Last checked at 24 Nov 2009 16:42
24 November 2009
NOT FOR PUBLICATION, DISTRIBUTION OR RELEASE, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN OR ANY OTHER JURISDICTION IN WHICH THE SAME WOULD BE PROHIBITED BY APPLICABLE LAW
Ceres Power Holdings plc
("Ceres" or the "Company")
Private Placement
Ceres Power Holdings plc ("Ceres" or the "Company") today announces its intention to raise at least £28 million before expenses via a placing (the "Placing") of new ordinary shares in the Company with a nominal value of 5 pence each (the "Placing Shares") with both existing shareholders and other institutions. The shares are expected to be offered to investors at a price between 165 and 175 pence per share to be determined via a bookbuilding process (the "Bookbuild").
The proceeds from the Placing will be used to fund the Company's micro-Combined Heat and Power ("CHP") product Beta and Gamma trialling programme and the investments required to scale-up volume manufacturing and product testing ahead of market launch. The Company anticipates that the proceeds of the Placing together with its existing cash resources will be sufficient to launch the CHP product in the UK with British Gas in 2011 and support delivery of the Company and its subsidiaries' (the "Group") other go-to-market programmes with Calor and Bord Gáis.
The Placing is conditional upon, inter alia, (i) admission of the Placing Shares to trading on the AIM market of the London Stock Exchange ("Admission"); and (ii) the approval by shareholders at a General Meeting of the Company to be held on 14 December 2009 of an increase in the Ceres directors' authority to allot shares and the disapplication of pre-emption rights in relation to the Placing Shares.
Commenting on the Placing, Ceres's chairman, Brian Count said: "The Board has always sought to ensure that the Group has a strong balance sheet to finance the business in a prudent manner. With global equity markets having recovered from the lows reached in early 2009, the Board considers it appropriate to raise capital now to further strengthen the balance sheet and enable the Group to reach market launch in the second half of 2011, irrespective of the financial climate."
Background to and Reasons for the Placing
Following the announcement of the strategic alliance with British Gas to develop, supply and distribute a mains gas wall-mountable residential CHP product for the UK market, the Group published, in June 2008, a roadmap of the CHP product development programme through to market launch in the second half of 2011. The Group has met all the key milestones under this programme resulting in the sign-off by British Gas and independent validation of the Alpha Phase and the receipt of the £2 million Alpha Phase completion payment in June 2009. The Beta phase of the CHP product development programme is underway and includes a sequence of activities relating to the design, procurement, build and trialling of Beta CHP units.
The Board welcomes British Gas's ongoing support for the Company and is pleased to announce that Centrica plc, the parent company of British Gas, has indicated its intention to subscribe for 9.95% of the Placing Shares, in line with its current shareholding in the Company, to continue to support the Company's CHP product development programme through to market launch with British Gas in the second half of 2011.
As at 30 June 2009, the Group held £23 million in net cash and financial assets. This includes the receipt of the £2 million Alpha completion payment from British Gas that will be used to fund part of the expenditure to be incurred in the Beta phase during 2009/10.
During the current financial year, the Group will continue to invest to support the scale-up for the Beta and Gamma phases of the British Gas programme and towards commercial launch. As a result, the Group expects its cash outflow to increase in 2009/10 relative to the prior year. The major components of this increased outflow are the annualised effect of the investments that have already been made in people and the Group's Horsham manufacturing facility and the increased development, procurement and other costs of the Beta phase, which in aggregate are expected to add approximately £3.2 million to operating costs; and a reduction in financial income of £1 million due to lower interest rates. Capital expenditure, net of grants received, is anticipated to increase by £0.2 million to £2.3 million in 2009/10. A further £1.3 million of capital and other operating expenditure that was incurred and accrued as a one off in 2008/09 is being paid in the current financial year.
These factors, together with movements in other operating working capital during 2009/10, would be expected to reduce the Group's cash and financial assets to approximately £9.4 million by 30 June 2010, prior to the impact of any new capital raised.
Details of the Placing
Ceres intends to issue new ordinary shares with a nominal value of 5 pence each in the capital of the Company, to raise at least £28 million, subject to the terms and conditions set out in the Placing Agreement (as defined below). The number of Placing Shares, the price at which the Placing Shares are to be placed and the identity of Placees will be determined at the close of the bookbuilding process (the "Bookbuild") and announced shortly thereafter. The Bookbuild will be launched immediately following this announcement by Morgan Stanley & Co. International plc ("Morgan Stanley") and Jefferies International Limited ("Jefferies") who are acting as joint bookrunners (the "Bookrunners") in connection with the Placing. The timing for the close of the Bookbuild and allocations is at the absolute discretion of the Bookrunners.
The Placing Shares will, when issued, be credited as fully paid and will rank pari passu in all respects with the existing ordinary shares of Ceres, including the right to receive all dividends and other distributions declared, made or paid after the date of the issue. Application for the Admission of the Placing Shares will be made on completion of the Placing. Settlement of payment for the Placing Shares issued pursuant to the Placing, as well as Admission, is expected to take place on or around 15 December 2009 (the "Closing Date"). The Placing is conditional on Admission becoming effective.
