Proposals for the Continuation of the ZDP Shares

21 October 2019

The information contained within this announcement is deemed by the Company to constitute inside information stipulated under the Market Abuse Regulation (EU) No. 596/2014. Upon the publication of this announcement via the Regulatory Information Service, this inside information is now considered to be in the public domain.

GLI Finance Limited

("the Company" or the "Group")

Proposals for the Continuation of the ZDP Shares

and

Notices of Class Meetings and Extraordinary General Meeting

The Company announces that a circular (the "Circular") will be posted today to holders of the Company's Ordinary Shares and ZDP Shares providing detail of the following proposals:

·      the extension of the life of the Company's ZDP Shares from 5 December 2019 to 5 December 2020 (the "Continuation"); and

·      an increase in the final capital entitlement to which ZDP Shareholders will be entitled at the extended repayment date from 130.696 pence per ZDP Share to 141.152 pence per ZDP Share, representing an increase in the return on the issue price of the ZDP Shares from 5.5 per cent. per annum to 8 per cent. per annum, with such increase being effective from 6 December 2019.

The Company announced in its interim report for the period to 30 June 2019 that there will likely be a near term funding gap in relation to the 2019 Final Capital Entitlement due on 5 December 2019 as certain loans made by the Group are expected to be repaid later than their contractual maturity. As at the date of this announcement, the 2019 Final Capital Entitlement is approximately £16.8 million.

The Company has been focussed on the repayment of the ZDP Shares and the Group continues to sell down its on-balance sheet loan exposure and seeks to generate cash through business activities. The Group's net assets at 30 June 2019 were £44.0 million and, excluding goodwill, were £21.1 million.

The Board must consider the interests of all Shareholders and does not believe that it is appropriate to liquidate a significant proportion of the Company's assets in order to meet the 2019 Final Capital Entitlement. Accordingly, the Board expects that the Company will not have sufficient cash resources to pay the 2019 Final Capital Entitlement in full in a manner that would satisfy the solvency test set out under Guernsey company law.

Given the resultant liquidity mismatch of the Group's loan book maturity profile and the 2019 Final Capital Entitlement due on 5 December 2019, the Board is proposing that the Group continues its process of selling down its loan exposure to raise cash, with the intention of using this cash (a) in the short term to effect a Tender Offer for ZDP Shares as described in further detail below, and (b) in the medium term to satisfy the Final Capital Entitlement of the ZDP Shares on an extended timeframe and to restart the Company's ZDP Share buyback programme, and (c) generally, to fund and develop the Group's business in the interests of Shareholders as a whole. 

The Company has engaged with major holders of both ZDP Shares and Ordinary Shares, and consulted with its advisers, in considering alternative proposals to enable the Company to satisfy the Final Capital Entitlement in a manner that is most beneficial to the Company and its Shareholders as a whole. The Board has determined that the Proposals offer the most equitable and effective solution.

The Board therefore proposes that the life of the ZDP Shares be extended such that they carry the right to receive the 2020 Final Capital Entitlement of 141.152 pence per ZDP Share on 5 December 2020 (being the date falling 12 months after the current ZDP Share Maturity Date). This Final Capital Entitlement has been calculated to represent an increase in the return on the issue price of the ZDP Shares from 5.5 per cent. per annum to 8 per cent. per annum, with such increase being effective from 6 December 2019.

If Shareholders vote in favour of the Continuation and the Proposals are implemented, the Board intends to announce details of a Tender Offer for ZDP Shares in or around February 2020, to complete on or around 5 March 2020, being three months from the current Maturity Date of the ZDP Shares.

It is intended that the Tender Offer be made by the Company to all ZDP Shareholders for the purchase of ZDP Shares, on a pro rata basis amongst ZDP Shareholders, at a price per ZDP Share equal to the then accrued capital entitlement per ZDP Share calculated in accordance with the New Articles. The Board intends that the Tender Offer will be for between 25 per cent. and 50 per cent. of the ZDP Shares then in issue (excluding ZDP Shares held in treasury). The Board intends that the Tender Offer will include an option for ZDP Shareholders who so elect to receive GLI Bonds rather than cash in satisfaction of the relevant tender price.

