Hochschild Regulatory News (HOC)

7 Oct 2009 14:43



 

________________________________________________________________________

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, SOUTH AFRICA OR JAPAN OR ANY JURISDICTION IN WHICH SUCH PUBLICATION OR DISTRIBUTION IS UNLAWFUL. THIS ANNOUNCEMENT DOES NOT CONSTITUTE OR FORM A PART OF ANY OFFER TO SELL OR SOLICITATION OF AN OFFER TO PURCHASE OR SUBSCRIBE FOR SECURITIES IN THE UNITED STATES, AUSTRALIA, CANADA, SOUTH AFRICA OR JAPAN OR ANY JURISDICTION IN WHICH IT WOULD BE UNLAWFUL TO DO SO.

7 October 2009 

Hochschild announces proposed Equity Placing and Convertible Bond Offering 

to raise up to $250 million

Placing of up to 30.735 million ordinary shares of 25 pence to raise approximately $150 million 

Convertible Bond Offering of approximately $100 million 

Expected combined gross proceeds of up to $250 million will provide Hochschild with the financial resources to: 

Pursue further acquisition opportunities in key mining districts 

Allow further investments in Lake Shore Gold and Gold Resource Corporation 

Fund value-added investment in existing operations and exploration projects 

Pre-pay $85 million of the Company's $200 million syndicated loan facility

Hochschild Mining plc ("Hochschild" or the "Company") today announces its intention to place up to 30.735 million new ordinary shares (the "Placing") and raise approximately $100 million through an offering of senior unsecured Convertible Bonds (the "Convertible Bonds") due 2014 ("the Bond Offering"). The proposed Placing and Bond Offering (together "the Offering") are expected to raise up to $250 million and the proceeds will be used to advance the Company's growth strategy and to refinance existing debt. 

As disclosed in the Interim Results in August 2009 and the Interim Management Statement ("IMS") published today, the Company continues to deliver strong operational and financial performance. Production for the 9 months to 30 September 2009 is up 18% year-on-year to 21.4 million attributable silver equivalent ounces and the Company confirms that it remains on track to achieve its full year production target of 28 million attributable silver equivalent ounces. 

Miguel Aramburú, Chief Executive Officer commented; 

"Since our IPO in 2006 we have consistently delivered on our strategy of organic growth, exploration and selective acquisition while maintaining a rigorous focus on cost and cash management. We are well positioned to benefit from further investment in our asset base as well as further selective M&A opportunities and have therefore decided to raise additional capital to provide the financial flexibility to consolidate our position in key mining districts and develop our project pipeline. We are optimistic about the value that we have already generated by our investments and we are committed to working closely with our partners to deliver further value to our shareholders."

The Placing 

Under the terms and conditions of the Placing, Hochschild intends to place up to 30.735 million ordinary shares of 25 pence each (the "Placing Shares"), representing approximately 9.9% of the Company's existing issued ordinary share capital, to raise up to $150 million. The Placing is being conducted through an accelerated bookbuild (the "Bookbuild") which will be launched immediately following this announcement. Goldman Sachs International ("GSI") and J.P. Morgan Cazenove ("JPMC") are acting as joint bookrunners (the "Joint Bookrunners"), (JPMC is a marketing name for the UK Investment Banking business of J.P. Morgan Securities Ltd).

Eduardo Hochschild, the Company's majority shareholder and Executive Chairman, will be committing a total of $5 million to the Placing and will be diluted as result. The Company's freefloat is also expected to increase as a result of the transaction. 

The number of Placing Shares and the price at which the Placing Shares are to be placed will be determined at the close of the Bookbuild process and will be announced shortly thereafter. The timing for the close of the Bookbuild, pricing and allocations is at the absolute discretion of the Joint Bookrunners. Preference in allocation of the Placing Shares will be given to existing shareholders of the Company.

