29th Jul 2009 07:00
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, HONG KONG, JAPAN, NEW ZEALAND, SOUTH AFRICA OR SWITZERLAND OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION
29 July 2009
Rexam PLC ("Rexam" or the "Company")
Rexam announces 4 for 11 Rights Issue to raise approximately £350.7 million of gross proceeds
The Board of Rexam, the global consumer packaging company, today announces a fully underwritten 4 for 11 Rights Issue of 233,799,459 Rights Issue Shares at a price of 150 pence per Rights Issue Share to raise approximately £350.7 million (approximately £334.3 million net of expenses).
In a separate announcement this morning Rexam has also published its half year results to 30 June 2009.
Rationale for the Rights Issue
The Board is taking proactive measures to maintain Rexam's investment grade credit rating. The loss of investment grade rating would be detrimental to the Group, both in terms of the cost and the availability of future credit, and would lead to a significant transfer of value from shareholders to debt providers.
The Rights Issue will enable the Group to put in place a more conservative and resilient long term capital structure and significantly enhances the prospect of maintaining the Group's current investment grade credit rating. The issue will also put Rexam in a strong position from which to grow when markets recover.
Since the Interim Management Statement in May it has become increasingly clear that the effect of the recession on Rexam's trading will be deeper and more prolonged than previously thought with cyclical, more premium parts of the business disproportionately impacted by the downturn. Destocking has given way to reduced underlying customer demand reducing the Group's ability to generate cash and pay down debt.
Management action to counter trading weakness includes plant closures and reductions in administration costs and headcount to deliver annualised savings of around £75 million in 2010. Capital expenditure in 2009 has been cut to £200 million, a £50 million reduction from earlier guidance, and the working capital performance to 30 June 2009 was £218 million better than the equivalent period in 2008.
In total some £1.3 billion of banking facilities was refinanced in the first half of 2009, however, £1.45 billion remains due in 2011 and 2012.
The Board has reviewed the dividend policy and will not declare a 2009 interim dividend but intends to recommend a final 2009 dividend of 8 pence per share at an expected total cost of approximately £70 million. In the medium term, the Group expects to establish dividend cover in the 2.0 - 2.5 times underlying earnings range.
Leslie Van de Walle, CEO of Rexam, said:
"We previously stated that we had limited visibility for 2009. While trading in the first half was broadly in line with our expectations, we now see no upturn in current trading conditions through the rest of 2009 and as a result we are taking prompt action. We examined all options available to us and consider that the Rights Issue is the right one. It will significantly enhance the prospect of maintaining the Group's current investment grade credit rating which is important for maintaining shareholder value.
Rexam remains a strong, profitable and well invested global business with leading positions in many markets that remain attractive in the medium and long term. Whilst we see no clear upturn in current trading conditions, the cost savings already announced and the further savings identified will have a material benefit, giving us greater confidence in our 2010 performance. Looking further ahead, the higher degree of cyclicality of parts of the Group's business, added to the strength of its core operations, will leave Rexam well placed to participate fully in the upturn when it comes."
A copy of this release has been posted on the Rexam website, www.rexam.com.
An analyst presentation and investor meeting will be held today at 09:00 UK time at Allen & Overy LLP, One Bishops Square, London E1 6AD. A copy of this release has been posted on the Rexam website, www.rexam.com. Subject to certain restrictions, the presentation will be webcast live on www.rexam.com and subsequently available on demand.
This summary should be read in conjunction with the full text of this announcement (including the Appendices).
Enquiries
Rexam PLC 020 7227 4100
Leslie Van de Walle, Chief Executive Officer
David Robbie, Finance Director
Citi 020 7986 4000
Nigel Mills
Charles Lytle
RBS Hoare Govett 020 7678 8000
Neil Collingridge
Greenhill 020 7198 7400
James Lupton
Financial Dynamics 020 7269 7291
Andrew Lorenz
Susanne Yule
Appendix I contains an expected timetable of principal events.
Capitalised terms used in this announcement are defined in Appendix II to this announcement.
Subject to certain restrictions, the full text of this announcement may be downloaded from www.rexam.com.
Disclaimer
This announcement does not constitute, or form part of any offer or invitation to purchase, otherwise acquire, subscribe for, sell, otherwise dispose of or issue, or any solicitation of any offer to sell, otherwise dispose of, issue, purchase, otherwise acquire or subscribe for, any security in the capital of the Company in any jurisdiction.