The Continuation requires the approval of Ordinary Shareholders at a class meeting of Ordinary Shareholders, the approval of ZDP Shareholders at a class meeting of ZDP Shareholders, and the approval of Ordinary Shareholders and ZDP Shareholders at an extraordinary general meeting. The Circular is accompanied by forms of proxy for shareholders to vote at the relevant meeting(s).

In the event that Shareholders do not vote in favour of the Proposals at the Meetings, then the terms of the ZDP Shares will remain unchanged. Accordingly, the return on the issue price of the ZDP Shares would remain at 5.5 per cent. per annum and the Company would be required to pay the 2019 Final Capital Entitlement on 5 December 2019. As stated above, the Board expects that the Company will not have sufficient cash resources to pay the 2019 Final Capital Entitlement in full in a manner that would satisfy the solvency test set out under Guernsey company law. In the event that the Company is required to pay the 2019 Final Capital Entitlement and has insufficient cash resources to lawfully do so then, in accordance with the Existing Articles, the Company shall redeem such number of ZDP Shares (on a pro-rata basis amongst ZDP Shareholders) as it is lawfully able to redeem on 5 December 2019, and thereafter shall redeem further ZDP Shares in tranches (on a pro-rata basis amongst ZDP Shareholders) as and when it is lawfully able to do so. In such circumstances, the Board considers that there may be an adverse reaction amongst the Group's loan funder network, which may disrupt the Company's operations and prejudice the ability of the Group to effectively pursue its lending business. The Board considers that such a situation would pose a material risk to the financial and trading position of the Group.

The expected timetable of events and a summary of key information contained in the Circular is presented below. The full Circular can be viewed at www.glifinance.com 

Capitalised terms used but not otherwise defined in the text of this announcement are defined in the appendix of this announcement.

Andy Whelan, CEO of the Company commented, "Whilst the extension to the ZDP was not initially planned, the feedback from a number of shareholders has been positive in understanding the position the Company has found itself facing.  We believe the proposed solution is sensible and equitable and ensures that all of the Company's stakeholders are treated fairly."

For further information, please contact:

GLI Finance Limited

Andy Whelan

+44 (0)1534 708900

Liberum Capital (Nominated Adviser and Corporate Broker)

Chris Clarke

Edward Thomas

+44 (0) 20 3100 2190

Instinctif Partners (PR Advisor)

Tim Linacre/Katie Bairsto

+44 (0)207 457 2020

LEI: 213800S2XOO3YSEGCA26

EXPECTED TIMETABLE

1)     Or as soon thereafter as the preceding Meeting concludes or is adjourned.

All of the times and dates in the expected timetable may be extended or brought forward without further notice. If any of the above times and/or dates change materially, the revised time(s) and/or date(s) will be notified to Shareholders by an announcement through a Regulatory Information Service provider.

All references to time in this announcement are to UK time.

The following Chairman's Letter is extracted from the Circular. References to numbered paragraphs or numbered Parts or references to "this document" refer to the Circular and might not correspond with this announcement. Please refer to the full Circular on the Company's website for further detail.

CHAIRMAN'S LETTER

To Ordinary Shareholders and ZDP Shareholders

Dear Shareholder

Proposals for the Continuation of the ZDP Shares and the adoption of New Articles

1)   Introduction

Your Board today announced Proposals for the extension of the life of the ZDP Shares to 5 December 2020 and a proposed Tender Offer for ZDP Shares anticipated to be made in the first quarter of 2020.

The extension of the life of the ZDP Shares requires the approval of Ordinary Shareholders and ZDP Shareholders at the Meetings.  The purpose of this document is to provide you with details of the Proposals and to set out the reasons why the Board recommends that you vote in favour of the Continuation of the ZDP Shares at the Meetings.