The Placing Shares will, when issued, be credited as fully paid and will rank pari passu in all respects with the existing ordinary shares of Hochschild, including the right to receive all dividends and other distributions declared, made or, paid after the date of the issue. Application will be made for the Placing Shares to be admitted to the Official List of the Financial Services Authority (the "FSA"), and to be admitted to trading by the London Stock Exchange plc (the "London Stock Exchange") on its main market for listed securities (together "Admission"). Settlement of payment for the Placing Shares issued pursuant to the Placing, as well as Admission, is expected to take place on 12 October 2009 (the "Closing Date"). The Placing is conditional on Admission becoming effective.

By choosing to participate in the Placing and by making an oral and legally binding offer to acquire Placing Shares, investors will be deemed to have read and understood this announcement in its entirety (including the Appendix) and to be making such offer on the terms and conditions and providing the representations, warranties and acknowledgements, contained in the Appendix to this announcement.

The Placing is not conditional on the Bond Offering. Your attention is drawn to the detailed terms and conditions of the Placing described below.

Convertible Bond Offering

The Company is offering approximately $100 million of senior unsecured Convertible Bonds due 2014 which will be convertible into fully paid ordinary shares ("Ordinary Shares") of 25 pence each of the Company. Prior to shareholder approval being obtained, the holders of the Bonds will receive cash instead of Ordinary Shares upon conversion of the Bonds. The final size of the Offering will be determined at the time of pricing, which is expected to be later today. 

The Bonds are expected to have a coupon of 5.75% to 6.5% per annum payable semi-annually in equal installments in arrears save for the first and last short coupons. The initial conversion price is expected to be set at a premium of between 30% and 35% to the clearing price of the concurrent Placing price. 

The Convertible Bonds will be issued at 100% of their principal amount and, unless previously redeemed, converted or purchased and cancelled, will mature on the fifth anniversary of the issue of the Bonds in 2014. The final terms of the Convertible Bonds are expected to be announced today and, subject to shareholder approval at an EGM expected to be held on 27 October 2009, settlement and delivery of the Bonds are expected on or about 20 October 2009. GSI and JPMC are acting as Joint Bookrunners. 

Application will be made to the FSA in its capacity as competent authority (the "United Kingdom Listing Authority") under the Financial Services and Markets Act 2000 "FSMA") for the Bonds to be admitted to the Official List of the United Kingdom Listing Authority and to the London Stock Exchange for the Bonds to be admitted to trading on the London Stock Exchange's Professional Securities Market. Listing particulars will be prepared in connection with the listing of the Bonds.

Rationale and proceeds 

The net proceeds from the Placing and the Convertible Bond Offering will serve to reinforce the Company's balance sheet after a successful period of value added investment and acquisition and provide increased financial flexibility to:  

Pursue further acquisition opportunities in key mining districts 

Allow further investments in Lake Shore Gold and Gold Resource Corporation 

Fund value-added investment in existing operations and exploration projects 

Pre-pay $85 million of the Company's $200 million syndicated loan facility

Following an extremely active 18 months, in which the Company has spent approximately $340 million on acquisitions and investments, the additional funding will enable Hochschild to pursue further opportunities in key mining districts within the Americas. 

On 27 August 2009, Hochschild's strategic partner, Lake Shore Gold, announced a definitive business combination agreement to acquire all of the outstanding common shares of West Timmins Mining Inc. ("WTM"). The transaction will create the new large-scale, wholly-owned Timmins West Gold Mine Complex, an extension of the world class Timmins gold mining trend which has supplied approximately 70 million ounces of gold over the last century. 

As a result of the business combination, Hochschild's 40% stake in Lake Shore Gold, which is currently valued at over $600 million, would be diluted to approximately 27% on completion. The Board of Lake Shore Gold has committed to look at ways in which Hochschild can return to a 40% shareholding in the enlarged company. Hochschild remains committed to the strategic alliance with Lake Shore Gold and will evaluate the merits of these options. Under the terms of the existing agreement with Lake Shore Gold, Hochschild is unable to increase its holding above 40% until November 2010. 

