Itm Power Regulatory News (ITM)

The information contained in this announcement is inside information for the purposes of article 7 of Regulation (EU) 596/2014.

NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES OF AMERICA (INCLUDING ITS TERRITORIES AND POSSESSIONS, ANY STATE OF THE UNITED STATES AND THE DISTRICT OF COLUMBIA) (THE UNITED STATES), AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA, THE REPUBLIC OF IRELAND OR ANY OTHER JURISDICTION WHERE IT IS UNLAWFUL TO RELEASE, PUBLISH OR DISTRIBUTE THIS ANNOUNCEMENT.

3 October 2019

ITM POWER PLC

Total fundraising of at least £52m

(i) a strategic investment of £38m by Linde

(ii) a proposed Firm Placing of £14m, and

(iii) an Open Offer of up to c£6.8m,

 each at 40 pence per share

Entry into new 50/50 Joint Venture with Linde AG

ITM Power plc (AIM: ITM) (ITM Power or the Group) is pleased to announce its intention to raise at least £52.0 million (before expenses) through (i) a strategic investment of £38.0 million at 40 pence per share by Linde UK Holdings No. 2 Limited, a member of the Linde AG group (Linde) (the Share Subscription); and (ii) a conditional placing of £14.0 million at 40 pence per share (the Firm Placed Shares) with certain existing and new institutional investors (the Firm Placing).

The Group has also entered into a 50/50 joint venture with Linde (the Joint Venture) which will focus on delivering green hydrogen to large scale industrial projects, principally those with an installed electrolyser capacity of 10 Megawatts ("MW") and above.

In addition to the Firm Placing and the Share Subscription, the Group intends to raise up to c.£6.8 million through an Open Offer (the Open Offer) of 17,053,126 New Ordinary Shares at 40 pence per share (the Open Offer Shares).

The net proceeds of the fundraising will be used principally to enhance the manufacturing capabilities of the Group, particularly for the development and production of large scale 5MW electrolysers, to facilitate product standardisation and manufacturing cost reduction, to fund its initial financial contribution to the Joint Venture, and provide working capital and balance sheet strength to support the delivery of the contract backlog and opportunity pipeline.

The Group has also today published its results for the year ended 30 April 2019 in a separate announcement.

Highlights of the conditional Share Subscription, the Firm Placing, the Open Offer and Joint Venture

·; ITM Power intends to raise a minimum of £52.0 million pursuant to the conditional Share Subscription, the Firm Placing and the Open Offer at a price of 40 pence per New Ordinary Share (the Issue Price).

·; Strategic investment of £38.0m by Linde, a world leader in industrial gases and engineering, via a Share Subscription for 95,000,000 New Ordinary Shares at the Issue price. On completion, Linde will hold approximately 20% of the Group's enlarged share capital.

·; Formation of the Joint Venture alongside Linde's strategic investment. The Joint Venture will focus on delivering green hydrogen to large scale industrial projects (generally being opportunities with installed electrolyser capacities of 10 Megawatts and above).

·; It is intended that Linde will appoint a Non-Executive Director to the Board of ITM Power following completion of the Share Subscription.

·; The Issue Price represents a discount of approximately 7.0 per cent to the closing mid-market price of an Existing Ordinary Share on 2 October 2019, being the latest practicable date prior to the publication of this announcement.

·; The Firm Placing is being conducted, subject to the satisfaction of certain conditions, on ITM Power's behalf by Investec Bank plc (Investec). The Firm Placing and the Open Offer are not being underwritten by Investec.

·; The Share Subscription, the Firm Placing and the Open Offer are inter-conditional. In particular, they are conditional on (amongst other things): (i) the passing by the requisite majority of Shareholders of resolutions to grant authorities to Directors to allot further shares for cash on a non-pre-emptive basis; and (ii) admission of the New Ordinary Shares to trading on AIM on or before 8.00 a.m. on 23 October 2019 (or such later time and/or date as may be agreed between the Group and Investec) (Admission).

