11 Jun 2010 07:01
Origo Partners PLC
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES OF AMERICA, CANADA, JAPAN, AUSTRALIA, SOUTH AFRICA OR IN ANY OTHER JURISDICTION IN WHICH OFFERS OR SALES WOULD BE PROHIBITED BY APPLICABLE LAW
Proposed Placing of new ordinary shares of Origo Partners PLC
Origo Partners PLC ("Origo" or the "Company") announces today its intention to raise up to US$30 million by way of a placing of new ordinary shares (the "Placing") to both existing and new shareholders (the "Placees").
The net proceeds of the Placing are intended be used to fund a number of new, well-advanced investment opportunities in the Chinese clean-tech and agriculture sectors and in the Mongolian natural resources sector.
The Placing is being conducted, subject to the satisfaction of certain conditions, through an accelerated book-building process to be carried out by Liberum Capital Limited ("Liberum") which is acting as broker in relation to the Placing.
Indications of interest in participating in the Placing have already been received from existing shareholders and new investors for in excess of US$25 million, in aggregate, at an indicative issue price of 25 pence per new Ordinary Share (the "Placing Shares"). The number of Placing Shares and the price at which the Placing Shares are to be placed (the "Placing Price") will be determined at the close of the book-building process, and will be announced shortly thereafter. The identity of Placees and the basis of the allocations are at the discretion of the Company and Liberum.
The Placing Shares will be issued credited as fully paid and will rank pari passu with the existing Ordinary Shares, including the right to receive all dividends and other distributions declared in respect of such shares after the date of their issue. The Company will apply for admission of the Placing Shares to trading on AIM, a market of the London Stock Exchange ("Admission"). It is expected that Admission will take place and that trading will commence on 17 June 2010. The Placing is conditional upon, inter alia, Admission becoming effective.
The appendix to this announcement (the "Announcement"), which forms part of the Announcement, sets out further details of the Placing.
Use of Proceeds
The net proceeds of the Placing are intended to be used, in conjunction with the Company's existing cash resources, to fund investment opportunities amounting to approximately US$50 million, which are anticipated to be comprised as follows:
- seed investment of approximately US$10 million in the Origo China Sustainable Development Fund, the launch of which was announced on 23 April 2010;
- Mongolian mineral resource investment opportunities amounting to approximately US$ 20 million; and
- investment opportunities in the Chinese clean-tech and agriculture sectors amounting to approximately US$20 million.
Origo has already identified and progressed to an advanced stage a number of new investment opportunities. In addition to the intended investment in the Origo China Sustainable Development Fund, the Company has short listed 6 investment opportunities, the intended investment allocation to which totals US$40 million, each of which are either subject to conditional purchase agreements or term-sheets.
The Company currently has approximately US$20 million of cash at hand, deployment of which is intended to be phased to meet the Company's operating cash costs for the next 18 months.
Origo continues to work closely with its portfolio companies and explore selected divestments as well as value-creating financings. Cash from mid-term liquidity events is expected no earlier than the first half of 2011.
Background and Reasons for the Placing
Origo has decided to pursue this fundraising so it can capitalise on the significant investment opportunities it has developed during 2010. The Company's strategy is focused on progressing China-centric investment and business development opportunities which utilise its China-based team and China-specific skill sets, as well as capitalising on the Mongolia presence it has built up.
The intended formation of the Origo China Sustainable Development Fund, a RMB-denominated private equity fund to be managed by Origo, in partnership with the Xinxiang Municipal Government, is a significant, positive development. The fund, which is intended to be the first RMB fund in a new series of funds for Origo in the domestic Chinese market, will expand the Company's ability to gain exposure to China opportunities where the likely preferred exit is via the domestic stock markets. The proposed commitment by the Company of funds raised in the Placing to the Origo China Sustainable Development Fund is intended to ensure, along with an investment by the Xinxiang Municipal Government, that the fund will be seeded.
Origo has developed and expanded its Mongolian presence, since the Company's investment in Gobi Coal and Energy in November 2009, in order to take advantage of the opportunities in a largely unmapped country with significant resource potential geared towards meeting China's demand for natural resources. Origo's efforts in this respect have yielded current opportunities for direct investments, primarily in exploration-stage mining assets, as well as the potential to develop an investment banking advisory service and other new partnerships in Mongolia.
Results update
The Company will publish its results for the year ended 31 December 2009 by the end of June. It expects to report a net asset value per share as at 31 December 2009, taking into account any movements in fair value as of that date, of US$ 0.61 (equivalent to 41p, based on current exchange rates).
Origo Partners CEO, Chris Rynning commented, "The funds raised from the proposed Placing will enable Origo to launch its first RMB fund which will significantly enhance our platform for investing and realizing value on the Chinese Mainland. We will also be able to capture recent mining and clean technology opportunities in China and Mongolia which our team have identified and progressed."
Contacts:
| Origo Partners plc Chris Rynning (chris@origoplc.com) Niklas Ponnert (niklas@origoplc.com)
|
+86 1390 124 6417
+86 1351 106 1672 |
| Nominated Adviser and Broker Liberum Capital Limited Simon Atkinson
| +44 (0)20 3100 2222 |
| Public Relations Aura Financial Andy Mills / Nina Legge | +44 (0)20 7321 0000 |
About Origo Partners PLC:
Origo is an established private equity investor and strategic consultancy business, which provides its shareholders with exposure to growth opportunities and private equity returns based on the China growth story.
Origo's business model is to generate capital gains from private equity investment in growth companies from which it also generates fees for consultancy services related to further fundraisings, M&A and strategic development.
Origo has a significant portfolio of investments in a range of industrial sectors, including metals and mining, agriculture, renewable energy/clean tech and technology, telecom and media ("TMT").
IMPORTANT INFORMATION
This Announcement contains (or may contain) certain forward-looking statements with respect to certain of the Company's plans and its current goals and expectations relating to its future financial condition and performance and which involve a number of risks and uncertainties. The Company cautions readers that no forward-looking statement is a guarantee of future performance and that actual results could differ materially from those contained in the forward-looking statements. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements sometimes use words such as "aim", "anticipate", "target", "expect", "estimate", "intend", "plan", "goal", "believe", or other words of similar meaning. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances, including, but not limited to, economic and business conditions, the effects of continued volatility in credit markets, market-related risks such as changes in the price of commodities or changes in interest rates and foreign exchange rates, the policies and actions of governmental and regulatory authorities, changes in legislation, the further development of standards and interpretations under International Financial Reporting Standards ("IFRS") applicable to past, current and future periods, evolving practices with regard to the interpretation and application of standards under IFRS, the outcome of pending and future litigation or regulatory investigations, the success of future explorations, acquisitions and other strategic transactions and the impact of competition. A number of these factors are beyond the Company's control. As a result, the Company's actual future results may differ materially from the plans, goals, and expectations set forth in the Company's forward-looking statements. Any forward-looking statements made in this Announcement by or on behalf of the Company speak only as of the date they are made. Except as required by the Financial Services Authority (the "FSA"), the London Stock Exchange or applicable law, the Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained in this Announcement to reflect any changes in the Company's expectations with regard thereto or any changes in events, conditions or circumstances on which any such statement is based.
This Announcement is for information purposes only and shall not constitute an offer to buy, sell, issue, or subscribe for, or the solicitation of an offer to buy, sell, issue, or subscribe for any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
This Announcement has been issued by and is the sole responsibility of the Company. No representation or warranty, express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by Liberum 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.
Liberum, which is authorised and regulated in the United Kingdom by the FSA, is acting for the Company and for no-one else in connection with the Placing, and will not be responsible to anyone other than the Company for providing the protections afforded to its customers or for providing advice to any other person in relation to the Placing or any other matter referred to herein.
The distribution of this Announcement and the offering of the Placing Shares in certain jurisdictions may be restricted by law. No action has been taken by the Company or Liberum that would permit an offering of such shares or possession or distribution of this Announcement or any other offering or publicity material relating to such shares in any jurisdiction where action for that purpose is required. Persons into whose possession this Announcement comes are required by the Company and Liberum to inform themselves about, and to observe such restrictions.
MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THIS ANNOUNCEMENT (INCLUDING THE APPENDIX) IS FOR INFORMATION PURPOSES ONLY AND IS DIRECTED ONLY AT PERSONS WHO ARE: (A) (I) INVESTMENT PROFESSIONALS FALLING WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 (THE "ORDER"), OR (II) PERSONS FALLING WITHIN ARTICLE 49(2)(A) TO (D) ("HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC") OF THE ORDER, AND (B) (I) 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 (THE "PROSPECTUS DIRECTIVE")), AND/OR (II) PERSONS IN THE UNITED KINGDOM WHO ARE QUALIFIED INVESTORS OR (C) PERSONS TO WHOM IT MAY OTHERWISE BE LAWFULLY COMMUNICATED (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS"). THIS ANNOUNCEMENT (INCLUDING THE APPENDIX) MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS ANNOUNCEMENT (INCLUDING THE APPENDIX) RELATE IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. THIS ANNOUNCEMENT (INCLUDING THE APPENDIX) DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN THE COMPANY.
This Announcement, including the Appendix, is not for distribution directly or indirectly in or into the United States (including its territories and possessions, any State of the United States and the District of Columbia), Canada, Australia or Japan or any jurisdiction into which the same would be unlawful. This Announcement does not constitute or form part of an offer or solicitation to purchase or subscribe for shares in the capital of the Company in the United States, Canada, Australia or Japan or any jurisdiction in which such an offer or solicitation is unlawful. In particular, the Placing Shares referred to in this Announcement have not been, and will not be, registered under the Securities Act or under the securities legislation of any state of the United States, and may not be offered or sold in the United States absent registration or pursuant to an exemption from, or in a transaction not subject to, the registration requirements under the Securities Act. Subject to exceptions, the Placing Shares referred to in this Announcement are being offered and sold only outside the United States in accordance with Regulation S under the Securities Act.
The relevant clearances have not been, and 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, and nor will they be, registered under with the securities laws of any state, province or territory of Canada, Australia or
Japan. 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 or Japan or any other jurisdiction in which offers or sales would be prohibited by applicable law.
The Placing Shares have not been approved or disapproved by the US Securities and Exchange Commission, any State securities commission or any 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 unlawful.
Persons (including, without limitation, nominees and trustees) who have a contractual or other legal obligation to forward a copy of the Appendix or this Announcement should seek appropriate advice before taking any action.
The Placing Shares to which this Announcement relates may be illiquid and / or subject to restrictions on their resale. Prospective purchasers of the Placing Shares should conduct their own due diligence on the Placing Shares. If you do not understand the contents of this Announcement you should consult an authorised financial adviser.
Neither the content of the Company's website nor any website accessible by hyperlinks on the Company's website is incorporated in, or forms part of, this Announcement.
APPENDIX: DETAILS OF THE PLACING
Liberum has entered into a placing agreement with the Company (the "Placing Agreement") under which, on the terms and subject to the conditions set out therein, Liberum has agreed to use its reasonable endeavours to procure subscribers for the Placing Shares at a price determined by Liberum and the Company following completion of the bookbuilding process in respect of the Placing (the "Bookbuild"), described in this Announcement.
The Placing Shares will, when issued and conditional on Admission, be credited as fully paid and will rank pari passu in all respects with the existing Ordinary Shares including the right to receive all dividends and other distributions declared in respect of such Ordinary Shares after the date of their issue.
The Placing Shares have not been and will not be offered generally to existing shareholders whether on a pre-emptive basis or otherwise. The Company is of the view that the Placing should achieve a fundraising in a timescale that would not be possible if the Company sought to undertake a pre-emptive issue which would require a prospectus to be published and which would be much more costly, and which would, in its opinion, have presented greater uncertainty as to the Placing Price that was likely to be achieved. Subject to it completing, the Placing will enable the Company to proceed with the short listed investment opportunities referred to in the Announcement, whereas a delay in the availability of funds to the Company could result in some, if not all, of these opportunities no longer being available. For these reasons the Company is proposing the Placing.
Under the AIM Rules for Companies (the "AIM Rules") a non pre-emptive issue of shares to a related party which exceeds specified class tests (as defined in the AIM Rules) is subject to certain disclosure and other requirements. Due to its holding of over 10 per cent of the Company's current issued share capital, any participation in the Placing of Lansdowne Partners Limited (which has previously notified the Company that its holding was 47,180,000 Ordinary Shares, representing approximately 21.4 per cent. of the Company's current issued share capital) would be deemed a transaction with a related party under the AIM Rules. The directors of the Company consider, having consulted with Liberum Capital, the Company's nominated adviser, that the terms of the Placing are fair and reasonable insofar as the Company's shareholders are concerned.
The Company will apply for admission of the Placing Shares to trading on AIM, a market of the London Stock Exchange ("Admission"). It is expected that Admission will take place and that trading will commence on 17 June 2010. The Placing is conditional upon, inter alia, Admission becoming effective.
Bookbuild
Liberum will today commence the Bookbuild to determine demand for participation in the Placing by Placees. Liberum and the Company shall be entitled to effect the Placing by such alternative method to the Bookbuild as they may, in their sole discretion, determine.
Participation in the Placing will only be available to persons who may lawfully be, and are, invited to participate by Liberum. Liberum and its affiliates are each entitled to enter bids in the Bookbuild as principal.
The Bookbuild will establish a single Placing Price payable to Liberum by all Placees whose bids are successful. The Placing Price and the number of Placing Shares to be issued will be agreed between Liberum and the Company following completion of the Bookbuild.
Each prospective Placee's allocation will be agreed between Liberum and the Company and will be confirmed orally to each prospective Placee by Liberum as agent of the Company following the close of the Bookbuild. That oral confirmation will establish an irrevocable legally binding commitment upon that person (who will at that point become a Placee) to subscribe for the number of Placing Shares allocated to it at the Placing Price.
Liberum may choose to accept bids, either in whole or in part, on the basis of allocations determined in agreement with the Company and may scale down any bids for this purpose on such basis as they may determine.
Each Placee's allocation and commitment will subsequently be evidenced by a placing letter issued to such Placee by Liberum.
To the fullest extent permissible by law, neither Liberum nor any of its affiliates shall have any liability to Placees (or to any other person whether acting on behalf of a Placee or otherwise). In particular, neither Liberum nor any of its affiliates shall have any liability (including to the fullest extent permissible by law, any fiduciary duties) in respect of Liberum's conduct of the Bookbuild or of such alternative method of effecting the Placing as Liberum and the Company may agree.
Conditions of the Placing
The obligations of Liberum under the Placing Agreement are conditional on, amongst other things:
(a) agreement being reached between the Company and Liberum on the Placing Price and the number of Placing Shares;
(b) publication of a placing results announcement by no later than 7.00 a.m. on 14 June 2010 (or such other time and/or date as may be agreed between the Company and Liberum); and
(c) Admission taking place by 8.00 a.m. (London time) on 17 June 2010 (or such later date as the Company and Liberum may otherwise agree not being later than 3:00 p.m. on 23 June 2010).
If any of the conditions contained in the Placing Agreement in relation to the Placing Shares are not fulfilled, where appropriate, or waived by Liberum, by the respective time or date where specified (or such later time and/or date as the Company and Liberum may agree, not being later than 3:00 p.m. on 23 June 2010), the Placing will not proceed.
Liberum is entitled at any time before Admission to terminate the Placing Agreement if, amongst other things:
(a) any of the conditions to Liberum's obligations under the Placing Agreement have not been satisfied by the Company or waived by Liberum; or
(b) there has been a material breach of any of the warranties contained in the Placing Agreement or any material failure by the Company to perform any of its obligations in the Placing Agreement; or
(c) there has occurred an event of force majeure the effect of which is such as to make it, in the judgement of either of Liberum acting reasonably and in good faith, impracticable or inadvisable to proceed with the Placing.
Upon such termination, the parties to the Placing Agreement shall be released and discharged (except for any liability arising before or in relation to such termination) from their respective obligations under or pursuant to the Placing Agreement subject to certain exceptions.
No offering document or prospectus has been or will be published in relation to the Placing and Placees' commitments will be made solely on the basis of the information contained in this Announcement (including this Appendix) released by the Company today, and subject to the further terms set forth in the placing letter to be provided to individual prospective Placees.