Gama Aviation Regulatory News (GMAA)

THIS ANNOUNCEMENT INCLUDING THE APPENDIX AND THE INFORMATION CONTAINED IN IT, IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL. PLEASE SEE THE IMPORTANT NOTICES SECTION WITHIN THIS ANNOUNCEMENT.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS STIPULATED UNDER THE MARKET ABUSE REGULATION (EU) NO. 596/2014.

9 February 2018

Gama Aviation Plc (AIM: GMAA)

Proposed Placing to raise £48 million

Hutchison to become strategic shareholder

Gama Aviation Plc ("Gama Aviation" or the "Group"), the global business aviation services provider, today announces its intention to raise £48 million (approximately US$67 million) (before commissions, fees and expenses) through a conditional placing of 19,591,837 new ordinary shares of one pence each in the Company (the "Placing Shares") with institutional and other investors at a placing price of 245 pence per Placing Share (the "Placing").

Highlights

· Proposed Placing to raise £48 million (approximately US$67 million) to accelerate the Group's strategy of becoming the leading global business aviation services group

· Hutchison Capital Holdings Limited, an affiliate of Hutchison Whampoa (China) Limited ("Hutchison"), has agreed to subscribe for new Ordinary Shares in the Placing comprising approximately 21% of the Enlarged Issued Share Capital

· US$19.8 million of the proceeds from the Placing will be used to acquire Hutchison's Hong Kong aviation interests: its 50% stake in Gama Aviation Hutchison Holdings Ltd ("GAHH") and its 20% stake in China Aircraft Services Limited ("CASL")

· The balance of proceeds are intended to be deployed during 2018 as follows:

o US$20 million capital investment in two Ground base maintenance facilities in the US and the development of the Sharjah business aviation centre in the Middle East

o acquisitions targeting Air opportunities in Europe and the Middle East and Ground opportunities in Europe

· The placing and the associated use of proceeds are expected to be dilutive to earnings in 2018, neutral in 2019 and enhancing thereafter

· Directors are confident in the strength of the Group's operations and believe the Company is well placed to achieve its expectations in the current year

Marwan Khalek, Chief Executive of Gama Aviation, said:

"The Group operates a robust and resilient business model and we have built a strong operational platform to support our growth through both organic investment and acquisition. The execution of our growth strategy now requires further capital to capture the investment opportunities with which we are currently presented and to accelerate the next stage of our development.

Hutchison's investment in the Company provides a strong endorsement of our stated strategy and our readiness to execute against that strategy. We welcome them as a long term partner who shares our ambition of becoming the leading global business aviation services Company."

A circular will be distributed to shareholders and made available on Gama Aviation's website shortly with further details of the Placing and to give notice of the general meeting to consider and, if thought fit, approve the resolutions laid out in the circular. The General Meeting is to be held at the offices of the Company at Business Aviation Centre, Farnborough Airport, Farnborough, Hampshire GU14 6XA at 2 p.m. on Thursday 1 March 2018. The formal notice of general meeting is set out in the circular.

This announcement and the appendix (the "Appendix") (which forms part of this announcement, such announcement and the Appendix together, the "Announcement") should be read in its entirety. In particular, your attention is drawn to the "Important Notices" section of this Announcement and to the detailed terms and conditions of the Placing described in the Appendix to this Announcement.

Capitalised terms not otherwise defined in the text of this Announcement (including the Appendix) have the meanings given to them in the 'Definitions' section at the end of this Announcement.

For more information contact:

Gama Aviation Plc +44 (0) 1252 553000

Marwan Khalek, Chief Executive Officer

Camarco +44 (0) 20 3757 4992

Ginny Pulbrook

Geoffrey Pelham-Lane

Jefferies International +44 (0) 207 029 8000

Simon Hardy

Will Soutar

Gama Aviation - Notes to Editors

Gama Aviation Plc (LSE AIM:GMAA) is a global business aviation services company that specialises in providing support for individuals, corporations and government agencies; allowing them to deliver on the promises they make.

The Company has two divisions: Air and Ground. Air services include: aircraft management, special mission support and charter; with Ground services covering: base & line aircraft maintenance services, aircraft modification design and installation and Fixed Base Operations (FBO).

More details can be found at: http://www.gamaaviation.com/

IMPORTANT NOTICES

This Announcement and the information contained in it is restricted and is not for publication, release or distribution, in whole or in part, directly or indirectly, in, into or from the United States, Australia, Canada, South Africa or Japan or any other state or jurisdiction in which publication, release or distribution would be unlawful, restricted or unauthorised (each a "Restricted Territory"). This Announcement is for information purposes only and does not constitute an offer to sell or issue, or the solicitation of an offer to buy, acquire or subscribe for shares in the capital of the Company in any Restricted Territory or any other state or jurisdiction in which such offer or solicitation is not authorised or to any person to whom it is unlawful to make such offer or solicitation. Any failure to comply with these restrictions may constitute a violation of the securities laws of such jurisdictions. Subject to certain exemptions, the securities referred to in this Announcement may not be offered or sold in any Restricted Territory or for the account or benefit of any national resident or citizen of any Restricted Territory. The Placing Shares have not been and will not be registered under the United States Securities Act of 1933, as amended (the "Securities Act") or with any securities regulatory authority of any state or other jurisdiction of the United States and may not be offered, sold, taken up, resold, transferred or delivered, directly or indirectly, within the United States except pursuant to registration under the Securities Act or an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction of the United States. The Placing Shares are being offered and sold outside the United States in offshore transactions in accordance with Regulation S under the Securities Act ("Regulation S"). No public offering of the shares referred to in this Announcement is being made in the United States, United Kingdom, any Restricted Territory or elsewhere. No representation is being made as to the availability of any exemption under the Securities Act for the reoffer, resale, pledge or transfer of the Placing Shares.

No prospectus will be made available in connection with the matters contained in this Announcement and no such prospectus is required (in accordance with the Prospectus Directive) to be published. Persons needing advice should consult an independent financial advisor.

The contents of this Announcement have not been reviewed by any regulatory authority in the United Kingdom, Hong Kong or elsewhere. You are advised to exercise caution in relation to the Placing. If you are in any doubt about any of the contents of this Announcement, you should obtain independent professional advice.

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 Jefferies or by any of its affiliates, agents, directors, consultants or employees 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, or any other statement made or purported to be made by or on behalf of Jefferies or any of its affiliates, agents, directors, consultants or employees in connection with the Company, the Placing Shares or the Placing and any responsibility therefore is expressly disclaimed. Jefferies and each of its affiliates, agents, directors, consultants or employees, accordingly disclaim all and any liability, whether arising in tort, contract or otherwise in respect of any statements or other information contained in this Announcement and nor representation or warranty, express or implied is made by Jefferies or any of its affiliates, agents, directors, consultants or employees as to the accuracy, completeness or sufficiency of the information contained in this Announcement.

Jefferies International Limited ("Jefferies"), which is authorised and regulated by the FCA in the United Kingdom, is acting solely for the Company and no one else in connection with the Placing and the Hutchison Transactions and will not be responsible to anyone other than the Company for providing the protections afforded to its clients nor for providing advice in relation to the Placing and/or the Hutchison Transactions and/or any other matter referred to in this Announcement. Apart from the responsibilities and liabilities, if any, which may be imposed on Jefferies by the UK Financial Services and Markets Act 2000 or by the regulatory regime established under it, neither Jefferies nor any of its affiliates, agents, directors, consultants or employees accepts any responsibility whatsoever for the contents of the information contained in this Announcement or for any other statement made or purported to be made by or on behalf of Jefferies or any of its affiliates, agents, directors, consultants or employees in connection with the Company, the Placing Shares, the Placing and/or the Hutchison Transactions. Jefferies and its affiliates, agents, directors, consultants and employees accordingly disclaim all and any liability, whether arising in tort, contract or otherwise (save as referred to above) in respect of any statements or other information contained in this Announcement and no representation or warranty, express or implied, is made by Jefferies or any of its affiliates, agents, directors, consultants or employees as to the accuracy, completeness or sufficiency of the information contained in this Announcement.

The offering of the Placing Shares in certain jurisdictions may be restricted by law. Neither this Announcement nor any part or copy of it may be taken or transmitted into the United States or distributed, directly or indirectly, in the United States, as that term is defined in Regulation S under the Securities Act. Neither this Announcement nor any copy of it may be taken, transmitted, or distributed directly or indirectly into any Restricted Territory. Any failure to comply with these restrictions may constitute a violation of United States or other Restricted Territory securities laws. No action has been taken by the Company or Jefferies 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 Jefferies to inform themselves about, and to observe, such restrictions.

Solely for the purposes of the product governance requirements contained within: (a) EU Directive 2014/65/EU on markets in financial instruments, as amended ("MiFID II"); (b) Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593 supplementing MiFID II; and (c) local implementing measures (together, the "MiFID II Product Governance Requirements"), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any "manufacturer" (for the purposes of the MiFID II Product Governance Requirements) may otherwise have with respect thereto, the Placing Shares have been subject to a product approval process, which has determined that the Placing Shares are: (i) compatible with an end target market of retail investors and investors who meet the criteria of professional clients and eligible counterparties, each as defined in MiFID II; and (ii) eligible for distribution through all distribution channels as are permitted by MiFID II (the "Target Market Assessment"). Notwithstanding the Target Market Assessment, distributors should note that: the price of the Placing Shares may decline and investors could lose all or part of their investment; the Placing Shares offer no guaranteed income and no capital protection; and an investment in the Placing Shares is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Offer. Furthermore, it is noted that, notwithstanding the Target Market Assessment, Jefferies has only procured investors who meet the criteria of professional clients and eligible counterparties.

For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of MiFID II; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the Placing Shares.

Each distributor is responsible for undertaking its own target market assessment in respect of the Placing Shares and determining appropriate distribution channels.

The information in this Announcement may not be forwarded or distributed to any other person and may not be reproduced in any manner whatsoever. Any forwarding, distribution, reproduction, or disclosure of this information in whole or in part is unauthorised. Failure to comply with this directive may result in a violation of the Securities Act or the applicable laws of other jurisdictions.

This Announcement does not identify or suggest, or purport to identify or suggest, the risks (direct or indirect) that may be associated with an investment in the Placing Shares. Any investment decision to buy Placing Shares in the Placing must be made solely on the basis of publicly available information, which has not been independently verified by Jefferies.

No statement in this Announcement is intended to be a profit forecast and no statement in this announcement should be interpreted to mean that the earnings per share of the Company for the current or future financial years would necessarily match or exceed the historical published earnings per share of the Company.