·; The net proceeds of the Share Subscription, the Firm Placing and the Open Offer (expected to be a minimum of approximately £50.8 million) will be utilised by the Group to facilitate the Group's move to its new, larger Bessemer Park facility in Sheffield with an annual production capacity of over 1000 MW per annum, fund and resource development of a 5MW electrolyser module, enhance product standardisation, meet initial funding requirements for the Joint Venture and to provide working capital to support (among other things) the delivery of the contract backlog and opportunity pipeline and to strengthen the Group's balance sheet.

The Group announced its final results for the year to 30 April 2019 on 3 October 2019. A copy of the final results will be available on the Group's website at www.itm-power.com.

The Group expects to publish a circular in connection with the Firm Placing, the Open Offer and the Share Subscription in the coming days. Shareholders should read the Circular and the Group's full year results in full before making any application for Open Offer Shares.

Graham Cooley, Chief Executive Officer of ITM Power plc, said:

"The major strategic investment from Linde cements a five year relationship between us and provides ITM Power with a world leading partner that brings deep expertise in engineering, procurement and construction and a global customer base. The joint venture will enable us to focus on our core competency of the development and sale of electrolysers, and with Linde as our partner to deliver green hydrogen at scale, The successful fundraising provides the financial resources to exploit this exciting opportunity to the full.

"We are seeing increasing global demand for hydrogen as a solution to renewable energy storage needs and the decarbonisation of major industrial processes. The fundraising and our partnership with Linde will help us to meet this demand on a growing scale, deliver efficiencies throughout our supply chain and represents a significant step on our pathway to medium-term profitability"

Enquiries:

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

Background to and reasons for the Firm Placing, Share Subscription, the Open Offer and use of proceeds

The Group is seeing a considerable expansion in each of its end-markets. This is being driven by the improving economics and output of renewable power generation, alongside the growing commercial and regulatory focus on decarbonisation of energy intensive industrial processes. These trends are driving an increasing demand for the provision of green hydrogen at scale and the Group is in discussions over a number of proposals to deliver projects of 100 Megawatts and above, particularly in the power to gas and renewable chemistry markets.

Linde Minority Share Investment into ITM Power and Joint Venture between ITM Power and Linde

The Group has entered into an agreement with Linde to establish a 50/50 Joint Venture through the formation of a new vehicle. The objective of the Joint Venture is to enable the acceleration of large scale green hydrogen plant construction.

Linde is a leading industrial gases and engineering company with 2018 pro forma sales of USD 28 billion (EUR 24 billion). The company employs approximately 80,000 people globally and serves customers in more than 100 countries worldwide.

The Directors expect Linde's size and global reach to significantly increase the ability of the Group to offer cost-competitive electrolysis products and systems in key markets, as well as to provide new opportunities through the Joint Venture's access to Linde's global customer base, and project delivery expertise. It is expected that these factors will materially increase the Group's volume of electrolyser sales. This is a key driver in the Group's ambition to continue the cost reduction and increase competitiveness.

The Group and Linde have enjoyed for several years a successful collaboration on hydrogen projects and the Joint Venture is believed by the Directors to represent an important step in the Group's development of the business and significantly enhancing the Group's capability to offer and efficiently deliver electrolysers for large-scale projects.

With the Joint Venture, the Group and Linde plan to primarily serve the refinery market, among others, with electrolysis-based hydrogen and green gases solutions, and jointly offer to customers feasibility studies, project development and EPC services. The Group will contribute with its electrolysis competences and supplies, and Linde will contribute with its proprietary technologies for gas separation and gas processing and its global project realization competencies.

The Directors believe that by combining Linde's world-leading experience with the Group's continued developments in delivery of PEM electrolyser technology at increasing scale with the Joint Venture, the Group will be uniquely placed to deliver large-scale and complex gas production projects to industrial customers. In particular the Joint Venture will enable the Group and Linde to combine ITM Power's expertise in Polymer Electrolyte Membrane ("PEM") electrolysis with Linde's successful global project realization experience in gases production and processing facilities. The Joint Venture is expected to significantly increase the ability of the Group to access complex large-scale projects and solutions with its electrolysis technology, which require project delivery and site integration.

