Proposed Placing Announcement

9th Apr 2008 07:14

D1 Oils Plc09 April 2008 NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO THE UNITED STATES OF AMERICA, AUSTRALIA, CANADA OR JAPAN D1 Oils plc 9 April 2008 D1 Oils plc Proposed Placing of 64,384,000 new Ordinary Shares D1 Oils plc ("D1" or the "Company") plans to raise £16.1 million (approximately£14.9 million after expenses) through a placing with existing shareholders of64,384,000 new Ordinary Shares in the Company at 25 pence per Ordinary Share(the "Placing Shares"). Highlights • Placing of 64,384,000 new Ordinary Shares at 25 pence per share raising £16.1 million before expenses • Proceeds of the Placing will be used to fund inter alia: o Revised strategy and growth of the business o D1's continued investment in its plant science business o D1's future cash contributions in relation to its joint venture with BP This announcement includes the text of a letter from the Chairman of the Companyincluded in a circular to shareholders to be posted on 9 April 2008, whichincludes further information on the Placing and an update on currentdevelopments of the business of the Company. Dresdner Kleinwort Securities Limited, Broker to the Company, is placing thePlacing Shares with existing shareholders as agent for the Company. DresdnerKleinwort Limited is Nominated Adviser to the Company. The Placing is subject to shareholder approval at an Extraordinary GeneralMeeting to be held on 9 May 2008. The Placing Price represents a discount of approximately 34 per cent. to theclosing middle market price of 37.75 pence per share on 8 April 2008, the lastBusiness Day prior to this announcement. The full terms and conditions of the Placing are set out in Appendix II to thisannouncement. Lord Oxburgh of Liverpool, Non-Executive Chairman of D1, said, "The political momentum to reduce emissions from transport and enhance energysecurity remains substantial in the majority of developed economies, and thereis growing recognition of the potential for farmers in the developing world tomeet this demand. Against this background there is real concern that it will notbe possible to meet demand for both fuel and food without threatening forests indeveloping countries. In this situation, Jatropha curcas brings the advantagesof reforestation and sequestration of CO2 in the trees and their root systems,the production of a feedstock oil for biodiesel from the grain, and the creationof jobs in some of the poorest parts of the world. The short-term challengesfacing the European biofuels industry only serve to reinforce the long-termglobal requirement for low-cost, alternative feedstocks to produce biofuels. This reinforces the imperative at the heart of D1's business strategy: the needto develop low-cost supplies of alternative, sustainable raw materials forbiofuels that are not subject to the same price pressures as food-grade crops.We are therefore refocusing the business on the upstream breeding, planting andmanaging of new varieties of sustainable, commercial biofuel crops, principallyJatropha curcas, and intend to withdraw from refining and trading operations inthe UK. The outcome of this placing and the significant levels of interest shownby the investment community demonstrate the continuing market confidence in thepotential of D1's business plan and its strategy to build a leadership positionin the global biofuels industry." Enquiries: D1 Oils plc Graham Prince, Director, Corporate Communications Tel: +44 (0) 3043 8732 Mob: +44 (0)7973 323 840 Brunswick Group Kate Holgate Tel: +44 (0) 20 7404 5959 Dresdner Kleinwort David Hutchison, Managing Director Keith Welch, Vice President Tel: +44 (0) 20 7623 8000 This announcement does not constitute an offer to sell or an invitation tosubscribe for, or the solicitation of an offer to buy or to subscribe for,Ordinary Shares in any jurisdiction in which such an offer or solicitation isunlawful and is not for distribution in or into Canada, Japan, the United Statesor Australia (a "Prohibited Jurisdiction"). The Ordinary Shares have not beenand will not be registered under the Securities Act or under the applicablesecurities laws of any state in the United States or any Prohibited Jurisdictionand, unless an exemption under such acts or laws is available, may not beoffered for sale or subscription or sold or subscribed directly or indirectlywithin a Prohibited Jurisdiction or for the account or benefit of any national,resident or citizen of a Prohibited Jurisdiction. The distribution of thisannouncement in other jurisdictions may be restricted by law and thereforepersons into whose possession this announcement comes should inform themselvesabout and observe any such restrictions. Any failure to comply with theserestrictions may constitute a violation of the securities laws of suchjurisdictions. The contents of this announcement are not to be construed as legal, financial ortax advice. If necessary, each recipient of this announcement should consulthis, her or its own legal adviser, financial adviser or tax adviser for legal,financial or tax advice. Dresdner Kleinwort Limited and Dresdner Kleinwort Securities Limited, who areauthorised and regulated by the Financial Services Authority, and Dresdner BankAG, London Branch, which is authorised by BAFin and by the Financial ServicesAuthority and which is regulated by the Financial Services Authority for theconduct of designated investment business in the United Kingdom, are acting forthe Company and for no one else in connection with the Placing and will not beresponsible to anyone other than the Company for providing the protectionsafforded to clients of Dresdner Bank AG, London Branch, Dresdner KleinwortSecurities Limited and Dresdner Kleinwort Limited, or for affording advice inrelation to the Placing, or any other matters referred to herein. Theresponsibilities of Dresdner Kleinwort Limited, as Nominated Adviser under theAIM Rules, are owed solely to the London Stock Exchange and are not owed to theCompany or to any of the Directors. No representation or warranty, express or implied, is made by Dresdner KleinwortLimited, Dresdner Kleinwort Securities Limited and/or Dresdner Bank AG, LondonBranch as to any of the contents of this announcement for which D1 is solelyresponsible. This announcement contains certain statements that are or may beforward-looking. These statements typically contain words such as "intends","expects", "anticipates", "estimates" and words of similar import. Bytheir nature, forward-looking statements involve risk and uncertainty becausethey relate to events and depend on circumstances that will occur in the futureand therefore undue reliance should not be placed on such forward-lookingstatements. Forward-looking statements speak only as of the date they are madeand the Company undertakes no obligation to update publicly any of them in lightof new information or future events except as required by the AIM Rules. Thereare a number of factors that could cause actual results and developments todiffer materially from those expressed or implied by such forward-lookingstatements. THE SECURITIES REFERRED TO IN THIS ANNOUNCEMENT HAVE NOT BEEN REGISTERED WITH,RECOMMENDED, 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 following is an abridged version of the text of the letter from the Chairmanof the Company included in a circular to be sent to Shareholders on 9 April2008. "Introduction Your Board has today announced that the Company plans to raise £16.1 millionbefore expenses (approximately £14.9 million after expenses) through a placingwith existing shareholders, underwritten by DBAG, of 64,384,000 Ordinary Sharesin the Company at 25 pence per Ordinary Share. The purpose of this document isto provide you with further information on the Placing and to convene the EGM toseek the approval of Shareholders for the Resolutions necessary to effect thePlacing. Development of the business to date Since D1 was listed on AIM in October 2004, the Company has made significantprogress in seeking to establish a global biodiesel business. In June 2005, weraised funding of £24.4 million to enable the business to work towards a visionof creating value from "earth to engine" through three core activities ofagronomy, refining and trading. In December 2006, a further £49.2 million wasraised to fund the development of our plant science programme and to expand ourUK refining capacity. In June 2007, we announced our 50/50 joint venture with BP, which was approvedby our shareholders at an extraordinary general meeting in July. Theestablishment of the joint venture vehicle, D1-BP Fuel Crops, recognises thepotential for the development of biofuels that make use of marginal land. Inoperational terms, we believe it is turning the range of jatropha plantingoperations and relationships established by D1 internationally since 2005 into acohesive, integrated and sustainable production base for the supply of crudejatropha oil at competitive prices. With effect from 1 October 2007, all of D1's planting of Jatropha curcas hasbeen through D1-BP Fuel Crops and it is now able to approach planting and supplychain activities with greater thoroughness; calculating the performance ofexisting planting more accurately; concentrating planting on areas where thecrop is proven to grow well; evaluating the likely logistical costs of bringingoil to market and assessing the ability of third party grain and oil supplypartners to deliver. Total planting and rights to off-take at 31 March 2008 was 192,016 hectaresworldwide. D1-BP Fuel Crops is evaluating a range of options for organisingplanting operations along with different models to seek to optimise the futuredelivery of oil to market. We expect that D1-BP Fuel Crops will produce itsfirst modest volumes of jatropha oil during the second half of 2008. In tandem with the formation of D1-BP Fuel Crops, D1's plant science programmehas been established as a separate company, wholly owned by D1 Oils plc. D1 OilsPlant Science Limited ("DOPSL") now acts as the exclusive supplier to D1-BP FuelCrops of elite planting material. It also implements its Sustainable Oil SupplyProgramme (SOSP) to enable oil production forecasting and to monitor theimplementation of sustainability policies. Our plant science operations have made solid progress throughout the year andhave been expanded to support joint venture planting in each region. 2007 brought significant challenges for the biofuels industry, including risingfeedstock prices and growing concerns in Europe over the sustainability of somefeedstocks. Imports of heavily subsidised biodiesel from the United States intothe EU market have exacerbated these issues. These challenges, we believe, havereinforced the imperative at the heart of D1's business strategy: the need todevelop low-cost, long-term supplies of sustainable, alternative, feedstock forbiofuels that are not subject to the same price pressures as food-grade crops.We believe that the development of alternative, sustainable biofuels feedstocks,of which Jatropha curcas is one of the most promising, offers significantopportunities for growth in the biofuels sector. In light of this potential and the continuing difficulties facing biodieselrefining in EU markets, D1 intends to cease its refinery and trading operationsand, instead, to refocus its business exclusively on technology and servicesrequired for the upstream breeding, development and planting of new varieties ofcommercial biofuel crops. As announced on 7 March 2008, we have alreadycommenced a consultation process with employees at both our Middlesbrough andBromborough sites. Insofar as we have not done so already, we will consult withemployees in relation to the future of the sites including their potentialclosure/sale. Update on activities Plant science and technology We have continued to make solid progress in our plant science programme. We haveexpanded our collection of Jatropha curcas accessions from around the globe, andbegan putting the most promising varieties from our already significantcollection through commercial breeding and product placement trials to identifyoptimal adaptation to different cultivation conditions. As at 31 December 2007,we had a total of 33 product placement and research trial sites for jatropha inoperation worldwide. We have established a central breeding and development facility in Cape Verdeand transferred our global collection of jatropha material to this site. We areexpanding our research and testing infrastructure worldwide in anticipation ofthe growth in business from the D1-BP Fuel Crops joint venture. We have begun toestablish new plant science development centres, and further facilities areplanned for other countries in which D1-BP Fuel Crops will operate, enabling D1to support fully the joint venture's planting activities. We have continued the development of our breeding programme to create the firstcultivars for future selection of high-yielding jatropha varieties.Multiplication of our first generation E1 material, selected