 22 million zero dividend preference shares of 0.0001 pence each in the capital of Picton ZDP Limited ("2016 ZDP Shares" and the "Issuer").  The terms and conditions set out and referred to herein are directed only at persons selected by Oriel Securities Limited ("Oriel") who are "Investment Professionals" falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "FPO") or "High Net Worth Companies, Unincorporated Associations etc" falling within Article 49(2) of the FPO or to persons to whom it may otherwise lawfully be communicated (all such persons together being referred to as "Permitted Persons").  The terms and conditions set out herein must not be acted on or relied on by persons who are not Permitted Persons.  The 2016 ZDP Shares that are the subject of the Placing are not being offered or sold to any person in the European Union, other than to "Qualified Investors" as defined in Article 2.1(E) of Directive 2003/71/EC (the "Prospectus Directive"), which includes legal entities which are regulated by the Financial Services Authority (the "FSA") or entities which are not so regulated whose corporate purpose is solely to invest in securities.

By participating in the Placing, each person who is invited to and who chooses to participate in the Placing (a "Placee") by making or accepting an offer to acquire 2016 ZDP Shares is deemed to have read and understood this announcement and the prospectus of the Issuer dated 13 September 2012 (the "Prospectus") in their entirety and to be providing the representations, warranties, undertakings, agreements and acknowledgements contained herein. 

2.                Overseas jurisdictions

No 2016 ZDP Shares have been, or will be, registered under the United States Securities Act of 1933 (as amended) (the "Securities Act"), or under the securities laws of any state or other political sub-division of the United States or under the applicable securities laws of Australia, Canada, Japan, New Zealand or the Republic of South Africa.  Accordingly, subject to certain exceptions, no 2016 ZDP Shares may, directly or indirectly, be offered, sold, transferred, taken up or delivered, directly or indirectly, in the United States, Australia, Canada, Japan, New Zealand or the Republic of South Africa or for the benefit of any US Person (within the meaning of Regulation S made under the Securities Act ("Regulation S").  Persons receiving this announcement or the Prospectus (including custodians, nominees and trustees) must not forward, distribute, mail or otherwise transmit them in or into the United States, Australia, Canada, Japan, New Zealand or the Republic of South Africa. 

In addition, the Issuer has not been and will not be registered under the US Investment Company Act of 1940, as amended (the "US Investment Company Act") and investors will not be entitled to the benefit of that Act.  No offer or sale of 2016 ZDP Shares may be made except under circumstances which will not result in the Issuer being required to registered under the US Investment Company Act.  The 2016 ZDP Shares may only be resold or transferred in accordance with the restrictions set out in the Prospectus.

The distribution of this announcement, the Prospectus and/or the issue of the 2016 ZDP Shares in certain jurisdictions may be restricted by law and/or regulation.  No action has been taken by the Issuer, Picton Property Income Limited (the "Parent"), Oriel or any of their respective Affiliates (as defined below) that would permit an offer of the 2016 ZDP Shares or possession or distribution of this announcement or any other publicity material relating to such 2016 ZDP Shares in any jurisdiction where action for that purpose is required.  Persons receiving this announcement are required to inform themselves about and to observe any such restrictions. 

3.                Placing

Oriel is arranging the Placing as agent for and on behalf of the Issuer.  Oriel is entitled, at its discretion and out of its own resources, at any time, to rebate to some or all investors or to such other parties as Oriel may wish, all or part of its placing commission.  Oriel is also entitled under the Placing Agreement (as defined below) to retain agents and may pay commissions in respect of the Placing to any or all of such agents, save that such commissions will be paid from Oriel's resources and may form part of its out of pocket expenses to be reimbursed by the Issuer or the Parent.