The growth prospects for Lake Shore Gold are impressive with current production targets of 30,000 ounces of gold by the end of 2009, increasing to 100,000 ounces in 2010 and 200,000 ounces in 2011. The new Timmins West Gold Mine Complex will consist of Lake Shore Gold's 100%-owned Timmins Mine with existing mine infrastructure, the Thunder Creek property, where high-grade intercepts have been reported within 800 metres of the Timmins shaft, and an extensive land package of adjacent exploration properties, giving Lake Shore Gold a leading position in this highly prospective area. 

Additionally, Hochschild has the right to increase its stake in Gold Resource Corporation ("GRC") from 24% to 40%, with the full support of the GRC board. GRC, which has a current market capitalisation in excess of $315 million, is a precious metals mining company with a number of 100% owned, high grade development projects in southern Mexico including the El Aguila project. This project is scheduled to begin production by the end of 2009 and the company expects to produce approximately 70,000 ounces of gold (4.2 million silver equivalent ounces) in its first full year of production. Hochschild is extremely confident about the long term potential of this investment. After the standstill period ends in February 2011, Hochschild can purchase additional shares in GRC without restriction. 

The Company is focused on producing profitable ounces and continues to identify and invest in projects which increase long term operational efficiency. In the past year, the Company has completed plant expansions at three of its operations which increased production capacity by 29% and also the construction of new power lines in Peru and Argentina ensuring a cost effective and reliable supply of energy. Furthermore, in June 2009, the Company announced the project to convert Arcata's production to doré which will improve operational efficiency, maximise revenue, lower working capital requirements and allow the Company to benefit from more stable commercial terms. The project is on schedule for completion in 2010. 

Proceeds will be also used to pre-pay the first three instalments (totalling $85 million) of the Company's existing syndicated loan facility of $200 million in order to extend its debt maturity until 2014 and provide increased financial flexibility in 2010. Following this transaction, the next repayment will not be due until July 2011. The remaining, reduced level of term debt is due to be repaid by early 2013 under the terms of the original agreement.

As stated in its IMS announced today, the Company's production continues to grow and the financial flexibility provided by these proceeds will allow it to further invest in existing operations and exploration activities to enhance its portfolio and add long term value for shareholders.

-------------------------------------------------------------------------------------------------------------------------

Enquiries:

Hochschild Mining plc

Isabel Lütgendorf +44 (0)20 7907 2934

Head of Investor Relations

Finsbury

Robin Walker +44 (0)20 7251 3801

Public Relations

__________________________________________________________________

About Hochschild Mining plc:

Hochschild Mining plc is a leading precious metals company listed on the London Stock Exchange (HOCM.L / HOC LN) with a primary focus on the exploration, mining, processing and sale of silver and gold. Hochschild has over forty years' experience in the mining of precious metal epithermal vein deposits and currently operates four underground epithermal vein mines, three located in southern Peru, one in southern Argentina and one open pit mine in northern Mexico. Hochschild also has numerous long-term prospects throughout the Americas. 

This announcement is for information only and, save as expressly set out herein, does not constitute an offer or invitation to underwrite, subscribe for or otherwise acquire or dispose of any securities or investment advice in any jurisdiction, including without limitation, the United Kingdom, the United States, Australia, Canada, South Africa or Japan. Persons needing advice should consult an independent financial adviser.

This announcement has been issued by and is the sole responsibility of Hochschild Mining plc (the "Company"). Goldman Sachs International, J.P. Morgan Cazenove Limited and J.P. Morgan Securities Ltd (together, the "Banks"), which are authorised and regulated in the United Kingdom by the Financial Services Authority, are acting for the Company and for no-one else in relation to the Placing and Bond Offering (together, the "Transaction"), and will not be responsible to any other person for providing the protections afforded to each of its respective clients nor for providing advice in connection with the Transaction. 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 the Banks or by any of their respective affiliates or agents as to or in relation to, the accuracy or completeness of this announcement or any other written or oral information made available to or publicly available to any interested party or its advisers, and any liability therefore is expressly disclaimed.