for higher yieldand good biodiesel profile, has begun in all three operating regions. D1-BP FuelCrops has already commenced planting selected E1 seedlings and intends to planta total of approximately 50,000 hectares with E1 material in 2008. All of D1'sseed orchards are now operational and have to date delivered some 20 tonnes ofplanting seed, sufficient to plant approximately 10,000 hectares of the E1planting planned for 2008. D1 is also building relationships with leading agricultural and plant scienceresearch institutions in operating regions. We recently signed an agreement withICRISAT to undertake research into jatropha in Andhra Pradesh in India. ICRISAT(www.icrisat.org) undertakes agricultural research and capacity building forsustainable development in the dry tropics through better agriculture. D1 OilsPlant Science will work with ICRISAT to collect, screen and identify jatrophawith high yield potential and oil content, develop suitable agronomy practicesfor sole cropping and identify the most profitable food and feed crops forintercropping with jatropha. A significant development in 2007 was D1's exclusive worldwide service agreementwith Keygene NV of the Netherlands (www.keygene.com), one of the global leadersin the science of genetic fingerprinting, in particular molecular markers andmarker-assisted breeding approaches. The agreement provides D1 with theexclusive rights to contract research and molecular services carried out byKeygene on jatropha. We believe this technology has the potential to increasesignificantly the effectiveness of D1's breeding programme for jatropha. During 2007, we introduced our SOSP to seek to implement optimal agronomypractices for the development of Jatropha curcas as a sustainable feedstock.Central to the programme is the surveying of jatropha plantations to identifykey success and risk factors for sustainable planting. D1 began survey activityin the first half of the year in co-operation with joint venture partners andfarmers, and continues in co-operation with D1-BP Fuel Crops. The surveys recordperformance data to enable grain and oil production forecasts and also gatherwider information on planting and stewardship practices. The latter form thebasis of the ongoing development of recommended planting and maintenancemethods, training manuals and guidance for the optimisation of oil yields.Initially focusing on planting and cultivation, the surveys will also extend toharvesting and expelling techniques, logistics and storage. The programme alsomonitors the implementation of policies for social, economic and environmentalsustainability. In addition to focusing on jatropha, we are undertaking early stageinvestigation into a range of alternative, sustainable crops for the productionof biofuel. Under the terms of our joint venture arrangements, D1-BP Fuel Cropshas a right to access (with the agreement of its shareholders) any new biodieselcrops that D1 may develop. The plant science team is also leading our programme to develop a commercialtechnology for the removal of anti-nutritional compounds present in jatrophameal after oil extraction. Having quantified compounds present in the meal andhaving measured their bioactivity, we have developed a laboratory extractionmethod to test extracted fractions and ensure the removal of unwanted elements.We are now moving to the next stage of the development process to create alarge-scale extraction method. Between 10 August 2004 and 26 November 2004, D1 entered into a number ofagreements in India with Nandan Biomatrix Limited, an Indian plant sciencecompany, for the supply and development of jatropha seeds. On 17 June 2005,Nandan submitted a claim to D1 for Rs. 80,796,029 (c.£1.0m), alleging that D1was in breach of these agreements and that a termination agreement(extinguishing Nandan's claims) is a forgery. D1 considers these claimsgroundless. On 10 August 2005, Nandan attempted to refer the dispute toarbitration, but failed on procedural grounds. Nandan have attempted this againand its application to appoint an arbitrator is currently before the Indiancourts. On 25 March 2008, Nandan obtained a "freezing" injunction in the Indiancourts against the incorrectly named "D1 Oils Limited". Having taken Indianlegal advice, D1 does not consider the injunction to be of any effect, althoughsteps are being taken to dissolve it on substantive grounds. D1-BP Fuel Crops D1-BP Fuel Crops began operations on 1 October 2007. The new company isexpanding its international team to handle the range of new functions that willbe required for the delivery of crude jatropha oil to the market, includingsustainability and supply chain management. These new areas of expertise arebeing added to the core group of experienced D1 managers and field staff in theregions. D1-BP Fuel Crops has commenced a strategic review of its business and isevaluating a range of options for organising planting operations, logistics andprocessing to seek to optimise the future delivery of oil to the developinginternational market for biofuels. Key to this planning process is establishingoil forecasts. Based on data gathered to date through surveys on the croppedarea being undertaken through the SOSP provided by D1, D1-BP Fuel Crops isexpecting to deliver the first quantities of jatropha oil during the second halfof 2008. Initial quantities of oil are expected to be modest but should increaseyear on year as existing trees mature and as new trees become productive. Planting and planting relationships now managed by the D1-BP Fuel Crops groupinclude the significantly expanded jatropha footprint achieved by D1 during thefirst half of 2007. This includes planting undertaken by D1 in partnership withWilliamson Magor, one of India's leading tea companies, in North East Indiawhich now stands at over 62,000 hectares. Planting in South East Asia, whichexpanded steadily during the year, includes relationships established with newpartners in Indonesia, including PT Astra Agro Lestari, part of the JardineMatheson Group, for the creation of a 500 hectare pilot jatropha plantation. As knowledge and experience of the performance of Jatropha curcas in differentclimate and soil conditions and under different planting and maintenance regimesincreases, D1-BP Fuel Crops is assessing the performance and commercialviability of the area planted to date and the viability of planting areas interms of logistics and access to markets. Greater rigour is being introducedinto relationships with third party oil and seed suppliers. Relationships withsuppliers and the reliability of their planting and ability to deliver grain areregularly assessed. Where felt appropriate, D1-BP Fuel Crops is remeasuring thequantity of planting achieved as well as seeking to develop new ways to bettermeasure and monitor planted areas in future. Relationships with suppliers whoseplanting is unlikely to be viable or who are unable to deliver grain will,subject to the terms thereof, likely be replaced with agreements with newpartners whom the joint venture judges to be better positioned to deliver overthe longer term. The table below indicates the broad geographic locations and types ofarrangements associated with jatropha planting worldwide in which D1-BP FuelCrops has an interest. The level of investment costs and security of future oilsupply will depend on the degree of direct involvement by D1-BP Fuel Crops andits joint venture partners. It is the policy of D1-BP Fuel Crops that wheretrees are lost due to natural wastage or mortality, or where planting has nottaken, such agricultural risks are reflected in the planting table as soon asthey are identified. This is in contrast to the previous policy of D1 wherebyeither replanting or new planting was undertaken in the following plantingseason and only the net increase in planting recorded. Where D1-BP Fuel Cropsconsiders replanting inappropriate or not possible, a provision is made and theplanting reported net. D1-BP Fuel Crops' policy, which will be utilised by D1from hereon, may lead to greater volatility in reported planting. Accordingly, D1- BP Fuel Crops has made provisions against planting that iseither unlikely to deliver the requisite quantity and quality, or which is toofar from available logistics facilities to make harvest and transport viable. D1has entered into discussions with D1-BP Fuel Crops and BP as to whether or notthere was a planting shortfall as at 31 July 2007 for the purposes of therelevant provisions of the joint venture agreement. A provision has been made inrelation to this matter and the Directors' current assessment is that there willbe no further financial obligation arising in this regard and they expect toreach a satisfactory agreement with their joint venture partner. Following these provisions, at 31 March 2008 D1-BP Fuel Crops had planted orobtained rights to offtake 192,016 hectares worldwide (please see table belowfor further details). This is lower than original expectations for the end ofthe current planting year, but as D1-BP Fuel Crops strengthens its planting andcrop management in the light of improving plant science expertise and greaterexperience on the ground, it has been necessary to slow the pace of planting aslocations and partners are reviewed for performance. It has not yet thereforebeen possible to replace all of the areas provided against with new plantingelsewhere. The table below summarises the aggregate worldwide hectares of jatropha plantingover which D1-BP Fuel Crops (or joint venture or partnership arrangementsinvolving D1-BP Fuel Crops) has rights1: Managed Contract Seed purchase Total plantations farming and oil supply hectares agreements India North East - 62,455 - 62,455 South - 5,922 - 5,922 Rest - 2,860 23,833 26,693 ------------------------------------------------- - 71,237 23,833 95,070 -------------------------------------------------Africa Zambia 2,276 70 23,179 25,525 Swaziland 1,064 210 6,112 7,386 Rest 50 879 13,638 14,567 ------------------------------------------------- 3,390 1,159 42,929 47,478 -------------------------------------------------South East Asia Indonesia 18 19,250 20,132 39,400 Rest - 2,212 7,856 10,068 ------------------------------------------------- 18 21,462 27,988 49,468 -------------------------------------------------Total 3,408 93,858 94,750 192,0161 ------------------------------------------------- ------------------------------------------------- 1 As reported to the Company by D1-BP Fuel Crops, as at 31 March 2008 Managed plantations are those farms where land and labour is controlled by D1-BPFuel Crops, either through its subsidiaries or joint venture partners. Undercontract farming, the farmer plants his own trees on his own land. D1-BP FuelCrops and its partners assist with the provision of seedlings and thearrangement of bank finance for planting, offer a buyback of harvested grainswith an offtake agreement, subject to a floor price and the achievement ofagreed quality standards, and provide support and advice during cultivation, andmonitor the condition of the crops. Seed and oil supply agreements arearms-length supply contracts with third parties whereby D1-BP Fuel Crops, eitherdirectly or through joint venture partners, has offtake arrangements in placeover future output from jatropha plantations which the third party isdeveloping. D1-BP Fuel Crops has limited involvement in this planting and relieson third parties to measure and manage the crop effectively. The rights to some planting is shared with third parties, such as joint venturepartners, with whom D1 and D1-BP Fuel Crops have worked to obtain rights toplanting of jatropha. As such, offtake from these areas of planting may well beshared with those third parties. Based on the forecasts for oil delivery, D1-BP Fuel Crops is now reviewing wherebest to place crushing, expelling and preprocessing assets. As plantationsmature and it moves closer to harvest and the crushing of grain for oil, D1-BPFuel Crops is preparing to deploy operational crushing and expelling units inZambia, North East India and Indonesia. Refining and trading Our activities in refining and trading have been impacted by the ongoingchallenges of high feedstock prices and by subsidised biodiesel imports from theUS. Refining margins across the industry came under increasing pressure fromrising vegetable oil prices. Although we were cushioned by stocks of vegetableoil previously purchased at lower prices, we were forced to run our refineriesbelow capacity. Prices continued to rise, however, and having processed existingstocks we stopped the refining of virgin oil in the third quarter of 2007. Wewere, however, able to take advantage of the flexibility of our modular D1 20refinery units by refining parcels of "off-spec" material purchased from othersuppliers. The import of heavily subsidised US biodiesel exacerbated the impact of risingfeedstock prices. Subsidised soya methyl ester began to enter the EU in volumein the form of a 99 per cent. soya biodiesel and 1 per cent. mineral dieselblend, so-called