4th Oct 2006 07:01
Dolphin Capital Investors Limited04 October 2006 For release at 07.00 Wednesday October 4th 2006 Not for release, publication or distribution in whole or in part, in or into theUnited States, Canada, Australia, the Republic of Ireland, the Republic of SouthAfrica, Japan or any other jurisdiction if to do so would constitute a violationof the relevant laws of such jurisdiction DOLPHIN CAPITAL INVESTORS LIMITED PLACING OF 217,959,896 NEW COMMON SHARES BY PANMURE GORDON AT 93 PENCE PER SHARE TO RAISE £202.7 MILLION (€300.0 MILLION) Dolphin Capital Investors Limited ("Dolphin", "DCI" or the "Company"), the firstreal estate investment company targeting residential resorts in south eastEurope, principally Greece, Cyprus, Turkey and Croatia, announces a placing (the"Placing") of 217,959,896 new common shares of €0.01 each ("Common Shares") at aprice of 93 pence per share to raise £202.7 million (€300.0 million) (beforeexpenses). The net proceeds of the Placing will be used to fund the Company'songoing investment programme. Highlights: • Fundraising of £202.7 million (€300.0 million) at a price of 93 pence per share • Funds used for Dolphin's ongoing investment programme • Investment Manager has identified a pipeline of €280 million of projects, which are in the negotiation stage • Funds expected to be fully committed within the next 12 months • Existing projects are advancing with their development plans • Creates the second largest AIM quoted real estate investment company Defined terms have the meaning set out at the end of this announcement. Unlessotherwise identified, the rate of exchange used throughout this announcement isEuro/GBP of 1.48. Placing Panmure Gordon, broker to the Company, has been appointed as sole bookrunner inconnection with the Placing and has entered into a placing agreement withDolphin under which it has agreed to use reasonable endeavours to procuresubscribers for 217,959,896 new Common Shares at 93 pence per share. The Placingis not underwritten. The Placing is subject to admission of the new Common Shares to trading on AIM.Application has been made for the new Common Shares to be admitted to trading onAIM and it is expected that admission will occur and dealings will commence at8.00 a.m. on 9 October 2006. The new Common Shares will rank pari passu in allrespects with the existing Common Shares traded on AIM. Comments Miltos Kambourides, founder and managing partner of Dolphin Capital Partners,commented: "We are very delighted with the level of support from existing and newinvestors. We look forward to deploying the funds raised in securing additionalprojects and generating significant value for our shareholders." Contacts: Dolphin Capital Investors: +30 210 36 14 255Miltos E Kambourides [email protected] A Charalambides [email protected] Adventis Financial PR 020 7034 4765Peter Binns [email protected] 020 7034 4760/ 07768 392582Annie Evangeli [email protected] 020 7034 4757/ 07778 507162 Grant Thornton Corporate Finance (Nominated Adviser) 020 7383 5100Philip SecrettFiona Kindness Panmure Gordon (Broker) 020 7459 3600Richard GrayDominic MorleyAndrew Potts Additional Information Background Dolphin is managed by Dolphin Capital Partners Limited ("DCP" or the "InvestmentManager"), an investment management business founded in 2004 by MiltosKambourides and Pierre Charalambides after leaving Soros Real Estate Partners.Dolphin was first capitalised with €5 million in summer 2005 by the InvestmentManager and a select group of investors led by partners of Fortress InvestmentGroup. Dolphin invests exclusively in sophisticated Residential Resorts at anearly development stage (the "Projects") in Southeast Europe (mainly Greece,Cyprus, Croatia and Turkey) that integrate residential units with leisurecomponents (e.g. golf, polo, hotel, marina) and which are marketed mainly to theNorthern European markets. Dolphin completed its Admission to trading on AIM inDecember 2005 raising an additional €104 million at 68 pence per share. TheCompany targets returns from its Projects of between 25% and 45% IRR based on alow-risk strategy of acquiring land below market value and assuming no profitsfrom leisure components. Interim Results The Company's interim results for the period ended 30 June 2006 were released on18 August 2006. The highlights of the period are as follows: • profit before tax was €60.9 million (since incorporation on 7 June 2005); • in the period to 30 June 2006, the Company completed the acquisition of three investments committing a total of €70.2 million of which €67.0 million was invested; • Dolphin's share of these Projects has been valued by Colliers International at €138.8 million (before deferred income tax liabilities), substantially ahead of the Investment Manager's expectations at the time of Admission; • a valuation produced by Colliers International at 30 June 2006 indicated a NAV per share of €1.73 (119p) before the impact of the exercise of founding shareholder warrants and the cost of deferred income tax liabilities, of €1.55 (107p) after the impact of the exercise of founding shareholder warrants and before the cost of deferred income tax liabilities, and of €1.34 (93p) after the impact of the exercise of founding shareholder warrants and the cost of deferred income tax liabilities; • a further two investments were completed in July thus bringing the total funds committed to €91 million of the €109 million raised (€5 million seed capital pre listing and €104 million at Admission); • as of 30 June 2006, the share price was 90 pence, an increase of 