By choosing to participate in the Placing and by making an oral and legally binding offer to acquire Placing Shares, investors will be deemed to have read and understood this announcement in its entirety (including the appendix) and to be making such offer on the terms and conditions contained herein and to be providing the representations, warranties and acknowledgements contained in the appendix to this announcement.
Your attention is drawn to the detailed terms and conditions of the Placing described below.
For further details, please contact.
| Ceres Power Holdings plc | Tel. +44 (0)1293 400 404 |
| Peter Bance, Chief Executive | |
| Rex Vevers, Finance Director |
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| Morgan Stanley | Tel. +44 (0)20 7425 8000 |
| Peter Moorhouse/Alastair Walmsley | |
| Jefferies | Tel. +44 (0)20 7029 8000 |
| Rupert Mitchell/Bruce Huber | |
| Kreab Gavin Anderson | Tel. +44 (0)20 7554 1400 |
| Ken Cronin/Deborah Walter/Robert Speed |
This announcement, including the appendix (together the "Announcement"), contains (or may contain) certain forward-looking statements with respect to certain of Ceres's plans and its current goals and expectations relating to its future financial condition, performance and trends and other matters that are not historical fact and which involve a number of risks and uncertainties. The Company cautions you that forward-looking statements are not guarantees of future performance and they involve risks, uncertainties and other important factors that could cause the actual results, performance or achievements of the Company to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Given these risks and uncertainties, prospective investors are cautioned not to place undue reliance on forward-looking statements. Such forward-looking statements are based on numerous assumptions and speak only as at the date of this Announcement. Except as required by law, the Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in its expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. The information and opinions contained in this Announcement are subject to change without notice and, subject to compliance with applicable law, Neither of Ceres, Morgan Stanley & Co. International plc ("Morgan Stanley") or Jefferies International Limited ("Jefferies") assume any responsibility or obligation to update publicly or revise any of the forward-looking statements contained herein.
This Announcement is for information purposes only and shall not constitute an offer to buy, sell, issue, or subscribe for, or the solicitation of an offer to buy, sell, issue, or subscribe for any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. This Announcement has been issued by and is the sole responsibility of Ceres.
No representation or warranty, express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by Morgan Stanley or Jefferies or by any of their affiliates or agents as to, or in relation to, the accuracy or completeness of this Announcement or any other written or oral information made available to or publicly available to any interested party or its advisers, and any liability therefore is expressly disclaimed.
Morgan Stanley is acting for Ceres and for no-one else in connection with the Placing, and will not be responsible to anyone other than Ceres for providing the protections afforded to clients of Morgan Stanley, or for providing advice to any other person in relation to the Placing or any other matter referred to herein.
Jefferies is acting for Ceres and for no-one else in connection with the Placing, and will not be responsible to anyone other than Ceres for providing the protections afforded to clients of Jefferies, or for providing advice to any other person in relation to the Placing or any other matter referred to herein.
The distribution of this Announcement and the Placing in certain jurisdictions may be restricted by law. No action has been taken by Ceres, Morgan Stanley or Jefferies that would permit an offering of such securities or possession or distribution of this Announcement or any other offering or publicity material relating to such securities in any jurisdiction where action for that purpose is required. Persons into whose possession this Announcement comes are required by Ceres, Morgan Stanley and Jefferies to inform themselves about, and to observe such restrictions.
The price of securities and the income from them may go down as well as up and investors may not get back the full amount invested on disposal of the securities.
Members of the public are not eligible to take part in the Placing. This Announcement and the terms and conditions set out herein are for information purposes only and are directed only at: (a) persons in Member States of the European Economic Area who are Qualified Investors (as defined in article 2(1)(e) of EU Directive 2003/71/EC of the European Parliament and the Council of 4 November 2003 (together with any implementing directive measure in any Member State, the "Prospectus Directive")); and/or (b) persons in the United Kingdom who are Qualified Investors and persons who are (i) investment professionals falling within article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order"); (ii) persons who fall within article 43 of the Order; (iii) persons falling within Article 49(2)(a) to (d) ("high net worth companies, unincorporated associations, etc") of the Order; or (iv) persons to whom it may otherwise be lawfully communicated (all such persons in (a) and (b) together being referred to as "Relevant Persons"). This Announcement and the terms and conditions set out herein must not be acted on or relied on by persons who are not Relevant Persons. Persons distributing this Announcement must satisfy themselves that it is lawful to do so. Any investment or investment activity to which this Announcement (including the appendix) and the terms and conditions set out herein relate is available only to Relevant Persons and will be engaged in only with Relevant Persons. This Announcement does not itself constitute an offer for sale or subscription of any securities in Ceres.
This Announcement, including the appendix, is not for release, publication or distribution, directly or indirectly, in or into the United States, Australia, Canada or Japan or any jurisdiction into which the same would be unlawful. This Announcement does not constitute or form part of an offer to sell or issue or a solicitation of an offer to purchase or subscribe for securities of Ceres in the United States, Australia, Canada or Japan or any jurisdiction in which such an offer or solicitation is unlawful. No public offering of securities of Ceres will be made in connection with the Placing in the United Kingdom, the United States or elsewhere.
