FJET.L Regulatory News (FJET)

THIS ANNOUNCEMENT, INCLUDING THE APPENDIX, AND THE INFORMATION CONTAINED HEREIN, IS NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, OR REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH IT WOULD BE UNLAWFUL TO DO SO.

fastjet Plc("fastjet", the "Company" or the "Group")

5 January 2017

PROPOSED PLACING TO RAISE GROSS PROCEEDS OF NOT LESS THAN US$28.8m

AGREEMENT WITH SOLENTA AVIATION HOLDINGS LIMITED FOR EQUITY OF US$19.2M

TRANSACTIONS INCREASE EQUITY BY AT LEAST US$48M

Highlights:

· Announcement of a conditional agreement with Solenta, a specialist African commercial aviation group based in Johannesburg, for the provision and operation of three wet-leased aircraft on a full ACMI basis and the supply of other services over the next five years

· Solenta currently operates 49 aircraft under 5 of its own African AOCs and has strategic alliances, or AOCs pending, in a further 7 African countries

· Solenta has proven experience of providing ACMI/wet-lease services in Africa and has experience and regulatory approvals in operating the Embraer aircraft to which fastjet is transitioning

· Agreement will see Solenta become a c. 28% shareholder in fastjet

o fastjet has agreed to issue Solenta c. 95.6 million new ordinary shares to acquire a Solenta group SPV that will own the right to enter into the three ordinary course wet-leases and to receive discounts to the value of US$19.2 million on the future cost of services provided by Solenta

· fastjet also announces a proposed Placing by way of an Accelerated Book Build to raise gross proceeds of not less than US$28.8 million, which is supported by the Company's major institutional shareholders

· Issue Price of 16.3 pence per share is a c.2% discount to the closing price on 4 January 2017

· Together, the Solenta Agreement and the Placing will, the Board believes:

o provide fastjet with the necessary infrastructure and capital to implement the final stages of its Stabilisation Plan and reach cash flow break even by Q4 2017

o further improve the cash flow profile of the business going forward

o allow the Company to leverage Solenta's existing African business and provide the platform to grow and scale fastjet flexibly and cost effectively

o provide further working capital to pursue new strategic/growth opportunities

· Solenta will have the right to nominate two directors to the Board of fastjet. The Company also intends to further strengthen and balance the Board with additional Non-Executive Directors at the appropriate time.

Nico Bezuidenhout, Interim Chairman and CEO, commented:

"Our agreement with Solenta represents a good operational and strategic fit. It provides fastjet with access to fleet and related services which, together with the funds raised through our proposed Placing, will allow us to successfully implement the final stages of our Stabilisation Plan. We have made good progress with the Plan and the near-term priority continues to be to fully stabilise the business and to reach cash flow break even by the fourth quarter of this year. As well as helping us to achieve this objective, the fundraising and Solenta Agreement will also provide the platform from which to flexibly and cost-effectively pursue fastjet's medium to long-term objective of becoming the first truly pan-African low-cost airline." 

This announcement contains inside information which is disclosed in accordance with the Market Abuse Regulation.

Expected timetable of principal events

The times and dates set out in the table above and mentioned throughout this announcement are indicative only and may be adjusted by the Company (in consultation with Liberum Capital Limited) with any amendments to the expected timings announced via a regulatory information service.

For more information, contact:

NOTES TO EDITORS

About Fastjet Plc

fastjet Plc is the holding company of the low cost airline fastjet which commenced flights under the fastjet brand in Tanzania in November 2012. By adhering to international standards of safety, quality, security and reliability; fastjet has brought a new flying experience to the African market at unprecedented low prices. Utilising a fleet of modern jet aircraft, fastjet has a long term strategy to implement the low-cost carrier model across Africa to become the continent's first low-cost, pan-Africa airline.

The results of the second quarter 2016 customer satisfaction surveys showed that an average of 73% of customers were likely to recommend fastjet to a friend. In developing its strong brand and identity, fastjet has won and been nominated for a number of awards, including Africa's Leading Low-Cost Airline 2016 at the 23rd World Travel Awards, winning three Transform awards for the rebrand and launch of fastjet, the award for "Brand Strategy of the Year" at 2014's Drum Marketing Awards in London, and the Transport Innovator Award at the 8th Transport Africa Awards 2015 in Johannesburg.

IMPORTANT INFORMATION

This Announcement contains (or may contain) certain forward-looking statements with respect to certain of the Company's plans and its current goals and expectations relating to its future financial condition and performance and which involve a number of risks and uncertainties. The Company cautions readers that no forward-looking statement is a guarantee of future performance and that actual results could differ materially from those contained in the forward-looking statements. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements sometimes use words such as "aim", "anticipate", "target", "expect", "estimate", "intend", "plan", "goal", "believe", or other words of similar meaning. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances, including, but not limited to, economic and business conditions, the effects of continued volatility in credit markets, market-related risks such as changes in the price of commodities or changes in interest rates and foreign exchange rates, the policies and actions of governmental and regulatory authorities, changes in legislation, the further development of standards and interpretations under International Financial Reporting Standards (IFRS) applicable to past, current and future periods, evolving practices with regard to the interpretation and application of standards under IFRS, the outcome of pending and future litigation or regulatory investigations, the success of future explorations, acquisitions and other strategic transactions and the impact of competition. A number of these factors are beyond the Company's control. As a result, the Company's actual future results may differ materially from the plans, goals, and expectations set forth in the Company's forward-looking statements. Any forward-looking statements made in this Announcement by or on behalf of the Company speak only as of the date they are made. Except as required by the Financial Conduct Authority (the FCA), the London Stock Exchange or applicable law, the Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained in this Announcement to reflect any changes in the Company's expectations with regard thereto or any changes in events, conditions or circumstances on which any such statement is based.

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 the Company. 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 Liberum Capital Limited or by any of its 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.

Liberum, Capital Limited which is authorised and regulated in the United Kingdom by the FCA, is acting for the Company and for no-one else in connection with the Placing, and will not be responsible to anyone other than the Company for providing the protections afforded to its customers 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 offering of the Placing Shares in certain jurisdictions may be restricted by law. No action has been taken by the Company or Liberum Capital Limited that would permit an offering of such shares or possession or distribution of this Announcement or any other offering or publicity material relating to such shares in any jurisdiction where action for that purpose is required. Persons into whose possession this Announcement comes are required by the Company and Liberum Capital Limited to inform themselves about, and to observe such restrictions.

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 to which this Announcement relates may be illiquid and / or subject to restrictions on their resale. Prospective purchasers of the Placing Shares should conduct their own due diligence on the Placing Shares. If you do not understand the contents of this Announcement you should consult an authorised financial adviser.

Neither the content of the Company's website nor any website accessible by hyperlinks on the Company's website is incorporated in, or forms part of, this Announcement.

The GBP/USD exchange used in respect of the Placing and Solenta Agreement is 1.2317.

