28th Mar 2006 07:04
SVB Holdings PLC28 March 2006 This announcement is not for publication or distribution, directly or indirectly, in or into the United States, Canada, Australia, Japan or any jurisdiction in which the same would be unlawful. SVB Holdings PLC Scheme of arrangement, formation and capitalisation of an FSA-regulated insurance company and £110 m (gross) fully underwritten rights issue Scheme of arrangement •creation of a new holding company listed on the Official List: Novae Group plc •Shareholders to receive one Novae Share for each SVB Share •Rights Issue •Rights Issue to raise approximately £103 million (net of expenses) •one New Novae Share for each Novae Share •Issue Price of 30.0p represents a 18.4 per cent. discount to 36.75p, being the Closing Price per SVB Share on 27 March 2006, the last business day prior to the announcement •NICL •formation of a newly established FSA authorised limited liability insurance company, NICL, to write regional commercial lines business in the UK •following the completion of the Scheme and Rights Issue, Novae will have two operating businesses: the existing Lloyd's business; and NICL, capitalised with £103 million from the net proceeds of the Rights Issue •Directors expect that the new platform will begin trading on 1 July 2006 •NICL market opportunity •the Directors believe that a significant market opportunity exists to create a new platform to service the UK regional commercial lines market •anticipated gross written premium income target (net of acquisition costs) of over £60 million in NICL's first full year of trading •SVB's current underwriting team has a proven record in product development •no new employees will be required for NICL to begin trading, which will benefit from the existing underwriting team's experience Commenting, Matthew Fosh, Chief Executive of SVB said:"The formation of a UK insurance company represents a key element of our stated strategy. The transactions we are announcing today are a powerful endorsement of the current business by investors, regulators and lenders. SVB is now able to grow and develop the top quartile business we have been nurturing during the past three years." This summary should be read in conjunction with the detailed announcement which follows. A presentation for analysts will be held today, 28 March 2006, at 10.00 a.m. at the offices of. M:Communications, Ninth Floor, 1 Ropemaker St, London, EC2Y 9HT. Analysts intending to attend the presentation are requested to notify M:Communications in advance. Enquiries:SVB Holdings PLC 020 7903 7300Matthew FoshOliver Corbett Hoare Govett Limited 020 7678 8000Sponsor, Financial Adviser, Broker and UnderwriterBob CowdellJohn MacGowanStephen Bowler M:Communications 020 7153 1521Nick Miles Hoare Govett Limited is regulated in the United Kingdom by the Financial Services Authority. Hoare Govett Limited is acting exclusively for SVB and Novae as sponsor, financial adviser, stockbroker and underwriter in relation to the proposed Scheme and Rights Issue and the listing of the Novae Shares and New Novae Shares on the Official List and their admission to trading on the London Stock Exchange's market for listed securities. Hoare Govett Limited is not acting for, nor will be responsible to, any person other than SVB and Novae for providing the protections afforded to its clients or for advising any other person in relation to the Scheme or the Rights Issue or any transaction or arrangement referred to herein. The release, publication or distribution of this announcement in certain jurisdictions may be restricted by law and therefore persons in such jurisdictions into which this announcement is released, published or distributed should inform themselves about and observe such restrictions. No offer, invitation or inducement to acquire shares or other securities in SVB or Novae is being made by or in connection with this announcement. Any offer, invitation or inducement to acquire shares in SVB or Novae will be made solely by means of the Prospectus, as updated by any supplementary prospectus, and any decision to keep, buy or sell shares in SVB or Novae should be made solely on the basis of the information contained in such document(s). Certain statements contained in this announcement constitute "forward looking statements". In some cases, these forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "plans", "targets", "prepares", "anticipates", "expects", "intends", "may", "will" or "should" or, in each case, their negative or other variations or comparable terminology. Investors should specifically consider the factors identified in this document which could cause actual results to differ before making an investment decision. Such forward looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of SVB or Novae or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-lookingstatements. Such forward-looking statements are based on numerous assumptions regarding SVB or Novae's present and future business strategies and the environment in which the Group will operate in the future. These forward-looking statements speak only as at the date of this announcement. Except as required by the FSA, the London Stock Exchange, the Prospectus Rules, the Listing Rules, the Disclosure Rules, the Part VI Rules or applicable law, the Company does not undertake any obligation to update or revise publicly any forward-looking statement, whether as a result of new information, future events or otherwise. Except as required by the FSA, the London Stock Exchange, the Prospectus Rules,the Listing Rules, the Disclosure Rules, the Part VI Rules or applicable law, the Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement contained herein to reflect any change in the Company's expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. This