Following the announcement by Funding Circle on 10 September 2018 of its intention to proceed with an initial public offer (the "IPO" or the "Offer"), Funding Circle today announces the price range for the IPO as well as the commencement of the Offer once an approved price range prospectus (the "Prospectus") has been published containing full details of the Offer, which is expected to take place later today.
The Company intends to apply for admission of its ordinary shares ("Shares") to the premium listing segment of the Official List of the Financial Conduct Authority (the "Official List") and to trading on London Stock Exchange's main market for listed securities (together, "Admission").
● The price range for the Offer has been set at 420 pence to 530 pence per Share (the "Price Range").
● The Offer size will comprise a maximum of 71,428,571 new Shares and a secondary component to be determined.
● Following the completion of the IPO, the issued ordinary share capital of the Company is expected to comprise between 329,708,334 and 345,053,027 Shares and the Company expects to have a free float in excess of 25% of the issued share capital (prior to any exercise of the Over-allotment Option).
● The Company intends to raise gross proceeds of approximately £300 million, which it intends to use to enhance its balance sheet position. The directors of the Company (the "Directors") believe this is important for the following reasons:
o to further engender trust in the Group’s business with investors, borrowers and regulators;
o to support the Group in pursuing growth over profitability in the medium term; and
o to provide strategic flexibility and create the ability to take advantage of opportunities either in current markets or new geographies.
● Certain existing shareholders, directors and employees (the "Selling Shareholders") of the Group are entitled to make available for sale 25% of their respective holdings in the Offer. As at the date of this announcement, however, Funding Circle has not received any binding commitment from any shareholder to make available any Shares for sale in the Offer.
● Heartland A/S ("Heartland") has agreed as part of the Offer to purchase (through its wholly-owned indirect subsidiary, Aktieselskabet as 2.7.2018) 10% of the issued ordinary share capital of the Company following the issue of the new Shares pursuant to the Offer. The purchase is conditional upon Admission and certain other conditions being satisfied, including that the Offer price is set within the Price Range.
● Index, Accel, DST and Stone Ridge have granted Goldman Sachs, as stabilising manager, an over-allotment option (the “Over-allotment Option”) of up to 10% of the total number of Shares comprised in the Offer.
● The Offer will comprise:
o an offer of Shares to institutional investors in qualifying jurisdictions (in the UK and elsewhere outside the United States in reliance on Regulation S and in accordance with locally applicable laws and regulations, and in the United States, only to qualified institutional buyers ("QIBs") as defined in rule 144A under the US Securities Act of 1933, as amended, or another exemption from, or transaction not subject to, registration under the US Securities Act of 1933, as amended) (the "Institutional Offer"); and
o an offer of Shares to certain retail stockbrokers and share dealing providers in the UK, who will facilitate the participation in the Offer of their retail clients in the UK, the Channel Islands and the Isle of Man (the "Intermediaries Offer"). Retail stockbrokers and share dealing providers interested in participating in the Intermediaries Offer should contact Solid Solutions Associates (firstname.lastname@example.org).
● The Company, Heartland and all shareholders holding more than 0.25% of the issued share capital of the Company immediately prior to Admission (other than the Directors and certain other employees of the Group) will or are expected to be subject to a 180 day lock-up from the date of Admission. The Directors and certain employees of the group will be subject to a 365 day lock-up from the date of Admission. The lock-ups are subject to certain customary exemptions and may otherwise only be waived with the consent of the Joint Global Coordinators.
● On 14 September 2018, Ms Geeta Gopalan has entered into a letter of appointment with the Company pursuant to which she has agreed to be appointed as a non-executive director of the Company with effect from 1 November 2018.
● It is expected that, following Admission, the Company will be eligible for inclusion in the FTSE UK indices within the Technology supersector.
● The Company has engaged Merrill Lynch International ("BofA Merrill Lynch"), Goldman Sachs International ("Goldman Sachs") and Morgan Stanley & Co. International plc ("Morgan Stanley") to act as Joint Global Co-ordinators and Joint Bookrunners and Numis Securities Limited ("Numis") to act as Joint Bookrunner on the Offer. BofA Merrill Lynch is also acting as sole Sponsor.
● As part of the IPO, retail investors in the UK, the Channel Islands and the Isle of Man will be able to apply for Shares via the Intermediaries Offer. The minimum application size in the Intermediaries Offer will be £1,000. The Intermediaries Offer is expected to open following publication of the Prospectus. Individuals must apply in the Intermediaries Offer through participating intermediaries. A list of the participating intermediaries as at the date of this announcement can be found below. Funding Circle confirms that the latest time and date for receipt of applications by intermediaries is 4pm on 27 September 2018. List of participating intermediaries as at the date of this announcement:
o AJ Bell Youinvest
o Albert E Sharp
o Alliance Trust Savings Limited
o Barclays Smart Investor
o Cornhill Capital Limited
o Hargreaves Lansdown
o iDealing.com Limited
o IG Group
o Interactive Investor
o Killik & Co
o Redmayne-Bentley Stockbrokers
o Saga Share Direct
o Sharedeal Active
o Shore Capital Stockbrokers Limited
o SVS Securities Plc
o The Share Centre
o TS Capital
o WH Ireland Limited