32% since Admission; • the Company had identified a substantial pipeline of further potential investment opportunities, and is currently at advanced negotiation stages for new investments which would require over €280 million of additional capital; and • the Company's rate of sourcing and executing investments had been considerably ahead of initial forecasts. Net Asset Value The reported net asset value of the Company at 30 June 2006 as disclosed in theCompany's interim results can be summarised as follows: • £ UpliftTotal NAV Before DITL* (millions) 188.1 130.1 75%1Total NAV After DITL* (millions) 163.0 112.7 52%1NAV/Share Before Shareholder Warrants & DITL* • 1.73 119p 75%2NAV per Common Share After Shareholder Warrants & Before DITL* • 1.55 107p 57%2NAV per Common Share After Shareholder Warrants & DITL* • 1.34 93p 37%2 1. Based on a NAV at Admission of £74.1 million / €109.0 million2. Based on the placing price at Admission of 68 pence* "DITL" - deferred income tax liabilityUsing GBP/Euro exchange rate of 0.692 as of 30 June 2006 Net Asset Value Growth As at 30 June 2006, the reported NAV included investments made during theperiod, namely Kilada Hills Golf Resort and Scorpio Bay Resort in Greece, andApollo Heights Polo Resort in Cyprus. The Investment Manager expects that theNAV will continue to grow, fuelled by: • the closing of the Amanmila Resort and Lavender Hills Golf Resort projects; • progress with the planning and permitting process for all existing projects; • increase in the shareholding of Apollo Heights Polo Resort as Dolphin funds its remaining commitment; • conclusion of additional land notarial pre-contracts that have been signed in relation to the Kilada Hills Golf Resort project; and • most importantly, closing of additional Projects in the pipeline that the Investment Manager believes are currently being negotiated at below market land prices or entry valuations Current Project Portfolio Summary Of the €109 million raised before and at the time of Admission, €91.1 millionhas been committed to Projects, €68.8 million of which has been invested in thefirst five Projects as detailed below. Four of these Projects, namely KiladaHills Golf Resort, Scorpio Bay Resort, Apollo Heights Polo Resort and AmanmilaResort, are part of the six investments presented within the Company's admissiondocument published in December 2005 (the "Prospective Investment Portfolio").The one additional investment, Lavender Hills Golf Resort, was sourced andclosed after December 2005. The two remaining investments from the Prospective Investment Portfolio remainunder review but have not been brought to closure for separate reasons: the sitefor Kyparissia Bay Resort falls under the Natura 2000 regime and consequentlythe planning risk remains relatively high, while, in respect of Artemis HillsResort, Dolphin Capital Partners is not comfortable with the proposed minorityposition and the proposed terms of the investment. The Investment Manager believes that all five closed investments aspire to bethe first Residential Resorts of their kind in their respective markets.Dolphin's capital commitments to, and investments in, each Project aresummarised below. Projects closed as at 30 June 2006 Development Country Proposed Land Minimum Residential DCI Shareholding DCI Investment Total Commitment Site (m2) Units Kilada Hills Greece 2,000,000 300 85% €45.0m €45.0m Apollo Heights Cyprus 4,620,000 750 64% €12.5m €15.7m Scorpio Bay Greece 1,720,000 300 51% €9.5m €9.5m Subtotal 8,340,000 1,350 €67.0m €70.2m Projects signed as of 31 July 2006 Development Country Proposed Land Minimum Residential DCI Shareholding DCI Investment Total Commitment Site (m2) Units Amanmila Greece 2,000,000 40 25%-50% - €5.0m Lavender Greece 2,920,000 300 85% €1.8m €15.9mHills Subtotal 4,920,000 340 €1.8m €20.9m Total 13,260,000 1,690 €68.8m €91.1m Investment Pipeline The Investment Manager has identified a number of potential investmentopportunities (the "Investment Pipeline"). If completed, the Investment Pipelinewould require a minimum aggregate capital commitment of approximately €280million of which approximately 60% is targeted to Projects in Greece. Dolphinexpects to fund the majority of the Projects comprising the Investment Pipelinefrom the net proceeds of the Placing. The completion of each such investment inthe Investment Pipeline depends in part upon the completion of the Placing, andalso, amongst other things, upon satisfactory completion of due diligence intoeach of the Investment Pipeline project companies and land sites and theexecution and delivery of final binding agreements in a form mutuallysatisfactory to the parties. There can be no guarantee that Dolphin willcomplete all or any of the Projects that form the Investment Pipeline. The Investment Pipeline consists of 12 Projects, at various stages ofnegotiation. One of the 12 Projects involves additional site expansion for theKilada Hills Golf Resort Project. In addition, the following two Projects are ata more advanced stage with non-binding terms sheets signed by the Company: Sitia Bay Resort, Crete A 200-plus hectare site that the Investment Manager believes to be one of themost advanced residential resorts in Crete in terms of permits. It will includea golf course, marina, hotel and residences. The total investment by the Companyis expected to be up to €25 million. Livka Bay Resort, Croatia A 55-plus hectare site that the Investment Manager believes to be one of themost advanced residential resorts in Croatia in terms of permits. Livka BayResort is located on the island of Solta