announcement is not for distribution or transmission, directly or indirectly, in or into the United States, Canada, Australia or Japan and does not constitute, or form part of, an offer to sell or the solicitation of an offer to subscribe for or buy any securities ("Securities"), nor the solicitation of any vote or approval in any jurisdiction, nor shall there be any sale, issue or transfer of the Securities referred to in this announcement in any jurisdiction in contravention of applicable law. The Securities have not been and will not be registered under the US Securities Act of 1933, as amended (the "Securities Act") and may not be offered or sold in the United States unless registered under the Securities Act or an exemption from such registration is available. No public offering of Securities of the Company is being made in the United States. SVB Holdings PLC Scheme of arrangement, formation and capitalisation of an FSA-regulated insurance company and £110 m (gross) fully underwritten rights issue 1. Introduction Following its announcement on 10 February 2006 of proposals to create a new holding company through the implementation of a scheme of arrangement, the Board announces proposals for the Scheme and Rights Issue. Further details of these proposals are to be set out in the Prospectus and in the Scheme Circular. The Scheme will result in Shareholders receiving Novae Shares in exchange for their existing holdings in SVB and in SVB becoming a subsidiary of Novae. The proceeds of the Rights Issue, which will raise £103.2 million net of expenses, will be used to capitalise a newly established FSA authorised limited liability insurance company, NICL, to write regional commercial lines business in the UK. Although SVB's assets will continue to be available to meet liabilities from its Lloyd's business, the net proceeds of the Rights Issue and any future profits of NICL will be held independently from, and thus will not be exposed to, such liabilities. The purpose of this announcement is to explain why the Board considers the Scheme and the Rights Issue to be in the best interests of Shareholders as a whole. 2. Reasons for the Scheme and Rights Issue SVB's origins are as a managing agent at Lloyd's and Lloyd's continues to be the appropriate platform from which to write large, international and specialist risks. However, as SVB seeks to fulfil its aim of diversifying by product and method of distribution, there is a growing proportion of its premium income for which Lloyd's is not the natural platform of choice. Lloyd's imposes a series of costs, for example, through the New Central Fund and other levies, which are offset by the rating, scale and subscription market benefits for large, international and specialist risks. Where such benefits are not exploited, as is the case for the UK regional commercial lines business where 100 per cent. of the risk is retained by the Group rather than placed in the subscription market, the costs of the Lloyd's market place SVB at a competitive disadvantage compared to those of a stand alone insurance company. The most appropriate platform from which to write UK regional commercial lines business is, in the Directors' opinion, an FSA regulated insurance company. It has been implicit in the development of NUL and in other UK regional commercial lines business, such as employers' liability and credit insurance, that, when appropriate, SVB would form a non-Lloyd's insurance company through which to transact such business. The Directors believe that it is essential for any new insurance company to be able to demonstrate clearly that it is not dependent on, nor subject to the volatility of results of, SVB's Lloyd's business. This can only realistically be achieved if there is no inter-linking between the two entities and no co-mingling of their assets. The Directors have considered various structures to achieve this. They have concluded that the creation of Novae as the new holding company for the Group through the implementation of the Scheme and the establishment of NICL as a wholly-owned subsidiary of Novae best achieves these aims. 3. Novae and the new Group structure Following the completion of the Scheme and Rights Issue, Novae will have two operating businesses:the Lloyd's business, of which SVB is, and will remain following the Scheme becoming effective, the holding company. The structure, assets and liabilities of the Lloyd's business are fundamentally unaltered by the Scheme, an important factor in SVB's continuing status as a Lloyd's franchisee. The Lloyd's business will be wholly-owned by Novae via SVB, which will become an intermediate holding company; and NICL, a newly incorporated company wholly-owned by Novae, capitalised with £103.2 million. On 3 February 2006, SVB made a formal application to operate NICL as an FSA regulated insurance company and the Directors are confident that approval will be granted by the end of May 2006. NICL's assets will be held separately from those supporting the Lloyd's business, providing clarity and transparency between the two component parts of Novae. As a result, the Directors believe that this should provide greater certainty in assessing Novae's prospects and thus in forming a view as to its value. 