Each Placee will be required to pay to Oriel, on the Issuer's behalf, the Issue Price for each 2016 ZDP Share agreed to be acquired by it under the Placing in accordance with the terms set out in this announcement and the Prospectus.  Each Placee's obligation to acquire and pay for 2016 ZDP Shares under the Placing will be owed to Oriel and the Issuer.  Each Placee has an immediate, separate, irrevocable and binding obligation, owed to Oriel, to pay to it (or as it may direct) in cleared funds an amount equal to the product of the Issue Price and the number of 2016 ZDP Shares such Placee has agreed to subscribe for.  Each Placee will be deemed to have read and understood this announcement and the Prospectus in its entirety, to be participating in the Placing upon the terms and conditions contained in this announcement and the Prospectus, and to be providing the representations, warranties, agreements, acknowledgements and undertakings, in each case as contained in this announcement and the Prospectus.  To the fullest extent permitted by law and applicable FSA rules (the "FSA Rules"), none of (i) Oriel, (ii) any director, officer, employee or consultant of Oriel, or (iii) to the extent not contained within (i) or (ii), any person connected with Oriel as defined in the FSA Rules ((i), (ii) and (iii) being together "Affiliates" and individually an "Affiliate"), shall have any liability to Placees or to any person other than the Issuer in respect of the Placing.

4.                Participation, bookbuilding and settlement

Participation in the Placing is only available to persons who may lawfully be, and are, invited to participate in it by Oriel.

Oriel is conducting a bookbuilding process to determine: (i) the demand for participation in the Placing at the Issue Price; and (ii) at what Gross Redemption Yield the 2016 ZDP GRY should be set (the "Bookbuilding").  The extent of each Placee's participation in the Placing shall be determined in accordance with sub-paragraph 4.7 below.  Each Placee, who confirms its agreement to Oriel to subscribe for 2016 ZDP Shares hereby agrees with Oriel and the Issuer to be bound by these terms and conditions as being the terms and conditions upon which 2016 ZDP Shares will be subscribed under the Placing. A Placee shall, without limitation, become so bound if Oriel confirms to the Placee its allocation.  Each Placee's obligations will be owed to the Issuer, the Parent and Oriel.  Each Placee will also have an immediate, separate, irrevocable and binding obligation, owed to Oriel, to pay to Oriel (or as Oriel may direct) in cleared funds an amount equal to the product of the Issue Price and the number of 2016 ZDP Shares such Placee is allocated. 

The Parent and/or the Issuer will make a further announcement following the close of the Bookbuilding setting out, inter alia, the results of the Placing and at what Gross Redemption Yield the 2016 ZDP GRY has been set.

Principal Terms of the Bookbuilding:

4.1               Oriel is arranging the Placing as agent for the Issuer;

4.2               participation will only be available to Permitted Persons who are invited to participate by Oriel and who communicate their wish to participate in the Bookbuilding to Oriel in accordance with sub-paragraph 4.4 below and who are able to participate in accordance with the terms and conditions set out herein and in the Prospectus.  Oriel may enter bids and participate as principal in the Bookbuilding with the prior agreement of the Issuer;

4.3               the Issue Price will be 100 pence per 2016 ZDP Share;

4.4               an institution that is a Permitted Person and that wishes to participate in the Bookbuilding will be required to indicate the number of 2016 ZDP Shares he would like to acquire at different Gross Redemption Yields ranging from 6.5% to 8.0% or at the Strike GRY;

4.5               any application will be made on the terms and conditions in this announcement and the Prospectus and will not be capable of variation or revocation after the close of the Bookbuilding process;

4.6               Oriel reserves the right not to accept applications or to accept applications in part rather than in whole.  The acceptance of applications shall be at the absolute discretion of Oriel;

4.7               subject to sub-paragraph 4.6, all applications:

4.7.1            at a Gross Redemption Yield above the 2016 ZDP GRY will not be satisfied;

4.7.2            at a Gross Redemption Yield below the 2016 ZDP GRY will be satisfied in full; and

4.7.3            at an amount equal to the 2016 ZDP GRY or the Strike GRY may, if the Issue is oversubscribed at the 2016 ZDP GRY, be subject to scaling back on the following basis: (i) applications at the Strike GRY will be satisfied in full and applications at an amount equal to the 2016 ZDP GRY will be scaled back (unless the 2016 ZDP GRY is 6.5 per cent., in which case the applications at a Gross Redemption Yield of 6.5 per cent. and applications at the Strike GRY will be scaled back pro rata); and (ii) applications at an amount equal to the 2016 ZDP GRY will be scaled back in favour of elections pursuant to the Rollover Offer at an amount equal to the 2016 ZDP GRY and any scaling back of applications will be at the discretion of Oriel.