AGREEMENT WITH SOLENTA AVIATION HOLDINGS LIMITED

 PROPOSED PLACING TO RAISE GROSS PROCEEDS OF NOT LESS THAN US$28.8m

Introduction

fastjet, the low cost African airline, is pleased to announce that it has entered in to a conditional agreement with Solenta Aviation Holdings Limited, a specialist African aviation aircraft operator and aircraft services group based in Johannesburg, South Africa ("Solenta") for the provision and operation of three wet-leased aircraft and the supply of other services over the next five years (the "Solenta Agreement"). In conjunction with this, the Company is pleased to announce a proposed placing, to be conducted by way of an accelerated book build ("Accelerated Book Build") process, to raise gross proceeds of not less than US$28.8 million through the issue of new ordinary shares (the "Placing") at 16.3 pence per new ordinary share (the "Issue Price").

Solenta

Solenta is the holding company of a specialised African commercial aviation group based in Johannesburg, South Africa. The Solenta group has been in operation since 2000 and provides a variety of aviation related services on the African continent including:

· Maintenance services, including for the Embraer aircraft type

· Crew Training services

· Aircraft Dry leasing

· Aircraft Wet leasing, including full ACMI services

Solenta has a fleet of 49 aircraft which it operates under AOCs in Algeria, Cote d'Ivoire, Gabon, Mozambique, and South Africa with strategic alliances or AOCs pending in Democratic Republic of Congo, Nigeria, Kenya, Mali, Senegal and Guinea. Solenta is a South African Civil Aviation Authority approved Aviation Training Organisation and Aircraft Maintenance Organisation. Major existing customers include DHL, Worldwide Express, United Nations World Food Program, ICRC Red Cross, all major oil and gas companies, including BP, Shell, Total, TFT, Japan Gas, AGIP, Anadarko and ENI, and Fedair Airlines. Solenta has been consistently profitable for the last several years.

The Solenta Agreement

The Solenta Agreement provides fastjet with access to aircraft capacity and related maintenance, crew and insurance services ("ACMI") through leases on ordinary trading terms over the next five years at a pre-agreed hourly rate. In addition, fastjet will have the right, subject to approval by the relevant authorities, to operate the Solenta wet-leased aircraft, and any existing or future fastjet aircraft, using any of the Solenta group's Air Operator Certificates ("AOCs") on the African continent under the fastjet brand. Furthermore, fastjet has an option to acquire an equity stake in one of Solenta's current or future AOCs on terms to be agreed and subject to any relevant regulatory restrictions.

Under the terms of the agreement, Solenta has agreed to recognise US$19.2 million of the aggregate total expected cost of the three, five year wet-leases as being satisfied immediately on completion through the issue of 95,633,199 new ordinary shares in the Company at the Issue Price (the "Consideration Shares"). Solenta will be paid the balance of the payments due under the wet-leases (including any adjustments) monthly, in cash, as the services are consumed by fastjet in the ordinary course over the term of the agreement. To give effect to the above, fastjet has conditionally agreed (pursuant to the Solenta Agreement) to acquire, for the Consideration Shares, the entire issued share capital of Aircraft and Services Limited, an SPV currently held within the Solenta group, which will have the right to enter into the wet-leases and to receive discounts to the value of US$19.2 million on the future cost of those and/or other services provided by Solenta. The Solenta Agreement is conditional upon, inter alia, the co-terminus completion of the Placing, which is itself subject to approval by shareholders in a General Meeting of the Company ("General Meeting"), and admission of the Consideration Shares and the new ordinary shares issued pursuant to the Placing (the "Placing Shares" and, together with the Consideration Shares, the "New Shares") to trading on AIM ("Admission").

On Admission, it is expected that Solenta will become a c.28% shareholder in the Company. Solenta's Consideration Shares will be subject to certain lock-up and security provisions, as summarised below, to ensure fastjet's position is protected should Solenta be unable to deliver the services as agreed. In addition, it has been agreed that Solenta will enter into a relationship agreement with fastjet to ensure all transactions and arrangements between the parties remain on an arms-length basis and subject to normal commercial terms.

Further information on Solenta and the Solenta Agreement is set out below.

The Placing

In conjunction with the Solenta Agreement, the Company is conducting the proposed Placing to provide fastjet with what the Board believes are the funds necessary to complete the Stabilisation Plan and reach cash flow break even by Q4 2017. In addition the funds raised will provide the Company with further working capital to pursue new strategic and growth opportunities, in particular expansion of the Company into the South African market.

The Placing is conditional upon, inter alia, the approval by shareholders at the General Meeting of the Authorising Resolution (as defined below) and Admission occurring.

The Company will shortly be publishing a circular (the "Circular") in connection with the Placing and will be convening the General Meeting to approve certain matters necessary to implement the Placing (the "Authorising Resolution").

If Shareholder approval of the Authorising Resolution is not passed, the Placing will not proceed and the Group is at the risk of not being able to continue trading as a going concern. If the Placing does not proceed and complete, and in the absence of the Group being able to successfully agree or implement any alternative funding, the Directors would seek to commence a process of placing the Group into administration. Under such circumstances, Shareholders could lose all or a substantial amount of the value of their investment in the Group. Accordingly, the Directors believe that the successful completion of the Placing represents the best option available to the Group.

The Company has entered into a placing agreement (the "Placing Agreement") with Liberum Capital Limited ("Liberum") on customary terms and conditions pursuant to which Liberum has conditionally agreed, as agent for the Company, to use its reasonable endeavours to procure Placees for the Placing Shares at the Issue Price. The Placing is being conducted by way of an Accelerated Book build led by Liberum as sole bookrunner ("Bookrunner"). Liberum will receive its professional fees pursuant to the Placing in the form of new ordinary shares in the Company at the Issue Price.

The books for the Accelerated Book Build will open with immediate effect. The books are expected to close no later than 4.00 pm (London) today. The timing of the closing of the books and the making of allocations may be accelerated or delayed at the Bookrunner's sole discretion. The Appendix to this Announcement contains the detailed terms and conditions of the Accelerated Book Build. The Placing is not being underwritten by Liberum or any other person. Details of the number of Placing Shares conditionally placed with institutional and other investors pursuant to the Placing and gross proceeds will be announced as soon as practicable after the close of the book building process.

Qualifying investors who are invited, and who choose, to participate in the Accelerated Book Build by making an oral and legally binding offer to acquire Placing Shares, 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 subject to the conditions contained herein and to be making the representations, warranties, undertakings and acknowledgements contained in the Appendix to this Announcement.

The Placing Shares will be issued credited as fully paid and will rank pari passu with existing ordinary shares of the Company ("Existing Ordinary Shares"), including the right to receive all dividends and other distributions (if any) declared, made or paid on or in respect of such shares after the date of their issue.

Your attention is drawn to the detailed terms and conditions of the Placing described in the Appendix to this announcement (which forms part of this announcement) (together, the "Announcement").

Background to the Solenta Agreement and Placing 

Nico Bezuidenhout joined the Company as Chief Executive Officer in August 2016 following a challenging period for fastjet in 2015 and H1 2016 and commenced a thorough review of the business. 2015 was a year of significant change for the Company as its network and fleet grew rapidly following a US$75m equity fundraising in April 2015. This growth in capacity occurred against a backdrop of difficult macroeconomic conditions in fastjet's markets (particularly Tanzania), delays in obtaining flying rights into Kenya, new international routes performing below expectations, as well as various changes to executive management and the Board. Operational performance consequently suffered. The rate of passenger and revenue growth seen in fastjet's early operations began to decline and its losses grew as overhead costs increased by 28 per cent., revenue per passenger decreased by 8 per cent. and load factors decreased by 7 per cent., resulting in an average monthly loss of c.US$5.0 million by Q4 in 2015. These trends continued into 2016 and were starkly evident in the Company's H1 2016 results. The doubling of fastjet's fleet in 2015, led to a 61 per cent. increase in seats flown in H1 2016 and a 32 per cent. decline in load factors, a fall in revenue per passenger of 4 per cent. and an increase in cost per passenger of 32 per cent. with only a 9 per cent. increase in passenger numbers. The loss from continuing activities after tax for H1 2016 was US$31.4 million compared to US$10.1 million for the same period in 2015.