B99, around the middle of 2007. US producers are currentlyeligible for subsidies of US$1 for every gallon (approximately 13 pence perlitre) of biodiesel blended with mineral diesel, which then receives furthersubsidy in EU markets. As a result, we believe this largely set market prices inthe EU and further eroded refinery margins. It is estimated that up to onemillion tonnes of B99 entered the EU during 2007. During 2007 we switched from refining virgin oil to purchasing and sellingquantities of B99 to meet our obligations to our principal offtaker, PetroplusRefining Teeside Limited. Our experience by the end of 2007 was that, givenhigher feedstock prices and subsidised imports, prices bid for such contractswere not at a level where there could be an adequate return. Consequently, ourofftake agreement with Petroplus was not renewed when it ended in December 2007. We began 2007 with the intention to increase UK refining capacity in advance ofthe introduction of the RTFO in 2008. We increased the capacity of our Teessidesite to 42,000 tonnes per annum in the first half of the year with the additionof a fifth refinery unit. This was the first upgraded D1 30 unit with anenhanced capacity of 10,000 tonnes per annum. Final commissioning was completedby the third quarter of 2007. However, as market conditions deteriorated, weheld capacity at Teesside at 42,000 tonnes. Having completed the acquisition ofour Bromborough site in January 2007, we began the conversion of the existingfacilities, which formerly produced fuel and lubricant additives, to create100,000 tonnes of initial biodiesel refining capacity. As conditions changed, weslowed the timetable for commissioning the first 50,000 tonnes of this capacity,and finally suspended the addition of the second 50,000 tonnes. As a result of the fundamental changes underway in the EU refining market, weintend to stop refining and trading and to concentrate our efforts exclusivelyon developing the upstream plant science services to breed, plant and manage newcommercial biofuels crops. As announced on 7 March 2008, we have already starteda consultation process with employees at both our Middlesbrough and Bromboroughsites. Insofar as we have not done so already, we will consult with employees inrelation to the future of the sites including their potential closure/sale.Also, in light of the intended cessation of refining and trading operations, D1is in discussions with Allied Irish Bank (the lessor under certain leases ofrefining equipment), with a view to terminating such leases in due course. Offer period update in relation to the Code On 20 March 2008, Karl Watkin announced that he was at a very preliminary stagein evaluating all options with regard to his shareholding in the Company,including an increase or decrease in his interest, and whether or not to make anoffer for the Company. Consequently, the Company is currently in an offer periodfor the purposes of the Code. Shareholders will be asked to approve the Placingfor the purposes of Rule 21 of the Code. Further announcements will be made by the Board in relation to this matter ifand when appropriate. Reasons for the Placing At the time of the formation of D1-BP Fuel Crops, the Board stated, subject to anumber of key assumptions, that it believed that the Company should be able tofund the delivery of its strategy without further recourse to Shareholders oroption holders. Since that announcement, D1's funding situation has beenadversely affected, inter alia, by heavily subsidised US imports which haveundermined the biodiesel refining market and by the resulting inability to raiseasset finance against operating refineries. To fund the ongoing development of our business, we are seeking, subject to theapproval of Shareholders, to raise further funds through the Placing to progressin each of the areas of our business, as follows. In plant science, the proceeds of the Placing will enable us to continue capitalexpenditure and working capital investment in our plant science research anddevelopment business and to invest in our feed programme to develop a commercialtechnology for the removal of anti-nutritional compounds present in jatrophameal. In planting, we intend to use the proceeds of the Placing to meet future cashcontributions in relation to D1-BP Fuel Crops to accelerate and enhance theplanting strategy. The next intended phase of development will concentrateplanting on areas where economic scale can be achieved and the crop is proven togrow well. The proceeds are also expected to be used in the deployment ofoperational crushing and expelling units in Zambia, North East India andIndonesia. The Board's revised business plan has been based upon a number key workingassumptions, namely: • D1-BP Fuel Crops meets its target of planting one million hectares over the four year period from its establishment on 1 October 2007; • First grain will be harvested two years after planting and mature yields will be attained five years after that; • The Company's guidance in relation to yields of non-defective seed under properly managed conditions in favourable climates remains unchanged at 1.7 and 2.7 tonnes per hectare for wild and E1 elite seed respectively. Acknowledging that not every hectare will be planted in optimal conditions, average mature yields will be 1.4 tonnes per hectare for wild seed and 2.2 tonnes per hectare for E1; • The purchase price for jatropha grain will be $132 per tonne from contract farmers and $145 per tonne under seed purchase agreements; • The selling price for Crude Jatropha Oil ('CJO') will be $1,000 per tonne for oil sold in country of origin and $1,300 per tonne for oil exported to Northern Europe; • Asset and working capital finance will be available to D1-BP Fuel Crops over the period 2008 to 2010; and • A realisation of value from the assets at D1 Oils' refining sites in Middlesbrough and Bromborough. In addition to the key assumptions set out above, your attention is drawn to therisk factors set out in Appendix I to this announcement. The table below summarises the proposed use of proceeds of the Placing for thetwo year period from 1 January 2008 to 31 December 2009 inclusive assuming netfunds raised of £14.9 million. In recognition of the fact that the Companyoperates in a dynamic and constantly evolving industry, the Board reserves theright to re-allocate funds as circumstances and opportunities arise. £m----------------------------------------------------------------------------------Operating costs and working capital 10.7Capital expenditure 3.0Feed programme investment 1.8Joint venture cash contributions 12.9Interest received and other items (1.2)Contingency 2.0----------------------------------------------------------------------------------Sub total 29.2Less cash at 1 January 2008 (14.3)----------------------------------------------------------------------------------Total 14.9 Based on the Board's revised business plan, the net funds raised of £14.9million should allow the Company to trade through to the end of 2009. Details of the Placing Subject to the passing of the relevant Resolutions at the EGM, the Company isproposing to raise £16.1 million (approximately £14.9 million after expenses) bythe issue of the Placing Shares. The Placing Shares will represent approximately103.4 per cent. of the current issued share capital of the Company. DKIB, asagent for the Company, is placing the Placing Shares with existing holders ofthe Company's shares at the Placing Price. The Placing Price represents a discount of approximately 34 per cent to theclosing middle market price of 37.75 per share on 8 April 2008, the lastBusiness Day prior to this announcement. The Placing by D1 is being conductedagainst the backdrop of volatile equity markets. The Board of D1 believes thatthe discount at which the Placing is being effected in part reflects thesemarket conditions. The Placing Agreement and the issue of the Placing Shares are each conditionalon, inter alia: (i) the passing at the EGM of the Resolutions numbered 2, 3 and 5; and (ii) Admission occurring on or before 8.00 a.m. on 12 May 2008 (or such latertime and date as the Company and Dresdner Kleinwort Securities Limited may agreebeing no later than 27 May 2008). DBAG has agreed that, to the extent that DKIB does not procure Placees tosubscribe for the total number of Placing Shares at a price equal to or inexcess of the Placing Price, DBAG shall itself subscribe as principal for thosePlacing Shares at the Placing Price. The Placing Shares will, when allotted and fully paid, rank pari passu in allrespects with the Existing Ordinary Shares. Admission is expected to take place and dealings in the Placing Shares tocommence on AIM on 12 May 2008. Share certificates in respect of Placing Sharesto be held in certificated form are expected to be despatched during the weekcommencing 19 May 2008. Placing Shares to be held in uncertificated form areexpected to be delivered in CREST by no later than 12 May 2008. For regulatory reasons the Placing has only been made, and the Placing Shareswill only be issued, to persons (i) in the EU who are also qualified investorsfor the purposes of the EU Prospectus Directive or who are other persons to whomthe Placing Shares can otherwise be offered or sold without the publication of aprospectus (and in the UK who are also persons falling within article 19,article 49 or, being members of certain bodies corporate, article 43 of theFinancial Services and Markets Act 2000 (Financial Promotion) Order 2001 or areotherwise persons to whom it may otherwise lawfully be communicated), and (ii)in other jurisdictions to whom it may lawfully be made. No other person mayparticipate in the Placing, or rely on any communication relating to thePlacing. The offer of the Placing Shares has not been and will not be made toShareholders generally or to the public for the purposes of the ProspectusRules. This document does not constitute a prospectus or an admission documentor an offer, or the solicitation of an offer, to subscribe or buy any of thePlacing Shares. The following directors and employees have committed to subscribe under thePlacing for the following Placing Shares at the Placing Price: Elliott Mannis 140,000 Lord Oxburgh 80,000 Dr Clive Morton 40,000 Barclay Forrest 40,000 Christopher Tawney 20,000 Christopher Leaver 10,000 Henk Joos 8,000 Graham Prince 6,000 Extraordinary General Meeting A notice convening the EGM to be held on 9 May 2008 at 11.00 a.m. at the officesof Dresdner Kleinwort Limited, 30 Gresham Street, London EC2V 7PG, is set out atthe end of the circular to shareholders. The purpose of the EGM is to seekShareholders' approval to the Resolutions set out in the notice of EGM. At theEGM, Resolutions will be proposed to: (1) increase the Company's authorised share capital from £2,000,000 to £3,000,000 by the creation of an additional 100,000,000 Ordinary Shares representing approximately 50 per cent. of the current existing authorised share capital of the Company; (2) authorise the Placing for the purposes of Rule 21 of the Code; (3) authorise the Directors pursuant to section 80 of the Act to allot the Placing Shares, representing approximately 103.4 per cent. of the existing issued share capital of the Company as at the date of this document; (4) authorise the Directors (by way of updated general authority pursuant to section 80 of the Act) to allot relevant securities (as defined for the purposes of that section) up to an aggregate nominal amount representing approximately one third of the Enlarged Issued Share Capital; (5) authorise the Directors pursuant to section 95 of the Act to allot the Placing Shares for cash without making a pre-emptive offer to Shareholders; and (6) authorise the Directors (by way of updated general authority pursuant to section 95 of the Act) to allot equity securities (as defined for the purposes of that section) for cash up to an aggregate nominal amount representing approximately 5 per cent. of the Enlarged Issued Share Capital. The Directors unanimously recommend that Shareholders vote in favour of all theResolutions, as they have undertaken to do in respect of their own beneficialholdings. The Directors' reason for putting forward Resolutions 2, 3 and 5 is toenable the Company to allot the Placing Shares for cash. If Resolutions 2, 3 and5 are not approved the Placing cannot occur. By Resolution 1, the Board proposes that the authorised share capital of theCompany is increased to 300,000,000 Ordinary Shares to take the opportunityafforded by the EGM to increase the authorised share capital of the Company sothat a 'headroom' of existing but unissued share capital is available forgeneral corporate purposes. To be passed, Resolutions 1 to 4 (being ordinary resolutions) will require asimple majority of those Shareholders voting in person or by proxy in favour ofthe Resolutions. Resolutions 5 and 6 (being special resolutions) requireapproval by not less than 75 per cent. of the votes cast by the Shareholdersvoting in person or by