Graft Polymer Regulatory News (GPL)

THIS ANNOUNCEMENT AND THE INFORMATION HEREIN (THE "ANNOUNCEMENT") IS RESTRICTED AND IS NOT FOR PUBLICATION, RELEASE, TRANSMISSION, DISTRIBUTION OR FORWARDING DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, RUSSIA, THE REPUBLIC OF SOUTH AFRICA, JAPAN OR ANY OTHER JURISDICTION IN WHICH SUCH PUBLICATION, TRANSMISSION, RELEASE, DISTRIBUTION OR FORWARDING WOULD BE UNLAWFUL. THIS ANNOUNCEMENT SHOULD BE READ IN ITS ENTIRETY. IN PARTICULAR, PERSONS RECEIVING THIS ANNOUNCEMENT SHOULD READ AND UNDERSTAND THE INFORMATION PROVIDED IN THE "IMPORTANT NOTICES" SECTION OF THIS ANNOUNCEMENT.

FURTHER, THIS ANNOUNCEMENT IS MADE FOR INFORMATION PURPOSES ONLY AND DOES NOT CONSTITUTE AN OFFER TO SELL OR ISSUE OR SOLICITATION TO BUY, SUBSCRIBE FOR OR OTHERWISE ACQUIRE SHARES IN GRAFT POLYMER (UK) PLC IN ANY JURISDICTION IN WHICH ANY SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF EU REGULATION 596/2014 AS IT FORMS PART OF DOMESTIC LAW IN THE UNITED KINGDOM BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018. UPON THE PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS INSIDE INFORMATION WILL BE CONSIDERED TO BE IN THE PUBLIC DOMAIN.

22 December 2023

Graft Polymer (UK) Plc

(the "Company")

Placing of New Ordinary Shares

Graft Polymer Plc (LSE:GPL), the multi-sector specialist chemical company offering modified and alloyed polymer and bio-polymer solutions for refiners, compounders and processors, today announces that it has conditionally placed 20,666,667 new ordinary shares ("Ordinary Shares") of 0.1 pence each in the capital of the Company ("New Ordinary Shares") (the "Placing Shares") with a new cornerstone investor at a price of 0.6 pence per Placing Share (the "Placing Price") ("Placing") in addition to receiving conditional subscriptions for 51,916,667 New Ordinary Shares at the Placing Price ("Subscription"), and agreements being entered into for 10,750,000 existing Ordinary Shares of 0.1 pence each in the capital of the Company ("Existing Shares") to be transferred by an existing shareholder at the Placing Price, raising gross proceeds of £500,000 (together, the "Fundraising"). In addition, one warrant is being issued by the Company for every two Placing Shares allotted, being in aggregate warrants over 10,333,333 Ordinary Shares, exercisable at 1 penny per Ordinary Share for a period of two years ("Placing Warrants"). The Placing Warrants will not be admitted to trading on London Stock Exchange or any other stock exchange.

The net proceeds of the Fundraising will be used to fund the Company's general working capital requirements. The Placing Price represents a discount of 45 per cent. to the closing price of the Ordinary Shares on 21 December 2023, being the trading day immediately prior to the release of this announcement.

CMC Markets Plc ("CMC") acted as Bookrunner and placing agent in connection with the Placing.

Commenting on the placing, Graft Polymer CEO / CTO Victor Bolduev, said: "This placing follows a year where we have made significant progress including the completion of our new commercial production facility in June 2023 and momentum with new contracts reflecting our competitive advantage based on strong innovation. We now have core infrastructure in place with established industry networks and the commitment of cornerstone investors. We look forward to delivering the next stage of growth". 

Appointment of CMC

CMC has been appointed as the Company's joint UK broker with immediate effect. CMC is headquartered in London, with hubs in Sydney and Singapore. CMC is listed on the London Stock Exchange and was admitted to the FTSE 250 on 20 June 2016. Investors and Brokers wishing to gain access to future CMC Markets transactions, should register their interest at: https://www.cmcmarkets.com/en-gb/capx.