This Announcement includes forward-looking statements, which include all statements other than statements of historical facts, including, without limitation, those regarding the Company's and/or its subsidiaries' (the "Group") financial position, business strategy, plans and objectives of management for future operations, or any statements preceded by, followed by or that include the words "targets", "believes", "expects", "aims", "intends", "will", "may", "anticipates", "would", "could" or similar expressions or negatives thereof. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond the Group's control that could cause the actual results, performance or achievements of the Group to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the Group's present and future business strategies and the environment in which the Group will operate in the future. These forward-looking statements speak only as at the date of this Announcement. The Company, its directors and its or their advisors expressly disclaim any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in the Group's expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based unless required to do so by applicable law or the AIM Rules for Companies, as published and amended from time to time by the London Stock Exchange.

The Placing Shares to be issued pursuant to the Placing will not be admitted to trading on any stock exchange other than the AIM market of the London Stock Exchange.

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.

KEY STATISTICS

*Assuming that all of the Placing Shares are issued and that no other Ordinary Shares are issued prior to Admission

EXPECTED TIMETABLE FOR PRINCIPAL EVENTS

(1) The times and dates set out in the expected timetable of principal events above and mentioned throughout this Announcement may be adjusted by the Company in consultation with Jefferies, in which event details of the new times and dates will be notified to the London Stock Exchange, and where appropriate, Shareholders by announcement by the Company on a regulatory information service.

(2) All references in this Announcement to times are to London time unless otherwise stated.

All references in this Announcement to "£", "pence" or "p" are to the lawful currency of the UK and to "US$" are to the lawful currency of the United States and HK$ are to the lawful currency of Hong Kong. For the purposes of this Announcement, an exchange rate of 1.3919 has been applied for the purposes of converting £ to US$ and an exchange rate of 0.12788 has been applied for the purposes of converting HK$ to US$.

Gama Aviation Plc (AIM: GMAA)

Proposed Placing to raise approximately £48 million

1. INTRODUCTION

The Company intends to raise £48 million (approximately US$67 million) before commissions, fees and expenses by way of a placing of 19,591,837 new Ordinary Shares with existing and new institutional and other investors at a price of 245 pence per new Ordinary Share.

For the Placing to proceed, the Company requires Shareholders' approval to authorise the Directors to allot the Placing Shares and disapply pre-emption rights in relation to the issue of the Placing Shares. The General Meeting is to be held at the offices of the Company at Business Aviation Centre, Farnborough Airport, Farnborough, Hampshire GU14 6XA at 2.00 p.m. on 1 March 2018.

The Board believes that raising equity finance using the flexibility provided by a non-pre-emptive placing is the most appropriate and optimal structure for the Company at this time. This allows both existing institutional holders and new institutional and other investors the opportunity to participate in the Placing and avoids the requirement for a prospectus, which is a costly and time consuming process.

2. BACKGROUND TO AND REASONS FOR THE PLACING

2.1. Information on the Group

The Group is a global business aviation services group that focuses on air operations (business aircraft management, special missions and charter of business aircraft) and ground operations (engineering, design, software, MRO, passenger handling and consultancy) currently in four geographical regions (Europe, US, Middle East and Asia). The Group was founded in 1983 by Marwan Khalek and Stephen Wright and currently employs over 1300 people in over 40 locations across 4 continents. The Group serves a broad variety of clients including high-net worth individuals, fleet operators, multi-national corporations and government entities, the latter including defence, law enforcement and health services.

The Group has very few competitors who possess the same global scale, breadth of services and depth of capabilities and expertise. The Group has leading positions in highly fragmented markets. For example, it is estimated that globally there are 1,141 aircraft management companies operating a total fleet size of approximately 4,300 aircraft, equivalent to nearly four aircraft per management company. Furthermore, regulatory change is helping to drive growth as it becomes less economical for smaller players to operate independently given the rising costs associated with increasing regulation. The Group has a robust business model with good forward visibility of revenues and derives over 70% of its gross profits from contracted revenues. The Group's gross profits are derived from aircraft being under contract not usage and so are not affected by utilisation rates in the way commercial airlines' profits are. Again, unlike commercial airlines, the Group's Air division has a capital light business model which does not have exposure to aircraft residual value risk (as the Group manages or leases aircraft rather than owns aircraft) and has no direct exposure to fuel cost variations as such cost is passed on to customers.

The Group's Air and Ground divisions are complementary with opportunities to cross sell both within and between the two.

Air division

The Group's Air division provides aircraft management, special mission and charter services. It offers a comprehensive fleet management service to business jet owners including the provision of management services, crew personnel, fuel, airworthiness, engineering oversight, insurance management, hangar space, valeting and all travel arrangements. It also works with a number of public agencies providing outsourced solutions to manage aviation operations for a variety of complex, time critical services such as air ambulance provision and aerial survey. The Group also acts as a charter broker for its managed aircraft with revenue shared between the Group and the underlying aircraft owner. The Air division has further margin expansion potential, with a total operating profit margin target of 5%, compared to a total operating profit margin of 2.9% for the 6 months to 30 June 2017.

Ground division

The Ground division provides base and line maintenance, repair and overhaul, design and modification (MRO) and fixed base operations (FBO). Base maintenance is the planned maintenance required by the aircraft manufacturer or component supplier, whereas line maintenance is irregular maintenance activity often as a result of component failure or wear and tear and both services are offered on either a fee or contract basis. The design and modification services provided by the Group increase the operating life and/or capability of an aircraft through services such as avionics or cabin system upgrades and incorporation of special mission capability. The Ground division provides FBO facilities at Glasgow, Aberdeen, Jersey and Sharjah airports offering parking, hangarage, line maintenance and other related ground handling tasks such as the fuelling of aircraft. As with the Air division, the Ground division has further margin expansion potential given a total operating profit margin of 13.6% for the 6 months to 30 June 2017 compared to its total operating profit margin target of 20%.

The Group offers its services globally and mainly operates across four regions: Europe, the US, the Middle East and Asia. Each region is at a different stage in its development: Europe is the Group's most mature region in terms of breadth of services provided (yet with opportunities to increase scale across mainland Europe); the Asia business is at start-up stage and the Middle East business is developing. The US business has achieved scale and the Group has the opportunity to add additional services from within its existing range in order to reach maturity.

2.2. Group strategy

The Group's strategy is to become the global market leader in business aviation services through organic, joint venture and acquisition-led growth. In order to execute on this strategy, the Group is focused on increasing the depth of its capabilities and expertise, broadening the regions it operates in and the services it offers in order to increase the scale of its presence in its chosen markets and to drive further revenue growth through cross selling opportunities.

2.3. Progress since the reverse takeover

Since the 2015 Merger, the Group has successfully executed and integrated a number of acquisitions and joint ventures. In particular, it successfully executed the merger of its US Air associate with the US Air business of BBA Aviation Plc (known as Landmark). This merger and acquisition activity has been underpinned by the Group strengthening its leadership team through adding experience and expertise in each of its operating regions during this period, developing the capability to grow both organically and inorganically.

In 2016, the Group acquired Aviation Beauport and FlyerTech. Aviation Beauport is a Jersey based business offering a range of business aviation services including aircraft charter, FBO services (including handling, parking and hangarage services) and aircraft management. FlyerTech is a Gatwick based business offering airworthiness management services. Both businesses have been successfully integrated into the Group's platform and have met or exceeded management's strategic and financial objectives since acquisition. The Group's merger of its US Air associate with the US Air business of BBA Aviation Plc (Landmark) has delivered significant revenue growth in the Group's US Air associate. The Group has also developed its presence in Asia through a joint venture with Hutchison in Hong Kong which is active across both the Air and Ground divisions including its recently established commercial partnership with CASL.

The Company has strengthened its Board and the Group's regional leadership and functional management teams to ensure it can execute its strategy and continue to grow profitably and sustainably. Dr Richard Steeves was appointed as an independent Non-Executive Director of the Company and brings to the Group valuable experience in growing a business organically and through acquisitions, having founded and built Synergy Health Plc from a market capitalisation of £12 million in 2001 to £1.4 billion when it was sold in 2015. Neil Medley, the Group's Chief Operating Officer, who joined the Company in September 2016, was appointed to the Board in January 2018. Neil has a strong track record of managing change and business integration as well as implementing business systems, having previously been at Detica Group Plc and BAE Systems Plc. Furthermore, there have been a number of recent hires to supplement the already strong regional operational management teams. In addition the Group has enhanced its capabilities across a number of key business functions including: legal, finance, IT, business process, risk management and marketing.

2.4. Hutchison Strategic Partnership

Hutchison's ultimate parent company is CK Hutchison Holdings Limited which is listed on the Hong Kong Stock Exchange. Hutchison operates across a number of sectors including the manufacture and distribution of healthcare, personal care, home care, traditional Chinese medicine and pharmaceutical products, the provision of aircraft maintenance; engineering and cabin cleaning services, the provision of logistics services and the operation of a rice farm and rice trading. Hutchison and the Group already operate a 50:50 joint venture in Hong Kong, GAHH, which wholly owns GAH(HK) providing both air and ground services. Hutchison is also a 20% shareholder in CASL, with whom the Group has a commercial collaboration. As described later in this Announcement, Hutchison Capital Holdings Limited, an affiliate of Hutchison, has agreed to subscribe for new Ordinary Shares in the Placing comprising 20% of the Enlarged Issued Share Capital. Hutchison's commitment to the Placing demonstrates its belief in the Group's potential. Hutchison also has a powerful brand, particularly in Asia, and significant financial strength. The Board believes that the combination of the above factors makes Hutchison the ideal partner to support the Group in achieving its long term objectives.

Hutchison has also entered into a Relationship Agreement with the Company, which will become effective on Admission, and is described further in section 8 of this Announcement. The Relationship Agreement gives Hutchison the right to appoint one director to the Board. Further, Hutchison has agreed to not acquire any interest in shares or other securities of the Company (unless with the prior consent of the Company) for the duration of the Relationship Agreement provided that this restriction shall not apply to certain third party offers in accordance with the City Code on Takeovers and Mergers or where Hutchison's interest in the Company is less than 25% in aggregate. 

Chi Keung (Simon) To, aged 66, is Hutchison's proposed appointee to the Board. Simon is the Managing Director of Hutchison and Chairman and Executive Director of Hutchison China MediTech Limited, a company listed on AIM and Nasdaq with a market capitalisation of approximately US$4.3 billion as at the Last Practical Date. Simon joined Hutchison in 1980 and has helped build it from a relatively small trading company into a multi-billion dollar investment and distribution group. Simon holds a First Class Honours Bachelor's Degree in Mechanical Engineering from Imperial College, London and a Master's Degree in Business Administration from Stanford University's Graduate School of Business.

Upon his appointment to the Board, the Company will enter into a non-executive Director letter of appointment with Simon To on terms to be agreed.

