Last checked at 27 May 2010 07:00
27th May 2010
NOT FOR DISTRIBUTION OR RELEASE, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION WHERE SUCH DISTRIBUTION OR RELEASE WOULD BE UNLAWFUL
Stanelco plc
Proposed Firm Placing and Placing and Open Offer to raise up to £3.5 million gross
Stanelco today announces its proposed issue of up to 2,806,525,416 New Ordinary Shares at 0.125 pence per New Ordinary Share through a Firm Placing and Placing and Open Offer to raise up to £3.5 million gross (approximately £2.8 million net of expenses) assuming the Issue is fully subscribed.
Highlights
·; Firm Placing and Placing and Open Offer to raise up to £3.5 million (approximately £2.8 million net of expenses)
·; Issue Price represents a discount of 37.5 per cent. to the share price of the Company at close of trading on 26 May 2010
·; A total of approximately £3.04 million has already been subscribed under the Issue, as follows:
o Firm Placing of £2.5 million (through the issue of 2,000,000,096 New Ordinary Shares); and
o Placing of £0.54 million (through the conditional issue of 430,639,904 New Ordinary Shares which are subject to clawback through the Open Offer)
·; Existing Ordinary Shareholders have the opportunity to apply for up to £1.0 million under the Issue through the Open Offer at the Issue Price (through the issue of up to 806,525,320 New Ordinary Shares)
·; The net proceeds will be used in the development of the Company's bioplastics business, to fund working capital growth and certain overhead costs
·; The Company is also proposing a name change to Biome Technologies plc and a move to AIM (which is subject to shareholder approval)
·; The Issue is subject to approval by the Company's Shareholders at a general meeting expected to be held on 14 June 2010
·; Admission of the Shares to listing on the Official List and to trading on the London Stock Exchange's main market for listed securities is expected to take place on 15 June 2010
John Standen, Non-Executive Chairman said:
"I am delighted that we have been able to obtain firm commitments from investors for more than our minimum fundraising target of £2.7 million. Existing shareholders now have the opportunity, through the Open Offer of £1.0 million, to take us to our maximum target of £3.5 million. Our move to AIM will align us more appropriately with fast developing growth businesses. With our shareholders' support, we now look forward to delivering on our developing strategy with renewed vigour."
Paul Mines, Chief Executive Officer said:
"We have the capability to build a leading bioplastics business, well founded on good science, excellent applications engineering and deep relationships with blue-chip clients; and last year's performance demonstrated we are making good strides in achieving this. This therefore leads to it being an appropriate opportunity to rename the Group and establish it as a brand name within the sector, following the successful branding of our bioplastics business."
ENQUIRIES:
| Stanelco plc | 023 8086 7100 |
| Paul Mines / Sue Bygrave |
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| Financial Dynamics | 020 7831 3113 |
| Jonathon Brill/Caroline Stewart |
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| Singer Capital Markets Limited (Financial adviser and broker) | 020 3205 7500 |
| James Maxwell / Richard Savage |
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| Hybridan LLP (Placing Agent) | 020 7947 4004 |
| Stephen Austin / Kelly Gardiner |
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IMPORTANT INFORMATION:
This announcement does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any New Ordinary Shares, nor shall it (or any part of it), or the fact of its distribution, form the basis of, or be relied on in connection with or act as any inducement to enter into, any contract or commitment whatsoever with respect to the proposed Firm Placing and Placing and Open Offer or otherwise. This announcement is not a prospectus and investors should not subscribe for or purchase any New Ordinary Shares referred to in this announcement except on the basis of information in the Prospectus expected to be published today.