2)   Background to and reasons for the Proposals

The Company currently has two classes of Shares in issue: Ordinary Shares and ZDP Shares. The Ordinary Shares have been traded on the AIM market of the London Stock Exchange since August 2005. The ZDP Shares were issued in December 2014 and have been traded on the standard listing segment of the main market of the London Stock Exchange since October 2015.  As at the date of this document, the Company's issued share capital is 312,065,699 Ordinary Shares (of which 7,925,999 Ordinary Shares are held by a subsidiary of the Company) and 20,791,418 ZDP Shares (of which 7,934,460 ZDP Shares are held by the Company as treasury shares).

The ZDP Shares are non-participating and non-voting (except in certain limited circumstances, including at the ZDP Class Meeting and the Extraordinary General Meeting) but carry the right to the repayment of a Final Capital Entitlement on their Maturity Date.  The Maturity Date of the ZDP Shares is currently 5 December 2019, on which date the holders of ZDP Shares are entitled to receive from the Company 130.696 pence for each ZDP Share that they hold, which would represent a return on the issue price of the ZDP Shares equivalent to 5.5 per cent. per annum.  The Final Capital Entitlement is to be paid by way of the redemption of the ZDP Shares, and under the Articles and applicable company law the Company may only redeem such Shares to the extent that the Board is comfortable that, after such redemption, the Company can satisfy the solvency test prescribed by Guernsey company law. 

The Company has engaged in a programme of utilising available cash funds to buy back ZDP Shares with a view to reducing the quantum of the 2019 Final Capital Entitlement.  ZDP Shares bought back are held by the Company in treasury.  As at the date of this document, 12,856,958 ZDP Shares remain in issue and are not held by the Company in treasury, equating to an aggregate 2019 Final Capital Entitlement on 5 December 2019 of approximately £16.8 million.

The Company announced in its interim report for the period to 30 June 2019 that there will likely be a near term funding gap in relation to the 2019 Final Capital Entitlement due on 5 December 2019 as certain loans made by the Group are expected to be repaid later than their contractual maturity.  The Company has been focussed on the repayment of the ZDP Shares and the Group continues to sell down its on-balance sheet loan exposure and seeks to generate cash through business activities.  The Group's net assets at 30 June 2019 were £44.0 million and, excluding goodwill, were £21.1 million.  The Board must consider the interests of all Shareholders and does not believe that it is appropriate to liquidate a significant proportion of the Company's assets in order to meet the 2019 Final Capital Entitlement.  Accordingly, the Board expects that the Company will not have sufficient cash resources to pay the 2019 Final Capital Entitlement in full in a manner that would satisfy the solvency test set out under Guernsey company law.

As loans are taking longer to be repaid and given the resultant liquidity mismatch of the Group's loan book maturity profile and the 2019 Final Capital Entitlement due on 5 December 2019, the Board is proposing that the Group continues its process of selling down its loan exposure to raise cash, with the intention of using this cash (a) in the short term to effect a Tender Offer of ZDP Shares as described at paragraph 7 below, (b) in the medium term to satisfy the Final Capital Entitlement of the ZDPs on an extended timeframe and to restart the Company's ZDP Share buyback programme, and (c) generally, to fund and develop the Group's business in the interests of Shareholders as a whole. 

The Company has engaged with major holders of both ZDP Shares and Ordinary Shares, and consulted with its advisers, in considering alternative proposals to enable the Company to satisfy the Final Capital Entitlement in a manner that is most beneficial to the Company and its Shareholders as a whole.  The Board has determined that the Proposals offer the most equitable and effective solution.

The Board therefore proposes that the life of the ZDP Shares be extended such that they carry the right to receive the 2020 Final Capital Entitlement of 141.152 pence per ZDP Share on 5 December 2020 (being the date falling 12 months after the current ZDP Share Maturity Date).  This Final Capital Entitlement has been calculated to represent an increase in the return on the issue price of the ZDP Shares from 5.5 per cent. per annum to 8 per cent. per annum, with such increase being effective from 6 December 2019.

The Proposals therefore involve extending the ZDP Shares at what the Board believes is an attractive yield to ZDP Shareholders that should allow the Company to continue to provide a reasonable return to Ordinary Shareholders. The Board believes that there is strong support amongst ZDP Shareholders for the Proposals that would enable them to continue their existing investment in the ZDP Shares at an increased yield.