The list of Simon To's current and former Directorships required to be disclosed pursuant to paragraph (g) of Schedule 2 of the AIM Rules for Companies is set out in Annexure 1 of this Announcement. In relation to the appointment of Simon To, there is no further information required to be disclosed pursuant to paragraph (g) of Schedule 2 of the AIM Rules for Companies.

2.5. Reasons for the Placing and use of proceeds

The Company has identified a number of organic and inorganic investment opportunities some of which are identified below. The Company is in active discussions in relation to some of these opportunities while others are currently under review. These opportunities are across both the Group's divisions and all of the regions in which it operates and the Board considers that these investment opportunities could accelerate the Group's strategy of becoming the leading global business aviation services group. The Group has the operational platform, management skills and leadership team to execute and integrate its investment opportunities and to manage transformative projects. It is however constrained by the amount of capital available to deploy on these opportunities and therefore the Directors believe that this is the appropriate time for the Company to raise further funds through the Placing.

The use of proceeds from the Placing is intended to be as follows:

Acquisition of Hutchison's 50% JV stake in GAHH

The Group is proposing to acquire the 50% of the issued share capital of GAHH that it does not already own for US$3.8 million. In the year ended 31 December 2016, GAHH reported revenue of HK$129.9 million (US$16.7 million), loss after tax of (HK$4.0 million) (US$0.5 million) and net liabilities of (HK$10.4 million) (US$1.3 million). The Board believes that there are significant growth opportunities at HKI and in Asia generally and GAHH is well placed to develop and grow in this context. Accordingly, the Board has decided to increase its economic interest and management control in GAHH by acquiring the company outright in line with its strategy of converting subsidiaries, joint ventures or associates to full ownership where it considers it appropriate to do so and where national ownership rules do not prohibit it. GAH(HK) was set-up in 2015 to provide air and ground services at HKI and currently has four aircraft under management. GAH(HK) also has a commercial collaboration with CASL under which it enhances CASL in providing business aviation maintenance at HKI.

Acquisition of Hutchison's 20% stake in CASL

The Group is also acquiring Hutchison's 20% stake in CASL for US$16 million. The other shareholders in CASL are United Airlines, Inc., China National Aviation Corporation (Group) Limited and China Airlines Limited. CASL was founded in 1995 and is the owner and operator of one of only three MRO facilities at HKI. It provides base and line maintenance, ground support equipment services, and cabin cleaning services to commercial airlines. In the year ended 31 December 2016, CASL reported revenue of US$79.1 million (2015: US$72.1 million), EBITDA of US$13.0 million (2015: US$12.4 million), profit after tax of US$7.8 million (2015: US$7.3 million) and net assets of US$72.2 million (2015: US$67.1 million). CASL's results for the year ended 31 December 2017 are expected to have been impacted by the capacity constraint of the current runways of HKI and an increase in labour costs. However, air traffic growth is expected at HKI, with a third runway planned to be built in the medium term, and CASL has the plan to construct further MRO capacity at HKI. CASL may also have the opportunity to expand its MRO capabilities into airports located in the PRC. Part of CASL's strategy is to develop business aviation maintenance and it has an existing commercial collaboration with GAH(HK) to progress this. Through the acquisition of Hutchison's 20% shareholding in CASL, the Group will gain board representation rights (comprising two directors on the board of CASL) and will be able to inform, guide and influence the performance and growth of business aviation maintenance, for the benefit of CASL's shareholders. The Board believes that this transaction will give the Group access to markets that would otherwise be difficult to penetrate and in a less capital intensive manner. Following completion of the CASL Acquisition, the Group's shareholding in CASL would result in CASL being treated as an associated company of the Group.

Investment to launch US base maintenance capability

The Company has allocated US$10 million of the Placing proceeds for the development of base maintenance facilities on the East and West coasts of the US. The US Ground division has a successful and growing line maintenance capability which it operates from 14 locations across the US. The Group also has proven base maintenance capability but the growth of this business is currently constrained by the Group's lack of base maintenance facilities in the US. US$10 million of Placing proceeds is intended to be invested in the acquisition of additional hangar capacity and associated tooling and equipment to enable the Group to address these capacity constraints, thereby unlocking the opportunity to grow the Group's base maintenance revenues. This expected revenue growth is underpinned by immediate access to revenues through cross-selling opportunities to the Group's managed fleet of over 200 aircraft in the US and access to existing third party line maintenance customers. The new facilities would provide further depth, breadth, scale and operational efficiencies in line with the Group's stated strategy. It is intended that both facilities would be operational during the second half of 2018.

Investment into Sharjah Business Aviation Centre

The Company has allocated US$5 million of the Placing proceeds as a seed investment in the development of a new business aviation centre at Sharjah International Airport to provide FBO services. The total development cost for the business aviation centre is expected to be approximately US$45 million, with further future funding expected to come from third parties through a sale and lease back arrangement. Based on increasing capacity constraints at Dubai International Airport and the disadvantages of Dubai World Central's location, the Board believes that Sharjah airport represents a geographically convenient and lower cost alternative to both airports. The Group is currently providing FBO services from two rented hangars at Sharjah to evaluate the market potential in line with the Group's strategic plan for new market entry. In July 2017, the Company signed a land lease and a 25 year concession with an associated development commitment, which will cost the Company US$0.6 million per annum, which also gives the Group exclusive rights to provide FBO services at Sharjah airport for five years which helps de-risk the investment. The new facility will create a platform for the growth of the Group's Middle East Air and Ground divisions, for example by opening up special mission contract opportunities and/or providing locations for parts distribution services. It will also allow the future development of a strong regional line and base maintenance capability in this strategically important gateway location.

Further strategic opportunities

The Group has identified a number of acquisition opportunities, other than those referenced above, which are strategically aligned to the Group's divisional and regional growth objectives. The Group also sees the opportunity to build on its current regional capabilities to develop an enhanced global aviation services capability, such as spare parts distribution and aircraft charter brokerage.

2.6. Summary

The Group operates a robust and resilient business model and has built a strong operational platform to support the growth of its business through both organic investment and acquisitions. The execution of the Group's growth strategy now requires further capital to capture the wide range of opportunities with which it is currently presented and to accelerate the next stage of its development. Hutchison's investment in the Company gives a strong partner to support the execution of the Group's strategy. The Company intends to deploy all of the Placing proceeds in 2018 with returns on expected investments and acquisitions anticipated to be dilutive to earnings in 2018, neutral in 2019 and enhancing thereafter.

3. INFORMATION ON GAHH

On 12 August 2014, GAHH was incorporated in Hong Kong for the purposes of acting as a holding company in relation to a proposed 50:50 joint venture between the Group and Hutchison. GAHH in turn incorporated GAH(HK) as a subsidiary on 4 September 2014 to be the vehicle through which the joint venture business would be operated.

GAH(HK) provides private aircraft management services across Asia. Based in Hong Kong, the company focuses on two main business divisions: Ground and Air. The Air division provides the full range of aircraft management services for both private and corporate clients, currently operating a fleet of four long range business aircraft, with four more deliveries planned during 2018. Future expansion is intended to allow the company to offer Air services within the PRC.

The Ground division provides MRO services to the Air fleet as well as third party clients in a long-term collaboration with CASL. From CASL's Hong Kong base, base maintenance services are offered across the long-range Gulfstream and Bombardier fleet of aircraft, with approvals for all major National Aviation Authorities.

GAH(HK) also currently works in collaboration with CASL to allow CASL to provide business aviation maintenance services at HKI. The terms of the collaboration are governed by the BJMC Agreement. In connection with the CASL Acquisition, GAH(HK)'s role as general sales agent under the BJMC Agreement has been brought to an end. Following completion of the CASL Acquisition, further changes may be required in connection with the arrangements between GAH(HK) and CASL, but it is not expected that this will alter the economic outcome for either party.

The Hong Kong team of 27 employees is led by an experienced international senior leadership team, under the guidance of General Manager Sergio Oliveira e Silva. An aviation professional with more than 20 years' experience, Mr Oliveira e Silva has a strong pedigree in both the European and Asian business aviation sectors.

Gama Aviation Group Limited, a wholly owned subsidiary of the Company, entered into a Subscription and Shareholders Agreement (SHA) with Hutchison on 30 January 2015. The SHA governs the business of GAHH and its subsidiaries in respect of aircraft management, charter, maintenance and repair, fixed base operations and related activities primarily in Hong Kong and with a view to GAHH or its subsidiaries entering into collaborative arrangements with local companies within the PRC for the conduct of similar business in the PRC and in the designated territory set out in the SHA in the future. This agreement will terminate on GAHH Completion. 

4. TERMS OF THE GAHH ACQUISITION

On 9 February 2018, GGAL and Hutchison entered into the GAHH SPA pursuant to which GGAL has conditionally agreed to acquire the 50 ordinary shares in the share capital of GAHH that it does not already own (the GAHH Shares) for cash consideration of US$3.8 million payable on GAHH Completion (the GAHH Purchase Price). The GAHH Shares comprise 50% of the entire issued share capital of GAHH and the entirety of Hutchison's interest in GAHH. The GAHH Purchase Price is also in consideration for the assignment to GGAL of all shareholder loans made by Hutchison to GAHH to take effect from GAHH Completion.

GAHH Completion is conditional on Admission occurring in accordance with the terms of the Placing Agreement and Hutchison receiving not less than 20% of the Enlarged Issued Share Capital and is therefore subject to the passing of the Resolutions at the General Meeting. Subject to the passing of the Resolutions, completion of the GAHH Acquisition is intended to take place within 2 business days after Admission occurring, subject to a long stop date falling on 10 April 2018. On completion, all directors of GAHH nominated by Hutchison will resign and will be replaced by directors nominated by GGAL.

GGAL has undertaken that by 31 December 2018 it will procure that the name of GAHH and its subsidiary company, GAH(HK) be changed so as to include no references to "Hutchison" or "Whampoa". Hutchison has given limited warranties to GGAL as to title to the GAHH Shares, capacity and authority to enter into the GAHH SPA and there being no encumbrances over the GAHH Shares and GGAL has given warranties to Hutchison as to its capacity and authority to enter into the GAHH SPA.

The GAHH SPA is governed by Hong Kong law.

GGAL and Hutchison have also entered into a Transitional Services Agreement pursuant to which Hutchison will continue to provide certain ongoing services to GAHH including, inter alia, accounting, secretarial and human resources services, until 31 December 2018. The Transitional Services Agreement is also governed by Hong Kong law.

