TIDMXPL
RNS Number : 0644J
Xplorer PLC
11 July 2013
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR
INDIRECTLY, IN OR INTO, THE UNITED STATES OF AMERICA, AUSTRALIA,
CANADA, SOUTH AFRICA OR JAPAN.
Xplorer Plc
("Xplorer" or the "Company")
Placing and Admission to trading on the London Stock
Exchange
Following the publication of its Prospectus on 10 July 2013,
Xplorer is pleased to announce that its entire issued ordinary
share capital has today been admitted to the Standard Listing
segment of the Official List of the Financial Conduct Authority and
to trading on the London Stock Exchange's main market for listed
securities under the ticker "XPL".
The Placing which was conditional on Admission, has now
completed raising gross proceeds of GBP1 million following the
issue of 6,250,000 ordinary shares of 0.1p each at 16p per Placing
Share.
Key elements of the Company's Prospectus are extracted below,
and a full version of can be downloaded at
www.xplorerplc.co.uk.
HIGHLIGHTS
-- A successful placing, fully subscribed by private investors
and well known UK institutional investors.
-- In partnership with Sprint Capital Partners Limited ("Sprint
Capital"), a Hong Kong based private equity investment manager:
o An early investor in Xplorer;
o Significant natural resources expertise and interests;
o Substantially backed; and
o Two directors in common with Xplorer.
-- Discussions commenced with several significant oil exploration & production companies.
-- Strong Board with considerable expertise relevant to
Xplorer's oil & gas sector focus roll-up strategy.
John Davies, Chairman, commented:
"This is the start of an exciting journey in the creation of
substantial value for our Shareholders. Our sights are set on a
significant transaction which will be supported by Sprint Capital.
Accordingly, we consider a listing on London's Official List,
rather than a junior market as appropriate to our ambitions for
building a substantial oil and gas business."
Chris McAuliffe, Director of Xplorer, commented:
"In-keeping with Sprint Capital's approach of partnering with
strong management teams with a proven track record in delivering
highly prospective projects, we are excited to be participating in
Xplorer. With discussions commencing with a number of producing and
near-term producing oil and gas acquisition candidates, we are
looking forward to initiating Xplorer's roll-up strategy in the
coming months."
Total Voting Rights & Disclosure of Shareholdings
In accordance with Disclosure and Transparency Rule 5.6.1, the
Company announces that its issued share capital consists of
11,250,100 ordinary shares of 0.1p each. The Company does not hold
any ordinary shares in treasury.
Therefore, as at 11 July 2013, the total number of voting rights
in the Company is 11,250,100.
Shareholders may use this figure 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
share capital of the Company under the Disclosure and Transparency
Rules.
Following the Placing, the Company has the following
Shareholders to be notified under the Disclosure and Transparency
Rules:
Party Name Number of Ordinary Shares % of Enlarged
On Admission Share Capital
----------------------- -------------------------- ---------------
John Roddison * 2,000,050 17.78
----------------------- -------------------------- ---------------
Christopher McAuliffe
** 1,875,050 16.67
----------------------- -------------------------- ---------------
Jacqueline Lim ** 1,875,050 16.67
----------------------- -------------------------- ---------------
Nicholas Nelson 750,000 6.66
----------------------- -------------------------- ---------------
* 1,875,050 Ordinary Shares held by Xplorer Capital Limited and
125,000 Ordinary Shares held by Wednesday Limited; both companies
are controlled by John Roddison, a Director of the Company.
** 1,875,050 Ordinary Shares held by Sprint Capital Management
Limited, a company jointly controlled by Christopher McAuliffe and
Jacqueline Lim, both Directors of the Company.
(All definitions contained in this announcement are as defined
in the Company's Prospectus, as extracted below.)
11 July 2013
Enquiries:
Xplorer Plc www.xplorerplc.co.uk
John Roddison, Director +44 207 495 7429
Nicholas Nelson, Corporate Comms. +44 7921 522 920 nn@xplorerplc.co.uk
Allenby Capital, Financial Adviser
& Broker
Nick Harriss, Director, Corporate
Finance +44 20 3328 5656
Optiva Securities, Placing Agent +44 203 137 1902
Jeremy King/ Graham Comrie graham.comrie@optivasecurities.com
Extracts from the Company's Prospectus
PART I
INVESTMENT OPPORTUNITY AND STRATEGY
1. Introduction
Xplorer is a newly established company incorporated under the
laws of England and Wales and formed for the purpose of acquiring a
company, business or asset that has operations in the oil and gas
exploration and production sector that it will then look to develop
and expand.
The Company has conditionally raised gross proceeds of
GBP1,000,000 through the Placing. The Company has also raised
GBP119,002 (gross proceeds) through the issue of new Ordinary
Shares and Convertible Loan Notes prior to the date of this
Prospectus, and has received commitments from Xplorer Capital and
Sprint Capital to pay up the remaining unpaid share capital for a
combined GBP56,000 on Admission.
The Board is responsible for the Company's business strategy and
its overall supervision, including the approval of the Acquisition.
The Board will also be responsible for the identification and
assessment of acquisition opportunities, the structuring and
execution of the Acquisition and determination and execution of
strategy for the acquired companies, businesses or assets. The
Board have considerable experience in identifying acquisition
targets and in executing such transactions. The Acquisition is
required to establish Xplorer's presence in the oil and gas sector
and will form the basis of Xplorer's growth in that sector. It is
not intended that Xplorer simply acquire minority stakes in oil and
gas entities but that it acquires and operates oil and gas
businesses.
2. The Value Opportunity
The Directors believe that increasing global industrialisation
and urbanisation, particularly in Asia (outside Japan) and the
other emerging markets, is likely to lead to increased global
demand for commodities. At the same time, the Directors believe
that the supply of commodities will be constrained by insufficient
investment to keep pace with increased demand and by exploration
and development challenges, which are likely in each case to
generate sustained inflation in commodity pricing. The Directors'
views in this area are supported by the findings of the
Organization of the Petroleum Exporting Countries (OPEC) in their
World Oil Outlook 2012 report.
The Directors consider these dynamics to be particularly
apparent in the oil & gas industry. In recent years, the oil
& gas industry has become significantly consolidated. Such
consolidation has resulted in the acquisition of many mid-sized
companies and the domination of the industry by a small number of
non-state owned, vertically integrated companies (commonly known as
the "oil majors" or "majors") and national oil companies. However,
many valuable resource assets have been acquired by non-majors,
which often do not have access to capital or sufficient know-how to
realise their development potential, especially in an increasingly
complex technical environment. Many of these businesses have a bias
towards exploration and development assets, so consequently do not
have sufficient producing assets to benefit from the currently high
oil prices in order to de-lever their balance sheets. Other parts
of the natural resources sector demonstrate similar
characteristics.
Accordingly, the Directors believe that the natural resources
sector, and especially the oil & gas industry, presents
multiple attractive investment opportunities. These include the
opportunity to acquire privately owned natural resource businesses,
or illiquid emerging market listed entities without the 'know-how'
or capital to unlock the value of their natural resource
assets.
3. Business strategy and execution
Xplorer (including subsequently acquired or incorporated
subsidiaries) will form a trading business, rather than an
investment entity. The Company intends that the Acquisition be of
an operating oil and gas exploration and production business that
can act as the cornerstone for building a substantial group within
the same sector. Xplorer intends to grow this operational oil and
gas exploration and production business both organically and by
acquisition. The Company aims to achieve its objective through the
identification and acquisition of companies, businesses or assets
where the existing owners are attracted to the Xplorer proposition,
namely the opportunity to sell for cash or hold an ownership
interest in a London listed company, with cash, access to capital
markets and the "know-how" to unlock the value of their acquired
resource assets.