Through the Joint Venture, the Group is expected to be in an improved position to accelerate the process of converting large-scale opportunities into sales, as well as to reduce project lead times and improve execution through dedicated and experienced resources across both electrolysis and project delivery / site integration requirements. The increased manufacturing capacity of the Group, together with Linde's engineering, procurement and construction management resources through the Joint Venture, is expected to further increase the volume of projects which can be delivered in parallel, driving an associated cost reduction which is expected to increase the Group's competitiveness.

Under the terms of the agreement, the Joint Venture will see an innovation management council created with equal representation from both ITM Power and Linde, with the target to determine measures to enhance the value propositions and competitive edge. The Joint Venture will be set up to include personnel from both organisations to leverage the depth of expertise from both the Group and Linde.

Move to Bessemer Park

The Group has an agreement for lease on a new 134,000 square foot facility at Bessemer Park in Sheffield. The facility is currently being developed in line with the Group's requirements and is expected to have an annual production capacity sufficient for the manufacture of over 1000 MW of electrolysers per annum, making the facility the world's largest PEM electrolyser manufacturing plant currently in development.

The facility is intended to be used for product assembly, stack manufacturing and development and testing of the Group's proposed 5MW stack module and will address capacity constraints that the Group currently experiences in its existing facilities, including limited power sources. The Bessemer Park site will also have a marketing area and office space for more than 100 employees. Current expectations are that occupation of administrative offices will commence in Spring 2020 and that manufacturing will commence in the summer of 2020.

The Directors expect the move to Bessemer Park will facilitate a number of advantages in addition to the increased manufacturing capacity, including semi-automation of manufacturing processes and a larger 5MW grid connection, to contribute to the Group's strategy of delivering increased system sizes for larger projects.

Continued Product Development

The Directors' immediate objective in terms of product development is to continue to focus on the scale up of proven electrolysis equipment, targeting penetration of larger markets. The Directors believe this approach to be a direct response to market demand from sales enquiries, trade fairs and marketing events and the large scale tender opportunities presenting in the market at present. To achieve this, the Group is pursuing the development of a 5MW 2-stack module which is scaleable for those projects of up to and beyond 100MW capacity that are increasingly being tendered. Product development, and in particular upscaling of product offering, is further supported through the Group's participation in large-scale feasibility studies, such as the 100MW Centurion project and the Gigastack feasibility study with Orsted.

The Group's provisional specifications for the 5MW module indicate that it will be capable of generating 2.1 tonnes of hydrogen per day, and the Group's current internal development timetable anticipates that first hydrogen from a 5MW module will be generated in the final quarter of 2020. The design of the 5MW module is intended to improve design integration techniques in order to reduce balance of plant costs on larger projects, and is further indicative of the Group's drive for continuous product improvement and cost reduction.

Cash Position and Requirements

As at 30 April 2019, the Group reported total financial assets of c£19.8m, of which c£5.2m is cash, c£1.7m is cash on guarantee and the remaining £12.9m is deployed working capital (debtors less creditors).

To manage working capital demands and to mitigate the impact of existing projects with cash receipts towards the end of the contractual agreement, the Group is seeking a move towards quoting for potential sales with upfront payment terms, thus reducing the initial working capital outlay of such commercial projects. On certain projects, working capital is also enhanced through working with, and receiving support from, partners on the development of technology.

Cash flow remains a key consideration for the Board, and the presiding financial objective for the Group is the achievement of a positive cash flow in the medium term.