The distribution of this announcement in certain jurisdictions may be restricted by law and such distribution could result in violation of the laws of such jurisdictions. In particular, this announcement is not for distribution in the United States, Australia, Canada, Japan, New Zealand or South Africa. This announcement is not an offer of securities for sale in the United States. The securities discussed herein have not been and will not be registered under the US Securities Act of 1933, as amended (the "US Securities Act") and may not be offered or sold in the United States absent registration or an exemption from registration under the US Securities Act. No public offering of the securities discussed herein is being made in the United States and the information contained herein does not constitute an offering of securities for sale in the United States, Australia, Canada, Japan, New Zealand or South Africa. This announcement is not for distribution directly or indirectly in or into the United States, Australia, Canada, Japan, New Zealand or South Africa. The information in this press release may not be forwarded or distributed to any other person and may not be reproduced in any manner whatsoever. Any forwarding, distribution, reproduction, or disclosure of this information in whole or in part is unauthorised. Failure to comply with this directive may result in a violation of the Securities Act or the applicable laws of other jurisdictions.
Singer Capital Markets Limited, which is authorised and regulated in the UK by the Financial Services Authority, is acting as sponsor, financial adviser and broker exclusively to Stanelco and no one else in connection with the Issue and Admission and will not regard any other person (whether or not a recipient of this announcement) as its client in relation to the Issue and Admission and will not be responsible to anyone other than the Company for providing the protections afforded to clients of Singer, or for providing advice in relation to the Issue or Admission or any transaction or arrangement referred to in the Prospectus or this announcement. Apart from the responsibilities and liabilities, if any, which may be imposed on Singer by FSMA or the regulatory regime established thereunder, Singer accepts no responsibility whatsoever or makes any representation or warranty, express or implied, for or in respect of the contents of the Prospectus or this announcement, including its accuracy, completeness or verification or regarding the legality of an investment in the New Ordinary Shares by a subscriber thereof under the laws applicable to such subscriber or for any other statement made or purported to be made by them, or on their behalf, in connection with the Company, the New Ordinary Shares, the Issue, and nothing in the Prospectus or this announcement is, or shall be relied upon as, a promise or representation in this respect, whether as to the past or future. Singer accordingly disclaims to the fullest extent permitted by applicable law all and any responsibility and liability whether arising in tort, contract or otherwise (save as referred to above) which it might otherwise be found to have in respect of the Prospectus or this announcement or any such statement.
Some of the statements in the Prospectus and this announcement include forward-looking statements which reflect Stanelco's or, as appropriate, the Directors' current views with respect to financial performance, business strategy, plans and objectives of management for future operations (including development plans relating to Stanelco's products and services). These statements include forward-looking statements both with respect to Stanelco and the sectors and industries in which Stanelco operates. Statements which include the words "expects", "intends", "plans", "believes", "projects", "anticipates", "will", "targets", "aims", "may", "would", "could", "continue" and similar statements of a future or forward-looking nature identify forward-looking statements.
All forward-looking statements address matters that involve risks and uncertainties. Accordingly, there are or will be important factors that could cause Stanelco's actual results to differ materially from those indicated in these statements. These factors include but are not limited to those described in the section of the Prospectus headed "Risk Factors", which should be read in conjunction with the other cautionary statements that are included in the Prospectus and this announcement. Any forward-looking statements in this announcement reflect Stanelco's current views with respect to future events and are subject to these and other risks, uncertainties and assumptions relating to Stanelco's business, results of operations, financial conditions and growth strategy.
These forward-looking statements speak only as of the date of the Prospectus or this announcement, as applicable. Subject to any obligations under the Prospectus Rules, the Disclosure and Transparency Rules and the Listing Rules and, save as required by the FSA, the London Stock Exchange, the City Code or applicable law and regulations, the Company undertakes no obligation publicly to update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. All subsequent written and oral forward-looking statements attributable to Stanelco or individuals acting on behalf of Stanelco are expressly qualified in their entirety by this paragraph. Prospective investors should specifically consider the factors identified in the Prospectus which could cause actual results to differ before making an investment decision.
