Proposed Placing and Open Offer

RNS Number : 4490J

Volex PLC

12 June 2014

 

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED IN IT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, OR THE REPUBLIC OF SOUTH AFRICA AND SHOULD NOT BE DISTRIBUTED IN, FORWARDED TO OR TRANSMITTED INTO THOSE COUNTRIES OR INTO ANY OTHER JURISDICTION WHERE TO DO SO MIGHT CONSTITUTE A VIOLATION OF LOCAL SECURITIES LAWS OR REGULATIONS.

THIS ANNOUNCEMENT IS AN ADVERTISEMENT AND DOES NOT CONSTITUTE A PROSPECTUS OR PROSPECTUS EQUIVALENT DOCUMENT. NOTHING IN THIS ANNOUNCEMENT SHALL CONSTITUTE OR FORM PART OF, AND SHOULD NOT BE CONSTRUED AS AN OFFER TO SELL OR ISSUE OR THE SOLICITATION OF AN OFFER TO BUY OR SUBSCRIBE FOR ANY SECURITIES REFERRED TO HEREIN NOR SHOULD IT FORM THE BASIS OF, OR BE RELIED ON IN CONNECTION WITH, ANY CONTRACT OR COMMITMENT WHATSOEVER. PLEASE SEE THE IMPORTANT NOTICES AT THE END OF THE SUMMARY.

12 June 2014

VOLEX PLC

Proposed Placing & Open Offer of 24,067,171 new ordinary shares ("New Shares") at 75 pence each to raise approximately £18.1 million (US$30.3 million) (the "Placing & Open Offer")

The Board of Volex plc ("Volex" or the "Group"), a global provider of power and data cabling solutions, announces today that it is proposing to raise gross proceeds of approximately £18.1 million (US$30.3 million) by the issue of 24,067,171 New Shares through the Placing & Open Offer at 75 pence per New Share. This, in conjunction with an amended and extended US$45.0 million committed bank facility also announced today, is expected to provide a stronger platform for the continued progress of the Volex Transformation Plan.

Highlights

·      Intention to raise gross proceeds of approximately £18.1 million (US$30.3 million)

·      Prepayment of US$25.0 million to reduce the existing bank facility to US$45.0 million, and to extend maturity to June 2017

·      Supported by the Group's largest shareholder NR Holdings Limited which is taking up its entitlement under the Open Offer in full

·      Expected to provide a stronger platform for the continued progress of the Volex Transformation Plan

With the exception of the Committed Shares, which Nathaniel Rothschild, NR Holdings Limited and certain of the Directors have irrevocably undertaken to take up pursuant to their respective entitlements under the Open Offer, the Placing & Open Offer is being fully underwritten by Investec subject to, and in accordance with, the terms of the Underwriting Agreement.

The Issue Price represents a discount of approximately 6.0 per cent. to the Closing Price of 79.75 pence on 11 June 2014 (being the last Business Day before this announcement).

The Placing & Open Offer is conditional on, among other things, the approval of Shareholders at a General Meeting to be held at 10.00 a.m. on 1 July 2014. Details relating to the General Meeting will be contained in the Circular to be sent to shareholders. If the Resolution is passed and the other conditions to the Placing & Open Offer are satisfied, it is expected that dealings in the New Shares will commence at 8:00 a.m. on 2 July 2014.

It is intended that the Prospectus will be sent to Qualifying Shareholders (other than Excluded Overseas Shareholders) this week. Further details of the Placing & Open Offer are set out in this announcement and will be set out in the Prospectus.

Background to and reasons for the Placing & Open Offer

Following several years of achieving revenue growth (revenue from continuing operations grew 42 per cent. from $365.4 million for the 52 weeks ended 4 April 2010 to $517.8 million for the 52 weeks ended 1 April 2012) through a strategy of increased investment and a focus on larger customers, the Group has experienced a significant downturn in demand for its products over the last 2 years. The Group's revenue fell 23 per cent. from $517.8 million for the 52 weeks ended 1 April 2012 to $400.2 million for the 52 weeks ended 30 March 2014 with underlying operating profit (after non-recurring items and share-based payments) falling 86 per cent. from $32.0 million to $4.5 million.

