MIDATECH PHARMA
MIDATECH PHARMA
Press Releases
Press Releases
Press release
Jul 27, 2020

UK Placing to Raise £5.0 million


NOT FOR PUBLICATION, DISTRIBUTION OR RELEASE DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA, JAPAN OR THE REPUBLIC OF SOUTH AFRICA OR IN ANY OTHER JURISDICTION IN WHICH OFFERS OR SALES WOULD BE PROHIBITED BY APPLICABLE LAW. THIS ANNOUNCEMENT IS NOT AN OFFER TO SELL OR A SOLICITATION TO BUY SECURITIES IN ANY JURISDICTION, INCLUDING THE UNITED STATES, CANADA, AUSTRALIA, JAPAN AND THE REPUBLIC OF SOUTH AFRICA. NEITHER THIS ANNOUNCEMENT NOR ANYTHING CONTAINED HEREIN SHALL FORM THE BASIS OF, OR BE RELIED UPON IN CONNECTION WITH, ANY OFFER OR COMMITMENT WHATSOEVER IN ANY JURISDICTION.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF REGULATION 2014/596/EU. IN ADDITION, MARKET SOUNDINGS WERE TAKEN IN RESPECT OF THE MATTERS CONTAINED IN THIS ANNOUNCEMENT, WITH THE RESULT THAT CERTAIN PERSONS BECAME AWARE OF SUCH INSIDE INFORMATION. UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN AND SUCH PERSONS SHALL THEREFORE CEASE TO BE IN POSSESSION OF INSIDE INFORMATION.

Midatech Pharma PLC

("Midatech" or the "Company")

UK Placing to Raise £5.0 million and Broker Option to raise up to a further £0.75 million

Midatech Pharma PLC (AIM: MTPH.L; Nasdaq: MTP), a drug delivery technology company focused on improving the bio-delivery and biodistribution of medicines, announces that it has raised £5.0 million (before expenses) by way of a placing to investors in the UK ("UK Placing") of 18,518,518 new ordinary shares of 0.1p each ("Placing Shares") at an issue price of £0.27 per share ("Issue Price"). The UK Placing was significantly oversubscribed and brings new UK institutions into the Company's shareholder base.

The issue price of the Placing Shares represents a discount of approximately 32% to the closing middle market price of £0.395 per existing ordinary share on 24 July 2020, being the last Business Day before this announcement. The Placing Shares represent approximately 32% of the issued share capital of the Company as enlarged by the UK Placing.

The allotment of the Placing Shares is being made pursuant to existing authorities to allot shares and other relevant securities and to disapply pre-emption rights under section 551 of the Companies Act 2006, which the Directors were given at the Company's General Meeting held on 2 March 2020.

Turner Pope Investments (TPI) Limited ("Turner Pope") acted as sole bookrunner for the UK Placing.

Use of Proceeds

The proceeds of the UK Placing, net of fees and expenses, are expected to be approximately £4.6 million ("Net Proceeds"). The Net Proceeds will be used to:

·   advance the Company's internal pipeline of Q-Sphera products through proof-of-concept and in vivo studies for potential out-licensing;

·    develop Q-Sphera technology for unique application with biologic active pharmaceutical ingredients; and

·    general corporate purposes.

Taking into account available cash resources and the expected Net Proceeds, the Company expects to have sufficient cash resources to fund operations into the fourth quarter of 2021.

Further information on the Placing

The Company and Turner Pope entered into a placing agreement ("Placing Agreement"), pursuant to which Turner Pope agreed to use its reasonable endeavours to procure placees pursuant to the UK Placing. Neither the UK Placing nor the Broker Option is underwritten. Turner Pope has received binding commitments from placees to acquire the Placing Shares at the Issue Price.

The Placing Agreement contains certain warranties and indemnities by the Company in favour of Turner Pope. It also contains provisions entitling Turner Pope to terminate the Placing Agreement prior to Admission if, among other things, a breach of any of the warranties occurs or on the occurrence of an event fundamentally and adversely affecting the position of the Company.

The UK Placing is conditional upon, inter alia:

a)     the Placing Agreement becoming unconditional in all respects (save for Admission occurring) and not having been terminated in accordance with its terms; and

(b)    Admission becoming effective by no later than 8.00 a.m. on 3 August 2020 (or such later time and/or date as the Company and Turner Pope may agree (being not later than 4.30 p.m. on 10 August 2020).

Broker Option

The Company has also granted an option to Turner Pope under the Placing Agreement in order to enable them to deal with additional demand under the UK Placing in the event that requests to participate in the UK Placing from qualifying investors are received during the period from the time of this Announcement to 8.00 a.m. on 27 July 2020 (the "Broker Option"). To participate in the Broker Option, qualifying investors should communicate their interest to Turner Pope via their independent financial adviser, stockbroker or other firm authorised by the Financial Conduct Authority, as Turner Pope cannot take director orders from individual private investors. Turner Pope should be contacted at 0203 657 0050.

Turner Pope may choose not to accept bids and/or to accept bids, either in whole or in part, on the basis of allocations determined at their discretion (after consultation with the Company) and may scale down any bids for this purpose on such basis as Turner Pope may determine.

Any shares issued pursuant to the exercise of the Broker Option ("Broker Option Shares") will be issued on the same terms and conditions as the Placing Shares. The Broker Option may be exercised by Turner Pope, following consultation with the Company, but there is no obligation on them to exercise the Broker Option or to seek to procure subscribers for Broker Option Shares pursuant to the Broker Option. The maximum number of Broker Option Shares that may be issued pursuant to the exercise of the Broker Option is 2,777,777. The maximum aggregate number of shares (including both the Placing Shares and Broker Option Shares) that may be issued is 21,296,295 (the "New Ordinary Shares").

The Broker Option Shares are not being made available to the public and none of the Broker Option Shares are being offered or sold in any jurisdiction where it would be unlawful to do so. No Prospectus will be issued in connection with the Broker Option.

If the Broker Option is exercised, settlement for the Broker Option Shares and admission of the Broker Option Shares to trading on AIM is expected to take place on or before 8.00 a.m. on 3 August 2020.

Application for Admission to trading on AIM

Subject to all conditions being met, application will be been made for the New Ordinary Shares in aggregate to be admitted to trading on AIM ("Admission"). It is expected that settlement of the Placing Shares and, if applicable, the Broker Option Shares and Admission will take place at 8.00 a.m. on or about 3 August 2020 and that dealings in the Placing Shares and, if applicable, the Broker Option Shares will commence at that time.

When issued the New Ordinary Shares will be fully paid and will rank pari passu in all respects with the existing Ordinary Shares.

Strategic Review

The Company provided a corporate update and announced the termination of the formal sale process under the City Code on Takeovers and Mergers (the "Code") on 23 July 2020. The Company is no longer considered to be in an "offer period" as defined in the Code. The strategic review initially announced by the Company on 31 March 2020 and updated on 20 April 2020 remains ongoing.

Commenting, Stephen Stamp, Midatech CEO and CFO, said: "I am delighted with the progress we have made since we switched our Q-Sphera strategy to a balanced internal pipeline and partner collaboration model. In only a few weeks we have both formulated internal candidates and demonstrated their in vitro dissolution; our next step is to confirm these results in vivo. We have also signed R&D collaborations with two prestigious partners to explore the feasibility of applying our technology to their proprietary molecules. If successful, we plan to enter into licence and technology transfer agreements with our partners. The proceeds of the UK Placing and Broker Option will allow us to take our internal pipeline through proof-of-concept and develop the Q-Sphera technology for unique applications with biologic active pharmaceutical ingredients."

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