NOT FOR DISTRIBUTION OR RELEASE, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION WHERE SUCH DISTRIBUTION OR RELEASE WOULD BE UNLAWFUL
Stanelco plc
Proposed Firm Placing and Placing and Open Offer to raise up to £3.5 million gross
Introduction
The Directors announce today that the Company proposes to raise approximately £3.5 million (before expenses) by way of a Firm Placing and Placing and Open Offer through the issue of New Ordinary Shares at an Issue Price of 0.125 pence per New Ordinary Share.
2,000,000,096 New Ordinary Shares will be issued through the Firm Placing and a maximum of 806,525,320 New Ordinary Shares (of which 430,639,904 New Ordinary Shares have been conditionally placed) will be issued through the Placing and Open Offer. Together, they represent approximately 91.2 per cent. of the existing issued ordinary shares capital of the Company and 47.7 per cent. of the enlarged issued share capital of the Company immediately following Admission (in each case assuming that the Issue is fully subscribed).
It is also proposed that the Company undertakes a change of name to Biome Technologies plc and a move to AIM.
The Issue is conditional, amongst other things, upon the passing of Resolution 1 to be proposed at the General Meeting to be held at the offices of Osborne Clarke at One London Wall, London, EC2Y 5EB at 10.00 a.m. on 14 June 2010.
Background to and reasons for the Issue and Use of Proceeds
Background
Since 2007, the principal focus of the Group's business has been directed towards bioplastics.
Stanelco's other principal business interest is RF applications which is involved in the design and manufacture of electrical equipment that utilises radio frequency for heating and sealing.
When embarking on the new strategy in 2007, the Board recognised that growth in the short term would not be profitable. Given the unforeseen litigation with Novamont and the resulting costs, the Company's cash resources are being reduced at a rate exceeding that which was originally anticipated. Consequently, the Group has been forced to raise funds earlier than the Board originally expected.
Intended strategy if the Issue is successful
Going forward, Stanelco's intended strategy is to continue to develop and broaden its underlying bioplastics business organically through the exploitation of higher value areas where the properties of bioplastic materials are most suitable and valued.
Stanelco's development work will seek not only to enhance the functional characteristics of its products but also to reduce the cost base of these materials in order to improve margins generated. Stanelco's products will also continue to have high levels of renewable constituents while also providing recycling or composting characteristics as required by each market. The Group will continue to seek to protect its existing intellectual property in a robust manner and will seek to protect new developments through patents and confidentiality in an appropriate manner.
Stanelco has also invested in sales representation in the North America over the last 20 months and intends to continue aggressive development of this market, which has a strong focus on renewable content for materials.
Biome Bioplastics will be utilised as the industrial brand for the development of the bioplastics business and Stanelco's commercial and technical development will continue to take place within this wholly owned subsidiary. The Biotec joint venture will continue to be optimised for supporting the manufacturing scale-up of existing and new products.
Stanelco will continue to develop the RF business in line with its re-emergence as a small scale OEM engineering business. Opportunities will also be sought to accelerate the business to a meaningful scale or to realise best value for Shareholders.
The Board has also examined all operational savings that can be made in order to underline to Shareholders the Directors' belief that the current development strategy is working and will continue to do so. In support of Stanelco's growth strategy the Directors will reduce their remuneration packages during this period of cash constraint by approximately 30 per cent. following successful completion of the Proposals, and make further staff cost reductions. These savings will reduce the cash burn in respect of central costs by approximately £0.3 million per annum.
The Board of Stanelco believes that the strategy being followed has strong prospects of building a valuable and fast growing business. However, it cannot be pursued unless the Issue is successful, and the Board therefore urges Shareholders to support it.
Funding
In order to continue to pursue the Group's intended strategy, the Company is seeking to raise up to £3.5 million (before expenses) from the Issue.
Provided that the Issue becomes unconditional, the net proceeds anticipated to be received by Stanelco will be approximately £2.8 million (assuming that the Issue is fully subscribed). It is envisioned that these funds will be invested as follows:
·; approximately 40 per cent. in the development of its bioplastics business;
·; approximately 35 per cent. to fund working capital; and
·; the remainder of the funds will be used for meeting central administrative overheads including salary costs and property rents.