4. Key features of the Scheme and the Rights Issue The new holding company structure will be implemented by a Court approved procedure known as a scheme of arrangement. The key features of the Scheme will be to replace SVB Shareholders' current interests in SVB with equivalent interests in Novae. Specifically, SVB Shares will be replaced by Novae Shares in the ratio of one-to-one. It is proposed that SVB's existing Deferred Shares, which have no economic value, should be cancelled for nil consideration immediately prior to the Scheme becoming effective. Save in respect of transaction costs, no changes are expected to be made to the assets and liabilities, including the contingent liabilities, of SVB. As a result, the level of capital in SVB's existing Lloyd's business will be unaffected. The Scheme will result in Novae replacing SVB as the listed holding company. Upon completion of the Scheme, and conditional upon it, the Rights Issue will raise £103.2 million net of expenses for Novae. The net proceeds of the Rights Issue will be used to provide the initial equity capital for NICL, which will be a wholly-owned subsidiary of Novae. The notice of the extraordinary general meeting convened to approve, inter alia,the Scheme also sets out the text of resolutions already approved by Novae which, if approved by SVB Shareholders at the Scheme EGM, will authorise the Directors for the purposes of section 80 of the Act, to exercise all the powers of the Company to allot the relevant securities for, amongst other things, the purposes of the Rights Issue. 5. The current market opportunity The Directors believe that the UK regional commercial lines market is predominantly intermediated, decentralised, dependent on legacy systems and working practices and is frequently characterised by poor service levels. As a result, product development is slow and costs are high. Therefore, the Directors believe that a significant market opportunity exists to create a new platform to service the UK regional commercial lines market in conjunction, rather than in competition, with producing brokers. SVB's current underwriting team has a proven record in product development, which will allow insureds to buy protection that better suits their needs rather than those which carriers are willing to sell. The Group's technology platform, which is being rolled out to intermediaries with direct access to potential buyers of UK regional commercial lines insurance, will permit more accurate pricing, contract certainty at inception, and higher and consistent service levels without the need to develop a major regional infrastructure. Moreover, scaleable technology will allow NICL to grow premium income more rapidly than costs with expenses being contained in a softer market. The use of technology and transparent pricing, together with contract certainty at inception, will help brokers to meet their own regulatory and contractual obligations. The absence of a tail of legacy underwriting will allow NICL to be more nimble than its competitors and focus resources on product development and future profitable growth. The rating environment for UK regional commercial lines business is inherently less volatile than for London market business. The formation of a dedicated UK regional commercial lines business thus provides a complement to the more volatile business transacted at Lloyd's. Prior to the 2005 windstorm losses insurance rates for UK regional commercial lines business had shown some softening from the peak levels seen in 2003/4. Reinsurance rates generallyhave hardened in the wake of the 2005 losses. As a result reinsurers are increasingly focusing on the quality of data, aggregation of risk and risk selection. The Directors therefore believe that there are good grounds for expecting rate hardening to extend to the UK regional commercial lines business. Given these factors, and the substantial progress that has been made in rehabilitating SVB's Lloyd's business, the Directors believe that this is an attractive time to exploit the market opportunity through the formation of NICL. 6. Further information on NICL NICL will be a UK insurance company wholly-owned by Novae. On 3 February 2006, SVB made a formal application to operate NICL as a FSA regulated insurance company. The Directors are confident that approval will be granted by the end of May 2006. The FSA is the UK's statutory financial services regulator established under the Financial Services and Markets Act 2000. The FSA's capital regime will determine the minimum regulatory (as opposed to ratingagency-driven) capital required by NICL. In addition, through its prudential sourcebooks and other general principles, rules and guidance, the FSA will set the overall regulatory framework within which NICL will operate. NICL's focus will be on writing UK regional commercial lines business. The Board is determined that NICL should have sufficient capital not only to achieve a robust financial strength rating but also to meet the security requirements of brokers. To achieve these aims, NICL will have an initial capitalisation of £103.2 million, which will be provided from the net proceeds of the Rights Issue. The formal FSA submission contained financial projections for NICL. These include a gross written premium income target (net of acquisition costs) of £63 million in NICL's first full year of trading. Its business plan anticipates ceding up to 30 per cent. of its gross premium as outwards reinsurance, limiting its modelled net exposure to any one catastrophe event to not more than £16 million. NICL will target business having an expected net ultimateloss ratio of not more than 75 per cent. Expenses will be controlled, inter alia, through the use of straight-through processing of business and a limited regional infrastructure. Critically, NICL will adhere to the same capital modelling and deployment methodology currently used across the Group. SVB is currently in discussions with leading rating agencies over the prospective rating of NICL. SVB is targeting an initial rating of A- (excellent). If a rating satisfactory to the Board and/or the FSA authorisation are not obtained by 31 December 2006, the Group will return the net proceeds of the Rights Issue. Following completion of the Rights Issue the Group will invest the net proceeds in line with its stated investment policies (which are to invest