This downturn was caused by a loss of alignment between the Group's strategic goals and the requirements of the Group's core customers in the power cord market and a reduction in demand from the Group's key infrastructure customers, arising from completion of 4G roll-out projects in the US and Japan in the data market. This resulted in a reduction in sales orders from a number of the Group's larger customers, which, coupled with its operational investment in increased production capacity, caused a significant reduction in profitability for the Group.

A new CEO was appointed in July 2013 to lead the recovery of the Group. The new management team is currently executing the Volex Transformation Plan, which aims to improve the Group's relationships with its customers and reduce its costs so that it is able to continue to offer quality products at competitive prices.

The downturn in the Group's trading and reduction in profitability have meant that the level of debt within the Group is now deemed by the Board to be too high, restricting the ability to execute the Volex Transformation Plan. Net debt has increased from $7.4 million as at 3 April 2011 to $32.2 million as at 30 March 2014 as a result of lower sales, increased costs and the Group's increased investment (purchases of property, plant and equipment were $10.3 million in the 52 weeks ended 1 April 2012, $24.9 million in the 52 weeks ended 31 March 2013 and $8.2 million in the 52 weeks ended 30 March 2014). As a result of the downturn, the management team requires greater financial flexibility in order to execute the Volex Transformation Plan.

The Company has entered into an amendment letter dated 11 June 2014 with Lloyds TSB Bank plc, HSBC Bank plc and Clydesdale Bank PLC its lenders (the "June Amendment Letter"). Under the terms of the June Amendment Letter, the terms of the Company's existing revolving credit facility (the "Facility") will be amended to limit the available facility to up to US$45.0 million (previously US$75 million) and extend the termination date from 15 June 2015 to 15 June 2017. In addition the Company has negotiated revisions to its financial covenants and interest rate margins. In consideration of these amendments, the Company will pay its lenders a work fee of US$0.3 million, and prepay US$25.0 million of its outstanding bank debt. The June Amendment Letter is conditional upon the Placing & Open Offer completing.

The Directors believe that these amendments combined with the reduction of outstanding bank debt from the net proceeds of the Placing & Open Offer will provide a more stable and certain funding structure of the Group for the next 3 years, to June 2017.

In the event that the Placing & Open Offer does not complete, and the June Amendment Letter does not become effective, the Facility will expire in June 2015 and the Company will be required to refinance its debt facilities during the forthcoming 12 months. Pending refinancing, and in order to maintain compliance with financial performance covenants in the Facility, the Company may have to undertake a number of mitigating actions available to it, in the event that actual performance falls below current expectations. These mitigating actions may slow the financial recovery of the Company, since they would include a reduction in capital expenditure that is focussed upon growing revenues and a slowing down of cost reduction exercises that are currently underway. The Directors believe that they have the financial controls and monitoring in place, which will enable these mitigating actions to be implemented in a timely manner, in the event that actual performance falls below current expectations.

The Board considers the Placing & Open Offer to be a suitable fundraising structure as it may allow access to new investors to broaden the Company's shareholder base, whilst providing existing Shareholders with the opportunity to participate on a pro rata basis to their existing shareholdings in the fundraising through the Open Offer.

Use of Proceeds

The Company intends to use the net proceeds of the Placing & Open Offer to reduce indebtedness and has agreed with its lending banks to prepay US$25.0 million of its outstanding financial indebtedness out of the net proceeds of the Placing & Open Offer.

Enquiries:

Volex PLC

Christoph Eisenhardt / Nick Parker

Tel: [phone]

Investec Bank PLC

Patrick Robb / Andrew Pinder

Matt Lewis / Dominic Emery / Sebastian Lawrence

Tel: [phone]

Tulchan Communications

Christian Cowley / James Macey White

Tel: [phone]

This summary should be read in conjunction with, and is subject to, the full text of this announcement as well as the Prospectus relating to the Placing & Open Offer which will be sent to Qualifying Shareholders (other than Excluded Overseas Shareholders) and will also be made available on the Company's website.

IMPORTANT INFORMATION

The defined terms set out in the Appendix apply to this announcement. Unless otherwise stated, references to time contained in this announcement are to UK time.

This announcement is an advertisement and does not constitute a prospectus. Nothing in this announcement should be interpreted as a term or condition of or form a part of, and should not be construed as, any offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of any securities, nor should it or any part of it form the basis of, or be relied on in connection with, any contract or commitment whatsoever. Any decision to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of any securities in the Company must be made only on the basis of the information contained in and incorporated by reference into the Prospectus.

