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23 June 2021

Vector Capital plc

("Vector Capital", the "Company" and with its subsidiaries the "Group") 

Placing to raise £1.5 million

Vector Capital plc (AIM: VCAP), a commercial lending group that offers secured loans primarily to businesses located in the United Kingdom, is pleased to announce that it has successfully completed a placing of new ordinary shares in the Company, raising gross proceeds of £1.5 million. These funds will be used to increase the Group's lending power to meet demand for the Group's loans.

Highlights

·    Vector Capital has raised gross proceeds of £1.5 million through a placing by the Company's sole broker, Allenby Capital Limited ("Allenby Capital"), of 3,191,490 new ordinary shares of 0.5p each in the Company (the "Placing Shares") at an issue price of 47 pence per Placing Share (the "Placing").

·    The Placing Shares will represent approximately 7.1 per cent. of the enlarged issued share capital of the Company and have been subscribed for by a combination of new investors and existing shareholders.

·    The Placing Shares are being issued at a price of 47 pence per Placing Share, representing a discount of approximately 7.84 per cent. to the closing mid-market share price of an existing ordinary share on 22 June 2021, the business day prior to this announcement.

·    The net proceeds of the Placing are expected to be used by the Company to increase the Group's lending power to meet demand for the Group's loans.

Agam Jain, Chief Executive of Vector Capital, said:

"With strong new and existing shareholder support for our proven strategy, I am very pleased to announce a successful Placing to increase our lending power.  We are seeing continuing demand for our loans, driven by a buoyant property market and our competitive strengths through our broker relationships and the speed at which we can approve loans.  Vector Capital is a profitable business with capacity to grow and this Placing positions us for further success as we build towards a £100m loan book which we are confident of reaching over the medium term.  The year is progressing positively in line with expectations and, with this in mind, I look forward to providing updates on our progress as we execute our growth strategy."

Background to and reasons for the Placing

The Company's shares were admitted to trading on AIM on 29 December 2020 and the Company raised gross proceeds of £3.1 million (net £2.6 million) at that time. The net proceeds have been deployed into new lending and will provide the base for drawing down further on the Group's debt facilities.

Current trading in 2021 has been in line with expectations and the Company is now concentrating on loan book growth. In the first three months of the year, the Company issued £4.2 million of new loans.

The Company is seeing healthy demand for new loans and has decided to undertake the Placing in order to meet that demand.

The net proceeds of the Placing are expected to total approximately £1.39 million and the Directors intend to use these funds to increase lending power and meet demand for the Company's loans. The Group also has the option to drawdown amounts from the facilities provided by the Company's two wholesale lenders, Shawbrook Bank and Aldermore Bank to increase the loan book further.

The Group has in place systems and employees to facilitate its medium term growth targets and, as a result, it is not anticipated that a significant portion of the Placing proceeds will be required for overheads.

Details of the Placing

A total of 3,191,490 Placing Shares are to be issued at a price of 47 pence per Share. The Placing has been conducted utilising the Company's existing share authorities. Allenby Capital acted as the Company's sole broker in connection with the Placing.  The Placing is conditional, inter alia, on admission of the Placing Shares to trading on AIM ("Admission") becoming effective.

The Placing Shares will be credited as fully paid and will rank equally in all respects with the Company's existing ordinary shares. The Placing Shares will be eligible for all future dividends and the Company expects to declare an interim dividend at the time of announcement of the half-yearly results to June 2021.

The Placing Shares have been placed with certain existing and new shareholders. The Directors value the Company's retail shareholders, but due to the size of the Placing, the small discount to the prevailing bid price of an Ordinary Share and the cost of undertaking a retail offer, the Board determined that it was not in the Company's interest to make the Placing available to all investors. However, this will be kept under review should the Company seek to raise further funds in the future.

Admission to trading and total voting rights

Application has been made to the London Stock Exchange for the Placing Shares to be admitted to trading on AIM. It is expected that Admission will become effective and that dealings in the Placing Shares on AIM will commence on or around 28 June 2021.

On Admission, the Company's issued ordinary share capital will consist of 45,244,385 ordinary shares of 0.5p each, with one vote per share. The Company does not hold any ordinary shares in treasury.  Therefore, on Admission, the total number of ordinary shares and voting rights in the Company will be 45,244,385.  With effect from Admission, this figure may be used by shareholders in the Company 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 share capital of the Company under the FCA's Disclosure Guidance and Transparency Rules.

Significant shareholders

Vector Holdings Limited, a company controlled by Agam Jain and his family, currently holds 34,000,000 Ordinary Shares. As a result of the issue of the Placing Shares and with effect from Admission, this holding will represent 75.15% of the Company's enlarged share capital. Vector Holdings Limited is not acquiring any shares pursuant to the Placing.

Notice to Distributors

Solely for the purposes of the temporary product intervention rules made under sections S137D and 138M of the Financial Services and Markets Act 2000 and the FCA Product Intervention and Product Governance Sourcebook (together, the "Product Governance Requirements"), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any "manufacturer" (for the purposes of the 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, as defined under the FCA Conduct of Business Sourcebook COBS 3 Client categorisation, and are eligible for distribution through all distribution channels as are permitted by the FCA Product Intervention and Product Governance Sourcebook (the "Target Market Assessment").

Notwithstanding the 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 offer no guaranteed income and no capital protection; and an investment in the Placing 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 Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Placing. Furthermore, it is noted that, notwithstanding the Target Market Assessment, Allenby Capital Limited will only procure investors who meet the criteria of professional clients and eligible counterparties. For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of the FCA Conduct of Business Sourcebook COBS 9A and 10A respectively; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the Placing Shares.

Each distributor is responsible for undertaking its own target market assessment in respect of the Placing Shares and determining appropriate distribution channels.

Enquiries

About Vector Capital:

Vector Capital provides secured, business-to-business loans to SMEs primarily based in England and Wales. Loans are typically secured by a first legal charge against real estate. The Company's customers typically borrow for general working capital purposes, bridging ahead of refinancing, land development and property acquisition. The loans provided by the Company are typically for renewable 12-month terms with fixed interest rates.

Important Notices

This Announcement includes "forward-looking statements" which includes all statements other than statements of historical fact, including, without limitation, those regarding the Company's financial position, business strategy, plans and objectives of management for future operations, or any statements preceded by, followed by or that include the words "targets", "believes", "expects", "aims", "intends", "will", "may", "anticipates", "would", "could" or similar expressions or negatives thereof. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond the Company's control that could cause the actual results, performance or achievements of the Group to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the Company's present and future business strategies and the environment in which the Company will operate in the future. These forward-looking statements speak only as at the date of this Announcement. The Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company's expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based unless required to do so by applicable law or the AIM Rules for Companies.

No statement in this Announcement is intended to be a profit forecast and no statement in this Announcement should be interpreted to mean that earnings per share of the Company for the current or future financial years would necessarily match or exceed the historical published earnings per share of the Company.