5. INFORMATION ON CASL

CASL was founded in 1995 and provides commercial aviation services for national and international carriers serving HKI and Shanghai airports. CASL is owned by China National Aviation Corporation (Group) Limited (40%), United Airlines, Inc. (20%), China Airlines Ltd (20%) and Hutchison (20%). CASL's ownership structure is reflective of its stature and strategic importance in servicing high volume and high growth air routes in the PRC. CASL established a further joint venture with China Eastern Airlines (Shanghai Eastern Aircraft Maintenance) in 2002 in which it retains a 40% minority shareholding.

With over 1000 employees based at HKI and Shanghai's Pudong and Hongqiao airports, CASL provides the commercial aviation community with the following services: 

· Line maintenance - out of phase defects requiring immediate attention

· Base maintenance - large, mandatory checks where the aircraft is out of service

· AOG support - if an aircraft cannot be flown and requires onsite maintenance input

· Supply & stores - pre-positioning of common parts and stores

· Cabin services - aircraft cleaning pre-flight

· Ground support equipment - rent-able airport vehicles for service tasks

In January 2017, GAH(HK) entered into the BJMC Agreement with CASL for the development and expansion of CASL's business jets maintenance services capability based in Hong Kong. Pursuant to this agreement GAH(HK) and CASL collaborate so as to support CASL's business aircraft maintenance activities at their Hong Kong facility. Following the execution of the BJMC Agreement, CASL currently provides base maintenance for the Bombardier Global and Gulfstream G300 - G650ER type of business jets across a range of national registrations.

6. TERMS OF THE CASL ACQUISITION

The CASL SPA

On 9 February 2018 GGAL and Hutchison entered into the CASL SPA under which GGAL has agreed to acquire 28,400,000 ordinary shares in the share capital of CASL (the CASL Shares) from Hutchison, comprising 20% of the entire issued share capital of CASL, and the entirety of Hutchison's interest in CASL, for cash consideration of US$16 million payable on CASL Completion (the CASL Purchase Price).

The CASL SPA contains a "locked box" mechanism under which Hutchison undertakes to pay to GGAL an amount equal to any "Leakage" between the date following 31 December 2017 (being the date of the most recent management accounts of CASL (the Locked Box Accounts)) and the date of CASL Completion other than "Permitted Leakage". The definition of Leakage includes any payment, assumption of liability or transfer by or loss of value from CASL or its subsidiaries to or conferring a benefit on Hutchison or any member of Hutchison's group, including, inter alia, in respect of any dividends, other forms of payment or transactions not entered into on arm's length terms. Permitted Leakage includes any payments in respect of third party insurance cover on past terms, payments specifically provided for in the Locked Box Accounts or Leakage between CASL group companies. The CASL SPA also contains a price adjustment mechanism if CASL's consolidated EBITDA as stated in its full year consolidated audited accounts for 2017 is more than 20% lower or higher than the consolidated EBITDA stated in the Locked Box Accounts.

CASL Completion is conditional on: (i) the approval of the existing shareholders of CASL pursuant to the CASL Shareholders' Agreement, (ii) Admission having occurred in accordance with the terms of the Placing Agreement and (iii) Hutchison having been issued Placing Shares comprising of at least 20% of the Enlarged Issued Share Capital. The CASL Acquisition is therefore subject to the passing of the Resolutions at the General Meeting. Subject to the passing of the Resolutions, completion of the CASL Acquisition is intended to take place within 2 business days after Admission occurring, subject to a long stop date falling on 10 April 2018. On CASL Completion, all directors of CASL nominated by Hutchison will resign and will be replaced by directors nominated by GGAL. It is intended that Marwan Khalek will be appointed as a director of CASL by GGAL and that Simon To, an existing nominee director of Hutchison, will remain on the CASL board but as an appointee of GGAL.

The CASL SPA contains, subject to certain exceptions, limitations and qualifications, warranties given by Hutchison in relation to a number of key matters including, inter alia, title to the CASL Shares, Hutchison's capacity and authority to enter into the CASL SPA and certain matters concerning the CASL group and its business (including in relation to the Locked Box Accounts, the audited consolidated financial statements of CASL as at 31 December 2016 (the Accounts Date) and the conduct of the CASL business since the Accounts Date). Except for claims based on fraud or breaches of certain key warranties, Hutchison's aggregate liability for claims under the warranties is limited to the CASL Purchase Price in the case of title and capacity related warranties and 35% of the CASL Purchase Price in the case of all other warranties. Further, except in the case of claims based on fraud or breaches of those key warranties, the Sellers will not be liable for breaches of warranties until the aggregate liability is greater than 1% of the CASL Purchase Price (in which case GGAL shall be entitled to all amounts resulting from those claims and not just the excess over that sum), provided that such threshold may be satisfied only by individual claims of 0.1% of the Purchase Price or greater. The CASL SPA contains limited warranties from GGAL in relation to, inter alia, its capacity and authority to enter into the CASL SPA.

Hutchison has also agreed, subject to certain limitations and qualifications, to certain pre-completion undertakings in respect of the conduct of CASL in the period between execution of the CASL SPA and CASL Completion. These undertakings include, inter alia, that it will exercise its contractual and voting rights (whether as a shareholder, through its board nominees or otherwise) to the extent it is lawfully able to do so to procure that: (i) CASL carries on its business substantially in the way carried on previously, (ii) Hutchison will promptly notify GGAL of any material correspondence with the Hong Kong Airport Authority, any circumstances which may lead to the termination of or a material claim under the CASL Commercial Agreement and any proposal to consider the transaction of any business which would be a reserved matter under the CASL Shareholders' Agreement and (iii) that Hutchison will, subject to limited exceptions, procure that no business which would be a reserved matter under the CASL Shareholders' Agreement is transacted, in each case without the consent of GGAL.

The CASL SPA is governed by Hong Kong law.

The CASL Shareholders' Agreement

With effect from GGAL being registered as the holder of the CASL Shares, GGAL will become party to the CASL Shareholders' Agreement in place of Hutchison. The other parties to the CASL Shareholders' Agreement will be United Airlines, Inc., China National Aviation Corporation (Group) Limited and China Airlines Limited, being the current shareholders in CASL as at the date of this Announcement (in addition to Hutchison).

The CASL Shareholders' Agreement governs the relationship of CASL's shareholders in relation to CASL and provides, inter alia, that (i) each shareholder will be entitled to appoint one director for each 10% of ordinary shares held (with voting at board meetings subject to a simple majority), (ii) shareholders have pre-emption rights in respect of any proposed transfer of ordinary shares to a third party (except transfers to affiliates) and (iii) that any transfer of shares to a third party may not be completed except with the prior approval of each existing shareholder. The agreement also contains put and call options exercisable in certain circumstances such as material disputes between shareholders that are unable to be resolved.

The agreement contains a set of board reserved matters requiring the approval of each CASL director including, inter alia, in relation to proposed mergers, joint ventures, related party transactions, assumptions of liabilities beyond stated amounts, key staff appointments and approval of business plans and budgets. There is also a more limited list of shareholder reserved matters, to be approved unanimously by CASL shareholders, including amendments to CASL's articles, termination or dissolution of CASL and in relation to any increase or transfer of share capital.

The CASL Shareholders' Agreement is governed by Hong Kong law.

7. DETAILS OF THE PLACING

The Company intends to raise £48 million (approximately US$67 million) before commissions, fees and expenses by way of a placing of 19,591,837 new Ordinary Shares with existing and new institutional and other investors at a price of 245 pence per new Ordinary Share.

Jefferies International Limited (Jefferies) is acting as sole Global Coordinator, Nominated Adviser and Broker to the Company in connection with the Placing.

The Placing is subject to the terms and conditions set out in the Appendix.

The Placing Price represents a discount of approximately 7.2% to the closing mid-market price of the Ordinary Shares on 8 February 2018 (being the last practicable dealing day prior to the date of this Announcement). The Placing Shares represent approximately 44.5% of the Existing Share Capital and approximately 30.8% of the Enlarged Issued Share Capital. The Placing Shares, when issued, will 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 declared, made or paid on or in respect of such shares.

Application will be made to the London Stock Exchange for the Placing Shares to be admitted to trading on AIM (Admission). It is expected that Admission will become effective, and that dealings in the Placing Shares will commence on AIM, at 8.00 a.m. on 2 March 2018.

The Placing is conditional upon, amongst other things, the Resolutions being passed at the General Meeting of the Company to be held on 1 March 2018 (or any adjournment thereof), the placing agreement between Jefferies and the Company (the Placing Agreement) having become unconditional and not having been terminated in accordance with its terms, and Admission becoming effective. Further details of the Placing Agreement can be found in the terms and conditions of the Placing contained in the Appendix to this Announcement.

As part of the Acquisition, Hutchison Capital Holdings Limited, an affiliate of Hutchison, has conditionally agreed to acquire and subscribe for Placing Shares at the Placing Price for such number of Placing Shares equal to approximately 21% of the Company's issued ordinary share capital immediately following Admission and completion of the Placing. Certain of the Directors will be participating in the Placing as described in section 11 of this Announcement.

Investors' participation in the Placing is, and their oral and legally binding offer to acquire and subscribe for Placing Shares is made, on the basis of the terms and subject to the conditions of the Placing contained in this Announcement (including the Appendix), which they are deemed to have read and understood, and on the basis that they are providing the representations, warranties and acknowledgements contained in the Appendix.

8. IRREVOCABLE UNDERTAKINGS AND RELATIONSHIP AGREEMENT

Irrevocable Undertakings

The Directors of the Company have given irrevocable undertakings to the Company to vote in favour of the Resolutions to be proposed at the General Meeting (and, where relevant, to procure that such action is taken by the relevant registered holders if that is not them) in respect of their entire beneficial holdings totalling in aggregate 11,337,140 Existing Ordinary Shares, representing approximately 25.8% of the Existing Share Capital.

Relationship Agreement

Immediately following Admission becoming effective, Hutchison is expected to own approximately 21% of the Enlarged Issued Share Capital of the Company. The Company and Hutchison have therefore entered into the Relationship Agreement (conditional on Admission) to regulate the Company's relationship with Hutchison (and its associates) and to limit Hutchison's influence over the Group's corporate actions and activities and the outcome of general matters pertaining to the Group with effect from Admission.

Pursuant to the Relationship Agreement, Hutchison has undertaken that it shall, and shall procure (so far as it is able) that each of its associates shall (amongst other things):

(a) conduct all transactions and arrangements between any member of the Group and any associate of Hutchison on arm's length terms and on a normal commercial basis, including in accordance with the related party transactions rules set out in the AIM Rules for Companies and only with the prior approval of a majority of Independent Directors; and

(b) not exercise its voting rights so as to (i) prevent the Group from managing its business for the benefit of the ordinary shareholders as a whole and independently of Hutchison and any of its associates; (ii) influence or seek to influence the day to day control of the Group; (iii) amend the articles of association of the Company in a manner which would be contrary with the principle of independence of the Company; and (iv) prevent the Group from complying with its obligations under the AIM Rules for Companies and any other applicable laws, regulations and stock exchange rules.

