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Benchmark Hlgs PLC - Placing and Open Offer

RNS Number : 4082B
Benchmark Holdings PLC
30 January 2020
 

THIS ANNOUNCEMENT, INCLUDING APPENDIX I AND THE INFORMATION CONTAINED IN IT, IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION, OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, NEW ZEALAND, SOUTH AFRICA OR ANY OTHER STATE OR JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.  PLEASE SEE THE IMPORTANT NOTICE AT THE END OF THIS ANNOUNCEMENT.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF EU REGULATION 956/2014 ("MAR").

 

 

Benchmark Holdings plc 

("Benchmark" or the "Company")

Placing to raise £36.4 million and Open Offer to raise up to £6.6 million (the "Fundraise")

and

Notice of General Meeting

 

Benchmark Holdings plc (LSE:BMK), the aquaculture health, nutrition and genetics business, announces that it has conditionally raised £36.4 million by way of a Placing at an Issue Price of 40p per Ordinary Share and intends to raise up to a further £6.6 million by way of an Open Offer to Qualifying Shareholders at an Issue Price of 40p per Ordinary Share.

Reasons for and benefits of the Fundraise

·      The Company has developed CleanTreat®, a proprietary system that removes medicinal residues from treatment water, and which is integral to the commercial delivery of product candidate BMK08, the Company's novel sea lice treatment for sea lice

·      The Directors strongly believe the Fundraise represents the optimal scale-up strategy for CleanTreat® ahead of the anticipated BMK08 regulatory approval by:

increasing its speed to market

delivering a higher expected return-on-investment

maximising value for Benchmark shareholders by retaining full ownership of CleanTreat®

·      The net proceeds from the Placing will be used as follows:

£19.0 million to fund the commercial development of Benchmark's CleanTreat® system to support the launch of BMK08; and

£16.0 million to provide additional working capital to fund the continuing business and strategy until the proceeds from the planned disposals (anticipated to amount to between £30 million and £35 million (before costs) in aggregate) are received. Capital will then be released to fund the Company's SPR shrimp roll-out and new species programmes

Summary of the Placing and Open Offer

·      The Fundraise is structured as a Placing to raise £36.4 million (£35.0 million net of expenses) and an Open Offer to Qualifying Shareholders to raise up to £6.6 million

·      The net proceeds of the proposed Open Offer of up to £6.6 million (before expenses) will be used to further support the Company's working capital requirements

·      The Issue Price of 40p per Ordinary Share represents a discount of 10.1% to the closing middle market price of 44.5p per Ordinary Share on 29 January 2020, being the last day prior to the date of this Announcement

·      Certain Directors of the Company have subscribed for Placing Shares in the Placing

·      The Fundraise is conditional upon, inter alia, shareholder approval which will be sought at the General Meeting of the Company to be held on 17 February 2020, notice of which will be contained in a Circular to be posted to shareholders later today

·      Numis is acting as Financial Adviser, Nominated Adviser and sole Broker in relation to the Fundraise

Peter George, Executive Chairman of Benchmark, commented:

"We are preparing to launch BMK08, our novel medicinal treatment to combat sea lice, one of the main biological challenges in salmon farming. This requires scaling up CleanTreat®, our proprietary system that removes medicinal residues from treatment water, and which is integral to the delivery of BMK08. Having reviewed a number of funding options, we strongly believe that an equity raise is the optimal funding strategy to deliver this scale."  

I am pleased that existing and new shareholders have placed their confidence in us to drive Benchmark to finally deliver on its enormous potential. The actions we will take in 2020 will deliver a profitable business, leading the future direction in key areas of sustainable Aquaculture."

 

Details of analyst / investor call today

There will be a call at 8:30am UK time today for analysts and investors. To register for the call please contact MHP Communications on +44 (0)20 3128 8742, or by email on benchmark@mhpc.com

The capitalised terms used in this Announcement have the meaning set out in Appendix II to this Announcement.

The ticker for the Company's ordinary shares is BMK. The Company's LEI is 2138001UQHM4VZGXUJ19.

The Company has 558,986,062 Existing Ordinary Shares. The Company holds no shares in treasury. This figure may be used by shareholders 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 Company under the Disclosure and Transparency Rules of the FCA.

This Announcement contains inside information for the purposes of MAR. In addition, market soundings (as defined in MAR) were taken in respect of the Placing 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.