The Company aims to generate value for Shareholders by focussing
on opportunities where there is less visibility on transaction
pricing owing to a combination of context and geography.
Business strategy - context
In terms of context, the Company intends to focus on acquiring
operating businesses or assets where value is trapped by virtue of
a capital or expertise deficit. The Directors believe such trapped
value may often occur in family controlled businesses and small
companies with complex or diverse ownership structures or where the
business or assets are considered to be non-core by a larger
natural resources company. The Company will look to provide
liquidity and/or cash to owners through the issue of new Ordinary
Shares as consideration for the Acquisition or to raise capital, as
well as the strategic and financial management expertise that the
Board has identified as lacking in many of the target group
businesses. The Directors consider this flexibility to be
particularly attractive to owners who wish to remain operationally
involved in, and participate in the future of, a target. The Board
will look to identify and recruit suitable operational expertise to
address any weaknesses in the management team of the
Acquisition.
Business strategy - geography and sector focus
In terms of geography, the Company intends to focus primarily on
emerging and under-developed geographic regions where the Directors
collectively have prior knowledge and experience. These include
Asia, the Middle East, and Latin America. However the Company will
not exclude other geographic regions where an opportunity presents
an appropriate investment proposition. Similarly, while the Company
intends to adopt an oil & gas focus, it will also remain open
to opportunities in other commodities in the natural resources
sector should an appropriate investment opportunity present
itself.
Execution
The Company anticipates that it will acquire the whole voting
control and equity interest of any target company or business.
The initial equity capital base of Xplorer will be relatively
small compared with the likely value of the Acquisition, so it is
intended to use Ordinary Shares as a material element of the
consideration for the Acquisition. As the Acquisition is expected
to be of a business valued at substantially more than Xplorer, it
will constitute a Reverse Takeover under the Listing Rules, and a
new Prospectus, a circular to Shareholders convening a general
meeting and a new Standard Listing application will be required.
The vendors of the Acquisition may receive a controlling stake in
Xplorer as part of the transaction, which may well also result in a
person or concert party owning 30 per cent. or greater of the
issued Ordinary Shares. As the vendors of the Acquisition are
unlikely to be connected with Xplorer and/or own any Ordinary
Shares, it is expected that the Company will apply for dispensation
under Rule 9 of the City Code, through a vote of independent
shareholders (known as a "Whitewash"). The information required
under the City Code for a Whitewash will be incorporated in the
circular to be sent to Shareholders to accompany a Reverse Takeover
and will require their vote at a general meeting. It is expected
that concurrently with the Acquisition that Xplorer will need to
raise new capital by making an offer of new Ordinary Shares for
cash. The Acquisition is more likely to be successfully completed
if the vendors agree to receive Ordinary Shares as a material
element of the consideration and the Company is able to raise
additional capital through the issue of new Ordinary Shares. It is
likely that the completion of the Acquisition will be contingent on
these events.
The Board brings considerable expertise that is specifically
relevant to this stage of the Company's development, i.e. in
relation to identifying, assessing and executing the Acquisition,
and negotiating and securing the required financing for the
Acquisition:
-- Christopher McAuliffe and Jaqueline Lim have experience of
sourcing and executing acquisitions within the natural resources
sector in a number of emerging economies. A list of the
particularly relevant transactions are in the following paragraph.
This experience will be important in successfully sourcing and
executing the Acquisition.
-- John Roddison is a Chartered Accountant with 35 years post
qualification experience. He was also Finance Director of AIM
quoted Silvermere Energy plc, which he left following the
successful reverse takeover of the Mustang Island assets (an
oilfield off the coast of Texas) in August 2011, which valued the
enlarged group at GBP4.25m. He has specific expertise in relation
to assessing, structuring and executing acquisitions, notably the
implementation of financial reporting procedures, undertaking
financial due diligence, managing capital requirements, and raising
debt and equity finance. This experience will be important in
successfully executing the Acquisition.
-- John Davies and Christopher McAuliffe have been involved in a
wide range of fundraisings of both equity and debt on public and
private markets. They have an extensive range of investor contacts,
which are expected to be important in successfully executing the
Acquisition.
-- Jacqueline Lim is a qualified corporate lawyer with 17 years
post qualification experience. She has particular expertise in
mergers, acquisition and capital markets transactions, both as a
lawyer and as a private equity investment manager, which will be
important in successfully executing the Acquisition.
The current Board has a focus on financial, transactional, legal
and strategic expertise, and these are the key strengths that they
will bring to the enlarged business following the Acquisition. The
Board believes that these are the most important areas of expertise
for the Company at this stage of its development, where the focus
is to identify, finance and execute the Acquisition. Christopher
McAuliffe has originated and advised on a large number of key
mergers & acquisition, debt, equity capital markets and private
equity transactions in Asia, including many deals in the natural
resources sector, notably:
-- Advising First Resources Limited, an Indonesian palm oil
producer on their S$295m IPO on the Singapore Stock Exchange in
2007;
-- Advising GMR Group, an Indian conglomerate, on their 2009
acquisition of Indonesian coal mining assets for US$100m;
-- Advising Indika Energy Tbk, an Indonesian energy group with
interests in coal mining, oil services and power generation on
their US$300m IPO on the Jakarta Stock Exchange;
-- Advising China Coal Energy Company Limited, one of China's
largest coal mining companies, on their US1bn IPO on the Hong Kong
Stock Exchange in 2006; and
-- Advising on the 2007 principal investment of US$150m into DP
Cleantech (formerly Dragon Power), a leading Chinese biomass energy
group.
The Company intends to leverage the Directors' extensive and
complementary network of contacts across the natural resources
industry to access a number of quality acquisition opportunities.
The Company and its Directors intend to assemble high calibre
transaction and operating teams to conduct due diligence on targets
and structure and execute the Acquisition and apply discipline to
transaction selection.
One of the key considerations when assessing the Acquisition
will be the quality of the operational management. It would be
expected that following the Acquisition, one or more of the senior
management team of the Acquisition would join the Board in order to
add operational expertise at that point, especially in relation to
the Acquisition. Information on the new Directors would be detailed
in the Prospectus and circular to Shareholders that will accompany
a Reverse Takeover. Additional Directors and management may also be
recruited externally if the Board identifies such a
requirement.
The Board will only recommend for Shareholder approval an
Acquisition if it believes that the terms of the Acquisition offer
an opportunity to holders of the Ordinary Shares to achieve
attractive returns. The Directors (other than John Davies) are
incentivised to achieve such returns through an aggregate holding
of 3,750,100 Ordinary Shares (3,875,100 Ordinary Shares on
Admission) and the Warrants. (See Part VII, paragraph 6 for further
information).
Following completion of the Acquisition, the Company intends to
implement a strategy designed to maximise Shareholder value by
optimising the capital structure of the acquired activities,
implementing disciplined operational improvements and strengthening
management, including through the services of the Directors who may
assume executive roles. The Company may also undertake targeted
investments within the operations of the acquired activities and
pursue strategic "bolt-on" acquisitions to increase the scale of
the Company's operating business.
