GLIF.L Regulatory News (GLIF)

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18 February 2020

GLI Finance Limited (the "Group" or the "Company")

Tender Offer for up to 25 per cent. of the issued ZDP Shares

and

Notice of Extraordinary General Meeting and posting of circular

As part of the ZDP Share continuation proposals approved by the Company's shareholders in November 2019, the Board stated that the Company intended to make a cash tender offer for a proportion of the Company's redeemable zero dividend preference shares ("ZDP Shares"). The Board now proposes to implement the Tender Offer for up to 25 per cent of the issued ZDP Shares (excluding ZDP Shares held in treasury) (the "Tender Offer").

The making of the Tender Offer requires the approval of ordinary shareholders at an extraordinary general meeting, to be held at the Company's registered office, Block C, Hirzel Court, Hirzel Street, St Peter Port, Guernsey GY1 2NL, Channel Islands on 6 March 2020 at 10.00 a.m. (the "Extraordinary General Meeting" or "EGM"). A circular (the "Circular") will today be posted to holders of the Company's ordinary shares of no par value ("Ordinary Shares") and ZDP Shares (together the "Shareholders") providing details of the Tender Offer, a notice of the Extraordinary General Meeting together with the required resolutions, forms of proxy for the attention of ordinary shareholders and tender forms for the attention of ZDP shareholders. The Circular will shortly be available on the Company's website at www.glifinance.com and Shareholders should consider the full contents of the Circular in addition to the summary information below.

Background to and reasons for the Tender Offer

Since the extension of the life of the Company's ZDP Shares to 5 December 2020, the Company has continued its process of selling down its loan exposure to raise cash, with the intention of using this cash to fund and develop the Group's business in the interests of Shareholders as a whole but also, in the shorter term, to effect the Tender Offer of ZDP Shares and to satisfy the final capital entitlement of the ZDP Shareholders.

As at the date of this announcement, 12,856,958 ZDP Shares remain in issue and are not held by the Company in treasury, equating to an aggregate final capital entitlement on 5 December 2020 of approximately £18.15 million.

The Tender Offer is being made for up to 3,214,239 ZDP Shares, being 25 per cent. of the issued ZDP Shares (excluding ZDP Shares held in treasury). Each ZDP Shareholder (other than Restricted Shareholders and certain Overseas Shareholders as defined in the Circular) may elect to sell up to 25 per cent. of their ZDP Shareholding. One ZDP Shareholder has irrevocably undertaken not to tender ZDP Shares in the Tender Offer, as described further below, so the total number of ZDP Shares that may be purchased by Liberum, as principal, pursuant to the Tender Offer and thereafter repurchased by the Company is 3,058,843.

The Tender Offer is being made at a price of 133.3 pence per ZDP Share (the "Tender Price"). This is equal to the accrued capital entitlement per ZDP Share as at 6 March 2020, the anticipated date of completion of the Tender Offer, calculated in accordance with the Company's articles (the "Articles"). The aggregate Tender Price, assuming that the full entitlement of ZDP Shares is tendered (and excluding the Excluded ZDP Shares as defined below), will be approximately £4.08 million.

The Tender Offer is being made for the benefit of both Ordinary Shareholders, who will benefit from the reduced overall capital entitlement of the ZDP Shares as a result of repurchasing 25 per cent. of the ZDP Shares sooner than their maturity date; and ZDP Shareholders, who may elect to realise some of their investment at this time if they wish to do so.

The Company has sufficient net tangible assets to meet all of its liabilities. The Board continually reviews the Company's capital structure and is focused on ensuring that the Company is appropriately capitalised ahead of the planned redemption of the ZDP Shares on 5 December 2020 and the repayment of the Company's 7 per cent. unsecured bonds on 30 June 2021.

The Board is also aware that there may be demand from certain ZDP Shareholders who wish to switch their exposure into the GLI Bonds and, dependent upon firm commitment to such action, the Board may consider this appropriate for future recommendation.

ZDP Shareholders are not obliged to tender any of their ZDP Shares and, if they do not wish to do so, they should not return a Tender Form or TTE Instruction.

Ordinary Shareholders may not participate in the Tender Offer. The Board believes that this proposal is in the interests of all Shareholders and the Company as a whole.

Details of the Tender Offer

Under the Tender Offer, which is being made by Liberum as principal, ZDP Shareholders (other than Restricted Shareholders and certain Overseas Shareholders) will be entitled to tender up to their Tender Entitlement, being 25 per cent. of the ZDP Shares they hold as at the Record Date. Tenders in excess of the Tender Entitlement will not be satisfied.

Subject to the satisfaction of the conditions relating to the Tender Offer, Liberum will purchase, as principal, ZDP Shares validly tendered under the Tender Offer at the Tender Price. Following completion of those purchases, the Company will then purchase the relevant ZDP Shares from Liberum pursuant to the Repurchase Agreement at the Tender Price by way of an on-market transaction on the main market of the London Stock Exchange. The ZDP Shares which the Company acquires from Liberum will be cancelled or held in treasury.