proxy." A copy of the circular is available, free of charge, for one month from the dateof posting at the registered office of the Company, Forty Foot Road,Middlesbrough, TS2 1HG. Definitions The following definitions apply throughout this announcement (other thanAppendix II to this announcement) unless otherwise stated or the contextrequires otherwise: "Admission" admission of the Placing Shares to trading on AIM and such admission becoming effective as provided in paragraph 6 of the AIM Rules for Companies "AIM" the AIM market, a market operated by the London Stock Exchange "AIM Rules" the AIM Rules for Companies and/or the AIM Rules for Nominated Advisers, as the context requires "AIM Rules for Companies" the rules and guidance notes contained in parts one and two of the booklet entitled AIM Rules for Companies published by the London Stock Exchange, as amended or reissued from time to time "AIM Rules for Nominated Advisers" the rules contained in the booklet entitled AIM Rules for Nominated Advisers published by the London Stock Exchange, as amended or reissued from time to time "Board" or "Directors" the board of directors of the Company "Business Day" any day (excluding Saturdays and Sundays) on which banks are open in London for general non- automated banking business "certificated" or "in certificated form" an Ordinary Share which is not in uncertificated form "Code" the City Code on Takeovers and Mergers "Company" or "we" or "D1" D1 Oils plc, a public limited company incorporated and registered in England and Wales with registered number 5212852 "CREST" the computerised settlement system to facilitate the holding of and the transfer of title of shares in uncertificated form, operated by Euroclear UK & Ireland Limited "CREST Regulations" the Uncertificated Securities Regulations 2001 (SI 2001 No. 3755), as amended "this document" the circular of the Company to be published on 9 April 2008 "D1-BP Fuel Crops" D1-BP Fuel Crops Limited, a limited company incorporated and registered in England and Wales with registered number 05617120 , being the 50/50 joint venture company owned by D1 Oils Trading Limited and BP International Limited "D1 Oils Plant Science" D1 Oils Plant Science Limited, a limited company incorporated and registered in England and Wales with registered number 06179784 "DBAG" Dresdner Bank AG, London Branch "DKIB" Dresdner Kleinwort Securities Limited "EGM" or "Extraordinary General Meeting" the extraordinary general meeting of the members of the Company to be convened for 11.00 am on 9 May 2008 "Enlarged Issued Share Capital" the enlarged issued share capital of the Company following Admission of the Placing Shares and taking into account the issue of any Ordinary Shares from time to time under the Option Agreement "EU" the European Union "•" or "Euro" the euro, currency of the EU "Existing Ordinary Shares" the 62,241,219 Ordinary Shares in issue as at 8 April 2008 "FSMA" the Financial Services and Markets Act 2000, as amended "Group" the Company and its subsidiary undertakings "ICRISAT" the International Crops Research Institute for the Semi-Arid Tropics "London Stock Exchange" London Stock Exchange plc "Option Agreement" the call option and relationship agreement with BP International Limited dated 29 June 2007 "Ordinary Shares" ordinary shares of 1p each in the capital of the Company "Placees" subscribers for the Placing Shares procured by Dresdner Kleinwort Securities Limited (as agent for the Company) pursuant to and on the terms of the Placing Agreement "Placing" the placing of the Placing Shares by Dresdner Kleinwort Securities Limited pursuant to the Placing Agreement "Placing Agreement" the conditional agreement dated 9 April 2008 between (1) Dresdner Kleinwort Securities Limited (2) Dresdner Bank AG, London Branch and (3) the Company relating to the Placing "Placing Price" the price at which the Placing Shares are placed with Placees, being a price of 25p per Placing Share "Placing Shares" 64,384,000 Ordinary Shares to be issued and placed in connection with the Placing at the Placing Price "Prospectus Rules" the prospectus rules of the Financial Services Authority forming part of the FSA Handbook "Resolutions" means the ordinary and special resolutions to be proposed at the EGM "RTFO" means the "Renewable Transport Fuel Obligation" announced by the UK Government in November 2005 "Securities Act" United States Securities Act of 1933, as amended "Shareholder(s)" the person(s) who are registered as holder(s) of Ordinary Shares from time to time "SOSP" D1's Sustainable Oil Supply Programme "UK" United Kingdom of Great Britain and Northern Ireland "uncertificated" or "in uncertificated recorded on the register of Ordinary Shares as being held in uncertificated form in CREST,form" entitlement to which by virtue of the CREST Regulations, may be transferred by means of CREST "US" or "United States" United States of America, each state thereof, its territories and possessions and the District of Columbia "US$" or "dollar" United States dollar "£" United Kingdom pounds sterling APPENDIX I Risk Factors Potential investors should carefully consider the risks described below beforemaking a decision to invest in the Company. This Appendix I contains what theDirectors believe to be the principal risk factors associated with an investmentin the Company. It should be noted that this list is not exhaustive and thatother risk factors will apply to an investment in the Company. If any of thefollowing risks actually occur, the Group's business, financial condition and/orresults of future operations could be materially adversely affected. In suchcircumstances, the value of the Company's shares could decline and an investormay lose all or part of his investment. Additional risks and uncertainties notpresently known to the Directors, or which the Directors currently deemimmaterial, may also have an adverse effect on the Group. This document containsforward-looking statements that involve risks and uncertainties. The Group'sactual results could differ materially from those anticipated in theforward-looking statements as a result of many factors, including the risksfaced by the Group which are described below and elsewhere in this document.Prospective investors should carefully consider the other information in thisannouncement. Unforeseen factors and developments The Group's ability to implement its business strategy may be adversely affectedby factors that the Group cannot currently foresee, such as unanticipated costsand expenses, interruptions to or delays in production, reduced demand for theGroup's product, technological change, loss of political support for biodieselor severe economic downturn. All of these factors may necessitate changes to thebusiness strategy described in this document. Competition There can be no assurance that potential competitors of the Group, which mayhave greater financial, research and development, sales and marketing andpersonnel resources than the Group, are not currently developing, or will not inthe future develop, products and processes that are equally or more effectiveand/or economical than the products developed by the Group or which wouldotherwise render the Group's products obsolete. The Group may be forced tochange the nature of its business as a result of competitive factors. Given thepotential for biofuels globally, it is anticipated that the market will becomeincreasingly competitive over the coming decade. Additionally, several otherbiofuels and renewable fuels could be introduced to the market as alternativesto mineral diesel. Should these alternatives be selected in the market thedemand for biodiesel could be diluted. Dependence on key personnel The Group believes that its future success will greatly depend upon theexpertise and continued services of certain key executives and technicalpersonnel, including the executive Directors. The Group cannot guarantee theretention of such key executives and technical personnel. As a result, theGroup's business, its results of operations and financial condition may beadversely affected. Suitability Investment in the Ordinary Shares may not be suitable for all readers of thisdocument. Readers are accordingly advised to consult a person authorised underthe Financial Services and Markets Act 2000 who specialises in investments ofthis nature before making any investment decision. Price volatility and liquidity The trading prices of the Company's Ordinary Shares may fluctuate. The OrdinaryShare price may fluctuate as a result of a variety of factors, including theoperating and share price performance of other companies in the industries andmarkets in which the Company operates; speculation about the Company's businessin the press, media or the investment community; changes to the Company's salesor profit estimates; the publication of research reports by analysts; andgeneral market conditions. Investors may realise less than the original amountinvested. The fact that the Ordinary Shares are admitted to AIM should not be taken asimplying that there is a liquid market for the Ordinary Shares. It may be moredifficult for an investor to realise his investment on AIM than to realise aninvestment in a company whose shares are listed on the Official List. Investorsmay therefore not be able to recover their original investment, especially sincethere may be a limited market for the Ordinary Shares, and market makers may notpublish competing prices. Economic and market cycles The Group's business may be affected by the general risks associated with allcompanies in the energy industry. The prices received for the Group's goods andproducts depend on numerous factors, many of which are beyond its control andthe exact effect of which cannot be accurately predicted. Such factors includegeneral economic and political activities, including the extent of governmentalregulation and taxation. An investment could be affected adversely by changes in economic, political,administrative, taxation or other regulatory factors, whether in the UK or inany other jurisdictions in which the Group may operate now or in the future. Inthe Company's case, this may include the regions of origin of its raw materialssuch as Southern Africa, South East Asia and India where such risks are likelyto be significant. The Directors consider that uncertainty surrounding economies worldwide maycontinue in the short to medium term, and this could affect the Group'sfinancial performance. Though currently stable, political instability in severalof the regions in which the Group operates is not uncommon and should thisoccur, could affect the Group's operations in certain regions. Future funding Additional capital may be required by the Company in due course. The Directorscannot be sure that such capital will be available or that such capital will beavailable on terms that are acceptable to the Company in the future. If required funds are not available, the Group may have to reduce expenditure onmaintaining, establishment and development of its business which could have amaterial adverse effect on the Company's business, financial conditions andprospects and the Group may no longer be deemed to be a going concern. Industry conditions The Group faces a number of industrial risks, including an ongoing consultationprocess with its employees at its Middlesbrough and Bromborough sites anddependence on key suppliers, both of which may lead to a deterioration infinancial performance. Intellectual property and know how The Group may be open to claims in relation to infringement of intellectualproperty ("IP") rights. This could lead to long and protracted litigation toprotect the Group's position. This process itself would divert resources awayfrom the Group's business. Any adverse judgments against the Group could lead tosubstantial fees, fines and the inability to manufacture, market or sell anyinfringing products. This would lead to substantial losses for the Company and,further, to the Group as a whole. The Group can also incur costs in protecting its IP rights. However, there is noguarantee that protection will be granted, for example through registration.Even if protection is granted, the Group may suffer an infringement of its IPrights. This would lead to costs in order to protect its rights and, as a resultmay lead to loss for the Group. Notwithstanding the problems surrounding theGroup's IP rights, it may be that competitors of the Group may produce similarproducts without infringing the Group's IP rights. The Group could suffer losswithout possibly having any remedy. Level of orders There can be no guarantee that orders will be received for the Group's productsin the anticipated volumes or within the timescales currently envisaged by theDirectors. The placing of orders for the Group's products could be materiallydelayed by circumstances such as customer evaluations or integration of theGroup's products taking longer than anticipated. The Company must also ensure that production capacity is at all times