In the Company's H1 2016 results announced on 20 September 2016, Mr Bezuidenhout identified the interventions he believed were required to stabilise the business: immediate cost containment; a revised business plan designed to stabilise the business and the introduction of new revenue generating initiatives (collectively, the "Stabilisation Plan"). Consequently, aggressive measures were taken to reduce costs in H2 2016: overheads were cut; initiatives to right size the fleet and aircraft type were implemented; route expansion was halted and output rationalised in order to achieve the Company's target of break-even by Q4 2017. The net proceeds of an US$18.8 million equity fundraising completed immediately prior to Mr Bezuidenhout arrival in August 2016 and US$7.8m realised from the sale of fastjet's single owned aircraft allowed the Company to implement the first steps of this revised business plan.

Update on the Stabilisation Plan

Cost reduction

As announced in the Trading Update of 25 November 2016, progress has been made with the Stabilisation Plan during H2 2016. As well as the sale of the owned A-319 aircraft, two leased A-319 aircraft have been returned early to their lessors and a third aircraft has now also been decommissioned, leaving two aircraft on legacy leases in the fleet. A smaller Embraer 190 entered service in October 2016 under a wet lease. The steps taken to rationalise the fleet have produced initial results of an 11 per cent. reduction in fuel cost, an 18 percentage point increase in load factor and a 12 per cent. increase in revenue per passenger and this is expected to result in a 10-15 per cent. reduction in operating costs for 2017.

An aggressive rationalisation of routes has seen underperforming routes cut entirely and frequencies reduced on certain loss making routes. The remaining routes are expected to contribute positively to operating revenues in December 2016, the peak operating period for fastjet.

The Directors expect that relocation of the Company's Head Office function from Gatwick Airport, United Kingdom to Johannesburg, South Africa will be substantially complete by March 2017 and will give rise to cost savings of approximately 35 per cent. With the commercial division having left Gatwick and ex-patriate pilots having left the business in December 2016, the payroll will reduce by 40 per cent. in January 2017 compared to the previous month. The finance function will transition to Johannesburg by March 2017 and operations oversight is expected to transition in July 2017.

The Company also expects to benefit from having its Head Office in closer proximity to its operating markets where experienced financial, commercial and project and governance resources are in place. Further cost savings are expected from an organisational restructuring of fastjet's operations in Tanzania and Zimbabwe and the more costly ex-patriate operational staff are being removed from the business. Year on year fixed operating costs and overheads are expected to reduce by approximately 25 per cent. and variable operating costs by approximately 35 per cent. in Q1 2017.

Revenue Generating Initiatives

New initiatives were introduced in Q4 2016 in a drive to boost revenue generation. Improving the distribution of fastjet's services through both trade and direct channels in order to stimulate revenue growth is a key focus of the Stabilisation Plan. A new global distribution system ("GDS") was introduced in September 2016 through Amadeus which allows fastjet to make available information on its flights, seat availability and other related information to travel agents and enables comprehensive information, communication, reservations, distribution, ticketing and related functions to be performed worldwide. The GDS is used by travel agents and is expected to improve fastjet's reach as between an estimated 50 to 75 per cent. of African air travel is booked through travel agents. The greater level of system connectivity provided by the GDS will also facilitate the development of improved interline agreements with International carriers. An interline agreement with Emirates, one of the world's largest international airlines, has started to generate passenger flows to fastjet, and the Directors believe completion of the Placing will provide the funds necessary to maximise the potential of this relationship.

The review of fastjet's operations undertaken by Mr Bezuidenhout has identified that a flexible approach to the traditional low cost carrier ("LCC") model is more appropriate for the business at its current stage of development. In June 2016 a new mobile payment platform with Pesapal was introduced, offering customers a faster and more convenient means of payment and an estimated 30 per cent. reduction in fastjet's transaction costs. On 31 March 2016, a new contact centre in South Africa started operations and is run by Mindpearl, a business process outsourcer, which provides a dedicated team to offer customer services to fastjet's passengers. Greater flexibility is also being introduced into fastjet's pricing models, for example the through-ticket service connecting various fastjet routes into single passenger journeys which commenced on 12 September 2016.

There are further initiatives planned to improve the Company's revenue generation in 2017. fastjet intends to improve its direct channels of distribution through upgrading its Central Reservations System by the end of Q1 2017. The Board is also improving the allocation of its marketing and PR budget in order to more effectively target fastjet's customer base. New marketing and PR initiatives which are designed to improve fastjet's market presence and generate additional revenues have been introduced or are in the planning stage. fastjet's established social media presence has proved to be a powerful brand building mechanism. Social media forms a key part of the Group's improved marketing programme as it offers a cost-effective promotional channel for generating ticket sales.

The Company is pleased with the progress made to date in delivering the Stabilisation Plan. However, the delivery of the plan has involved certain unexpected delays and more onerous costs than had originally been anticipated, particularly in respect of the maintenance costs associated with the return of leased A-319 aircraft (c.US$4.8 million) and additional costs due to regulatory delays associated with transitioning the fleet to Embraer E-190 aircraft in Tanzania (c.US$2.5 million). A further c.US$2.8 million of costs are estimated to be payable during 2017 associated with operating the remaining A-319 aircraft, and has been provided for in quantifying fastjet's capital requirements for 2017. In addition, the cost of the corporate reorganisation process has been higher than anticipated and the Company's creditor balance at the time of the August 2016 fundraise was c.US$3.2 million higher than originally expected, combining to place strain on the cash resources available to the Company and consequently leading to the requirement to raise additional funds.

As announced on 25 November 2016, the Company needs to raise further capital to allow it to continue to operate and complete the implementation of the Stabilisation Plan. Since that announcement the Company has engaged with new and existing investors in regard to raising further capital, and has evaluated a number of different strategic opportunities identified by Mr Bezuidenhout that aim to either reduce the Company's immediate/near-term capital requirements and/or facilitate fastjet's growth into new attractive markets.

The Directors believe the Solenta Agreement, in conjunction with the Placing, will provide the Company with the necessary infrastructure and capital to ensure delivery of its existing strategy to implement the final stages of the Stabilisation Plan and reach cash flow break even by Q4 2017. However, it will also allow the Company to think strategically beyond stabilisation as it looks to grow into new attractive markets, where Mr Bezuidenhout has significant experience and expertise.

Strategy

The Stabilisation Plan represents a multi-faceted strategic approach aimed at rapidly reducing cost and sustainably increasing revenue as it applies to existing fastjet operations, after which phased growth is to be pursued through organic means as well as through geographic expansion.