This Announcement should be read in its entirety. In particular, your attention is drawn to the "Important Notice" section of this Announcement below and to the detailed terms and conditions of the Placing set out in Appendix I. By choosing to participate in the Placing and by making an oral and legally binding offer to acquire Placing Shares, investors will be deemed to have read and understood this Announcement in its entirety and to be making such offer on the terms and subject to the conditions in it, and to be providing the representations, warranties and acknowledgements contained in Appendix I.

For further information please contact:

Benchmark Holdings plc

Tel:  +44 (0)20 7920 3150

Peter George, Executive Chairman

 

Septima Maguire, CFO

 

Ivonne Cantu, Investor Relations Director

 

 

 

 

 

Numis

Tel:  +44 (0)20 7260 1000

Freddie Barnfield, Duncan Monteith (Nominated Adviser)

 

James Black (Corporate Broking)

 

 

 

MHP Communications

Katie Hunt / Reg Hoare / Alistair de Kare-Silver

Tel:  +44 (0)20 3128 8742

 

 

 

Introduction

Benchmark's mission is to enable aquaculture food producers to improve their sustainability and profitability by offering products and solutions which increase yield, product quality and animal health and welfare. Benchmark's aim is to be the leading supplier of solutions in genetics, specialist nutrition and health to the aquaculture industry.

The Company has developed product candidate BMK08, a novel medicinal treatment to combat sea lice, one of the main biological challenges in salmon farming. In parallel, the Company has developed CleanTreat®, a proprietary system that removes medicinal residues from treatment water, and which is integral to the delivery of product candidate BMK08.

The Group is preparing to launch product candidate BMK08 in the first half of 2021 following its anticipated regulatory approval, and this will require scaling up CleanTreat®, with an associated funding requirement. Having reviewed a number of funding options, the Directors strongly believe that an equity raise is the optimal funding strategy to enable speed to market and maximise returns for Benchmark shareholders. The Company estimates that a £19.0 million investment is required to fund the commercial scale-up of CleanTreat® with commitments required ahead of the launch of BMK08. In addition, the Company is seeking to raise up to £24.0 million (before expenses) for working capital purposes to fund the Group's continuing operations and strategy until receipt of proceeds from its previously announced disposals programme. The Company expects its previously announced disposals to generate between £30 million and £35 million (before costs) in aggregate, although the timing and proceeds from these disposals are not wholly within the Group's control. Once the disposals complete capital will then be released to fund the Company's specific pathogen resistant ("SPR") shrimp roll-out and new species programmes.

Benchmark is proposing to raise up to approximately £43.0 million (before expenses) by the issue of up to 107,440,766 new Ordinary Shares at a price of 40 pence per Ordinary Share. The Fundraise is being made by way of a Placing of 91,000,000 Placing Shares and an Open Offer of up to 16,440,766 Open Offer Shares to Qualifying Shareholders holding Ordinary Shares at the close of business on 28 January 2020. The Issue Price of 40 pence per Ordinary Share represents a 10.1 per cent. discount to the closing middle market price of 44.5 pence per Ordinary Share on 29 January 2020, the last business day before this Announcement.

The Placing Shares represent approximately 16.3% of the issued share capital of the Company prior to the Fundraise and the Open Offer Shares represent up to approximately 2.9% of the issued share capital of the Company prior to the Fundraise.

Background to and reasons for the Fundraise

Benchmark's aim is to be the leading supplier of solutions in genetics, specialist nutrition and health to the aquaculture industry. Benchmark's primary focus is on developing sustainable solutions to the main biological and disease problems in the industry.

The Group has a broad portfolio of products and solutions that improve yield, quality, animal health and welfare, and reduce environmental impact across the production cycle. These include eggs and sea lice treatments for the salmon sector, live feed (Artemia), specialist diets, genetics and probiotics for the shrimp and sea bass/sea bream sectors as well as genetics products and services for tilapia and other species.

The market has a growing need for solutions that improve the sustainability of food production in aquaculture. Benchmark's focus on delivering products and solutions that improve animal health and welfare, and that reduce environmental impact, in the Directors' opinion positions it as a leader in improving sustainability standards in aquaculture.

Product Candidate BMK08 and CleanTreat®

Sea lice are the most significant biological challenge in salmon farming with an estimated annual cost to the industry of approximately £1 billion, excluding any costs associated with reputational loss. Currently, there is no treatment in the market that is fully efficacious. Excluding 'cleanerfish', a species of fish that feed on the sea lice that live on farmed fish, medicinal bath treatments were the most prevalent treatment for sea lice until 2015. Since then, the use of medicinal treatments has declined substantially as a result of increased sea lice resistance to such medicines and the progression of environmental awareness. This has resulted in a large increase in the use of mechanical treatments, which have become the most used solution after 'cleanerfish', and which are typically more detrimental to animal welfare.