The ability of Overseas Shareholders to accept the offer may be restricted in certain jurisdictions. Pursuant to section 562 of the 2006 Act, the Open Offer to Qualifying Shareholders who have no registered address within a member state of the European Economic Area and who have not supplied the Company with an address within a member state of the European Economic Area for the service of notices will be made by the Company publishing a notice in the London Gazette on 13 June 2014 stating where copies of the Prospectus and Application Form may be inspected or obtained on personal application by or on behalf of Qualifying Shareholders.

This announcement is not an offer of securities for sale, or a solicitation of an offer to buy securities, in the United States or in any other jurisdiction where such offer or solicitation would not be permitted. Securities may not be offered or sold in the United States absent registration with the United States Securities and Exchange Commission or an exemption from registration. The securities described in this announcement, when and if offered, will not be registered under the United States Securities Act of 1933, as amended (the "Securities Act"), or with any regulatory authority or under the applicable securities laws of any state or other jurisdiction of the United States, or the relevant laws of any state, province or territory of any other Restricted Jurisdiction and the New Shares may not be offered, sold, pledged, or otherwise transferred directly or indirectly, within the United States (as defined in Regulation S under the Securities Act), except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state or local securities law. This announcement does not constitute an offer to sell or a solicitation of an offer to buy New Shares in any jurisdiction in which such offer or solicitation is unlawful. This announcement is not a prospectus or other offering document. There will be no public offering of securities in the United States.

Investec, which is authorised by the Prudential Regulation Authority ("PRA") and regulated by the PRA and the Financial Conduct Authority, is acting for the Company only and no-one else in connection with the Placing & Open Offer and Admission and will not regard any other person (whether or not a recipient of this announcement) as a client in relation to the Placing & Open Offer or Admission and will not be responsible to anyone other than the Company for providing the protections afforded to its clients or for providing advice in relation to the Placing & Open Offer or Admission or any matters referred to in this announcement.

Apart from the responsibilities and liabilities, if any, which may be imposed on Investec by FSMA, Investec accepts no responsibility whatsoever for the contents of this announcement, including its accuracy, completeness or verification of any other statement made or purported to be made by it, or on its behalf, in connection with the Company, the New Shares, the Placing & Open Offer or Admission. Investec accordingly disclaims all and any liability whether arising in tort, contract or otherwise (save as referred to above) which it might otherwise have in respect of this announcement of any such statement.

Certain statements made in this announcement constitute forward-looking statements. Forward-looking statements can be identified by the use of words such as "may", "will", "should", "predict", "assurance", "aim", "hope", "risk", "expect", "intend", "estimate", "anticipate", "believe", "plan", "seek", "continue" or other similar expressions that are predictive or indicative of future events. All statements other than statements of historical facts included in this announcement, including, without limitation, those regarding the Group's expectations, intentions and beliefs concerning, amongst other things, the Group's results of operations, financial position, growth strategy, prospects, dividend policy and the industries in which the Group operates, are forward-looking statements. By their nature, such forward-looking statements involve known and unknown risks, uncertainties and other factors, many of which are outside the control of the Group and its Directors, which may cause the actual results, performance, achievements, cash flows, dividends of the Group or industry results to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. As such, forward-looking statements are no guarantee of future performance.

Such forward-looking statements are based on numerous assumptions regarding the Group's present and future business strategies and the environment in which the Group will operate in the future. Among the important factors that could cause the Group's actual results, performance or achievements to differ materially from those in the forward-looking statements include, among others, economic conditions in the relevant markets of the world, market position of the Company or its subsidiaries, earnings, financial position, cash flows, return on capital and operating margins, political uncertainty, the actions of competitors, activities by governmental authorities such as changes in taxation or regulation, changing business or other market conditions and general economic conditions and such other risk factors identified in the "Risk Factors" section of the Prospectus. Forward-looking statements should, therefore, be construed in light of such risk factors and undue reliance should not be placed on forward-looking statements. These forward-looking statements speak only as of the date of this announcement and are not intended to give assurance as to future results.

Neither the content of the Company's website (or any other website) nor any website accessible by hyperlinks on the Company's website (or any other website) is incorporated in, or forms part of, this announcement.

