STOB.L Regulatory News (STOB)

NOT FOR DISTRIBUTION IN OR INTO THE UNITED STATES, OR IN OR INTO CANADA, AUSTRALIA, SOUTH AFRICA, JAPAN OR ANY OTHER JURISDICTION IN WHICH SUCH DISTRIBUTION WOULD BE PROHIBITED BY APPLICABLE LAW

THIS ANNOUNCEMENT IS NOT AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES, NOR SHALL THERE BE ANY OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES REFERRED TO IN THIS ANNOUNCEMENT IN ANY JURISDICTION IN WHICH SUCH OFFER FOR SALE OR SOLICITATION WOULD BE UNLAWFUL UNDER THE SECURITIES LAWS OF ANY SUCH JURISDICTION. THIS ANNOUNCEMENT IS NOT AN OFFER OF OR SOLICITATION TO PURCHASE OR SUBSCRIBE FOR SECURITIES IN THE UNITED STATES OR ANY OTHER JURISDICTION

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF REGULATION 596/2014

2nd May 2019

Stobart Group Limited

(the "Stobart Group" or the "Company")

Exchangeable Bond Offering

Stobart Group Limited, the aviation, energy and civil engineering group, today announces the launch of an offering (the "Offering"), through its wholly owned subsidiary Stobart Finance PLC (the "Issuer"), of up to £57.3 million of secured guaranteed exchangeable bonds (the "Bonds").

The Bonds will have a five year maturity and will be unconditionally and irrevocably guaranteed by the Company and will be exchangeable into ordinary shares of 1 penny each in the capital of Eddie Stobart Logistics PLC ("ESL") (the "Ordinary Shares").

The net proceeds of the Bonds are intended to be used to support the Company's growth plans for aviation and energy. The Bonds will be issued at par, in principal amounts of £100,000 and integral multiples of £1,000 in excess thereof, and will bear interest in the range of 2.25 - 2.75% per annum, payable semi-annually in arrear in equal instalments. The Issuer will also pay holders of the Bonds ("Bondholders") a cash amount equal to the gross value of all cash dividends attributable to the Ordinary Shares during the term of the Bonds.

The Bonds will be secured by (among other things) a charge over the Ordinary Shares held by the Issuer from time to time and certain contractual rights of the Issuer.

Unless previously redeemed or purchased and cancelled by the Issuer, each Bond will be exchangeable, broadly at any time during their five year term, at the sole option of the Bondholders into a pro rata number of Ordinary Shares (the "Exchange Right") (the "Exchange Property"). The initial number of Ordinary Shares per Bond will be set at the time of pricing of the Bonds by reference to a premium expected to be in the range of 25 - 35% over the reference share price of £0.95 (the "Reference Share Price"). The Bonds will contain customary provisions for the adjustment to the Exchange Property in the event of the occurrence of certain dilutive events including, among others, share sub-divisions, consolidations, and redenominations, rights issues, bonus issues, reorganisations and capital distributions.

Upon the exercise by a Bondholder of its Exchange Right, the Issuer may elect to settle its obligations by way of delivery of the Exchange Property, payment of a cash alternative amount (calculated by reference to the volume weighted average price of an Ordinary Share on the London Stock Exchange over of period of 40 consecutive trading days commencing on the second trading day after the Issuer advises a Bondholder that it has elected to settle its obligations under the Exchange Right in full or part by payment of a cash amount) or a combination of the two.

Unless previously exchanged, redeemed, or purchased and cancelled, and subject to a share redemption option of the Issuer, the Bonds will be redeemed at par on the fifth anniversary of the Closing Date (as defined below).

The Issuer will have the option to redeem the Bonds in whole, but not in part, at their principal amount together with accrued interest:

· at any time on or after the date falling 3 years and 21 days after the Closing Date if the volume weighted average price on the London Stock Exchange of the Ordinary Shares underlying each £1,000 principal amount of Bonds shall have exceeded £1,300 on at least 20 out of 30 consecutive trading days; or

· at any time if, Exchange Rights shall have been exercised and/or purchases (and corresponding cancellations) and/or redemptions effected in respect of 85 per cent. or more in principal amount of the Bonds originally issued; or

· in the event of an offer relating to the underlying Ordinary Shares where the offer consideration consists wholly of cash, at any time on or after the date falling 10 trading days after the offer consideration date.