Use of Proceeds

The Directors intend to use the proceeds of the Firm Placing, the Open Offer and the Share Subscription to:

·; facilitate the Group's move to new larger facilities at Bessemer Park in Sheffield, which will consolidate the Group's two current sites and is expected to facilitate annual production capacity of over 1000MW. This would include installation of an enlarged grid connection with a capacity of 5MW, in order to be able to test larger scale electrolysers, as well as development of semi-automated manufacturing processes to enable cost reduction;

·; fund and resource the Group's development of a 5MW electrolyser module, which is seen by the Directors as a key opportunity to increase the scale of projects which the Group is capable of delivering on a competitive basis, along with further product development focusing on the delivery of electrolyser systems;

·; to meet requirements for the funding of the Joint Venture referred to above, which is expected to be an initial £2million; and

·; provide working capital to support (among other things) the delivery of the contract backlog and opportunity pipeline, to strengthen the Group's balance sheet, to assist in meeting tender requirements and to improve contractual terms offered by customers and suppliers, in particular with regard to obtaining improved upfront payment terms from customers and suppliers;

Backlog and Pipeline

As at the beginning of September 2019, the Group had c.£17.1 million of existing projects under contract and a further c.£16.1 million in the later stages of negotiation (c.£33.2 million in total). In addition, the Group has a qualified opportunity pipeline of c.£379 million of commercial sales, which consists of over 50 separate projects, across all three end markets, Renewable Chemistry, Power-to-Gas Storage and Clean Fuel.

For each of the projects qualified within this figure, the Group has been engaged to provide a written proposal within the past 12 months, the client is understood to remain actively interested in pursuing the project, and the Directors believe the client has the financial means and the ambition to implement the project in the medium term. The majority of these projects, both under contract or negotiation and in the qualified pipeline, provide for a portion of the project cost to be paid by the client to the relevant member of the Group up front, with the corresponding balance of the income typically received towards the end of the contract. This results in a working capital shortfall during the middle and later stages of the contract term, when cash is used in the build phase as well as final commissioning and user testing. The Board is also of the opinion that to bid effectively for the increasing number of larger scale projects it is important that the Group can demonstrate a robust balance sheet and financial condition.

Details of the Firm Placing, the Open Offer and the Share Subscription

Structure

The Directors have given careful consideration as to the structure of the proposed fundraising and have concluded that the Firm Placing, the Open Offer and the Share Subscription is the most suitable option available to the Group and its Shareholders at this time.

It is intended that 35,000,000 Firm Placed Shares will be issued through the Firm Placing at 40 pence per New Ordinary Share to raise gross proceeds of £14.0 million. Up to 17,053,126 New Ordinary Shares will be issued through the Open Offer at 40 pence per New Ordinary Share to raise gross proceeds of up to approximately £6.8 million.

Principal terms of the Firm Placing

The Group is proposing to issue 35,000,000 Firm Placed Shares pursuant to the Firm Placing. In accordance with the terms of the Firm Placing and Open Offer Agreement, Investec has agreed to use reasonable endeavours to procure placees for the Firm Placing Shares at the Placing Price.

The Firm Placing is not being underwritten.

Dr. Graham Cooley, Robert Putnam, Sir Roger Bone and Martin Green have undertaken to subscribe for, in aggregate, 265,000 Firm Placed Shares in the Firm Placing at a price of 40 pence per New Ordinary Share, as set out below.

The Firm Placed Shares are not subject to clawback and are not part of the Open Offer.

Under the Firm Placing and Open Offer Agreement, the Group has agreed to pay to Investec a fixed sum together with a commission based on the aggregate value of certain of the Firm Placed Shares placed at the Issue Price and the costs and expenses of the Firm Placing together with any applicable VAT.

Principal terms of the Open Offer

The Board considers it important that Qualifying Shareholders have the opportunity to participate in the fundraising, and the Directors have concluded that the Open Offer is the most suitable option available to the Group and its Shareholders.

The Open Offer provides an opportunity for all Qualifying Shareholders to participate in the fundraising by both subscribing for their respective Basic Entitlements and by subscribing for Excess Shares under the Excess Application Facility, subject to availability.

Pursuant to the Open Offer, Qualifying Shareholders will be given the opportunity to subscribe for 1 Open Offer Share for every 19 Existing Ordinary Shares held on the Record Date.