VOLEX PLC

Proposed Placing & Open Offer of 24,067,171 new ordinary shares ("New Shares") at 75 pence each to raise approximately £18.1 million (US$30.3 million) (the "Placing & Open Offer")

Principal terms and conditions of the Placing& Open Offer

The Company is proposing to raise gross proceeds of approximately £18.1 million (approximately £16.7 million net of expenses) by the issue of 24,067,171 New Shares by way of the Placing & Open Offer at 75 pence per New Share. The New Shares, with the exception of the Committed Shares, have been conditionally placed with institutional investors by Investec (subject to clawback to satisfy valid applications by Qualifying Shareholders under the Open Offer). Qualifying Shareholders are being offered the right to subscribe for New Shares in accordance with the terms of the Open Offer. The ability of Qualifying Shareholders to accept the Open Offer may be restricted in certain jurisdictions.

The Issue Price of 75 pence per New Share represents a discount of approximately 6.0 per cent. to the Closing Price of 79.75 pence on 11 June 2014 (the last Business Day before this announcement).

The Placing & Open Offer is expected to result in 24,067,171 New Shares being issued (representing approximately 36.4 per cent. of the existing issued share capital and 26.7 per cent. of the Enlarged Ordinary Share Capital).

With the exception of the Committed Shares, which Nathaniel Rothschild, NR Holdings Limited and certain of the Directors have irrevocably undertaken to take up pursuant to their respective entitlements under the Open Offer, the Placing & Open Offer is being fully underwritten by Investec subject to, and in accordance with, the terms of the Underwriting Agreement.

As part of the Placing & Open Offer, the New Shares, excluding the Committed Shares, are being allocated to placees who have agreed to subscribe for such shares pursuant to the Placing. These shares are subject to clawback to satisfy valid applications by Qualifying Shareholders under the Open Offer. In the event that valid applications are not received in respect of any of the New Shares under the Open Offer, unallocated New Shares will be placed under the Placing.

Open Offer

Under the Open Offer, Qualifying Shareholders are being offered the opportunity to subscribe at the Issue Price for New Shares on the following basis:

4 New Shares for every 11 Existing Shares

registered in their name on the Record Date.

The ability of Qualifying Shareholders to accept the Open Offer may be restricted in certain jurisdictions.

Open Offer Entitlements under the Open Offer will be rounded down to the nearest whole number and any fractional entitlements to New Shares will not be allocated. The aggregate number of New Shares available for subscription pursuant to the Open Offer will not exceed 24,067,171 New Shares.

Shareholders will experience dilution in their ownership and voting interests in the Company to the extent that they do not or cannot subscribe in full for their Open Offer Entitlements.

New Shares

The New Shares, when issued and fully paid, or credited as fully paid, will rank in full for all dividends or distributions made, paid or declared after the date of issue and otherwise pari passu in all respects with the Existing Shares.

No temporary documents of title will be issued in respect of New Shares held in certificated form. In respect of those Qualifying Shareholders who have elected to hold their New Shares in uncertificated form, the New Shares are expected to be credited to their stock accounts maintained in CREST as soon as possible after 8.00 a.m. on 2 July 2014. In respect of those Qualifying Shareholders who have elected to hold their New Shares in certificated form, definitive certificates are expected to be posted by 9 July 2014.

Applications will be made to the UKLA and the London Stock Exchange for the New Shares to be listed on the Official List and to be admitted to trading on the main market of the London Stock Exchange respectively. Admission is expected to occur on 2 July 2014 when dealings in the New Shares are expected to commence.

Conditions

The Placing & Open Offer are conditional, inter alia, upon:

(a)        the passing of the Resolution at the General Meeting;

(b)        the Underwriting Agreement having become unconditional in all respects; and

(c)        Admission becoming effective by no later than 8.00 a.m. on 2 July 2014 (or such later time and date as the Company and Investec may agree, not being later than 8.00 a.m. on 16 July 2014).

Prior to Admission, Investec may terminate the Underwriting Agreement in certain defined circumstances. Following Admission, the Underwriting Agreement cannot be terminated.

Accordingly, if these and the other conditions to which the Open Offer is subject are not satisfied or waived (where capable of waiver), the Placing & Open Offer will be revoked and will not proceed.

Irrevocable undertakings

Nathaniel Rothschild and NR Holdings Limited have irrevocably undertaken to subscribe in full for the New Shares to which they are entitled pursuant to their Open Offer Entitlement, representing 6,137,538 New Shares in aggregate.