Over the past ten years, the Group has developed product candidate BMK08, a novel medicinal bath treatment for sea lice. In parallel to product candidate BMK08, the Group has developed CleanTreat®, a proprietary system that removes medicinal residues from treatment water before the water is discharged back into the ocean. CleanTreat® is integral to the delivery of product candidate BMK08 and significantly reduces its environmental impact. In addition to removing medicinal residues, CleanTreat® removes the organic material from the treatment water, including sea lice, which is essential in combating sea lice resistance to the medicine.

Over the last 24 months, the Group has conducted an extensive programme of trials for product candidate BMK08 in combination with CleanTreat® with five top salmon producers in Norway, treating approximately 35,000 tonnes of salmon. Throughout these trials product candidate BMK08 has demonstrated approximately 99% efficacy, and higher animal welfare than mechanical treatments. The Directors believe there is demonstrable and growing interest from customers for the product and estimates that the product candidate BMK08 CleanTreat® solution could reach peak annual sales of £50 million in Norway alone and £75 million globally.

CleanTreat® has supported the trials of product candidate BMK08 since 2017, treating more than 400,000 m3 of water. In 2019, CleanTreat® was awarded a prestigious industry innovation award at the world's largest aquaculture technology exhibition, AquaNor. CleanTreat® addresses environmental medicinal contamination, one of the most pressing sustainability concerns in society and has broad potential application for current and future medicinal treatments beyond product candidate BMK08.

Product candidate BMK08 in combination with CleanTreat® is potentially transformative for the farmed salmon industry, addressing the urgent need for a highly efficacious treatment for sea lice with better animal welfare credentials.

The Group believes product candidate BMK08 in combination with CleanTreat® can potentially deliver significant value to customers:

·      Lower mortality and improved growth resulting in higher yield and improved operational margin;

·      Reduced risk of resistance to product candidate BMK08 developing;

·      Reduced need for alternative treatments across the production cycle; and

·      Better animal welfare, beneficial to industry reputation with consumers.

The Group is preparing to launch product candidate BMK08 together with CleanTreat® in the first half of 2021, subject to receipt of regulatory approval for product candidate BMK08, the timing and obtaining of which is not within the Group's control. The Company estimates that the commercial launch of CleanTreat® requires a £19.0 million investment with commitments required ahead of the product candidate BMK08 launch date in order to have sufficient CleanTreat® capacity and qualified personnel in place for an efficient roll-out of product candidate BMK08.

The Company has considered various strategies to scale up CleanTreat® including alternative funding options and, with support from a number of its major shareholders, has determined that retaining full ownership of CleanTreat® by raising equity is the optimal route in order to increase speed to market and maximise the returns for Benchmark shareholders with the potential to generate a higher expected return from the Company's investment in product candidate BMK08 and CleanTreat®. The Directors believe that this, together with the disposals and restructuring programmes being implemented in 2020, will accelerate Benchmark's move from a position of net R&D investment to becoming a profitable and cash generating company.

Benchmark's strategy and near term priorities

In 2018, the Company developed a five-year organic growth strategy focussed on delivering returns from the platform built since the Company's IPO in 2013 through acquisitions and investment in research and development. The Company has five strategic pillars:

1.   implement structural efficiencies - including the disposal of or exit from non-core areas®, establishing a partnership agreement for its companion animal products, streamlining its pipeline of health products and implementing a comprehensive review of the Group's operating base;

2.   grow in established markets from existing capacity - including increasing production of the Company's new salmon egg facility in Norway and expanding its commercial footprint in the shrimp nursery and grow-out segments;

3.   commercial delivery of the Group's pipeline of health products - including product candidate BMK08 and CleanTreat®;

4.   focused investment in markets that leverage the Group's platform - including the launch of the Company's SPR shrimp which leverages Benchmark's expertise in genetics and commercial footprint in shrimp; and

5.   position Benchmark in areas of future growth - including through its ongoing investment in genetics where the Company achieved a significant breakthrough in 2019, identifying a key genetic marker in tilapia linked with resistance against Streptococcus iniae, one of the major diseases affecting the species.