The Placing Shares have not been and will not be registered under the US Securities Act of 1933, as amended (the "Securities Act") or under the laws of any state or other jurisdiction of the United States, and may not be offered, sold, transferred or delivered, directly or indirectly, in or into the United States except pursuant to an exemption from or in a transaction not subject to the registration requirements of the Securities Act and in compliance with the securities laws of any state of the United States.
No money, securities or other consideration from any person inside the United States is being solicited by this Announcement and the appendix and, if sent in response to information contained in this Announcement or the appendix, will not be accepted.
Any indication in this Announcement of the price at which ordinary shares in the capital of the Company have been bought or sold in the past cannot be relied upon as a guide to future performance. No statement in this Announcement is intended to be a profit forecast and no statement in this Announcement should be interpreted to mean that earnings per share of the Company for the current or future financial years would necessarily match or exceed the historical published earnings per share of the Company.
Persons (including individuals, funds or otherwise) by whom or on whose behalf a commitment to acquire Placing Shares has been given ("Placees") will be deemed to have read and understood this Announcement, including its appendix, in its entirety and to be making such offer on the terms and conditions, and to be providing the representations, warranties, acknowledgements, and undertakings contained in the appendix. In particular, each such Placee represents, warrants and acknowledges that it is is (1) a "qualified institutional buyer" (as defined in Rule 144A under the Securities Act) and has duly executed an investor letter in a form provided to it and delivered the same to Morgan Stanley or Jefferies (as applicable), or (2):
(a) a Relevant Person (as defined above) and undertakes that it will acquire, hold, manage or dispose of any Placing Shares that are allocated to it for the purposes of its business;
(b) in the case of a Relevant Person in a member state of the EEA which has implemented the Prospectus Directive (each a "Relevant Member State") who acquires any Placing Shares pursuant to the Placing:
(i) a Qualified Investor (as defined in the Prospectus Directive); and
(ii) in the case of any Placing Shares acquired by it as a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive, (a) the Placing Shares acquired by it in the Placing have not been acquired on behalf of, nor have they been acquired with a view to their offer or resale to, persons in any Relevant Member State other than Qualified Investors or in circumstances in which the prior consent of Morgan Stanley or Jefferies (as applicable) has been given to the offer or resale; or (b) where Placing Shares have been acquired by it on behalf of persons in any member state of the EEA other than Qualified Investors, the offer of those Placing Shares to it is not treated under the Prospectus Directive as having been made to such persons; and
(c) acquiring the Placing Shares for its own account or is acquiring the Placing Shares for an account with respect to which it exercises sole investment discretion, and that, unless otherwise agreed with Ceres, it (and any such account) is subscribing for the Placing Shares in an "offshore transaction" (within the meaning of Regulation S under the Securities Act).
The relevant clearances have not been, and nor will they be, obtained from the securities commission of any province or territory of Canada; no prospectus has been lodged with, or registered by, the Australian Securities and Investments Commission or the Japanese Ministry of Finance, and the Placing Shares have not been, and nor will they be, registered under or offered in compliance with the securities laws of any state, province or territory of Australia, Canada or Japan. Accordingly, the Placing Shares may not (unless an exemption under the relevant securities laws is applicable) be offered, sold, resold or delivered, directly or indirectly, in or into the United States, Australia, Canada or Japan or any other jurisdiction in which the same would be prohibited by applicable law.
The Placing Shares have not been approved or disapproved by the US Securities and Exchange Commission, any state securities commission or any other regulatory authority in the United States, nor have any of the foregoing authorities passed upon or endorsed the merits of the Placing or the accuracy or adequacy of this Announcement. Any representation to the contrary is unlawful. Persons (including, without limitation, nominees and trustees) who have a contractual or other legal obligation to forward a copy of the appendix or this announcement should seek appropriate advice before taking any action.
The Placing Shares will not be admitted to trading on any stock exchange other than the AIM market of the London Stock Exchange.
Neither the content of Ceres's website nor any website accessible by hyperlinks on Ceres's website is incorporated in, or forms part of, this Announcement.
Persons (including, without limitation, nominees and trustee) who have a contractual or other legal obligation to forward a copy of this Announcement should seek appropriate advice before taking any action.
Each Placee should consult with its own advisors as to legal, tax, business and related aspects of a purchase of Placing Shares.
APPENDIX
TERMS AND CONDITIONS
IMPORTANT INFORMATION FOR PLACEES ONLY REGARDING THE PLACING
In this appendix, unless the context otherwise requires, Ceres means Ceres Power Holdings plc and Placee means a Relevant Person (including individuals, funds or others) on whose behalf a commitment to acquire Placing Shares has been given.
Details of the Placing
It is intended that Morgan Stanley & Co. International plc ("Morgan Stanley") and Jefferies International Limited ("Jefferies" and, together with Morgan Stanley, the "Managers") will enter into an agreement with Ceres (the "Placing Agreement") following completion of the bookbuilding process in respect of the Placing (the "Bookbuild"), as described in this Announcement. Under the Placing Agreement, on the terms and subject to the conditions set out therein, the Managers will (severally, but not jointly or jointly and severally) agree to use reasonable endeavours to procure subscribers for the Placing Shares at the Placing Price (as defined below).
The Placing Shares will, when issued, be credited as fully paid and will rank pari passu in all respects with the existing ordinary shares of Ceres including the right to receive all dividends and other distributions declared in respect of such ordinary shares after the date of issue of the Placing Shares.