The proposed repurchase of ZDP Shares following the Tender Offer would be categorised as a form of distribution under Guernsey Companies Law. Before the repurchase may be undertaken, the Board must be satisfied, on reasonable grounds, that the Company will satisfy the solvency test as defined under the Guernsey Companies Law immediately after the repurchase has been completed. The Board will also need to consider if the financial position of the Company is expected to, or has, changed materially between the time of the authorisation of the repurchase and the actual time of the repurchase. Currently, the Board is satisfied that the Company will satisfy the solvency test. However, if the Board ceases to be satisfied prior to completion of the Tender Offer that the Company will satisfy the solvency test immediately after the repurchase by the Company of the ZDP Shares from Liberum, then the repurchase will no longer be deemed to be authorised, and as a result, the Tender Offer will not proceed (or be capable of becoming unconditional) and the ZDP Shares will not be repurchased.

ZDP Shareholders should note that, once tendered, ZDP Shares may not be sold, transferred, charged or otherwise disposed of other than in accordance with the Tender Offer.

Shareholders who are in any doubt as to the contents of this announcement or the Circular, or as to the action to be taken, should immediately consult their stockbroker, bank manager, solicitor, accountant or other independent financial adviser authorised under FSMA.

The attention of ZDP Shareholders is also drawn to Part 4 of the Circular which sets out a general guide to certain aspects of current UK and Guernsey taxation law and HMRC and Revenue Service published practice. This information is a general guide and is not exhaustive. Shareholders who are in any doubt as to their tax position or who are subject to tax in a jurisdiction other than the UK should consult an appropriate professional adviser.

This announcement is not a recommendation for ZDP Shareholders to tender their ZDP Shares under the Tender Offer. Whether or not ZDP Shareholders tender their ZDP Shares will depend on, amongst other things, their view of the Company's prospects and their own individual circumstances, including their tax position, on which they should seek their own independent advice.

The Loan Swap Repurchase and irrevocable undertaking

The Company has agreed in principle with one ZDP Shareholder to repurchase that shareholder's entire holding of ZDP Shares upon or shortly after completion of the Tender Offer (the "Loan Swap Repurchase"). The relevant shareholder holds 621,586 ZDP Shares (the "Excluded ZDP Shares").

The consideration proposed to be paid by the Company pursuant to the Loan Swap Repurchase is the in specie transfer of a loan currently on the balance sheet of the Company (the "Loan Consideration"). The loan that is proposed to be transferred has a maturity date of 7 June 2021, hence post the ZDP Share repayment date of 5 December 2020. The valuation of the Loan Consideration is £828,574, being equal to the aggregate accrued capital entitlement of the Excluded ZDP Shares as at 6 March 2020, the anticipated date of completion of the Tender Offer and the Loan Swap Repurchase. Interest accrues on the loan at a rate of 7 per cent. per annum.

The Loan Swap Repurchase therefore allows the Company to reduce the quantum of the ZDP repayment obligation in December 2020 and also reduce the Group's on-balance sheet loan exposure. The Loan Swap Repurchase will be made on the terms of the draft agreement set out in the Appendix to the Circular and which Ordinary Shareholders are being asked to approve at the EGM, as required by applicable law.

The Company and Liberum have received from the holder of the Excluded ZDP Shares an irrevocable undertaking not to tender the Excluded ZDP Shares under the Tender Offer. The Excluded ZDP Shares represent approximately 4.8 per cent. of the issued ZDP Share capital of the Company (excluding ZDP Shares held in treasury).

Expected Timetable of Events

All of the times and dates in the expected timetable may be extended or brought forward without further notice, at the discretion of the Company, with the consent of Liberum. If any of the above times and/or dates change materially, the revised time(s) and/or date(s) will be notified to Shareholders by an announcement through a Regulatory Information Service provider.

All references to time in this announcement are to UK time.

Capitalised terms used but not otherwise defined in the text of this announcement are defined in the Circular.

LEI: 213800S2XOO3YSEGCA26

IMPORTANT NOTICE

If Shareholders are in any doubt about the contents of this announcement or the action they should take, they are recommended to seek advice from their stockbroker, solicitor, accountant, bank manager or other appropriately authorised independent financial adviser authorised under the Financial Services and Markets Act 2000 (as amended) if they are in the United Kingdom or from another appropriately authorised independent financial adviser if they are in a territory outside the United Kingdom.

This announcement does not constitute, or form part of, any offer for or invitation to sell or purchase any securities, or any solicitation of any offer for, securities in any jurisdiction. Any acceptance or other response to the Tender Offer should be made only on the basis of information contained in or referred to in the Circular. The Circular will contain important information, including the full terms and conditions of the Tender Offer, which Shareholders are urged to read carefully. The Tender Offer is not being made, directly or indirectly, in or into, or by use of the mails of, or by any means or instrumentality of interstate or foreign commerce of, or any facilities of a national securities exchange of United States, Canada, Australia, New Zealand, South Africa and Japan and any other jurisdiction where such distribution of the Circular into or inside or from such jurisdiction would constitute a violation of the laws of such jurisdiction.

Certain statements in this announcement constitute forward-looking statements. Any statement in this announcement that is not a statement of historical fact including, without limitation, those regarding the Company's future expectations, operations, financial performance, financial condition and business is a forward-looking statement. Such forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially. These risks and uncertainties include, among other factors, changing economic, financial, business or other market conditions. These and other factors could adversely affect the outcome and financial effects of the plans and events described in this presentation. As a result you are cautioned not to place reliance on such forward-looking statements. Nothing in this announcement should be construed as a profit forecast.