As set out in the Company's 2019 annual report, Benchmark's priorities for the next 12 months are to execute its programme of structural efficiencies as set out above, to prepare for the commercial launch of product candidate BMK08 and CleanTreat®, and to execute its strategy in its core business areas of Genetics and Advanced Nutrition, including the launch of the SPR shrimp, establishing production of salmon eggs in Chile and expanding its Advanced Nutrition business into the nursery and grow-out shrimp segments.

Liquidity and working capital requirement

Liquidity and cash management constitute a priority for the Company while it continues to invest in the commercialisation of product candidate BMK08 in combination with CleanTreat® and research and development of other pipeline products, with a focus on those closest to commercialisation. At 30 September 2019, the Company had net debt of £87.1 million and liquidity (undrawn facilities plus cash balances) of £28.2 million.

A comprehensive programme to strengthen the Company's balance sheet is being undertaken including the disposal of or exit from non-core businesses, a cost reduction/cost containment plan and enhanced working capital management. In the area of disposals and exits, the Company has made progress since the last update in December 2019 with bids received for its veterinary training and veterinary services businesses, and disposals are expected to complete in 2020.

The Group's planned disposals are expected to generate between £30 million and £35 million (before costs) in aggregate; however, the timing of these disposals and the proceeds received from them are not wholly within the Company's control. The Fundraise will allow the Group to execute its strategic growth initiatives without interruption, including the commercialisation of product candidate BMK08 and CleanTreat®, and support its continuing business. As the disposals complete and working capital pressure is reduced, capital is expected to be released to be invested in the Company's genetic programmes.

Use of proceeds

The Placing is expected to raise £36.4 million in gross proceeds (approximately £35.0 million in net proceeds). The Board currently intends to use the funds raised by way of the Placing as follows:

·      £19.0 million to fund the commercial development of CleanTreat® to support the launch of product candidate BMK08 enabling speed to market and maximising value for Benchmark shareholders; and

·      £16.0 million working capital to fund the continuing business and strategy until proceeds from the disposals, which the Directors expect to be between £30 million and £35 million (before costs) in aggregate, are received. Capital will then be released to fund the roll-out of the Company's SPR shrimp and its new species programmes.

In addition, the Company proposes to raise gross proceeds of up to £6.6 million (£6.5 million net of expenses) through the Open Offer. The Board currently intends to use the additional funds raised pursuant to the Open Offer for general working capital purposes.

Current trading and prospects

As set out in the Company's Announcement of its full year results in December 2019, the Company expects to deliver underlying adjusted EBITDA from continuing operations (before one-off other income) in line with the financial year ended September 2019 in the current financial year.

Trading in the first quarter of the year was in line with the trends reported in the full year results Announcement with positive trading in Genetics and Advanced Nutrition continuing to be affected by weak markets.

Overall, the Group is currently trading in line with the Director's expectations for the full year.

Update on planned disposals

Following the appointment of external advisers and, in certain cases, the commencement of sale processes, the Company has accelerated its programme of disposals and expects at least two of these to conclude in the first half of calendar year 2020. The Company has received indicative offers from several interested parties for the veterinary training and veterinary services businesses and is currently progressing discussions with those relevant interested parties. On the indications given, the Company may receive, in aggregate, up to approximately £29 million in cash consideration from these two disposals (before costs), although there can be no certainty as to their timing or successful conclusion (nor any others within the programme of disposals), or of the final consideration achieved which could be significantly below the level indicated by the current bids. The Company is also in advanced discussions with a potential buyer for one of its smaller non-core businesses which may result in the receipt of an additional up to £2 million of cash consideration (before costs) in the next few weeks.

Details of the Placing

Pursuant to the Placing Agreement, Numis has agreed to use its reasonable endeavours to procure Placees for 91,000,000 new Ordinary Shares at the Issue Price representing gross proceeds of £36.4 million. The Placing Shares are not subject to clawback and are not part of the Open Offer.

The terms and conditions of the Placing are set out in Appendix I to this Announcement.

The Placing is conditional, inter alia, on the following:

i)          The Resolutions being passed at the General Meeting;

ii)          the Placing Agreement not being terminated prior to Admission of the Placing Shares and becoming unconditional in all respects; and

iii)         Admission of the Placing Shares having become effective on or before 8.00 a.m. on 19 February 2020 (or such later date and/or time as the Company and Numis may agree, being no later than 8.30 a.m. 4 March 2020).