Application for listing and admission to trading
Application will be made to the London Stock Exchange for admission to trading of the Placing Shares on AIM ("Admission"). It is expected that Admission will become effective on or around 15 December 2009 and that dealings in the Placing Shares will commence at that time.
Bookbuild
The Managers will today commence the Bookbuild to determine demand for participation in the Placing by Placees. This appendix gives details of the terms and conditions of, and the mechanics of participation in, the Placing. No commissions will be paid to Placees or by Placees in respect of any Placing Shares.
The Managers and Ceres shall be entitled to effect the Placing by such alternative method to the Bookbuild as they may, in their sole discretion, determine.
Participation in, and principal terms of, the Placing
The Managers will act as joint bookrunners for and agents of Ceres in connection with the Placing.
Participation in the Placing will only be available to persons who may lawfully be, and are, invited to participate by a Manager. The Managers and their respective affiliates are each entitled to enter bids in the Bookbuild as principal.
By participating in the Bookbuild and the Placing, Placees will be deemed to have read and understood this Announcement (including this appendix) in its entirety and to be participating and making an offer for Placing Shares on the terms and conditions, and to be providing the representations, warranties, acknowledgments and undertakings, contained in this Announcement (including this appendix).
The Bookbuild will establish a single price payable to the relevant Manager by all Placees whose bids are successful (the "Placing Price"). The Placing Price and the number of Placing Shares to be issued will be agreed between the Managers and Ceres following completion of the Bookbuild. The Placing Price and the number of Placing Shares will be announced to a Regulatory Information Service following the completion of the Bookbuild (the "Pricing Announcement").
To bid in the Bookbuild, Placees should communicate their bid by telephone to their usual sales contact at the relevant Manager. Each bid should state the number of Placing Shares which the prospective Placee wishes to subscribe for at the Placing Price. Bids may be scaled down by the Managers on the basis referred to in paragraph 10 below.
The Bookbuild is expected to close no later than 8.00 a.m. (London time) on 25 November 2009 but may be closed earlier or later at the discretion of the Managers and Ceres. The Managers may, in agreement with Ceres, accept bids that are received after the Bookbuild has closed. Ceres reserves the right (upon the agreement of the Managers) to reduce or seek to increase the amount to be raised pursuant to the Placing, in its absolute discretion.
Each prospective Placee's allocation will be confirmed to such Placee orally by the relevant Manager as agent of Ceres following the close of the Bookbuild. That oral confirmation will constitute an irrevocable legally binding commitment upon that person (who will at that point become a Placee) to subscribe for the number of Placing Shares allocated to it at the Placing Price on the terms and conditions set out in this Announcement (including this appendix) and in accordance with Ceres's memorandum and articles of association.
Each prospective Placee's allocation and commitment will be evidenced by a contract note issued to such Placee by the relevant Manager. The terms of this appendix will be deemed incorporated therein. The Company will make a further announcement following the close of the Bookbuild detailing the number of Placing Shares to be issued and the price at which Placing Shares have been placed.
Each Placee will also have an immediate, separate, irrevocable and binding obligation, owed to the relevant Manager, to pay it (or as it may direct) in cleared funds, an amount equal to the product of the Placing Price and the number of Placing Shares such Placee has agreed to subscribe and Ceres has agreed to allot and issue to that Placee.
Subject to paragraphs 5 and 6 above, the Managers may choose to accept bids, either in whole or in part, on the basis of allocations and may scale down any bids for this purpose on such basis as they may determine. The Managers may also, notwithstanding paragraphs 5 and 6 above, subject to the prior consent of Ceres (i) allocate Placing Shares after the time of any initial allocation to any person submitting a bid after that time and (ii) allocate Placing Shares after the Bookbuild has closed to any person submitting a bid after that time.
A bid in the Bookbuild will be made on the terms and subject to the conditions in this Announcement and will be legally binding on the Placee on behalf of which it is made and except with the consent of the relevant Manager will not be capable of variation or revocation after the time at which it is submitted.
Irrespective of the time at which a Placee's allocation pursuant to the Placing is confirmed, settlement for all Placing Shares to be acquired pursuant to the Placing will be required to be made at the same time, on the basis explained below under "Registration and settlement".
All obligations under the Bookbuild and Placing will be subject to fulfilment or (where applicable) waiver of the conditions referred to below under "Conditions of the Placing" and to the Placing not being terminated on the basis referred to below under "Termination of the Placing".
By participating in the Bookbuild, each Placee will agree that its rights and obligations in respect of the Placing will terminate only in the circumstances described below and will not be capable of rescission or termination by the Placee.
To the fullest extent permissible by law, neither the Managers nor any of their relevant affiliates shall have any liability to Placees (or to any other person whether acting on behalf of a Placee or otherwise). In particular, neither the Managers nor any of their respective affiliates shall have any liability (including to the fullest extent permissible by law, any fiduciary duties) in respect of such Manager's conduct of the Bookbuild or of such alternative method of effecting the Placing as the Managers and Ceres may agree.