This announcement is an advertisement and not a prospectus. Nothing in this announcement should be interpreted as a term or condition of the Rights Issue. Any decision to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of any Provisional Allotment Letter, Nil Paid Rights, Fully Paid Rights and/or the Rights Issue Shares should only be made on the basis of information contained in and incorporated by reference into the Prospectus (including any supplement thereto) which contains further details relating to the Company in general as well as a summary of the risk factors to which any investment is subject. Copies of the Prospectus will be available on publication from Rexam's registered office and from the Company's website at www.rexam.com, provided that, subject to certain exceptions, the Prospectus will not be available (whether through the website or otherwise) to Shareholders in Excluded Territories or the United States.
Please see the important notices in Appendix III to this announcement.
The Rights Issue
1 Introduction
Rexam announces today that it is to raise approximately £350.7 million (approximately £334.3 million net of expenses) by way of a 4 for 11 Rights Issue of 233,799,459 Rights Issue Shares at a price of 150 pence per Rights Issue Share. This price represents a 45.7 per cent discount to the closing middle market price of 276.25 pence per Share on 28 July 2009, the latest practicable date before the announcement of the equity raising and a discount of 38.2 per cent to the theoretical ex-rights price ("TERP") on the same basis.
The Rights Issue has been fully underwritten by the Joint Underwriters. The Directors have received financial advice from Greenhill in relation to the Rights Issue.
The necessary authorities to allot the Rights Issue Shares were given at the Annual General Meeting on 7 May 2009. The purpose of this letter, therefore, is to set out the background to and the reasons for the Rights Issue and to explain why the Directors strongly believe that the Rights Issue is in the best interests of the Company and Shareholders taken as a whole.
2 Background to and reasons for the Rights Issue
Strategic overview
In recent years, Rexam has pursued a strategy to build a world leading global consumer packaging company with attractive medium and long term growth prospects. Rexam is today a leading global consumer packaging company and a leading global beverage can maker by sales volumes with market leading positions in many of the regions and markets in which it operates. In 2008, the Beverage Cans business represented 72 per cent and Plastic Packaging 28 per cent of continuing sales (excluding disposals).
Over the last three years this strategy has been implemented through a number of key acquisitions and a significant capital expenditure programme focused on growth opportunities in the European beverage can and the global rigid plastic packaging markets. The capital structure put in place to deliver this strategy took into account Rexam's continued ability to generate profits and cash flows from its investments. It also reflected the defensiveness of Rexam's free cash flow from operations, underlying profits development, the realisation of post acquisition synergies and the commitment to maintain its dividend policy, together with the importance of retaining its investment grade credit rating.
Recent trading
During 2008, the Directors believed that there was every indication that the investment in acquisitions and new capacity would deliver the expected returns and, indeed, this proved to be the case in the first half of 2008. In addition to the benefit of the acquisitions of OI Plastics and the Russian beverage can maker, Rostar, there was the benefit of new capacity coming on stream, good organic volume growth, pricing initiatives, pass through of raw material prices and favourable foreign exchange translation. Sales in the first half of 2008 grew 30 per cent to £2,191 million compared with the first half of 2007 with organic sales growth of eight per cent. In the same period, underlying operating profit grew 47 per cent to £217 million, including eight per cent organic growth. Underlying profit before tax was £158 million compared with £98 million in the first half of 2007.
However, in the second half of 2008 and particularly in the fourth quarter, the global economic environment deteriorated dramatically. Whilst Rexam is a resilient business, it is not immune to a significant downturn in the wider economy. As Rexam's customers began to destock their supply chain and the recession began to affect consumer buying patterns, Rexam's trading was impacted, especially in parts of the European beverage cans business and the Closures and Personal Care divisions of its Plastic Packaging business.
Rexam's underlying profit before tax in the second half of 2008 was £170 million, albeit benefiting from the positive effect of foreign currency exchange, but the rate of profitable growth was not what it had been in the first half of 2008. In addition, the economic downturn was having an adverse impact on the cost and availability of credit, which is of central significance to Rexam given the need to refinance approximately £2.6 billion of debt facilities as they mature between 2010 and 2013.
In March 2009, S&P downgraded Rexam to the lowest investment grade rating (BBB-) and gave a stable outlook. Moody's reaffirmed its investment grade rating (Baa3) but changed its outlook from stable to negative.
2009 half year results and current trading
In the first half of 2009, Rexam's reported sales grew 15 per cent as a result of favourable foreign currency exchange due to the strengthening of the US dollar and the euro. Organic sales declined by six per cent and organic underlying profit declined 20 per cent primarily attributable to weak trading in Plastic Packaging. The 2009 half year financial results will be set out in the Prospectus.
Since the Interim Management Statement in May 2009, it has become increasingly clear that the effect of the recession on Rexam's trading will be deeper and more sustained than previously thought. It is evident that destocking has now given way to reduced underlying customer demand. Summer trading is usually stronger than the first quarter and whilst there has been a seasonal pick up, it has been from a lower base.