4. The Company's Competitive Strengths
The Directors believe that the Company should be well placed to
compete against other market participants in the oil and gas
exploration and production sector on the basis of the following
competitive advantages:
-- the Directors have a strong track record of operating in
emerging and under-developed markets and a significant
understanding of the sector. See "Part II - The Company, its Board,
and the Acquisition Structure" for further details;
-- the Directors have an extensive network of relationships with
the key decision-makers and owners of potential targets in the
sector; and
-- the Company has considerable flexibility in how it would be
able to finance the consideration for the Acquisition, which will
include the Net Proceeds together with the potential to incur
indebtedness and/or to issue additional listed equity (whether to
raise additional cash or as transaction consideration).
5. Use of Proceeds
The Company's intention is to use the Net Proceeds of the
Placing to fund the due diligence and other transaction costs in
respect of the Acquisition. Prior to completion of the Acquisition,
the Company will invest or deposit the Net Proceeds in sterling
denominated money market instruments, government securities,
commercial paper, asset backed commercial paper, corporate bonds
and/or deposits with commercial banks. Each of these instruments or
commercial banks will be no less than AA- rated at the time of
investment or deposit.
Prior to completion of the Acquisition, a portion of the gross
proceeds of the Placing will be used for ongoing corporate
purposes, including to pay the expenses of the Placing (as further
described in Part III of this document) and the Company's ongoing
costs and expenses (as further described in Part II and Part VII of
this document), including directors' fees, due diligence costs, and
other costs of sourcing, reviewing and pursuing the
Acquisition.
6. Capital and returns management
The Company has conditionally raised gross proceeds of
GBP1,000,000 from the Placing, giving net proceeds to the Company
of approximately GBP840,350. Further equity capital raisings are
expected be undertaken by the Company as it pursues its objectives.
The amount of any such additional equity to be raised, which could
be substantial, will depend on the nature of the Acquisition
opportunities which arise and the form of consideration the Company
uses to make the Acquisition, and so cannot be determined with any
certainty at this time.
The Company expects that returns for Shareholders will derive
primarily from capital appreciation of the Ordinary Shares and any
dividends paid pursuant to the Company's dividend policy set out
below. The Articles include pre-emption rights in favour of
existing Shareholders which have been disapplied in relation,
amongst other things, to the issue of new Ordinary Shares for cash
pursuant to the Placing, the Warrants and the Allenby Warrants, or
in connection with: (a) the allotment of Ordinary Shares for cash
or otherwise up to an aggregate nominal amount of 10 per cent. of
the nominal value of the issued Ordinary Shares (as at the close of
the first Business Day following Admission), and (b) allotments of
Ordinary Shares where such Ordinary Shares have been offered to
holders of existing Ordinary Shares subject to various prescribed
exclusions. Otherwise, Shareholders will have pre-emption rights
which will generally apply in respect of future issues of Ordinary
Shares for cash. See paragraph 2 of Part VII of this document for
further details.
If the Acquisition is not completed before the second
anniversary of Admission, then (unless the Acquisition has been
previously announced but completes after the second anniversary of
Admission or the Company is in active negotiations relating to the
Acquisition which is announced shortly after the second anniversary
of Admission and subsequently completes) the Board will recommend
to Shareholders either that the Company be wound up by Special
Resolution (in order to return to Shareholders any remaining
distributable assets) or that the Company continue to pursue the
Acquisition for a further year. The Board's recommendation will
then be put to a Shareholder vote.
7. Dividend Policy
The Company intends to pay dividends on the Ordinary Shares
following the Acquisition at such times (if any) and in such
amounts (if any) as the Board determines appropriate. The Board's
current intention is to retain any earnings for use in its business
operations, and the Board does not anticipate declaring any
dividends in the foreseeable future. The Company will only pay
dividends to the extent that to do so is in accordance with all
applicable laws.
8. Corporate Governance
In order to implement its business strategy, the Company has
adopted a corporate governance structure more fully outlined in
Part II of this document. The key features of this structure
are:
-- a non-executive board with three Non-Executive Directors and
an Independent Non-Executive Chairman. The Board has extensive
experience of making international acquisitions and has relevant
experience in the natural resources sector. The Company has
established separate Audit and Risk and Remuneration Committees
chaired by the Non-Executive Chairman; and
-- the Company will seek Shareholder approval at a general
meeting in order for the Company to complete the Acquisition if, as
anticipated, the Acquisition constitutes a Reverse Takeover.
9. Sprint Capital
Sprint Capital is a Hong Kong based private equity investment
manager, focused on undertaking investments in the mining and
natural resources sector. Sprint Capital is controlled by
Christopher McAuliffe and Jacqueline Lim, who are also directors of
Xplorer. Sprint Capital owns 1,875,050 Ordinary Shares and
1,875,000 Warrants. Sprint Capital seeks to invest in resources
which are in high demand across China and the wider Asian region
(including high grade thermal and metallurgical coal, oil and gas,
iron ore, potash and copper). Sprint Capital's investment approach
is to partner with strong management teams with a proven track
record in bringing highly prospective exploration and
development-stage projects through to production. Sprint Capital
will not be a contracted adviser or an external manager to the
Company but Christopher McAuliffe and Jacqueline Lim may introduce
suitable acquisition opportunities that they identify through their
work with Sprint Capital. Sprint Capital will not be separately
remunerated for such introductions, but will instead hope to gain
through an increase in the value of its shareholding in Xplorer.
There is no contractual or advisory relationship between Sprint
Capital and Xplorer other than that described in paragraph 13(ii)
of Part VII of this Prospectus.
10. RPS Energy Consultants Limited
The Company has appointed RPS Energy Consultants Limited, a
highly experienced provider of geoscience and engineering
consultancy services to the oil and gas industry, to provide
independent assessments of potential Acquisition targets, and to
provide advice to the Board on the maximisation of those assets
post acquisition. The provision of the technical due diligence
information from RPS Energy Consultants Limited will assist the
Board in their decision making process when assessing the
attractiveness of potential Acquisition targets. Key elements of
this technical due diligence information includes:
-- Technical, resource and economic assessments of potential Acquisition targets;
-- Strategy consulting on the development of assets, post Acquisition; and
-- Reservoir engineering, in order to maximise the economic
return on producing oil and gas assets, post Acquisition.
The information provided to the Board by RPS Energy Consultants
Limited will enable the Board to make suitable judgements regarding
the geoscience and engineering aspects of a potential Acquisition.
RPS Energy Consultants Limited will not perform management
functions, but provide advisory and consultancy services. Further
details of the terms of engagement of RPS Energy Consultants
Limited are set out in Part VII paragraph 12(ix).
RPS Energy Consultants Limited is a wholly owned subsidiary of
RPS Group plc, ("RPS") listed on the Main Market of the London
Stock Exchange and valued at around GBP500m. RPS employ 5,000
people in the UK, Ireland, the Netherlands, the United States,
Canada, Brazil, Africa, the Middle East, Australia and Asia. Their
international presence allows them to undertake co-ordinated and
integrated projects throughout the world. Since the beginning of
2010 they have undertaken projects in 123 countries across six
continents. RPS is an international consultancy providing advice
upon:
-- the exploration and production of energy and other natural resources; and
-- the development and management of the built and natural environment.
Within the energy sector, RPS is a global, multi-disciplinary
consultancy. They provide integrated technical, commercial and
project management support in the fields of geoscience, engineering
and HS&E (health, safety and environment) to the energy sector.
Their aim is to help clients develop their energy resources across
the complete life-cycle, combining technical and commercial skills
with an extensive knowledge of environmental and safety issues.
Within the energy sector they operate in the following
areas:
Operations Support
Cost effective operations are the key to successful energy
projects, in both oil & gas and renewables. RPS has been
instrumental in providing project management and technical support
as well as expert quality control for seismic surveys, site
investigation, well operations, positioning and infrastructure
projects.
Technical Studies
RPS has worked in almost every petroleum basin in the world,
undertaking projects ranging from niche specialist work to large
multi-disciplinary exploration and production studies. This mix of
experience and expertise comes from highly-experienced staff and
associates, comprising a wide range of surface and sub-surface
disciplines.
Advisory
RPS provide independent, technically-led advice and management
support, using experienced consultants to work individually or with
clients' teams. Whether working on business process, specific
assets or portfolios, RPS provide high-level support across the
complete E&P value chain. The individual RPS consultants
assigned to assist the Board evaluate the Acquisition will depend
on the nature (location, type of hydrocarbon, stage of development,
etc.) of the asset being acquired.
Emerging Areas
The diverse resources available from within the broader RPS
Group, including the Environmental and Planning & Development
teams, enables them to deliver focused advice on complex areas of
new and emerging business both in the oil & gas and renewable
energy industry.
RPS is owned by a broad range of institutional and private
investors, with no single shareholder owning over 10%. RPS' CEO is
Dr Alan S Hearne, a role he has held since 1981. Dr Hearne was the
Plc Entrepreneur of the Year in 2001. RPS' Chairman is Brook Land,
the former senior partner of the leading law firm Nabarro.
PART II
THE COMPANY, ITS BOARD AND THE ACQUISITION STRUCTURE
1. The Company
The Company was incorporated in England and Wales on 12 March
2012. Its share capital will, on Admission, consist of the Existing
Ordinary Shares and the New Ordinary Shares. It is intended that
the Enlarged Share Capital will be admitted by the FCA to the
standard listing segment of the Official List in accordance with
Chapter 14 of the Listing Rules and to trading on the London Stock
Exchange's Main Market for listed securities.
2. The Directors
The Directors believe the Board comprises a knowledgeable and
experienced group of professionals with relevant experience for
sourcing, evaluating, structuring and executing the Acquisition.
The Company will not be externally managed and the Board will have
full responsibility for its activities.
The details of the Directors are listed below:
John Guy William Davenport Davies, Independent Non-Executive
Chairman, aged 56, date of birth 19 February 1957
John has over 30 years experience in investment banking with
Rowe and Pitman (1979-1981), Brown Brothers Harriman & Co
(1981-1985) and Lehman Brothers where he became Co-Head of
Institutional Equity Sales Europe (1985-1994). He was then
appointed as a Managing Director of Bear Stearns International
(1994-1996), before taking the role of Managing Director at
Instinet (1996-1997), the electronic agency broker then owned by
Reuters. In 1997 he joined Credit Lyonnais in London where he was
Global Head of European Equity Sales. In 2001 he began his current
specialist focus on hedge fund advisory and marketing, co-founding
Altius Partners in partnership with Geneva based Mirabaud Group in
2001 and DNA Advisors in 2004. In 2006 he founded Davenport Capital
Limited. He is currently a director of Davenport Capital. John
holds an M.A. (Hons.) in Law from Emmanuel College, University of
Cambridge.
John's responsibilities will include overseeing the proper
functioning of the Board, liaison with the financial adviser and
broker to the Company, co-ordinating the Prospective Investors,
liaising with the Shareholders on a continuing basis and overseeing
the integration of the Acquisition or Acquisitions including the
induction and development of new directors. He will also oversee
that the regulatory requirements of all statutory bodies are met
regarding all the Company's financial and regulatory affairs.
Christopher John McAuliffe, Non-Executive Director, aged 48,
date of birth 12 December 1964
Chris is an experienced industrials and resources banker with
significant relationships across Asia. Until February 2008, Chris
was Managing Director and co-head of Asia Pacific Industrials Group
for Citigroup (HK). Prior to which he worked for 13 years with CSFB
(including BZW) including 5 years as Managing Director and Head of
Asia Industrials Group at CSFB (Singapore). Chris has originated
and advised on a large number of key mergers & acquisition,
debt, equity capital markets and private equity transactions in
Asia, including many deals in the natural resources sector,
notably:
-- Advising First Resources Limited, an Indonesian palm oil
producer on their S$295m IPO on the Singapore Stock Exchange in
2007;
-- Advising GMR Group, an Indian conglomerate, on their 2009
acquisition of Indonesian coal mining assets for US$100m;
-- Advising Indika Energy Tbk, an Indonesian energy group with
interests in coal mining, oil services and power generation on
their US$300m IPO on the Jakarta Stock Exchange;
-- Advising China Coal Energy Company Limited, one of China's
largest coal mining companies, on their US1bn IPO on the Hong Kong
Stock Exchange in 2006; and
-- Advising on the 2007 principal investment of US$150m into DP
Cleantech (formerly Dragon Power), a leading Chinese biomass energy
group.
Chris is a member and Vice Chairman of the Supervisory Board of
Asian Bamboo AG, China's largest bamboo producer, which listed on
the Frankfurt Stock Exchange in 2007. Asian Bamboo AG grows,
processes and distributes bamboo products, and had total revenues
in 2011 of EUR90m. Chris is also an advisory board member of
Asiasons Capital Group, an alternative asset investment and
management group (predominantly involving private equity) focused
on opportunities in emerging East Asia. The Group is listed on the
Main Board of the Singapore Stock Exchange and has a market
capitalization of circa US$500m as at August 2012. Chris holds a
Business Law Degree LLB (Hons.) from Huddersfield University and an
MBA from Bradford Business School.
He is a founder shareholder and Managing Director of Sprint
Capital and Sprint Capital Management Limited. Sprint Capital is a
Hong Kong based private equity investment manager, focused on
undertaking investments in the mining and natural resources sector.
Sprint Capital seeks to invest in resources which are in high
demand across China and the wider Asian region (including high
grade thermal and metallurgical coal, oil and gas, iron ore, potash
and copper). Sprint Capital's investment approach is to partner
with strong management teams with a proven track record in bringing
highly prospective exploration and development-stage projects
through to production. Sprint Capital will not be a contracted
adviser or an external manager to the Company but Christopher
McAuliffe may introduce suitable acquisition opportunities that he
identifies through his work with Sprint Capital. Sprint Capital
will not be separately remunerated for such introductions, but will
instead hope to gain through an increase in the value of its
shareholding in Xplorer. There is no contractual or advisory
relationship between Sprint Capital and Xplorer other than that
described in paragraph 13(ii) of Part VII of this Prospectus. Chris
will not be separately remunerated for such introductions; the
terms of his appointment are laid on in Part VII, paragraph 7 of
this Prospectus.
Chris will assist with all transaction activity related to the
Acquisition or Acquisitions, including, identification, financial
analysis, due diligence, contract negotiation and execution.
Jacqueline Lim (Hui - Erh Lim), Non-Executive Director, aged 43,
date of birth 14 May 1970
Jacqueline has over 15 years of experience in London and Hong
Kong focusing on corporate finance, cross-border mergers and
acquisitions, equity capital market and private equity
transactions. She started her career as a lawyer with Allen &
Overy in London and was a Partner with Paul Hastings, Janofsky
& Walker responsible for its equity capital markets practice in
Hong Kong, advising on a number of landmark transactions in Hong
Kong, including many deals in the natural resources sector,
including Western Mining, Hidili, Titan Mining, SSRG, GMR and
Dragon Power. Jacqueline then became a Partner and Head of China
Investments at Asiasons Capital Group, an alternative asset
investment and management group listed on the Singapore Stock
Exchange. Jacqueline is a founder shareholder and Managing Director
of Sprint Capital and Sprint Capital Management Limited. Jacqueline
received her LL.B.(Hons.) and Masters Degree in Law from the
University of Bristol, qualifying as a Barrister in England and a
Solicitor in Hong Kong. She is fluent in Mandarin and Cantonese, as
well as English. Jacqueline Lim may introduce suitable acquisition
opportunities that she identifies through her work with Sprint
Capital. Sprint Capital will not be separately remunerated for such
introductions, but will instead hope to gain through an increase in
the value of its shareholding in Xplorer. Jacqueline will not be
separately remunerated for such introductions; the terms of her
appointment are laid on in Part VII, paragraph 7 of this
Prospectus.