In addition, Hutchison has undertaken that it shall not, and to procure (so far as it is able) that none of its associates shall, acquire any direct or indirect interest in the share capital or voting rights of the Company in any circumstances where Hutchison or its associates' aggregate holdings would equal or exceed 25% of the aggregate share capital of the Company (without the prior written consent of the Board).

The Company has agreed, conditional on Admission, to appoint one person designated by Hutchison, as a non-executive Director of the Company. Hutchison's rights to maintain a representative on the Board of Directors shall continue for so long as it and its associates continue (in aggregate) to beneficially hold not less than 15% of the aggregate voting rights in the Company from time to time. It is intended that Simon To will be appointed as Hutchison's nominee director on the Board.

The obligations of the parties under the Relationship Agreement automatically terminate on: (i) Hutchison (or any of its associates) ceasing to control at least 15% of the Ordinary Shares; or (ii) the Ordinary Shares ceasing to be admitted to AIM.

9. CURRENT TRADING AND OUTLOOK

Underlying earnings for the full year to 31 December 2017 are in line with the Company's expectations and consistent with the trading outlook provided at the time of the interim results published in September 2017.

The Company has continued the solid progress it made during the first half of 2017 in improving its cash conversion, resulting in cash and cash equivalents as at 31 December 2017 of US$22 million (2016: US$11 million). After funding the acquisition of 51% of Gama Group Mena FZC, which closed in October 2017, and securing a further US$2 million of finance leases in July 2017 for the purchase of a support aircraft under the Scottish Air Ambulance contract, net debt was US$13 million as at 31 December 2017 (2016: US$19 million).

Air division

The US Air associate, which includes the Landmark acquisition from the start of the year, has delivered significant revenue growth during 2017. The "Wheels Up" programme continues to support contracted growth in the US. In the final quarter of 2017, the US business invested heavily in its sales force to enhance the growth of the managed fleet and charter. The EU Air division has continued to build on the operational efficiencies implemented in 2016, with significant margin improvements being realised during 2017. The Middle East and Asia Air divisions had a stable year and both begin 2018 with solid platforms for growth.

Ground division

The US Ground division enjoyed strong organic revenue growth during 2017. As planned, the operating margin and profit achieved in 2017 reflects the Company's focus on scaling up the business, recruiting line maintenance engineers ahead of revenue growth and significant investment in training. Having made this investment, the division is now poised to return to more normalised margins in 2018. The EU Ground division grew modestly during 2017, with an improvement in levels of discretionary spend and increased base maintenance activity at the Oxford facility.

The Middle East Ground division had a stable year with the number of aircraft movements through the FBO facilities showing an improving trend. The Asia Ground division delivered its first revenues during the final quarter of 2017 through its commercial collaboration with CASL.

2018 outlook

The directors are confident in the strength of the Company's operations and believe the Company is well paced to achieve its expectations for the current year.

10. LITIGATION  

The Company is involved in a number of legal proceedings, most of which arise from historic Hangar 8 trading activity, prior to the 2015 Merger, and those relating to disputes with Dustin Dryden (a former executive director of the Company who resigned in September 2015) and affiliated entities. Taking account of the circumstances of each set of proceedings, legal advice received in relation to them and the Company's views as to the merits of such proceedings, the Company intends to continue to vigorously pursue/defend such proceedings.

Exceptional items

The Company has incurred legal costs of US$1.0 million associated with these proceedings in the year ended 31 December 2017, which will be treated as an exceptional item. The Board believes a similar amount will be incurred for future legal costs, through to the conclusion of the various proceedings, which will also be treated as exceptional.

Additionally, US$0.6 million of exceptional charges for transaction costs and business and re-organisation costs were taken in the first half of the year; a similar charge has been incurred in the second half.

Prior year adjustment

In respect of one of the proceedings against the Company, amounting to US$1.9 million, arising as a result of historic unrecorded liabilities in the Hangar 8 business, the Board has decided to make a US$1.3 million provision in the form of a prior year adjustment.

Litigation

The remaining proceedings fall into two categories, the first involves proceedings by the Company to recover long-standing trade receivables that amount to approximately US$5.5 million. The Company has made adequate provisions or holds security against these claims and as a result the Board does not expect any further provisions will be required. In addition, based on legal advice, the Board considers the proceedings to recover these receivables are likely to be successful.

The second involves a number of proceedings brought against the Company in which the claimants seek to recover damages for alleged contractual breaches which amount to approximately US$15.3 million. Based on a detailed analysis of the claims and legal advice, the Board believes that these claims are speculative and/or overlapping and the Company continues to vigorously defend them.

By the time all these proceedings, some of which are with the same counterparties, are determined or settled, the Board expects the overall awards and settlements to result in a cash inflow to the Company.

A summary of such legal proceedings is as follows:

Litigation involving Dustin Dryden and/or entities associated with him

The Group is involved in various legal proceedings with Mr Dustin Dryden, a former executive director of the Group who resigned on 30 September 2015, and companies owned by, or associated with, him.

The Group has issued proceedings in the High Court in England against Volare Aviation Limited seeking to recover unpaid amounts for maintenance and other work undertaken by the Group on two aircraft (the Volare Aircraft) for an aggregate amount of £432,855. Separately Skye Holdings Limited, Offshore Jets Limited and Dustin Dryden (together the Claimants) have issued proceedings in the High Court in England against the Group for amounts in respect of: (a) the sale of aircraft parts by the Group to the Claimants which the Claimants allege should have been accompanied by certain certification documents; (b) an alleged failure of the Group to deliver certain parts agreed to be sold to the Claimants; (c) unpaid rent in respect of a house let by the Group from the Claimants for crew accommodation; (d) a promissory note issued by Dustin Dryden in favour of the Company to underwrite certain amounts due to the Group from third party debtors; (e) remuneration alleged to be payable to Dustin Dryden; and (f) losses alleged to have been suffered as a result of unreasonable delay and deficiencies in the works performed on the Volare Aircraft. The aggregate amount claimed by the Claimants is £6,071,505. Based on its legal advice, the Board believes that these claims either very materially exaggerate the Claimants' loss and/or are without substance or merit and/or are speculative/opportunistic. The Group is therefore defending these claims vigorously and is counterclaiming for: (a) US$256,868 in respect of outstanding amounts under a loan account from the Group to Dustin Dryden; and (b) unpaid operating and maintenance costs owed by the Claimants to the Group in the sum of £204,167. A hearing in relation to all of these proceedings has been scheduled for June 2018.

Legacy claims arising from arrangements prior to the 2015 Merger

The Group is involved in a number of claims arising out of arrangements entered into by the Hangar 8 Group Companies prior to the 2015 Merger. All of these arise from the manner in which the Hangar 8 Group Companies conducted their commercial relationships prior to the 2015 Merger comprising the following:

(A) TAZ Hawker

TAZ Hawker 1 Limited and TAZ Hawker 2 Limited (the TAZ Companies) have issued legal proceedings in the High Court of England against the Group in respect of sums allegedly owed under Operating Agreements relating to two Hawker Beechcraft 900XP aircraft which were managed by the Group between June 2009 and May 2015. The claim is for £1,428,788.84 (plus interest in the region of £550,000). By mutual agreement the proceedings were stayed to allow for settlement discussions which have concluded successfully and a settlement has been reached in principle (subject to final documentation) within the parameters of the financial provision made by the Company.

(B) SPC Aviation

The Group had been in dialogue with SPC Aviation Limited (SPC) for the recovery of trade receivables due to it in respect of the management and operation of a Challenger 601 aircraft (the Aircraft) owned by SPC. SPC has issued proceedings in the High Court of England against the Group in relation to the operation and maintenance by the Group of the Aircraft. SPC's claim is in respect of alleged: (a) invoicing errors and failures to obtain prior approvals; (b) misrepresentations in relation to the value of the Aircraft; (c) breach of an agreement to supply engines with certain maintenance cost coverage; and (d) loss of charter income due to delays in carrying out a scheduled maintenance check. The aggregate amount of these claims is £4,787,198.91, although since aspects of the claims appear to overlap and stem from the same loss, the true value of the claim has not been specified by the SPC and, based on its legal advice, the Board believes the true value of the claim to be substantially less. The Group has filed its defence and made a counterclaim for the unpaid invoices totalling £1,001,981.66 and has asserted a lien against the Aircraft and a retention of title claim against parts fitted to it.

(C) Christopher Perry

The Group has received a letter before action in connection with a sale and purchase agreement for the acquisition of Star-Gate Aviation (Proprietary) Limited dated 2 March 2012 and made between Chris Perry (CP) and the Company (the SPA). CP is claiming damages arising from the alleged exercise of an option conferred on him under the SPA. The option, if exercisable and validly exercised, would have required the Company to allot shares in the Company to CP which, based on the market price on the date of the purported exercise of the option, were worth £251,602.28.

(D) ACC Columbia

In 2017 ACC Columbia Jet Service GmbH issued proceedings against the Group in the Regional Court of Cologne for unpaid receivables for the certain works undertaken on a Challenger 601-3R aircraft pursuant to a series of work orders allegedly issued by the Group. The amount of the claim was €83,330.43. The Group has reached a commercial settlement in principle with the claimant (subject to final documentation).

(E) Jadita

The Group received a letter before action from Jadita Holding Limited (Jadita) in August 2017 in relation to purportedly unpaid rentals and maintenance reserve amounts in respect of an aircraft sub-lease agreement for a Bombardier Challenger 604 aircraft. The claim amounts to €1,818,809 in aggregate. The Group responded in September 2017 acknowledging the debt and highlighting to Jadita that the claimed amount had been off-set against sums that are due from Jadita to the Group under the terms of the same agreement. The off-setting arrangement, whilst not contractual, has been the customary way in which the parties have dealt with their respective liabilities. However, if Jadita decides to bring any action on the technicality of no contractual right to off-set, the Group intends to respond with a counterclaim for the amount owed under the same contract.

(G) Agence pour la Securite de la Navigation Aerienne en Afrique et a Madagascar ("Asecna")

ASECNA (the entity responsible for providing air traffic control services for airspace above the western and central part of the African continent and Madagascar) has issued proceedings against the Group in the Commercial Court of Paris for an alleged failure to settle invoices issued by ASECNA for the total amount of €348,872.73. The Group accepts that €155,189.54 of this amount is due and payable to ASECNA and such sum is fully provided for in the Group's existing financial statements. The remainder is disputed by the Group. The Group is engaged in settlement discussions.