The Open Offer will raise gross proceeds of up to approximately £6.8 million.

The Issue Price represents a 7.0 per cent. discount to the Closing Price of 43 pence per Ordinary Share on the Latest Practicable Date.

Basic Entitlement

Qualifying Shareholders will be invited, on and subject to the terms and conditions of the Open Offer, to apply for any number of Open Offer Shares (subject to the limit on the number of Excess Shares that can be applied for using the Excess Application Facility) at the Issue Price. Qualifying Shareholders have a Basic Entitlement of:

1 Open Offer Share for every 19 Existing Ordinary Shares

registered in the name of the relevant Qualifying Shareholder on the Record Date.

Basic Entitlements under the Open Offer will be rounded down to the nearest whole number and any fractional entitlements to Open Offer Shares will be disregarded in calculating Basic Entitlements and will be aggregated and made available to Qualifying Shareholders under the Excess Application Facility.

The aggregate number of Open Offer Shares available for subscription pursuant to the Open Offer will not exceed 17,053,126 New Ordinary Shares.

Principal terms of the conditional Share Subscription

Pursuant to a subscription agreement dated on or about the date of this announcement, Linde UK Holdings No.2 Limited has agreed to subscribe for 95,000,000 New Ordinary Shares at a price of 40 pence per New Ordinary Share, raising £38.0m before expenses. The Share Subscription is conditional on (amongst other things):

(a) the Firm Placing and Open Offer Agreement having not lapsed or been terminated in accordance with its terms and the Open Offer Shares and the Firm Placed Shares having been admitted to trading on AIM in accordance with the AIM Rules;

(b) the Group successfully raising, pursuant to the Share Subscription, the Firm Placing and the Open Offer, an amount which equals not less than £52,000,000 and not more than £59,000,000;

(c) the New Ordinary Shares issued pursuant to the Share Subscription representing not less than 20% of the Enlarged Share Capital of the Group; and

(d) admission of the Subscription Shares occurring no later than 8.00 am on the date on which Admission occurs.

Pursuant to the Subscription Agreement:

(a) Linde will have the right, following completion of the Share Subscription and for so long as it holds at least 10 per cent of the issued ordinary share capital of the Group, to appoint a non-executive director to the Board;

(b) following completion of the Share Subscription, the Group will establish a technology management committee which will be responsible for setting the direction of product innovation for the Group, which committee will be chaired by the non-executive director appointed by Linde; and

(c) Linde has agreed, other than in certain limited circumstances, not to sell any of the Subscription Shares for a period of 12 months following completion of the Share Subscription or acquire shares which would increase Linde's shareholding to more than 29.99% of the Group's issued ordinary share capital.

Conditionality

The Firm Placing, the Share Subscription and the Open Offer are conditional, among other things, upon the following:

(a) the passing, without amendment, of the Resolutions at the General Meeting;

(b) Admission occurring by no later than 8.00 a.m. on 23 October 2019 (or such later time and/or date as may be agreed between the Group and Investec, being no later than 8.00 a.m. on 1 November 2019); and

(c) the Firm Placing and Open Offer Agreement and the Subscription Agreement becoming unconditional in all respects and not having been terminated in accordance with their terms.

If the conditions set out above are not satisfied or waived (where capable of waiver), the Firm Placing, the Share Subscription and the Open Offer will lapse; and

(a) the Firm Placed Shares will not be issued and all monies received from investors in respect of the Firm Placed Shares will be returned to them (at the investors' risk and without interest) as soon as possible thereafter; and

(b) any Basic Entitlements and Excess CREST Open Offer Entitlements admitted to CREST will, after that time and date, be disabled and application monies under the Open Offer will be refunded to the applicants, by cheque (at the applicant's risk) in the case of Qualifying Non-CREST Shareholders and by way of a CREST payment in the case of Qualifying CREST Shareholders, without interest, as soon as practicable thereafter.