near Split and will include a marina, ahotel and residences. The total investment by the Company is expected to be €35million. The Investment Manager believes that the Projects forming the InvestmentPipeline meet Dolphin's investment criteria and that the proceeds of the Placingare expected to be committed to Projects within 12 months of the completion ofthe Placing. Amendments to the Investment Management Agreement As a result of the Placing, certain changes to the Investment ManagementAgreement are necessary to amend terms structured specifically around theoriginal placing undertaken at the time of Admission. The key changes aresummarised as follows: (i) Management Fee The management fee payable by the Company to Dolphin Capital Partners has beenamended from 2 per cent. of equity funds raised (being €109 million before thePlacing) to now be 2 per cent. of Equity Funds, which is defined as follows: • €109 million; plus • the gross proceeds of further equity issues; plus • realised net profits less any amounts distributed to Shareholders. (ii) Escrow arrangements in relation to the performance fee The escrow arrangements for the payment of performance fees payable to theInvestment Manager have been amended to take into account the proceeds of thePlacing. The following table compares the escrow arrangements at the time ofAdmission, and following the completion of the Placing. The key change relatesto the final release of performance fees from the escrow account to theInvestment Manager which will only occur once the Company has distributed toShareholders the €109 million equity funds raised plus the proceeds of thePlacing (all at an 8 per cent. compound return). This amendment further alignsthe Investment Manager with Shareholders by focusing the Investment Manager onmaximising shareholder returns, which once realised, are distributed toShareholders. Escrow At Admission Amended terms Up to €109m returned 50% of overall performance fee 50% of overall performance fee held in escrow held in escrow Above €109m returned 25% of overall performance fee 25% of overall performance fee held in escrow held in escrow Above €109m plus 8% hurdle All performance fees released from 25% of any performance fee earnedreturned escrow held in escrow €109m plus new equity funds N/A All performance fees released fromreturned plus 8% hurdle escrow Warrant Deed The Directors have considered the fee arrangements that were entered into withthe Investment Manager and as set out in the Company's admission document inDecember 2005. The Directors have entered into a warrant deed arrangement (the"Over-performance Warrant Deed") with the Investment Manager to furtherincentivise the Investment Manager and to provide an incentive arrangement thatfocuses on maximising NAV. The key terms of the Over-performance Warrant Deed are as follows: • the issue of over-performance warrants equivalent to 10 per cent. of the NAV uplift above 30 per cent. when comparing the increase between the Base NAV and the Closing NAV; • the Base NAV is the NAV at 30 June 2006 plus the gross proceeds of the Placing (calculated in Euros); • the Closing NAV is the NAV reported at 31 December 2007 plus any dividends and any other distributions paid by the Company (calculated in Euros); • the warrant exercise price is €0.01; and • the Common Shares issued as a result of the exercise of the warrants will be subject to a lock-in agreement for a period of 2 years from the date of publication of the 31 December 2007 NAV. The Directors (excluding Miltos Kambourides who is considered a related partyfor the purposes of the proposed amendments to the Investment ManagementAgreement and the entering into of the Over-performance Warrant Deed), havingconsulted with Grant Thornton Corporate Finance, the Company's nominatedadviser, consider the amendments to the Investment Management Agreement and theentering into of the Over-performance Warrant Deed to be fair and reasonableinsofar as Shareholders are concerned. Variation of Distributions Policy The AIM admission document of the Company dated 5 December 2005 provided that,"(f)or the first three years following Admission only, the profits realised fromProjects (net of performance fees due) could be made available for reinvestmentinto further Projects as determined by the Board". The Board has approved avariation to this policy with the effect that following the expiry of the threeyear period following Admission the Company shall distribute realisedproceeds/returns from a Project up to an amount representing the aggregate ofthe capital invested in the Project and the preferred annualised return of 8 percent. per annum, but that any profits realised over and above this aggregateamount may be reinvested in further investment Projects as determined by theBoard rather than immediately distributed. Amendment to quarterly NAV reporting As set out in the Company's AIM admission document, the Company reports its NAVon a quarterly basis. The valuation guideline adopted by the Directors was forproperty valuations to be conducted on a quarterly basis. The Directors have hadan opportunity to discuss the recent property valuation with the InvestmentManager and believe that the additional cost and time involved in obtainingvaluations on a quarterly basis outweigh the benefits. Accordingly, theDirectors will amend the Company's valuation guidelines so that a propertyvaluation is only obtained at the end of June and December of each year. This isin line with a number of the Company's peers listed on AIM. The Company willcontinue to report NAV on a