sufficientto match the level of orders. Failure to do so could lead to the financialimpact of inefficient production, missed sales opportunities and late deliveryto customers. Risks associated with international sales The Group intends to continue to expand internationally and therefore itsresults could be affected significantly by currency fluctuations (see below).Other risks from international business activities include complying withregulatory requirements and standards, tariffs and other trade barriers,reliance on third parties to distribute products and potentially adverse taxconsequences. Operational risks The financial performance of the Company is at all times subject to operationalrisks. In the plant science area, there is a risk that improvements in varietyperformance, in terms of yield, vitality, disease resistance, etc will not be asrapid as the Company plans. Plant breeding activities, and the plantationbusiness itself, D1-BP Fuel Crops, are subject to the agricultural riskshighlighted below. Downstream of the agricultural operation, there is arequirement for: transportation, expelling, storage and refining (of crudejatropha oil to produce refined jatropha oil). For some of these activities newequipment, processes and operating arrangements are required, and couldtherefore face unforeseen problems, in which case production and financialperformance would be delayed. Unanticipated additional maintenance of machinerywould also impact the production capacity and revenue projections. The risk ofcontamination of the pure vegetable oil exists, should the proper qualityprocedures and handling guidelines not be followed. Transportation of crudejatropha oil from the regions in which the Group operates could be subject tounforeseen delay. Raw materials The principal raw material of the Company's business is jatropha seeds forplanting, and harvested grain for crushing to produce jatropha oil. The financial performance of the Company may therefore be affected byfluctuations in the market price of jatropha seeds and jatropha grain and, inparticular, a reduction in the price of jatropha seeds and grain may lead to adiminution in the value of stocks held. The Company is also at risk of the contamination of its raw materials suppliesat source which may lead to stock writedowns and an inability to supplycustomers. The Company attempts to safeguard against this risk by checkingmaterials prior to purchase and dispatch and on receipt at the relevantprocessing facility. Agricultural risks The Group's business may be affected by all general risks associated withagricultural production. The risk of fire, drought, or other extreme weather isa factor for all crops and would result in lower crop yields than projected.Theft is also a concern in certain regions, should trees be deemed valuable asanother commodity in those regions. Where planting is undertaken using seeds orseedlings bought from the third parties then it can be difficult to vouch forthe quality of the planting material, resulting in poor performance. There islimited experience of large scale jatropha planting; this means that the bestagronomic and husbandry practices are not yet fully understood. In addition,where the crop is being grown by third party farmers, direct control over theirday-to-day activities is limited. Therefore there is a risk that optimum cropperformance will not be achieved. In addition, farmers may choose to sell theirharvests to other parties, despite the existence of a contract with D1-BP FuelCrops, which would reduce available oil volumes. Interest rate risk The Company's borrowing costs in respect of its floating rate borrowings mayincrease as a result of rising interest rates, although the Directors believethe economic effect of interest fluctuations on the Company's financialperformance to be small due to the absolute amounts of such borrowings beingrelatively small. Currency exchange rate fluctuations The Company conducts much of its business overseas in currencies other thanpound sterling and as such its financial performance is subject to the effectsof fluctuations in foreign exchange rates, in particular the rate of exchangebetween the US dollar and pound sterling. A sustained depreciation in the US dollar against pound sterling may affect thesterling value of margins achieved in the overseas businesses and thecompetitiveness of the Company's operations in the UK vis a vis other parts ofthe world. Market demand and acceptance Whilst the Directors believe that there will be viable markets for the Group'sproducts there can be no assurance that the Group's products will prove to bemore successful than competing products now or in the future. If the Group'sproducts do not gain market acceptance, further expenditure on marketing anddevelopment may be required to make them commercially viable. The increased demand for biodiesel in the market is largely created by globalpolicies mandating biodiesel blends as a part of a government's energy strategy.There is a risk that governments do not enforce their recommended targets, or arisk that government commitment to their strategy is short term as opposed tolong term. Securities traded on AIM The Existing Ordinary Shares are and the Placing Shares will be traded on AIMrather than listed on the Official List of the UK Listing Authority and tradedin the main market of the London Stock Exchange. An investment in shares tradedon AIM may carry a higher risk than an investment in shares listed on theOfficial List. Investors should be aware that the value of the Ordinary Shares may be volatileand may go down as well as up and investors may therefore not recover theiroriginal investment. APPENDIX II TERMS AND CONDITIONS OF THE PLACING IMPORTANT INFORMATION FOR PLACEES ONLY MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THISANNOUNCEMENT AND THE TERMS AND CONDITIONS SET OUT AND REFERRED TO HEREIN AREDIRECTED ONLY AT PERSONS SELECTED BY DRESDNER KLEINWORT SECURITIES LIMITED("DKIB") WHO ARE "INVESTMENT PROFESSIONALS" AS DESCRIBED IN ARTICLE 19, "HIGHNET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS ETC" AS DESCRIBED IN ARTICLE 49OR MEMBERS OF CERTAIN BODIES CORPORATE AS DESCRIBED IN ARTICLE 43 OF THEFINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 (the"FPO") OR TO PERSONS WHOM IT MAY OTHERWISE LAWFULLY BE COMMUNICATED (ALL SUCHPERSONS TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS"). THIS ANNOUNCEMENT ANDTHE TERMS AND CONDITIONS SET OUT HEREIN MUST NOT BE ACTED ON OR RELIED ON BYPERSONS WHO ARE NOT RELEVANT PERSONS. ANY INVESTMENT ACTIVITY TO WHICH THISDOCUMENT AND THE TERMS AND CONDITIONS SET OUT HEREIN RELATES IS AVAILBLE ONLY TORELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. THE NEW ORDINARY SHARES THAT ARE THE SUBJECT OF THE PLACING (THE "PLACINGSHARES") ARE NOT BEING OFFERED OR SOLD TO ANY PERSON IN THE EUROPEAN UNION,OTHER THAN TO QUALIFIED INVESTORS AS DEFINED IN SECTION 86(7) OF THE FINANCIALSERVICES AND MARKETS ACT 2000 ("FSMA"), BEING PERSONS FALLING WITHIN ARTICLE 2.1(E)(I), (II) OR (III) OF DIRECTIVE 2003/71/EC (THE "PROSPECTUS DIRECTIVE"),WHICH INCLUDES LEGAL ENTITIES WHICH ARE REGULATED BY THE FINANCIAL SERVICESAUTHORITY (THE "FSA") OR ENTITIES WHICH ARE NOT SO REGULATED WHOSE CORPORATEPURPOSE IS SOLELY TO INVEST IN SECURITIES OR OTHER PERSONS TO WHOM THE PLACINGSHARES MAY OTHERWISE BE LAWFULLY OFFERED OR SOLD WITHOUT THE PUBLICATION OF APROSPECTUS. The Placing Shares have not been and will not be registered under the UnitedStates Securities Act of 1933, as amended (the "Securities Act") or under thesecurities laws of any state or other jurisdiction of the United States and maynot be offered, sold, resold or delivered, directly or indirectly, in or intothe United States absent registration except pursuant to an exemption from or ina transaction not subject to the registration requirements of the SecuritiesAct. No public offering of the Placing Shares is being made in the UnitedStates. The Placing (as defined below) is being made outside the United Statesin offshore transactions (as defined in Regulation S under the Securities Act("Regulation S")) meeting the requirements of Regulation S under the SecuritiesAct and may be made within the United States to institutional investors who arequalified institutional buyers within the meaning of Rule 144A under theSecurities Act ("QIBs"), and also QPs (as defined below) in transactions thatare exempt from, or not subject to, the registration requirements under theSecurities Act. Prospective investors are hereby notified thatRegent plc (the "Company") may be relying on the exemption from the provisionsof Section 5 of the Securities Act provided by Rule 144A. This announcement (including the terms and conditions set out herein) does notconstitute an offer of securities for sale in the United States nor thesolicitation of an offer to buy any such securities, nor may securities beoffered or sold in the United States, or in any jurisdiction in which such offeror solicitation is unlawful and the information contained herein is not forpublication or distribution to persons in the United States or any jurisdictionin which such publication or distribution is unlawful. Persons receiving thisannouncement (including custodians, nominees and trustees) must not forward,distribute, mail or otherwise transmit it in or into the United States or usethe United States mails, directly or indirectly, in connection with the Placing.The Company does not intend to register the Placing Shares under the SecuritiesAct. This announcement does not constitute an offer to sell or issue or asolicitation of an offer to buy or subscribe for Placing Shares in anyjurisdiction including, without limitation, Canada, Australia, Japan or anyother jurisdiction in which such offer or solicitation is or may be unlawful (a"Prohibited Jurisdiction"). This announcement and the information containedherein are not for publication or distribution, directly or indirectly, topersons in a Prohibited Jurisdiction unless permitted pursuant to an exemptionunder the relevant local law or regulation in any such jurisdiction. The distribution of this announcement, the Placing and/or issue of the PlacingShares in certain jurisdictions may be restricted by law and/or regulation. Noaction has been taken by the Company, DKIB or Dresdner Bank AG, London Branch("DBAG") or any of their respective Affiliates (as defined below) that wouldpermit an offer of the Placing Shares or possession or distribution of thisannouncement or any other publicity material relating to such Placing Shares inany jurisdiction where action for that purpose is required. Persons receivingthis announcement are required to inform themselves about and to observe anysuch restrictions. By participating in the Bookbuilding Process (as defined below), each person whois invited to and who chooses to participate in the Placing (a "Placee") bymaking an oral offer to take up Placing Shares is deemed to have read andunderstood this announcement in its entirety and to be providing therepresentations, warranties, undertakings, agreements and acknowledgementscontained herein. Details of the Placing Agreement and the Placing Shares The Company has today entered into a placing agreement (the "Placing Agreement")with DKIB and DBAG, under which DKIB has, subject to the terms set out therein,agreed to use its reasonable endeavours, as agent of the Company, to procurePlacees for the Placing Shares (the "Placing"). DBAG has agreed that to theextent that DKIB does not procure Placees for the Placing Shares, DBAG shallitself subscribe for such Placing Shares, as principal. The Placing Shares will, when issued, be credited as fully paid and will rankpari passu in all respects with the existing issued ordinary shares of 1 penceeach in the capital of the Company, including the right to receive all dividendsand other distributions declared, made or paid in respect of such ordinaryshares after the date of issue of the Placing Shares. The Placing Shares will be issued free of any pre-emption rights, encumbrance,lien or other security interest. The Company confirms that, following thepassing of the Resolutions (as defined below), it will be entitled to allot thePlacing Shares pursuant to section 80 of the Companies Act 1985 (as amended) asif section 89(1) of that Act did not apply to such allotment. Application for admission to trading Application will be made to London Stock Exchange plc (the "London StockExchange") for admission to trading of the Placing Shares on the AIM market ofthe London Stock Exchange ("Admission"). It is expected that Admission willbecome effective and that dealings will commence on 12 May 2008, and in anyevent no later than 27 May 2008. Bookbuild Commencing today, DKIB will be conducting an accelerated bookbuilding process(the "Bookbuilding Process") to determine demand for participation in thePlacing by Placees. This announcement gives details of the terms and conditionsof, and the mechanics of participation in, the Placing. Participation in, and