Further Details of the Fundraising

The Placing is conditional on, inter alia, (i) the placing agreement entered into between the Company and CMC becoming unconditional in all respects in relation to the Placing and not having been terminated in accordance with its terms; and (ii) Admission (as defined below). The Placing Shares will be allotted and issued under the Company's existing authorities obtained at the Company's last annual general meeting held on 27 July 2023.

The Company will not be able to satisfy its obligations in full under the Fundraising by the issue and admission to the Official List (standard listing segment) of the London Stock Exchange's main market for listed securities ("Official List") of all the New Ordinary Shares pursuant to the Fundraising without producing of an FCA approved prospectus. The Company is proposing to issue and admit 20,666,667 Placing Shares (available under the Company's existing headroom under the UK Prospectus Regulation as at the date of this announcement) on or around 4 January 2024 ("Admission").

On the same date, Victor Bolduev, a Director and shareholder of the Company, will transfer 10,750,000 Existing Shares held by him to settle the Fundraising in a timely manner, and certain individuals shall conditionally subscribe for 51,916,667 New Ordinary Shares. Further detail in respect of the agreements being entered into between (among others) the Company and Mr Bolduev is set out below.

Share Purchase and Subscription Agreements

Mr Bolduev will transfer 10,750,000 Existing Shares pursuant to the terms of a Share Purchase Agreement to be entered into between Mr Bolduev and the transferees.

In addition, an aggregate of 51,916,667 New Ordinary Shares will be issued to subscribers (which includes certain Directors of the Company or their connected persons) ("Subscribers") pursuant to a Subscription Agreement between the Company and the Subscribers as soon as reasonably practicable subject to compliance by the Company with the Companies Act 2006, UK Prospectus Regulation, the Listing Rules and the Company's dealing policy. The Company undertakes to make the necessary listing and admission hearing applications to have those New Ordinary Shares admitted to trading at the appropriate time.

The Company is undertaking a material related party transaction with Victor Bolduev and his associates for the purpose of rule 7.3 of the FCA's Disclosure Guidance and Transparency Rules. Mr Bolduev is a Director of the Company. Pursuant to the Subscription Agreement, Mr Bolduev and his associates will pay to the Company cash consideration (as defined in section 583 of the Companies Act 2006) of £153,175. Mr Bolduev and his associates will be issued, in aggregate and subject to various conditions as set out in the paragraph above, 25,529,117 Ordinary Shares at the Placing Price. This material related party transaction has been approved by the board of Directors of the Company. Mr Bolduev did not take part in the board of Directors' consideration of the transaction with him and his associates and he did not vote on the relevant board decision.

On Admission, the Concert Party (as referred to in the Company's prospectus published on 21 December 2021) shall hold Ordinary Shares carrying 50.81 per cent. of the voting rights of the Company.

ENDS

For further information, visit www.graftpolymer.com, follow on Twitter @PolymerLtd or contact:

Graft Polymer (UK) Plc

Roby Zomer, Non-Executive Chairman Via Flagstaff

Yifat Steuer, CFO and Executive Director

CMC Markets

Douglas Crippen Tel 02030038632

Flagstaff Strategic and Investor Communications Tel + 44 (0) 207 129 1474

Tim Thompson graftpolymer@flagstaffcomms.com

Mark Edwards

Alison Allfrey

Anna Probert

Placing Agreement and issue of warrants

The Company and CMC have entered into a Placing Agreement pursuant to which CMC has agreed, subject to certain conditions, to use its reasonable endeavours to procure subscribers for the Placing Shares at the Placing Price. The Company has given warranties and undertakings to CMC in relation to, inter alia, its business and the performance of its duties. In addition, the Company has agreed to indemnify CMC in relation to certain liabilities that they may incur in undertaking the Placing. CMC has the right to terminate the Placing Agreement in certain circumstances prior to Admission (as defined below) and, in particular, in the event that there has been, inter alia, a material breach of any of the warranties. No part of the Placing is being underwritten.