Conditions of the Placing
The Placing will be conditional upon the Placing Agreement being entered into and becoming unconditional and not having been terminated in accordance with its terms. The obligations of each Manager under the Placing Agreement will be conditional on, inter alia:
If any of the conditions contained in the Placing Agreement in relation to the Placing Shares are not fulfilled or (where applicable) waived by Morgan Stanley, by the respective time or date where specified (or such later time and/or date as Ceres and Morgan Stanley may agree), the Placing Agreement will terminate (with the consequences specified below). If the Placing Agreement is terminated, the Placing will not proceed and the Placee's rights and obligations hereunder in relation to the Placing Shares shall cease and terminate at such time and each Placee agrees that no claim can be made by the Placee in respect thereof.
Morgan Stanley may, at its discretion and upon such terms as it thinks fit, waive compliance by Ceres with any of Ceres's obligations in relation to the conditions in the Placing Agreement (other than Admission and the passing of the GM Resolution). Any such extension or waiver will not affect Placees' commitments as set out in this Announcement.
Neither Manager, nor Ceres nor any other person shall have any liability to any Placee (or to any other person whether acting on behalf of a Placee or otherwise) in respect of any decision they may make as to whether or not to waive or to extend the time and/or the date for the satisfaction of any condition to the Placing nor for any decision they may make as to the satisfaction of any condition or in respect of the Placing generally, and by participating in the Placing each Placee agrees that any such decision is within the absolute discretion of the relevant Manager.
Termination of the Placing
Morgan Stanley will be entitled, at any time before Admission, after consultation with Jefferies to the extent reasonably practicable, to terminate the Placing Agreement in accordance with the terms of the Placing Agreement, inter alia, if:
Upon such termination, the parties to the Placing Agreement will cease and determine immediately (except as regards any provisions of the Placing Agreement breached before such termination) from their respective obligations under or pursuant to the Placing Agreement subject to certain exceptions.
By participating in the Placing, Placees agree that the exercise by a Manager or Ceres of any right of termination or other discretion under the Placing Agreement shall be within the absolute discretion of the relevant Manager or Ceres (as the case may be) and that they need not make any reference to Placees and that they shall have no liability to Placees whatsoever in connection with any such exercise or failure so to exercise.
No prospectus
No offering document or prospectus has been or will be submitted to be approved by the FSA in relation to the Placing and Placees' commitments will be made solely on the basis of the information contained in this Announcement (including this appendix), and subject to the further terms set forth in the contract note to be provided to individual prospective Placees.
Each Placee, by accepting a participation in the Placing, agrees that the content of this Announcement (including this appendix) is exclusively the responsibility of Ceres and confirms that it has neither received nor relied on any other information, representation, warranty, or statement made by or on behalf of Ceres or a Manager or any other person and neither of the Managers nor Ceres nor any other person will be liable for any Placee's decision to participate in the Placing based on any other information, representation, warranty or statement which the Placees may have obtained or received. Each Placee acknowledges and agrees that it has relied on its own investigation of the business, financial or other position of Ceres in accepting a participation in the Placing. Nothing in this paragraph shall exclude the liability of any person for fraudulent misrepresentation.
Registration and settlement
Settlement of transactions in the Placing Shares (ISIN: GB00B0351429) following Admission will take place within the system administered by Euroclear UK & Ireland Limited ("CREST"), subject to certain exceptions. Ceres reserves the right to require settlement for and delivery of the Placing Shares (or a portion thereof) to Placees in certificated form if, in the relevant Manager's opinion, delivery or settlement is not possible or practicable within the CREST system or would not be consistent with the regulatory requirements in the Placee's jurisdiction.
Following the close of the Bookbuild for the Placing, each Placee allocated Placing Shares in the Placing will be sent a contract note stating the number of Placing Shares to be allocated to it at the Placing Price and settlement instructions.
Each Placee agrees that it will do all things necessary to ensure that delivery and payment is completed in accordance with the standing CREST or certificated settlement instructions that it has in place with the relevant Manager.
Ceres will deliver the Placing Shares to a CREST account operated by Morgan Stanley as agent for Ceres and Morgan Stanley will enter its delivery (DEL) instruction into the CREST system. The input to CREST by a Placee of a matching or acceptance instruction will then allow delivery of the relevant Placing Shares to that Placee against payment.
It is expected that settlement will be on 15 December 2009 following Ceres's general meeting to consider and, if thought fit, pass the GM Resolution in accordance with the instructions given to the Managers.
Interest is chargeable daily on payments not received from Placees on the due date in accordance with the arrangements set out above at the rate of two percentage points above LIBOR as determined by the relevant Manager.
Each Placee is deemed to agree that, if it does not comply with these obligations, Ceres may sell any or all of the Placing Shares allocated to that Placee on such Placee's behalf and retain from the proceeds, for Ceres's account and benefit, an amount equal to the aggregate amount owed by the Placee plus any interest due. The relevant Placee will, however, remain liable for any shortfall below the aggregate amount owed by it and may be required to bear any stamp duty or stamp duty reserve tax (together with any interest or penalties) which may arise upon the sale of such Placing Shares on such Placee's behalf.
If Placing Shares are to be delivered to a custodian or settlement agent, Placees should ensure that the trade confirmation is copied and delivered immediately to the relevant person within that organisation. Insofar as Placing Shares are registered in a Placee's name or that of its nominee or in the name of any person for whom a Placee is contracting as agent or that of a nominee for such person, such Placing Shares should, subject as provided below, be so registered free from any liability to UK stamp duty or stamp duty reserve tax. Placees will not be entitled to receive any fee or commission in connection with the Placing.