Claims against Igho Sanomi and associated litigation with Credit Suisse

The Group is seeking to recover debts in the aggregate sum of US$3,060,169.25, together with interest totalling US$201,461.21 from Igho Sanomi, and companies owned by, or associated with him. The debts comprise: (a) US$1,521,684.46 (together with interest of US$114,458.52) owed by Taleveras Group of Companies Limited under the terms of various leasing agreements in respect of a Bombardier Global Express aircraft; (b) US$1,400,338.35 (together with interest of US$87,002.69) owed by Taleveras Petroleum Trading DMCC under the terms of an aircraft management agreement for a Bombardier Global 5000 aircraft (the "Taleveras Aircraft"); and (c) US$138,146.94 owed by Mr Sanomi personally under the terms of a charter agreement for a Global Bombardier 5000 aircraft. The Group has asserted a contractual lien over the Taleveras Aircraft as security against the amounts due to it under (b) above. Additionally, the Group has issued payment demands to each of the three debtors and the time for payment under those demands has expired. The Group has instructed its solicitors to prepare formal proceedings to recover the debts.

In a related action, Credit Suisse AG (CS) who provided loan financing to the owner of the Taleveras Aircraft secured by a mortgage charge over the Taleveras Aircraft, has issued proceedings against the Group challenging the Group's contractual rights to exert a lien. The Group is defending the action. To help facilitate the sale of the Taleveras Aircraft by CS, the Group agreed to deliver up the Taleveras Aircraft to CS on condition that CS paid into the Court the amount of US$1,484,308.46 (referred to above) as alternative security in lieu of the Group's lien over the Taleveras Aircraft. Such payment was made on 16 January 2018 and the Taleveras Aircraft was delivered to CS the following day. The dispute with CS over the lien has no adverse bearing on the validity or the recoverability of the receivables due from Mr Sanomi and the Taleveras companies.

Ukraine State Aviation Administration

The Ukraine State Aviation Administration has issued a Protocol of Contravention of The Air Code of Ukraine in respect of flights historically operated by the Group and imposed fines totalling €86,100. The Group has received Ukrainian legal advice that these Protocols and the associated fines are invalid and unenforceable under applicable law. In any event, any sums that become payable, together with associated legal costs, are fully recoverable from the Group's client for whom the aircraft is managed and operated.

11. DIRECTORS' PARTICIPATION IN THE PLACING

The Directors have in aggregate agreed to acquire and subscribe for 255,105 Placing Shares in the Placing (representing £625,007 at the Placing Price).

The shareholding of each Director (and/or their connected persons) in the Company (i) as at the date of this Announcement and (ii) immediately following Admission, together with details of their participation in the Placing, is set out in the table below:

APPENDIX

TERMS AND CONDITIONS

 IMPORTANT INFORMATION ON THE PLACING FOR INVITED PLACEES ONLY

MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING (AS DEFINED BELOW). THIS ANNOUNCEMENT AND THE TERMS AND CONDITIONS SET OUT IN THIS APPENDIX (TOGETHER, THE "ANNOUNCEMENT") ARE FOR INFORMATION PURPOSES ONLY AND ARE DIRECTED ONLY AT PERSONS WHOSE ORDINARY ACTIVITIES INVOLVE THEM IN ACQUIRING, HOLDING, MANAGING AND DISPOSING OF INVESTMENTS (AS PRINCIPAL OR AGENT) FOR THE PURPOSES OF THEIR BUSINESS AND WHO HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS AND ARE: (A) IF IN A MEMBER STATE OF THE EUROPEAN ECONOMIC AREA (THE "EEA"), PERSONS WHO ARE QUALIFIED INVESTORS ("QUALIFIED INVESTORS") AS DEFINED IN SECTION 86(7) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000, AS AMENDED (THE "FSMA"), BEING PERSONS FALLING WITHIN THE MEANING OF ARTICLE 2.1(E) OF DIRECTIVE 2003/71/EC, AS AMENDED, INCLUDING BY THE 2010 PD AMENDING DIRECTIVE (DIRECTIVE 2010/73/EU), TO THE EXTENT IMPLEMENTED IN THE RELEVANT MEMBER STATE (THE "PROSPECTUS DIRECTIVE"); (B) IF IN THE UNITED KINGDOM, PERSONS WHO FALL WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005, AS AMENDED (THE "ORDER"), OR ARE PERSONS WHO FALL WITHIN ARTICLE 49(2)(A) TO (D) ("HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC") OF THE ORDER; OR (C) PERSONS TO WHOM IT MAY OTHERWISE BE LAWFULLY COMMUNICATED (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS").

THIS ANNOUNCEMENT MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS ANNOUNCEMENT RELATES IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS.

THE SECURITIES REFERRED TO IN THIS ANNOUNCEMENT HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER THE SECURITIES LAWS OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES, AND MAY NOT BE OFFERED, SOLD, TAKEN UP, RESOLD TRANSFERRED OR DELIVERED DIRECTLY OR INDIRECTLY IN OR INTO THE UNITED STATES EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN COMPLIANCE WITH THE SECURITIES LAWS OF ANY STATE OR ANY OTHER JURISDICTION OF THE UNITED STATES. THE SECURITIES REFERRED TO IN THIS ANNOUNCEMENT ARE BEING OFFERED AND SOLD OUTSIDE THE UNITED STATES IN OFFSHORE TRANSACTIONS IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT. NO PUBLIC OFFERING OF THE SHARES REFERRED TO IN THIS ANNOUNCEMENT IS BEING MADE IN THE UNITED STATES, THE UNITED KINGDOM OR ELSEWHERE.

THE CONTENTS OF THIS ANNOUNCEMENT HAVE NOT BEEN REVIEWED BY ANY REGULATORY AUTHORITY IN THE UNITED KINGDOM, HONG KONG OR ELSEWHERE. YOU ARE ADVISED TO EXERCISE CAUTION IN RELATION TO THE PLACING. IF YOU ARE IN ANY DOUBT ABOUT ANY OF THE CONTENTS OF THIS ANNOUNCEMENT, YOU SHOULD OBTAIN INDEPENDENT PROFESSIONAL ADVICE.

Neither Gama Aviation plc (the "Company") nor Jefferies International Limited ("Jefferies") makes any representation to persons who participate in the placing ("Placees") of new Ordinary Shares in the capital of the Company (the "Placing") of nominal value of one pence (the "Placing Shares") regarding an investment in the securities referred to in this Announcement under the laws applicable to such Placees. Each Placee should consult its own advisers as to the legal, tax, business, financial and related aspects of an investment in the Placing Shares.

Placees' participation in the Placing is, and their oral and legally binding offer to acquire and subscribe for Placing Shares is made, on the basis of the terms and subject to the conditions of the Placing contained in this Announcement (including this Appendix), which they are deemed to have read and understood in its entirety, and on the basis that they are providing the representations, warranties, indemnities, acknowledgments and undertakings contained herein.

Details of the Placing Agreement and of the Placing Shares

Jefferies and the Company have today entered into a placing agreement (the "Placing Agreement") under which, on the terms and subject to the conditions set out therein, Jefferies agreed to use its reasonable endeavours, as agent of the Company, to procure Placees for the Placing Shares.

In addition, to the extent that any Placee procured by Jefferies fails to subscribe for any or all of the Placing Shares which have been allocated to it in the Placing or for which it has agreed to subscribe at the Placing Price, Jefferies agrees, on the terms and subject to the conditions set out in the Placing Agreement, to subscribe as principal for such Placing Shares at the Placing Price at Admission.

The Placing Shares have been duly authorised and 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 declared, made or paid in respect of such shares. No commissions will be paid to Placees or by Placees in respect of any Placing Shares.

Hutchison participation

As part of the Acquisitions, Hutchison Capital Holdings Limited, an affiliate of Hutchison, has conditionally agreed to acquire and subscribe in the Placing at the Placing Price for such number of Placing Shares equal to approximately 21% of the Company's issued ordinary share capital immediately following Admission and completion of the Placing.

Application for admission to trading

Application will be made to London Stock Exchange plc (the "London Stock Exchange") for admission of the Placing Shares to trading on AIM ("Admission"). It is expected that Admission will become effective on or around 8.00 a.m. on 2 March 2018 and that dealings in the Placing Shares will commence at that time.

Participation in, and principal terms of, the Placing

1. Jefferies is acting as sole bookrunner and agent of the Company in connection with the Placing.

2. Participation in the Placing is only available to persons who may lawfully participate.

3. Each Placee's participation in the Placing is, and their oral and legally binding offer to acquire and subscribe for Placing Shares is made, on the terms and subject to the conditions in this Announcement.

4. Each Placee's oral offer to acquire and subscribe for Placing Shares in the Placing is legally binding on the Placee on behalf of which it is made and, except with Jefferies' consent, is not capable of variation or revocation. Each Placee has an immediate, separate, irrevocable and binding obligation owed to Jefferies, as agent for the Company, to pay Jefferies (or as it may direct) in cleared funds an amount equal to the product of the Placing Price and the number of Placing Shares such Placee has agreed to subscribe for and the Company has agreed to allot.

5. Each Placee's allocation of Placing Shares has been agreed between Jefferies and the Company and will be confirmed orally to each Placee by Jefferies (as agent for the Company). A contract note confirming this allocation, the aggregate amount owed by such Placee to Jefferies and settlement instructions will be despatched shortly. The oral confirmation to such Placee constitutes an irrevocable legally binding commitment upon that person (who will at that point become a Placee) in favour of Jefferies and the Company to subscribe for the number of Placing Shares allocated to it at the Placing Price on the terms and conditions set out in this Appendix and in accordance with the Company's articles of association. All obligations under the 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". By participating in Placing, 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.

6. Irrespective of the time at which a Placee's allocation pursuant to the Placing is confirmed, settlement for all Placing Shares to be subscribed for pursuant to the Placing will be required to be made at the same time, on the basis explained below under "Registration and Settlement".

7. To the fullest extent permissible by law, neither Jefferies nor any of its affiliates, agents, directors, officers, consultants or employees shall have any liability to Placees (or to any other person whether acting on behalf of a Placee or otherwise). In particular, neither Jefferies nor any of its affiliates, agents, directors, officers, consultants or employees shall have any liability (including to the fullest extent permissible by law, any fiduciary duties) in respect of Jefferies' conduct of the Placing.

Conditions of the Placing

The Placing is conditional upon, among other things, the Placing Agreement becoming unconditional and not having been terminated in accordance with its terms. The obligations of Jefferies under the Placing Agreement in respect of the Placing Shares are conditional on, among other things:

(a) the approval of the Resolutions at the General Meeting of the Company to be held on 1 March 2018 (or any adjournment thereof);

(b) the Company allotting, subject to Admission, the Placing Shares in accordance with the Placing Agreement;

(c) none of the representations and warranties set out in the Placing Agreement being untrue, inaccurate or misleading on and as at each of the dates stated in the Placing Agreement, in each case by reference to the facts and circumstances then subsisting; and

(d) Admission having occurred by 8.00 a.m. (London time) on 2 March 2018 (or such later date as Jefferies and the Company may agree, being not later than 3.00 p.m. on 10 April 2018).