Nathaniel Rothschild and NR Holdings Limited, holding in aggregate 16,878,232 Ordinary Shares, representing 25.5 per cent. of the Ordinary Shares as at 11 June 2014, have also irrevocably undertaken to vote or procure the registered holder of the Ordinary Shares to vote in favour of the Resolution in respect of these shares.

Each of the Directors is supportive of the fundraising and those Directors who hold Ordinary Shares have irrevocably undertaken to subscribe, in aggregate, for 30,908 New Shares which they are entitled to pursuant to their respective Open Offer Entitlements as follows:

Director	New Shares
Karen Slatford	10,909
Christoph Eisenhardt	9,090
Daren Morris	10,909
Total	30,908

In addition, each of the Directors holding Ordinary Shares has irrevocably undertaken to vote, or procure that the registered holder of their Ordinary Shares votes, in favour of the Resolution in respect of his/her own beneficial holdings. The combined beneficial holdings of the Directors together amount to 85,000 Ordinary Shares, representing approximately 0.13 per cent. of the Ordinary Shares in issue as at 11 June 2014 (being the last practicable date prior to this announcement).

Structure of the Placing & Open Offer

For technical reasons, the Company will issue the New Shares in consideration for the transfer to it by Investec (the "Newco Subscriber") of the issued ordinary shares of Newco held by the Newco Subscriber and the entire issued redeemable preference share capital of Newco, which will result in the Company owning the entire issued share capital of Newco, the only assets of which will be its cash resources. These resources will represent the net proceeds of the Placing & Open Offer. The Company will be able to utilise this amount by redeeming the redeemable preference shares it will then hold in Newco and, during any interim period prior to redemption, by procuring that Newco lends the amount to the Company (or another member of the Group). The structure of the Placing & Open Offer is expected to have the effect of creating distributable reserves equal to the net proceeds of the Placing & Open Offer less the par value of the New Shares.

Overseas Shareholders

Pursuant to section 562 of the 2006 Act, the Open Offer to Qualifying Shareholders who have no registered address within a member state of the European Economic Area and who have not supplied the Company with an address within a member state of the European Economic Area for the service of notices will be made by the Company publishing a notice in the London Gazette on 13 June 2014 stating where copies of the Prospectus and Application Form may be inspected or obtained on personal application by or on behalf of Qualifying Shareholders. However, in order to facilitate acceptance of the Open Offer by Qualifying Shareholders by virtue of such publication, the Prospectus and Application Form will also be posted to such Qualifying Shareholders (other than those who have a registered address or are resident or located in the United States or any other Restricted Jurisdiction). Overseas Qualifying Shareholders, if it is lawful to do so, may accept the Open Offer either by returning the Application Form posted to them in accordance with the instructions set out therein or, subject to surrendering any original Application Form posted to them, by obtaining a copy thereof from the place stated in the notice in the London Gazette and returning it in accordance with the instructions set out therein. Similarly, Open Offer Entitlements are expected to be credited to stock accounts of Qualifying CREST Shareholders (other than those who have a registered address or are resident or located in the United States or any other Restricted Jurisdiction).

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

Each of the times and dates in the table below is indicative only and may be subject to change.

Record Date for entitlement under the Open Offer	close of business on 11 June 2014
Announcement of the Placing & Open Offer	12 June 2014
Ex-entitlement date for the Open Offer	8.00 a.m. on 12 June 2014
Publication of the Prospectus	12 June 2014
Posting of the Prospectus, Circular, Form of Proxy and Application Form	13 June 2014
Open Offer Entitlements credited to stock accounts of Qualifying CREST Shareholders	As soon as possible after 8.00 a.m. on 16 June 2014
Recommended latest time and date for requesting withdrawal of Open Offer Entitlements from CREST	4.30pm on 24 June 2014
Latest time and date for depositing Open Offer Entitlements into CREST	3.00pm on 25 June 2014
Latest time and date for splitting of Application Forms (to satisfy bona fide market claims only)	3.00pm on 26 June 2014
Latest time and date for receipt of Forms of Proxy	10.00am on 27 June 2014
Latest time and date for receipt of completed Application Forms and payment in full under the Open Offer or settlement of relevant CREST instruction	11.00 a.m. on 30 June 2014
General Meeting	10.00am on 1 July 2014
Admission and commencement of dealings in New Shares	8.00am on 2 July 2014
CREST Members' accounts credited in respect of New Shares in uncertificated form	As soon as possible after 8.00am on 2 July 2014
Despatch of definitive share certificates for New Shares in certificated form	by 9 July 2014

Notes:

The times set out in the expected timetable of principal events above and mentioned throughout this announcement are times in London unless otherwise stated, and may be adjusted by the Company in consultation with or, if required, with the agreement of Investec, in which event details of the new times and dates will be notified to the UK Listing Authority, the London Stock Exchange and, where appropriate, Shareholders.