Representations and warranties
By participating in the Placing, each Placee (and any person acting on such Placee's behalf):
represents and warrants that it has read this Announcement, including this appendix, in its entirety and that its acquisition of Placing Shares is subject to and based upon all the terms, conditions, representations, warranties, acknowledgements, agreements and undertakings and other information contained herein;
acknowledges that no offering document or prospectus has been or will be prepared in connection with the Placing and that it has not received a prospectus or other offering document in connection therewith;
acknowledges that (i) the Placing Shares are of the same class as securities admitted to trading on the AIM market of the London Stock Exchange, and Ceres is therefore required to publish certain business and financial information in accordance with the AIM rules (the "Exchange Information"), which includes a description of the nature of Ceres's business and Ceres's financial information, including balance sheets and income statements, and that it is able to obtain or access such information, and is able to obtain access to such information or comparable information concerning any other publicly traded company; (ii) none of the Managers, their respective affiliates or any person acting on such person's behalf has made any representation to it, express or implied, with respect to Ceres, the Placing Shares or the accuracy, completeness or adequacy of Exchange Information or any other information; (iii) it may not rely, and has not relied, on any investigation that a Manager, any of its affiliates, or any person acting on its or their behalf, may have conducted with respect to the Placing Shares or Ceres; (iv) it has conducted its own investigation of Ceres and the Placing Shares; (v) it has received all information that it believes is necessary or appropriate in connection with its investment in the Placing Shares (and, without limiting the foregoing, it does not require any disclosure or offering document or prospectus for such purpose); (vi) it has made its own assessment and has satisfied itself concerning the relevant tax, legal, currency and other economic considerations relevant to its investment in the Placing Shares; (vii) it has had the opportunity to ask questions concerning the terms and conditions of the Placing; and (viii) it has such knowledge and experience in financial and business matters that its is capable of evaluating the merits and risks of its investment in the Placing Shares. It acknowledges and agrees that it will not hold any of the Managers, their respective affiliates or any person acting on its or their behalf responsible for any misstatements in or omissions from any information, concerning Ceres and the Placing Shares, including (without limitation) the Exchange Information;
acknowledges that neither of the Managers nor Ceres nor any of their affiliates nor any person acting on behalf of any of them has provided, and will not provide, it with any material regarding the Placing Shares or Ceres or other than this Announcement; nor has it requested any of the Managers, Ceres, any of their affiliates or any person acting on behalf of any of them to provide it with any such information;
acknowledges that it and, if different, the beneficial owner of the Placing Shares is not, and at the time the Placing Shares are acquired will not be residents of Australia, Canada or Japan, and each of it and the beneficial owner of the Placing Shares is, and at the time they are acquired will be, (i) a "qualified institutional buyer" within the meaning of Rule 144A under the Securities Act ("QIB"), or (ii) acquiring the Placing Shares in an "offshore transaction" in accordance with Rule 903 or 904 of Regulation S under the Securities Act;
acknowledges and understands that the Placing Shares have not been and will not be registered under the Securities Act or with any state or other jurisdiction of the United States, nor approved or disapproved by the US Securities and Exchange Commission, any state securities commission in the United States or any other United States regulatory authority, and agrees not to reoffer, resell, pledge or otherwise transfer the Placing Shares except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act;
acknowledges that the Placing Shares have not been and will not be registered under the securities legislation of the United States, Australia, Canada or Japan and, subject to certain exceptions, may not be offered, sold, taken up, renounced or delivered or transferred, directly or indirectly, in or into those jurisdictions;
acknowledges that the Placing Shares offered and sold in the United States are "restricted securities" within the meaning of Rule 144(a)(3) under the Securities Act and, so long as the Placing Shares are "restricted securities", it will not deposit the Placing Shares into any unrestricted depositary receipt facility maintained by any depositary bank in respect of the Company's Ordinary Shares and represents and warrants if the Placing Shares were offered to it in the United States,,that it will not reoffer, sell, pledge or otherwise transfer the Placing Shares except (i) in an offshore transaction in accordance with Regulation S under the Securities Act; (ii) in the United States to QIBs pursuant to Rule 144A under the Securities Act; (iii) pursuant to Rule 144 under the Securities Act (if available) or (iv) pursuant to an effective registration statement under the Securities Act and that, in each such case, such offer, sale, pledge, or transfer will be made in accordance with any applicable securities laws of any state of the United States;
acknowledges that the content of this Announcement is exclusively the responsibility of Ceres and that neither of the Managers, their respective affiliates nor any person acting on a Manager's behalf has or shall have any liability for any information, representation or statement contained in this Announcement or any information previously published by or on behalf of Ceres and will not be liable for any Placee's decision to participate in the Placing based on any information, representation or statement contained in this Announcement or otherwise. Each Placee further represents, warrants and agrees that the only information on which it is entitled to rely and on which such Placee has relied in committing itself to subscribe for the Placing Shares is contained in this Announcement and any information previously published by Ceres by notification to a Regulatory Information Service, such information being all that it deems necessary to make an investment decision in respect of the Placing Shares and that it has neither received nor relied on any other information given or representations, warranties or statements made by a Manager or Ceres and neither of the Managers nor Ceres will be liable for any Placee's decision to accept an invitation to participate in the Placing based on any other information, representation, warranty or statement. Each Placee further acknowledges and agrees that it has relied on its own investigation of the business, financial or other position of Ceres in deciding to participate in the Placing. Nothing in this paragraph excludes the liability of any person for fraudulent misrepresentation made by that person;