Application will be made for the Placing Shares to be admitted to trading on AIM subject to the passing of the Resolutions at the General Meeting. It is expected that Admission will become effective on 19 February 2020 and that dealings for normal settlement in the Placing Shares will commence at 8.00 a.m. on 19 February 2020. The Placing Shares will, when issued and fully paid, rank pari passu in all respects with the Ordinary Shares in issue at that time, including the right to receive all dividends and other distributions declared, made or paid after the date of Admission. The Placing is not underwritten.

The Placing is not conditional on Admission of the Open Offer Shares; if the Placing does not complete, then the Open Offer will lapse. However, if the Open Offer does not complete, then this will not prevent the Placing from completing.

Details of the Open Offer

Subject to the fulfilment of the conditions set out below, Qualifying Shareholders may subscribe for Open Offer Shares in proportion to their holding of Existing Ordinary Shares held on the Record Date. Shareholders subscribing for their full entitlement under the Open Offer may also request additional Open Offer Shares as an Excess Entitlement, up to the total number of Open Offer Shares available to Qualifying Shareholders under the Open Offer. The Open Offer is not underwritten.

The Open Offer is conditional, inter alia, on the following:

i)          The Resolutions being passed at the General Meeting;

ii)          the Placing Agreement not being terminated prior to Admission of the Placing Shares and having become unconditional in all respects;

iii)         Admission of the Placing Shares becoming effective on or before 8.00 a.m. on 19 February 2020 (or such later date and/or time as the Company and Numis may agree, being no later than 8.30 a.m. on 4 March 2020); and

iv)         Admission of the Open Offer Shares becoming effective on or before 8.00 a.m. on 19 February 2020 (or such later date and/or time as the Company and Numis may agree, being no later than 8.30 a.m. on 4 March 2020).

The allotment and issue of the Open Offer Shares is conditional on Admission of the Placing Shares but the Placing is not conditional on Admission of the Open Offer Shares; if the Placing does not complete, then the Open Offer will lapse. However, if the Open Offer does not complete, this will not prevent the Placing from completing.

If these and the other conditions to the Open Offer are not satisfied or waived (where capable of waiver), the Open Offer will lapse and will not proceed and any applications made by Qualifying Shareholders will be rejected. In these circumstances, application monies received by the Receiving Agent in respect of Open Offer Shares will be returned (at the Applicant's sole risk), without payment of interest, as soon as reasonably practicable thereafter. Lapsing of the Open Offer cannot occur after dealings in the Open Offer Shares have begun.

Basic Entitlement

Subject to the terms and conditions of the Open Offer, the Company invites Qualifying Shareholders to apply for their Basic Entitlement of Open Offer Shares at the Issue Price. Each Qualifying Shareholder's Basic Entitlement has been calculated on the following basis:

1 Open Offer Share for every 34 Existing Ordinary Shares held at the Record Date

Basic Entitlements will be rounded down to the nearest whole number of Ordinary Shares.

Excess Entitlement

Qualifying Shareholders are also invited to apply for additional Open Offer Shares (up to the total number of Open Offer Shares available to Qualifying Shareholders under the Open Offer) as an Excess Entitlement. Any Open Offer Shares not issued to a Qualifying Shareholder pursuant to their Basic Entitlement will be apportioned between those Qualifying Shareholders who have applied for an Excess Entitlement at the sole and absolute discretion of the Company, provided that no Qualifying Shareholder shall be required to subscribe for more Open Offer Shares than he or she has specified on the Application Form or through CREST.

The Open Offer Shares will, when issued and fully paid, rank pari passu in all respects with the Ordinary Shares in issue at that time, including the right to receive all dividends and other distributions declared, made or paid after the date of Admission of the Open Offer Shares. The Open Offer is not being underwritten.

Qualifying Shareholders should note that the Open Offer is not a "rights issue". Invitations to apply under the Open Offer are not transferable unless to satisfy bona fide market claims. Qualifying non-CREST Shareholders should be aware that the Application Form is not a negotiable document and cannot be traded. Qualifying Shareholders should also be aware that in the Open Offer, unlike in a rights issue, any Open Offer Shares not applied for pursuant to the Open Offer (including under the Excess Application Facility) will not be sold in the market nor will they be placed for the benefit of Qualifying Shareholders who do not apply for Open Offer Shares under the Open Offer (including under the Excess Application Facility). The Company reserves the right to place, with other third party investors at the Issue Price, any Open Offer Shares that are not taken up by Qualifying Shareholders pursuant to the Open Offer. Any such placement will be agreed between the Company and Numis, in which case Numis would use its reasonable endeavours to procure such other subscribers pursuant to the Placing Agreement and such placement will be subject to the terms and conditions of the Placing as set out in Appendix I to this Announcement.