If: (i) any of the conditions contained in the Placing Agreement are not fulfilled or, where permitted, waived by Jefferies by the time or date specified (or such later time and/or date as the Company and Jefferies may agree); or (ii) any of such conditions become incapable of being satisfied; or (iii) the Placing Agreement is terminated in the circumstances specified below under "Right to terminate under the Placing Agreement", the Placing will not proceed and the Placees' rights and obligations hereunder in relation to the Placing Shares shall cease and terminate at such time and each Placee agrees that no claim can be made by the Placee in respect thereof. Any such waiver by Jefferies will not affect Placees' commitments as set out in this Announcement.

Neither Jefferies, the Company nor any of their respective affiliates, agents, directors, officers, consultants or employees shall have any liability, whether in contract, tort or otherwise, to any Placee (or to any other person whether acting on behalf of a Placee or otherwise) in respect of any decision they may make as to whether or not to waive or to extend the time and/or the date for the satisfaction of any condition to the Placing nor for any decision they may make as to the satisfaction of any condition or in respect of the Placing generally, and by participating in the Placing each Placee agrees that any such decision is within the absolute discretion of Jefferies.

Lock-up

The Company has, subject to certain customary exceptions, agreed not to allot, issue or grant any rights in respect of any of its Ordinary Shares in the period from the date of this Announcement until 90 days after Admission without Jefferies' prior consent.

Right to terminate under the Placing Agreement

Jefferies is entitled, at any time prior to Admission, to terminate the Placing Agreement in accordance with its terms by giving notice (in writing or orally) in certain circumstances, including (among others things) a breach of representations and warranties given to Jefferies by the Company in the Placing Agreement, the occurrence of a material adverse change in the Company's business or in its financial or trading position, or the occurrence of a force majeure event.

Upon such notice being given, the Company and Jefferies shall be released and discharged (except for any liability arising before or in relation to such termination) from their respective obligations under or pursuant to the Placing Agreement, subject to certain exceptions.

By participating in the Placing, each Placee agrees that the exercise or non-exercise by Jefferies of any right of termination or other discretion under the Placing Agreement shall be within the absolute discretion of Jefferies and that Jefferies does not need to make any reference to Placees and that Jefferies shall have no liability to Placees whatsoever in connection with any such exercise or failure so to exercise.

No prospectus

No offering document or prospectus has been or will be submitted to be approved by the FCA or London Stock Exchange in relation to the Placing and Placees' participation in the Placing (including their oral and legally binding offer to acquire and subscribe for Placing Shares) is made solely on the basis of the information contained in this Announcement (including this Appendix) which has been released by the Company today and any information publicly announced to a Regulatory Information Service ("RIS") by or on behalf of the Company prior to or on the date of this Announcement and subject to the further terms set forth in the contract note to be provided to individual prospective Placees.

By participating in the Placing, each Placee agrees that the content of this Announcement (including this Appendix) is exclusively the responsibility of the Company and confirms that it has neither received nor relied on any other information, representation, warranty, or statement made by or on behalf of Jefferies or the Company or any other person and neither Jefferies, the Company nor any of their respective affiliates will be liable for any Placee's decision to participate in the Placing based on any other information, representation, warranty or statement which the Placees may have obtained or received. Each Placee acknowledges and agrees that it has relied on its own investigation of the business, financial or other position of the Company in accepting a participation in the Placing. Nothing in this paragraph shall exclude or limit the liability of any person for fraudulent misrepresentation by that person.

Registration and settlement

Settlement of transactions in the Placing Shares following Admission will take place within the system administered by Euroclear UK & Ireland Limited ("CREST"), subject to certain exceptions, Jefferies and the Company reserve the right to require settlement for and delivery of the Placing Shares (or a portion thereof) to Placees in certificated form if delivery or settlement is not possible or practicable within the CREST system or would not be consistent with the regulatory requirements in the Placee's jurisdiction.

Each Placee allocated Placing Shares in the Placing will be sent a contract note confirming the number of Placing Shares allocated to it at the Placing Price, the aggregate amount owed by such Placee to Jefferies and settlement instructions. Each Placee agrees that it will do all things necessary to ensure that delivery and payment is completed in accordance with the standing CREST or certificated settlement instructions that it has in place with Jefferies.

The Company will deliver the Placing Shares to a CREST account operated by Jefferies as the Company's agent and Jefferies will enter its delivery (DEL) instruction into the CREST system. The input to CREST by a Placee of a matching or acceptance instruction will then allow delivery of the relevant Placing Shares to that Placee against payment.

It is expected that settlement will be on or around 8.00 a.m. on 2 March 2018 on a delivery versus payment basis in accordance with the instructions set out in the trade confirmation unless otherwise notified by Jefferies.

Interest is chargeable daily on payments not received from Placees on the due date in accordance with the arrangements set out above at the rate of two percentage points above LIBOR as determined by Jefferies.

Each Placee is deemed to agree that, if it does not comply with these obligations, Jefferies may sell any or all of the Placing Shares allocated to that Placee on such Placee's behalf and retain from the proceeds, for Jefferies' account and benefit, an amount equal to the aggregate amount owed by the Placee plus any interest due. The relevant Placee will, however, remain liable for any shortfall below the aggregate amount owed by it and may be required to bear any stamp duty or stamp duty reserve tax (together with any interest or penalties) which may arise upon the sale of such Placing Shares on such Placee's behalf.

If Placing Shares are to be delivered to a custodian or settlement agent, Placees should ensure that the 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. Placees shall not be entitled to receive any fee or commission in connection with the Placing. If there are any circumstances in which any other stamp duty or stamp duty reserve tax (together with interest and penalties) is payable in respect of the issue of the Placing Shares, neither Jefferies nor the Company shall be responsible for the payment thereof.

Representations and warranties

By participating in the Placing each Placee (and any person acting on such Placee's behalf) irrevocably acknowledges, confirms, undertakes, represents, warrants and agrees (as the case may be) with the Company and Jefferies (in its capacity as sole bookrunner and placing agent of the Company), in each case as a fundamental term of their offer to acquire and subscribe for Placing Shares, the following:

(a) it has read and understood this Announcement, including this Appendix, in its entirety and that its subscription of 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;

(b) that no offering document or prospectus has been or will be prepared in connection with the Placing and it has not received and will not receive a prospectus or other offering document in connection with the Placing or the Placing Shares;

(c) that the Ordinary Shares are admitted to trading on AIM, and that the Company is therefore required to publish certain business and financial information in accordance with the AIM Rules for Companies and that it is able to obtain or access such information, or comparable information concerning any other publicly traded company, in each case without undue difficulty;

(d) that neither Jefferies, the Company nor any of their respective affiliates, agents, directors, officers, consultants or employees nor any person acting on behalf of any of them has provided, and none of them will provide, it with any material or information regarding the Placing Shares or the Company or any other person other than this Announcement, including this Appendix, nor has it requested Jefferies, the Company, nor any of their respective affiliates or any person acting on behalf of any of them to provide it with any such material or information;

(e) unless otherwise specifically agreed with Jefferies, that it is not, and at the time the Placing Shares are acquired, neither it nor the beneficial owner of the Placing Shares will be a resident of the United States, Australia, Canada, South Africa or Japan or any other state or jurisdiction in which it is unlawful to make or accept an offer to acquire the Placing Shares (each a "Restricted Territory") and further acknowledges that the Placing Shares have not been and will not be registered under the securities legislation of the United States or any other Restricted Territory and, subject to certain exceptions, may not be offered, sold, transferred, delivered or distributed, directly or indirectly, in or into those jurisdictions;

(f) that it is not, unless otherwise specifically agreed with Jefferies, within a Restricted Territory or any other jurisdiction in which it is unlawful to make or accept an offer to acquire the Placing Shares;

(g) that the content of this Announcement is exclusively the responsibility of the Company and that neither Jefferies nor any of its affiliates, agents, directors, officers, consultants or employees nor any person acting on its or their behalf has or shall have any liability, in contract, tort or otherwise for any information, representation or statement contained in this Announcement, any misstatements in or omission from any publicly available information relating to the Company, or any information previously or subsequently published by or on behalf of the Company, including, without limitation, any information required to be published by the Company pursuant to applicable laws (the "Exchange Information") 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 any information published prior to or on the date of this Announcement by or on behalf of the Company or otherwise. Each Placee further represents, warrants and agrees that the only information on which it is entitled to rely and on which such Placee has relied in committing itself to subscribe for the Placing Shares is contained in this Announcement and any information previously published by the Company by notification to a RIS, 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 Jefferies or the Company and neither Jefferies 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 on its own investigation of the business, financial or other position of the Company in deciding to participate in the Placing. Neither Jefferies, the Company nor any of their respective affiliates has made any representations to it, express or implied, with respect to the Company, the Placing and the Placing Shares or the accuracy, completeness or adequacy of the Exchange Information, and each of them expressly disclaims any liability in respect thereof. Nothing in this paragraph or otherwise in this Announcement excludes the liability of any person for fraudulent misrepresentation made by that person;

(h) 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 issue or transfer Placing Shares into a clearance service;

(i) that it has complied with its obligations under the Criminal Justice Act 1993 (the "CJA"), the Market Abuse Regulation (Regulation (EU) No. 596/2014) ("MAR"), and in connection with money laundering and terrorist financing under the Proceeds of Crime Act 2002 (as amended), the Terrorism Act 2000, the Terrorism Act 2006, the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 and any related or similar rules, regulations or guidelines, issued, administered or enforced by any government agency having jurisdiction in respect thereof (the "Regulations") and the Money Laundering Sourcebook of the FCA 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;

(j) that it is acting as principal only in respect of the Placing or, if it is acting for any other person: (i) it is duly authorised to do so and has full power to make the acknowledgments, representations and agreements herein on behalf of each such person; (ii) it exercises sole investment discretion as to each such person's account; (iii) it is and will remain liable to Jefferies and the Company for the performance of all its obligations as a Placee in respect of the Placing (regardless of the fact that it is acting for another person); (iv) it is both an "authorised person" for the purposes of FSMA and a Qualified Investor as defined in the Prospectus Directive acting as agent for such person; and (iv) such person is either (1) a "qualified investor" as referred to at section 86(7) of FSMA or (2) a "client" (as defined in section 86(2) of FSMA) of its that has engaged it to act as such client's agent on terms which enable it to make decisions concerning the Placing or any other offers of transferable securities on such client's behalf without reference to such client;

