NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO, THE UNITED STATES OF AMERICA, AUSTRALIA, CANADA, THE REPUBLIC OF SOUTH AFRICA, JAPAN, OR ANY JURISDICTION WHERE TO DO SO MIGHT CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION.

THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED TO CONSTITUTE INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (EU) NO. 596/2014.  UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN

Mercantile Ports & Logistics Limited

("MPL", or the "Company")

Conditional fund raise to raise gross proceeds of up to approximately £27.75 million through a placing and subscription and up to approximately £2.07 million through an open offer

Placing of up to 973,151,000 New Ordinary Shares at 2 pence per share

Open Offer of up to 103,504,424 New Ordinary Shares at 2 pence per share

Subscription for 414,349,000 New Ordinary Shares at 2 pence per share

Notice of Annual General Meeting

Mercantile Ports and Logistics Limited (AIM: MPL), which is developing a modern port and logistics facility near Navi Mumbai, India, today announces an oversubscribed fund raising through a conditional Placing, Subscription and Open Offer to raise up to £29.82 million, before expenses.

Transaction highlights:

·      Conditional fund raise to raise gross proceeds of up to £29.82 million, including:

·      £19.46 million raised from a Placing with institutional investors

·      £8.29 million raised from a Subscription by India-based strategic investor, Hunch Ventures

·      Open Offer to raise up to an additional £2.07 million from all existing Qualifying Shareholders

·      Net proceeds of the Transaction to partially substitute undrawn banking facility, pay accrued bank interest and other outstanding liabilities, along with the continued construction and completion of the Facility

·      Transaction conditional upon Shareholder approval at the Annual General Meeting to be held on 6 December

An explanatory circular (the Circular") is expected to be posted to Shareholders shortly, together with an accompanying Application Form for the Open Offer and Notice of Annual General Meeting. The Circular contains full details of the Transaction, the notice of and matters to be considered at the Annual General Meeting, and further details on how Qualifying Shareholders may apply under the Open Offer.

Nikhil Ghandi, Executive Chairman, commented:

"I have been delighted with the support shown from institutional shareholders to the issues the Company has faced. With the receipt of the proceeds of the Transaction, the Company will have no concerns over access to banking facilities and will have the resources to complete the Facility. I am delighted to welcome Karanpal Singh to the board and as a strategic shareholder. His significant investment in the Company is testimony in the confidence he has in our team at MPL and the opportunities available to the Company. Jeremy Warner Allen has significant experience advising public companies and we look forward to benefitting from this.

Commercial operations are about to commence in the context of a positive macro-economic backdrop and we have a strong partnership with the MMB. We have customers signed up, a growing pipeline, a re-energised board and a successful strategic investor that shares our vision. These are exciting times for MPL."

Karanpal Singh commented:

"We have been monitoring the logistics sector in India and tracking the progress made by the Mercantile team at the Karanja facility. This facility will play a key role developing the region with its strategic location encouraging the utilisation of India's waterways and coastal routes to efficiently move cargo, in line with government policy initiatives. Our investment in Mercantile is very much in line with the investment philosophy of Hunch Ventures' India vision, which seeks to make strategic investments in businesses that will play a role in India's future growth and development. As a strategic investor, we look forward to playing our role in growing the business starting with the Karanja facility."  

Enquiries:

IMPORTANT NOTICE

This announcement is released by Mercantile Ports & Logistics Limited and contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 ("MAR") it is disclosed in accordance with the Group's obligations under Article 17 of MAR.

For the purposes of MAR and Article 2 of Commission Implementing Regulation (EU) 2016/1055, this announcement is being made on behalf of the Group by its company secretary.

No action has been taken by the Group or Cenkos, or any of their respective affiliates, that would, or which is intended to, permit a public offer of the New Ordinary Shares in any jurisdiction or the possession or distribution of this announcement or any other offering or publicity material relating to the New Ordinary Shares in any jurisdiction where action for that purpose is required. Any failure to comply with these restrictions may constitute a violation of the securities laws of such jurisdictions. Persons into whose possession this announcement comes shall inform themselves about, and observe, such restrictions.