Directors' participation

As part of the Placing, certain PDMRs have agreed to subscribe for Placing Shares pursuant to the Placing. The number of Placing Shares subscribed for by each PDMR and their resulting shareholdings on Admission (assuming full subscription under the Open Offer) are set out below:

Name

Number of existing Ordinary Shares

Percentage of existing Ordinary Shares

Number of Placing Shares subscribed for

Number of Ordinary Shares held on Admission

Percentage of Enlarged Share Capital on Admission*

Peter George

1,000,000

0.18%

1,250,000

2,250,000

0.34%

Septima Maguire

-

-

250,000

250,000

0.04%

Susan Searle

98,125

0.02%

100,000

198,125

0.03%

Hugo Wahnish

275,000

0.05%

75,000

350,000

0.05%

Yngve Myhre

400,000

0.07%

200,000

600,000

0.09%

Kevin Quinn

60,929

0.01%

25,000

85,929

0.01%

Jan-Emil Johansen

-

-

125,000

125,000

0.02%

* Assuming full subscription under the Open Offer

Application for Admission

Application will be made to the London Stock Exchange for the Placing Shares and the Open Offer Shares to be admitted to trading on AIM. It is expected that Admission will become effective and that dealings for normal settlement in the Placing Shares and the Open Offer Shares on AIM will commence at 8.00 a.m. on 19 February 2020.

Notice of General Meeting

The issue of the new Ordinary Shares is conditional upon, inter alia, the approval by the Shareholders of the Resolutions. A notice convening the General Meeting to be held at 2.00 p.m. on 17 February 2020 at the offices of Travers Smith LLP at 10 Snow Hill, London, EC1A 2AL, for the purpose of considering and, if thought fit, passing the Resolutions, is set out within the Circular to be posted to shareholders shortly. The Resolutions proposed are to enable the issue of the new Ordinary Shares.

Resolution 1 - Authority to allot shares

Resolution 1 is an ordinary resolution to authorise the Directors under section 551 of the Companies Act 2006 (as amended, modified, consolidated, re-enacted or replaced from time to time) (the "Act") to issue and allot the new Ordinary Shares. The Act requires that the authority of Directors to allot shares and to make offers or agreements to allot shares in the Company or grant rights to subscribe for or convert any security into shares (the "relevant securities") should be subject to the approval of Shareholders in a general meeting or to an authority set out in the Company's articles of association. Accordingly, Resolution 1 will be proposed to authorise the Directors to allot relevant securities in respect of the issue of the new Ordinary Shares. This authority is in addition to all existing authorities under section 551 of the Act and will expire at on the conclusion of the Company's next Annual General Meeting.

 

Resolution 2 - Disapplication of statutory pre-emption rights

Resolution 2 is a special resolution to disapply the statutory pre-emption rights under section 571 of the Act in respect of equity securities (as defined in section 560 of the Act). The Act requires that any equity securities issued wholly for cash must be offered to existing Shareholders in proportion to their existing shareholdings unless otherwise approved by Shareholders in a general meeting or accepted under the Company's articles of association. A special resolution will be proposed at the General Meeting to give the Directors authority to allot equity securities for cash other than on a pro rata basis pursuant to the issue of the new Ordinary Shares. This authority is in addition to all existing authorities under section 570 of the Act and will expire on the conclusion of the Company's next Annual General Meeting.

Risk Factors and Additional Information

The Circular also contains a number of risk factors and additional information on the Fundraise and the Company.

Action to be taken in respect of the General Meeting

Shareholders will find accompanying the Circular a Form of Proxy for use at the General Meeting. Whether or not Shareholders intend to be present at the General Meeting, they are requested to complete, sign and return the Form of Proxy in accordance with the instructions printed on it to Equiniti Limited, Aspect house, Spencer Road, Lancing, West Sussex, BN99 6DA as soon as possible and, in any event, so as to arrive no later than 2.00 p.m. on 13 February 2020. Completion and return of the Form of Proxy will not affect Shareholders' right to attend and vote in person at the General Meeting if they so wish. Further information regarding the appointment of proxies can be found in the Circular.

In the case of Shareholders who hold their Ordinary Shares in uncertificated form and receive these materials through their broker or other intermediary, the Shareholder should complet

Quick facts: Benchmark Holdings PLC

Price: 27

Market: AIM
Market Cap: £180.19 m
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