quarterly basis, based on the half yearly valuationof each of the Projects. However, the Company reserves the right to undertakequarterly valuations on selected Projects, including for example Projects signedafter the end of a half year. Trading Update Following the announcement of the Company's interim results on 18 August 2006,the Company wishes to update investors in relation to developments at the KiladaHills Golf Resort in Greece. On 30 August 2006, the Company received finalbuilding permits for 46,741 buildable square metres. The permits include thoserequired for an 18-hole golf course, a hotel and residential units and theInvestment Manager therefore believes this makes Kilada Hills Golf Resort themost mature Project in terms of the number of granted permits in Greece. Inaddition, the Investment Manager is currently exploring an offer for partialrealisation of the Company's investment in the Kilada Hills Golf Resort Project. Next Steps for Dolphin Following the completion of the Placing, Dolphin will aim to: • advance the development plans of existing Projects; • invest the net proceeds of the Placing in Projects, including those in the Investment Pipeline, some of which are already in advanced negotiation stages; • expand its investments into Croatia and Turkey, in order to diversify the portfolio and strengthen DCI's position as the leading investor in the Southeast European residential resort market; • continue to grow NAV from both existing and new Projects; • expand the DCP team; and • explore potential project realisations and/or exits. Looking Ahead Since its admission to trading on AIM in December 2005, Dolphin has successfullyestablished itself as one of the leading investment companies for theresidential resort sector in Southeast Europe and has almost fully committed itsexisting funds, to date in investments in Greece and Cyprus. Following a very productive first half of the year, Dolphin expects to furthercapitalise on its first mover advantage and continue to build its investmentportfolio. Dolphin's existing Project pipeline consists of highly attractiveinvestment opportunities that the Investment Manager believes could generatestrong development and capital returns. ................................................................................ Grant Thornton Corporate Finance, a division of Grant Thornton UK LLP, which isauthorised and regulated by the Financial Services Authority, is acting asnominated adviser to Dolphin and for no one else in connection with the mattersreferred to above and will not be responsible to anyone other than Dolphin forproviding the protections afforded to its customers or for providing advice toany other person in relation to the matters referred to above. Panmure Gordon (Broking) Limited, which is authorised and regulated by theFinancial Services Authority, is acting for Dolphin and for no one else inconnection with the matters referred to above and will not be responsible toanyone other than Dolphin for providing the protections afforded to itscustomers or for providing advice to any other person in relation to the mattersreferred to above. This announcement has been issued by, and is the sole responsibility of,Dolphin. This announcement does not constitute or form part of any offer orinvitation to sell or issue, or any solicitation of any offer to acquire,purchase or subscribe for any securities. This announcement has not beenexamined or approved by the FSA or the London Stock Exchange or any otherregulatory authority. Definitions The following definitions apply throughout this document unless the contextrequires otherwise: "Admission" admission of the Common Shares of the Company to trading on AIM in December 2005 "AIM" the market of that name operated by the London Stock Exchange "Business Day" a day, other than a Saturday or Sunday, on which banks are open for business in London "Colliers International" Colliers International S.A. "Common Shareholders" or "Shareholders" registered holders of Common Shares or Depositary Interests, as the case may be "Common Shares" common shares of €0.01 each in the Company and, save where the context requires otherwise, Depositary Interests representing such shares "Company" or "Dolphin" Dolphin Capital Investors Limited "CREST" the computerised settlement system (being the relevant system as defined in the Uncertificated Securities Regulations 2001 (S.I 2001/3755) to facilitate the transfer of title of shares in uncertificated form operated by CRESTCo Limited "Deed Poll" the deed poll dated 21 November 2005 entered into by the depositary and which constituted the Depositary Interests "Depositary" or "Computershare" Computershare Investor Services PLC "Depositary Interests" independent securities to be issued by the Depositary representing Common Shares which may be held and transferred through the CREST system "Directors" or "Board" the directors of the Company including any duly appointed committee thereof "Dolphin Capital Partners" or "DCP" Dolphin Capital Partners Limited "Fortress Investment Group" or "Fortress" Fortress Investment Group LLC "Founding Shareholders" the 13 parties, including the Investment Manager and Fortress, who in June 2005 subscribed a total of €5 million for Common Shares in the Company "Founding Shareholder Warrants" the warrants to subscribe for Common Shares, subject to the terms and conditions set out in the Founding Shareholder Warrant Instrument and issued to the Founding Shareholders "Founding Shareholder Warrant Instrument" the instrument of the Company dated 6 December 2005 