No prospectus has been made available in connection with the matters contained in this announcement and no such prospectus is required (in accordance with the Prospectus Directive (as defined below)) to be published.

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN, IS FOR INFORMATION PURPOSES ONLY, AND IS NOT INTENDED TO AND DOES NOT CONSTITUTE OR FORM PART OF ANY OFFER OR INVITATION TO PURCHASE OR SUBSCRIBE FOR, UNDERWRITE, SELL OR ISSUE OR THE SOLICITATION OF AN OFFER TO PURCHASE OR SUBSCRIBE, SELL, ACQUIRE, DISPOSE OF THE NEW ORDINARY SHARES OR ANY OTHER SECURITY IN THE UNITED STATES (INCLUDING ITS TERRITORIES AND POSSESSIONS, ANY STATE OF THE UNITED STATES AND THE DISTRICT OF COLUMBIA, COLLECTIVELY THE "UNITED STATES"), AUSTRALIA, CANADA, JAPAN OR REPUBLIC OF SOUTH AFRICA OR IN ANY JURISDICTION IN WHICH, OR TO ANY PERSONS TO WHOM, SUCH OFFERING, SOLICITATION OR SALE WOULD BE UNLAWFUL.

The New Ordinary Shares have not been and will not be registered under the United States Securities Act of 1933, as amended (the "Securities Act") or under the securities laws of any state or other jurisdiction of the United States, and may not be offered, sold or transferred, directly or indirectly, in or into the United States unless registered under the Securities Act or pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in compliance with applicable state laws. There will be no public offering of the New Ordinary Shares in the United States or elsewhere other than in the United Kingdom and certain other jurisdictions.

The relevant clearances have not been, and nor will they be, obtained from the securities commission of any province or territory of Canada; no prospectus has been lodged with, or registered by, the Australian Securities and Investments Commission or the Japanese Ministry of Finance; and the New Ordinary Shares have not been, and nor will they be, registered under or offered in compliance with the securities laws of any state, province or territory of Canada, Australia, Japan or Republic of South Africa. Accordingly, the New Ordinary Shares may not (unless an exemption under the relevant securities laws is applicable) be offered, sold, resold or delivered, directly or indirectly, in or into Canada, Australia, Japan or Republic of South Africa or any other jurisdiction outside the United Kingdom or to, or for the account or benefit of any national, resident or citizen of Australia, Japan or Republic of South Africa or to any investor located or resident in Canada.

Cenkos is authorised and regulated in the United Kingdom by the Financial Conduct Authority and is acting exclusively for the Company in connection with the Transaction and Admission and no one else and will not be responsible to anyone other than the Company for providing the protections afforded to its clients nor for providing advice to any other person in relation to the Transaction and Admission and/or any other matter referred to in this announcement.

This announcement is being issued by and is the sole responsibility of the Company. No representation or warranty, express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by Cenkos (apart from the responsibilities or liabilities that may be imposed by the FSMA, as amended, or the regulatory regime established thereunder) or any of its affiliates or any of its or respective directors, officers, employees, advisers, representatives or shareholders (collectively, "Representatives") for the contents of this announcement, or any other written or oral information made available to or publicly available to any interested party or its advisers, or any other statement made or purported to be made by or on behalf of the Company or Cenkos or any of their respective affiliates or by any of their respective Representatives in connection with the Group, the New Ordinary Shares, the Transaction or Admission and any responsibility and liability whether arising in tort, contract or otherwise therefore is expressly disclaimed. Cenkos and its affiliates and each of their respective Representatives accordingly disclaim all and any liability, whether arising in tort, contract or otherwise (save as referred to above) in respect of any statements or other information contained in this announcement and no representation or warranty, express or implied, is made by Cenkos or any of its affiliates or any of their respective Representatives as to the accuracy, fairness, verification, completeness or sufficiency of the information contained in this announcement and nothing in this announcement is, or shall be relied upon as, a promise or representation in this respect, whether as to the past or future.