The initial focus on cost-reduction through fleet and route changes, a relocation of the head-office function and active supplier-engagements aimed at reducing input-cost, paired with revenue-enhancing initiatives such as a broadening of the Company's distribution network, is designed to result in short-term liquidity improvements and medium-term margin gains. The Board believes that with a significantly reduced cost base, combined with management positioned in proximity to its markets and customers under the supervision of the current CEO, along with a more flexible approach to operating the traditional LCC model, the existing fastjet business has a viable and attractive future.

As stability is established, it is intended that the Company's medium to long term strategy will return towards realising its vision of becoming a truly pan-African low-cost carrier. With the relocation of fastjet's headquarters to Johannesburg, the Company will look to expand its prospects into new markets, firstly South Africa. South African domestic air traffic accounts for c. 12 million passengers per year and the country is a significantly more developed aviation market than Tanzania and Zimbabwe, but has significant ties to them both. On this basis and then given Mr Bezuidenhout's significant operational experience in the market, the Board of fastjet believes that aviation in South Africa will provide fastjet with an attractive opportunity for expansion.

In context of the above the Board believes that the agreement with Solenta represents a good operational and strategic fit. Specifically:

· Solenta has proven expertise in the provisioning of ACMI services within an African context and has specific experience and regulatory approvals in operating the Embraer aircraft type, representing important support considerations for fastjet's own current fleet transitioning process. Solenta furthermore has localised maintenance and training capability, supporting fastjet's ongoing intent as part of the Stabilisation Plan to re-engineer its supply-chain with a view of improving cost-efficiency and ensuring improved proximity of supply to operating markets;

· Solenta's established African footprint may be leveraged to support expansion of fastjet operations and/or the fastjet brand in a manner that may be more cost-effective (from a regulatory compliance standpoint), holds less associated risk and is likely more expedient;

· The intended structure of the relationship with Solenta, to the extent that it involves Solenta assuming an equity position within fastjet, has the effect of interjecting a strategic shareholder into fastjet's equity mix whilst simultaneously reducing cash-outflows from the business as it relates to ACMI services.

The Solenta Agreement, viewed together with the current capital raising exercise, consequently serves, in the Board's opinion, to provide the framework and cash-resources necessary to complete the Stabilisation Plan, expected to result in a cash-flow breakeven by Q4 2017, as well as providing enhanced operational capability to pursue growth opportunities, all in a structure designed to enlarge fastjet's investor base and manage the risk and cost associated with expansion.

Further information on the Solenta Agreement

The Solenta Agreement provides fastjet with the option to wet-lease, on a full ACMI basis in the ordinary course, Solenta aircraft in fastjet livery over the next five years at a pre-agreed hourly rate (subject to certain adjustments including, inter alia, aircraft usage and aircraft type). The Agreement provides additional flexibility, allowing the substitution of bundled services for individual service components. Initially the wet-leased aircraft will be Embraer 145s, which fastjet management believes are well suited as replacements for the Company's A-319s on its smaller / shorter routes. In addition, going forward, fastjet will have the right to request these aircraft be substituted with Embraer E-190 / E-195s or ATR72-600s, subject to a fair and reasonable adjustment to the hourly rate. This will give the Company the opportunity to sub-lease its current A-319s saving further costs and provide the Company with the flexibility to grow its capacity in-line with demand as existing routes develop and new routes are set up.

fastjet will have the right, subject to approval by the relevant authorities, to deploy the Solenta aircraft on any of the Company's existing AOCs or deploy these or any other aircraft on any one of Solenta's AOCs on the African continent under the fastjet brand in exchange for a cost contribution / revenue share, depending on use. fastjet's experience in obtaining AOCs to date has shown AOC applications to be time consuming, uncertain and costly processes. Consequently, gaining access to Solenta's AOCs will provide the Company with a flexible and cost-effective method of growing its brand presence into new markets without being subject to the regulatory risk and cost associated with AOC approvals and ongoing maintenance. Moreover, Solenta has also granted fastjet the right to acquire currently or in the future a stake in an AOC under the control of Solenta on terms to be agreed, and then subject to ownership and control restrictions as well as requisite regulatory approvals, should it be in fastjet's best interests to do so.

Under the terms of the agreement, Solenta has agreed to recognise US$19.2 million of the aggregate total expected cost of the three, five year wet-leases as being satisfied immediately on completion through the issue of the Consideration Shares. Solenta will be paid the balance of the payments due under the wet-leases (including any adjustments) monthly, in cash, as the services are consumed by fastjet in the ordinary course over the term of the agreement. The Directors believe this is an attractive payment structure as it will reduce the Company's working capital requirements over the life of the agreement and provides fastjet with a supportive new strategic shareholder that has significant operational experience in the African aviation market.

To give effect to the above, fastjet has conditionally agreed (pursuant to the Solenta Agreement) to acquire, for the Consideration Shares, the entire issued share capital of Aircraft and Services Limited, an SPV currently held within the Solenta group, which will have the right to enter into the wet-leases and to receive discounts to the value of US$19.2 million on the future cost of those and/or other services provided by Solenta. The Solenta Agreement is conditional upon, inter alia, the co-terminus completion of the Placing, which is itself subject to approval by shareholders at the General Meeting and Admission. On Admission, following receipt of the Consideration Shares, Solenta will become a c.28% shareholder in the Company.

Solenta Lock-up and Security Provisions

Under the terms of the Solenta Agreement, Solenta's Consideration Shares will be subject to a lock-up for the shorter of 9 months from the commencement of the first aircraft wet lease and 12 months from the date of the Solenta Agreement. On the expiry of this initial period a number of Consideration Shares will be released from lock-up but will remain subject to certain orderly market provisions. The exact number to be released will be calculated according to certain provisions set out in the Solenta Agreement that account for levels of usage of agreed services over the period and changes in the Company's share price. Thereafter, each quarter further Consideration Shares will be released from the lock-up (but will also remain subject to certain orderly market provisions) subject to the same calculation as referred to above as Solenta provides ACMI services to fastjet. In addition, fastjet will at all times retain a charge over any unreleased locked-up Consideration Shares allowing fastjet to regain rights over those shares, should Solenta default and fail to provide the services as agreed. The Solenta Agreement contains certain exceptions and derogations to the lock-up provisions including, inter alia, any disposal or undertaking given by way of acceptance of a general offer to acquire the Company or pursuant to a court order, where the Company goes into liquidation, receivership or appoints an administrator, where the Company fails to pay Solenta for agreed and provided services and where the Company's CEO leaves within 36 months of the date of the Solenta Agreement.

Solenta Relationship Agreement

On the basis Solenta will become a c.28% shareholder in the Company on Admission, the Company and Solenta have agreed to enter into a relationship agreement at completion pursuant to which Solenta, in its capacity as a substantial shareholder, will give various undertakings to the Company to ensure the relationship and any arrangements between Solenta, its associates and the Company remain on an arms-length basis / are transacted on normal commercial terms. So long as Solenta remains interested in more than 20% of the Company's voting share capital it will retain the right to nominate two directors to the Board of fastjet. As long as Solenta remains interested in more than 10% of the Company's voting share capital (but less than 20%), it will retain the right to nominate one director to the Board. In both cases, any nomination will be subject to suitability and appropriateness as determined by fastjet's Nomad. Should Solenta cease to be a substantial shareholder, as defined in the AIM Rules, the relationship agreement shall terminate.