The distribution of this announcement and the placing of the Placing Shares and the Convertible Bonds as set out in this announcement in certain jurisdictions may be restricted by law. No action has been taken by the Company or the Banks that would permit an offering of such securities or possession or distribution of this announcement or any other offering or publicity material relating to such securities in any jurisdiction where action for that purpose is required. Persons into whose possession this announcement comes are required by the Company and the Banks to inform themselves about, and to observe, such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

This announcement is directed only at persons (i) having professional experience in matters relating to investments who fall within the definition of "investment professionals" in Article 19(5) of the Financial Services and Markets Act (Financial Promotion) Order 2005 (the "Order") or (ii) who are high net worth entities falling within Article 49(2)(a) to (d) of the Order, and other persons to whom it may otherwise lawfully be communicated (all such persons together being referred to as "relevant persons"). This announcement must not be acted or relied on in the United Kingdom by persons who are not relevant persons.

This document is not a Prospectus but an advertisement and investors should not subscribe for any securities referred to in this document except on the basis of the information contained in the IMS or otherwise in the public domain. The content of the Company's website accessible by hyperlinks on the Company's website neither is incorporated in, nor forms part of, this document.

This announcement contains certain forward looking statements, including such statements within the meaning of Section 27A of the US Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended. In particular, such forward looking statements may relate to matters such as the business, strategy, investments, production, major projects and their contribution to expected production and other plans of the Company and its current goals, assumptions and expectations relating to its future financial condition, performance and results. 

Forward-looking statements include, without limitation, statements typically containing words such as "intends", "expects", "anticipates", "targets", "plans", "estimates" and words of similar import. By their nature, forward looking statements involve risks and uncertainties because they relate to events and depend on circumstances that will or may occur in the future. Actual results, performance or achievements of the Company may be materially different from any future results, performance or achievements expressed or implied by such forward looking statements. Factors that could cause or contribute to differences between the actual results, performance or achievements of the Company and current expectations include, but are not limited to, legislative, fiscal and regulatory developments, competitive conditions, technological developments, exchange rate fluctuations and general economic conditions. These factors, risks and uncertainties are referred to in the section of this announcement entitled 'Risks' which, in turn, refers to matters disclosed in the Risk Management section of the 2008 Annual Report. Past performance is no guide to future performance and persons needing advice should consult an independent financial adviser.

The forward looking statements reflect knowledge and information available at the date of preparation of this announcement. Except as required by the Listing Rules and applicable law, the Board of the Company does not undertake any obligation to update or change any forward looking statements to reflect events occurring after the date of this announcement.

The Placing Shares have not been, and will not be, registered under the Securities Act or under the laws of any state or other jurisdiction of the United States and may not be offered, sold or transferred, directly or indirectly, within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. 

The Bonds and the Ordinary Shares to be issued upon conversion of the Bonds have not been and will not be registered under the Securities Act, and the Bonds, which are in bearer form, are subject to U.S. tax law requirements. The Bonds and the Ordinary Shares to be issued upon conversion of the Bonds may not be offered, sold or delivered within the United States or to U.S. persons (as defined in Section 7701(a)(30) of the Internal Revenue Code of 1986, as amended) except in certain transactions permitted by U.S. tax regulations and the Securities Act. 

Subject to certain exceptions, this announcement does not constitute an offer to sell or issue or the solicitation of an offer to buy or acquire securities of the Company in the United States, Australia, Canada, South Africa or Japan or any jurisdiction in which such an offer or solicitation is unlawful. No money, securities or other consideration is being solicited and, if sent in response to the information herein, will not be accepted. There will be no public offer of any securities of the Company in the United States or elsewhere.

Any indication in this announcement of the price at which ordinary shares have been bought or sold in the past cannot be relied upon as a guide to future performance. No statement in this announcement is intended to be a profit or production forecast and no statement in this announcement should be interpreted to mean that earnings per share of the Company for the current or future financial years would necessarily match or exceed the historical published earnings per share of the Company.