The majority of the business is demonstrating the expected resilience. The Company estimates that about 25 per cent of sales, primarily comprising the cyclical, more premium areas of the business, are driving around 75 per cent of the current organic profit decline.
Management actions
In this challenging environment, management has, since the second half of 2008, taken and continues to take timely and decisive action.
In the second half of 2008, Rexam announced the closure of its Forest Park, Georgia, and Oklahoma City beverage can plants and the decommissioning of one beverage can line in Longview, Texas, to reduce overcapacity in the US beverage can market. The closures amounted to a 15 per cent reduction in Rexam's US 12oz beverage can making capacity. There was also a reduction of 270 employees in the North American beverage can organisation. The exceptional cash restructuring charge in 2008 for these measures was £17 million with expected annualised savings of £20 million in 2010.
In 2009, the focus has initially been on restructuring Plastic Packaging to reduce cost and increase efficiency, and follows consolidation work already undertaken in 2008 in conjunction with the acquisition of OI Plastics. These measures will result in annualised savings of approximately £30 million from 2010 onwards for a one off cash cost in 2009 of £42 million. They include a five per cent reduction in capacity with the closure and consolidation of six plants, split between the Closures and Personal Care divisions in the US and the rest of its global locations, as well as a ten per cent headcount reduction (approximately 1,500 people). Rexam has also imposed shortened working hours for all Personal Care employees until the end of 2009.
A further £5 million in annual savings for a one off cash cost of £6 million have resulted from other cost reduction initiatives including a 30 per cent reduction in senior executive positions and a 20 per cent reduction in corporate staff. Rexam has also implemented salary restraints and cancelled 2009 awards under the 2009 LTIP for all senior management.
Rexam is currently finalising plans for a seven per cent reduction of its beverage can capacity in Europe. This will result in annualised savings in 2010 of £20 million for one off cash costs of £25 million.
Overall, the actions set out above reduce the Group's cost base by approximately £75 million per annum in 2010 (including around £25 million expected in 2009) at an exceptional cash cost of around £90 million including some £50 million in 2009.
In addition to these cost saving measures, there has been a strong focus on cash flow. Capital expenditure in 2009 has been cut to £200 million, a £50 million reduction from earlier guidance and representing just over 0.8 times underlying depreciation and amortisation, with all non essential projects cancelled. Resources have been focused on improving working capital, including £113 million in inventories together with some receivables discounting. The Group's working capital performance for the six months to 30 June 2009 was £218 million better than the same period in 2008.
In 2009 and 2010, the Directors intend to limit capital expenditure to below underlying depreciation and amortisation (2008: 2.2 times underlying depreciation and amortisation). Given the level of capital expenditure in recent years, management believes that the operations are well invested and that this level of capital expenditure will be sufficient for maintenance and other purposes as Rexam looks to maximise the returns from its investments when the recovery comes.
As announced today, the Board has reviewed the dividend policy in the light of the capital needs of the Group and the Rights Issue. Details can be found under Dividends and Dividend Policy in paragraph 4 below.
Financing and liquidity
Rexam has a high level of indebtedness, but this has continued to be deemed appropriate given the defensiveness of Rexam's free cash flow from operations and its underlying profit development. Rexam maintains a close review of its rating position and has an ongoing dialogue with the rating agencies.
As at 30 June 2009, the Group's net borrowings were £2.1 billion (up from £1.9 billion as at 30 June 2008) with interest cover (on underlying operating profit) of 3.3 times (June 2008: 4.0 times) which is outside Rexam's own target. The Group's principal debt covenant is that net debt to EBITDA should be less than 3.5 times. At 30 June 2009, the Group was below this at 2.6 times.
Against a difficult credit environment Rexam has been successfully refinancing its banking facilities in advance of them falling due; in total, some £1.3 billion was refinanced in the first half of 2009. In the first quarter of 2009, Rexam secured £453 million of bilateral facilities to underpin its access to liquidity. In June 2009, it refinanced a substantial portion of its £775 million revolving credit facility and negotiated a number of bilateral facilities which were due to mature in 2010. The refinancing package, which totals £896 million (as at 30 June 2009 exchange rates) of new committed debt facilities, consists of £647 million of syndicated forward start commitments and £249 million of new bilateral commitments. The margin, although higher than in the past, is in line with current market levels. As at 30 June 2009, the Group's principal committed loan and bank facilities totalled £3.2 billion.
The Group's next major round of refinancing will be in relation to the £495 million committed bank facilities due in 2011, followed by a further £904 million of bank facilities due in 2012 with £1,062 million, comprising the €700 million bond, the US bond and US private placement, due in 2013.