(k) that it has not offered or sold and, prior to the expiry of a period of six months from Admission, will not offer or sell any Placing Shares to persons in the United Kingdom, except to Qualified Investors 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 FSMA;

(l) if a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive, that the Placing Shares subscribed for by it in the Placing will not be subscribed for 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 EEA other than Qualified Investors, or in circumstances in which the prior consent of Jefferies has been given to the proposed offer or resale;

(m) that it has not offered or sold and will not offer or sell any Placing Shares to the public in any member state of the EEA except in circumstances falling within Article 3(2) of the Prospectus Directive which do not result in any requirement for the publication of a prospectus pursuant to Article 3 of that Directive;

(n) that it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of FSMA) relating to the Placing Shares in circumstances in which section 21(1) of FSMA does not require approval of the communication by an authorised person;

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

(p) if in a member state of the EEA, unless otherwise specifically agreed with Jefferies and the Company in writing, that it is a "qualified investor" within the meaning of Article 2(1)(e) of the Prospectus Directive;

(q) if in the United Kingdom, that it is a person (i) having professional experience in matters relating to investments who falls within the definition of "investment professionals" in Article 19(5) of the Order or (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 lawfully be communicated;

(r) that no action has been or will be taken by Jefferies or the Company or any person acting on behalf of Jefferies or the Company 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;

(s) that it and any person acting on its behalf has capacity and authority and is otherwise entitled to acquire the Placing Shares under the laws of all relevant jurisdictions which apply to it and that it has fully observed such laws and obtained all such governmental and other guarantees, permits, authorisations, approvals and consents which may be required thereunder and complied with all necessary formalities and that it has not taken any action or omitted to take any action which will or may result in Jefferies, the Company or any of their respective directors, officers, agents, employees or advisers acting in breach of the legal or regulatory requirements of any jurisdiction in connection with the Placing and that the subscription for and purchase of the Placing Shares by it or any person acting on its behalf will be in compliance with applicable laws and regulations in the jurisdiction of its residence, the residence of the Company, or otherwise;

(t) that it has all necessary capacity and has obtained all necessary consents and authorities to enable it to commit to its 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;

(u) 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 Jefferies may in its absolute discretion determine and without liability to such Placee;

(v) that its allocation of Placing Shares represents a maximum number of Placing Shares which it will be entitled, and required, to subscribe for;

(w) that the person whom it specifies for registration as holder of the Placing Shares will be (i) itself or (ii) its nominee, as the case may be. None of Jefferies, the Company, any of their respective affiliates or any person acting on behalf of any of them will be responsible for any liability to stamp duty or stamp duty reserve tax or other similar duties or taxes resulting from a failure to observe this requirement. Each Placee and any person acting on behalf of such Placee agrees to indemnify Jefferies and the Company in respect of the same (together with any and all costs, losses, claims, liabilities, penalties, interest, fines and expenses (including legal fees and expenses)) on an after-tax basis on the basis that the Placing Shares will be allotted to the CREST stock account of Jefferies who will hold them as nominee on behalf of such Placee until settlement in accordance with its standing settlement instructions;

(x) that neither Jefferies, nor any of its affiliates, nor any person acting on its or their behalf, is making any recommendations to it or, advising it regarding the suitability of any transactions it may enter into in connection with the Placing and that participation in the Placing is on the basis that it is not and will not be a client of Jefferies and that Jefferies has no duties or responsibilities to it for providing the protections afforded to their 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;

(y) that in making its decision to subscribe for the Placing Shares, it has knowledge and experience in financial, business and international investment matters as is required to evaluate the merits and risks of subscribing for or purchasing the Placing Shares. It further confirms that it is experienced in investing in securities of this nature in this sector and is aware that it may be required to bear, and is able to bear, the economic risk of participating in, and is able to sustain a complete loss in connection with, the Placing. It further confirms that it relied on 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 not upon any view expressed or information provided by or on behalf of Jefferies. It further confirms that it has had sufficient time to consider and conduct its own investigation with respect to the offer and purchase of the Placing Shares, including the legal, regulatory, tax, business, currency and other economic and financial considerations relevant to such investment and it will not look to the Company, Jefferies, any of their respective affiliates or any person acting on their behalf for all or part of any such loss or losses it or they may suffer;

(z) that it may not rely on any investigation that either Jefferies or any person acting on its behalf may or may not have conducted with respect to the Company and its affiliates or the Placing and Jefferies has not made any representation or warranty to it, express or implied, with respect to the merits of the Placing, the subscription for or purchase of the Placing Shares, or as to the condition, financial or otherwise, of the Company and its affiliates, or as to any other matter relating thereto, and nothing herein shall be construed as a recommendation to it to subscribe for the Placing Shares. It acknowledges, understands and agrees that no information has been prepared or verified by, or is the responsibility of, Jefferies for the purposes of this Placing;

(aa) that in connection with the Placing, Jefferies and any of its affiliates acting as an investor for its own account may take up Placing Shares in the Company and in that capacity may retain, purchase or sell for its own account such Placing Shares in the Company and any securities of the Company or related investments and may offer or sell such securities or other investments otherwise than in connection with the Placing. Jefferies does not intend to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligation to do so;

(bb) that these terms and conditions and any agreements entered into by it pursuant to these terms and conditions, and any non-contractual obligations arising out of or in connection with such agreements, shall be governed by and construed in accordance with the laws of England and Wales and it submits (on behalf of itself and on behalf of any person on whose behalf it is acting) to the exclusive jurisdiction of the English courts as regards any claim, dispute or matter arising out of any such contract, except that enforcement proceedings in respect of the obligation to make payment for the Placing Shares (together with any interest chargeable thereon) may be taken by Jefferies or the Company 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;

(cc) that Jefferies, the Company and their respective affiliates, agents, directors, officers, partners or employees and others will rely upon the truth and accuracy of the representations, warranties and acknowledgements set forth herein and which are given to Jefferies on its own behalf and to the Company on its own behalf and are irrevocable and it irrevocably authorises Jefferies and the Company to produce this Announcement, pursuant to, in connection with, or as may be required by any applicable law or regulation, administrative or legal proceeding or official inquiry with respect to the matters set forth herein;

(dd) that the exercise or non-exercise by Jefferies of any right of termination or other discretion under the Placing Agreement shall be within the absolute discretion of Jefferies and that Jefferies does not need to make any reference to Placees and that Jefferies shall have no liability to Placees whatsoever in connection with any such exercise or failure so to exercise;

(ee) that it will indemnify on an after tax basis and hold Jefferies, the Company and their respective affiliates, agents, directors, officers, partners and employees 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;

(ff) that its commitment to subscribe for Placing Shares on the terms set out in this Appendix and in the contract note will continue notwithstanding any amendment that may in future be made to the terms of the Placing and that Placees will have no right to be consulted or require that their consent be obtained with respect to the Placing;

(gg) if it is subscribing for the Placing Shares as a fiduciary or agent for one or more investor accounts, that it has full power and authority to make, and does make, the foregoing representations, warranties, acknowledgements, agreements and undertakings on behalf of each such accounts;

(hh) that time is of the essence as regards its obligations under this Appendix;

(ii) that any document that is to be sent to it in connection with the Placing will be sent at its own risk and may be sent to it at any address provided by it to Jefferies;

(jj) that the Placing Shares will be issued subject to the terms and conditions set out in this Appendix;

(kk) that it is not a person located in the United States and will acquire the Placing Shares in an "offshore transaction", as defined in Regulation S, conducted in accordance with Regulation S and that the Placing Shares were not offered to it by means of "directed selling efforts", as defined in Regulation S; and

(ll) that it is not acting on a non-discretionary basis for the account or benefit of a person located within the United States at the time the undertaking to subscribe for Placing Shares was given and it is not acquiring the Placing Shares with a view to the offer, sale, resale, transfer, delivery or distribution, directly or indirectly, of any Placing Shares into the United States.

The foregoing representations, warranties and confirmations are given for the benefit of the Company and Jefferies and are irrevocable. Each Placee and any person acting on behalf of the Placee acknowledges that neither the Company nor Jefferies owes any fiduciary or other duties to any Placee in respect of any representations, warranties, undertakings or indemnities in the Placing Agreement.

Miscellaneous

The rights and remedies of Jefferies and the Company under these terms and conditions are in addition to any rights and remedies which would otherwise be available to each of them and the exercise or partial exercise of one will not prevent the exercise of others.

Please also note that the agreement to allot and issue Placing Shares to Placees (or the persons for whom Placees are contracting as agent) free of stamp duty and stamp duty reserve tax in the UK relates only to their allotment and issue to Placees, or such persons as they nominate as their agents, direct from the Company for the Placing Shares in question. Such agreement also assumes that the Placing Shares are not being acquired in connection with arrangements to issue depositary receipts or to issue or transfer the Placing Shares into a clearance service. Neither Jefferies nor the Company is liable to bear any stamp duty and stamp duty reserve tax and any other similar duties or taxes (transfer taxes) that arise on a sale of Placing Shares if there are any such arrangements or that arise subsequent to their acquisition by Placees or for transfer taxes arising otherwise than under the laws of the United Kingdom. Each Placee should, therefore, take its own advice as to whether any such transfer tax liability arises. Furthermore, each Placee agrees to indemnify on an after-tax basis and hold Jefferies, the Company and their respective affiliates harmless from any and all interest, fines or penalties in relation to transfer taxes to the extent that such interest, fines or penalties arise from the unreasonable default or delay of that Placee or its agent.

Each Placee and any person acting on behalf of each Placee acknowledges and agrees that Jefferies or any of its affiliates may, at its absolute discretion, agree to become a Placee in respect of some or all of the Placing Shares.

Each Placee and any person acting on behalf of the Placee acknowledges and agrees that, in participating in the Placing (including in making an oral and legally binding offer to acquire and subscribe for Placing Shares), it has neither received nor relied on nor acted upon any 'inside information' (for the purposes of MAR and section 56 of the CJA) concerning the Company.

All references to time in this Announcement are to London time unless otherwise stated. All times and dates in this Announcement may be subject to amendment by Jefferies (in its absolute discretion). Jefferies shall notify the Placees and any person acting on behalf of the Placees of any changes.

The price of an Ordinary Share and any income expected from them may go down as well as up and investors may not get back the full amount invested upon disposal of the shares. Past performance is no guide to future performance and persons needing advice should consult an independent 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.

ANNEXURE 1

AIM RULES FOR COMPANIES SCHEDULE 2 (G) INFORMATION

Simon To, holds or has held the following directorships in the five years preceding his appointment to the Gama Aviation Plc Board.

DEFINITIONS

The following definitions apply in this Announcement unless the context otherwise requires: