Rolls-Royce Regulatory News (RR.)

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, NEW ZEALAND, UNITED ARAB EMIRATES, SOUTH AFRICA OR ANY OTHER JURISDICTION WHERE THE EXTENSION OR AVAILABILITY OF THE RIGHTS ISSUE (AND ANY OTHER TRANSACTION CONTEMPLATED THEREBY) WOULD BREACH ANY APPLICABLE LAW OR REGULATION.

THIS ANNOUNCEMENT IS AN ADVERTISEMENT AND DOES NOT CONSTITUTE A PROSPECTUS OR PROSPECTUS EQUIVALENT DOCUMENT. NOTHING HEREIN SHALL CONSTITUTE AN OFFERING OF ANY SECURITIES. NOTHING IN THIS ANNOUNCEMENT SHOULD BE INTERPRETED AS A TERM OR CONDITION OF THE RIGHTS ISSUE. ANY DECISION TO PURCHASE, SUBSCRIBE FOR, OTHERWISE ACQUIRE, SELL OR OTHERWISE DISPOSE OF ANY NIL PAID RIGHTS, FULLY PAID RIGHTS OR NEW ORDINARY SHARES MUST BE MADE ONLY ON THE BASIS OF THE INFORMATION CONTAINED IN AND INCORPORATED BY REFERENCE INTO THE PROSPECTUS.

ROLLS-ROYCE HOLDINGS PLC

RESULTS OF RIGHTS ISSUE

12 November 2020

Rolls-Royce Holdings plc ("Rolls-Royce" or the "Company") today announces that the 10 for 3 rights issue of 6,436,601,676 New Ordinary Shares at 32 pence per New Ordinary Share announced on 1 October 2020 (the "Rights Issue") closed for acceptances at 11:00 a.m. on 11 November 2020. The Company received valid acceptances in respect of 6,061,504,884 New Ordinary Shares, representing approximately 94.2 per cent. of the total number of New Ordinary Shares to be issued pursuant to the fully underwritten Rights Issue.

It is expected that the New Ordinary Shares in uncertificated form will be credited to CREST accounts by no later than today and that definitive share certificates in respect of New Ordinary Shares held in certificated form will be despatched by no later than 25 November 2020.

It is expected that the New Ordinary Shares will commence trading, fully paid, on the London Stock Exchange plc's main market for listed securities at 8:00 a.m. today.

In accordance with their obligations as underwriters in respect of the Rights Issue as set out in the combined prospectus and circular dated 1 October 2020 (the "Prospectus"), BNP Paribas, Citigroup, Goldman Sachs, HSBC, Jefferies, Morgan Stanley, Crédit Agricole CIB, Santander, SMBC Nikko and Société Générale (the "Underwriters") will use reasonable endeavours to procure subscribers for the remaining 375,096,792 New Ordinary Shares not taken up in by Qualifying Shareholders at the Rights Issue Price, failing which the Underwriters have agreed to subscribe themselves (in the agreed proportions), on a several basis, for any remaining New Ordinary Shares at the Rights Issue Price.

The net proceeds from the placing of such New Ordinary Shares (after the deduction of the Rights Issue Price of 32 pence per New Ordinary Share and the expenses of procuring subscribers, including any applicable brokerage commissions and VAT which are not recoverable) will be paid (without interest) to those Shareholders whose rights have lapsed in accordance with the terms of the Rights Issue, pro rata to their lapsed provisional allotments, save that individual amounts of less than £5.00 will not be paid to such persons but will be aggregated and will accrue for the benefit of the Company.

A further announcement as to the number of New Ordinary Shares for which subscribers have been procured will be made in due course.

Under the terms of the offering of three tranches of senior unsecured notes denominated in US dollars, euros and sterling, respectively, announced on 14 October 2020 (the "Bond Offering"), the proceeds of the Bond Offering can, subject to satisfaction of certain other conditions, be released from escrow and made available to Rolls-Royce.

Unless the context requires otherwise, words and expressions defined in the Prospectus shall have the same meanings in this announcement.

LEI: 213800EC7997ZBLZJH69

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IMPORTANT NOTICES

This announcement has been issued by and is the sole responsibility of the Company. The information contained in this announcement is for background purposes only and does not purport to be full or complete. No reliance may or should be placed by any person for any purpose whatsoever on the information contained in this announcement or on its accuracy or completeness. The information in this announcement is subject to change without notice.

This announcement is not a prospectus (or a prospectus equivalent document) but an advertisement. Neither this announcement nor anything contained in it shall form the basis of, or be relied upon in conjunction with, any offer or commitment whatsoever in any jurisdiction. Investors should not acquire any Nil Paid Rights, Fully Paid Rights or New Ordinary Shares except on the basis of the information contained in the Prospectus.