Reasons for the Rights Issue
The recession has had a significant impact on some of the more cyclical and premium parts of Rexam's business such as dispensing systems, speciality closures and specialty cans, and this has put pressure on profits and cash flow. The weakness in trading performance has already impacted Rexam's credit rating as described above. Rexam therefore needs to reduce its underlying indebtedness accordingly in order to remain investment grade. Rexam understands that a number of the individual metrics used by the rating agencies already imply a sub-investment grade rating and that currently qualitative and subjective factors are underpinning Rexam's investment grade ratings. The current trading and the lack of recovery in the second quarter of 2009 have impacted the 2010 outlook and Rexam's ability to generate significant free cash flows to pay down debt in 2010. This, allied to the change in the credit environment, has led the Directors to believe that, despite the actions already taken (including today's announced change to the dividend policy), the risk of losing Rexam's investment grade credit rating has significantly increased and is now unacceptably high. The loss of investment grade credit rating would be detrimental to the Group, both in terms of the cost and the availability of future credit. Assuming that the current differentials (estimated by Rexam to be 350 bps) between the cost of investment and sub investment grade credit persist, the incremental cost to interest payments in 2010 and 2011 could be £26 million and £44 million respectively. Looking further out to 2012 Rexam estimates that, the incremental cost could be more than £100 million as opposed to £25 million if investment grade were maintained.
The Directors have examined all options available to the Company to maintain its investment grade rating. These included cost reductions, asset sales, a convertible bond issue and suspending or reducing the dividend. In light of current and expected trading, they determined that none of these options, neither individually or combined, would provide sufficient guarantee against the risk of a credit rating downgrade.
The Directors believe that the Rights Issue is the right response. It will allow the Group to put in place a more conservative and resilient long-term capital structure appropriate to the current profitability and cash generation profile of the Group. As the Company focuses on generating returns, capital expenditure will be maintained below underlying depreciation and amortisation in 2009 and 2010 and no significant acquisitions will be undertaken in the medium term. Management continues to focus on working capital improvement and remains committed to positive free cash flow in 2009.
Having sought independent financial advice on this matter, the Directors believe that in conjunction with management actions already taken and to be taken and the rebasing of the dividend, the Rights Issue, whilst no guarantee, will significantly enhance the prospect of maintaining the Group's current investment grade credit rating. The injection of equity will also reduce the reliance on debt and debt refinancing markets and provide flexibility in the event of a more prolonged downturn in general economic conditions.
Rexam going forward
The Board believes that Rexam remains a strong, profitable and well invested global business with leading positions in many markets that remain attractive in the medium and long term. Consumer packaging is generally regarded as a defensive industry: even in times of recession, people continue to eat, drink and take care of their health and appearance. Despite the economic conditions, the Group continues to demonstrate a relatively resilient operational performance.
Rexam continues to deliver a relatively resilient operational performance against a very challenging backdrop. Significant and appropriate action has been taken to mitigate the effect of the downturn, and the Rights Issue announced today will strengthen Rexam's financial position with regard to its investment grade rating. Rexam sees no clear upturn through the rest of the year in current trading conditions. However, during 2010 the cost savings already announced and the further savings identified will have a material benefit giving Rexam greater confidence in its performance. Looking further ahead, the higher degree of cyclicality of parts of the Group's business, added to the strength of its core operations, will leave Rexam well placed to participate fully in the upturn when it comes.
3 Use of proceeds and effect on earnings
The proceeds of the Rights Issue will be used to reduce the Group's net indebtedness and help underpin Rexam's investment grade credit rating.
Had the Rights Issue taken place at the date of the Group's latest balance sheet, being 30 June 2009, the effect on the balance sheet would have been an increase in cash equal to the proceeds (net of expenses) of the Rights Issue.
Had the Rights Issue taken place at the beginning of the 2009 financial year, the effect on the Group's 2009 earnings would have been positive. However, the increased number of Shares in issue following the Rights Issue would have had a negative effect on the Group's basic and underlying earnings per share.
4 Dividends and Dividend policy
On 19 February 2009, after careful consideration, the Board announced with its 2008 full year results that, notwithstanding the current economic environment and subject to shareholder approval, it would increase the final dividend by five per cent in respect of the year ended 31 December 2008 in line with its stated dividend policy. It also added that given the economic uncertainty and the emphasis on prudence, any further dividend increase in the short term would be kept under close review.
The Board has reviewed its dividend policy in light of the Rights Issue and the capital needs of the Group and has concluded that it will not declare a 2009 interim dividend.