constituting the Founding Shareholder Warrants "Grant Thornton Corporate Finance" the corporate finance division of Grant Thornton UK LLP which is authorised and regulated by the Financial Services Authority to carry on investment business "Investment Pipeline" the identified Projects in respect of which Dolphin is currently negotiating a participation, as described in this announcement "Investment Management Agreement" the investment management agreement between the Company and the Investment Manager dated 1 August 2005 (as amended and restated on 8 December 2005) "Investment Manager" or "DCP" Dolphin Capital Partners Limited "Internal Rate of Return" or "IRR" internal rate of return, being the annualised discounted rate at which the net present value of the relevant cash flows sum to zero, calculated in accordance with accepted industry practice "London Stock Exchange" London Stock Exchange plc "NAV" or "Net Asset Value" the value of the assets of the Company less its liabilities, determined in accordance with the accounting principles adopted by the Company from time to time "Net asset Value per Common Share" the Net Asset Value divided by the number of Common Shares in issue from time to time "Panmure Gordon" Panmure Gordon (Broking) Limited "Placees" persons who are to acquire Common Shares pursuant to the Placing "Placing" means the conditional placing by Panmure Gordon as described in this announcement "Placing Agreement" the conditional placing agreement dated 4 October 2006 and entered into between the Company, the Investment Manager, Panmure Gordon and Grant Thornton Corporate Finance "Placing Price" 93 pence per Common Share "Region" or "Southeast Europe" Croatia, Cyprus, Greece, and Turkey "Residential Resorts" or "Project(s)" master-planned residential resort developments which incorporate a combination of, but are not limited to, leisure facilities such as hotels, golf courses, polo fields, country clubs, spas and marinas "UK" or "United Kingdom" the United Kingdom of Great Britain and Northern Ireland "US" or "USA" or "United States" United States of America (including the States thereof and the District of Columbia), its territories and possessions In this document, unless otherwise specified, all references to "pounds" or "£"are to United Kingdom pounds sterling, references to "dollars" or "$" are to USdollars and all references to "Euro" or "•" are to the unit of money used in allEuropean Union countries which have adopted the single European currency unit. This press release may contain forward-looking statements with respect toDolphin and its operations, strategy, financial performance and condition. Thesestatements generally can be identified by use of forward looking words such as"may", "will", "expect", "estimate", "anticipate", "use", "intends", "believe"or "continue" or the negative thereof or similar variations. The actual resultsand performance of Dolphin could differ materially from those expressed orimplied by such statements. Such statements are qualified in their entirety bythe inherent risks and uncertainties surrounding future expectations, includingthat the transaction contemplated herein is completed. Important factors thatcould cause actual results to differ materially from expectations include, amongother things, general economic and market factors, competition, changes ingovernment regulation. The cautionary statements qualify all forward-lookingstatements attributable to Dolphin and persons acting on its behalf. Unlessotherwise stated, all forward-looking statements speak only as of the date ofthis press release and the parties have no obligation to update such statements. APPENDIX Axia Ventures Limited ("Axia"), of which the Company's Director Mr AntoniosAchilleoudis is also a director, has acted as sub-placing agent to PanmureGordon in connection with the Placing and will therefore receive a proportion ofthe Placing commissions payable to Panmure Gordon under the Placing. This appendix contains important information for Placees in the United Kingdom.Members of the public are not eligible to take part in the Placing. Thisappendix and the terms set out herein are directed only at persons in the UnitedKingdom selected by Panmure Gordon who have professional experience in mattersrelating to investments and are "investment professionals" within the meaning ofArticle 19 (5) of the Financial Services and Markets Act 2000 (FinancialPromotion) Order 2005 (as amended) (the "Order"), are persons falling withinArticle 49(2)(a) to (d) ("high net worth companies, unincorporated associations,etc.") of the Order or are otherwise persons to whom it may lawfully becommunicated (all such persons together being referred to as "RelevantPersons"). Terms of the Placing If a Relevant Person chooses to participate in the Placing by making oraccepting an offer to acquire new Common Shares (each such Relevant Person whoseparticipation is accepted by Panmure Gordon in accordance with this appendixbeing hereinafter referred to as a "Placee" and together, as the "Placees") itwill be deemed to have read and understood this announcement and this appendixin its entirety and to be making or accepting such offer on the terms and to beproviding the representations, warranties and acknowledgements, contained inthis appendix. The new Common Shares and Depositary Interests referred to in this announcementhave not been and will not be registered under the US Securities Act of 1933(the "Securities Act") or the securities laws of any state of the United States,and may not be offered or sold, taken