APPENDIX: FURTHER DETAILS OF THE PLACING

THIS ANNOUNCEMENT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN OR SOUTH AFRICA OR ANY OTHER STATE OR JURISDICTION IN WHICH SUCH DISTRIBUTION WOULD BE UNLAWFUL.

IMPORTANT INFORMATION ON THE PLACING FOR INVITED PLACEES ONLY.

MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THIS APPENDIX AND THE TERMS AND CONDITIONS SET OUT HEREIN ARE FOR INFORMATION PURPOSES ONLY AND ARE DIRECTED ONLY AT: (A) PERSONS IN MEMBER STATES OF THE EUROPEAN ECONOMIC AREA WHO ARE QUALIFIED INVESTORS (AS DEFINED IN ARTICLE 2(1)(E) OF EU DIRECTIVE 2003/71/EC AND ANY IMPLEMENTING MEASURE ADOPTED BY ANY MEMBER STATE (THE "PROSPECTUS DIRECTIVE") OR (B) QUALIFIED INVESTORS IN THE UNITED KINGDOM, WHO ARE PERSONS WHO (I) HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS FALLING WITHIN ARTICLE 19(1) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 (THE "ORDER"); (II) ARE PERSONS FALLING WITHIN ARTICLE 49(2)(A) TO (D) ("HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC") OF THE ORDER; OR (III) ARE PERSONS TO WHOM IT MAY OTHERWISE BE LAWFULLY COMMUNICATED (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS"). THIS APPENDIX AND THE TERMS AND CONDITIONS SET OUT HEREIN MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS APPENDIX AND THE TERMS AND CONDITIONS SET OUT HEREIN RELATES IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. THIS APPENDIX DOES NOT ITSELF CONSTITUTE AN OFFER FOR THE SALE OR ISSUE OF ANY SECURITIES IN THE COMPANY.

Persons who are invited to and who choose to participate in the Placing, by making an oral or written offer to acquire Placing Shares will be deemed to have read and understood this announcement, including this appendix, in its entirety and to be making such offer on the terms and conditions, and to be providing the representations, warranties, acknowledgements, and undertakings contained in this appendix. Unless the context otherwise requires, terms defined in the announcement shall have the same meaning in this appendix 

In this appendix, unless the context otherwise requires, "Placee" means a person (including individuals, funds or others) making or who has made an oral or written offer to acquire Placing Shares or on whose behalf such an offer to acquire Placing Shares is or has been made. In particular, each such Placee represents, warrants and acknowledges that it is: (a) a Relevant Person (as defined above) and undertakes that it will acquire, hold, manage or dispose of any Placing Shares that are allocated to it for the purposes of its business; and (b) either (i) outside the United States and is subscribing for the Placing Shares in an "offshore transaction" (within the meaning of Regulation S under the US Securities Act of 1933 (the "US Securities Act") or (ii) a "qualified institutional buyer" (as defined in Rule 144A under the Securities Act) ("QIB") and has duly executed an investor letter in a form provided to it (the "QIB Letter") and delivered the same to GSI or Cazenove Incorporated (on behalf of JPMC) (or their respective US broker-dealer affiliates).

This announcement is for information only and does not constitute an offer to sell or issue or the solicitation of an offer to buy, subscribe for or acquire any securities, including the Placing Shares in any jurisdiction in which such offer or solicitation is or may be unlawful. This announcement and the information contained herein is not for release, publication or distribution, in whole or in part, directly or indirectly, in or into the United States, Australia, Canada, Japan or South Africa or any other state or jurisdiction in which it would be unlawful to do so. No public offer of securities of the Company is being made in the United Kingdom, United States or elsewhere.

In particular, the Placing Shares referred to in this announcement have not been and will not be registered under the US Securities Act and may not be offered, sold or transferred within the United States except pursuant to an exemption from, or as part of a transaction not subject to, the registration requirements of the US Securities Act. Any offering to be made in the United States will be made to a limited number of QIBs in reliance on the exemption from registration provided by Rule 144A under the US Securities Act or another exemption from, or in a transaction not subject to, registration under the US Securities Act.