In the medium term the Group intends to establish dividend cover in the 2.0 - 2.5x underlying earnings range, split broadly one third, two thirds between the interim and final payments. Recognising the importance of the dividend to many shareholders, the Board expects to declare a final 2009 dividend of 8 pence per share at an expected cost of around £70 million.
The Group's dividend policy is predicated on financial resources being available and underlying earnings developing as currently anticipated.
Servicing of the €750,000,000 6.75% Capital Securities due 2067 (ISIN XS0307868744) will not be affected by the change in the dividend policy.
5 Principal terms and conditions of the Rights Issue
The Company is offering 233,799,459 new Shares by way of a Rights Issue. The Rights Issue Price of 150 pence per Rights Issue Share represents a 45.7 per cent discount to the closing middle-market price of 276.25 pence per Share on 28 July 2009, being the last Business Day before the announcement of the Rights Issue, and a discount of 38.2 per cent to the TERP on the same basis. The Rights Issue is expected to raise approximately 350.7 million (before expenses).
The Rights Issue will be made on the basis of:
4 Rights Issue Shares for every 11 Shares held on the Record Date
at 150 pence per Rights Issue Share
on the terms and conditions set out in this document and, in the case of Qualifying non-CREST Shareholders only, the Provisional Allotment Letter. Holdings of Shares in certificated and uncertificated form will be treated as separate holdings for the purpose of calculating entitlements under the Rights Issue. Fractional entitlements to Rights Issue Shares will not be allotted and, where necessary, entitlements will be rounded down to the nearest whole number of Rights Issue Shares. Fractional entitlements will be aggregated and sold in the market for the benefit of the Company.
The Rights Issue Shares will, when issued and fully paid, rank pari passu in all respects with the Shares now in issue including the right to receive all dividends and other distributions declared, made or paid after the date of allotment of the Rights Issue Shares.
The Rights Issue is conditional, amongst other things, upon:
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(a)
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Admission becoming effective by not later than 8.00am on 30 July 2009 (or such later time and/or date as the Company and the Banks may agree); and
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(b)
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the Underwriting Agreement becoming unconditional in all respects and not having been rescinded or terminated in accordance with its terms before Admission.
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Upon completion of the Rights Issue, the Rights Issue Shares will represent approximately 27 per cent of the enlarged issued share capital of the Company, assuming no exercise of outstanding options granted through the Employee Share Schemes between the date of the Prospectus and completion of the Rights Issue.
Application will be made to the UK Listing Authority for the Rights Issue Shares to be admitted to the Official List. Application will also be made to the London Stock Exchange for the Rights Issue Shares to be admitted to trading on the London Stock Exchange's market for listed securities. It is expected that Admission will become effective and that dealings in the Nil Paid Rights will commence on 30 July 2009.
The Company has arranged for the Rights Issue to be fully underwritten by the Joint Underwriters on, and subject to, the terms of the Underwriting Agreement, to provide certainty as to the amount of capital to be raised.
The latest time and date for acceptance and payment in full under the Rights Issue is expected to be 11.00am on 18 August 2009.
Appendix I
Expected timetable of principal events
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2009
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Record Date for the Rights Issue
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5.00pm on 23 July
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Announcement of the Rights Issue
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29 July
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Despatch of Provisional Allotment Letters (to Qualifying non-CREST Shareholders only)(1)
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29 July
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Admission and commencement of dealings in the Nil Paid Rights on the London Stock Exchange
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8.00am on 30 July
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Shares marked "ex-rights" by the London Stock Exchange
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8.00am on 30 July
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Stock accounts credited with Nil Paid Rights (for Qualifying CREST Shareholders only)(1)
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30 July
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Nil Paid Rights and Fully Paid Rights enabled in CREST
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by 8.00am on 30 July
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Recommended latest time and date for requesting withdrawal of Nil Paid Rights from CREST (ie if your Nil Paid Rights are in CREST and you wish to convert them into certificated form)
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4.30pm on 12 August
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Latest time and date for depositing renounced Provisional Allotment Letters, nil paid, into CREST or for dematerialising Nil Paid Rights into a CREST stock account
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3.00pm on 13 August
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Latest time and date for splitting Provisional Allotment Letters, nil paid
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3.00pm on 14 August
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Latest time and date for acceptance and payment in full
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11.00am on 18 August
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Results of Rights Issue to be announced
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by 8.00am on 19 August
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Commencement of dealing in Rights Issue Shares fully paid
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8.00am on 19 August
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Rights Issue Shares credited to CREST stock accounts
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8.00am on 19 August
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Despatch of definitive share certificates for Rights Issue Shares in certificated form
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by no later than 26 August
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Despatch of sale of rights cheques
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by no later than 26 August
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(1)
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Subject to certain restrictions relating to certain Qualifying Shareholders with registered addresses outside the UK.