Use of proceeds

The net proceeds of the Placing will be used for working capital purposes, allowing the Company to complete the Stabilisation Plan and allow the Board time to implement its previously identified new revenue generating initiatives and reach cash flow break even by Q4 2017.

In addition, the Placing will provide the Company with further working capital to enable it to pursue new strategic/growth opportunities, in particular expansion of the Company into the South African market.

fastjet Board

Following the resignation of Colin Child as Non-Executive Chairman announced on 25 November 2016, Nico Bezuidenhout assumed the role of Interim Chairman, in addition to his role as CEO, pending the appointment of a new Non-Executive Chairman in due course. Noting that Solenta will have the right to nominate two directors to the Board of fastjet, the Company also intends to further strengthen and balance the Board with additional Non-Executive Directors at the appropriate time.

Application for Admission to trading on AIM

Application will be made to the London Stock Exchange for the Consideration Shares and Placing Shares to be admitted to trading on AIM. It is expected that Admission will become effective and that dealings for normal settlement in the Consideration Shares and Placing Shares on AIM will commence at 8.00 a.m. on 24 January 2017.

ENDS 

APPENDIX: TERMS AND CONDITIONS OF THE PLACING

THIS ANNOUNCEMENT, INCLUDING THIS APPENDIX (TOGETHER, THE "ANNOUNCEMENT") AND THE INFORMATION IN IT IS RESTRICTED AND IS NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, OR THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH SUCH PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.

IMPORTANT INFORMATION ON THE PLACING FOR INVITED PLACEES ONLY.

MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THIS APPENDIX AND THE TERMS AND CONDITIONS SET OUT HEREIN ARE FOR INFORMATION PURPOSES ONLY AND ARE DIRECTED ONLY AT: (A) PERSONS WHO ARE IN A MEMBER STATE OF THE EUROPEAN ECONOMIC AREA AND ARE "QUALIFIED INVESTORS" AS DEFINED IN ARTICLE 2.1(E) OF THE EU PROSPECTUS DIRECTIVE (WHICH MEANS DIRECTIVE 2003/71/EC AND INCLUDES ANY RELEVANT IMPLEMENTING DIRECTIVE MEASURE IN ANY MEMBER STATE) (THE PROSPECTUS DIRECTIVE); AND (B) IN THE UNITED KINGDOM, PERSONS WHO ARE: (I) "INVESTMENT PROFESSIONALS" WITHIN THE MEANING OF ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 (THE ORDER); (II) PERSONS FALLING WITHIN ARTICLE 49(2)(A) TO (D) ("HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC.") OF THE ORDER; OR (III) PERSONS TO WHOM IT MAY OTHERWISE BE LAWFULLY COMMUNICATED (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS RELEVANT PERSONS). THIS APPENDIX AND THE TERMS AND CONDITIONS SET OUT HEREIN MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS APPENDIX AND THE TERMS AND CONDITIONS SET OUT HEREIN RELATES IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. THIS APPENDIX DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN THE COMPANY. THIS ANNOUNCEMENT IS NOT AN OFFER OF OR SOLICITATION TO PURCHASE OR SUBSCRIBE FOR SECURITIES IN THE UNITED STATES. THE SECURITIES REFERRED TO HEREIN HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE SECURITIES ACT), AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES, EXCEPT PURSUANT TO AN APPLICABLE EXEMPTION FROM, OR AS PART OF A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. NO OFFERING OF SECURITIES IS BEING MADE IN THE UNITED STATES. NO MONEY, SECURITIES OR OTHER CONSIDERATION FROM ANY PERSON INSIDE THE UNITED STATES IS BEING SOLICITED AND, IF SENT IN RESPONSE TO THE INFORMATION CONTAINED IN THIS ANNOUNCEMENT, WILL NOT BE ACCEPTED.

EACH PLACEE SHOULD CONSULT WITH ITS OWN ADVISERS AS TO LEGAL, TAX, BUSINESS AND RELATED ASPECTS OF AN INVESTMENT IN PLACING SHARES.

Persons who are invited to and who choose to participate in the Placing, by making (or on whose behalf there is made) an oral or written offer to subscribe for Placing Shares (the Placees), will be deemed to have read and understood this Announcement, including this 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 this Appendix. In particular each such Placee represents, warrants and acknowledges to the Company and the Bookrunner that:

1. it is 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;

2. 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, (i) 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 Member State of the European Economic Area which has implemented the Prospectus Directive other than Qualified Investors or in circumstances in which the prior consent of the Bookrunner has been given to the offer or resale; or (ii) 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

3. either:(a) (i) it is not in the United States, and (ii) it is not acting for the account or benefit of a person in the United States; (b) it is a dealer or other professional fiduciary in the United States acting on a discretionary basis for a non-US person (other than an estate or trust) in reliance on Regulation S; or (c) it is otherwise acquiring the Placing Shares in an "offshore transaction" meeting the requirements of Regulation S under the Securities Act.

The Company and the Bookrunner will rely upon the truth and accuracy of the foregoing representations, acknowledgements and agreements.

This Announcement does not constitute an offer, and may not be used in connection with an offer, to sell or issue or the solicitation of an offer to buy or subscribe for Placing Shares in any jurisdiction in which such offer or solicitation is or may be unlawful. This Announcement and the information contained herein is not for publication or distribution, directly or indirectly, to persons in the United States, Australia, Canada, Japan or the Republic of South Africa or in any other jurisdiction in which such publication or distribution is unlawful. Persons into whose possession this Announcement may come are required by the Company to inform themselves about and to observe any restrictions of transfer of this Announcement. No public offer of securities of the Company is being made in the United Kingdom, the United States or elsewhere.

In particular, the Placing Shares referred to in this Announcement have not been and will not be registered under the Securities Act or any laws of or with any securities regulatory authority of any state or other jurisdiction of the United States, and may not be offered, sold, pledged or otherwise transferred within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and the securities laws of any state or other jurisdiction of the United States. The Placing Shares are being offered and sold only outside the United States in accordance with Regulation S.

The relevant clearances have not been, 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 or the South African Reserve Bank; and the Placing Shares have not been, nor will they be, registered under or offered in compliance with the securities laws of any state, province or territory of Australia, Canada, Japan or the Republic of South Africa. 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 Australia, Canada, Japan or the Republic of South Africa or any other jurisdiction outside the United Kingdom.

Persons (including, without limitation, nominees and trustees) who have a contractual or other legal obligation to forward a copy of this Appendix or the Announcement of which it forms part should seek appropriate advice before taking any action.

In this Appendix, unless the context otherwise requires, "Placee" means a Relevant Person (including individuals, funds or others) on whose behalf a commitment to subscribe for Placing Shares has been given.

Details of the Placing Agreement and the Placing Shares

Liberum has entered into the Placing Agreement with the Company under which Liberum has conditionally agreed on the terms and subject to the conditions set out therein, as agent for the Company, to use its reasonable endeavours to place the Placing Shares at the Issue Price with certain institutional investors. The Placing is not being underwritten by Liberum or any other person.

The number of Placing Shares at the Issue Price will be determined following completion of the Accelerated Book Build as set out in this Announcement.

The Placing Shares will, when issued, be credited as fully paid and will rank pari passu in all respects with the Existing Ordinary Shares, including the right to receive all dividends and other distributions (if any) declared, made or paid on or in respect of the Existing Ordinary Shares after the date of issue of the Placing Shares.