3)   Importance of vote

In the event that Shareholders do not vote in favour of the Proposals at the Meetings, then the terms of the ZDP Shares will remain unchanged.  Accordingly, the return on the issue price of the ZDP Shares would remain at 5.5 per cent. per annum and the Company would be required to pay the 2019 Final Capital Entitlement on 5 December 2019.  As stated above, the Board expects that the Company will not have sufficient cash resources to pay the 2019 Final Capital Entitlement in full in a manner that would satisfy the solvency test set out under Guernsey company law.  In the event that the Company is required to pay the 2019 Final Capital Entitlement and has insufficient cash resources to lawfully do so then, in accordance with the Existing Articles, the Company shall redeem such number of ZDP Shares (on a pro-rata basis amongst ZDP Shareholders) as it is lawfully able to redeem on 5 December 2019, and thereafter shall redeem further ZDP Shares in tranches (on a pro-rata basis amongst ZDP Shareholders) as and when it is lawfully able to do so. In such circumstances, the Board considers that there may be an adverse reaction amongst the Group's loan funder network, which may disrupt the Company's operations and prejudice the ability of the Group to effectively pursue its lending business. The Board considers that such a situation would pose a material risk to the financial and trading position of the Group. 

4)   Overview of the Proposals

The Proposals comprise the adoption of the New Articles which will extend the term of the ZDP Shares to 5 December 2020 and provide for a 2020 Final Capital Entitlement of 141.152 pence per ZDP Share.

If the Continuation is implemented, the Board expects to make the Tender Offer to ZDP Shareholders in or around February 2020 and to complete it on or around 5 March 2020. 

A continuation of an investment in the ZDP Shares will allow ZDP Shareholders to continue their investment in the Company at a higher yield. As noted at paragraph 1 of Part 3 of this document, UK resident ZDP Shareholders should generally not be treated as making a disposal for the purposes of UK taxation of chargeable gains as a result of doing so.  It is important to note that the discussion of the tax treatment contained in Part 3 of this document is intended only as a general and non-exhaustive summary of the expected tax treatment and ZDP Shareholders are advised to seek independent professional advice as to the tax consequences for them of the Proposals.

5)   Key features of the amended ZDP Shares

If the Proposals are adopted, the ZDP Shares:

·      will have a repayment date of 5 December 2020;

·      are designed to provide ZDP Shareholders with a level of capital growth at a rate of 8 per cent. per annum with effect from 6 December 2019, an increase above the rate of 5.5 per cent. per annum which applies to the ZDP Shares up to 5 December 2019;

·      subject to the Company having sufficient assets at the time to satisfy the solvency test set out under Guernsey company law, will carry the right to be paid the 2020 Final Capital Entitlement of 141.152 pence in cash on 5 December 2020; and

·      will continue to benefit from the protection afforded by the Cover Test.

Save as set out above, the rights of the ZDP Shares following the implementation of the Proposals will be the same as the rights of the existing ZDP Shares.  The amended rights of the ZDP Shares are set out in the New Articles and are described in full in Part 2 of this document.  The New Articles are available for inspection as set out in Part 4 of this document.

The ability of the Company to pay the 2020 Final Capital Entitlement is dependent on the performance of the Company's business and investments.  ZDP Shares are not a guaranteed, protected or secured investment and ZDP Shareholders may therefore not receive their full 2020 Final Capital Entitlement.

6)   Mechanics of the Continuation

6.1 Adoption of the New Articles

The Continuation will be implemented by way of the adoption of the New Articles. 

The New Articles contain the amended rights attaching to the ZDP Shares as set out in Part 2 of this document.  The New Articles contain a right attaching to all ZDP Shares for such ZDP Shares to be redeemed on 5 December 2020 at a redemption price of 141.152 pence per ZDP Share (being the 2020 Final Capital Entitlement).

The Existing Articles and the New Articles (in the form of a comparison document showing the changes between the two) are available for inspection as set out in Part 4 of this document.