The Company is confident that the cash generation of Biotec is sufficient to meet the envisioned ongoing costs of the Novamont litigation and therefore does not currently anticipate using a significant amount of the net proceeds of the Issue to finance the resolution of the litigation.
The Company has conditionally raised approximately £2.5 through the Firm Placing and approximately £0.54 million through the Placing.
In the event that Resolution 1 at the General Meeting is not passed, the Issue will not proceed. The Group will therefore be obliged to immediately follow an alternate strategy that focuses principally on conserving cash resources whilst seeking to realise potential value through an orderly disposal of the Group's assets.
The Board anticipates that such a strategy will almost certainly include:
·; the cessation of the bioplastic commercial activities by Stanelco, placing reliance on SPhere to drive any future sales;
·; termination of bioplastic product development activities by Stanelco. Biotec has no market facing technical development and so such activities will therefore end;
·; the holding of Biotec as an investment with a view to realising value at some point (pre-emption rights, the current patent dispute with Novamont and the joint venture agreement limit options in this regard);
·; the reduction of the Stanelco Board to one or two individuals charged with a part-time monitoring role; and
·; managing the RF business for minor cash generation whilst seeking a viable exit route for the business.
The Board will also consider a delisting of the Group from the public markets completely to save further costs. In the Board's opinion, it is not anticipated this alternate strategy will realise significant value for Shareholders and there is a material risk that Shareholder value will be significantly impacted.
Proposed move to AIM
In view of the Group's size, the Board has decided that it is now appropriate to move trading in the Company's shares to AIM.
It is expected that the move to AIM will significantly reduce the Company's regulatory workload and expense to a level consistent with the Group's current structure. The Board believes that the move will have negligible impact on the ability of Shareholders to trade Ordinary Shares and access information in relation to the Company.
In addition, due to the expiry of the rights conferred by the Company's "Golden Share" in Biotec, Stanelco is no longer eligible for a Premium Listing, as Stanelco no longer controls the majority of its assets.
Proposed Management Incentive Scheme
Subject to the approval of Shareholders at the General Meeting, it is proposed that the Company will adopt the Stanelco plc Public Equity Plan. This plan will provide a performance based incentive for the Company's Executive Directors and other senior executives of Stanelco with the aim of ensuring that the interests of the Executive Directors and other key executives and Shareholders are closely aligned.
As part of the introduction of the Stanelco plc Public Equity Plan, the Board proposes that no further share options will be granted to participants in this new plan under any of the Company's share option plans during the three years following the approval of the new plan at the General Meeting.
Dividend Policy
The Company is a growing business which historically invested, and continues to invest, in order to maximise the future growth opportunities as set out in this announcement. The Company has not paid any dividends to its Shareholders in its recent past and the Board does not currently consider it appropriate to pay any dividends. The Board may reconsider this policy once the Group becomes cash generative.
Principal terms and timing of the Issue
Structure
Stanelco intends to issue 2,000,000,096 New Ordinary Shares through the Firm Placing and up to 806,525,320 New Ordinary Shares through the Placing and Open Offer at 0.125 pence per New Ordinary Share to raise gross proceeds of £3.5 million (assuming the Issue is fully subscribed).
The Issue Price represents a 37.5 per cent. discount to the Stanelco closing price of 0.20 pence per Ordinary Share on 26 May 2010, being the Business Day prior to the date of the announcement of the Issue.
Firm Placing
The Firm Placees have agreed to subscribe for 2,000,000,096 New Ordinary Shares at the Issue Price (representing gross proceeds of £2.5 million). The Firm Placed Shares are not subject to clawback and are not part of the Placing and Open Offer.