principal terms of, the Bookbuilding Process Each of DKIB and its respective Affiliates (as defined below) is entitled toparticipate as a Placee in the Bookbuilding Process. The Bookbuilding Process will establish a single price (the "Placing Price")payable to DKIB by all Placees. The Bookbuilding Process is expected to close around 7.00 a.m. London time on 9April 2008. A further announcement will be made following the close of theBookbuilding Process detailing the Placing Price at which the Placing Shares arebeing placed (the "Pricing Announcement"). DKIB may, in its sole discretion,accept bids that are received after the Bookbuilding Process has closed. A bid in the Bookbuilding Process will be made on the terms and conditions inthis announcement and will not be capable of variation or revocation after theclose of the Bookbuilding Process. A Placee who wishes to participate in the Bookbuilding Process shouldcommunicate its bid by telephone to the usual contact at DKIB. If successful,DKIB will re-contact and confirm orally to Placees following the close of theBookbuilding Process the size of their respective allocations and a tradeconfirmation (and supporting placing letter) will be dispatched as soon aspossible thereafter. DKIB's oral confirmation of the size of allocations andeach Placee's oral commitments to accept the same will constitute a legallybinding agreement pursuant to which each such Placee will be required to acceptthe number of Placing Shares allocated to the Placee at the Placing Price setout in the Pricing Announcement and otherwise on the terms and subject to theconditions set out herein and in accordance with the Company's Memorandum andArticles of Association. DKIB reserves the right to scale back the number of Placing Shares to besubscribed by any Placee in the event of an oversubscription under the Placing.DKIB also reserves the right not to accept offers to subscribe for PlacingShares or to accept such offers in part rather than in whole. The acceptance ofoffers shall be at the absolute discretion of DKIB. DKIB shall be entitled toeffect the Placing by such alternative method to the Bookbuilding Process as itshall in its sole discretion determine. To the fullest extent permissible bylaw, neither DKIB, any holding company thereof, nor any subsidiary, branch oraffiliate of DKIB (each an "Affiliate") nor any person acting on their behalfshall have any liability to Placees (or to any other person whether acting onbehalf of a Placee or otherwise). In particular, neither DKIB, nor any Affiliatethereof nor any person acting on their behalf shall have any liability inrespect of its conduct of the Bookbuilding Process or of such alternative methodof effecting the Placing as it may determine. No commissions will be paid toPlacees or by Placees in respect of any Placing Shares. Each Placee's obligations will be owed to the Company and to DKIB. Following theoral confirmation referred to above, each Placee will also have an immediate,separate, irrevocable and binding obligation, owed to DKIB and the Company, topay to DKIB (or as DKIB may direct) in cleared funds an amount equal to theproduct of the Placing Price and the number of Placing Shares such Placee hasagreed to acquire. The Company shall allot such Placing Shares to a CRESTaccount operated by DKIB for onward delivery to each Placee following eachPlacee's payment to DKIB of such amount. All obligations of the Company, DBAG and DKIB under the Placing will be subjectto fulfilment of the conditions referred to below under "Conditions of thePlacing". Conditions of the Placing The Placing is conditional upon the Placing Agreement becoming unconditional andnot having been terminated in accordance with its terms. The obligations of DKIB and DBAG under the Placing Agreement are conditional,inter alia, on: 1. Admission occurring by no later than 12 May 2008 (or such other date as may be agreed between the Company and DKIB, not being later than 27 May 2008); 2. the Company complying with its obligations under the Placing Agreement to the extent they fall to be performed prior to Admission including the delivery, on the day of (and prior to) Admission, to DKIB of a certificate confirming, inter alia, that none of the representations, warranties and undertakings given by the Company in the Placing Agreement has been breached or is unfulfilled or was untrue, inaccurate or misleading when made or would be breached or unfulfilled or be untrue, inaccurate or misleading were it to be repeated by reference to the facts subsisting on the date of Admission; 3. the Company passing certain resolutions to be proposed at an extraordinary general meeting to, inter alia, authorise the Placing for the purposes of Rule 21 of the Code and authorise the directors of the Company to allot and issue the Placing Shares pursuant to sections 80 and 95 of the Companies Act 1985 (the "Resolutions"); and 4. the Company allotting prior to Admission, subject only to Admission, the Placing Shares. If (a) the conditions are not fulfilled or (to the extent permitted under thePlacing Agreement) waived by DKIB, or (b) the Placing Agreement is terminated inthe circumstances specified below, the Placing will lapse and each Placee'srights and obligations hereunder shall cease and determine at such time and noclaim may be made by a Placee in respect thereof. By participating in the Bookbuilding Process, each Placee agrees that its rightsand obligations hereunder terminate only in the circumstances described aboveand under 'Right to terminate under the Placing Agreement' below, and will notbe capable of rescission or termination by the Placee. DKIB reserves the right to waive or to extend the time and/or date forfulfilment of any of the conditions in the Placing Agreement where such waiveror extension is permitted under the terms of the Placing Agreement. Any suchextension or waiver will not affect Placees' commitments. DKIB shall not haveany liability to any Placee (or to any other person whether acting on behalf ofa Placee or otherwise) in respect of any decision it may make as to whether ornot to waive or to extend the time and/or date for the satisfaction of anycondition in the Placing Agreement or in respect of the Placing generally. Right to terminate under the Placing Agreement DKIB may, at any time before Admission, terminate the Placing Agreement bygiving notice to the Company if: 1. in the opinion of DKIB (acting in good faith), any of the warranties given by the Company in the Placing Agreement are not true and accurate or have become misleading (or would not be true and accurate or would be misleading if they were repeated at any time before Admission) by reference to the facts subsisting at the relevant time provided that DKIB consults with the Company (where practicable) prior to the giving of any such notice; 2. in the opinion of DKIB (acting in good faith), the Company fails to comply with any of its obligations under the Placing Agreement and such failure has, or is likely to have (in the opinion of DKIB, acting in good faith), a material effect on the Placing; 3. in the opinion of DKIB (acting in good faith) there has been a material adverse change in the financial or trading position or prospects of the Group (defined as the Company and its subsidiary undertakings); or 4. in the absolute discretion of DKIB, there has been a change in national or international financial, political, economic or stock market conditions (primary or secondary); an incident of terrorism, outbreak or escalation of hostilities, war, declaration of martial law or any other calamity or crisis; a suspension or material limitation in trading of securities generally on any stock exchange; any change in currency exchange rates or exchange controls or a disruption of settlement systems or a material disruption in commercial banking as would be likely to prejudice the success of the Placing. By participating in the Placing, each Placee agrees with DKIB that the exerciseby DKIB of any right of termination or other discretion under the PlacingAgreement shall be within the absolute discretion of DKIB and that, to thefullest extent permitted by law, DKIB need not make any reference to the Placeein this regard and that DKIB shall not have any liability whatsoever to thePlacee in connection with any such exercise. No Prospectus No offering document or prospectus has been or will be prepared in relation tothe Placing and Placees' commitments will be made solely on the basis of theinformation contained in this announcement and any information previouslypublished by or on behalf of the Company by notification to a RegulatoryInformation Service (as defined in the AIM Rules for Companies of the LondonStock Exchange). Each Placee, by accepting a participation in the Placing,agrees that the content of this announcement is exclusively the responsibilityof the Company and confirms to DKIB, DBAG and the Company that it has neitherreceived nor relied on any information, representation, warranty or statementmade by or on behalf of DKIB (other than the amount of the relevant Placingparticipation in the oral confirmation given to Placees and the tradeconfirmation referred to below), DBAG, any of their respective Affiliates, anypersons acting on their behalf or the Company and none of DKIB, DBAG or theCompany or any of their respective Affiliates will be liable for the decision ofany Placee to participate in the Placing based on any other information,representation, warranty or statement which the Placee may have obtained orreceived (regardless of whether or not such information, representation,warranty or statement was given or made by or on behalf of any such persons). Byparticipating in the Placing, each Placee acknowledges and agrees, to DKIB foritself and as agent for the Company and to DBAG, that, except in relation to theinformation contained in this announcement, it has relied on its owninvestigation of the business, financial or other position of the Company indeciding to participate in the Placing. Nothing in this paragraph shall excludethe liability of any person for fraudulent misrepresentation. Registration and settlement Settlement of transactions in the Placing Shares (ISIN GB00B02QN400) followingAdmission will take place within the CREST system, using the DVP mechanism,subject to certain exceptions. DKIB reserves the right to require settlement forand delivery of the Placing Shares to Placees by such other means that it deemsnecessary, if delivery or settlement is not possible or practicable within theCREST system within the timetable set out in this announcement or would not beconsistent with the regulatory requirements in the Placee's jurisdiction. Each Placee allocated Placing Shares in the Placing will be sent a tradeconfirmation stating the number of Placing Shares allocated to it, the PlacingPrice, the aggregate amount owed by such Placee to DKIB and settlementinstructions. Placees should settle against CREST ID: 318. It is expected thatsuch trade confirmation will be despatched on 9 April 2008 and that this willalso be the trade date. Each Placee agrees that it will do all things necessaryto ensure that delivery and payment is completed in accordance with either thestanding CREST or certificated settlement instructions which it has in placewith DKIB. It is expected that settlement will be on 12 May 2008 on a T+22 basis inaccordance with the instructions set out in the trade confirmation. Interest is chargeable daily on payments not received from Placees on the duedate in accordance with the arrangements set out above at the rate of 2percentage points above the base rate of Barclays Bank Plc. Each Placee is deemed to agree that if it does not comply with theseobligations, DKIB may sell any or all of the Placing Shares allocated to thePlacee on such Placee's behalf and retain from the proceeds, for its own accountand profit, an amount equal to the aggregate amount owed by the Placee plus anyinterest due. The Placee will, however, remain liable for any shortfall belowthe aggregate amount owed by such Placee and it may be required to bear anystamp duty or stamp duty reserve tax (together with any interest or penalties)which may arise upon the sale of such Placing Shares on such Placee's behalf. If Placing Shares are to be delivered to a custodian or settlement agent, thePlacee should ensure that the trade confirmation is copied and deliveredimmediately to the relevant person within that organisation. Insofar as Placing Shares are registered in the Placee's name or that of itsnominee or in the name of any person for whom the Placee is contracting as agentor that of a nominee for such person, such Placing Shares will, subject asprovided below, be so registered free from any liability to PTM levy, stamp dutyor stamp duty reserve tax. If there are any circumstances in which any otherstamp duty or stamp duty reserve tax is payable in respect of the issue of thePlacing Shares, neither DKIB, DBAG nor the Company shall be responsible for thepayment