APPENDIX

DEFINITIONS

The following definitions apply throughout this announcement, unless stated otherwise:

"2006 Act"                                          the Companies Act 2006, as amended;

"Admission"                                       the admission of the New Shares to the Official List becoming effective in accordance with the Listing Rules and the admission of such shares to trading on the main market of the London Stock Exchange for listed securities becoming effective in accordance with the Admission and Disclosure Standards;

"Admission and Disclosure               the Admission and Disclosure Standards of the London Stock

Standards"                                        Exchange containing, among other things, the admission requirements to be observed by companies seeking admission to trading on the main market of the London Stock Exchange for listed securities;

"Application Form"                            the application form to accompany the Prospectus by which Qualifying Non-CREST Shareholders will be able to apply for New Shares under the Open Offer;

"Board"                                             the board of directors of the Company;

"Business Day"                                  any day (excluding Saturdays and Sundays or public holidays in England and Wales) on which banks are generally open in the City of London for the transaction of normal banking business;

"certificated" or "in certificated          where a share or other security is not in uncertificated form;

form"

"Circular"                                          a circular to be sent to Shareholders convening the General Meeting at which the Resolution will be proposed;

"Closing Price"                                  the closing mid-market price of an Ordinary Share as derived from the Daily Official List of the London Stock Exchange on the specified date;

"Committed Shares"                          30,908 New Shares which certain Directors have irrevocably undertaken to apply for under the Open Offer pursuant to the Directors' Irrevocable Undertakings and 6,137,538 New Shares which Nathaniel Rothschild and NR Holdings Limited have irrevocably undertaken to apply for under the Open Offer pursuant to the Shareholder Irrevocable Undertakings;

"Company" or "Volex"                        Volex plc, a public limited company incorporated in England and Wales with registered number 158956;

"CREST"                                            the relevant system, as defined in the CREST Regulations, for paperless settlement of share transfers and the holding of shares in uncertificated form (in respect of which Euroclear UK is the operator as defined in the CREST Regulations);

"CREST Regulations"                        the Uncertificated Securities Regulations 2001 (SI 2001 No. 01/3755), as amended;

"Daily Official List"                            the daily record setting out the prices of all trades in shares and other securities conducted on the London Stock Exchange;

"Directors' Irrevocable                      the irrevocable undertakings given by each of Karen Slatford,

Undertakings"                                   Christoph Eisenhardt and Daren Morris to apply for their full Open Offer Entitlements amounting to 30,908 New Shares in aggregate;

"Directors"                                         the current directors of the Company;

"Enlarged Ordinary Share Capital"   the issued ordinary share capital of the Company immediately following the issue of the New Shares pursuant to the Placing & Open Offer;

"Euroclear UK"                                  Euroclear UK and Ireland Limited (formerly CRESTCO Limited), the operator of CREST;

"European Economic Area"               the European Union, Iceland, Norway and Liechtenstein;

"Excluded Overseas Shareholders"  subject to certain exemptions, Shareholders who are located or have registered addresses in any Restricted Jurisdiction;

"Existing Shares"                              the fully paid Ordinary Shares in issue at the Record Date;

"Financial Conduct Authority"           the Financial Conduct Authority of the UK in its capacity as the

or "FCA"                                             competent authority for the purposes of Part VI of FSMA and in the exercise of its functions in respect of admission to the Official List otherwise than in accordance with Part VI of FSMA;

"Form of Proxy"                                form of proxy accompanying the Circular for use by Shareholders in relation to the General Meeting;

"FSMA"                                              the Financial Services and Markets Act 2000, as amended from time to time;

"General Meeting"                            the General Meeting of the Company to be held on 1 July 2014 at 10.00 a.m.;

"Group"                                             the Company and each of its subsidiaries and subsidiary undertakings from time to time;

"Investec" or "Newco Subscriber"      Investec Bank plc, a public limited company, incorporated in England and Wales with registered number 00489604;