solely in cash and short duration investment grade bonds) until fully deployed in NICL. 7. Operation and management of NICL Subject to the Scheme and Rights Issue completing, NICL obtaining the necessary consents from the FSA and a leading rating agency awarding NICL an appropriate rating, the Directors expect that the new platform will begin trading on 1 July 2006. The UK regional commercial lines market is not as heavily skewed to 1 January or 1 April renewals as other, particularly international, catastrophe and reinsurance markets. As a result, NICL's precise commencement date is not critical in determining the level of business it will attract in its first year. No new employees will be required for NICL to begin trading. Those underwriters writing business in the classes targeted by NICL will, in addition to being able to commit on behalf of SVB's Lloyd's business, be able to accept premium on behalf of NICL. NICL will use the relevant portions of SVB's existing claims, reinsurance, actuarial, accounting and compliance infrastructure, for which a recharge will be made. The executive directors of NICL will be the relevant SVB Directors and senior managers, all of whom are currently occupying FSA control function roles and all of whom have been individually approved by the FSA. The board of NICL will comprise its executive chairman, six executive directors and four non-executive directors, of which one will be independent of the Group. Each of these individuals will be approved by the FSA. The board of NICL will meet quarterly. The executive management team will meet monthly, with minutes of those meetings submitted to the Board. 8. Underwriting Philosophy The new management team has introduced a capital allocation model across all parts of the Group. Capital is only deployed where its pre-tax return is expected to exceed the prevailing hurdle rate unless there is an over riding commercial or strategic imperative. The hurdle rate for a particular business unit may be raised (but not lowered) to reflect a higher risk profile, for example to reflect litigation or foreign currency risk. The hurdle rate for 2006 is 12.5 per cent. Each of SVB's underwriting units is allocated solvency capital reflecting expected annual gross premium written and the volatility of the class in question. A charge is made for the allocated solvency capital in calculating unit economic value added. Underwriter bonuses are predominantly determined by unit economic value added. NICL will operate on a similar basis. Capital will only be deployed where there is an expectation that it can achieve a return, after all other costs, equal to or greater than the prevailing hurdle rate, which in turn is set at a premium to the estimated pre-tax weighted average cost of capital. Within these parameters, the overall underwriting philosophy is that SVB, and Novae, should be characterised by: •product mix and diversification; •underwriting leadership; and •risk control and mitigation. 9. SVB's Lloyd's business The structure, assets and liabilities of SVB's Lloyd's business are expected to be fundamentally unchanged by the Scheme and Rights Issue. SVB's Lloyd's business reports its results by continuing underwriting segment, being Specialty, Property, Liability and Aviation & Marine. The Discontinued Units, which comprise the liability reinsurance, healthcare and third party liability classes, are reported separately. There are some other lines of business, such as US professional indemnity and marine excess of loss, from which SVB has withdrawn but where financial performance remains withincontinuing underwriting so as to preserve the precision of the original definition of Discontinued Units. SVB manages two active syndicates at Lloyd's, Syndicate 1007 and Syndicate 2147. The majority of underwriting units comprising the Specialty segment form part of Syndicate 1007. The Property, Liability and Aviation & Marine segments are made up of units forming part of Syndicate 2147. One of the two principal effects of the Scheme will be to transfer Shareholders' interests in SVB to Novae. SVB's issued share capital will be reorganised under the Scheme and it will cease to be a listed company in its own right. The other principal effect will be that the business currently written by Syndicate 2147 under a binding authority from NUL, and currently reported within the Specialty and Liability segments, will in the future be written by NICL. 10. Current trading and prospects Experience to date in 2006 has been broadly consistent with the Directors' expectations, both as regards rating and claims. On Property business there have been rate increases of, on average, approximately 25 per cent. This reflects the strong rating activity on US catastrophe reinsurance business where a considerable amount of income is written at the beginning of the year. Aviation reinsurance business renewed in the last quarter of 2005 has generally been on expiring terms rather than at reduced rates. Although comparatively little business is transacted on Specialty classes early in the year, rate softening has slowed significantly from the experience in mid 2005. Exposure to loss for some parts of the business has a distinctly seasonal nature. Claims experience on Property business can be heavily affected by US windstorm experience in the third quarter. In this context there have been no major events which imply significant loss activity to date this year. However, it is too early to make any reliable comment on likely claims experience for the year as a whole. The Board believes that the Group's prospects for at least the current financial year are encouraging. The Board will announce the Q1 2006 syndicate results and forecasts in early May 2006 and, inter alia, the contents of this announcement will be sent to Shareholders, by way of a supplementary prospectus, as soon as practicable thereafter. 