A copy of the Prospectus is available on the Company's website, www.rolls-royce.com/investors. 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. The Prospectus provides further details of the New Ordinary Shares, the Nil Paid Rights and the Fully Paid Rights being offered pursuant to the Rights Issue.

This announcement does not contain or constitute an offer for sale or the solicitation of an offer to purchase or subscribe for securities in the United States or any other state or jurisdiction in which such release, publication or distribution would be unlawful. The Nil Paid Rights, the Fully Paid Rights and the New Ordinary Shares have not been and will not be registered under the US Securities Act of 1933, as amended (the "Securities Act") or under any securities laws of any state or other jurisdiction of the United States and may not be offered, sold, pledged, taken up, exercised, resold, renounced, transferred or delivered, directly or indirectly, in or into the United States except pursuant to an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction of the United States or other jurisdiction. There will be no public offer of the Nil Paid Rights, the Fully Paid Rights or the New Ordinary Shares in the United States. Subject to certain limited exceptions, Provisional Allotment Letters have not been, and will not be, sent to, and Nil Paid Rights have not been, and will not be, credited to the CREST account of, any Qualifying Shareholder with a registered address in or that is located in the United States. None of the New Ordinary Shares, the Nil Paid Rights, the Fully Paid Rights or the Provisional Allotment Letters, this announcement or any other document connected with the Rights Issue has been or will be approved or disapproved by the United States Securities and Exchange Commission or by the securities commissions of any state or other jurisdiction of the United States or any other regulatory authority, nor have any of the foregoing authorities passed upon or endorsed the merits of the offering of the New Ordinary Shares, the Nil Paid Rights or the Fully Paid Rights, or the accuracy or adequacy of the Provisional Allotment Letters, this announcement or any other document connected with the Rights Issue. Any representation to the contrary is a criminal offence in the United States.

This announcement is for information purposes only and is not intended to and does not constitute or form part of any offer or invitation to purchase or subscribe for, or any solicitation to purchase or subscribe for, Nil Paid Rights, Fully Paid Rights or New Ordinary Shares or to take up any entitlements to Nil Paid Rights in any jurisdiction. No offer or invitation to purchase or subscribe for, or any solicitation to purchase or subscribe for, Nil Paid Rights, Fully Paid Rights or New Ordinary Shares or to take up any entitlements to Nil Paid Rights will be made in any jurisdiction in which such an offer or solicitation is unlawful.

The information contained in this announcement, the Prospectus and the Provisional Allotment Letters is not for release, publication or distribution to persons in the United States, New Zealand, United Arab Emirates, South Africa or any other jurisdiction where the extension or availability of the Rights Issue (and any other transaction contemplated thereby) would breach any applicable law or regulation, and, subject to certain exceptions, should not be distributed, forwarded to or transmitted in or into any jurisdiction, where to do so might constitute a violation of local securities laws or regulations.

The distribution of this announcement, the Prospectus, the Provisional Allotment Letter, and the offering or transfer of Nil Paid Rights, Fully Paid Rights or New Ordinary Shares into jurisdictions other than the United Kingdom may be restricted by law, and, therefore, persons into whose possession this announcement, the Prospectus, the Provisional Allotment Letter and/or any accompanying documents comes should inform themselves about and observe any such restrictions. Any failure to comply with any such restrictions may constitute a violation of the securities laws of such jurisdiction. In particular, subject to certain exceptions, this announcement, the Prospectus and the Provisional Allotment Letters should not be distributed, forwarded to or transmitted in or into the United States, New Zealand, United Arab Emirates South Africa or any other jurisdiction where the extension or availability of the Rights Issue (and any other transaction contemplated thereby) would breach any applicable law or regulation. Recipients of this announcement and/or the Prospectus should conduct their own investigation, evaluation and analysis of the business, data and property described in this announcement and/or the Prospectus.

This announcement does not constitute a recommendation concerning any investor's options with respect to the Rights Issue. The price and value of securities can go down as well as up. Past performance is not a guide to future performance. The contents of this announcement are not to be construed as legal, business, financial or tax advice. Each shareholder or prospective investor should consult his, her or its own legal adviser, business adviser, financial adviser or tax adviser for legal, financial, business or tax advice.