thereof. Placees will not be entitled to receive any fee or commissionin connection with the Placing. Representations and Warranties By participating in the Placing, each Placee (and any person acting on suchPlacee's behalf): 1. represents and warrants that it has read and understood this announcement in its entirety and acknowledges that its participation in the Placing will be governed by the terms of this announcement; 2. acknowledges that no prospectus or other offering document has been prepared in connection with the Placing; 3. agrees to indemnify on an after-tax basis and hold harmless the Company, DKIB, DBAG, any of their respective Affiliates and any person acting on their behalf from any and all costs, claims, liabilities and expenses (including legal fees and expenses) arising out of or in connection with any breach of the representations, warranties, acknowledgements, agreements and undertakings in this announcement and further agrees that the provisions of this announcement shall survive after completion of the Placing; 4. acknowledges that the ordinary shares of the Company with a nominal value of 1 pence each are listed on the AIM market of the London Stock Exchange, and the Company is therefore required to publish certain business and financial information in accordance with the rules and practices of the London Stock Exchange (collectively, the "Exchange Information"), which includes a description of the nature of the Company's business and the Company's most recent balance sheet and profit and loss account, and similar statements for preceding financial years, and that the Placee is able to obtain or access the Exchange Information without undue difficulty; 5. acknowledges that none of DKIB, the Company nor any of their respective Affiliates nor any person acting on DKIB's, the Company's or their respective Affiliates' behalf has provided, and will not provide it with any material or information regarding the Placing Shares or the Company; nor has it requested DKIB, the Company, any of their respective Affiliates or any person acting on DKIB's, the Company's or their respective Affiliates' behalf to provide it with any such material or information; 6. acknowledges that the content of this announcement is exclusively the responsibility of the Company and that none of DKIB, DBAG, any of their respective Affiliates nor any person acting on their behalf will be responsible for or shall have any liability for any information, representation or statement relating to the Company contained in this announcement or any information previously published by or on behalf of the Company and none of DKIB, DBAG, any of their respective Affiliates nor any person acting on their behalf will be liable for any Placee's decision to participate in the Placing based on any information, representation or statement contained in this announcement or otherwise. Each Placee further represents, warrants and agrees that the only information on which it is entitled to rely and on which such Placee has relied in committing to subscribe for the Placing Shares is contained in this announcement and any information that is publicly available, including any Exchange Information, such information being all that it deems necessary to make an investment decision in respect of the Placing Shares, and that it has relied on its own investigation with respect to the Placing Shares and the Company in connection with its decision to subscribe for the Placing Shares and acknowledges that it is not relying on any investigation that DKIB, DBAG, the Company, any of their respective Affiliates or any person acting on their behalf may have conducted with respect to the Placing Shares or the Company and none of such persons has made any representations to it, express or implied, with respect thereto; 7. acknowledges that it has not relied on any information relating to the Company contained in any research reports prepared by DKIB, any of its Affiliates or any person acting on DKIB's or any of its Affiliates' behalf and understands that (i) none of DKIB, any of its Affiliates nor any person acting on their behalf has or shall have any liability for public information or any representation; (ii) none of DKIB, any of its Affiliates nor any person acting on their behalf has or shall have any liability for any additional information that has otherwise been made available to such Placee, whether at the date of publication, the date of this announcement or otherwise; and that (iii) none of DKIB, any of its Affiliates nor any person acting on their behalf makes any representation or warranty, express or implied, as to the truth, accuracy or completeness of such information, whether at the date of publication, the date of this announcement or otherwise; 8. represents and warrants that it (i) is entitled to acquire the Placing Shares under the laws and regulations of all relevant jurisdictions which apply to it; (ii) has fully observed such laws and regulations and obtained all such governmental and other guarantees and other consents and authorities which may be required thereunder and complied with all necessary formalities; (iii) has all necessary capacity to commit to participation in the Placing and to perform its obligations in relation thereto and will honour such obligations; (iv) has paid any issue, transfer or other taxes due in connection with its participation in any territory; and (v) has not taken any action which will or may result in the Company, DBAG or DKIB, any of their Affiliates or any person acting on their behalf being in breach of the legal and/or regulatory requirements of any territory in connection with the Placing; 9. represents and warrants that the acquisition by the Placee, or the person specified by the Placee for registration as holder, of Placing Shares will not give rise to a liability under any of sections 67, 70, 93 or 96 of the Finance Act 1986 (depositary receipts and clearance services) and that the Placing Shares are not being acquired in connection with arrangements to issue depositary receipts or to issue or transfer Placing Shares into a clearance system; 10. represents and warrants that it understands that the Placing Shares have not been and will not be registered under the Securities Act or under the securities laws of any state or other jurisdiction of the United States (as defined below) and that the Company has not been registered as an "investment company" under the United States Investment Company Act of 1940, as amended; 11. represents and warrants that unless it is a "US Person" (within the meaning of Regulation S) that is a QIB in the United States to which the Placing Shares will be offered on a private placement basis, it is, or at the time the Placing Shares are acquired, it will be, (a) the beneficial owner of such Placing Shares and is neither a person located in the United States of America, its territories or possessions, any state of the United States or the District of Columbia (the "United States") nor on behalf of a person in the United States, (b) acquiring the Placing Shares in an offshore transaction (as defined in Regulation S under the Securities Act) and (c) will not offer or sell, directly or indirectly, any of the Placing Shares in the United States except in accordance with Regulation S or pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act; 12. represents and warrants that it has not offered or sold and will not offer or sell any Placing Shares to persons in the United Kingdom prior to Admission except to qualified investors as defined in section 86(7) of FSMA, being persons falling within Article 2.1(e)(i), (ii) or (iii) of the Prospectus Directive; 13. represents and warrants that it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of FSMA) relating to the Placing Shares in circumstances in which section 21(1) of FSMA does not require approval of the communication by an authorised person; 14. represents and warrants that it has complied and will comply with all applicable provisions of FSMA with respect to anything done by it in relation to the Placing Shares in, from or otherwise involving the United Kingdom; 15. represents and warrants that it has complied with its obligations in connection with money laundering and terrorist financing under the Criminal Justice Act 1993, the Proceeds of Crime Act 2002, the Terrorism Act 2000, the Anti-terrorism Crime and Security Act 2001 and the Money Laundering Regulations (2003) (the "Regulations") and, if it is making payment on behalf of a third party, that satisfactory evidence has been obtained and recorded by it to verify the identity of the third party as required by the Regulations; 16. unless otherwise agreed with DKIB, represents and warrants that it is (a) a person falling within Article 19(5) of the FPO or (b) a person falling within Article 49(2)(a) to (d) of the FPO and undertakes that it will acquire, hold, manage or dispose of any Placing Shares that are allocated to it for the purposes of its business; 17. unless otherwise agreed with DKIB, represents and warrants that it is a qualified investor as defined in section 86(7) of FSMA, being a person falling within Article 2.1(e)(i), (ii) or (iii) of the Prospectus Directive; 18. represents and warrants that it has all necessary capacity and has obtained all necessary consents and authorities to enable it to commit to participate in the Placing and to perform its obligations in relation thereto (including, without limitation, in the case of any person on whose behalf it is acting, all necessary consents and authorities to agree to the terms set out or referred to in this document) and will honour such obligations; 19. undertakes that it (and any person acting on its behalf) will pay for the Placing Shares acquired by it in accordance with this announcement on the due time and date set out herein against delivery of such Placing Shares to it, failing which the relevant Placing Shares may be placed with other Placees or sold as DKIB may, in its absolute discretion, determine and it will remain liable for any shortfall below the net proceeds of such sale and the placing proceeds of such Placing Shares and may be required to bear any stamp duty or stamp duty reserve tax (together with any interest or penalties due pursuant to the terms set out or referred to in this announcement) which may arise upon the sale of such Placee's Placing Shares on its behalf; 20. acknowledges that neither DKIB, DBAG, the Company, any of their respective Affiliates nor any person acting on their behalf is making any recommendations to it or advising it regarding the suitability or merits of any transaction it may enter into in connection with the Placing, and acknowledges that neither the Company, DKIB, DBAG, any of their respective Affiliates nor any person acting on their behalf has any duties or responsibilities to it for providing advice in relation to the Placing or in respect of any representations, warranties, undertakings or indemnities contained in the Placing Agreement or for the exercise or performance of any of DKIB's or DBAG's rights and obligations thereunder, including any right to waive or vary any condition or exercise any termination right contained therein; 21. undertakes that (i) the person whom it specifies for registration as holder of the Placing Shares will be (a) the Placee or (b) the Placee's nominee, as the case may be, (ii) neither DKIB, DBAG nor the Company will be responsible for any liability to stamp duty or stamp duty reserve tax resulting from a failure to observe this requirement and (iii) the Placee and any person acting on its behalf agrees to acquire the Placing Shares on the basis that the Placing Shares will be allotted to the CREST stock account of DKIB which will hold them as settlement agent to facilitate the transaction and as nominee for the Placees until settlement in accordance with its standing settlement instructions with payment for the Placing Shares being made simultaneously upon receipt of the Placing Shares in the Placee's stock account on a delivery versus payment basis; 22. acknowledges that any agreements entered into by it pursuant to these terms and conditions shall be governed by and construed in accordance with the laws of England and it submits (on behalf of itself and on behalf of any person on whose behalf it is acting) to the exclusive jurisdiction of the English courts as regards any claim, dispute or matter arising out of any such contract; 23. acknowledges that it irrevocably appoints any director of DKIB as its agent for the purposes of executing and delivering to the Company and/or its registrars any documents on its behalf necessary to enable it to be registered as the holder of any of the Placing Shares agreed to be taken up by it under the Placing; 24. represents and warrants that it is not a resident of any Prohibited Jurisdiction and acknowledges that the Placing Shares have not been and will not be registered nor will a prospectus be cleared in respect of the Placing Shares under the securities legislation of any Prohibited Jurisdictions and, subject to certain exceptions, may not be offered, sold, taken up, renounced or delivered or transferred, directly or indirectly, within any Prohibited Jurisdiction; 25. acknowledges that the agreement to settle each Placee's acquisition of Placing Shares (and/or the acquisition of a person for whom it is contracting as agent) free of stamp duty and stamp duty reserve tax depends on the settlement relating only to an acquisition by it and/or such person direct from the Company of the Placing Shares in question. Such agreement assumes that the Placing Shares are not being acquired in connection with arrangements to issue depositary receipts or to issue or transfer the Placing Shares into a clearance service. If there were any such arrangements, or the settlement related to other dealing in the Placing Shares, stamp duty or stamp duty reserve tax may be payable, for which neither the Company, DKIB nor DBAG will be responsible. If this is the case, the Placee should take its own advice and notify DKIB accordingly; 26. acknowledges that the Placing Shares will be issued and/or transferred subject to the terms and conditions set out in this announcement; 27. acknowledges that when a Placee or any person acting on behalf of the Placee is dealing with DKIB, any money held in an account with DKIB 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 relevant rules and regulations of the FSA. 