11. Dividend policy and capital management Since establishing the exceptional provision in 2004, SVB has not paid a dividend. The financial legacy of the business written between 1997 and 2001, and the residual effects this had on the 2002 underwriting year in run off, has left SVB cash constrained: a rising capital requirement and the increasing cost of that capital has resulted in significant cash outflows. Moreover, SVB's balance sheet has been highly geared during the rehabilitation period, rendering the payment of a dividend inappropriate. Following the Scheme and Rights Issue, Novae intends to adopt a formal capital management policy made up of two components: •annual dividends: in the absence of unforeseen circumstances the Board expects to recommend the resumption of dividends with effect from the year ending 31 December 2007. The aggregate level of annual dividend payment will be set at not less than 30 per cent. of profits available for distribution from both NICL and SVB's Lloyd's business, subject in the case of the Lloyd's business to the need to satisfy solvency deficits and other funding requirements and in NICL to the requirements, if any, of the FSA; and •the Directors will continue to maintain an active capital management strategy and anticipate returning capital to Shareholders if the Board cannot realistically deploy such capital at an expected return greater than its prevailing hurdle rate. 12. Principal terms of the Rights Issue Subject to satisfaction of the conditions referred to below, the Board proposes to raise approximately £103.2 million, net of expenses, by offering 366,106,728 New Novae Shares by way of rights at 30.0p per New Novae Share, payable in full on acceptance. The offer is being made to Qualifying Shareholders, on the terms set out in this document, on the basis of: one New Novae Share for each Novae Shareheld on the Record Date and so in proportion to any other number of Novae Shares held. All the New Novae Shares will, when issued and fully paid, rank pari passu in all respects with the Novae Shares, including the right to receive all dividends or distributions made, paid or declared after the Scheme Effective Date. Hoare Govett has, subject to the fulfilment of certain conditions in the Underwriting Agreement, underwritten the Rights Issue in full. If a Qualifying Shareholder does not take up the offer of New Novae Shares, his shareholding will be diluted by 50.0 per cent. The Issue Price represents a 18.4 per cent. discount to 36.75p, being the Closing Price per SVB Share on 27 March 2006, the latest practicable date prior to the publication of this announcement. The Rights Issue is conditional, inter alia, upon:(i) the Scheme becoming effective by not later than 8.00 a.m. on 18 May 2006 (or such other time and/or date as the Company and Hoare Govett, subject to Court approval, may agree);(ii) Admission of the Novae Shares becoming effective by not later than 8.00 a.m. on 18 May 2006 (or such other time and/or date as the Company and Hoare Govett may agree);(iii) Admission of the New Novae Shares becoming effective by not later than 8.00 a.m. on 22 May 2006 (or such other time and/or date as the Company and Hoare Govett may agree); and(iv) the Underwriting Agreement becoming unconditional (save for the condition relating to Admission) and not having been terminated in accordance with its terms prior to Admission. Application has been made to the UK Listing Authority for the New Novae Shares (nil and fully paid) to be admitted to the Official List and to the London Stock Exchange for the New Novae Shares to be admitted to trading on the London Stock Exchange's market for listed securities. Dealings in the Nil Paid Rights are expected to commence at 8.00 a.m. on 22 May 2006. The latest date for acceptance and payment in full under the Rights Issue is expected to be 11.00 a.m. on 12 June 2006. Application has been made for the Nil Paid Rights and Fully Paid Rights to be admitted to CREST. It is expected that the Nil Paid Rights and Fully Paid Rights will be enabled for settlement in, and admitted to, CREST on 22 May 2006, as soon as practicable after admission of the Nil Paid Rights and Fully Paid Rights to the Official List has become effective. 13. Recommendation Your Board, which has received financial advice in relation to the Scheme and Rights Issue from Hoare Govett, considers that the Scheme and Rights Issue are in the best interests of Shareholders as a whole. In providing its advice Hoare Govett has taken into account the Board's commercial assessment of the Scheme and Rights Issue. 14. General The scheme circular in connection with the scheme of arrangement ("Scheme Circular") and the Prospectus in connection with the Rights Issue (the "Prospectus") will be dispatched to Shareholders as soon as practicable. EXPECTED TIMETABLE OF PRINCIPAL EVENTS Announcement of the Scheme and the Rights Issue 28 March Latest time for receipt by Registrars of Forms of Proxy for the Court Meeting (the blue card)(2) 10.00 a.m. on 22 April Latest time for receipt of Forms of Proxy for the Scheme EGM (the white card) 10.20 a.m. on 22 April Voting Record Time for the Court Meeting and Scheme EGM(2A) 6.00 p.m. on 22 April Court Meeting 10.00 a.m. on 24 April Scheme EGM(3) 10.20 a.m. on 24 April Court Hearing of the petition to sanction the Scheme 17 May Last day of dealings in SVB Shares 17 May Scheme Record Date, which will be the business day before the Scheme Effective Date(4) 6.00 p.m. on 17 May Scheme Effective Date(4) 18 May De-listing of SVB Shares(4) 7.59 a.m. on 18 May Admission of Novae Shares and commencement of dealings in Novae Shares on the London Stock Exchange's market for listed securities(4) 8.00 a.m. on 18 May Crediting of