The maximum:

· market value of the gross assets of Stobart Group which will be the subject of the Offering is £44,024,390 based on the closing mid-price on 1st May 2019; and

· consideration that the Issuer could receive for the disposal of the aggregate Exchange Property to the Bondholders (which could occur if every Bondholder exercised its Exchange Right and the Issuer elected to settle its obligations in full by way of delivery of the Exchange Property), is £57.3 million, being the maximum aggregate principal amount of the Bonds.

The Bonds will be offered via an accelerated book building process (the "Bookbuild") through a private placement, Reg S (Cat 1) only, to institutional investors outside the United States, Canada, Australia, South Africa or Japan. The Bookbuild is expected to close no later than 8:00 a.m. on 3rd May 2019, but the Sole Bookrunner reserves the right to close the Bookbuild earlier, without further notice.

The Issuer intends to make the Ordinary Shares underlying the Bonds available to Bondholders for hedging purposes and will lend such Ordinary Shares under a stock lending arrangement (but without making any undertakings as to the availability of the Ordinary Shares to individual Bondholders, and the Issuer may terminate or be required to terminate the stock lending arrangement at any time and without putting in place a replacement arrangement).

The final terms of the Bonds (including the number of Ordinary Shares that the Bonds will be secured by and that will be subject to the Exchange Right) are expected to be announced on 3rd May 2019, although they may be announced earlier, without further notice. Settlement and delivery of the Bonds is expected to take place on or about 8th May 2019 (the "Closing Date").

It is intended that application will be made for the Bonds to be admitted to trading on the Open Market (Freiverkehr) of the Frankfurt Stock Exchange within 30 days after the Closing Date.

In connection with the Offering, the Sole Bookrunner may purchase Ordinary Shares sold by investors in the Bonds as part of the investors' hedging activities.

Stifel Nicolaus Europe Limited is acting as Sole Bookrunner. Orbit Investment Securities Services Plc is acting as Selling Agent.

This announcement does not constitute or form part of any offer or solicitation to purchase or subscribe for or to sell securities and the Offering is not an offer to the public in any jurisdiction.

Contact Details:

This announcement relates to information that qualified, or may have qualified, as inside information for the purposes of Article 7(1) of the Market Abuse Regulation (EU) 596/2014 ("MAR"). For the purposes of MAR and Article 2 of Commission Implementing Regulation (EU) 2016/1055, this announcement is made by Louise Brace, Company Secretary of Stobart Group Limited. In addition, market soundings (as defined in MAR) were taken in respect of the Offering with the result that certain persons became aware of inside information (as defined in MAR), as permitted by MAR. This inside information is set out in this announcement. Therefore those persons that received inside information in a market sounding are no longer in possession of such inside information relating to the Company and its securities.

DISCLAIMER

NO ACTION HAS BEEN TAKEN BY THE ISSUER, THE COMPANY, THE SOLE BOOKRUNNER OR ANY OF THEIR RESPECTIVE AFFILIATES THAT WOULD PERMIT AN OFFERING OF THE BONDS OR POSSESSION OR DISTRIBUTION OF THIS ANNOUNCEMENT OR ANY OFFERING OR PUBLICITY MATERIAL RELATING TO THE BONDS IN ANY JURISDICTION WHERE ACTION FOR THAT PURPOSE IS REQUIRED. PERSONS INTO WHOSE POSSESSION THIS ANNOUNCEMENT COMES ARE REQUIRED BY THE ISSUER, THE COMPANY AND THE SOLE BOOKRUNNER TO INFORM THEMSELVES ABOUT, AND TO OBSERVE, ANY SUCH RESTRICTIONS.