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Notes
The dates set out in the expected timetable of principal events above and mentioned throughout this announcement, and in the Prospectus and the Provisional Allotment Letters are indicative only and may be adjusted by Rexam in which event details of the new dates will be notified to the FSA, to the London Stock Exchange and, where appropriate, to Shareholders.
Appendix II
Definitions
In this announcement the following expressions have the following meanings unless the context requires otherwise.
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Admission |
the admission of the Rights Issue Shares (nil paid): (i) to the Official List; and (ii) to trading on the London Stock Exchange's main market for listed securities becoming effective in accordance, respectively, with the Listing Rules and the Admission and Disclosure Standards |
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Admission and Disclosure Standards |
the Admission and Disclosure Standards of the London Stock Exchange, as revised from time to time |
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Australia |
the Commonwealth of Australia and its territories and possessions |
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Banks |
Citigroup Global Markets U.K. Equity Limited, Citigroup Global Markets Limited, RBS Hoare Govett Limited and Greenhill & Co. International LLP |
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Barclays |
Barclays Capital, the investment banking division of Barclays Bank PLC and/or Barclays Bank PLC, as the context requires |
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Business Day |
any day (excluding Saturdays and Sundays) on which banks are open in London for normal banking business |
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Canada |
Canada, its provinces and territories and all areas under its jurisdiction and political subdivisions of it |
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Capital Securities |
the €750,000,000 6.75 per cent. Capital Securities issued by the Company, listed on the Official List and admitted to trading on the London Stock Exchange's Gilt-Edged and Fixed Interest Market (International Securities Identification Number XS0307868744) |
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certified or certificated form |
not in uncertificated form |
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Citi |
Citigroup Global Markets U.K. Equity Limited and/or Citigroup Global Markets Limited, as the context requires |
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Company or Rexam |
Rexam PLC |
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CREST |
the relevant system (as defined in the CREST Regulations) for paperless settlement of share transfers and the holding of shares in uncertificated form in respect of which Euroclear UK & Ireland is the operator (as defined in the CREST Regulations) |
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CREST Regulations |
the Uncertificated Securities Regulations 2001 (SI 2001 No. 3755), as amended from time to time |
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Directors or the Board |
the current directors of the Company whose names are set out on paragraph 6.1 of Part VIII of the Prospectus |
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Disclosure Rules and Transparency Rules |
the disclosure rules made by the FSA under Part VI of FSMA, as amended from time to time |
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EBITDA |
earnings before interest, taxation, depreciation and amortisation |
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Employee Share Schemes |
the Rexam Long Term Incentive Plan 2007, the Rexam Long Term Incentive Plan 2009, the Rexam Executive Share Option Scheme 1997, the Rexam Executive Share Option Scheme 2007, the Rexam Savings Related Share Option Scheme 1997, the Rexam Savings Related Share Option Scheme 2007, the Rexam Savings Related Share Option Scheme 2002 (Republic of Ireland), the Rexam Savings Related Share Option Scheme 2007 (Republic of Ireland) and the Rexam Deferred Bonus Incentive Scheme 2007 |
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Euroclear UK & Ireland |
Euroclear UK & Ireland Limited, the operator of CREST |
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Excluded Territories |
Australia, Canada, Hong Kong, Japan, New Zealand South Africa and Switzerland |
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FSA |
the Financial Services Authority in its capacity as the competent authority for the purposes of Part VI of FSMA and in the exercise of its functions in respect of admission to the Official List otherwise than in accordance with Part VI of FSMA |
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FSMA |
the Financial Services and Markets Act 2000, as amended from time to time |
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Fully Paid Rights |
rights to acquire Rights Issue Shares, fully paid |
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Greenhill |
Greenhill & Co. International LLP |
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Group |
the Company and its subsidiaries from time to time |
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HSBC |
HSBC Bank plc |
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Japan |
Japan, its provinces and territories and all areas under its jurisdiction |
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Joint Underwriters |
Citigroup Global Markets U.K. Equity Limited, RBS Hoare Govett, Barclays, BNP Paribas, HSBC, Lloyds TSB and Société Générale |
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Listing Rules |
the listing rules made by the FSA under Part VI of FSMA, as amended from time to time |
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Lloyds TSB |
Lloyds TSB Corporate Markets and/or Lloyds TSB Bank plc, as the case may be |
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London Stock Exchange |
London Stock Exchange plc |
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Nil Paid Rights |
Rights Issue Shares in nil paid form provisionally allotted to Qualifying Shareholders pursuant to the Rights Issue |
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Official List |
the Official List of the FSA |
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Overseas Shareholders |