If the Proposals are approved by Shareholders, the New Articles will be adopted on the date of on which the Resolutions are passed.  Upon the Continuation, ZDP Shareholders shall continue to hold ZDP Shares on the amended terms as set out in the New Articles.  In the case of any discrepancy between this document and the New Articles, the terms of the New Articles will prevail. 

6.2  Dealings in ZDP Shares

No new securities will be issued by the Company in connection with the Continuation and the ZDP Shares will continue to be held by ZDP Shareholders, albeit on the revised terms of the Continuation.

Dealings in the ZDP Shares will continue to be effective in CREST and the existing ISIN number GG00BTDYD136 will continue to apply.

ZDP Shareholders who hold their ZDP Shares in certificated from will not receive replacement certificates in respect of their ZDP Shares. 

6.3  Taxation

The attention of ZDP Shareholders is drawn to Part 3 of this document which sets out a general guide to certain aspects of current UK and Guernsey taxation law and HMRC published practice.

7)   The Tender Offer

If Shareholders vote in favour of the Continuation at the Meetings and the Proposals are implemented, the Board intends to announce details of a Tender Offer for ZDP Shares in or around February 2020, to complete on or around 5 March 2020, being three months from the current Maturity Date of the ZDP Shares.

It is intended that the Tender Offer be made by the Company to all ZDP Shareholders for the purchase of ZDP Shares, on a pro rata basis amongst ZDP Shareholders, at a price per ZDP Share equal to the then accrued capital entitlement per ZDP Share calculated in accordance with the New Articles. The Board intends that the Tender Offer will be for between 25 per cent. and 50 per cent. of the ZDP Shares then in issue (excluding ZDP Shares held in treasury).  The Board intends that the Tender Offer will include an option for ZDP Shareholders who so elect to receive GLI Bonds rather than cash in satisfaction of the relevant tender price.  The Board may determine that the Tender Offer should include an excess facility, such that to the extent that some ZDP Shareholders elect not to accept the offer in respect of some or all of their entitlement, the Company would buy back further ZDP Shares, on a pro rata basis, from ZDP Shareholders who have indicated that they wish to sell more ZDP Shares than their entitlement under the Tender Offer.

The Company will not buy back any ZDP Shares in the period from the date of this document to the date of completion of the Tender Offer.  Accordingly, it is intended that all of the cash reserves of the Group, other than as are required to fund the business of the Group, will be available for return to ZDP Shareholders who wish to sell ZDP Shares in the Tender Offer.  Following completion of the Tender Offer, it is the Board's current intention to reinstate its ZDP Share buyback programme such that ZDP Shares may be bought by the Company from time to time and subject to the parameters of that programme.

Although it is the Board's intention and expectation that the Company will be able to make the Tender Offer in March 2020, this is subject to the Company's ability at that time to lawfully purchase its own shares, which depends on the Board's determination that the Company may do so in satisfaction of the solvency test prescribed by Guernsey company law.  There can be no guarantee that the Tender Offer will be implemented in March 2020, to the extent referred to above, or at all.

8)   Certain considerations relating to the Proposals

The implementation of the Proposals carry with them certain considerations for Shareholders as described below:

·      if the Continuation is not effected prior to 5 December 2019, and unless the Board implements alternative proposals prior to that date, then on that date the Company is required to pay the 2019 Final Capital Entitlement to ZDP Shareholders.  As at the date of this document, the Board expects that the Company will not have sufficient cash reserves in order to do so in a manner that would satisfy the solvency test set out under Guernsey company law.  In the event that the Company is required to pay the 2019 Final Capital Entitlement and has insufficient cash resources to lawfully do so then, in accordance with the Existing Articles, the Company shall redeem such number of ZDP Shares (on a pro-rata basis amongst ZDP Shareholders) as it is lawfully able to redeem on 5 December 2019, and thereafter shall redeem further ZDP Shares in tranches (on a pro-rata basis amongst ZDP Shareholders) as and when it is lawfully able to do so;