Novae Shares to CREST accounts(4) 18 May Record Date for the Rights Issue 6.00 p.m. on 18 May Despatch of Provisional Allotment Letters (to Qualifying non-CREST Shareholders only)(4) 19 May Dealings expected to commence in the New Novae Shares, nil paid, on the London Stock Exchange(4) 8.00 a.m. on 22 May Dealings to commence in the Novae Shares, ex-rights, on the London Stock Exchange(4) 8.00 a.m. on 22 May Nil Paid Rights credited to stock accounts in CREST of Qualifying CREST Shareholders and enabled(4) 22 May Despatch of share certificates in respect of Novae Shares (within ten business days after the Scheme Effective Date)(4) by 2 June Recommended latest time for requesting withdrawal of Nil Paid Rights from CREST(4) 3.00 p.m. 6 June Recommended latest time for depositing renounced Provisional Allotment Letters into CREST(4) 4.30 p.m. 7 June Latest time and date for splitting Provisional Allotment Letters, nil paid and fully paid(4) 3.00 p.m. 8 June Latest time and date for registration of renunciation of Provisional Allotment Letters, fully paid(4) 11.00 a.m. 12 June Latest time and date for acceptance and payment in full(4) 11.00 a.m. 12 June Dealings in New Novae Shares, fully paid, commence on the London Stock Exchange(4) 8.00 a.m. 13 June New Novae Shares in definitive and uncertificated form credited to stock accounts in CREST(4) 13 June Expected date of despatch of definitive share certificates for New Novae Shares in certificated form(4) by 23 June Notes:(1) Reference to times in this announcement are to London time unless otherwise stated.(2) Forms of Proxy for this meeting (the blue card) not returned by this time may still be handed to the Chairman of the meeting at the start of the Court Meeting.(2A) If either the Court Meeting or the Scheme EGM is adjourned, the Voting Record Time for the adjourned meeting will be 6.00 p.m. on the date falling two days before the adjourned meeting.(3) To commence at the time specified or, if later, immediately following the conclusion or adjournment of the Court Meeting.(4) These dates are indicative only and will depend, inter alia, on the date on which the Court sanctions the Scheme.(5) The dates set out in the expected timetable of principal events above and mentioned throughout this document and in the Provisional Allotment Letters may be adjusted by SVB or Novae in which event details of the new dates will be notified to the UK Listing Authority, the London Stock Exchange and, where appropriate, to Shareholders.(6) If you have any queries on the procedure for acceptance and payment, you should contact Computershare Investor Services PLC, PO Box 859, The Pavilions, Bridgwater Road, Bristol BS99 1XZ on 0870 702 0100 or from outside the UK _44 (0) 870 702 0100. Please note that Computershare Investor Services PLC cannot provide financial advice on the Rights Issue or as to whether or not you should take up your rights under the Rights Issue. DEFINITIONS The following definitions apply throughout this document unless the context requires otherwise "Act" the Companies Act 1985, as amended; "Admission" the admission of the Novae Shares and/or the New Novae Shares nil paid (as the context so requires) to the Official List in accordance with the Listing Rules and the admission to trading on the London Stock Exchange's market for listed securities in accordance with the Admission and Disclosure Standards; "Admission and Disclosure the requirements contained in the publication Standards" "Admission and Disclosure Standards" dated July 2005 (as amended from time to time) containing, inter alia, the admission requirements to be observed by companies seeking admission to trading on the London Stock Exchange's market for listed securities; "Board" or "Directors" the directors of SVB or, following the Scheme becoming effective, the directors of Novae (as the context so requires); "business day" any day other than a Saturday or Sunday on which banks are generally open for business in England and Wales; "certificated" or "in a share or other security which is not in certificated form" uncertificated form; "Closing Price" the closing middle market quotation of an SVB Share as published in the Daily Official List; "Company" SVB, or following the Scheme becoming effective, Novae; "Court" the High Court of Justice of England and Wales; "Court Hearing" the hearing by the Court of the petition to sanction the Scheme and confirm the reduction of the share capital of SVB provided by clause 1 of the Scheme and by the cancellation of the SVB Deferred Shares under section 137 of the Act; "Court Meeting" the meeting of the SVB Shareholders convened by order of the Court pursuant to section 425 of the Act for 10.00 a.m. on 24 April 2006, including any adjournment thereof, notice of which is contained in Part V of the Scheme Circular; "Court Order" the Order of the Court sanctioning the Scheme under section 425 of the Act and confirming the reduction of the share capital of SVB provided for by clause 1 of the Scheme and the cancellation of the SVB Deferred Shares under section 137 of the Act; "CREST" the relevant system (as defined in the CREST Regulations) in respect of which CRESCTCo Limited is the Operator (as defined in the CREST Regulations); "CRESTCo" CRESTCo Limited; "CREST Regulations" the Uncertificated Securities Regulations 2001 (SI 2001 No.3755) as amended from time to time; "Daily Official List" the London Stock Exchange Daily Official List; "Discontinued Units" discontinued lines of business which comprise the liability reinsurance, healthcare and third party liability classes of insurance; "Excluded Territories" the United States and Japan; "Forms of Proxy" the forms of proxy for use at the Court Meeting (the blue card) and the Scheme EGM (the white card) which will accompany the Scheme Circular (and "Form of Proxy" shall mean any of them); "FSA" or "Financial Services the UK Financial Services Authority;Authority" "Fully Paid Rights" fully paid rights to acquire New Novae Shares; "Group" SVB (or, following the Scheme becoming effective, Novae) and its subsidiary undertakings, as the context requires (and "member of the Group" shall be construed accordingly); "Hoare Govett" Hoare Govett Limited; "Issue Price" 30.0p per New Novae Share; "Listing Rules" the rules relating to admission to the Official List issued from time to time by the Financial Services Authority in accordance with section 73A(2) of the Financial Services and Markets Act 2000; "Lloyd's" the Society and Corporation of Lloyd's incorporated by the Lloyd's Act 1871; "London Stock Exchange" London Stock Exchange plc; "New Novae Shares" the new Novae Shares proposed to be issued by Novae (credited as fully paid) under the Rights Issue; "NICL" Novae Insurance Company Limited, a company incorporated in England with limited liability under number 5673327; "Nil Paid Rights" New Novae Shares in nil paid form provisionally allotted to Qualifying Shareholders pursuant to the Rights Issue; "Novae" Novae Group plc, a company incorporated in England with limited liability under number 5673306; "Novae Shareholders" holders of Novae Shares; "Novae Shares" the ordinary shares of 10 pence each in the capital of Novae; "NUL" Novae Underwriting Limited, a company incorporated in England with limited liability under number 03043816; "Official List" the official list maintained by the UK Listing Authority; "Overseas Shareholders" SVB Shareholders resident in, or citizens or nationals of, jurisdictions outside the United Kingdom; "Prospectus" the prospectus relating to Novae and the New Novae Shares prepared in accordance with the listing rules of the UK Listing authority made under Part VI of the Financial Services and Markets Act 2000; "Prospectus Rules" the prospectus rules made under Part VI of the Financial Services and Markets Act 2000 (as set out in the Financial Services Authority's Handbook of Rules and Guidance); "Provisional Allotment Letter" the renounceable provisional allotment letter to be despatched to Qualifying non-CREST Shareholders (other than those, subject to certain exceptions, with registered addresses in the Excluded Territories) by the Company in respect of the New Novae Shares provisionally allotted to them pursuant to the Rights Issue; "Qualifying CREST Qualifying Shareholders whose SVB Shares on the Shareholders" register of members of the Company at 6.00 p.m. on the Record Date are in uncertificated form; "Qualifying non-CREST Qualifying Shareholders whose SVB Shares on the Shareholders" register of members of the Company at 6.00 p.m. on the Record Date in certificated form; "Qualifying Shareholders" holders of Novae Shares on the register of members of Novae as at the Record Date; "Record Date" 6.00 p.m. on the Scheme Effective Date; "Registrars" Computershare Investor Services PLC of P.O. Box 82, The Pavilions, Bridgwater Road, Bristol BS99 7NH; "Rights Issue" the offer by way of rights of the New Novae Shares to Qualifying Shareholders on the terms and subject to the conditions set out or referred to in the Prospectus and, in the case of Qualifying non-CREST Shareholders only, in the Provisional Allotment Letter; "Scheme" the proposed scheme of arrangement under section 425 of the Act set out in Part III of the Scheme Circular, in its original form or with or subject to any modification thereof or addition thereto or condition approved or imposed by the Court; "Scheme Circular" the document relating to SVB and Novae dated on or about 28 March 2006; "Scheme Effective Date" the date on which the Scheme becomes effective in accordance with its terms, expected to be on or about 18 May 2006; "Scheme EGM" the extraordinary general meeting of SVB to be held at 10.20 a.m. (or, if later, immediately following the conclusion or adjournment of the Court Meeting) on 24 April 2006 including any adjournment thereof, notice of which is contained in Part VI of the Scheme Circular; "Scheme Record Date" the business day immediately preceding the Scheme Effective Date; "Securities Act" the United States Securities Act of 1933, as amended; "Shareholders" the holders of SVB Shares, or following the Scheme becoming effective, Novae Shares; "Sterling" or "£" the lawful currency for the time being in the UK; "SVB" SVB Holdings PLC; "SVB Deferred Shares" the fully paid deferred shares of 40 pence each in the capital of SVB; "SVB Deferred Shareholder" the holder of SVB Deferred Shares, being as at the date of this document the company secretary of SVB; "SVB Shares" the fully paid ordinary shares of 10 pence each in the capital of SVB; "uncertificated" or recorded on the relevant register of the share or "in uncertificated form" security concerned as being in uncertificated form in CREST and title to which may be transferred by means of CREST; "Underwriting Agreement" the conditional agreement dated 28 March 2006 between Hoare Govett, SVB and Novae relating to the Rights Issue; "UK" the United Kingdom of Great Britain and Northern Ireland; "UK Listing Authority" the United Kingdom Financial Services Authority or "UKLA" acting in its capacity as the competent authority for listing under Part VI of the Financial Services and Markets Act 2000; "US" the United States of America, its territories and possessions, any State of the United States of America and the District of Columbia, and all other areas subject to its jurisdiction; "Voting Record Time" 6.00 p.m. on the day which is two days before the date of the Court Meeting and the Scheme EGM or, if either meeting is adjourned, 6.00 p.m. on the day which is two days before the date of the adjourned meeting. All references to legislation in this document are to English legislation unless the contrary is indicated. All references to time in this document are to London time unless the contrary is indicated. Any reference to any provision of any legislation shall include any amendment, modification, re-enactment or extension thereof. Words importing the singular shall include the plural and vice versa, and words importing the masculine gender shall include the feminine or neutral gender. GLOSSARY OF TECHNICAL TERMSThe following definitions apply to terms used in this document: "Council" the Council of Lloyd's and any person or delegate acting under its authority, including the Lloyd's Market Board and the Lloyd's Regulatory Board; "Lloyd's" the Society and Corporation of Lloyd's created and governed by the Lloyd's Act 1871-1872; "managing agent" an underwriting agent at Lloyd's responsible for managing a syndicate; "member" or "member of except where the context otherwise requires, an Lloyd's" underwriting member at Lloyd's; "New Central Fund" a fund established pursuant to the Central Fund Byelaw (No. 23 of 1996) by Lloyd's primarily as a policyholders' protection fund in the event of a member being unable to meet his/its underwriting liabilities. The NewCentral Fund may also be used, with certain exceptions, for any purpose which may appear to the Council to further any of the objects of Lloyd's; "prudential sourcebook" the interim prudential sourcebook for insurers made by the FSA under the Financial Services and Markets Act 2000; "reinsurance" the insurance of contractual liabilities incurred under contracts of insurance or reinsurance; "syndicate" members of Lloyd's are grouped into syndicates, each of which is represented at Lloyd's by a professional underwriter who accepts risks on behalf of the whole syndicate. Some syndicates comprise a single corporate entity; Hoare Govett Limited is regulated in the United Kingdom by the Financial Services Authority. Hoare Govett Limited is acting exclusively for SVB and Novae as sponsor, financial adviser, stockbroker and underwriter in relation to the proposed Scheme and Rights Issue and the listing of the Novae Shares and New Novae Shares on the Official List and their admission to trading on the London Stock Exchange's market for listed securities. Hoare Govett Limitedis not acting for, nor will be responsible to, any person other than SVB and Novae for providing the protections afforded to its clients or for advising any other person in relation to the Scheme or the Rights Issue or any transaction or arrangement referred to herein. The release, publication or distribution of this announcement in certain jurisdictions may be restricted by law and therefore persons in such jurisdictions into which this announcement is released, published or distributed should inform themselves about and observe such restrictions. No offer, invitation or inducement to acquire shares or other securities in SVB or Novae is being made by or in connection with this announcement. Any offer, invitation or inducement to acquire shares in SVB or Novae will be made solely by means of the Prospectus as updated by any supplementary prospectus, and any decision to keep, buy or sell shares in SVB or Novae should be made solely on the basis of the information contained in such document(s). Certain statements contained in this announcement constitute "forward looking statements". In some cases, these forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "plans", "targets", "prepares", "anticipates", "expects", "intends", "may", "will" or "should" or, in each case, their negative or other variations or comparable terminology. Investors should specificallyconsider the factors identified in this document which could cause actual results to differ before making an investment decision. Such forward looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of SVB or Novae or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-lookingstatements. Such forward-looking statements are based on numerous assumptions regarding SVB or Novae's present and future business strategies and the environment in which the Group will operate in the future. These forward-looking statements speak only as at the date of this announcement. Except as required by the FSA, the London Stock Exchange, the Prospectus Rules, the Listing Rules, the Disclosure Rules, the Part VI Rules or applicable law, the Company does not undertake any obligation to update or revise publicly any forward-looking statement, whether as a result of new information, future events or otherwise. Except as required by the FSA, the London Stock Exchange, the Prospectus Rules, the Listing Rules, the Disclosure Rules, the Part VI Rules or applicable law, the Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement contained herein to reflect any change in the Company's expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. This announcement is not for distribution or transmission, directly or indirectly, in or into the United States, Canada, Australia or Japan and does not constitute, or form part of, an offer to sell or the solicitation of an offer to subscribe for or buy and any securities ("Securities"), nor the solicitation of any vote or approval in any jurisdiction, nor shall there be any sale, issue or transfer of the Securities referred to in this announcementin any jurisdiction in contravention of applicable law. The Securities have not been and will not be registered under the US Securities Act of 1933, as amended (the "Securities Act") and may not be offered or sold in the United States unless registered under the Securities Act or an exemption from such registration is available. No public offering of Securities of the Company is being made in the United States. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Novae Group