The relevant clearances have not been, nor will they be, obtained from the securities commission of any province or territory of Canada; no prospectus has been lodged with or registered by the Australian Securities and Investments Commission or the Japanese Ministry of Finance; and the Placing Shares have not been, nor will they be, registered under or offered in compliance with the securities laws of any state, province or territory of Canada, Australia, Japan or South Africa. Accordingly, the Placing Shares may not (unless an exemption under the relevant securities laws is applicable) be offered, sold, resold or delivered, directly or indirectly, in or into the United States, Canada, Australia, Japan or South Africa or any other jurisdiction outside the United Kingdom.

The Placing Shares have not been approved or disapproved by the US Securities and Exchange Commission, any state securities commission or other regulatory authority in the United States, nor have any of the foregoing authorities passed upon or endorsed the merits of the Placing or the accuracy or adequacy of this announcement. Any representation to the contrary is a criminal offence in the United States.

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

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

Details of the Placing Agreement and the Placing Shares

The Banks have entered into a Placing Agreement (the "Placing Agreement") with the Company under which GSI and JPMC have, on the terms and subject to the conditions set out therein, undertaken to use reasonable endeavours to procure Placees to take up the Placing Shares at the Placing Price. Subject to the execution of the terms of sale setting out the final number of Placing Shares and the final Placing Price following completion of the Bookbuilding (the "Terms of Sale"), if such Placees fail to pay for the Placing Shares at the applicable Placing Price, GSI and JPMSL have severally (and not jointly or jointly and severally) agreed to subscribe for such shares, and the Company has agreed to allot or issue, as applicable, such shares to GSI and JPMSL, at the applicable Placing Price and on the terms set out in the Placing Agreement. The Placing Price will be determined following completion of the Bookbuilding as set out in this announcement and the Placing Agreement. 

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

Application for listing and admission to trading

Application will be made to the Financial Services Authority (the "FSA") for admission of the Placing Shares to the Official List of the UK Listing Authority (the "Official List") and to London Stock Exchange plc for admission to trading of the Placing Shares on its main market for listed securities (together, "Admission"). It is expected that Admission will become effective on or around 12 October 2009 and that dealings in the Placing Shares will commence at that time.

Bookbuilding

GSI and JPMC will today commence the bookbuilding process in respect to the Placing (the "Bookbuilding") to determine demand for participation in the Placing by Placees. This appendix gives details of the terms and conditions of, and the mechanics of participation in, the Placing. No commissions will be paid to Placees or by Placees in respect of any Placing Shares.

GSI and JPMC shall be entitled to effect the Placing by such alternative method to the Bookbuilding as they may, in their sole discretion, determine.

Participation in, and principal terms of, the Placing

GSI and JPMC are arranging the Placing as joint bookrunners and agents of the Company.

Participation in the Placing will only be available to persons who may lawfully be, and are, invited to participate by GSI or JPMC. GSI and JPMC are entitled to enter bids in the Bookbuilding as principal.

The allotment and issue of the Placing Shares to Placees by the Company will be in consideration of the transfer to the Company by JPMC of shares in a Jersey incorporated company ("JerseyCo"), pursuant to a subscription and transfer agreement entered into between JPMC, the Company and JerseyCo (the "Transfer Agreement"). The consideration from the Company for the transfer of the shares in JerseyCo will be satisfied by the issue of the Placing Shares to the Placees by the Company. JPMC will procure the allotment by the Company of such Placing Shares to Placees by effecting the necessary transfer from JPMC to the Company of shares in JerseyCo.

The Bookbuilding will establish a single price payable to the Joint Bookrunners by all Placees whose bids are successful (the "Placing Price"). The Placing Price and the aggregate proceeds to be raised through the Placing will be determined by the Joint Bookrunners following completion of the Bookbuilding and any discount to the market price of the Ordinary Shares will be determined in accordance with the Listing Rules.

To bid in the Bookbuilding, Placees should communicate their bid by telephone to their usual sales contact at the relevant Joint Bookrunner. Each bid should state the number of Placing Shares which the prospective Placee wishes to acquire at either the Placing Price which is ultimately established by the Joint Bookrunners or at prices up to a price limit specified in its bid. Bids may be scaled down by the Joint Bookrunners on the basis referred to paragraph 9 below. 

The timing of the close of the Bookbuilding will be at the discretion of the Joint Bookrunners. The Joint Bookrunners may accept bids that are received after the Bookbuilding has closed. The Company reserves the right (upon the Agreement of the Joint Bookrunners) to reduce or seek to increase the amount to be raised pursuant to the Placing in its absolute discretion.

Each Placee's allocation will be confirmed to Placees orally by the relevant Joint Bookrunners following the close of the Bookbuilding, and a trade confirmation will be dispatched as soon as possible thereafter. The relevant Joint Bookrunner's oral confirmation to such Placee will constitute an irrevocable legally binding commitment upon such person (who will at that point become a Placee) in favour of the relevant Joint Bookrunner and the Company, under which it agrees to acquire 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 Memorandum and Articles of Association.

The Company will make a further announcement following the close of the Bookbuilding detailing the number of Placing Shares to be issued and the price at which Placing Shares have been placed in an announcement on a Regulatory Information Service following the completion of the Bookbuilding (the "Pricing announcement").

Subject to paragraphs 5 and 6 above, the Joint Bookrunners may choose to accept bids, either in whole or in part, on the basis of allocations determined at their discretion and may scale down any bids for this purpose on such basis as it may determine. The Joint Bookrunners may also, notwithstanding paragraphs 5 and 6 above, (i) allocate Placing Shares after the time of any initial allocation to any person submitting a bid after that time and (ii) allocate Placing Shares after the Bookbuilding has closed to any person submitting a bid after that time.

A bid in the Bookbuilding will be made on the terms and subject to the conditions in this announcement and will be legally binding on the Placee on behalf of which it is made and except with the relevant Joint Bookrunner's consent will not be capable of variation or revocation after the time at which it is submitted. Each Placee will also have an immediate, separate, irrevocable and binding obligation, owed to the relevant Joint Bookrunner, to pay it (or as it may direct) in cleared funds an amount equal to the product of the Placing Price and the number of Placing Shares such Placee has agreed to acquire. Each Placee's obligations will be owed to the Company and to the relevant Joint Bookrunner.

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

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

All obligations under the Bookbuilding and Placing will be subject to fulfilment of the conditions referred to below under "Conditions of the Placing and termination rights under the Placing Agreement" and to the Placing not being terminated on the basis referred to in such section below.

By participating in the Bookbuilding, each Placee will agree that its rights and obligations in respect of the Placing will terminate only in the circumstances described below and will not be capable of rescission or termination by the Placee.

To the fullest extent permissible by law, none of the Joint Bookrunners, any of their respective affiliates or any person acting on its or their behalf shall have any responsibility or liability to Placees (or to any other person, whether acting on behalf of a Placee or otherwise). In particular, none of the Joint Bookrunners, any of their respective affiliates or any person acting on its or their behalf shall have any responsibility or liability (including to the extent permissible by law, any fiduciary duties) in respect of the Joint Bookrunners' conduct of the Bookbuilding or of any alternative method of effecting the Placing as the Joint Bookrunners and the Company may determine.

Conditions of the Placing and termination rights under the Placing Agreement

The Joint Bookrunners' obligations under the Placing Agreement in respect of the Placing Shares are conditional on, inter alia:

If (i) any of the conditions contained in the Placing Agreement in relation to the Placing Shares is not fulfilled or waived by the Joint Bookrunners by the respective times or dates specified (or such later time and/or date as the Company and the Banks may agree) in accordance with the Placing Agreement or (ii) the Placing Agreement is terminated (see below), the Placing in relation to the Placing Shares will lapse 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 it in respect thereof.

The Joint Bookrunners may, at their discretion and upon such terms as they think fit, waive compliance by the Company with the whole or any part of any of the Company's obligations in relation to the conditions in the Placing Agreement save that the above condition (a) relating to Admission occurring may not be waived. Any such extension or waiver will not affect Placees' commitments as set out in this announcement.

The Joint Bookrunners are entitled, at any time before Admission, to terminate the Placing Agreement by giving notice to the Company in certain circumstances, including, but not limited to, a breach of the warranties given to the Joint Bookrunners in the Placing Agreement, a breach by the Company of any of its obligations under the Placing Agreement, which breach, in each case, is in the opinion of any Bank (acting in good faith) material in the context of the Company, the Company's group taken as a whole, the Placing or Admission, the occurrence of, in the opinion of any Bank (acting in good faith), a material adverse effect or the withdrawal of refusal by the FSA or the London Stock Exchange of the application of the Company for Admission.

By participating in the Placing, Placees agree that the exercise by any Bank of any right of termination or other right or discretion under the Placing Agreement (including in respect of any decision it may make as to whether or not to waive or to extend the time and/ or date for the satisfaction of any condition to the Placing or as to the satisfaction of any condition or in respect of the Placing generally) shall be within the absolute discretion of that Bank, and that in determining whether or how to exercise any such right or discretion each Bank shall be entitled to act in furtherance of its own interests and need not make any reference to Placees or otherwise take their interests into account and that no Bank shall have any responsibility or liability to Placees whatsoever in connection with any such determination or exercise.

No Prospectus

No offering document or prospectus has been or will be submitted to be approved by the FSA in relation to the Placing and Placees' commitments will be made solely on the basis of the information contained in this announcement and any information previously published by the Company by notification to a Regulatory Information Service, such information being all that such Placee deems necessary to make an investment decision in respect of the Placing Shares. In particular, each Placee, by accepting a participation in the Placing, acknowledges that this announcement does not contain information that would be required to be included in a prospectus approved by the FSA and that no financial or other information has been provided in respect of the Company other than what is contained in this announcement. Each Placee, by accepting a participation in the Placing, agrees that the content of this announcement is exclusively the responsibility of the Company and confirms that it has neither received nor relied on any other information, representation, warranty, or statement made by or on behalf of the Company or the Joint Bookrunners or any other person and none of the Joint Bookrunners, the Company, their respective affiliates or any person acting on its or their behalf, or any other person will be responsible or 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 the liability of any person for fraudulent misrepresentation.

Registration and Settlement

Settlement of transactions in the Placing Shares (ISIN: GB00B1FW5029) following Admission will take place within the CREST system, subject to certain exceptions. The Joint Bookrunners reserve the right to require settlement for and delivery of the Placing Shares (or any portion thereof) to Placees by such other means (including delivering the Placing Shares, or any portion thereof, in certificated form) that they deem necessary if delivery or settlement is not possible or practicable within the CREST system within the timetable set out in this announcement 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 trade confirmation in accordance with standing arrangements in place with the relevant Joint Bookrunner stating the number of Placing Shares allocated to it at the Placing Price, the aggregate amount owed by such Placee to the relevant Joint Bookrunner and settlement instructions. Each Placee agrees that it will do all things necessary to ensure that delivery and payment is completed in accordance with either the standing CREST or certificated settlement instructions that it has in place with the relevant Joint Bookrunner.

It is expected that settlement will be on 12 October 2009 on a T+3 basis in accordance with the instructions set out in the trade confirmation. 

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

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

If Placing Shares are to be delivered to a custodian or settlement agent, Placees should ensure that the trade confirmation is copied and delivered immediately to the relevant person within that organisation.

Insofar as Placing Shares are registered in a Placee's name or that of its nominee or in the name of any person for whom a Placee is contracting as agent or that of a nominee for such person, such Placing Shares should, subject as provided below, be so registered free from any liability to UK stamp duty or stamp duty reserve tax.

ENDMSCEADEXEDENFFE