NOTICE TO ALL INVESTORS

BNP Paribas ("BNP Paribas"), Citigroup Global Markets Limited ("Citigroup"), Goldman Sachs International ("Goldman Sachs"), HSBC Bank plc ("HSBC"), Jefferies International Limited ("Jefferies"), Morgan Stanley & Co. International plc ("Morgan Stanley"), Crédit Agricole Corporate and Investment Bank ("Crédit Agricole CIB"), Banco Santander, S.A. ("Santander"), SMBC Nikko Capital Markets Limited ("SMBC Nikko") and Société Générale ("Société Générale", and, together with Goldman Sachs, Morgan Stanley, BNP Paribas, Citigroup, HSBC, Jefferies, Crédit Agricole CIB, Santander and SMBC Nikko, the "Banks") are authorised in the United Kingdom by the Financial Conduct Authority and regulated by the Financial Conduct Authority and, in the case of BNP Paribas, lead supervised by the European Central Bank ("ECB") and the Autorité de Contrôle Prudentiel et de Résolution ("ACPR") (and its London Branch is authorised by the ECB, the ACPR and the Prudential Regulation Authority and subject to limited regulation by the Financial Conduct Authority and the Prudential Regulation Authority). Each of the Banks is acting exclusively for Rolls-Royce Holdings plc in relation to the Rights Issue and no other person in connection with the Rights Issue and will not be responsible to anyone other than Rolls-Royce Holdings plc for providing the protections afforded to their respective clients nor for providing advice to any person in relation to the Rights Issue or any matters referred to in this announcement. Goldman Sachs is acting as Financial Adviser to the Company and no other person in connection with this announcement and will not be responsible to anyone other than the Company for providing the protections afforded to clients of Goldman Sachs nor for providing advice to any person in relation to any matters referred to in this announcement.

None of the Banks, nor any of their respective subsidiaries, branches or affiliates, nor any of their respective directors, officers or employees owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of the Banks in connection with the Rights Issue, this announcement, any statement contained herein, or otherwise.

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, nor any of their respective subsidiaries, branches, affiliates or agents as to, or in relation to, the accuracy or completeness of this announcement or any other information made available to or publicly available to any interested party or its advisers, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available, and any liability therefore is expressly disclaimed.

In connection with the Rights Issue, the Banks and any of their respective affiliates, may in accordance with applicable legal and regulatory provisions, engage in transactions in relation to the Nil Paid Rights, the Fully Paid Rights, the New Ordinary Shares and/or related instruments for their own account provided that the Banks and their respective affiliates may not engage in short selling for the purpose of hedging their commitments under the Underwriting Agreement (subject to certain exceptions in the Underwriting Agreement). Accordingly, references in the Prospectus to the Nil Paid Rights, Fully Paid Rights or New Ordinary Shares being issued, offered, subscribed, acquired, placed or otherwise dealt in should be read as including any issue or offer to, or subscription, acquisition, placing or dealing by, the Banks and any of their affiliates acting in such capacity.

The Banks and their respective affiliates may enter into financing arrangements with investors in connection with which the Banks and any of their affiliates may from time to time acquire, hold or dispose of New Ordinary Shares. In addition, the Banks may also co-ordinate a sell-down in the event that any underwriting crystallises as a result of the Rights Issue. The Banks and their respective affiliates do not intend to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligations to do so.

In the event that the Banks acquire New Shares which are not taken up by Qualifying Shareholders, the Banks and their respective affiliates may co-ordinate disposals of such shares in accordance with applicable law and regulation. The Banks and their respective affiliates do not propose to make any public disclosure in relation to such transactions.

Greenhill & Co. International LLP ("Greenhill") is authorised by the Financial Conduct Authority and regulated by the Financial Conduct Authority and is acting exclusively as financial adviser to the Company and no one else in connection with the matters described in this announcement and will not be responsible to anyone other than the Company for providing the protections afforded to clients of Greenhill nor for providing advice in connection with the matters referred to herein. Neither Greenhill nor any of its subsidiaries, branches or affiliates, nor any of its directors, officers or employees owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Greenhill in connection with the Rights Issue, this announcement, any statement contained herein, or otherwise.

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 Nil Paid Rights, the Fully Paid Rights and the New Ordinary Shares have been subject to a product approval process, which has determined that they each 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; 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 Nil Paid Rights, the Fully Paid Rights and/or the New Ordinary Shares may decline and investors could lose all or part of their investment; the Nil Paid Rights, the Fully Paid Rights and the New Ordinary Shares offer no guaranteed income and no capital protection; and an investment in the Nil Paid Rights, the Fully Paid Rights and/or the New Ordinary 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 sufficient 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 offer. Furthermore, it is noted that, notwithstanding the Target Market Assessment, the Underwriters will only procure 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 Nil Paid Rights, the Fully Paid Rights and/or the New Ordinary Shares. Each distributor is responsible for undertaking its own target market assessment in respect of the Nil Paid Rights, the Fully Paid Rights and/or the New Ordinary Shares and determining appropriate distribution channels.