Application for admission to trading

Application will be made for admission of the Placing Shares to trading on AIM. It is expected that settlement of any such shares and Admission will become effective on or around 8.00 am on 24 January 2017 and that dealings in the Placing Shares will commence at that time.

Accelerated Book Build

The Bookrunner will today commence an Accelerated Book Building process in respect to the Placing to determine demand for participation in the Placing by any Placees at the Issue Price. This Appendix gives details of the terms and conditions of, and the mechanics of participation in, the Accelerated Book Build. No commissions will be paid to Placees or by Placees in respect of any Placing Shares.

The Bookrunner and the Company shall be entitled to effect the Placing (in whole or in part) by such alternative method to the Accelerated Book Build as they may, in their sole discretion, determine.

Participation in, and principal terms of, the Placing

1. The Bookrunner is arranging the Accelerated Book Build and Placing as an agent of the Company.

2. Participation in the Accelerated Book Build will only be available to persons who may lawfully be, and are, invited to participate by the Bookrunner. The Bookrunner and its affiliates are entitled to enter bids in the Accelerated Book Build as principal.

3. The Accelerated Book Build will establish the number of Placing Shares to be issued at the Issue Price, which will be agreed between the Bookrunner and the Company following completion of the Accelerated Book Build. The number of Placing Shares will be announced on a Regulatory Information Service following the completion of the Accelerated Book Build.

4. To bid in the Accelerated Book Build, prospective Placees should communicate their bid by telephone to their usual sales contact at Liberum. Each bid should state the number of Placing Shares which the prospective Placee wishes to subscribe for at the Issue Price. Bids may be scaled down by the Bookrunner on the basis referred to paragraph 8 below.

5. The Accelerated Book Build is expected to close no later than 4.00 pm (London) today but may be closed earlier or later at the discretion of the Bookrunner. The Bookrunner may, in agreement with the Company, accept bids that are received after the Accelerated Book Build has closed.

6. Each Placee's allocation will be confirmed to Placees orally, or by email, by the Bookrunner whom they contact following the close of the Accelerated Book Build and a trade confirmation or contract note will be dispatched as soon as possible thereafter. A Bookrunner's oral or emailed confirmation to such Placee will constitute an irrevocable legally binding commitment upon such person (who will at that point become a Placee) in favour of the Bookrunner and the Company, under which it agrees to subscribe for the number of Placing Shares allocated to it at the Issue Price on the terms and conditions set out in this Appendix (which are deemed to be incorporated in such trade confirmation or contract note) and in accordance with the Company's Articles of Association.

7. The Company will make a further announcement following the close of the Accelerated Book Build detailing the number of Placing Shares to be issued at the Issue Price.

8. Subject to paragraphs 4 and 5 above, the Bookrunner may choose to accept or reject bids, either in whole or in part, on the basis of allocations determined at its discretion (in consultation with the Company) and may scale down any bids for this purpose on such basis as they may determine. The Bookrunner may also, notwithstanding paragraphs 4 and 5 above, subject to the prior consent of the Company: (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 Accelerated Book Build has closed to any person submitting a bid after that time.

9. A bid in the Accelerated Book Build 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 Bookrunner, will not be capable of variation or revocation after the time at which it is submitted. Each Placee will also have an immediate, separate, irrevocable and binding obligation, owed to the Bookrunner, to pay to the Bookrunner (or as the Bookrunner may direct) in cleared funds an amount equal to the product of the Issue Price and the number of Placing Shares for which such Placee has agreed to subscribe. Each Placee's obligations will be owed to the Bookrunner.

10. Except as required by law or regulation, no press release or other announcement will be made by the Bookrunner or the Company using the name of any Placee (or its agent), in its capacity as Placee (or agent), other than with such Placee's prior written consent.

11. 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".

12. All obligations under the Accelerated Book Build and Placing will be subject to fulfilment 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 "Right to terminate under the Placing Agreement".

13. By participating in the Accelerated Book Build, each Placee agrees 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.

14. To the fullest extent permissible by law and the applicable rules of the FCA, neither Liberum nor any of its affiliates shall have any liability to Placees (or to any other person whether acting on behalf of a Placee or otherwise whether or not a recipient of these terms and conditions) in respect of the Placing. Each Placee acknowledges and agrees that the Company is responsible for the allotment of the Placing Shares to the Placees and the Bookrunner shall have no liability to the Placees for the failure of the Company to fulfil those obligations. In particular, neither Liberum nor any of its affiliates shall have any liability (including to the extent permissible by law, any fiduciary duties) in respect of the Bookrunner's conduct of the Accelerated Book Build or of such alternative method of effecting the Placing (in whole or in part) as the Bookrunner and the Company may agree.

Conditions of the Placing

Completion of the Placing is conditional on, inter alia:

(a) the issue of the Circular by the Company by 5.00 p.m. on 6 January 2017

(b) the passing of the Authorising Resolution (without amendment) by shareholders in a general meeting of the Company;

(c) the Company having complied with its obligations under the Placing Agreement to the extent that such obligations fall to be performed prior to Admission;

(d) none of the warranties in the Placing Agreement being untrue, inaccurate or misleading;

(e) the Placing Agreement not having been terminated in accordance with its terms; and

(f) Admission becoming effective by no later than 8.00 a.m. on 24 January 2017 (or such later time and/or date as the Company and the Bookrunner may agree (being not later than 8.00 a.m. on 31 January 2017).

If: (i) any of the conditions contained in the Placing Agreement in relation to the Placing Shares are not fulfilled or waived by the Bookrunner by the respective time or date where specified (or such later time or date as the Company and the Bookrunner may agree, but not being later than 8.00 am on 31 January 2017); (ii) any of such conditions becomes incapable of being fulfilled; or (iii) the Placing Agreement is terminated in its entirety in the circumstances specified below, the Placing will lapse 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 against the Bookrunner in respect thereof.

The Bookrunner may, at its discretion and upon such terms as it thinks fit, waive, or extend the period for, compliance by the Company with the whole or any part of any of the Company's obligations in relation to the conditions in the Placing Agreement save that the above condition relating to Admission taking place may not be waived. Any such extension or waiver will not affect Placees' commitments as set out in this Announcement.

Neither Liberum nor the Company 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 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 Bookrunner.

Right to terminate under the Placing Agreement

The Bookrunner is entitled, at any time before Admission, to terminate its obligations under the Placing Agreement by giving notice to the Company in certain circumstances, including, inter alia:

(a) a breach of the warranties given by the Company in the Placing Agreement; or

(b) a material breach by the Company of any of its obligations under the Placing Agreement; or

(c) in the Bookrunner's opinion, there having been a material adverse change in the financial position, business or prospects of the Group; or

(d) the occurrence of a force majeure event which, in the opinion of the Bookrunner, makes it impractical or inadvisable to proceed with the Placing.

Following Admission, the Placing Agreement is not capable of termination to the extent that it relates to the Placing of the Placing Shares. The rights and obligations of the Placees shall terminate only in the circumstances described in these terms and conditions and will not be subject to termination by the Placee or any prospective Placee at any time or in any circumstances. By participating in the Placing, Placees agree that the exercise by the Bookrunner of any right of termination or other discretion under the Placing Agreement shall be within the absolute discretion of the Bookrunner, and that it need not make any reference to Placees and that it shall have no liability to Placees whatsoever in connection with any such exercise.