Application for Admission

Application will be made to the London Stock Exchange for the New Ordinary Shares to be admitted to trading on AIM. Admission is expected to take place, and dealings on AIM are expected to commence, at 8.00 a.m. on 23 October 2019 (or such later time and/or date as may be agreed between the Group and Investec, being no later than 8.00 a.m. on 1 November 2019). No temporary document of title will be issued.

The New Ordinary Shares will, following Admission, rank pari passu in all respects with the Existing Ordinary Shares and will carry the right to receive all dividends and distributions declared, made or paid on or in respect of the Ordinary Shares after Admission.

Effect of the Firm Placing and the Open Offer

Upon completion of the Firm Placing, the Open Offer and the Share Subscription, the New Ordinary Shares will represent approximately 31.2 per cent. of the Enlarged Share Capital (assuming the Open Offer is subscribed in full).

Total voting rights

Following Admission, the Group will have a total of 471,062,527 Ordinary Shares in issue (assuming the Open Offer is subscribed in full). With effect from Admission, this figure may (assuming the Open Offer is subscribed in full) be used by shareholders 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 Group, under the Disclosure Guidance and Transparency Rules of the Financial Conduct Authority.

Intentions of the Directors in relation to the Firm Placing

The following participants intend to subscribe for an aggregate of 265,000 Firm Placed Shares as set out below:

Irrevocable voting commitments from certain Directors

Directors, who in aggregate hold 1,691,182 Existing Ordinary Shares, representing approximately 0.52% per cent. of the Existing Issued Share Capital, have irrevocably undertaken to vote (and where such Existing Ordinary Shares are registered in the name of any other persons have irrevocably undertaken to use reasonable endeavours to procure that those persons will vote) in favour of the Resolutions at the General Meeting.

General Meeting and Circular to Shareholders

A General Meeting of the Group is planned to be held at 11.00 a.m. on 22 October 2019, at the offices of Burges Salmon LLP, 6 New Street Square, London, EC4A 3BF. The General Meeting is being held for the purpose of considering and, if thought fit, passing the Resolutions in order to approve the Firm Placing, the Open Offer and the Share Subscription.

A summary and explanation of the Resolutions will be set out in the Circular to be sent out shortly.

Important information

This announcement is for information purposes only and does not purport to be full or complete. No reliance may be placed for any purpose on the information contained in this announcement or its accuracy or completeness.

This announcement does not itself constitute an offer or invitation to underwrite, subscribe for or otherwise acquire or dispose of any securities in the Group and does not constitute investment advice.

Neither this announcement nor any copy of it may be taken or transmitted, published, distributed, reproduced or otherwise made available, in whole or in part, directly or indirectly, for any purpose whatsoever, into the United States, Australia, Canada, Japan, the Republic of South Africa, the Republic of Ireland or to any persons in any of those jurisdictions or any other jurisdiction where to do so would constitute a violation of the relevant securities laws of such jurisdiction. Any failure to comply with this restriction may constitute a violation of United States, Australian, Canadian, Japanese, South African or Irish securities laws. The distribution of this announcement in other jurisdictions may be restricted by law and persons into whose possession this announcement comes should inform themselves about, and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the laws of the relevant jurisdiction.

This announcement does not constitute, or form part of, any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for any Ordinary Shares or other securities in the Group.

This announcement is restricted and may not be released, published or distributed in the United States, Australia, Canada, Japan, the Republic of South Africa, the Republic of Ireland or in any jurisdiction to whom or in which such offer or solicitation is unlawful. The Firm Placing, the Open Offer and the Share Subscription and the distribution of this announcement and other information in connection with the Firm Placing, the Open Offer and the Share Subscription in certain jurisdictions may be restricted by law and persons into whose possession this announcement, any document or other information referred to herein, comes should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction. Neither this announcement nor any part of it nor the fact of its distribution shall form the basis of or be relied on in connection with or act as an inducement to enter into any contract or commitment whatsoever.

In particular, the securities of the Group (including the Firm Placed Shares, the Open Offer Shares and the Subscription Shares) have not been and will not be registered under the US 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 accordingly the Firm Placed Shares, the Open Offer Shares and the Subscription Shares may not be offered, sold, pledged or transferred, directly or indirectly, in, into or 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 the securities laws of any relevant state or jurisdiction of the United States. There is no intention to register any portion of the offering in the United States or to conduct a public offering of securities in the United States.

The Firm Placed Shares, the Open Offer Shares and the Subscription 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 Firm Placing, the Open Offer and the Share Subscription or the accuracy or adequacy of this announcement. Any representation to the contrary is a criminal offence in the United States.

Investec, which is authorised by the Prudential Regulation Authority and regulated in the United Kingdom by the FCA and the Prudential Regulation Authority, is acting as Nominated Adviser, Financial Adviser and Broker to the Group in respect of the Firm Placing. Investec is acting exclusively for the Group and for no-one else in connection with the Firm Placing and the matters referred to herein, and will not be treating any other person as its client, in relation thereto and will not be responsible for providing the regulatory protections afforded to its customers nor for providing advice in connection with the Firm Placing or any other matters referred to herein. Apart from the responsibilities and liabilities (if any) imposed on Investec, as the case may be, by the Financial Services and Markets Act 2000 (as amended) or any regulatory regime established thereunder, Investec does not make any representation express or implied in relation to, nor accepts any responsibility whatsoever for, the contents of this announcement, the Circular, or any other statement made or purported to be made by it or on its behalf in connection with the Group or the matters referred to herein. Investec (and its affiliates) accordingly, to the fullest extent permissible by law, disclaims any and all liability (save for statutory liability) whether arising in tort, contract or otherwise which it might have in respect of the contents of this this announcement or any other statement made or purported to be made by it or on its behalf in connection with the Group or the matters referred to herein. Any other person in receipt of this announcement should seek their own independent legal, investment and tax advice as they see fit.

All offers of the Firm Placed Shares, the Open Offer Shares and the Subscription Shares in the EEA will be made pursuant to an exemption under the Prospectus Regulation (2017/1129) from the requirement to produce a prospectus.

Forward-looking statements

Certain information contained in this announcement constitute forward looking information. This information relates to future events or occurrences or the Group and/or the Group's future performance. All information other than information of historical fact is forward looking information. The use of any of the words "anticipate", "plan", "continue", "estimate", "expect", "may", "will", "project", "should", "believe", "predict" and "potential" and similar expressions are intended to identify forward looking information. This information involves known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward looking information. No assurance can be given that this information will prove to be correct and such forward looking information included in this announcement should not be relied upon. Forward-looking information speaks only as of the date of this announcement.

The forward looking information included in this announcement is expressly qualified by this cautionary statement and is made as of the date of this announcement. The Group does not undertake any obligation to publicly update or revise any forward looking information except as required by applicable securities laws.

Information to distributors

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 Firm Placed Shares, the Open Offer Shares and the Subscription Shares have been subject to a product approval process, which has determined that the Firm Placed Shares, the Open Offer Shares and the Subscription 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, 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 appropriate resources to be able to bear any losses that may result therefrom; 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 Firm Placed Shares, the Open Offer Shares and the Subscription Shares may decline and investors could lose all or part of their investment; the Firm Placed Shares, the Open Offer Shares and the Subscription Shares offer no guaranteed income and no capital protection; and an investment in the Firm Placed Shares, the Open Offer Shares and the Subscription 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 appropriate 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 Firm Placing, the Open Offer and Share Subscription. Furthermore, it is noted that, notwithstanding the Target Market Assessment Investec 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 Firm Placed Shares, the Open Offer Shares and the Subscription Shares.

Each distributor is responsible for undertaking its own target market assessment in respect of the Firm Placed Shares, the Open Offer Shares and the Subscription Shares and determining appropriate distribution channels.

DEFINITIONS

The following definitions apply throughout this announcement unless the context otherwise requires: