Results Of Equity Capital Raise
Pennon completed £180 million equity raise of 24.7 million shares at 730p to fund acquisition.
- Gross proceeds raised £180 million
- New ordinary shares issued 24,657,535
- Offer price per share 730 pence
- Shares issued as % of existing capital 9.4%
- Placing proceeds £173 million
- Net proceeds £176 million
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- 596/2014) AS IT FORMS PART OF UK LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018, AS AMENDED.
Pennon Group plc ("Pennon", the "Group" or the "Company")
RESULTS OF EQUITY CAPITAL RAISE
Pennon ("Pennon", the "Group" or the "Company") is pleased to announce the successful completion of the equity capital raise of new ordinary shares of 61.05 pence each in the capital of the Company (the "New Ordinary Shares") announced earlier today (the "Equity Capital Raise"). The Equity Capital Raise in total comprises 24,657,535 New Ordinary Shares (representing approximately 9.4 per cent. of the Company's existing issued share capital) and will raise gross proceeds of approximately £180 million.
A total of 23,711,998 New Ordinary Shares have been conditionally placed by Barclays Bank PLC ("Barclays") and Morgan Stanley & Co. International plc ("Morgan Stanley") (together, the "Bookrunners") at a price of 730 pence per New Ordinary Share (the "Offer Price"), with existing and new institutional investors, raising gross proceeds of approximately £173 million (the "Placing").
Concurrently with the Placing, certain directors and executives of the Company have subscribed for an aggregate of 20,537 New Ordinary Shares at the Offer Price, pursuant to subscription letters entered into with the Company, raising gross proceeds of approximately £150,000 (the "Subscription"). In addition, retail investors have subscribed in the separate retail offer made by the Company via the PrimaryBid platform for a total of 925,000 New Ordinary Shares at the Offer Price, raising gross proceeds of approximately £7 million (the "Retail Offer").
The Offer Price represents a discount of approximately 2.6 per cent to the closing share price of 750 pence on 9 January 2024 and a discount of 4.9 per cent to the middle market price at the time at which the Company and the Bookrunners agreed the Offer Price.
Applications have been made to the Financial Conduct Authority (the "FCA") and the London Stock Exchange plc (the "LSE") respectively for the admission of the New Ordinary Shares to the premium listing segment of the Official List of the FCA and to trading on the main market for listed securities of the LSE (together, "Admission"). It is expected that Admission will take place on or before 8.00 a.m. on 12 January 2024 and that dealings in the New Ordinary Shares will commence at that time. The Equity Capital Raise is conditional upon, amongst other things, Admission becoming effective and the placing agreement entered into between the Company and the Bookrunners not having been terminated in accordance with its terms. The New Ordinary Shares will, when issued, be fully paid and free of all liens, charges and encumbrances and will rank pari passu in all respects with the existing ordinary shares of the Company, including the right to receive all dividends and other distributions declared, made or paid after the date of issue.
For the purposes of the Disclosure Guidance and Transparency Rules, the total issued share capital of the Company following Admission will consist of 286,018,720 ordinary shares. The Company holds 5,628 shares in treasury. Therefore, the total number of voting rights in the Company following Admission will be 286,013,092 which is the figure which 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 Guidance and Transparency Rules.
Directors' participation in the Subscription
The following directors of the Company have agreed to subscribe for the following number of New Ordinary Shares at the Offer Price as part of the Subscription:
| Name | Number of New Ordinary Shares |
|---|---|
| Susan Davy | 8,356 |
| Steve Buck | 2,054 |
| Gill Rider | 2,054 |
| Dorothy Burwell | 2,054 |
| Jon Butterworth | 2,054 |
| Loraine Woodhouse | 2,054 |
The person responsible for arranging the release of this announcement on behalf of the Company is Andrew Garard, Group General Counsel and Company Secretary
Pennon Group PLC LEI: 213800V1CCTS41GWH423
The Equity Capital Raise is a non-pre-emptive issue of equity securities for cash and accordingly the Company makes the following post transaction report in accordance with the most recently published Pre-Emption Group Statement of Principles (2022).
| Name of issuer | Pennon Group plc |
| Transaction details | In aggregate, the Equity Capital Raise of 24,657,535 New Ordinary Shares represents approximately 9.4% of the Company's issued ordinary share capital. Settlement for the New Ordinary Shares and Admission are expected to take place on or before 8.00 a.m. on 12 January 2024. |
| Use of proceeds | The Equity Capital Raise of approximately £180 million in aggregate will be used in connection with the Acquisition, in order to ensure that the pro forma leverage and capital structure for the enlarged Group following the Acquisition remains consistent with Pennon's well-established water business gearing range of 55-65% (1) . |
| Quantum of proceeds | In aggregate, the Equity Capital Raise will raise gross proceeds of approximately £180 million and net proceeds of approximately £176 million. |
| Discount | The Offer Price represents a discount of approximately 2.6 per cent to the closing share price of 750 pence on 9 January 2024 and a discount of 4.9 per cent to the middle market price at the time at which the Company and the Bookrunners agreed the Offer Price . |
| Consultation | The Bookrunners undertook a pre-launch wall-crossing process, including consultation with major shareholders, to the extent reasonably practicable and permitted by law. |
| Retail investors | The Equity Capital Raise included a Retail Offer, for a total of 925,000 New Ordinary Shares, via the PrimaryBid platform. Retail investors, who participated in the Retail Offer, were able to do so at the same Offer Price as all other investors participating in the Placing and Subscription. The Retail Offer was made available to existing shareholders and new investors in the UK. Investors were able to participate through PrimaryBid's platform via its partner network (covering 60+ FCA registered intermediaries) and through PrimaryBid's free-to-use direct channel. Investors had the ability to participate in this transaction through ISAs and SIPPs, as well as General Investment Accounts (GIAs). This combination of participation routes meant that, to the extent practicable on the transaction timetable, eligible UK retail investors (including certificated retail shareholders) had the opportunity to participate in the Equity Capital Raise alongside institutional investors. Allocations in the Retail Offer were preferentially directed towards existing shareholders in keeping with the principle of soft pre-emption. |
Note: (1) Gearing at the regulated water business level, defined as net debt / RCV
UK Product Governance Requirements
Solely for the purposes of the product governance requirements of Chapter 3 of the FCA Handbook Product Intervention and Product Governance Sourcebook (the "UK Product Governance Requirements"), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any 'manufacturer' (for the purposes of the UK Product Governance Requirements) may otherwise have with respect thereto, the Placing Shares have been subject to a product approval process, which has determined that the Placing Shares are: (i) compatible with an end target market of retail investors and investors who meet the criteria of professional clients and eligible counterparties, each defined in Chapter 3 of the FCA Handbook Conduct of Business Sourcebook; and (ii) eligible for distribution through all permitted distribution channels (the "UK Target Market Assessment"). Notwithstanding the UK Target Market Assessment, distributors should note that: the price of the Placing Shares may decline and investors could lose all or part of their investment; the Placing Shares offer no guaranteed income and no capital protection; and an investment in the Placing Shares is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The UK Target Market Assessment is without prejudice to any contractual, legal or regulatory selling restrictions in relation to the Placing. Furthermore, it is noted that, notwithstanding the UK Target Market Assessment, the Bookrunners will only procure investors who meet the criteria of professional clients and eligible counterparties.
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