No Prospectus

The Placing Shares are being offered to a limited number of specifically invited persons only and will not be offered in such a way as to require a prospectus in the United Kingdom or in any other jurisdiction. No offering document, admission document or prospectus has been or will be submitted to be approved by the FCA in relation to the Placing, and any Placees' commitments will be made solely on the basis of the information contained in the Announcement (including this Appendix) and the Exchange Information (as defined further below).

Each Placee, by accepting a participation in the Placing, agrees that the content of this Announcement is exclusively the responsibility of the Company and confirms that it has neither received nor relied on any other information (other than the Exchange Information), representation, warranty, or statement made by or on behalf of the Company or Liberum or any other person and neither the Bookrunner nor the Company 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 and, if given or made, such information, representation, warranty or statement must not be relied upon as having been authorised by any of the Bookrunner, the Company, or their respective officers, directors, employees or agents.

Each Placee acknowledges and agrees that it has relied on its own investigation of the business, financial or other position of the Company in accepting a participation in the Placing. Neither the Company nor the Bookrunner is making any undertaking or warranty to any Placee regarding the legality of an investment in the Placing Shares by such Placee under any legal, investment or similar laws or regulations. Each Placee should not consider any information in this Announcement to be legal, tax or business advice. Each Placee should consult its own solicitor, tax adviser and financial adviser for independent legal, tax and financial advice regarding an investment in the Placing Shares. 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: GB00BWGCH354) following Admission will take place within the system administered by Euroclear UK & Ireland Limited (CREST) provided that, subject to certain exceptions, the Bookrunner reserves the right to require settlement for, and delivery of, the Placing Shares (or a portion thereof) to Placees by such other means that they deem necessary if delivery or settlement is not possible or practicable within CREST within the timetable set out in this Announcement or would not be consistent with the regulatory requirements in any Placee's jurisdiction.

Following the close of the Accelerated Book Build, each Placee allocated Placing Shares in the Placing will be sent a trade confirmation or contract note in accordance with the standing arrangements in place with the Bookrunner, stating the number of Placing Shares allocated to it at the Issue Price, the aggregate amount owed by such Placee to the Bookrunner (in GBP) and settlement instructions. Each Placee agrees that it will do all things necessary to ensure that delivery and payment is completed in accordance with either the standing CREST or certificated settlement instructions that it has in place with the Bookrunner.

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 (2) percentage points above LIBOR as determined by the Bookrunner.

Each Placee is deemed to agree that, if it does not comply with these obligations, the Bookrunner may sell any or all of the Placing Shares allocated to that Placee on such Placee's behalf and retain from the proceeds, for the Bookrunner's account and benefit (as agent for the Company), 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 or securities transfer tax (together with any interest or penalties) which may arise upon the sale of such Placing Shares on such Placee's behalf. By communicating a bid for Placing Shares, each Placee confers on the Bookrunner all such authorities and powers necessary to carry out any such sale and agrees to ratify and confirm all actions which the Bookrunner lawfully takes in pursuance of such sale.

If Placing Shares are to be delivered to a custodian or settlement agent, Placees should ensure that the trade confirmation or contract note 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 or securities transfer tax. Placees will not be entitled to receive any fee or commission in connection with the Placing.

Representations, Warranties and Further Terms

By participating in the Placing each Placee (and any person acting on such Placee's behalf) makes the following representations, warranties, acknowledgements, agreements and undertakings (as the case may be) to the Company and the Bookrunner:

1. represents and warrants that it has read and understood this Announcement, including the Appendix, in its entirety and that its subscription for Placing Shares is subject to and based upon all the terms, conditions, representations, warranties, acknowledgements, agreements and undertakings and other information contained herein and undertakes not to redistribute or duplicate this Announcement;

2. acknowledges that no offering document, admission document or prospectus has been prepared in connection with the Placing and represents and warrants that it has not received and will not receive a prospectus, admission document or other offering document in connection therewith;

3. acknowledges that the Existing Ordinary Shares are admitted to trading on AIM, and the Company is therefore required to publish certain business and financial information in accordance with the AIM Rules (collectively "Exchange Information");

4. acknowledges that none of Liberum, the Company, any of their respective affiliates or any person acting on behalf of any of them has provided, and will not provide it, with any material regarding the Placing Shares or the Company other than this Announcement; nor has it requested any of Liberum, the Company, any of their respective affiliates or any person acting on behalf of any of them to provide it with any such information;

5. acknowledges that the content of this Announcement is exclusively the responsibility of the Company, and that none of Liberum, their respective affiliates or any person acting on behalf of any of them has or shall have any liability for any information, representation or statement contained in this Announcement or any information previously or concurrently published by or on behalf of the Company, 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 acquire the Placing Shares is contained in this Announcement and any Exchange Information, such information being all that it deems necessary to make an investment decision in respect of the Placing Shares and that it has neither received nor relied on any other information given or representations, warranties or statements made by any of Liberum or the Company, or, if received, it has not relied upon any such information, representations, warranties or statements (including any management presentation that may have been received by any prospective Placee) and neither Liberum nor the Company 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 solely on its own investigation of the business, financial or other position of the Company in deciding to participate in the Placing and it will not rely on any investigation that Liberum, its affiliates or any person acting on behalf of any of them has or may have conducted;

6. represents and warrants that it has neither received nor relied on any unpublished price sensitive information concerning the Company in accepting this invitation to participate in the Placing;

7. acknowledges that none of Liberum, its affiliates or any person acting on behalf of any of them has or shall have any liability for the Exchange Information, any publicly available or filed information or any representation relating to the Company, provided that nothing in this paragraph excludes the liability of any person for fraudulent misrepresentation made by that person;

8. represents and warrants that: (a) (i) it is not in the United States, and (ii) it is not acting for the account or benefit of a person in the United States; (b) it is a dealer or other professional fiduciary in the United States acting on a discretionary basis for a non-US person (other than an estate or trust) in reliance on Regulation S; or (c) it is otherwise acquiring the Placing Shares in an "offshore transaction" meeting the requirements of Regulation S under the Securities Act;

9. acknowledges that it is acquiring the Placing Shares for its own account or for one or more accounts as to each of which it exercises sole investment discretion, for investment purposes and not with a view to any distribution or for resale in connection with, the distribution thereof in whole or in part, in the United States and that it has full power to make the acknowledgements, representations and agreements herein on behalf of each such account;

10. acknowledges 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;

11. unless otherwise specifically agreed in writing with Liberum, represents and warrants that neither it nor the beneficial owner of such Placing Shares will be a resident of the United States, Australia, Canada, Japan or the Republic of South Africa;

12. acknowledges that the Placing Shares have not been and will not be registered under the securities legislation of the United States, Australia, Canada, Japan or the Republic of South Africa and, subject to certain exceptions, may not be offered, sold, taken up, renounced or delivered or transferred, directly or indirectly, within those jurisdictions;

13. represents and warrants that the issue to it, or the person specified by it for registration as holder, of Placing Shares will not give rise to a liability under any of sections 67, 70, 93 or 96 of the Finance Act 1986 (depositary receipts and clearance services) and that the Placing Shares are not being acquired in connection with arrangements to issue depositary receipts or to transfer Placing Shares into a clearance system;