Qualifying Shareholders who have registered addresses outside the UK |
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Prospectus |
the prospectus to be published by the Company in relation to the Rights Issue |
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Prospectus Rules |
the prospectus rules made by the FSA under Part VI of FSMA, as amended from time to time |
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Provisional Allotment Letter |
the renounceable provisional allotment letter to be sent to Qualifying non-CREST Shareholders, other than, subject to certain exceptions, Overseas Shareholders with a registered address in, or otherwise resident in the Excluded Territories or the United States, in respect of the Rights Issue Shares to be provisionally allotted to them |
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Qualified Institutional Buyer or QIB |
has the meaning given in Rule 144A under the US Securities Act |
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Qualifying CREST Shareholders |
Qualifying Shareholders whose Shares on the register of members of the Company on the Record Date are in uncertificated form |
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Qualifying non-CREST Shareholders |
Qualifying Shareholders whose Shares on the register of members of the Company on the Record Date are in certificated form |
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Qualifying Shareholders |
holders of Shares on the register of members of the Company on the Record Date |
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RBS Hoare Govett |
RBS Hoare Govett Limited |
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Record Date |
5.00pm on 23 July 2009 |
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Rights Issue |
the proposed issue of the Rights Issue Shares to Qualifying Shareholders by way of rights at the Rights Issue Price on the terms and subject to the conditions set out in this document and, in the case of Qualifying non-CREST Shareholders only, the Provisional Allotment Letter |
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Rights Issue Price |
150 pence per Rights Issue Share |
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Rights Issue Shares |
the 233,799,459 new Shares to be issued by the Company pursuant to the Rights Issue |
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Shareholders |
holders of Shares |
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Shares |
the ordinary shares of 64 2/7 pence each in the capital of the Company |
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Société Générale |
Société Générale Corporate and Investment Banking |
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Underwriting Agreement |
the agreement between the Company, Citi, RBS Hoare Govett, Greenhill, Barclays, BNP Paribas, HSBC, Lloyds TSB and Société Générale dated 29 July 2009 relating to the Rights Issue |
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United Kingdom or UK |
the United Kingdom of Great Britain and Northern Ireland |
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United States or US |
the United States of America, its territories and possessions, any state of the United States of America and the District of Columbia |
|
US Securities Act |
the United States Securities Act 1933, as amended |
|
£, pence or sterling |
the lawful currency of the UK |
|
€, euros |
the currency introduced at the start of the third stage of European economic and monetary union pursuant to the Treaty establishing the European Community, as amended |
|
$, US dollars |
the lawful currency of the United States |
Appendix III
Important notices
Citigroup Global Markets Limited, Citigroup Global Markets U.K. Equity Limited, RBS Hoare Govett Limited, Greenhill & Co. International LLP, Barclays Bank PLC, BNP Paribas, HSBC Bank plc, Lloyds TSB Bank plc and Société Générale each of which is authorised and regulated in the United Kingdom by the FSA, are each acting exclusively for the Company and no one else in connection with the Rights Issue and will not regard any other person as a client in relation to the Rights Issue and will not be responsible to anyone other than the Company for providing the protections afforded their respective clients, or for providing advice to any such person on the contents of the Prospectus or this announcement or any transaction referred to in the Prospectus or this announcement.
Each of Citi, RBS Hoare Govett, Greenhill, Barclays, BNP Paribas, HSBC, Lloyds TSB and Société Générale and each of their respective directors, officers, employees, advisers or any of their respective affiliates, accept(s) no responsibility whatsoever for, and makes no representation or warranty, express or implied, in relation to, the contents of this announcement (including, but not limited to, its accuracy, fairness, sufficiency, completeness or verification) or any other opinion or statement made or purported to be made by any of them, or on their behalf, in connection with the Company, the securities or the Rights Issue and nothing in this document shall be relied upon as a promise or representation in this respect, whether as to the past or the future. Citi, RBS Hoare Govett, Greenhill, Barclays, BNP Paribas, HSBC, Lloyds TSB and Société Générale and each of their respective directors, officers, employees, advisers or any of their respective affiliates, parent undertakings, subsidiary undertakings or subsidiaries of their parent undertakings accordingly disclaims to the fullest extent permitted by law all and any responsibility and liability, whether arising in tort, contract or otherwise, howsoever arising, directly or indirectly, in respect of this announcement or any such opinion or statement.
No person has been authorised to give any information or to make any representations other than those contained in this announcement and, if given or made, such information or representations must not be relied on as having been authorised by Rexam. Subject to the Listing Rules, the Prospectus Rules and the Disclosure and Transparency Rules, the issue of this announcement shall not, in any circumstances, create any implication that there has been no change in the affairs of the business of Rexam since the date of this announcement or that the information in it is correct as at any subsequent date.