up, delivered or transferred (directly orindirectly) and will not qualify for sale within the United States. There willbe no public offer of the new Common Shares or the Depositary Interests in theUnited States. The new Common Shares and Depositary Interests have not beenrecommended, approved or disapproved by any United States federal or statesecurities commission or regulatory authority. Furthermore, the foregoingauthorities have not confirmed the accuracy or determined the adequacy of thisannouncement. Any representation to the contrary is a criminal offence in theUnited States. The new Common Shares and Depositary Interests will not be lodged or registeredwith the Australian Securities and Investments Commission under Australia'sCorporations Law and are not being offered for subscription or sale and may notbe directly or indirectly offered, sold or delivered in or into Australia or forthe account or benefit of any person or corporation in (or with a registeredaddress in) Australia. No document in relation to the new Common Shares or the Depositary Interests hasbeen or will be lodged for registration with the Registrar of Companies in theRepublic of Ireland and the new Common Shares will not be offered, sold ordelivered, directly or indirectly in the Republic of Ireland. All subscribersfor new Common Shares must provide addresses outside the Republic of Ireland forthe receipt of certificates for new Common Shares. The relevant clearances have not been, and will not be obtained from theMinistry of Finance of Japan and no circular in relation to the new CommonShares or the Depositary Interests has been or will be lodged with or registeredby the Ministry of Finance of Japan. Neither the new Common Shares nor theDepositary Interests may therefore be offered or sold, directly or indirectly,in or into Japan, its territories and possessions and any areas subject to itsjurisdiction. The approval of the South African Exchange Control Authorities has not been, andwill not be, obtained in relation to the new Common Shares or the DepositaryInterests. Neither the new Common Shares nor the Depositary Interests maytherefore be offered or sold directly or indirectly in or into South Africa. This announcement and appendix do not constitute an offer to sell or issue or asolicitation of an offer to buy or subscribe for new Common Shares or DepositaryInterests in any jurisdiction in which to do so would be unlawful. Thedistribution of this announcement and the placing and issue of the new CommonShares and Depositary Interests in certain jurisdictions may be restricted bylaw. Persons to whose attention this announcement has been drawn are required bythe Company and Panmure Gordon to inform themselves about and to observe anysuch restrictions. 1. Panmure Gordon will arrange the Placing as agent for and on behalf of theCompany. Participation will only be available to persons invited to participateby Panmure Gordon. Panmure Gordon will determine in its absolute discretion theextent of each Placee's participation in the Placing, which will not necessarilybe the same for each Placee. 2. The price payable per new Common Share shall be the Placing Price (inpounds). 3. A Placee's commitment to subscribe for a fixed number of new Common Shareswill be agreed with and confirmed to it orally by Panmure Gordon (the "PlacingCommitment") and a contract note (a "Contract Note") will be dispatched as soonas possible thereafter. The oral confirmation to the Placee by Panmure Gordon(the "Oral Confirmation") constitutes an irrevocable, legally bindingcontractual commitment to Panmure Gordon (as agent for the Company) to subscribefor the number of new Common Shares allocated to it on the terms set out in thisappendix. 4. Commissions will not be paid to Placees in connection with the Placing. 5. Panmure Gordon has the right, inter alia, to terminate the Placing (in itsabsolute discretion) if: (i) prior to Admission, any of the representations orwarranties contained in the Placing Agreement are untrue or misleading in anymaterial respect; or (ii) prior to Admission there occurs an event of forcemajeure. If the Placing Agreement is terminated prior to Admission, the Placingwill lapse and the rights and obligations of the Placees hereunder shall ceaseand determine at such time and no claim can be made by any Placee in respectthereof. In such event, all monies (if any) paid by the Placees to PanmureGordon at such time shall be returned to the Placees at their sole risk withoutany obligation on the part of the Company or Panmure Gordon or any of theirrespective affiliates to account to the Placees for any interest earned on suchfunds. The Placees acknowledge and agree that the Company and Panmure Gordon mayexercise their contractual rights to waive or to extend the time and/or date forfulfilment of any of the conditions in the Placing Agreement. Any such extensionor waiver will not affect Placees' commitments. 6. Neither Panmure Gordon nor the Company shall have any liability to anyPlacee (or to any other person whether acting on behalf of a Placee orotherwise) in respect of the exercise of its contractual rights to waive or toextend the time and/or date for the satisfaction of any condition in the PlacingAgreement or in respect of the Placing generally. 7. Each Placee acknowledges to, and agrees with, Panmure Gordon for itselfand as agent for the Company, that except in relation to the information in thisannouncement, it has relied on its own investigation of the business, financialor other position of the Company in deciding to participate in the Placing. 