4.8               all allocation and scaling back is subject to the satisfaction of Listing Rule 14.2.2.

 

4.9               the Bookbuilding process is expected to close no later than 1.00 p.m. (London time) on 9 October 2012, but may be closed earlier or later at the discretion of Oriel and the Issuer.  Oriel may, in its sole discretion, accept applications that are received after the Bookbuilding has closed.  Notwithstanding the provisions of this paragraph 4 Oriel will be entitled to effect the Placing by such alternative method to the Bookbuilding as it may, in its absolute discretion, determine;

4.10             the Parent and/or the Issuer will announce at what Gross Redemption Yield the 2016 ZDP GRY has been set following the close of the Bookbuilding.

Oriel shall confirm to each Placee the number of 2016 ZDP Shares allocated to it in accordance with the above and each Placee agrees to subscribe for the amount of 2016 ZDP Shares allocated to such Placee under the Placing at the Issue Price in accordance with the arrangements described in, and subject to, the terms of these terms and conditions.  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 such Investor may have.

All obligations under the Placing will be subject to fulfilment of the conditions referred to below under paragraph 8 below.

Settlement of transactions in the 2016 ZDP Shares (ISIN: GG00B8N2KC06; SEDOL: B8N2KC0) will take place within the CREST system, subject to certain exceptions, on a delivery versus payment ("DVP") basis.  All Placees are to be settled through Oriel against CREST ID: BAQAQ.  Oriel reserves the right to require settlement for and delivery of any 2016 ZDP Shares to any Placees by such other means that it deems appropriate 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 any Placee's jurisdiction.  A Placee whose 2016 ZDP Shares are to be delivered to a custodian or settlement agent should ensure that the written confirmation is copied and delivered immediately to the appropriate person within that organisation.

Insofar as 2016 ZDP 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 2016 ZDP Shares should, subject as provided below, be so registered free from any liability to UK stamp duty or stamp duty reserve tax. 

No UK stamp duty or stamp duty reserve tax should be payable to the extent that the 2016 ZDP Shares are issued into CREST to, or to the nominee of, a Placee who holds those shares beneficially (and not as agent or nominee for any other person) within the CREST system and registered in the name of such Placee or such Placee's nominee provided that the 2016 ZDP Shares are not issued to a person whose business is or includes issuing depositary receipts or the provision of clearance services or to an agent or nominee for any such person.

Any arrangements to issue or transfer the 2016 ZDP Shares into a depositary receipts system or a clearance service or to hold the 2016 ZDP Shares as agent or nominee of a person to whom a depositary receipt may be issued or who will hold the 2016 ZDP Shares in a clearance service, or any arrangements subsequently to transfer the 2016 ZDP Shares, may give rise to UK stamp duty and/or stamp duty reserve tax, for which neither the Issuer nor Oriel will be responsible and the Placee to whom (or on behalf of whom, or in respect of the person for whom it is participating in the Placing as an agent or nominee) the allocation, allotment, issue or delivery of 2016 ZDP Shares has given rise to such UK stamp duty or stamp duty reserve tax undertakes to pay such UK stamp duty or stamp duty reserve tax forthwith and to indemnify on an after-tax basis and to hold harmless the Issuer and Oriel in the event that any of the Issuer and/ or Oriel has incurred any such liability to UK stamp duty or stamp duty reserve tax.  In addition, Placees should note that they will be liable to pay 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 subscription by them for any 2016 ZDP Shares or the agreement by them to subscribe for any 2016 ZDP Shares.

When a Placee or person acting on behalf of the Placee is dealing with Oriel, any money held in an account with Oriel 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 FSA Rules.  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 Oriel's money in accordance with the client money rules and will be used by Oriel in the course of its own business; and the Placee will rank only as a general creditor of Oriel.