·      ZDP Shareholders will need to consider the tax consequences of the Proposals, based on their particular circumstances.  As described in Part 3 of this document, UK resident ZDP Shareholders should not generally be treated as making a disposal for the purposes of UK taxation of chargeable gains as a result of the Continuation but may incur tax liabilities on any subsequent disposal of their ZDP Shares. Shareholders who are in any doubt as to the tax consequences of the Proposals should seek independent professional advice;

·      the ZDP Shares are designed to be held over the long-term and may not be suitable as short-term investments. There can be no guarantee that any appreciation in the value of the Company's assets will occur and investors may not get back the full value of their investment.  The past performance of the Company is not a guide to the future performance of the Company; and 

·      the ZDP Shares rank prior to the Ordinary Shares in respect of the Final Capital Entitlement. Although that is the case, on a return of assets, including the winding-up of the Company, ZDP Shareholders would only receive payment if there are sufficient assets of the Company and having regard to all other unsecured liabilities of the Company, including the Company's liability to repay the GLI Bonds. ZDP Shares are not a secured, protected or guaranteed investment. There can be no guarantee that the Company will be able to pay the 2020 Final Capital Entitlement on 5 December 2020.

Shareholders should read carefully the information on the Proposals set out in this document.

Shareholders who are in any doubt as to the contents of this document or as to the action to be taken should immediately seek their own personal financial advice from their independent professional adviser authorised under the Financial Services and Markets Act 2000.

9)   The Meetings

The implementation of the Proposals requires Shareholder approval at the following Meetings:

·      the passing by ZDP Shareholders of the special resolution to be proposed at the ZDP Class Meeting;

·      the passing by Ordinary Shareholders of the special resolution to be proposed at the Ordinary Class Meeting; and

·      the passing by Ordinary Shareholders and ZDP Shareholders (voting together) of the special resolution to be proposed at the Extraordinary General Meeting.

Notices of the ZDP Class Meeting, the Ordinary Class Meeting and the Extraordinary General Meeting are set out in Part 6 of this document. 

9.1  ZDP Class Meeting

The ZDP Class Meeting has been convened for 8 November 2019 at 2.00 p.m. to enable ZDP Shareholders to consider and, if thought fit, pass a special resolution consenting to the passing of the Resolution to be proposed at the Extraordinary General Meeting and any variation of their class rights which might arise under or as a result of the passing and carrying into effect of such Resolution.  In the event that this Meeting is adjourned due to the absence of a quorum, the adjourned Meeting will be held at the same venue on the same day at 2.30 p.m.

The majority required for the passing of the Resolution to be proposed at the ZDP Class Meeting is not less than 75 per cent. of the votes cast (in person or by proxy) on that Resolution at the ZDP Class Meeting.

The ZDP Class Meeting will take place at the Company's registered office, Block C, Hirzel Court, Hirzel Street, St Peter Port, Guernsey GY1 2NL, Channel Islands.  ZDP Shareholders alone are entitled to attend and vote at the ZDP Class Meeting.

The quorum for the ZDP Class Meeting is two persons present in person or by proxy and holding at least one third of the issued ZDP Shares at the date of the Meeting. If the Meeting is not quorate, it will be adjourned to the time and place indicated above, whereupon one person holding ZDP Shares and present in person or by proxy shall form the quorum.

9.2  Ordinary Class Meeting

A meeting of Ordinary Shareholders has been convened for 8 November 2019 at 2.05 p.m. (or as soon thereafter as the ZDP Class Meeting shall have concluded or been adjourned) to enable Ordinary Shareholders to consider and, if thought fit, pass a special resolution consenting to the passing of the Resolution to be proposed at the Extraordinary General Meeting and any variation of their class rights which might arise under or as a result of the passing and carrying into effect of such Resolution.  In the event that this Meeting is adjourned due to the absence of a quorum, the adjourned Meeting will be held at the same venue on the same day at 2.35 p.m.

The majority required for the passing of the Resolution to be proposed at the Ordinary Class Meeting is not less than 75 per cent. of the votes cast (in person or by proxy) on that Resolution at the Ordinary Class Meeting.

The Ordinary Class Meeting will take place at the Company's registered office, Block C, Hirzel Court, Hirzel Street, St Peter Port, Guernsey GY1 2NL, Channel Islands.  Ordinary Shareholders alone are entitled to attend and vote at the Ordinary Class Meeting.