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 DKIB's money in accordance with the client money rules and will be used by DKIB in the course of its business; and the Placee will rank only as a general creditor of DKIB. 28. acknowledges that DKIB may (in its absolute discretion) satisfy its obligations to procure Placees by itself agreeing to become a Placee in respect of some or all of the Placing Shares or by nominating any connected or associated person to do so; 29. acknowledges and understands that the Company, DKIB, DBAG and others will rely upon the truth and accuracy of the foregoing representations, warranties, agreements, undertakings and acknowledgements; and 30. acknowledges that until 40 days after the later of the commencement of the Placing and the closing date, an offer or sale of Placing Shares within the United States by any dealer (whether or not participating in the Placing) may violate the registration requirements of the Securities Act if such offer or sale is made otherwise than in accordance with Rule 144A or pursuant to another exemption from registration under the Securities Act to a person that is a QP (as defined below). Additional Representations and Warranties by US Persons In addition to the foregoing, each Placee which is a US Person to which thePlacing Shares will be offered in transactions exempt from, or not subject to,the registration requirements of the Securities Act represents, warrants andagrees as follows: 31. that (a) it is a qualified institutional buyer within the meaning of Rule 144A of the Securities Act; (b) it is a "qualified purchaser" within the meaning of Section 2(a)(51) of the United States Investment Company Act of 1940, as amended ("QP"), and is not (i) a broker or dealer which owns or invests less than US$25 million in securities of unaffiliated issuers; (ii) a participant-directed employee plan; or (iii) formed for the purposes of investing in the Placing Shares or the Company; (c) it has duly executed, or will duly execute, an investor letter in the form provided to it by DKIB in which it will make certain undertakings, representations and warranties in addition to those contained herein; and (d) it is subscribing for the Placing Shares for its own account, or for the account managed on behalf of another QIB that is also a QP, and not with a view to any distribution within the meaning of the Securities Act or applicable state law except as set forth below; 32. it acknowledges and agrees that no offering circular or prospectus will be provided in connection with the Placing Shares and it has, or to the extent it is acquiring Placing Shares for the account of another QIB, such other QIB (a) has, sufficient knowledge, sophistication and experience in financial and business matters so as to be capable of evaluating the merits and risks of the purchase of the Placing Shares; (b) is able to bear the economic and financial risk (including a complete loss) of such a purchase; (c) has had sufficient time to consider and conduct its own investigation with respect to the offer and purchase of the Placing Shares, including the tax, legal, currency and other economic considerations relevant to such investment; and (d) will not look to the Company, DKIB, DBAG, any of their respective Affiliates or any person acting on their behalf for all or part of any such loss or losses it or they may suffer; 33. it understands and agrees that (a) the Placing Shares are "restricted securities" within the meaning of Rule 144(a)(3) under the Securities Act; (b) the undersigned will not offer, sell, transfer, pledge, hypothecate or otherwise dispose of any Placing Shares except in an offshore transaction outside the United States in accordance with Regulation S under the Securities Act (and not in a prearranged transaction resulting in the sale of Placing Shares into the United States or to a US Person) in accordance with any other applicable laws of the United States governing the offer and sale of such Placing Shares, and in each case it will notify any purchaser of the Placing Shares of the resale restrictions relating to the Placing Shares, if still applicable; (c) understands and agrees that the Placing Shares (to the extent they are in certificated form), unless otherwise determined by the Company in accordance with applicable law, will bear a legend to that effect in addition to such other legends as the Company deems necessary or as are required under applicable law; and (d) understands that the Company or registrar and transfer agent for the Placing Shares will not be required to accept for registration of transfer any Placing Shares except upon presentation of evidence (including an opinion of legal counsel satisfactory to the Company) to the Company and the transfer agent that the foregoing restrictions on transfer have been complied with; 34. it understands and agrees that if any beneficial owner of ordinary shares in the Company is at any time a US person and not a QP, the Company may (i) require such beneficial owner to sell its ordinary shares to a person who is not a US person or who is a QIB and a QP and is qualified to purchase such shares in a transaction exempt from registration under the Securities Act or (ii) sell such shares on behalf of such beneficial owner at the best price reasonably obtainable to a person who is not a US person or who is a QIB and a QP and is qualified to purchase such shares in a transaction exempt from registration under the Securities Act; 35. without limiting the generality of clause (c) of paragraph 32 above, it acknowledges that the Company may be a passive foreign investment company (" PFIC") for US federal income tax purposes, and it could be a PFIC in future years. The Company has not undertaken an extensive PFIC analysis, however, if such analysis reveals no significant differences between tax and book values for income and losses, then there is a significant likelihood that the Company is a PFIC currently and may be a PFIC in future years. If the Company is a PFIC, then US taxable investors may be subject to adverse US tax consequences in respect of their investment in the Company's shares. US investors may be able to mitigate these adverse US tax consequences by making certain elections for US tax purposes; 36. it agrees that no purchaser of the Placing Shares shall deposit the Placing Shares into any unrestricted American Depositary Receipt facility established or maintained by a depositary bank, unless and until such time as such Placing Shares are no longer "restricted securities" within the meaning of Rule 144(a)(3) under the Securities Act; and 37. it acknowledges and agrees that the Company, DKIB, their respective Affiliates and any person acting on their behalf will rely upon its representations, warranties, undertakings, agreements and acknowledgements set forth herein and in the investor letter, and agrees to notify the Company and DKIB promptly in writing if any of its representations, warranties, undertakings, agreements or acknowledgements cease to be accurate and complete. The acknowledgements, agreements, undertakings, representations and warrantiesreferred to above are given to each of the Company, DKIB, DBAG (for their ownbenefit and, where relevant, the benefit of their respective Affiliates and anyperson acting on their behalf) and are irrevocable. No UK stamp duty or stamp duty reserve tax should be payable to the extent thatthe Placing Shares are issued or transferred (as the case may be) into CREST to,or to the nominee of, a Placee who holds those shares beneficially (and not asagent or nominee for any other person) within the CREST system and registered inthe name of such Placee or such Placee's nominee. Any arrangements to issue or transfer the Placing Shares into a depositaryreceipts system or a clearance service or to hold the Placing Shares as agent ornominee of a person to whom a depositary receipt may be issued or who will holdthe Placing Shares in a clearance service, or any arrangements subsequently totransfer the Placing Shares, may give rise to stamp duty and/or stamp dutyreserve tax, for which neither the Company nor DKIB nor DBAG will be responsibleand the Placee to whom (or on behalf of whom, or in respect of the person forwhom it is participating in the Placing as an agent or nominee) the allocation,allotment, issue or delivery of Placing Shares has given rise to such stamp dutyor stamp duty reserve tax undertakes to pay such stamp duty or stamp dutyreserve tax forthwith and to indemnify on an after-tax basis and to holdharmless the Company, DKIB and DBAG in the event that any of the Company and/orDKIB and/or DBAG has incurred any such liability to stamp duty or stamp dutyreserve tax. In addition, Placees should note that they 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 penaltiesrelating thereto) payable outside the UK by them or any other person on theacquisition by them of any Placing Shares or the agreement by them to acquireany Placing Shares. All times and dates in this announcement may be subject to amendment. DKIB shallnotify the Placees and any person acting on behalf of the Placees of any suchchanges. This announcement has been issued by the Company and is the sole responsibilityof the Company. The rights and remedies of DKIB, DBAG and the Company under these terms andconditions are in addition to any rights and remedies which would otherwise beavailable to each of them and the exercise or partial exercise or partialexercise of one will not prevent the exercise of others. Each Placee may be asked to disclose in writing or orally to DKIB: (a) if he is an individual, his nationality; or (b) if he is a discretionary fund manager, the jurisdiction in which the funds are managed or owned. Dresdner Kleinwort Limited and Dresdner Kleinwort Securities Limited, who areauthorised and regulated by the Financial Services Authority, and Dresdner BankAG, London Branch, which is authorised by BAFin and by the Financial ServicesAuthority and which is regulated by the Financial Services Authority for theconduct of designated investment business in the United Kingdom, are acting forthe Company and for no one else in connection with the Placing and will not beresponsible to anyone other than the Company for providing the protectionsafforded to clients of Dresdner Bank AG, London Branch, Dresdner KleinwortSecurities Limited and Dresdner Kleinwort Limited, or for affording advice inrelation to the Placing, or any other matters referred to herein. All times and dates in this announcement may be subject to amendment. DKIB shallnotify the Placees and any person acting on behalf of the Placees of anychanges. This announcement has been prepared solely to provide information about thePlacing and it does not constitute, or form part of, any offer or invitation topurchase, underwrite or otherwise acquire Placing Shares being offered, or thesolicitation of any such offer. Without limiting the foregoing statement, thisannouncement does not constitute an offer of securities for sale in the UnitedStates nor the solicitation of an offer to buy any such securities, nor maysecurities be offered or sold in the United States absent registration or anexemption from registration as provided in the Securities Act and the rules andregulations thereunder. The Company does not intend to register the PlacingShares under the Securities Act. This information is provided by RNS The company news service from the London Stock Exchange

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