8. Settlement of transactions in the new Common Shares following Admissionwill take place through settlement of the Depositary Interests within CREST,subject to certain exceptions. Panmure Gordon reserves the right to requiresettlement for and delivery of the new Common Shares to the Placees in suchother means that it deems necessary if delivery or settlement of the DepositaryInterests is not possible within CREST within the timetable set out in thisannouncement or would not be consistent with the regulatory requirements in thejurisdictions of such Placees. 9. It is expected that settlement of the Placing will occur on 9 October2006. On that date each Placee must settle the full amount owed by it in respectof the new Common Shares allocated to it. Panmure Gordon may (after consultationwith the Company) specify a later settlement date at its absolute discretion.Payment must be made in cleared funds. The payment instructions for settlementin CREST and settlement outside of CREST will be set out in the Contract Note.The trade date of the new Common Shares is 4 October 2006. Interest ischargeable daily on payments to the extent that value is received after the duedate at the rate per annum of 2 percentage points above the Barclays Bank plcbase rate. If a Placee does not comply with these obligations, Panmure Gordonmay sell the new Common Shares allocated to such Placee (as agent for suchPlacee) and retain from the proceeds, for its own account, an amount equal tothe Placing Price plus any interest due. The relevant Placee will, however,remain liable, inter alia, for any shortfall below the Placing Price and it maybe required to bear any stamp duty or stamp duty reserve tax (together with anyinterest or penalties) which may arise upon the sale of its new Common Shares onits behalf. Time shall be of the essence as regards the obligations of Placeesto settle payment for the new Common Shares and to comply with their otherobligations under this appendix. 10. If new Common Shares are to be delivered to a custodian or settlement agentof a Placee, the relevant Placee should ensure that its Contract Note is copiedand delivered immediately to the relevant person within that organisation.Insofar as new Common Shares are to be registered in the name of a Placee orthat of its nominee, such new Common Shares will, subject as provided below, beso registered free from any liability to UK stamp duty or stamp duty reservetax. Representations and Warranties by Placees By participating in the Placing, each Placee (and any persons acting on itsbehalf): 1. represents and warrants that it has read this announcement in its entiretyand acknowledges that its participation in the Placing will be governed by theterms of this appendix and press release and the Placing Agreement; 2. represents, warrants and undertakes that it will subscribe for the newCommon Shares allocated to it in the Placing and pay up for the same inaccordance with the terms of this appendix failing which the relevant new CommonShares may be placed with other subscribers or sold as Panmure Gordon determinesand without incurring liability to such Placee; 3. undertakes and acknowledges that its obligations under the Placing areirrevocable; 4. represents and warrants that it is entitled to subscribe for new CommonShares under the laws of all relevant jurisdictions which apply to it and thatit has fully observed such laws and obtained all such governmental and otherguarantees and other consents which may be required thereunder and complied withall necessary formalities; 5. acknowledges that it is not entitled to rely on any information(including, without limitation, any information contained in any managementpresentation given in relation to the Placing) other than that contained in thisannouncement (including this appendix); 6. represents and warrants that the issue to the Placee, or the personspecified by such Placee for registration as holder of new Common Shares, willnot give rise to a liability under any of sections 67, 70, 93 or 96 of theFinance Act 1986 (depositary receipts and clearance services); 7. represents and warrants that it has complied with its obligations inconnection with money laundering under the Criminal Justice Act 1993 and theMoney Laundering Regulations 2003 (the "Regulations") and, if it is makingpayment on behalf of a third party, that satisfactory evidence has been obtainedand recorded by it to verify the identity of the third party as required by theRegulations; 8. represents and warrants that it is a person falling within Article 19 (5)or Article 49(2)(a) to (d) of the Order and undertakes that it will acquire,hold, manage or dispose of any new Common Shares that are allocated to it forthe purposes of its business; 9. represents and warrants that it has complied and will comply with allapplicable provisions of the Financial Services and Markets Act 2000 ("FSMA")with respect to anything done by it in relation to the new Common Shares in,from or otherwise involving the United Kingdom and will not sell or offer tosell the new Common Shares in a manner which will result in an offer to thepublic in the United Kingdom within the meaning of FSMA; 10. represents and warrants that its obligations under the Placing are valid,binding and enforceable and that it has all necessary capacity and authority,and has obtained all necessary consents and authorities to enable it to committo participation in the Placing and to perform its obligations in relationthereto and will honour its obligations (including, without limitation, in thecase