The quorum for the Ordinary Class Meeting is two persons present in person or by proxy and holding at least one third of the issued Ordinary Shares at the date of the Meeting. If the Meeting is not quorate, it will be adjourned to the time and place indicated above, whereupon one person holding Ordinary Shares and present in person or by proxy shall form the quorum.

9.3  Extraordinary General Meeting

The Extraordinary General Meeting has been convened for 8 November 2019 at 2.10 p.m. (or as soon thereafter as the Ordinary Class Meeting concludes or is adjourned). In the event that this Meeting is adjourned due to the absence of a quorum the adjourned meeting will be held at the same venue on the same day at 2.40 p.m.

Ordinary Shareholders and ZDP Shareholders are entitled to vote (together) in respect of the Resolution to be proposed at the Extraordinary General Meeting. 

At the Extraordinary General Meeting, Shareholders will be asked to consider and, if thought fit, pass a special resolution to approve the adoption of the New Articles in substitution for the Existing Articles.

The majority required for the passing of the Resolution to be proposed at the Extraordinary General Meeting is not less than 75 per cent. of the votes cast (in person or by proxy) on that Resolution at the Extraordinary General Meeting.

The Extraordinary General Meeting will take place at the Company's registered office, Block C, Hirzel Court, Hirzel Street, St Peter Port, Guernsey GY1 2NL, Channel Islands.  Ordinary Shareholders and ZDP Shareholders are entitled to attend and vote at the Extraordinary General Meeting.

The quorum for the Extraordinary General Meeting is two members present in person or by proxy and holding 5 per cent. or more of the voting rights available at the Meeting. If the Meeting is not quorate, it will be adjourned to the time and place indicated above, whereupon such Shareholders as attend in person or by proxy shall form the quorum.

Notices of all of the above Meetings are set out in Part 6 of this document.

10)  Action to be taken

Forms of proxy for Shareholders are enclosed as follows:

(a)           for ZDP Shareholders to vote at the ZDP Class Meeting, a pink form of proxy;

(b)           for Ordinary Shareholders to vote at the Ordinary Class Meeting, a blue form of proxy; and

(c)           for all Shareholders to vote at the the Extraordinary General Meeting, a white form of proxy.

Whether or not you propose to attend the Meetings in person, you are requested to complete and sign the forms of proxy.

Completed forms of proxy should be returned by post or by hand to the Company's Registrar, Link Market Services, PXS 1, 34 Beckenham Road, Beckenham, Kent BR3 4TU, United Kingdom, as soon as possible, and in any case so as to be received by the Registrar by not later than:

(a)           2.00 p.m. on 6 November 2019 in relation to the pink form of proxy for the ZDP Class Meeting;

(b)           2.05 p.m. on 6 November 2019 in relation to the blue form of proxy for the Ordinary Class Meeting; and

(c)           2.10 p.m. on 6 November 2019 in relation to the white form of proxy relating to the Extraordinary General Meeting.

The lodging of a form of proxy will not prevent you from attending the relevant Meeting and voting in person if you are entitled to do so.

11)  Recommendation

The Board considers that the terms of the Proposals are in the best interests of both ZDP Shareholders and Ordinary Shareholders and the Company as a whole. 

The Board unanimously recommends that ZDP Shareholders vote in favour of the Resolutions to be proposed at the ZDP Class Meeting and the Extraordinary General Meeting. The Board unanimously recommends that Ordinary Shareholders vote in favour of the Resolutions to be proposed at the Ordinary Class Meeting and the Extraordinary General Meeting.

Members of the Board intend to vote their own beneficial shareholdings, totalling 11,317,893 Ordinary Shares (representing in aggregate approximately 3.63 per cent. of the issued Ordinary Share capital of the Company), in favour of the Proposals.

Shareholders in any doubt as to the action they should take should consult an appropriately qualified independent adviser, authorised under the Financial Services and Markets Act 2000, without delay.

Yours faithfully

Patrick Firth
Chairman

APPENDIX - DEFINITIONS