14. represents and warrants that: (i) 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 (as amended), the Terrorism Act 2006 and the Money Laundering Regulations 2007 and (ii) it is not a person: (a) with whom transactions are prohibited under the Foreign Corrupt Practices Act of 1977 or any economic sanction programmes administered by, or regulations promulgated by, the Office of Foreign Assets Control of the U.S. Department of the Treasury; (b) named on the Consolidated List of Financial Sanctions Targets maintained by HM Treasury of the United Kingdom; or (c) subject to financial sanctions imposed pursuant to a regulation of the European Union or a regulation adopted by the United Nations (together, 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 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 and has obtained all governmental and other consents (if any) which may be required for the purpose of, or as a consequence of, such purchase, and it will provide promptly to the Bookrunner such evidence, if any, as to the identity or location or legal status of any person which the Bookrunner may request from it in connection with the Placing (for the purpose of complying with such Regulations or ascertaining the nationality of any person or the jurisdiction(s) to which any person is subject or otherwise) in the form and manner requested by the Bookrunner on the basis that any failure by it to do so may result in the number of Placing Shares that are to be purchased by it or at its direction pursuant to the Placing being reduced to such number, or to nil, as the Bookrunner may decide at its sole discretion;

15. if a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive, 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 Qualified Investors, or in circumstances in which the prior consent of the Bookrunner has been given to the offer or resale;

16. represents and warrants that it has not offered or sold and, prior to the expiry of a period of six (6) months from Admission, 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);

17. 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;

18. 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 the FSMA) relating to the Placing Shares in circumstances which do not require the approval of the communication by an authorised person under section 21(1) of the FSMA;

19. represents and warrants that it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the Placing Shares in, from or otherwise involving, the United Kingdom;

20. if in a Member State of the European Economic Area, unless otherwise specifically agreed with Liberum in writing, represents and warrants that it is a Qualified Investor within the meaning of the Prospectus Directive;

21. if in the United Kingdom, represents and warrants that it is a person: (i) who is an investment professionals within the meaning of article 19(5) of the Order; (ii) who falls within Article 49(2)(A) to (D) ("High Net Worth Companies, Unincorporated Associations, etc.") of the Order; or (iii) to whom this Announcement may otherwise be lawfully communicated;

22. represents and warrants that it and any person acting on its behalf is entitled to acquire the Placing Shares under the laws of all relevant jurisdictions and that it has all necessary capacity and has obtained all necessary consents and authorities and taken any other necessary actions to enable it to commit to this participation in the Placing and to perform its obligations in relation thereto (including, without limitation, in the case of any person on whose behalf it is acting, all necessary consents and authorities to agree to the terms set out or referred to in this Announcement) and will honour such obligations;

23. where it is acquiring Placing Shares for one or more managed accounts, represents and warrants that it is authorised in writing by each managed account: (a) to acquire the Placing Shares for each managed account; (b) to make on its behalf the representations, warranties, acknowledgements, undertakings and agreements in this Appendix and the Announcement of which it forms part; and (c) to receive on its behalf any investment letter relating to the Placing in the form provided to you by the Bookrunner;

24. 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 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 Bookrunner may in its sole discretion determine and without liability to such Placee and it will remain liable for any shortfall below the net proceeds of such sale and the placing proceeds of such Placing Shares and may be required to bear the liability for any stamp duty or stamp duty reserve tax or security transfer tax (together with any interest or penalties due pursuant to or referred to in these terms and conditions) which may arise upon the placing or sale of such Placee's Placing Shares on its behalf;

25. acknowledges that none of Liberum, its affiliates, or any person acting on behalf of any of them, 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 treated for these purposes as a client of Liberum and that Liberum has no 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;

26. undertakes that the person whom it specifies for registration as the holder of the Placing Shares will be (i) itself or (ii) its nominee, as the case may be. None of Liberum nor the Company will be responsible for any liability to stamp duty or stamp duty reserve tax resulting from a failure to observe this requirement. Each Placee and any person acting on behalf of such Placee agrees to participate in the Placing and it agrees to indemnify the Company, Liberum in respect of the same on the basis that the Placing Shares will be allotted to the CREST stock account of Liberum who will hold them as nominee on behalf of such Placee until settlement in accordance with its standing settlement instructions;

27. acknowledges that these terms and conditions and any agreements entered into by it pursuant to these terms and conditions shall be governed by and construed in accordance with the laws of England and 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 the Company or Liberum 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;

28. acknowledges that time shall be of the essence as regards to obligations pursuant to this Appendix to the Announcement;

29. agrees that the Company, Liberum, 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 Bookrunner on their own behalf and on behalf of the Company and are irrevocable and are irrevocably authorised to produce this Announcement or a copy thereof to any interested party in any administrative or legal proceeding or official inquiry with respect to the matters covered hereby;

30. agrees to indemnify on an after-tax basis and hold the Company, Liberum and their respective affiliates harmless 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;

31. acknowledges that no action has been or will be taken by any of the Company, Liberum or any person acting on behalf of the Company or Liberum 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;

32. acknowledges that it is an institution that 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 it, and any accounts for which it may be acting, are 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 the Company and its associates taken as a whole, and the terms of the Placing, including the merits and risks involved; and

33. acknowledges that its commitment to subscribe for Placing Shares on the terms set out herein and in the trade confirmation or 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 the Company's conduct of the Placing.

The representations, warranties, acknowledgments and undertakings contained in this Appendix are given to the Bookrunner for itself and on behalf of the Company and are irrevocable.

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 a subscription by it and/or such person direct from the Company for the Placing Shares in question. Such agreement assumes that the Placing Shares are not being subscribed for in connection with arrangements to issue depositary receipts or to transfer the Placing Shares into a clearance service. If there are any such arrangements, or the settlement relates to any other subsequent dealing in the Placing Shares, stamp duty or stamp duty reserve tax may be payable, for which neither the Company nor Liberum will be responsible, and the Placee to whom (or on behalf of whom, or in respect of the person for whom it is participating in the Placing as an agent or nominee) the allocation, allotment, issue or delivery of Placing Shares has given rise to such UK stamp duty or stamp duty reserve tax undertakes to pay such UK stamp duty or stamp duty reserve tax forthwith and to indemnify on an after-tax basis and to hold harmless the Company and Liberum in the event that any of the Company and/or Liberum has incurred any such liability to UK stamp duty or stamp duty reserve tax. If this is the case, each Placee should seek its own advice and notify the Bookrunner accordingly.

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 UK 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 the Placee, acknowledges that the Bookrunner does not owe any fiduciary or other duties to any Placee in respect of any representations, warranties, undertakings or indemnities in the Placing Agreement.

Each Placee and any person acting on behalf of the Placee acknowledges and agrees that Liberum or any of its affiliates may, at their 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 the Bookrunner, any money held in an account with the Bookrunner 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 FCA made under the 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 Bookrunner's money in accordance with the client money rules and will be used by the Bookrunner in the course of their own business and the Placee will rank only as a general creditor of the Bookrunner.

All times and dates in this Announcement may be subject to amendment. The Bookrunner shall notify the Placees and any person acting on behalf of the Placees of any changes.

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