of any person on whose behalf it is acting, all necessary consents andauthorities to agree to the terms set out or referred to in this announcement); 11. acknowledges that Panmure Gordon is acting solely for the Company and thatparticipation in the Placing is on the basis that it is not and will not be aclient or customer of Panmure Gordon or any of its affiliates and that PanmureGordon and its affiliates have no duties or responsibilities to it for providingthe protections afforded to their clients or customers or for providing advicein relation to the Placing or in respect of any representations, warranties,undertakings or indemnities contained in the Placing Agreement nor for theexercise or performance of any of Panmure Gordon's rights and obligationsthereunder, including any right to waive or vary conditions or exercise anytermination right; 12. undertakes and agrees that (i) the person whom it specifies forregistration as holder of the new Common Shares will be (a) the Placee or (b) anominee of the Placee, (ii) neither Panmure Gordon nor the Company or any oftheir respective affiliates will be responsible for any liability to stamp dutyor stamp duty reserve tax resulting from a failure to observe this requirementand (iii) the Placee and any person acting on its behalf agrees to subscribe onthe basis that the new Depositary Interests will be allotted to the CREST stockaccount of Panmure Gordon who will act as settlement agent in order tofacilitate the settlement process; 13. acknowledges that any agreements entered into by it pursuant to these termsand conditions shall be governed by and construed in accordance with the laws ofEngland and it submits (on behalf of itself and on behalf of any person on whosebehalf it is acting) to the exclusive jurisdiction of the English courts asregards any claim, dispute or matter arising out of any such contract; 14. acknowledges that the new Common Shares have not been and will not beregistered under the Securities Act or under the relevant securities laws of anystate of the United States, any of Australia, Japan, the Republic of Ireland orSouth Africa or any state or territory within any such country and, subject tocertain limited exceptions, may not be directly or indirectly offered, sold,renounced, transferred, taken-up or delivered in, into or within thosejurisdictions; 15. represents, warrants and acknowledges to Panmure Gordon for itself and asagent for the Company that it is outside the United States and will only offerand sell the new Common Shares outside the United States in offshoretransactions in accordance with Regulation S of the Securities Act; 16. represents, warrants and undertakes and agrees that neither it nor itsaffiliates (as defined in Rule 501(b) of the Securities Act) nor any personacting on its or their behalf have engaged in or will engage in any "generalsolicitation or general advertising" (within the meaning of Regulation D underthe Securities Act) or "directed selling efforts" (as defined in Regulation Sunder the Securities Act) in connection with any offer or sale of the Shares; 17. acknowledges that the agreement to settle each Placee's subscription(and/or the subscription of a person for whom it is contracting as agent) freeof stamp duty and stamp duty reserve tax depends on the settlement relating onlyto a subscription by it and/or such person direct from the Company for theCommon Shares in question. Such agreement assumes that the new Common Shares arenot being acquired in connection with arrangements to issue depositary receiptsor to transfer the new Common Shares into a clearance service. If there were anysuch arrangements, or the settlement related to other dealing in the new CommonShares, stamp duty or stamp duty reserve tax may be payable, for which neitherthe Company nor Panmure Gordon nor any of their respective affiliates will beresponsible. If this is the case, the relevant Placee should take its own adviceand notify Panmure Gordon accordingly. In addition, Placees should note thatthey will be liable for any capital duty, 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 outsidethe UK by them or any other person on the acquisition by them of any new CommonShares or the agreement by them to acquire any new Common Shares; and 18. acknowledges that any monies of any Placee or any person acting on behalfof the Placee held or received by Panmure Gordon will not be subject to theprotections conferred by the UK Financial Services Authority's Client MoneyRules. As a consequence, these monies will not be segregated from the monies ofPanmure Gordon and may be used by Panmure Gordon in the course of its business,and the relevant Placee or any person acting on its behalf will therefore rankas a general creditor of Panmure Gordon. The acknowledgements, undertakings, representations and warranties referred toabove are given to each of the Company and Panmure Gordon (for their own benefitand, where relevant, the benefit of their respective affiliates) and areirrevocable. The Company and Panmure Gordon will rely upon the truth andaccuracy of the foregoing acknowledgements, undertakings, representations andwarranties. Settlement Details No Placing letters will be issued. Conditional Contract Notes will be issued inaccordance with standard settlement instructions between Placees and PanmureGordon. Panmure Gordon will use CREST account 83801 to settle on a DVP basiswith Placees' confirmed splits with a trade date of 4 October 2006 and asettlement date of 9 October 2006. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Dci Advisors