THIS ANNOUNCEMENT IS NOT FOR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES (AS DEFINED IN REGULATION S UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "U.S. SECURITIES ACT")). THE SECURITIES MENTIONED IN THIS ANNOUNCEMENT HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT AND MAY NOT BE OFFERED, SOLD OR DELIVERED WITHIN THE UNITED STATES ABSENT REGISTRATION OR EXEMPTION FROM REGISTRATION UNDER THE U.S. SECURITIES ACT. THIS ANNOUNCEMENT DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY, NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL. THERE WILL BE NO PUBLIC OFFER OF THE SECURITIES REFERRED TO IN THIS ANNOUNCEMENT IN THE UNITED STATES OR IN ANY OTHER JURISDICTION.

THIS DOCUMENT AND THE OFFER WHEN MADE ARE ONLY ADDRESSED TO AND DIRECTED, IN MEMBER STATES OF THE EUROPEAN ECONOMIC AREA (EACH, A "MEMBER STATE"), AT PERSONS WHO ARE "QUALIFIED INVESTORS" WITHIN THE MEANING OF ARTICLE 2(1)(E) OF THE PROSPECTUS DIRECTIVE (DIRECTIVE 2003/71/EC) ("QUALIFIED INVESTORS"). EACH PERSON WHO INITIALLY ACQUIRES ANY SECURITIES OR TO WHOM ANY OFFER OF SECURITIES MAY BE MADE WILL BE DEEMED TO HAVE REPRESENTED, ACKNOWLEDGED AND AGREED THAT IT IS A QUALIFIED INVESTOR. FOR THESE PURPOSES, THE EXPRESSION "PROSPECTUS DIRECTIVE" MEANS DIRECTIVE 2003/71/EC (AS AMENDED), AND INCLUDES ANY RELEVANT IMPLEMENTING MEASURE IN THE MEMBER STATE.

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 BONDS HAVE BEEN SUBJECT TO A PRODUCT APPROVAL PROCESS, WHICH HAS DETERMINED THAT: (I) THE TARGET MARKET FOR THE BONDS IS ELIGIBLE COUNTERPARTIES AND PROFESSIONAL CLIENTS ONLY, EACH AS DEFINED IN MIFID II; AND (II) ALL CHANNELS FOR DISTRIBUTION OF THE BONDS TO ELIGIBLE COUNTERPARTIES AND PROFESSIONAL CLIENTS ARE APPROPRIATE. ANY PERSON SUBSEQUENTLY OFFERING, SELLING OR RECOMMENDING THE BONDS (A "DISTRIBUTOR") SHOULD TAKE INTO CONSIDERATION THE MANUFACTURER'S TARGET MARKET ASSESSMENT; HOWEVER, A DISTRIBUTOR SUBJECT TO MIFID II IS RESPONSIBLE FOR UNDERTAKING ITS OWN TARGET MARKET ASSESSMENT IN RESPECT OF THE BONDS (BY EITHER ADOPTING OR REFINING THE MANUFACTURER'S TARGET MARKET ASSESSMENT) AND DETERMINING APPROPRIATE DISTRIBUTION CHANNELS.

THE TARGET MARKET ASSESSMENT IS WITHOUT PREJUDICE TO THE REQUIREMENTS OF ANY CONTRACTUAL OR LEGAL SELLING RESTRICTIONS IN RELATION TO ANY OFFERING OF THE BONDS.

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 BONDS.

THE BONDS ARE NOT INTENDED TO BE OFFERED, SOLD OR OTHERWISE MADE AVAILABLE TO AND SHOULD NOT BE OFFERED, SOLD OR OTHERWISE MADE AVAILABLE TO ANY RETAIL INVESTOR IN THE EEA. FOR THESE PURPOSES, A RETAIL INVESTOR MEANS A PERSON WHO IS ONE (OR MORE) OF: (I) A RETAIL CLIENT AS DEFINED IN POINT (11) OF ARTICLE 4(1) OF MIFID II; OR (II) A CUSTOMER WITHIN THE MEANING OF DIRECTIVE 2002/92/EC, WHERE THAT CUSTOMER WOULD NOT QUALIFY AS A PROFESSIONAL CLIENT AS DEFINED IN POINT (10) OF ARTICLE 4(1) OF MIFID II. CONSEQUENTLY, NO KEY INFORMATION DOCUMENT REQUIRED BY REGULATION (EU) NO 1286/2014, AS AMENDED (THE "PRIIPS REGULATION") FOR OFFERING OR SELLING THE BONDS OR OTHERWISE MAKING THEM AVAILABLE TO RETAIL INVESTORS IN THE EEA HAS BEEN PREPARED AND THEREFORE OFFERING OR SELLING THE BONDS OR OTHERWISE MAKING THEM AVAILABLE TO ANY RETAIL INVESTOR IN THE EEA MAY BE UNLAWFUL UNDER THE PRIIPS REGULATION.

IN ADDITION, IN THE UNITED KINGDOM THIS ANNOUNCEMENT IS BEING DISTRIBUTED ONLY TO, AND IS DIRECTED ONLY AT, QUALIFIED INVESTORS (I) WHO HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS FALLING WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005, AS AMENDED (THE "ORDER") AND QUALIFIED INVESTORS FALLING WITHIN ARTICLE 49(2)(A) TO (D) OF THE ORDER, AND (II) TO WHOM IT MAY OTHERWISE LAWFULLY BE COMMUNICATED (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS"). THIS ANNOUNCEMENT MUST NOT BE ACTED ON OR RELIED ON (I) IN THE UNITED KINGDOM, BY PERSONS WHO ARE NOT RELEVANT PERSONS, AND (II) IN ANY MEMBER STATE OF THE EEA OTHER THAN THE UNITED KINGDOM, BY PERSONS WHO ARE NOT QUALIFIED INVESTORS.

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 for any purpose on the information contained in this announcement or on its completeness, accuracy or fairness.

ANY DECISION TO PURCHASE ANY OF THE BONDS SHOULD ONLY BE MADE ON THE BASIS OF AN INDEPENDENT REVIEW BY A PROSPECTIVE INVESTOR OF THE PUBLICLY AVAILABLE INFORMATION RELATING TO THE ISSUER, THE COMPANY, EDDIE STOBART LOGISTICS PLC ("ESL") AND THE ORDINARY SHARES and the information contained in the term sheet to be issued by the Issuer in connection with the Offering. NEITHER THE SOLE BOOKRUNNER NOR ANY OF ITS AFFILIATES ACCEPT ANY LIABILITY ARISING FROM THE USE OF, OR MAKE ANY REPRESENTATION AS TO THE ACCURACY OR COMPLETENESS OF, THIS ANNOUNCEMENT OR ANY PUBLICLY AVAILABLE INFORMATION RELATING TO THE ISSUER, THE COMPANY, ESL OR THE ORDINARY SHARES. THE INFORMATION CONTAINED IN THIS ANNOUNCEMENT IS SUBJECT TO CHANGE IN ITS ENTIRETY WITHOUT NOTICE UP TO THE CLOSING DATE.

EACH PROSPECTIVE INVESTOR SHOULD PROCEED ON THE ASSUMPTION THAT IT MUST BEAR THE ECONOMIC RISK OF AN INVESTMENT IN THE BONDS OR THE UNDERLYING ORDINARY SHARES (TOGETHER WITH THE BONDS, THE "SECURITIES"). NONE OF THE ISSUER, THE COMPANY OR THE SOLE BOOKRUNNER MAKE ANY REPRESENTATION AS TO (I) THE SUITABILITY OF THE SECURITIES FOR ANY PARTICULAR INVESTOR, (II) THE APPROPRIATE ACCOUNTING TREATMENT AND POTENTIAL TAX CONSEQUENCES OF INVESTING IN THE SECURITIES OR (III) THE FUTURE PERFORMANCE OF THE SECURITIES EITHER IN ABSOLUTE TERMS OR RELATIVE TO COMPETING INVESTMENTS.

THE SOLE BOOKRUNNER IS ACTING ON BEHALF OF THE ISSUER AND THE COMPANY AND NO ONE ELSE IN CONNECTION WITH THE BONDS AND WILL NOT BE RESPONSIBLE TO ANY OTHER PERSON FOR PROVIDING THE PROTECTIONS AFFORDED TO CLIENTS OF THE SOLE BOOKRUNNER OR FOR PROVIDING ADVICE IN RELATION TO THE SECURITIES.