acknowledges that neither of the Managers nor any person acting on behalf of a Manager nor any of their respective affiliates has or shall have any liability for any publicly available or filed information, or any representation relating to Ceres, provided that nothing in this paragraph excludes the liability of any person for fraudulent misrepresentation made by that person;
represents and warrants that neither it, nor the person specified by it for registration as a holder of Placing Shares is, or is acting as nominee or agent for, and that the Placing Shares will not be allotted to, a person who falls within, or who is or may be liable to stamp duty or stamp duty reserve tax under, any of sections 67, 70, 93 and 96 of the Finance Act 1986 (depositary receipts and clearance services) or any amendment to or any re-enactment or extension of those provisions;
represents and warrants that it has complied with its obligations in connection with money laundering and terrorist financing under the Proceeds of Crime Act 2002, the Terrorism Act 2000, the Terrorism Act 2006 and the Money Laundering Regulations 2007 (the "Regulations") and, if making payment on behalf of a third party, that satisfactory evidence has been obtained and recorded by it to verify the identity of the third party as required by the Regulations;
if a financial intermediary, as that term is used in Article 3(2) of the Directive of the European Parliament and of the Council of 4 November 2003 on the prospectus to be published when securities are offered to the public or admitted to trading (No 2003/71/EC) (as amended) (the "Prospectus Directive") (including any relevant implementing measure in any member state), represents and warrants that the Placing Shares purchased by it in the Placing will not be acquired on a non-discretionary basis on behalf of, nor will they be acquired with a view to their offer or resale to, persons in a member state of the European Economic Area which has implemented the Prospectus Directive other than to qualified investors, or in circumstances in which the prior consent of the relevant Manager has been given to the proposed offer or resale;
represents and warrants that it has not offered or sold and will not offer or sell any Placing Shares to persons in the United Kingdom, except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their business or otherwise in circumstances which have not resulted and which will not result in an offer to the public in the United Kingdom within the meaning of section 85(1) of the Financial Services and Markets Act 2000 ("FSMA");
represents and warrants that it has not offered or sold and will not offer or sell any Placing Shares to persons in the European Economic Area prior to Admission except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their business or otherwise in circumstances which have not resulted in and which will not result in an offer to the public in any member state of the European Economic Area within the meaning of the Prospectus Directive (including any relevant implementing measure in any member state);
represents and warrants that it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of FSMA) relating to the Placing Shares in circumstances in which section 21(1) of FSMA does not require approval of the communication by an authorised person;
represents and warrants that it has complied and will comply with all applicable provisions of FSMA with respect to anything done by it in relation to the Placing Shares in, from or otherwise involving, the United Kingdom;
represents and warrants that it is a "qualified investor" within the meaning of the Prospectus Directive (including any relevant implementing measure in any member state);
represents and warrants that it and any person acting on its behalf is entitled to subscribe for and purchase the Placing Shares under the laws of all relevant jurisdictions which would apply to it, and that it and any person acting on its behalf is in compliance with applicable laws in the jurisdiction of its residence, the residence of the Company, or otherwise and that it has all necessary capacity and has obtained all necessary consent and authorisation;
undertakes that it (and any person acting on its behalf) will make payment for the Placing Shares allocated to it in accordance with this Announcement (including this appendix) and the contract note on the due time and date set out herein, failing which the relevant Placing Shares may be placed with other subscribers or sold as the relevant Manager may in its discretion determine and without liability to such Placee and it will remain liable for any amount by which the net proceeds of such sale falls short of the product of the Placing Price and the number of Placing Shares allocated to it and may be required to bear any stamp duty or stamp duty reserve tax (together with any interest or penalties due pursuant to the terms set out are referred to in this Announcement) which may arise upon the sale of such Placee's Placing Shares on its behalf;
acknowledges that its allocation (if any) of Placing Shares will represent a maximum number of Placing Shares which it will be entitled, and required, to subscribe for, and that Ceres may call upon it to subscribe for a lower number of Placing Shares (if any), but in no event in aggregate more than the aforementioned maximum;
acknowledges that neither Manager, nor any of their respective affiliates, nor any person acting on its or their behalf, is making any recommendations to it, advising it regarding the suitability of any transactions it may enter into in connection with the Placing and that participation in the Placing is on the basis that it is not and will not be a client of Morgan Stanley or Jefferies and that neither Morgan Stanley or Jefferies has any duties or responsibilities to it for providing the protections afforded to its clients or customers or for providing advice in relation to the Placing nor in respect of any representations, warranties, undertakings or indemnities contained in the Placing Agreement nor for the exercise or performance of any of its rights and obligations thereunder including any rights to waive or vary any conditions or exercise any termination right;