Jacqueline will assist with all transaction activity related to
the Acquisition or Acquisitions, including, identification,
financial analysis, due diligence, contract negotiation and
execution, as well as providing in-house legal advice.
John Roddison FCA, Non-Executive Director, aged 58, date of
birth 2 January 1955
John is a chartered accountant (qualifying in 1977 with the
Institute of Chartered Accountants of England and Wales) and is
senior partner of Brown McLeod, a medium-sized accounting firm.
John has built Brown McLeod into a specialist accounting firm with
a select client base comprised of ultra high net worth individuals
and a large number of clients in the Entertainment Industry
covering Music, Film, Theatre and TV. His music clients include
Pulp, Richard Hawley, Wretch 32 and The Kills and he has worked
extensively in the film industry and acted as finance director for
Parallel Pictures PLC, a film production company, which was
admitted to AIM in 1998.
He also previously served as Finance Director for AIM quoted
Silvermere Energy PLC, which owns oil and gas activities in the
Gulf of Mexico, off the coast of Texas, USA. He left following the
successful reverse takeover of the Mustang Island assets in August
2011, which valued the enlarged group at GBP4.25m.
John's responsibilities will include overall control of the
Company's accounting function, including, audit systems, financial
reporting, corporate finance, including, financial due diligence,
managing capital requirements, debt, taxation and equity with
particular reference to the Acquisition.
3. Independence of the Board
John Davies is currently the only "independent" member of the
Based (using the definition set out in the Corporate Governance
Code). It is intended that additional Directors, both executive and
non-executive, will be appointed at the time of the Acquisition and
that independence will be one of the factors taken into account at
that time.
4. Directors' Fees
John Davies will be entitled to receive an annual fee of
GBP36,000 based on 3 days per month at GBP3,000 per month with any
additional days in excess of 3 days per month being paid at
GBP1,000 per day plus reasonable expenses. Christopher McAuliffe,
Jacqueline Lim and John Roddison, will each be entitled to receive
an annual fee of GBP24,000 based on 2 days per month at GBP2,000
per month with any additional days in excess of 2 days per month
being paid at GBP1,000 per day plus reasonable expenses. Further
details of Directors' letters of appointment are set out in
paragraph 7 of Part VII of this document.
5. Strategic Decisions
Members and responsibility
The Directors are responsible for the Company's objectives and
business strategy and its overall supervision. Acquisition,
divestment and other strategic decisions will all be considered and
determined by the Board. The Board will provide leadership within a
framework of prudent and effective controls. The Board will set the
corporate governance values of the Company and will have overall
responsibility for setting the Company's strategic aims, defining
the business plan and strategy, managing the financial and
operational resources of the Company and reviewing the performance
of the officers and management of the Company's business. The
Acquisition will be subject to Board approval and in the event that
it constitutes a Reverse Takeover, Shareholder approval will be
sought.
Frequency of meetings
While the Board will schedule quarterly meetings, it will hold
additional meetings as and when required.
Audit and Risk Committee
The Company has established an Audit and Risk Committee with
delegated duties and responsibilities. The Audit and Risk Committee
will be responsible, amongst other things, for making
recommendations to the Board on the appointment of auditors and the
audit fee, monitoring and reviewing the integrity of the Company's
financial statements and any formal announcements on the Company's
financial performance as well as reports from the Company's
auditors on those financial statements. In addition, the Audit and
Risk Committee will review the Company's internal financial control
and risk management systems to assist the Board in fulfilling its
responsibilities relating to the effectiveness of those systems,
including an evaluation of the capabilities of such systems in
light of the expected requirements for any specific acquisition
target. The Audit and Risk Committee will meet at least four times
a year, or more frequently if required.
Financial Management
The Company does not currently have a finance director and
responsibility for financial management of the Company is
undertaken by the Directors. Due to the limited number of financial
transactions pre-Acquisition and the financial expertise of the
Board, the Board believes this to be appropriate. Brown &
McLeod, an accountancy practice where Mr Roddison is the senior
partner, will provide bookkeeping services prior to the
Acquisition. However, it is the Company's intention to appoint a
finance director to the Board, to the extent that a suitable
candidate is not provided by the target business which is the
subject of the first Acquisition.
Corporate Governance
The Company will observe the requirements of the Corporate
Governance Code (the UK Corporate Governance Code, as published by
the Financial Reporting Council). This is the corporate governance
regime for England and Wales, the Company's country of
incorporation. As at the date of this Prospectus the Company is,
and at the date of Admission will be, in compliance with the
Corporate Governance Code with the exception of the following:
-- Given the size and non-executive composition of the Board,
certain provisions of the Corporate Governance Code (in particular
the provisions relating to the composition of the Board, the
division of responsibilities between the Chairman and chief
executive and executive compensation), are not being complied with
by the Company as the Board considers these provisions to be
inapplicable to the Company.
-- Until the Acquisition is made the Company will not have a
nominations committee. Following the Acquisition the Board intends
to put in place nominations committee. The Board as a whole will
review the appointment of new members of the Board prior to the
Acquisition, taking into account the interests of Shareholders and
the performance of the Company.
-- Until a further Independent Non-Executive Director is
appointed, the Board will not comply with the provision of the
Corporate Governance Code that at least half of the Board,
excluding the Chairman, should comprise non-executive directors
determined by the Board to be independent. The Company intends to
appoint an additional Independent Non-Executive Director following
the Acquisition so that the Board complies with this provision.
At this stage of the Company's development, the Board considers
these three elements of the Corporate Governance Code to be
inappropriate. The Company does have an Audit and Risk Committee
and a Remuneration Committee, both of which are chaired by the
Non-Executive Chairman. The Company will seek Shareholder approval
at a general meeting in respect of the Acquisition if the
Acquisition constitutes a Reverse Takeover. The Board intends to
review its observance of the remaining aspects of the Corporate
Governance Code concurrent with the Acquisition.
As at the date of this document, the Board has voluntarily
adopted the Model Code for directors' dealings contained in the
Listing Rules. The Board will be responsible for taking proper and
reasonable steps for ensuring compliance with the Model Code by the
Directors.
Compliance with the Model Code is being undertaken on a
voluntary basis, and the FCA will not have the authority to (and
will not) monitor the Company's compliance with the Model Code nor
will it be able to impose any sanctions in respect of failure by
the Company to comply.
The Company is applying for a Standard Listing of the Ordinary
Shares on the Official List and a Standard Listing offers less
protection to Investors than would otherwise be the case with a
Premium Listing on the Official List. Further details on the
consequences of a Standard Listing are set out in the section
entitled "Consequences of a Standard Listing" on page 21 of this
document.
6. Acquisition Structure
Acquisitions are expected to be structured by way of private
share purchase or business or asset purchase agreements between the
Company and the relevant sellers. Further details on the types of
Acquisitions that may be carried out by the Company are detailed in
Part I of this document.
7. Material Contracts
The Company has entered into a number of other contracts since
incorporation, including but not limited to, the Registrar
Agreement and the Placing Agreement, which are summarised in
paragraph 12 of Part VII of this document.
8. Operating and Financial Review, Capital Resources and Indebtedness
The Company was incorporated on 12 March 2012. It has not as yet
traded and no material level of interest income has been received
to date. Since incorporation, its expenses have related to
professional and associated expenses related to the Standard
Listing, and Placing. These expenses have been met from the
proceeds of the issue of new Ordinary Shares, the history of which
is described fully in Part VII paragraph 2, and which have been the
only sources of cash for the Company to date.
As at the date of this Prospectus, the Company will have cash
resources of GBP100 plus unused overdraft facilities of GBP3,300.
This includes the proceeds from the issue of GBP100,000 of
Convertible Loan Notes, which compulsorily convert into 1,250,000
Ordinary Shares on Admission. This figure does not include the
unpaid GBP56,000 of capital due on the Deferred Shares, which is
due unconditionally on Admission, nor does it include the Net
Proceeds from the Placing, which is not underwritten and is
conditional on Admission. The Company expects to issue
significantly more Ordinary Shares than it currently has in issue
when completes the Acquisition. The Company may also significantly
increase its level of borrowings post-Acquisition.
The Company's capitalisation and Indebtedness are summarised in
the table below:
Total Current Debt
---------------------------------------------------- -----------
- Guaranteed -
---------------------------------------------------- -----------
- Secured -
---------------------------------------------------- -----------
- Unguaranteed/Unsecured -
---------------------------------------------------- -----------
Total Non-Current Debt (excluding current portion
of long-term debt)
---------------------------------------------------- -----------
- Guaranteed -
---------------------------------------------------- -----------
- Secured -
---------------------------------------------------- -----------
- Unguaranteed/Unsecured -
---------------------------------------------------- -----------
Shareholder's Equity (extracted pro-forma statement
in Part Va)
---------------------------------------------------- -----------
a) Share capital GBP839,538
---------------------------------------------------- -----------
b) Legal Reserves -
---------------------------------------------------- -----------
c) Other reserves -
---------------------------------------------------- -----------
Total GBP839,538
---------------------------------------------------- -----------
The pro-forma statement in Part Va of this Prospectus has been
prepared for illustrative purposes only. Because of its nature, the
Pro Forma Financial Information addresses a hypothetical situation
and, therefore, does not represent the Company's actual financial
position.
PART III
THE PLACING
1. Description of the Placing
Under the Placing, 6,250,000 Placing Shares have been
conditionally subscribed for by Investors at the Placing Price of
16 pence per Ordinary Share, conditionally raising gross proceeds
of GBP1,000,000, subject to commissions and other estimated fees
and expenses of GBP159,650.
The net proceeds to the Company amount to approximately
GBP840,350, after deduction of fees and expenses payable by the
Company which are related to the Placing and Admission. The Placing
is conditional on, inter alia, Admission. If Admission does not
proceed, the Placing will not proceed and all monies paid will be
refunded to the applicants.
The Placing Shares have been made available primarily to
institutional investors in the UK and elsewhere. In accordance with
Listing Rule 14.3, at Admission at least 25% of the Ordinary Shares
of this listed class will be in public hands (as defined in the
Listing Rules).
Completion of the Placing will be announced via a regulatory
news service on Admission, which is expected to take place at 8.00
a.m. on 11 July 2013.
2. Sprint Capital and Xplorer Capital Equity Commitment
On 26 November 2012 Sprint Capital subscribed for 37,500
ordinary shares of GBP1.00 each in the capital of the Company,
which pursuant to the Reorganisation, were subdivided and
reclassified into 37,500 Deferred Shares and 1,875,000 Ordinary
Shares at an equivalent subscription price of 2 pence per Ordinary
Share, in respect of which GBP9,500 has been paid up and Sprint
Capital has undertaken to pay up the balance of GBP28,000 on the
earlier of the date of Admission and 12 months from the date of
subscription.
On 26 November 2012 Xplorer Capital subscribed for 37,500
ordinary shares of GBP1.00 each in the capital of the Company,
which pursuant to the Reorganisation, were subdivided and
reclassified into 37,500 Deferred Shares and 1,875,000 Ordinary
Shares at an equivalent subscription price of 2 pence per Ordinary
Share, in respect of which GBP9,500 has been paid up and Xplorer
Capital has undertaken to pay up the balance of GBP28,000 on the
earlier of the date of Admission and 12 months from the date of
subscription.
On 23 August 2012, John Roddison gave a guarantee for a 12 month
overdraft facility of GBP75,000 granted by Royal Bank of Scotland
plc to the Company as more fully described in Paragraph 12 (vi) of
Part VII of this Document. In consideration for the issue of the
Warrants, further details of which are set out in paragraph 12
(vii) of Part VII of this document, Xplorer Capital and Sprint
Capital have agreed to guarantee the obligations of John Roddison
in the event that Royal Bank of Scotland plc enforce the guarantee
given by him on the overdraft facility.
3. Admission, Dealings and CREST
The Placing is subject to the satisfaction of conditions
contained in the Placing Agreement, including Admission occurring
on or before 11 July 2013 or such later date as may be agreed by
Allenby, the Directors and the Company (being not later than 31
July 2013). Further details of the Placing Agreement are set out in
paragraph 12 (i) of Part VII of this document.
Admission is expected to take place and unconditional dealings
in the Ordinary Shares are expected to commence on the London Stock
Exchange at 8.00 a.m. on 11 July 2013. Dealings on the London Stock
Exchange before Admission will only be settled if Admission takes
place. All dealings in Ordinary Shares prior to commencement of
unconditional dealings will be at the sole risk of the parties
concerned.
The expected date for electronic settlement of such dealings
will be 11 July 2013. All dealings between the commencement of
conditional dealings and the commencement of unconditional dealings
will be on a "when issued basis". If the Placing does not become
unconditional in all respects, any such dealings will be of no
effect and any such dealings will be at the risk of the parties
concerned.
Where applicable, definitive share certificates in respect of
the New Ordinary Shares are expected to be despatched, by post at
the risk of the recipients, to the relevant holders, not later than
25 July 2013. The Ordinary Shares are in registered form and can
also be held in uncertificated form. Prior to the despatch of
definitive share certificates in respect of any Ordinary Shares
which are held in certificated form, transfers of those Ordinary
Shares will be certified against the register of members of the
Company. No temporary documents of title will be issued.
4. Placing Arrangements
The Company, the Directors, and Allenby have entered into the
Placing Agreement pursuant to which Allenby has agreed, subject to
certain conditions, to use its reasonable endeavours to procure
subscribers for the Placing Shares at the Placing Price. The
Placing Agreement does not include any underwriting
obligations.
Allenby may terminate the Placing Agreement (and the
arrangements associated with it) at any time prior to Admission in
certain circumstances (including for a material breach of
warranty). If this right is exercised, the Placing and these
arrangements will lapse and any monies received in respect of the
Placing will be returned to applicants without interest by
Allenby.
Further details of the terms of the Placing Agreement are
contained in paragraph 12 (i) of Part VII of this document.
5. Allocation and Pricing
All Ordinary Shares issued or sold pursuant to the Placing will
be issued or sold (as applicable) at the Placing Price which has
been determined by Allenby after consultation with the
Directors.
Allocations will be determined by agreement between the
Directors and the Company after indications of interest from
Prospective Investors have been received. A number of factors will
be considered upon deciding the basis of allocations under the
Placing, including the level and nature of the demand for the
Ordinary Shares, investor profile and the firm through which they
are made. Each Prospective Investor shall only be entitled to
acquire their allocation. Allocations will be managed by Allenby so
that the Company shall have sufficient shares in public hands, as
defined in the Listing Rules. Admission will only be applied for if
applications are received under the Placing for 6,250,000 Ordinary
Shares, and those applications are conditional only on Admission.
Admission will also only be applied for if a minimum of 3,000,000
Placing Shares are allocated to Investors whose individual and
unconnected Shareholdings will each equate to less than 5.0 per
cent. of the Enlarged Share Capital, and who do not fall within any
of the other excluded categories of investors in Listing Rule
14.2.2 (4).
Conditional upon Admission occurring and becoming effective by
8.00 a.m. London time on or prior to 11 July 2013 (or such later
date as the Company, Allenby and Optiva may agree (not being later
than 31 July 2013)) and the Investors being allocated Placing
Shares, an Investor who has applied for Ordinary Shares agrees to
become a member of the Company and agrees to subscribe for those
Ordinary Shares allocated to it by Allenby (such allocations not
being subject to clawback) at the Placing Price. To the fullest
extent permitted by law, Investors will not be entitled to rescind
their agreement at any time. In the event that Admission does not
becoming effective by 8.00 a.m. London time on or prior to 11 July
2013 (or such later date as the Company, Allenby and Optiva may
agree (not being later than 31 July 2013)), Investors will receive
a full refund of monies subscribed.
The rights attaching to the Placing Shares will be uniform in
all respects and all of the Ordinary Shares will form a single
class for all purposes.
The Placing Shares are priced at a premium to net asset value
(post Placing) of approximately 8.7 pence per share. The net asset
value reflects the cash balances of the Company, as the Company has
no other assets until the Acquisition is completed. The premium to
net asset value places an intangible value on the strategy proposed
by the Board and the human capital contained in the Board, as well
as reflecting the costs incurred in achieving the Placing and
Admission. At the Placing Price, the Enlarged Share Capital will
have a total value of GBP1,800,016.
6. Payment
Each Investor undertakes to pay the Placing Price for the
Placing Shares issued to such Investor in such manner as shall be
directed by Allenby. Liability for stamp duty and stamp duty
reserve tax is as described in paragraph 3 of Part VI of this
document.
If Admission does not occur, subscription monies will be
returned without interest by Allenby.
7. Use of Proceeds
The gross proceeds of the Placing will be used to pay the
expenses of the Placing and further the Company's objective of
making one or more Acquisitions. As stated above, in making any
Acquisition the Company will focus on the acquisition of
controlling interests in companies, businesses and/or assets in the
oil and gas sector.
The Company's intention is to use the Net Proceeds of the
Placing to fund the due diligence and other transaction costs in
respect of the Acquisition. This due diligence will include a
legal, financial, technical and operational evaluation of the
Acquisition. The Company has appointed RPS Energy Consultants
Limited, a highly experienced provider of geoscience and
engineering consultancy services to the oil and gas industry, to
provide independent assessments of potential Acquisition targets,
and to provide advice to the Board on the maximisation of those
assets post acquisition. The provision of the technical due
diligence information from RPS Energy Consultants Limited will
assist the Board in their decision making process when assessing
the attractiveness of potential Acquisition targets. Key elements
of this technical due diligence information includes:
-- Technical, resource and economic assessments of potential Acquisition targets;
-- Strategy consulting on the development of assets, post Acquisition; and
-- Reservoir engineering, in order to maximise the economic
return on producing oil and gas assets, post Acquisition.
The information provided to the Board by RPS Energy Consultants
Limited will enable the Board to make suitable judgements regarding
the geoscience and engineering aspects of a potential Acquisition.
The amount to be paid to RPS Energy Consultants Limited will depend
on the specifics of the Acquisition, but is estimated to be in the
range of GBP100,000 - GBP200,000, with approximately two thirds of
this amount being payable on success. Other principal other parties
who will retained to undertake elements of the Acquisition process
will be lawyers, accountants and financial advisers, but they will
be selected once the Acquisition is identified. The amount to be
paid to these other advisers will depend on the specifics of the
Acquisition, but is estimated to be in the range of GBP300,000 -
GBP400,000, with approximately two thirds of this amount being
payable on success.
8. CREST
CREST is a paperless settlement procedure enabling securities to
be evidenced otherwise than by a certificate and transferred
otherwise than by written instrument. The Articles permit the
holding of Ordinary Shares under the CREST system. The Company has
applied for the Ordinary Shares to be admitted to CREST with effect
from Admission and it is expected that the Ordinary Shares will be
admitted with effect from that time. Accordingly, settlement of
transactions in the Ordinary Shares following Admission may take
place within the CREST system if any Investor so wishes.
CREST is a voluntary system and Investors who wish to receive
and retain certificates for their securities will be able to do so.
An Investor applying for Ordinary Shares in the Placing may elect
to receive Ordinary Shares in uncertificated form if such Investor
is a system-member (as defined in the Regulations) in relation to
CREST.
9. Selling Restrictions
The Ordinary Shares will not be registered under the Securities
Act or the securities laws of any state or other jurisdiction of
the US and may not be taken up, offered, sold, resold, transferred,
delivered or distributed, directly or indirectly, within into or in
the US.
The Placing is being made by means of offering placing of new
Ordinary Shares to certain institutional investors in the UK and
elsewhere outside the US in accordance with Regulation S. The
Company has not been and will not be registered under the US
Investment Company Act, and Investors will not be entitled to the
benefits of that Act.
Certain restrictions that apply to the distribution of this
document and the New Ordinary Shares being issued pursuant to the
Placing in certain jurisdictions are described in the section
headed "Notices to Investors" in Part VIII of this document.
DEFINITIONS
The following definitions apply throughout this document, unless
the context requires otherwise:
"Acquisition" or "Acquisitions" the acquisition by the Company of
one or more companies or businesses
as described in Part I of this document
(and, in the context of the Acquisition
or Acquisitions, references to a
company without reference to a business
and vice versa shall in both cases
be construed to mean both a company
and a business);
"Admission" the admission of the Ordinary Shares
to the Standard Segment of the Official
List and to trading on the London
Stock Exchange's Main Market for
listed securities;
"AIM" the market of that name, operated
by the London Stock Exchange;
"Allenby" Allenby Capital Limited, financial
adviser and joint broker to the
Company, which is authorised and
regulated in the UK by the FCA;
"Allenby Warrants" means the 75,000 warrants to be
granted to Allenby to subscribe
for Ordinary Shares at 10 pence
per share for a period of five years
from Admission and as more particularly
detailed in Part VII of this document;
"Articles" the articles of association of the
Company;
"Board" or "Directors" the directors of the Company whose
names are set out on page 28 of
this document;
"Business Day" means a day (other than a Saturday
or Sunday) on which banks are open
for business in London;
"Chapter 10" Chapter 10 of the Listing Rules;
"City Code" the City Code on Takeovers and Mergers;
"Company" or "Xplorer" Xplorer plc, a company incorporated
in England and Wales with company
number 7987393;
"Companies Act" the Companies Act 2006, as amended;
"Control" (i) the power (whether by way of
ownership of shares, proxy, contract,
agency or otherwise) to: (a) cast,
or control the casting of, 30 per
cent. or more of the maximum number
of votes that might be cast at a
general meeting of the Company,
or (b) appoint or remove all, or
the majority, of the directors or
other equivalent officers of the
Company, or (c) give directions
with respect to the operating and
financial policies of the Company
with which the directors or other
equivalent officers of the Company
are obliged to comply, and/or (ii)
the holding beneficially of 30 per
cent. or more of the issued share
capital of the Company (excluding
any part of that issued share capital
that carries no right to participate
beyond a specified amount in a distribution
of either profits or capital), but
excluding in the case of each of
(i) and (ii) above any such power
or holding that arises as a result
of the issue of Ordinary Shares
by the Company to an investor in
connection with an Acquisition;
"Convertible Loan Notes" GBP100,000 convertible loan notes
constituted by the Convertible Loan
Note Instrument;
"Convertible Loan Note Instrument" the convertible loan note instrument
constituting the Convertible Loan
Notes, which were issued by the
Company on 4 December 2012;
"Corporate Governance Code" the code of best practice including
the principles of good governance
known as the "UK Corporate Governance
Code" (the latest edition of which
was published in June 2010) published
by the Financial Reporting Council
as amended from time to time;
"CREST" the relevant system (as defined
in the Uncertificated Securities
Regulations 2001) in respect of
which Euroclear UK & Ireland is
the operator (as defined in the
Uncertificated Securities Regulations
2001);
"Deferred Shares" the 75,002 deferred shares of GBP0.95
each in issue as at the date of
this Prospectus;
"Disclosure and Transparency the Disclosure and Transparency
Rules" Rules of the UK Listing Authority
made in accordance with section
73A of FSMA;
"EEA" the European Economic Area;
"EEA States" the member states of the European
Union and the European Economic
Area;
"Enlarged Share Capital" the entire issued share capital
of the Company upon Admission, comprising
the New Ordinary Shares and the
Existing Ordinary Shares and the
Ordinary Shares issued by the Company
on conversion of the Convertible
Loan Notes;
"ERISA" the US Employee Retirement Income
Security Act of 1974, as amended;
"Euroclear UK & Ireland" Euroclear UK & Ireland Limited,
the operator of CREST;
"Existing Ordinary Shares" the 3,750,100 Ordinary Shares in
issue as at the date of this document;
"FCA" the UK Financial Conduct Authority;
"FSMA" the Financial Services and Markets
Act 2000, as amended;
"Group" the Company and its subsidiaries
from time to time;
"Historical Financial Information" the historical financial information
of the Company for the period ended
31 October 2012 as set out in Part
IV (B) of this document;
"HMRC" Her Majesty's Revenue and Customs;
"IFRS" International Financial Reporting
Standards as endorsed by the European
Union;
"Investor" a person who confirms his agreement
to Allenby to subscribe for Placing
Shares under the Placing;
"Listing Rules" the Listing Rules made by the FCA
under Part VI of the FSMA;
"Locked In Persons" Sprint Capital and Xplorer Capital;
"London Stock Exchange" London Stock Exchange plc;
"Model Code" the Model Code on director's dealings
in securities set out in Listing
Rule 9, Annex 1R;
"Net Proceeds" the funds received on closing of
the Placing less any expenses paid
or payable in connection with the
Placing and Admission;
"New Ordinary Shares" the 6,250,000 new Ordinary Shares
to be allotted and issued pursuant
to the Placing;
"Non-Executive Directors" the non-executive directors of the
Company whose names are set out
on page 28 of this document;
"Official List" the Official List of the UKLA;
"Overseas Shareholder" a Shareholder in a territory other
than the UK;
"Ordinary Shares" ordinary shares of 0.1 pence each
in the share capital of the Company;
"Overseas Shareholder" a Shareholder in a territory other
than the UK;
"Optiva" Optiva Securities Limited, joint
broker and placing agent to the
Company which is authorised and
regulated by the FCA;
"Placing" the conditional placing of the Placing
Shares by Allenby at the Placing
Price pursuant to the Placing Agreement;
"Placing Agreement" the conditional agreement dated
27 June 2013 between the Company,
the Directors and Allenby, summary
details of which are set out in
paragraph 12 (i) of Part VII of
this document;
"Placing Price" 16 pence per Placing Share;
"Placing Shares" the 6,250,000 New Ordinary Shares
to be allotted pursuant to the Placing;
"Premium Listing" a Premium Listing under Rule 6 of
the Listing Rules;
"Pro Forma Financial Information" the unaudited pro forma statement
of net assets of the Company as
at 31 October 2012 as set out in
Part V (A) of this document;
"Prospective Investors" prospective investors in New Ordinary
Shares;
"Prospectus" a prospectus required under the
Prospectus Directive and prepared
in accordance with the Prospectus
Rules;
"Prospectus Directive" Directive 2003/71/EC of the European
Union;
"Prospectus Rules" the Prospectus Rules made by the
FCA under Part VI of the FSMA;
"Registrar" Share Registrars Limited;
"Registrar Agreement" the registrar agreement dated 10
October 2012 entered into between
the Company and the Registrar, details
of which are set out in paragraph
12 (ii) of Part VII of this document;
"Regulations" the Uncertificated Securities Regulations
2001 (SI 2001 No. 3755);
"Regulation S" Regulation S under the Securities
Act;
"Reorganisation the subdivision and reclassification
of each of the issued ordinary shares
of GBP1.00 in the capital of the
Company into 50 new Ordinary Shares
and 1 Deferred Share;
"Reverse Takeover" a transaction defined as a reverse
takeover under Listing Rule 10;
"SEC" the US Securities and Exchange Commission;
"Securities Act" the US Securities Act of 1933, as
amended;
"Shareholders" the holders of Ordinary Shares and/or
the New Ordinary Shares (as the
context requires);
"Special Resolution" a special resolution within the
meaning of the Companies Act;
"Sprint Capital" Sprint Capital Management Limited,
a company incorporated in the Cayman
Islands with company number 262894;
"Standard Listing" a Standard Listing under Chapter
14 of the Listing Rules;
"Sterling Denominated Money the wholesale markets for money-related
Markets" instrument denominated in Sterling
(including, without limitation,
commercial paper, floating rate
notes, certificates of deposit and
bonds);
"Subscriber Shares" the two ordinary shares of GBP1
each in the share capital of the
Company, issued on incorporation,
and subsequently sub-divided and
reclassified into 100 Ordinary Shares
and two Deferred Shares ;
"Subsidiary" has the meaning set out in sections
1159 and Schedule 6 of the Companies
Act;
"Takeover Panel" the Panel on Takeovers and Mergers;
"UK" or "United Kingdom" the United Kingdom of Great Britain
and Northern Ireland;
"UK Listing Authority" or "UKLA" the FCA acting in its capacity as
the competent authority for the
purposes of Part VI of the FSMA
and in the exercise of its functions
in respect of admission to the Official
List;
"US" or "United States" the United States of America;
"US Investment Company Act" the US Investment Company Act of
1940, as amended, and related rules;
"US Person" has the meaning set out in Regulation
S;
"US Tax Code" the US Internal Revenue Code of
1986, as amended;
"VAT" UK Value Added Tax;
"Warrant Holders" "Warrant Holders" means Xplorer
Capital and Sprint Capital;
"Warrant Instrument" an instrument setting out the terms
of the Warrants to be granted to
each of the Warrant Holders;
" Warrants" 3,750,000 warrants to subscribe
for Ordinary Shares at a subscription
price of 0.1p each for a period
from the date of the Acquisition
to three years from Admission as
more particularly detailed in Part
VII of this document; and
"Xplorer Capital" Xplorer Capital Limited.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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