"Issue Price"                                      75 pence per New Share;

"Listing Rules"                                   the listing rules made by the FCA under Part VI of FSMA (as amended from time to time);

"London Stock Exchange"                London Stock Exchange plc;

"Newco"                                            Rendezvous 1 Capital (Jersey) Limited;

"New Shares"                                    the new Ordinary Shares to be allotted and issued by the Company pursuant to the Placing & Open Offer;

"Notice of the General Meeting"       the notice of the General Meeting;

"NR Holdings Limited"                       a company registered in England and Wales with company number 05437717;

"Official List"                                     the Official List of the UK Listing Authority;

"Open Offer"                                      the conditional invitation to be contained in the Prospectus to Qualifying Shareholders inviting them to subscribe for the New Shares at the Issue Price on the terms and subject to the conditions set out in the Prospectus and, in the case of Qualifying Non-CREST Shareholders only, the Application Form;

"Open Offer Entitlement"                   the pro rata entitlement of Qualifying Shareholders to subscribe for 4 New Shares for every 11 Existing Shares registered in their name as at the Record Date;

"Ordinary Shares"                             ordinary shares of 25 pence each in the capital of the Company;

"Overseas Shareholders"                  Shareholders who have registered addresses in, or who are resident or ordinarily resident in or citizens of, or which are corporations, partnerships or other entities created or organised under the laws of countries other than the United Kingdom or persons who are nominees of or custodians, trustees or guardians for citizens, residents in or nationals of, countries outside the United Kingdom;

"Placing"                                           the conditional placing by Investec on behalf of the Company of the New Shares, excluding the Committed Shares, pursuant to the Underwriting Agreement;

"Prospectus"                                      the prospectus relating to the Company for the purpose of the Placing & Open Offer (together with any supplements or amendments thereto) expected to be dated 12 June 2014;

"Qualifying Non-CREST                     Qualifying Shareholders holding Ordinary Shares on the

Shareholders"                                   Record Date in certified form;

"Qualifying Shareholders"                holders of Ordinary Shares on the Register of Members at the Record Date;

"Record Date"                                   close of business on 11 June 2014;

"Register of Members"                      the Company's register of members;

"Resolution"                                      the resolution to be proposed at the General Meeting and set out in the Notice of the General Meeting;

"Restricted Jurisdiction"                    each of Australia, Canada, Japan, the Republic of South Africa and the United States and any other jurisdiction where the extension or availability of the Placing & Open Offer (and any other transaction contemplated thereby) would breach any applicable law or regulation;

"Shareholders"                                  holders of Ordinary Shares;

"Shareholder Irrevocable                 the irrevocable undertakings given by Nathaniel Rothschild and

Undertakings"                                   NR Holdings Limited to apply for their full Open Offer Entitlements amounting to 6,137,538 New Shares in aggregate and to vote in favour of the Resolution to be proposed at the General Meeting;

"Sterling" or "£" or "pence"                 the lawful currency of the UK;

"subsidiary"                                       a subsidiary, as that term is defined in section 1159 of the 2006 Act;

"subsidiary undertaking"                   a subsidiary undertaking, as that term is defined in section 1162 of the 2006 Act;

"UK Listing Authority" or                    the FCA in its capacity as the competent authority for the

"UKLA"                                              purposes of Part VI of FSMA and in the exercise of its functions in respect of the admission to the Official List otherwise than in accordance with Part VI of FSMA;

"uncertificated" or                             recorded on the relevant register of the share or security

"in uncertificated form"                    concerned as being held in uncertificated form in CREST and title to which, by virtue of the CREST Regulations, may be transferred by means of CREST;

"Underwriting Agreement"               the underwriting agreement between the Company and Investec dated 12 June 2014 relating to the Placing & Open Offer;

"United Kingdom" or "UK"                  the United Kingdom of Great Britain and Northern Ireland;

"United States" or "US"                       the United States of America, its territories and possessions, any state of the United States of America and the District of Columbia;

"US$" or "$"                                        the lawful currency of the United States; and

"Volex Transformation Plan"            a plan developed by the Company which aims to improve the Group's relationships with its customers and reduce its costs so that it is able to continue to offer quality products at competitive prices. The key elements of the plan focus on increased customer focus, design-to-cost manufacturing, supply chain management and improved financial management.

 

END

 

 

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