undertakes that the person whom it specifies for registration as holder of the Placing Shares will be (i) itself or (ii) its nominee, as the case may be. Neither of the Managers nor Ceres will be responsible for any liability to stamp duty or stamp duty reserve tax resulting from a failure to observe this requirement. Each Placee and any person acting on behalf of such Placee agrees to participate in the Placing and it agrees to indemnify Ceres and each Manager on an after tax basis in respect of the same on the basis that the Placing Shares will be allotted to the CREST stock account of Morgan Stanley who will hold them as nominee on behalf of such Placee until settlement in accordance with its standing settlement instructions;
acknowledges that these terms and conditions and any agreements entered into by it pursuant to these terms and conditions and any non-contractual obligations arising out of or in connection with such agreements shall be governed by and construed in accordance with the laws of England and Wales and it submits (on behalf of itself and on behalf of any person on whose behalf it is acting) to the exclusive jurisdiction of the English courts as regards any claim, dispute or matter arising out of any such contract, except that enforcement proceedings in respect of the obligation to make payment for the Placing Shares (together with any interest chargeable thereon) may be taken by Ceres or a Manager in any jurisdiction in which the relevant Placee is incorporated or in which any of its securities have a quotation on a recognised stock exchange;
agrees that Ceres, the Managers and their respective affiliates and others will rely upon the truth and accuracy of the foregoing representations, warranties, acknowledgements and undertakings which are given to the Managers on its own behalf and on behalf of Ceres and are irrevocable;
agrees to indemnify and hold Ceres, each Manager and their respective affiliates harmless on an after-tax basis from any and all costs, claims, liabilities and expenses (including legal fees and expenses) arising out of or in connection with any breach of the representations, warranties, acknowledgements, agreements and undertakings in this appendix and further agrees that the provisions of this appendix shall survive after completion of the Placing;
acknowledges that its commitment to subscribe for Placing Shares on the terms set out herein and in the contract note will continue notwithstanding any amendment that may in future be made to the terms of the Placing and that Placees will have no right to be consulted or require that their consent be obtained with respect to Ceres's conduct of the Placing. The foregoing representations, warranties and confirmations are given for the benefit of Ceres as well as each Manager. The agreement to settle a Placee's subscription (and/or the subscription of a person for whom such Placee is contracting as agent) free of stamp duty and stamp duty reserve tax depends on the settlement relating only to the subscription by it and/or such person direct from Ceres for the Placing Shares in question. Such agreement assumes, and is based on a warranty from each Placee, that neither it, nor the person specified by it for registration as holder, of Placing Shares is, or is acting as nominee or agent for, and that the Placing Shares will not be allotted or issued to, a person who falls within, or who is or may be liable to stamp duty or stamp duty reserve tax under, any of sections 67, 70, 93 and 96 of the Finance Act 1986 (depositary receipts and clearance services) or any amendment to or any re-enactment or extension of those provisions. If there are any such arrangements, or the settlement relates to any other dealing in the Placing Shares, stamp duty or stamp duty reserve tax may be payable. In that event the Placee agrees that it shall be responsible for such stamp duty or stamp duty reserve tax, and neither Ceres nor a Manager shall be responsible for such stamp duty or stamp duty reserve tax or any penalty or interest arising in connection with the same. If this is the case, each Placee should seek its own advice and notify the relevant Manager accordingly;
acknowledges that no action has been or will be taken by any of the Company, a Manager or any person acting on behalf of Ceres or a Manager that would, or is intended to, permit a public offer of the Placing Shares in any country or jurisdiction where any such action for that purpose is required;
acknowledges that it has knowledge and experience in financial, business and international investment matters as is required to evaluate the merits and risks of subscribing for the Placing Shares. It further acknowledges that it is experienced in investing in securities of this nature and is aware that it may be required to bear, and is able to bear, the economic risk of, and is able to sustain a complete loss in connection with the Placing. It has relied upon its own examination and due diligence of Ceres and its associates taken as a whole, and the terms of the Placing, including the merits and risks involved; and
if it is a pension fund or investment company, its purchase of Placing Shares is in full compliance with applicable laws and regulations.
In addition, Placees should note that they will be liable for any stamp duty and all other stamp, issue, securities, transfer, registration, documentary or other duties or taxes (including any interest, fines or penalties relating thereto) payable outside the United Kingdom by them or any other person on the subscription by them of any Placing Shares or the agreement by them to subscribe for any Placing Shares.
Each Placee and any person acting on behalf of each Placee acknowledges and agrees that a Manager or any of its affiliates may, at its absolute discretion, agree to become a Placee in respect of some or all of the Placing Shares.
When a Placee or person acting on behalf of the Placee is dealing with a Manager, any money held in an account with such Manager on behalf of the Placee and/or any person acting on behalf of the Placee will not be treated as client money within the meaning of the rules and regulations of the FSA made under FSMA. The Placee acknowledges that the money will not be subject to the protections conferred by the client money rules; as a consequence, this money will not be segregated from the relevant Manager's money in accordance with the client money rules and will be used by such Manager in the course of its own business; and the Placee will rank only as a general creditor of the Manager. All times and dates in this Announcement may be subject to amendment. The Managers shall notify the Placees and any person acting on behalf of the Placees of any changes.
Past performance is no guide to future performance and persons needing advice should consult an independent financial adviser.