Helios Underw Regulatory News (HUW)

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA, THE REPUBLIC OF IRELAND, NEW ZEALAND OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.

THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT CONSTITUTE OR CONTAIN ANY INVITATION, SOLICITATION, RECOMMENDATION, OFFER OR ADVICE TO ANY PERSON TO SUBSCRIBE FOR, OTHERWISE ACQUIRE OR DISPOSE OF ANY SECURITIES IN HELIOS UNDERWRITING PLC OR ANY OTHER ENTITY IN ANY JURISDICTION. NEITHER THIS ANNOUNCEMENT NOR THE FACT OF ITS DISTRIBUTION, SHALL FORM THE BASIS OF, OR BE RELIED ON IN CONNECTION WITH ANY INVESTMENT DECISION IN RESPECT OF HELIOS UNDERWRITING PLC.

MEMBERS OF THE PUBLIC SHALL NOT BE ELIGIBLE TO TAKE PART IN THE PROPOSED FUNDRASING, WHICH IS TO BE LIMITED TO PERSONS WHO: (i) HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS WITHIN THE MEANING OF ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 (THE "ORDER"); OR (ii) ARE PERSONS WITHIN ARTICLE 49(2)(A) TO (D) ("HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS ETC.") OF THE ORDER; OR (iii) ARE PERSONS WITHIN ARTICLE 50 ("SOPHISTICATED INVESTORS") OF THE ORDER; OR (iv) ARE PERSONS WITHIN ARTICLE 51 ("ASSOCIATIONS OF HIGH NET WORTH OR SOPHISTICATED INVESTORS") OF THE ORDER; OR (v) ARE PERSONS WHO MIGHT OTHERWISE BE LAWFULLY ENTITLED TO PARTICIPATE IN THE FUNDRAISING. 

FOR IMMEDIATE RELEASE

7 October 2020

Helios Underwriting plc

("Helios" or the "Company")

Proposed Fundraising

Further to its announcement of 10 August 2020 (the "Announcement"), Helios, the unique investment vehicle which acquires and consolidates underwriting capacity at Lloyd's, confirms that the Board is considering a fundraising to raise £20.0 million through the issue of new ordinary shares in the Company ("New Shares") to take advantage of the attractive opportunities for growth and shareholder value enhancement in the hardening market (the "Fundraising"). The Company currently has indications of interest for the substantial part of the Fundraising, including sizeable orders from insurance specialist institutional investors.

The discussions with potential investors have crystallised around an issue price of 120 pence per share ("Issue Price"), being a discount of approximately 42 per cent. to adjusted net asset value ("ANAV"), but a premium of approximately 25 per cent. to the closing mid-market price on 6 October 2020. An issue at this price and to raise no more than £20 million will limit the dilution to existing shareholders' ANAV per share, whilst allowing the Company to raise the necessary firepower to finance the additional capital required to fund the increase in the Company's capacity from pre-emptions, make further LLV acquisitions, to increase Helios' retained capacity and to participate in upcoming capacity auctions. The Fundraising is expected to be subject to shareholder approval.

As part of the Fundraising, the Company intends to enter into conditional agreements with Nigel Hanbury, Chief Executive of the Company, and Arthur Manners, Chief Financial Officer of the Company, to acquire an LLV from each of them for a combined consideration of £5.5 million, being a 21 per cent. discount to their Humphrey valuation of approximately £7.0 million, expected to be satisfied by the allotment and issue of mainly New Shares (approximately £4.3 million) and some cash (approximately £1.0 million, after the repayment of an inter-company loan of approximately £1.2 million) at completion ("Acquisitions"). The Acquisitions are in-line with the Company's strategy to increase its underwriting capacity, but also enables Nigel Hanbury and Arthur Manners to continue to invest in the Company, within the context of the Fundraising, further aligning themselves with the Company's shareholders. The Acquisitions are expected to constitute related party transactions for the purpose of the AIM Rules and will require specific shareholder approval and a statement from Shore Capital, the Company's nominated adviser, as to the fairness and reasonableness of the terms of Acquisitions.

Discussions are ongoing and remain at an early stage and a further announcement will be made in due course. There can be no certainty that the Fundraising and Acquisitions will be completed, nor as to the terms on which it may be achieved.

Nigel Hanbury, Chief Executive of Helios, commented:

"We are most encouraged by the progress we have made on the potential fundraising thus far, and by the significant interest we have seen from well-known and respected insurance specialist institutions.

"We remain convinced that this is a period of unprecedented opportunity for Helios, with a hardening market coupled with the opportunities we see to increase capacity from pre-emptions, make further LLV acquisitions and participate in capacity auctions, all of which would be value enhancing for our shareholders."

Market soundings, as defined in the Market Abuse Regulation ("MAR"), have been taken in respect of the proposed Fundraising, with the result that certain persons became aware of inside information, as permitted by MAR. That inside information is set out in this announcement and has been disclosed as soon as possible in accordance with paragraph 7 of Article 17 of MAR.

For further information, please contact:

Helios Underwriting plc

Nigel Hanbury - Chief Executive 07787 530 404 / nigel.hanbury@huwplc.com

Arthur Manners - Chief Financial Officer 07754 965 917

Shore Capital

Robert Finlay 020 7408 4080

David Coaten

Henry Willcocks

Buchanan

Helen Tarbet / Henry Wilson / George Beale 07872 604 453

020 7466 5111

About Helios

Helios provides a limited liability direct investment into the Lloyd's insurance market and is quoted on the London Stock Exchange's AIM market (ticker: HUW). Helios trades within the Lloyd's insurance market writing approximately £70m of capacity for the 2020 account. The portfolio provides a good spread of business being concentrated in property insurance and reinsurance. For further information please visit www.huwplc.com.