The information contained herein is restricted and is not for release, publication or distribution, directly or indirectly, in whole or in part, in or into the United States (including its territories and possessions, any state of the United States and the District of Columbia), Australia, Canada, Hong Kong, Japan, New Zealand, South Africa or Switzerland or any other jurisdiction where to do so would constitute a violation of the relevant laws of such jurisdiction. The securities referred to herein have not been and will not be registered under the securities laws of such jurisdictions and may not be offered, sold, taken up, exercised, resold, renounced, transferred or delivered, directly or indirectly, within such jurisdictions except pursuant to an exemption from and in compliance with any applicable securities laws.
The distribution of this announcement, the Prospectus, the Provisional Allotment Letter and/or the accompanying documents, and/or the transfer or offering of Nil Paid Rights, Fully Paid Rights or Rights Issue Shares in jurisdictions outside the United Kingdom may be restricted by law and therefore persons into whose possession this announcement or any such document comes should inform themselves about and observe any of those restrictions. Any failure to comply with any of those restrictions may constitute a violation of the securities law of any such jurisdiction. In particular, this announcement should not be distributed, forwarded or transmitted to or into the United States or any Excluded Territory.
This announcement and the information contained herein does not constitute, or will not constitute, and does not form, or will not form, part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities in the United States. Securities may not be offered or sold in the United States without registration under the US Securities Act of 1933, as amended (the "US Securities Act"), or an applicable exemption therefrom and in compliance with any applicable securities laws of any state or other jurisdiction of the United States. None of the securities referred to in this announcement have been or will be registered under the US Securities Act. Accordingly, unless a relevant exemption from such requirements is available, none of such securities may, subject to certain exceptions, be offered, sold, taken up, renounced or delivered, directly or indirectly, within the United States. There will be no public offer of securities in the United States.
This announcement has been prepared for the purposes of complying with applicable law and regulation in the United Kingdom and the information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws and regulations of any jurisdiction outside the United Kingdom.
No statement in this announcement is intended as a profit forecast and no statement in this announcement should be interpreted to mean that earnings per Share or underlying earnings per Share for the current or future years would necessarily match or exceed the historical published earnings per Share.
Neither the content of the Company's website (nor any other website) nor any website accessible by hyperlinks on the Company's website is incorporated in, or forms part of, this announcement.
Cautionary note regarding forward looking statements
This announcement includes forward-looking statements. The words "believe", "estimate", "anticipate", "expect", "intend", "aim", "plan", "predict", "project", "continue", "assume", "positioned", "may", "will", "should", "shall", "risk" and any other similar expressions that are predictions of or indicate future events and future trends identify forward-looking statements. These forward-looking statements include all matters that are not historical facts. Investors should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties and other factors that are in many cases beyond Rexam's control.
By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Forward-looking statements are not guarantees of future performance, and Rexam's actual results of operations, financial condition and liquidity, and the development of the markets and the industry in which the Group operates may differ materially from those made in or suggested by the forward-looking statements contained in this announcement. In addition, even if the results of operations, financial position and liquidity, and the development of the markets and industry in which the Group operates are consistent with the forward-looking statements contained in this announcement, those results or developments may not be indicative of results or developments in subsequent periods. The cautionary statements set forth above should be considered in connection with any subsequent written or oral forward-looking statements that Rexam, or persons acting on its behalf, may issue. Factors that may cause Rexam's actual results to differ materially from those expressed or implied by the forward-looking statements in this announcement include but are not limited to the section of the Prospectus entitled "Risk Factors", which should be read in conjunction with the other cautionary statements that are included in the Prospectus.
Forward-looking statements may, and often do, differ materially from actual results. These forward-looking statements are made only as of the date of this announcement and are not intended to give any assurances as to future results. Save as required by law or regulation (including, without limitation, the Listing Rules, the Prospectus Rules and the Disclosure and Transparency Rules), Rexam and Citigroup Global Markets Limited, Citigroup Global Markets U.K. Equity Limited, RBS Hoare Govett Limited, Greenhill & Co. International LLP, Barclays Bank PLC, BNP Paribas, HSBC Bank plc, Lloyds TSB Bank plc and Société Générale undertake no obligation to update these forward-looking statements whether as a result of new information, future developments or otherwise, and will not publicly release any revisions which may be made to these forward-looking statements that may result from events or circumstances arising after the date of this announcement.
All references to time in this announcement are to London time unless otherwise stated.
Related Shares:
REX.L