18 Nov 2009 07:00
THE INFORMATION CONTAINED HEREIN IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN OR THE REPUBLIC OF SOUTH AFRICA.
This Announcement is for information only and does not constitute an offer to sell or issue or the solicitation of an offer to buy, or 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 is not for release, publication or distribution, in whole or in part, directly or indirectly, in or into Australia, Canada, Japan, the Republic of South Africa, the United States 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, the United States or elsewhere.
18 November 2009
PURECIRCLE LIMITED
("PureCircle" or the "Company")
Placing of £40 million to support accelerated growth
PureCircle (LSE: PURE), the world's leading producer of natural high intensity sweetener, Reb A, announces the placing of 20,000,000 new ordinary shares of the Company (the "Placing Shares") at a price of £2.00 each (the "Placing"), raising £40 million (approximately US$67 million) for the Company, before expenses.
Background to the Placing
Since US Food and Drug Administration "Generally Recognised as Safe" clearance for high purity Reb A to be used as a food and beverage ingredient was granted in December 2008, a range of stevia-sweetened products have been launched in the USA and performed well, securing strong sales. For example, stevia-sweetened "tabletop" products have secured 10% of the USA tabletop sweetener market. Similarly, sales of PepsiCo's SoBe Lifewater beverage flavours sweetened with Reb A, which were launched in 2009, are outperforming the category (Source: Nielsen).
With continuing pressure for the reduction of calories in food and beverages, PureCircle's discussions with both current and potential clients have led to the expectation that such clients are planning launches of stevia-sweetened products and line extensions in a wider range and larger size in 2010 and 2011.
The Company believes that ingredients in mainstream food and beverage products need to be supported by economically viable mass market pricing, scaled and secure supply and consumer demand. Accordingly, with the proceeds of the Placing, PureCircle intends to launch initiatives in all three areas.
In addition the Placing is expected to increase the liquidity in the Company's shares.
Use of proceeds
The net proceeds of the Placing will be used as follows:
The Company believes that widespread adoption of stevia by major food and beverage companies will require enhanced working capital support from PureCircle in the form of larger inventories and increased receivables resulting from higher sales volumes. To support its global clients, PureCircle intends to hold finished goods inventories in all key sales markets.
PureCircle plans to accelerate the expansion of its production capacity, initially with a new stevia extraction facility in Paraguay, South America. It is expected that work will start on this early in FY 2011. In addition the Company intends to invest further in proprietary leaf development and expansion as part of its global leaf diversification programme.
During 2010 PureCircle plans to invest approximately US$25 million to implement a marketing and branding campaign focused on raising consumer awareness of the benefits of stevia. The Company's aim is to integrate the marketing into its customers' launch plans. The stevia ingredient brand positioning will be aligned closely to PureCircle, thereby creating additional brand equity for the Company.
The Company's marketing plans are underpinned by the findings of a nationwide US consumer research programme commissioned by PureCircle in May 2009. This was undertaken by LaunchForce, a US consumer research firm. The research findings are being shared with PureCircle's major clients and partners. The Company believes that the findings and PureCircle's marketing plans have been well received by clients. More information about the research findings can be found by viewing the webinar recently held with the LaunchForce CEO that can be accessed from www.purecircle.com.
Following completion of the Placing, the number of shares in issue will increase from 132,723,044 to 152,723,044 (of which 44,640 are currently held by the Company in treasury (in respect of which no voting rights may be exercised)).
Details of the Placing
The Placing, which is being carried out under the existing powers of the directors, is conditional, inter alia, on completion of a placing agreement entered into between the Company, Hanson Westhouse Limited, Mirabaud Securities LLP and Liberum Capital Limited.
The Placing has not been underwritten. Application has been made for admission of the Placing Shares to trading on AIM ("Admission") and it is expected that Admission will take place at 8.00 a.m. on 20 November 2009.
Assuming that settlement and Admission occurs, the Placing will raise £40 million (approximately US$67 million) for the Company, before expenses. The funds will be used to support and accelerate PureCircle's position in the global stevia sweetener industry.
The Placing Shares will be credited as fully paid and will rank pari passu in all respects with the existing ordinary shares in the share capital of the Company.
Commenting on the Placing, the Company's Chairman, Paul Selway-Swift, said "We are delighted by the support shown by existing and new shareholders for the Placing, which was substantially oversubscribed. We see this as a strong vote of confidence in our growth story, underpinned by the rapidly developing global stevia market. I look forward to reporting on further progress in the future."
Commenting on the Placing, the Company's CEO, Magomet Malsagov, said "We are determined to maintain our position at the forefront of the stevia industry as its growth accelerates in 2010 and 2011. Strengthened by the funding from the Placing we are well placed to support the exciting growth plans of our clients."
Enquiries:
| PureCircle Limited (www.purecircle.com) Magomet Malsagov, Managing Director William Mitchell, Finance Director | +60 1 2388 8049 +44 7974 005163 |
| Westport Communications Alan Frame Jeanette Bishop | +44 20 7065 2690 alan@westportcomms.com jeanette@westportcomms.com |
| RFC Corporate Finance Ltd (Nomad to the Company) Stephen Allen | +61 8 9480 2500 |
| Hanson Westhouse Limited Tim Feather | +44 20 7601 6100 |
| Mirabaud Securities LLP Rory Scott | +44 20 7321 2508 |
| Liberum Capital Limited Clayton Bush | +44 20 3100 2000 |
This announcement is for information purposes only and does not contain or constitute an offer to sell or issue or the solicitation of an offer to buy, acquire or subscribe for, securities in any jurisdiction. This announcement does not contain or constitute an offer to sell or issue or the solicitation of an offer to buy, acquire or subscribe for, securities to any person in the United States, Australia, Canada, Japan, the Republic of South Africa or in any jurisdiction to whom or in which such offer or solicitation is unlawful. The securities referred to herein may not be offered or sold in the United States absent registration under the US Securities Act of 1933, as amended (the "Securities Act") or another exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. Subject to certain exceptions, the securities referred to herein may not be offered or sold in Australia, Canada, Japan or the Republic of South Africa or to, or for the account or benefit of, any national, resident or citizen of Australia, Canada, Japan or the Republic of South Africa. The offer and sale of the securities referred to herein has not been and will not be registered under the Securities Act or under the applicable securities laws of Australia, Canada, Japan or the Republic of South Africa. There will be no public offer of the securities in the United States.
The information in this announcement may contain forward-looking statements. Any statement other than a statement of historical fact is a forward-looking statement. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual results to differ materially from those expressed or implied by any forward-looking statement. More detailed information on the potential factors that could affect the financial results of PureCircle is contained in the PureCircle's public filings and reports. PureCircle does not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. You should not place undue reliance on any forward-looking statement, which speaks only as of the date of its issuance.
The information contained in this announcement is not for release, publication or distribution, directly or indirectly, in or into the United States, Australia, Canada, Japan or the Republic of South Africa.