5.                Prospectus

Placees' commitments in respect of 2016 ZDP Shares will be made solely on the basis of the information contained in the Prospectus and on the terms contained in it and this announcement.  Each Placee, by accepting a participation in the Placing, undertakes that it has neither received nor relied on any other information, representation, warranty or statement (express or implied), written or oral, made at any time by or on behalf of Oriel or the Issuer or the Parent and none of the Issuer, the Parent, Oriel nor their respective Affiliates will be liable for any Placee's decision to participate in the Placing based on any other information, representation, warranty or statement.  Each Placee acknowledges and agrees that it has relied on the Prospectus and its own investigation of the business, financial or other position of the Issuer and the Parent in accepting a participation in the Placing.  Nothing in this paragraph shall exclude the liability of any person for fraudulent misrepresentation.

6.                2016 ZDP Shares

The 2016 ZDP Shares will, when issued, be fully paid, rank pari passu in all respects with each other and will be issued subject to the Issuer's memorandum and articles of incorporation.  The 2016 ZDP Shares will be issued free of any pre-emption rights, encumbrance, lien or other security interest.  Application will be made to the UK Listing Authority and the London Stock Exchange for the 2016 ZDP Shares to be admitted to a standard listing on the Official List and to trading on the London Stock Exchange's main market for listed securities. In respect of the 2016 ZDP Shares, it is expected that admission to the Official List will become effective and that dealings will commence on 15 October 2012.

7.                Placing Agreement

Oriel has agreed, on the terms and subject to the conditions set out in the placing agreement made between the Issuer, the Parent and Oriel (the "Placing Agreement"), to use its reasonable endeavours as agent of the Issuer to procure persons to acquire the 2016 ZDP Shares at the Issue Price.  The Placing has not been underwritten by Oriel.

8.                Placing conditions

The Placing is conditional on (i) valid elections under the Rollover Offer and/or applications under the Placing being received in respect of 2016 ZDP Shares with an aggregate value, at the Issue Price, of at least £20 million, (ii) the Placing Agreement remaining in full force and effect and not having been terminated in accordance with its terms; (iii) or Admission of the 2016 ZDP Shares issued pursuant to the Rollover Offer and the Placing.

Oriel reserves the right to waive or extend the time and/or date for the fulfilment of any of the conditions in the Placing Agreement to a time no later than 8.00 a.m. on 31 October 2012 (the "Long Stop Date").

If any condition in the Placing Agreement is not fulfilled or waived by Oriel by the relevant time, the Placing will lapse and each Placee's rights and obligations pursuant to the Placing shall cease and terminate at such time. 

The Placing Agreement may be terminated by Oriel at any time prior to Admission in certain circumstances including, inter alia, following a breach of the Placing Agreement or the warranties by the Issuer or the Parent or the occurrence of certain force majeure events.  The exercise of any right of termination pursuant to the Placing Agreement, any waiver of any condition in the Placing Agreement and any decision by Oriel whether or not to extend the time for satisfaction of any condition in the Placing Agreement shall be within Oriel's absolute discretion.  Oriel shall have no liability to any Placee in the event of any such termination, waiver or extension or in respect of any decision whether to exercise any such right of termination, waiver or extension.  The Parent will inform each Placee if Oriel's obligations under the Placing Agreement do not become unconditional by 8.00 a.m. on 15 October 2012, or such later time and date as Oriel may in its absolute discretion determine (being no later than 8.00 a.m. on the Long Stop Date).

9.                Payment default

A Placee's entitlement to receive any 2016 ZDP Shares will be conditional on Oriel's receipt of payment from the relevant Placee by the time and date Oriel may in its absolute discretion and direct. 

If any Placee fails to make such payment by the required time for any 2016 ZDP Shares (i) the Issuer may release itself (if it decides in its absolute discretion to do so) and will be released from all obligations it may have to allot and/or issue any such 2016 ZDP Shares to such Placee or at its direction which are then unallotted and/or unissued, (ii) the Issuer may exercise all rights of lien, forfeiture and set-off over and in respect of any such 2016 ZDP Shares to the fullest extent permitted under its articles of incorporation or otherwise by law and to the extent that such Placee then has any interest in or rights in respect of any such shares, (iii) the Issuer or, as applicable, Oriel may sell (and each of them is irrevocably authorised by such Placee to do so) all or any of such shares on such Placee's behalf and then retain from the proceeds, for the account and benefit of the Issuer or, where applicable, Oriel (a) any amount up to the total amount due to it as, or in respect of, subscription monies, or as interest on such monies, for any 2016 ZDP Shares, (b) any amount required to cover any stamp duty or stamp duty reserve tax arising on the sale, and (c) any amount required to cover dealing costs and/or commissions necessarily or reasonably incurred by it in respect of such sale, and (iv) such Placee shall remain liable to the Issuer and to Oriel for the full amount of any losses and of any costs which it may suffer or incur as a result of it (a) not receiving payment in full for such 2016 ZDP Shares by the required time, and/or (b) the sale of any such 2016 ZDP Shares to any other person at whatever price and on whatever terms are actually obtained for such sale by or for it.  Interest may be charged in respect of payments not received by Oriel for value by the required time referred to above at the rate of 4% above the above the base rate of HSBC Bank plc.

10.               Placees' warranties and undertakings to the Issuer and Oriel

By receiving the Prospectus and agreeing with Oriel to acquire 2016 ZDP Shares under the Placing, a Placee irrevocably represents, warrants and undertakes to each of the Issuer, the Parent and Oriel, on behalf of itself and each company in its Group (if any) ("Group" meaning in relation to a company, that company, any company of which it is a subsidiary (having the meaning set out in section 1159 of the Companies Act 2006 as amended) (its holding company) and any other subsidiary of such holding company), in each case as a fundamental term of such Placee's application for 2016 ZDP Shares and of the Issuer's obligation to allot and/or issue any 2016 ZDP Shares to it or at its direction, that:

10.1             it agrees to and accepts all of the terms set out in this announcement and the Prospectus and that is has the funds available and it has the power and authority to subscribe for the 2016 ZDP Shares and to give all confirmations and to execute and deliver all documents necessary to effect such subscription;

10.2             its rights and obligations in respect of the Placing will terminate only in the circumstances described in this announcement and the Prospectus and will not be capable of rescission or termination by it in any other circumstances;

10.3             the contents of the Prospectus and this announcement, both of which have been issued by the Issuer, are the responsibility of the Issuer and of those persons (including the Parent) who are stated in it as having accepted responsibility for such contents, and of no other persons;

10.4             it has neither received nor relied on any other information, representation, warranty or statement (express or implied), written or oral, made at any time by or on behalf of the Issuer, the Parent or Oriel and none of the Issuer, the Parent, Oriel nor their respective Affiliates will be liable for any Placee's decision to participate in the Placing based on any other information, representation, warranty or statement, other than as contained in the Prospectus (for which the only person(s) responsible to it is or are the person(s) stated in the Prospectus as having accepted responsibility for such information, representation, warranty or statement);

10.5             it has relied on its own investigation of the business, financial or other position of the Issuer and the Parent in accepting a participation in the Placing;

10.6             it is not a customer of Oriel in relation to the Placing, but rather a corporate finance contact.  Oriel is not acting for it in connection with the Placing and will not be responsible to it in respect of the Placing for providing protections afforded to their customers or for advising it on the Placing;

10.7             neither it nor any company in its Group has been, and will not be, given any warranty or representation by the Issuer, the Parent Oriel or by any Affiliate of either of them in relation to any 2016 ZDP Shares;

10.8             it will pay the full amount at the Issue Price as and when required in respect of all 2016 ZDP Shares allocated to it in accordance with these terms and conditions and will do all things necessary on its part to ensure that payment for such shares and their delivery to it or at its direction is completed in accordance with the standing CREST instructions (or, where applicable, standing certificated settlement instructions) that it has in place with Oriel or puts in place with Oriel with its agreement;

10.9             it is entitled to acquire 2016 ZDP Shares under the laws of all relevant jurisdictions which apply to it and it has complied, and will fully comply, with all such laws (including where applicable, the UK Terrorism Act 2000, the UK Anti-Terrorism, Crime and Security Act 2001, the UK Proceeds of Crime Act 2002, the UK Money Laundering Regulations 2007, the UK Bribery Act 2010, the Guernsey Money Laundering Regulations 2003 and the Criminal Justice (Proceeds of Crime) Bailiwick of Guernsey Law, 1999 each as amended from time to time) and has obtained all governmental and other consents (if any) which may be required for the purpose of, or as a consequence of, such acquisition, and it will provide promptly to Oriel such evidence, if any, as to the identity or location or legal status of any person which Oriel may request from it in connection with the Placing (for the purpose of complying with any such laws or regulations or ascertaining the nationality of any person or the jurisdiction(s) to which any person is subject or otherwise) in the form and manner requested by Oriel on the basis that any failure by it to do so may result in the number of 2016 ZDP Shares that are to be allotted and/or issued to it or at its direction pursuant to the Placing being reduced to such number, or to nil, as Oriel may decide at its sole discretion;

10.10           it has complied and will comply with all applicable provisions of FSMA with respect to anything done or to be done by it in relation to any 2016 ZDP Shares in, from or otherwise involving the United Kingdom and it has not made or communicated or caused to be made or communicated, and it will not make or communicate or cause to be made or communicated, any "financial promotion" in relation to 2016 ZDP Shares in contravention of section 21 of FSMA;

10.11           it is both a Qualified Investor and, if in the UK, a Permitted Person or other person at or to whom any private communication relating to the Issuer that is a "financial promotion" (as such term is used in relation to FSMA) may lawfully be issued, directed or otherwise communicated, otherwise than by an authorised person, without contravening the restriction in section 21 of FSMA;

10.12           it is acting as principal only in respect of the Placing or, if it is acting for any other person in respect of the Placing (i) it is duly authorised to do so, (ii) it is and remains liable to the Issuer and/or the Parent and/or Oriel for the performance of all its obligations as a Placee in respect of the Placing (regardless of the fact that it is acting for another person), (iii) it is both an "authorised person" for the purposes of FSMA and a "qualified investor" as defined at Article 2.1(e)(i) of the Prospectus Directive acting as agent for such person, and (iv) such person is either (a) a FSMA Qualified Investor or (b) its "client" (as defined in section 86(2) of FSMA) that has engaged it to act as his agent on terms which enable it to make decisions concerning the Placing or any other offers of transferable securities on his behalf without reference to him;

10.13           it is not, and is not acting in relation to the Placing as nominee or agent for, a person who is or may be liable to stamp duty or stamp duty reserve tax in respect of any agreement to acquire (or any acquisition of) shares or other securities at a rate in excess of 0.5 per cent.  (including, without limitation, under sections 67, 70, 93 or 96 of the Finance Act 1986 concerning depositary receipts and clearance services), and the allocation, allotment, issue and/or delivery to it, or any person specified by it for registration as holder, of 2016 ZDP Shares will not give rise to a liability under any such section;

10.14           it will not treat any 2016 ZDP Shares in any manner that would contravene any legislation applicable in any territory or jurisdiction and no aspect of its participation in the Placing will contravene any legislation applicable in any territory or jurisdiction in any respect or cause the Issuer or Oriel to contravene any such legislation in any respect;

10.15           Oriel may (in its absolute discretion) satisfy its obligations to procure Placees by themselves agreeing to become Placees in respect of some or all of the 2016 ZDP Shares or by nominating any other Affiliate or any person associated with any Affiliate to do so;

10.16           time is of the essence as regards its obligations under this announcement;

10.17           this announcement and any contract which may be entered into between it and Oriel and/or the Issuer and/or the Parent pursuant to it or the Placing, and all disputes or claims arising out of or in connection with either this announcement or any such contract (including any non-contractual obligation arising in connection with the same) shall be governed by and construed in accordance with the laws of England, for which purpose it submits to the exclusive jurisdiction of the courts of England and Wales as regards any claim, dispute, or matter arising out of or relating to this announcement or such contract, except that each of the Issuer and Oriel shall have the right to bring enforcement proceedings in respect of any judgement obtained against such Placee in the courts of England and Wales in the courts of any other relevant jurisdiction;

10.18           each right or remedy of the Issuer or the Parent or Oriel provided for in this announcement is in addition to any other right or remedy which is available to such person and the exercise of any such right or remedy in whole or in part shall not preclude the subsequent exercise of any such right or remedy;

10.19           any document that is to be sent to it in connection with the Placing will be sent at its risk and may be sent to it at any address provided by it to Oriel;

10.20           nothing in this announcement or the Prospectus shall exclude any liability of any person for fraud on its part;

10.21           all times and dates in this announcement and the Prospectus are subject to amendment at the discretion of Oriel except that in no circumstances will the date scheduled for Admission be later than the Long Stop Date;

10.22           none of its rights or obligations in respect of the Placing is conditional on any other person agreeing to acquire any 2016 ZDP Shares under the Placing and no failure by any other Placee to meet any of its obligations in respect of the Placing shall affect any of its obligations in respect of the Placing;

10.23           it has acknowledged the contents of paragraph 2 of this announcement and that it, or the beneficial owner, as applicable, is entitled to subscribe for 2016 ZDP Shares under the laws of all relevant jurisdictions which apply to it, or the beneficial owner, as applicable, and that it has fully observed such laws and obtained all such governmental and other guarantees and other consents in either case which may be required thereunder and complied with all necessary formalities;

10.24           it undertakes that the person who it specifies for registration as holder of the 2016 ZDP Shares will be (i) itself or (ii) its nominee, as the case may be.  None of Oriel nor the Issuer nor the Parent 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 participate in the Placing and it agrees to indemnify the Issuer and Oriel in respect of the same on the basis that the 2016 ZDP Shares will be credited to the CREST stock account of Oriel (CREST ID: BAQAQ) who will hold them as nominee for the subscribers of such shares until settlement in accordance with its standing settlement instructions;

10.25           no portion of the assets used by such investor to purchase, and no portion of the assets used by such investor to hold, the 2016 ZDP Shares or any beneficial interest therein constitutes or will constitute the assets of (i) an employee benefit plan as defined in section 3(3) of ERISA (whether or not subject to the provisions of Title 1 of ERISA, but excluding plans maintained outside the US that are described in Section 4(b)(4) of ERIDA); (ii) a plan, individual retirement account or other arrangement that is described in Section 4975 of the US Tax Code (whether or not such plan, account or arrangement is subject to Section 4975 of the US Tax Code); (iii) an insurance company using general account assets, if such general account assets are deemed to include assets of any of the foregoing types of plans, accounts or arrangements for purposes of Title 1 of ERISA or Section 4975 of the US Tax Code; or (iv) an entity which is deemed to hold the assets of any of the foregoing types of plans, accounts or arrangements that is subject to Title 1 of ERISA or Section 4975 of the US Tax Code;

10.26           it is purchasing the 2016 ZDP Shares for its own account or for one or more investment accounts for which it is acting as a fiduciary or agent, in each case for investment only, and not with a view to or for sale or other transfer in connection with a distribution of the 2016 ZDP Shares in any manner that would violate the US Securities Act, the US Investment Company Act or any other applicable securities law;

10.27           if in the future it decides to offer, sell, transfer, assign or otherwise dispose of the 2016 ZDP Shares, it will do so only in compliance with an exemption from the registration requirements of the US Securities Act and under circumstances which will not require the Company to register under the US Investment Company Act.  It acknowledges that any sale, transfer, assignment, pledge or other disposal that might (in the opinion of the Directors) require the Company to register under the Investment Company Act will be subject to the compulsory transfer provisions as provided in the Articles;

10.28           it acknowledges and understands that the Issuer, the Parent, Oriel and others will rely upon the truth and accuracy of the foregoing representations, warranties, acknowledgements and undertakings which are given to Oriel on its own behalf and on behalf of the Issuer and are irrevocable;

10.29           it acknowledges that neither Oriel, nor any of their Affiliates nor any person acting on behalf of Oriel or their Affiliates is making any recommendations to it, advising it regarding the suitability of any transactions it may enter into in connection with the Placing nor providing advice in relation to the Placing nor in respect of any representations, warranties, undertakings or indemnities contained in the Placing Agreement nor the exercise or performance of any of Oriel's rights and obligations thereunder including any rights to waive or vary any conditions or exercise any termination right; and

10.30           the rights and remedies of the Issuer, the Parent and Oriel under these terms and conditions are in addition to any rights or 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.

Defined terms used in this announcement shall have the same meaning as ascribed to them in the prospectus of the Issuer dated 13 September 2012 for the rollover offer of 2012 ZDP Shares into 2016 ZDP Shares and placing of 2016 ZDP Shares (the "Prospectus").

 

END

 

 

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