Under the terms of the Placing Agreement, CMC will receive a commission relating to the Placing Shares and warrants to subscribe for 1,500,000 New Ordinary Shares ("Broker Warrants"). The Broker Warrants are exercisable at 0.6p for a period of two years from the date of Admission (as defined below). The Broker Warrants will not be admitted to trading on the LSE or any other stock exchange. The issue of New Ordinary Shares upon exercise of the Placing Warrants and the Broker Warrants will be conditional on compliance with all applicable laws and regulations, including the UK Prospectus Regulation.

Total voting rights

On Admission, the Company will have 124,763,966 ordinary shares of 0.1p each in issue, each with one voting right. There are no shares held in treasury. Therefore, the Company's total number of ordinary shares in issue and voting rights will be 124,763,966 and this figure may be used by shareholders from Admission as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the Company under the FCA's Disclosure Guidance and Transparency Rules.

About Graft Polymer

Graft Polymer is a London Stock Exchange listed company (GPL) with a cutting-edge research and development (R&D) and manufacturing facility based in Slovenia which has already introduced more than 50 products to the market. The core business of the Group comprises polymer modification and drug delivery system developments. The Group has developed a proprietary set of polymer modification technologies, including using recycled raw materials and a closed loop system to reduce waste. Graft Polymer's technology can improve existing products and processing methodologies by enhancing performance, simplifying manufacturing, reducing material consumption, widening the choice of feedstocks, and reducing costs.

Graft Polymer has three divisions: the first division focusses on polymer modification; the second is GraftBio which develops IP for Bio/Pharma applications (including a drug delivery system to support and provide solutions to the market, which had been heavily impacted by the COVID-19 pandemic); and the third is the Group's food supplement division. A significant milestone was reached in May 2022 when the Slovenian manufacturing facility was granted a Hazard Analysis and Critical Control Point (HACCP) Certificate. The HACCP Certificate allows it to enter the lucrative Business-to-Consumer market and commercialise its IP for bio/pharma applications, developing active pharmaceutical ingredients and drug delivery platforms for use in the food supplement market, thereby introducing a further revenue stream to its business.

ESG is at the forefront of the Group's strategy and the facility in Slovenia has been granted ISO 14001 accreditation in recognition of the environmental management systems in place to reduce waste. Graft Polymer only uses REACH and ROHS certificated raw materials instead of toxic raw materials, and its extensive R&D programme has also developed specialised recycling polymer additives which increases the strength of recycled blends and plastic products whilst also reducing plastic waste by between 40 and 50 per cent.

Forward Looking Statements

This announcement includes statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "plans", "anticipates", "targets", "aims", "continues", "expects", "intends", "hopes", "may", "will", "would", "could" or "should" or, in each case, their negative or other variations or comparable terminology. These forward-looking statements include matters that are not facts. They appear in a number of places throughout this announcement and include statements regarding the Directors' beliefs or current expectations. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. Investors should not place undue reliance on forward-looking statements, which speak only as of the date of this announcement.

Notice to overseas persons

This announcement does not constitute, or form part of, a prospectus relating to the Company, nor does it constitute or contain any invitation or offer to any person, or any public offer, to subscribe for, purchase or otherwise acquire any shares in the Company or advise persons to do so in any jurisdiction, nor shall it, or any part of it form the basis of or be relied on in connection with any contract or as an inducement to enter into any contract or commitment with the Company.

This announcement is not for release, publication or distribution, in whole or in part, directly or indirectly, in or into Australia, Canada, Japan or the Republic of South Africa, Russia or any jurisdiction into which the publication or distribution would be unlawful. 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 or acquire shares in the capital of the Company in Australia, Canada, Japan, New Zealand, the Republic of South Africa, Russia or any jurisdiction in which such offer or solicitation would be unlawful or require preparation of any prospectus or other offer documentation or would be unlawful prior to registration, exemption from registration or qualification under the securities laws of any such jurisdiction. Persons into whose possession this announcement comes are required by the Company to inform themselves about, and to observe, such restrictions.

This announcement is not for publication or distribution, directly or indirectly, in or into the United States of America. This announcement is not an offer of securities for sale into the United States. The securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States, except pursuant to an applicable exemption from registration. No public offering of securities is being made in the United States.

ENDS