Placing and Open Offer
Under the Open Offer, Qualifying Shareholders will have a Basic Entitlement of:
0.262 of an Open Offer Share for each Existing Ordinary Share
Qualifying Shareholders may also apply, under the Excess Application Facility, for additional Excess Shares (save that the total number of New Ordinary Shares to be issued by the Company pursuant to the Issue shall be limited to 2,806,525,416). Accordingly, to the extent that valid subscriptions under the Open Offer are made for in excess of 806,525,320 New Ordinary Shares, applications under the Excess Application Facility will be allocated by the Directors to Shareholders who apply under the Excess Application Facility pro rata to their existing holdings of Ordinary Shares.
Under the Placing and Open Offer, Stanelco intends to issue up to 806,525,320 New Ordinary Shares at the Issue Price (representing gross proceeds of £1.0 million).
The Conditional Placees have agreed to subscribe for the Conditional Placed Ordinary Shares pursuant to the Placing.
Conditionality
The Issue is conditional upon the following:
·; the passing of Resolution 1 to be proposed at the General Meeting;
·; Admission becoming effective by not later than 8.00 a.m. on 15 June 2010; and
·; the Placing Agreement becoming unconditional in all respects.
Current Trading and Prospects
Stanelco announced its Final Results for the year ended 31 December 2009 on 29 April 2010. Stanelco reported turnover of £17.9 million (2008: £14.8 million), a loss from operations of £2.6 million (2008: £2.8 million) and a loss before taxation of £3.6 million (2008: £0.5 million (profit)).
In the Company's interim management statement made on 29 April 2010, the following statements were made:
"Group revenues continued to grow strongly during the three months to 31 March 2010 and the Group's overall trading performance remains in line with the Board's expectations for the year.
Previously, Stanelco held a casting vote over certain matters in Biotec (the "Golden Share"); this arrangement expired on 31 December 2009 and shareholder control with SPhere SA moved seamlessly to a clear 50/50 basis. The Company will no longer consolidate 100% of Biotec's results. The revenue and cash balances reported in this announcement, therefore, include 50% of the figures reported by Biotec and the prior year figures are reported on the same basis to allow a like-for-like comparison.
Group revenues increased from £2.1 million to £2.6 million in the three months to 31 March 2010 on a like-for-like basis (including 50% of Biotec's revenues), an increase of 26% compared with the same period last year. This reflected a 76% increase in bioplastic sales made by the UK bioplastics business, Biome Bioplastics, a 58% increase in sales in RF Applications division and a 7% increase in third party sales from our joint venture, Biotec.
Our cash position at 31 March 2010 was £2.4 million, including 50% of Biotec's cash balance."
Working capital
The Company is of the opinion that taking into account the net proceeds of the Firm Placing and Placing, the Group has sufficient working capital for its present requirements, that is, for at least 12 months from the date of this document.
Directors' Intentions
The Directors currently beneficially own, in aggregate, 3,100,000 Existing Ordinary Shares representing approximately 0.1 per cent. of the issued ordinary share capital of the Company as at 26 May 2010 (the latest practicable date prior to publication of this announcement). Certain Directors and members of the Company's senior management team have agreed to subscribe for an aggregate of 97,600,000 New Ordinary Shares in the Firm Placing and the Placing.
General Meeting
The Company is required to obtain certain Shareholder approvals in connection with the Firm Placing and Placing and Open Offer, the change of name to Biome Technologies plc, the proposed PEP and move to AIM and a general meeting is therefore to be held at 10.00 a.m. on 14 June 2010 at which the recommended resolutions containing such approvals will be sought.
The Board, which has received financial advice from Singer in connection with the Proposals and the adoption of the PEP, considers that these proposals and the passing of the resolutions are in the best interests of the Company and the Shareholders as a whole. In providing its advice Singer has taken into account the Board's commercial assessments.
Accordingly, the Board unanimously recommends that you vote in favour of the Resolutions to be proposed at the General Meeting, as the Directors intend to do in respect of their own beneficial holdings totaling 3,100,000 Existing Ordinary Shares, representing approximately 0.1 per cent. of the Existing Ordinary Shares of the Company as at 26 May 2010.
Expected Timetable
Each of the times and dates set out below and mentioned elsewhere in this announcement may be adjusted by the Company, in which event details of the new times and dates will be notified.
| Record Date for entitlement to participate in the Open Offer | close of business on 26 May 2010
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| Announcement of the Issue, publication of the Prospectus and posting of the Prospectus, Form of Proxy and, to Qualifying non-CREST Shareholders only, the Non-CREST Application Form
| 27 May 2010
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| Ex-entitlement date for the Open Offer | 27 May 2010
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| Basic Entitlements and Excess CREST Open Offer Entitlements credited to CREST stock accounts of Qualifying CREST Shareholders
| 28 May 2010
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| Recommended latest time for requesting withdrawal of Basic Entitlements and Excess CREST Open Offer Entitlements from CREST
| 4.30 p.m. on 7 June 2010
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| Latest time for depositing Basic Entitlements and Excess CREST Open Offer Entitlements into CREST
| 3.00 p.m. on 8 June 2010
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| Latest time and date for splitting Non-CREST Application Forms (to satisfy bona fide market claims only)
| 3.00 p.m. on 9 June 2010
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| Latest time for receipt of completed Non-CREST Application Forms and payment in full under the Open Offer or settlement of relevant CREST instructions (as appropriate)
| 11.00 a.m. on 11 June 2010
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| Latest time for receipt of Forms of Proxy and electronic proxy appointments via the CREST system
| 10.00 a.m. on 12 June 2010
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| Results of the Issue announced through a Regulatory Information Service
| 14 June 2010
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| General Meeting
| 10.00 a.m. on 14 June 2010
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| Admission of, and commencement of dealings in, the New Ordinary Shares
| By 8.00 a.m. on 15 June 2010
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| New Ordinary Shares in uncertificated form expected to be credited to accounts in CREST
| 15 June 2010
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| Expected date of despatch of definitive share certificates for New Ordinary Shares in certificated form
| 22 June 2010
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| Expected last day of dealing in Ordinary Shares on the Official List
| 9 July 2010
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| Expected date of Admission to AIM and first day of dealing in Ordinary Shares
| 12 July 2010
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Definitions
The following definitions apply throughout this announcement, unless the context otherwise requires:
| "Admission" | the admission of the New Ordinary Shares to the Official List becoming effective in accordance with the Listing Rules and the admission of such shares to trading on the main market for listed securities of the London Stock Exchange becoming effective in accordance with the Admission and Disclosure Standards;
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| "Admission and Disclosure Standards" | the requirements contained in the publication "Admission and Disclosure Standards" containing, inter alia, the admission requirements to be observed by companies seeking admission to trading on the London Stock Exchange's main market for listed securities;
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| "AIM" | the AIM market operated by the London Stock Exchange;
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| "Annual Report and Accounts" | the annual report and accounts prepared by the Company for the financial years ended 31 December 2007 and/or 31 December 2008 and/or 31 December 2009 (as the case may be);
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| "Basic Entitlement" | the pro rata entitlement of Qualifying Shareholders to subscribe for 0.262 Open Offer Shares for every Existing Ordinary Share registered in their name as at the Record Date;
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| "Biotec" | Biotec Holding GmbH, a company registered and incorporated in Germany;
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| "Board" | the board of Directors of the Company from time to time;
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| "Business Day" | any day on which banks are generally open in London for the transaction of business other than a Saturday or Sunday or public holiday;
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| "certificated" or "in certificated form" | a share or other security which is not in uncertificated form (that is, not in CREST);
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| "City Code" | the UK City Code on Takeovers and Mergers;
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| "Closing Price" | the closing, middle market quotation of an Existing Ordinary Share, as published in the Daily Official List;
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| "Companies Act" | the Companies Act 2006, as amended;
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| "Conditional Placees" | any persons who have agreed to subscribe for Conditional Placed Shares;
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| "Conditional Placed Shares" or "Placing Shares" | the 430,639,904 Open Offer Shares to be allotted and issued by the Company under the Placing subject to claw back to satisfy valid applications by Qualifying Shareholders under the Open Offer or Excess Application Facility pursuant to the Placing Agreement;
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| "CREST" | the system for the paperless settlement of trades in securities and the holding of uncertificated securities in accordance with the CREST Regulations operated by Euroclear;
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| "Daily Official List" | the daily official list of the London Stock Exchange;
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| "Director(s)" | the director(s) of the Company;
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| "Disclosure and Transparency Rules" | the disclosure and transparency rules made under Part VI of the FSMA (as set out in the FSA Handbook), as amended;
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| "Enlarged Issued Share Capital" | the issued ordinary share capital of the Company following the issue of the New Ordinary Shares pursuant to the Firm Placing and Placing and Open Offer;
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| "EU" | the European Union first established by the treaty made at Maastricht on 7 February 1992;
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| "Euroclear" | Euroclear UK & Ireland Limited;
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| "European Economic Area" | the EU, Iceland, Norway and Lichtenstein;
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| "Excess Application Facility" | the arrangement pursuant to which Qualifying Shareholders may apply for additional Open Offer Shares in excess of their Basic Entitlement in accordance with the terms and conditions of the Open Offer;
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| "Excess CREST Open Offer Entitlement" | in respect of each Qualifying CREST Shareholder who has taken up his Basic Entitlement in full, the entitlement (in addition to his Basic Entitlement) to apply for Open Offer Shares up to the number of Open Offer Shares comprised in his Open Offer Entitlement, credited to his stock account in CREST, pursuant to the Excess Application Facility, which may be subject to scaling back in accordance with the provisions of the Prospectus;
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| "Excess Shares" | Open Offer Shares which are not taken up by Qualifying Shareholders pursuant to their Basic Entitlement and are offered to Qualifying Shareholders under the Excess Application Facility;
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| "Executive Directors" | the executive Directors of the Company, being Paul R Mines and Susan J Bygrave;
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| "Existing Ordinary Shares" | the Ordinary Shares in issue at the Record Date;
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| "Final Results" | the Company's final results for the year ended 31 December 2009, as announced on 29 April 2010;
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| "Firm Placing" | the placing by Singer of the Firm Placed Shares with the Firm Placees pursuant to the Placing Agreement;
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| "Firm Placed Shares" | the 2,000,000,095 New Ordinary Shares to be allotted and issued by the Company under the Firm Placing;
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| "Firm Placees" | any persons who have agreed to subscribe for Firm Placed Shares;
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| "Form of Proxy" | the form of proxy for use at the General Meeting which will accompany the Prospectus;
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| "FSA" or "Financial Services Authority" | the Financial Services Authority of the United Kingdom;
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| "FSMA" | Financial Services and Markets Act 2000, as amended;
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| "General Meeting" | the general meeting of the Company to be convened pursuant to the notice set out at in the Prospectus
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| "Group" | the Company, its subsidiary undertakings and Biotec, and, where the context permits, each of them;
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| "Issue" | the Firm Placing and Placing and Open Offer;
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| "Issue Price" | 0.125 pence per New Ordinary Share;
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| "Listing Rules" | the listing rules made under section 73A of the FSMA (as set out in the FSA Handbook), as amended;
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| "London Stock Exchange" | London Stock Exchange plc or its successor(s);
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| "New Ordinary Shares" | the new Ordinary Shares to be issued by the Company pursuant to the Firm Placing and Placing and Open Offer;
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| "Non-CREST Application Form" | the application form for use by Qualifying Non-CREST Shareholders relating to applications for Open Offer Shares (including in respect of Excess Shares under the Excess Application Facility);
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| "Non-executive Directors" | the non-executive Directors of the Company, being John F Standen and Elizabeth Filkin;
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| "Novamont" | Novamont S.p.A.;
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| "Official List" | the Official List of the FSA pursuant to Part VI of the FSMA;
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| "Open Offer" | the invitation by the Company to Qualifying Shareholders to apply to subscribe for Open Offer Shares on the terms and conditions set out in the Prospectus and, in the case of Qualifying Non-CREST Shareholders, in the Non-CREST Application Form;
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| "Open Offer Entitlement" | an entitlement to subscribe for Open Offer Shares allocated to a Qualifying Shareholder under the Open Offer;
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| "Open Offer Shares" | the 806,525,320 New Ordinary Shares to be offered, allotted and issued to Qualifying Shareholders under the Open Offer;
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| "Ordinary Shares" | the ordinary shares of 0.1p each in the capital of the Company;
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| "PEP" | the Stanelco plc Public Equity Plan;
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| "Placing" | the conditional placing by Singer of the Conditional Placed Shares pursuant to the Placing Agreement;
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| "Placing Agreement" | the conditional agreement dated [27] May 2010 between the Company and Singer;
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| "Premium Listing" | as defined in the Listing Rules;
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| "Proposals" | the Issue, the removal of the limit on the Company's authorized share capital, the change of name of the Company the cancellation of the admission of the Ordinary Shares to the Official List and to trading on the London Stock Exchange's main market for listed securities and the application for admission to trading on AIM;
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| "Prospectus" | the prospectus expected to be published later today, comprising a prospectus relating to the Company for the purpose of the Issue and the admission of the New Ordinary Shares to the Official List and to trading on the main market for listed securities of the London Stock Exchange (together with any supplements or amendments thereto);
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| "Prospectus Rules" | the prospectus rules made under Part VI of the FSMA (as set out in the FSA Handbook), as amended;
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| "Qualifying CREST Shareholders" | Qualifying Shareholders holding Ordinary Shares in uncertificated form;
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| "Qualifying Non-CREST Shareholders" | Qualifying Shareholders holding Ordinary Shares in certificated form;
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| "Qualifying Shareholders" | holders of Existing Ordinary Shares on the register of members of the Company on the Record Date with the exception (subject to certain exceptions) of persons with a registered address or located or resident in any Restricted Jurisdiction;
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| "Record Date" | 6.00 p.m. on 26 May 2010;
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| "Regulatory Information Service" | one of the regulatory information services authorised by the UK Listing authority to receive, process and disseminate regulatory information from listed companies;
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| "Resolution 1" | the resolution numbered 1 to be proposed at the General Meeting (to approve: (a) the Issue and matters associated with it, (b) the abolition of the limit on the Company's authorised share capital; and (c) to grant the Directors authority to apply for admission of the Ordinary Shares to AIM;
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| "Resolutions" | Resolution 1 and Resolution 2;
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| "Restricted Jurisdiction" | each of Australia, Canada, Japan, New Zealand, South Africa and the United States;
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| "RF" | radio frequency;
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| "Securities Act" | the US Securities Act of 1933, as amended;
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| "Singer Capital Markets" or "Singer" | Singer Capital Markets Limited whose registered office is at One Hanover Street, London W1S 1YZ;
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| "Shareholder(s)" | holder(s) of Ordinary Shares;
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| "Stanelco" or the "Company" | Stanelco plc (company number 01873702) whose registered office is at Starpol Technology Centre, North Road, Marchwood, Southampton, Hampshire SO40 4BL;
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| "stock account" | an account within a member account in CREST to which a holding of a particular share or other security in CREST is credited;
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| "subsidiary" | a subsidiary as that term is defined in section 1159 of the Companies Act;
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| "subsidiary undertaking" | a subsidiary undertaking as that term is defined in section 1162 of the Companies Act;
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| "UK Listing Authority" | the Financial Services Authority acting in its capacity as the competent authority in the UK for the purposes of the FSMA;
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| "uncertificated" or "in uncertificated form" | a share or other security recorded on the relevant register of the share or security concerned as being held in uncertificated form in CREST and title to which by virtue of the CREST regulations, may be transferred by means of CREST;
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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 and the District of Columbia;
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