This announcement does not identify or suggest, or purport to identify or suggest, the risks (direct or indirect) that may be associated with an investment in the New Ordinary Shares. Any investment decision to buy New Ordinary Shares in the Transaction must be made solely on the basis of information contained in the Circular in connection with the Transaction and the proposed admission of the Company's ordinary shares to trading on AIM, a market operated by the London Stock Exchange. Copies of the Circular will be available from the Company's website at www.mercpl.com.

This announcement contains (or may contain) certain forward-looking statements, beliefs or opinions, with respect to certain of the Group's current expectations and projections about future prospects, developments, strategies, performance, anticipated events or trends and other matters that are not historical facts. These forward-looking statements, which sometimes use words such as "aim", "anticipate", "believe", "intend", "plan" "estimate", "expect" and words of similar meaning, include all matters that are not historical facts and reflect the directors' beliefs and expectations and involve a number of risks, uncertainties and assumptions that could cause actual results and performance to differ materially from any expected future results or performance expressed or implied by the forward-looking statement, including, but not limited to, those risks and uncertainties described in the risk factors included in the Circular. These statements are subject to unknown risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Statements contained in this announcement regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. The information contained in this announcement is subject to change without notice and, except as required by applicable law, neither the Company nor Cenkos nor any of their respective affiliates nor any of their respective Representatives assumes any responsibility or obligation to update, amend or revise publicly or review any of the forward-looking statements contained in this announcement. You should not place undue reliance on forward-looking statements, which speak only as of the date of this announcement. Any indication in this announcement of the price at which New Ordinary Shares have been bought or sold in the past cannot be relied upon as a guide to future performance. No statement in this announcement is or is intended to be a profit forecast or profit estimate or to imply that the earnings of the Group for the current or future financial years will necessarily match or exceed the historical or published earnings of the Group. Past performance of the Group cannot be relied on as a guide to future performance and persons reading this announcement are cautioned not to place undue reliance on such forward-looking statements.

The New Ordinary Shares to be issued pursuant to the Transaction will not be admitted to trading on any stock exchange other than the AIM market operated by the London Stock Exchange.

Neither the content of the Company's website nor any website accessible by hyperlinks on the Company's website is incorporated in, or forms part of, this announcement.

Information for Distributors

Solely for the purposes of the product governance requirements contained within: (a) EU Directive 2014/65/EU on markets in financial instruments, as amended ("MiFID II"); (b) Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593 supplementing MiFID II; and (c) local implementing measures (together, the "MiFID II 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 New Ordinary Shares have been subject to a product approval process, which has determined that such securities are: (i) compatible with an end target market of investors who meet the criteria of retail and professional clients and eligible counterparties, each as defined in MiFID II; and (ii) eligible for distribution through all distribution channels as are permitted by MiFID II (the "Target Market Assessment").

Notwithstanding the Target Market Assessment, distributors should note that: the price of the New Ordinary Shares may decline and investors could lose all or part of their investment; the New Ordinary Shares offer no guaranteed income and no capital protection; and an investment in New Ordinary 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 Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Proposals. Furthermore, it is noted that, notwithstanding the Target Market Assessment, Cenkos 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 MiFID II; 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 New Ordinary Shares pursuant to the Transaction.

Each distributor is responsible for undertaking its own Target Market Assessment in respect of the New Ordinary Shares and determining appropriate distribution channels.

Mercantile Ports & Logistics Limited

("MPL", or the "Company")

Conditional fund raise to raise gross proceeds of up to £29.8 million

Placing of up to 973,151,000 New Ordinary Shares at 2 pence per share

Open Offer of up to 103,504,424 New Ordinary Shares at 2 pence per share

Subscription for 414,349,000 New Ordinary Shares at 2 pence per share

Notice of Annual General Meeting

1.   Introduction

The Company announces a conditional Placing, Open Offer and Subscription to raise up to approximately £29.8 million before expenses by the issue of up to 1,491,004,424 New Ordinary Shares at the Offer Price of 2 pence per Ordinary Share.

The Placing will raise approximately £19.46 million (before expenses) by the issue by the Company of 973,151,000 New Ordinary Shares at the Offer Price. In addition, in order to provide Shareholders who have not taken part in the Placing with an opportunity to participate in the proposed issue of New Ordinary Shares, the Company is providing all Qualifying Shareholders with the opportunity to subscribe at the Offer Price for an aggregate of up to 103,504,424 Offer Shares, to raise up to approximately £2.07 million (before expenses), on the basis of 1 New Ordinary Share for every 4 Existing Ordinary Shares, at 2 pence each, payable in full on acceptance.

Furthermore, Hunch Ventures, an India-based strategic investor in growth opportunities, has agreed to subscribe for, and the Company has agreed to issue, 414,349,000 New Ordinary Shares at the Offer Price on Admission, representing gross subscription proceeds of approximately £8.29 million on such terms as are further described at paragraph 4 below.

The receipt of the Transaction proceeds is conditional, inter alia, upon Shareholder approval at the Annual General Meeting  that will grant to the Directors the authority to issue the New Ordinary Shares and the power to dis-apply pre-emption rights set out in the articles of incorporation of the Company in respect of the New Ordinary Shares and Admission.

The Open Offer provides Qualifying Shareholders with an opportunity to participate in the proposed issue of the New Ordinary Shares on a pre-emptive basis while providing the Company with additional capital to invest in the business of the Group. The Offer Price is at a discount of 2.4 per cent. to the closing middle market price of 2.05 pence per Existing Ordinary Share on 15 November 2018 (being the last practicable date before publication of this announcement).

2.   Status of the Project

The Company has made significant progress in achieving its goal of constructing and operating a 200 acre port and logistics facility at Karanja Creek near Navi Mumbai, India. One side of the Company's 400 metre general cargo jetty is capable of receiving vessels and the separate 200 metre bulk berth is nearly complete. Approximately 100 acres of land have been reclaimed, with approximately another 15 acres of reclamation material on site, meaning that there is significantly more than the 50 acres of back up land reclaimed as is required to enable the Facility to commence commercial operations. Storage facilities, which are not yet in place, will be completed in consultation with contracted customers and their requirements.

As previously reported, the customs approval process has taken longer than originally envisaged. Whilst this has been frustrating and delayed the start of commercial operations, the Company was pleased to report that all approvals had been received and that Karanja Terminal and Logistics Private Limited had received confirmation from the Ministry of Finance for the customs jurisdiction to be at Jawaharlal Nehru Customs House, which will enable the Company to have seamless container handling operations between the Facility and JNPT, India's largest and busiest container handling port. The Company still awaits the final allocation of customs staff and the Directors believe that this will take place imminently and enable the Company to commence unrestricted commercial operations.

In the meantime, the Facility has been granted a No Objection Certificate (NOC) by the customs authorities, enabling it to handle domestic cargo, which does not require assessment of customs duty or its payment. Whilst operational trials have previously been carried out by the Company itself, the Facility has recently handled cargo for immediate onward transportation for one of India's most prominent steel manufacturers on a trial basis.

The Company is pleased with the level of visibility it has on its future revenues. As previously reported, the Company has signed contracts with two customers, which together envisage growing volume to 5 million tonnes of cargo in the third year of operations. In addition, the Company is in discussions to secure a number of contracts, including with one of India's largest fertilizer companies, with one of India's most prominent steel manufacturers (which has already conducted trials at the Facility) and also with a large fly ash distributor. This is alongside the discussions that continue with other interested parties and the encouragement from the MMB for arrangements to be reached with JNPT, to help relieve congestion.

The Directors consider the Facility to be well-aligned with Indian government policy, which is referred to in more detail below. In addition, the Directors believe that the Facility is ideally situated to benefit from some of the significant infrastructure projects that are taking place near the site. In particular, projects that have commenced or are proposed include the US$2.7bn Mumbai Trans Harbour Link, the US$2.5bn Navi Mumbai airport, JNPT's US$1.3bn Fourth Terminal and the Navi Mumbai Digital City. Each of these projects will require enormous quantities of steel, cement and other materials, and the Directors expect the Facility to play a part in the logistics for the construction of some or all of these projects.

The Company has been delighted with the support that it has received from the MMB and in particular the extension of its lease of the Project Land to 2059. Whilst the Directors' immediate focus is on completing the build out of the Company's Facility to 200 acres, the Directors are proud to have received permission from the MMB to extend the Facility to 400 acres, with 2,000 metres of sea frontage, which the Directors intend to pursue in the future. The Directors expect the Facility to be operational in the coming weeks and for the reclamation of the land to continue this year and next year in parallel with the pipeline of new business becoming realised.

3.   Background and Reasons for the Transaction

In the Company's interim results for the six months ended 30 June 2018, announced on 28 September 2018, the Company referred to the banking crisis that continues in India and the fact that the Company had £20 million of headroom in its existing credit facility. The Company remains in compliance with the terms of its banking facility, which is personally guaranteed by the Company's Chairman, Nikhil Gandhi. While India's banking crisis continues, Mr Gandhi has provided an interest free, unsecured loan to the Company through Grevek Investment & Finance Private Limited, a company controlled by him. In addition, Mr Gandhi has offered to provide a loan on the same terms as the Company's existing banking facilities, if required. This offer has not been acted on by the Company, although the Company has not been able to access its undrawn banking facilities.

In the Company's interim results, the Directors stated that they did not consider reliance upon financial support from the Chairman to be desirable and that the Company would consider alternatives to refinance its existing banking facilities. Having explored various options, and in consultation with some of the Company's major shareholders, the Directors have concluded that the Transaction should be pursued. The net proceeds of the Transaction will be used to substitute approximately £16 million of the undrawn banking facility and to fund, as a result of the delays to the Company's previous timetable, approximately £10 million of additional interest payments that have been and will be incurred. Any funds received under the Open Offer will be used to pay down or substitute the Company's debt, which the Directors consider to be expensive with an interest rate, which is a floating rate currently standing at approximately 13.2 per cent per annum.

Upon completion of the Transaction, the Directors are confident that the Company will be able to complete the 200 acre Facility with the funds available to it and will not be reliant upon undrawn debt. Following Admission, the  Company will explore different banking arrangements on more favourable terms.

4.   Subscription

The Company has agreed with Hunch Ventures to issue 414,349,000 New Ordinary Shares to Hunch Ventures at the Offer Price per share. The Subscription is conditional on, inter alia:

(a)   the passing of the Transaction Resolutions at the Annual General Meeting;

(b)   Admission becoming effective by no later than 8.00a.m. on 7 December 2018 or such later date as the Company, Cenkos and Hunch Ventures may agree in writing; and

(c)    delivery of the Promissory Note/Bank Guarantee.

If any of the conditions are not satisfied, the Subscription Shares will not be issued to Hunch Ventures (or any member of Hunch Ventures' group of companies as Hunch Ventures may direct).

The Subscription Shares are not subject to clawback. The Subscription is not being underwritten.

The Subscription Shares will be issued free of all liens, charges and encumbrances and will, when issued and fully paid, rank pari passu in all respects with the Existing Ordinary Shares, including the right to receive all dividends and other distributions declared, made or paid after the date of their issue.

Application will be made to the London Stock Exchange for the admission of the Subscription Shares to trading on AIM. It is expected that Admission will occur and that dealings will commence at 8.00 a.m. on 7 December 2018 at which time it is also expected that the Subscription Shares will be enabled for settlement in CREST.

The Subscription Shares will comprise 23 per cent. of the Company's issued share capital following the issue of the Placing Shares and the Subscription Shares.

Subscription Agreement

Pursuant to the terms of the Subscription Agreement, Hunch Ventures has agreed to subscribe for the Subscription Shares at the Offer Price per Subscription Share.  The aggregate subscription price payable by Hunch Ventures in respect of the Subscription Shares amounts to approximately £8.29 million.

Hunch Ventures is registered in India and, as such, the prior approval of the RBI is required prior to Hunch Ventures being able to transfer the Subscription Price, in cash, from India to the Company's bank account in Guernsey.  The prior consent of the RBI is needed, which would not be forthcoming within the timeframe envisaged for the Transaction. The Board expects Hunch Ventures to be a long term, strategic investor to the Group and, as such, has agreed to structure the subscription in accordance with the terms of the Subscription Agreement in order to facilitate Hunch Ventures' investment in a manner which ensures compliance with the requirements of the RBI. Further detail of the Subscription Agreement are set out in the Circular to Shareholders.

Details of Hunch Ventures

Hunch Ventures, which focusses on growth opportunities, has been following the development of the Facility for some time and the Directors are delighted to receive its support, with Hunch Ventures sharing the Directors' view on the opportunities available for the Facility and for the Company more widely. Following Admission, Hunch Venture's promoter, Karanpal Singh, will join the Board and the Company looks forward to benefitting from his prior experience across a range of sectors including steel, iron ore, gold mining, power production and cement manufacturing.

5.   Market and Macroeconomic Dynamics

Indian Macroeconomic Environment

India's macroeconomic landscape includes economic growth forecasts which maintain the strong GDP figures of the previous decade. The World Bank is currently forecasting 7.3% real GDP growth for CY18E and 7.5% for CY19E and CY20E, placing India as one of the fastest growing major economies worldwide. GDP has more than doubled since 2007 to US$2.6tn at a CAGR of 8.0%. This upward trend is expected to continue, with the World Bank forecasting GDP terms to reach US$3.2tn in CY20E.

Trade in India remains a fundamental part of GDP, accounting for circa 40% and the Directors believe that continued economic strength will support shipping trade volumes. At the same time, India's population of 1.4 billion is rapidly urbanising and has an increasing per capita wealth, which should result in an increase in the consumption of materials, and in turn increase demand for trade and shipping in the country.

Indian Shipping and Port Industry

India's economic strength is placing substantial stress on its port and logistics infrastructure, an aspect in which India lags behind its counterparts (ranked 44th globally in World Bank 'International Logistics Ranking' 2018).

India's vast coast line (c7,500km) and inland water ways (c14,500km) offer substantial opportunities for domestic cargo transportation. The Directors believe that the Facility is well positioned both in location and berth size to accommodate ships used for domestic cargo transportation. The cost per tonne per kilometer of moving cargo by sea or inland waterway routes can be up to 80 per cent. lower than by road or rail. However, the Directors believe that India's maritime logistics sector is under-utilised when compared to its road and railway logistics sectors.

Despite the under-utilisation of ports as a transportation method, India's Major Ports continue to be heavily congested. This results in inefficiencies. India's Major Ports have average turnaround time, being the time in which a vessel can be loaded or discharged of cargo, of 4.5 days compared to only 1 day and 1.2 days in China and the United States respectively, which the Indian government fears could hamper India's potential for wider economic growth.

India's Prime Minister has stated that ports are the gateways to development in the country and that past governments have failed to recognise the importance of ports and water ways in the country. The Indian government plans to develop 14 coastal economic regions as part of plans to revive the country's Sagarmala (string of ports) project. The Sagarmala initiative was approved by the Indian Government's Ministry of Shipping with the stated aim of "accelerating economic development in the country by harnessing the potential of India's coastline and river network". The Sagarmala project is a strategic and customer-oriented initiative to modernise India's ports and develop coastal shipping, an area of opportunity for the Facility. Under the National Perspective Plan for Sagarmala, six new mega ports are proposed to be developed in the country, and the economic regions are to be converted into manufacturing hubs, supported by port modernisation projects. The Directors believe that this further validates the Group's investment in the Facility to date and represents opportunities once the Facility is fully operational.

JNPT is located twelve nautical miles via sea and 14km via road from the Facility. The proximity of the Facility to JNPT is a key factor that the Directors believe will contribute to the Company's success.  JNPT is India's largest container handler by volume and is the primary gateway for container shipments in India. JNPT accounts for approximately 60 per cent. of India's container traffic and is ranked 24^th among global container ports.  Congestion issues have been a recent problem at JNPT, with poor evacuation infrastructure leading to high levels of congestion and resulting in an inability to grow volumes through the port. The Directors believe that the Facility can play an important role in relieving congestion at JNPT.

The Directors continue to believe that the Facility will have limited direct competition from surrounding Minor Ports and that the Facility will also benefit from the expected phasing out of Mumbai Port, which is expected to be developed as prime real estate.

6.   The Placing and Open Offer

Details of the Placing

The Company has conditionally raised approximately £19.46 million before expenses by the conditional Placing of 973,151,000 Placing Shares at the Offer Price to the Placees.

The Placing is conditional, inter alia, upon:

(a)           the passing of the Transaction Resolutions at the Annual General Meeting;

(b)           the Placing Agreement and the Subscription Agreement becoming or being declared unconditional in all respects and not having been terminated in accordance with their respective terms prior to Admission;

(c)            Admission becoming effective by no later than 8.00 a.m. on 7 December 2018 or such later time and/or date (being no later than 8.30 a.m. on 21 December 2018) as Cenkos Securities and the Company may agree.

If any of the conditions are not satisfied, the Placing Shares will not be issued and all monies received from the Placees will be returned to the Placees (at the Placees' risk and without interest) as soon as possible thereafter.

The Placing Shares are not subject to clawback. The Placing is not being underwritten.

The Placing Shares will be issued free of all liens, charges and encumbrances and will, when issued and fully paid, rank pari passu in all respects with the Existing Ordinary Shares, including the right to receive all dividends and other distributions declared, made or paid after the date of their issue.

Application will be made to the London Stock Exchange for the admission of the Placing Shares to trading on AIM. It is expected that Admission will occur and that dealings will commence at 8.00 a.m. on 7 December 2018 at which time it is also expected that the Placing Shares will be enabled for settlement in CREST.

Use of net proceeds

The net proceeds of the Placing and Subscription are expected to be approximately £26 million and it is proposed that such proceeds shall be used as follows:

·      to substitute approximately £16 million of undrawn bank facilities; and

·      the balance used to partially substitute undrawn banking facility, pay accrued bank interest and other outstanding liabilities, along with the continued construction and completion of the Facility.

To the extent that further funds are raised via the Open Offer, these will be used to substitute or pay down debt, which the Directors consider to be expensive.

Details of the Open Offer

The Company is proposing to raise up to approximately £2.07 million before expenses through the Open Offer. A total of 103,504,424 New Ordinary Shares are available to Qualifying Shareholders pursuant to the Open Offer at the Offer Price, payable in full on acceptance. Any Offer Shares not subscribed for by Qualifying Shareholders will be available to Qualifying Shareholders under the Excess Application Facility. The balance of any Offer Shares not subscribed for under the Excess Application Facility will not be available to Placees under the Placing.

Qualifying Shareholders may apply for Offer Shares under the Open Offer at the Offer Price on the following basis:

1 Offer Share for every 4 Existing Ordinary Shares

and so in proportion for any number of Existing Ordinary Shares held by Qualifying Shareholders on the Record Date. Entitlements of Qualifying Shareholders will be rounded down to the nearest whole number of Offer Shares. Fractional entitlements which would otherwise arise will not be issued to the Qualifying Shareholders but will aggregated and be made available under the Excess Application Facility. The Excess Application Facility enables Qualifying Shareholders to apply for Excess Shares in excess of their Open Offer Entitlement. Not all Shareholders will be Qualifying Shareholders. Shareholders who are located in, or are citizens of, or have a registered office in Restricted Jurisdictions will not qualify to participate in the Open Offer. The attention of Overseas Shareholders is drawn to paragraph 7 of Part 3 of the Circular.

Valid applications by Qualifying Shareholders will be satisfied in full up to their Open Offer Entitlements as shown on the Application Form or credited to their CREST account(s). Applicants can apply for less or more than their entitlements under the Open Offer but the Company cannot guarantee that any application for Excess Shares under the Excess Application Facility will be satisfied as this will depend in part on the extent to which other Qualifying Shareholders apply for less than or more than their own Open Offer Entitlements. The Company may satisfy valid applications for Excess Shares of applicants in whole or in part but reserves the right not to satisfy any excess above any Open Offer Entitlement. The Board may scale back applications made in excess of Open Offer Entitlements on such basis as it reasonably considers to be appropriate.

Qualifying Shareholders should note that the Open Offer is not a rights issue and therefore any Offer Shares which are not applied for by Qualifying Shareholders will not be sold in the market for the benefit of the Qualifying Shareholders who do not apply under the Open Offer. The Application Form is not a document of title and cannot be traded or otherwise transferred.

Further details of the Open Offer and the terms and conditions on which it is being made, including the procedure for application and payment for Offer Shares, are contained in Part 3 of the Circular and, in the case of Qualifying Non-CREST Shareholders on the accompanying Application Form.

The Open Offer is conditional on the Placing becoming or being declared unconditional in all respects and not being terminated before Admission (as the case may be). If the Placing does not proceed, the Offer Shares will not be issued and all monies received by the Receiving Agents from applicants will be returned to such applicants (at the applicants' risk and without interest) as soon as possible, but within 14 days thereafter. Any Open Offer Entitlements admitted to CREST will thereafter be disabled.

The Offer Shares will be issued free of all liens, charges and encumbrances and will, when issued and fully paid, rank pari passu in all respects with the Existing Ordinary Shares, including the right to receive all dividends and other distributions declared, made or paid after the date of their issue.

Application will be made to the London Stock Exchange for the admission of the Offer Shares to trading on AIM. It is expected that Admission will occur and that dealings will commence at 8.00 a.m. on 7 December 2018 at which time it is also expected that the Offer Shares will be enabled for settlement in CREST.

Placing Agreement

Pursuant to the Placing Agreement, Cenkos Securities has agreed to use its reasonable endeavours as agent of the Company to procure subscribers for the Placing Shares at the Offer Price.

The Company will bear all other expenses of, and incidental to, the Placing, Open Offer and Subscription, including the fees of the London Stock Exchange, printing costs, Registrars' and Receiving Agent's fees, all legal and accounting fees of the Company and all stamp duty and other taxes and duties payable.

The Placing Agreement contains certain customary warranties and indemnities from the Company in favour of Cenkos Securities and is conditional, inter alia, upon:

(a)           the passing of the Transaction Resolutions at the Annual General Meeting;

(b)           the Placing Agreement and the Subscription Agreement having become unconditional in all respects (save for the condition relating to Admission) and not having been terminated in accordance with its terms prior to Admission; and

(c)            Admission becoming effective not later than 8.00 a.m. on 7 December 2018 or such later time and/or date as the Company and Cenkos Securities may agree, being not later than 21 December 2018.

(d)           the Promissory Note/Bank Guarantee (i) having been duly entered into by the parties to such agreement (ii) not having lapsed or been terminated and (iii) having become unconditional, in each case save for Admission.

Cenkos Securities may terminate the Placing Agreement if, inter alia: the Company is in material breach of any of its obligations under the Placing Agreement; or there has occurred, in the opinion of Cenkos Securities, acting in good faith, a material adverse change in the business of the Group or in the financial or trading position or prospects of the Group.

7.   Effect of the Transaction

Upon Admission, the New Ordinary Shares will represent approximately 78.3 per cent. of the Enlarged Share Capital (assuming full take up under the Placing, the Open Offer and that all of the Subscription Shares are issued.

Following the issue of the New Ordinary Shares pursuant to the Placing, Open Offer and Subscription and assuming full take up thereunder, Qualifying Shareholders who do not take up their Open Offer Entitlements will suffer a dilution of approximately 78.3 per cent. to their interest in the Company. 

In due course, the Company intends to carry out a share consolidation. Further details will be announced as appropriate.

Directors' participation in the Transaction

The Directors have indicated that they intend to subscribe for a combined total of £410,000 in the Placing. In addition, they may apply for New Ordinary Shares under the Open Offer. A further announcement will be made in respect of the Directors' participation in the Transaction immediately following Admission.

8.   Board Changes

Following Admission, it is proposed that Karanpal Singh and Jeremy Warner Allen join the Board. As referred to above, as promoter of Hunch Ventures and with experience across a range of sectors including steel, iron ore, gold mining, power production and cement manufacturing, the Directors look forward to welcoming Mr Singh to the Board. Mr Warner Allen will join the board in a senior capacity, having had a successful career in the City as an adviser to growth companies across multiple sectors. As a previous adviser to MPL, he has in depth knowledge of the Company and its opportunities. With his previous background advising public companies, the Board looks forward to benefitting from his experience, particularly in matters relating to communication with Shareholders.

The optimum construct of the Board will be considered by the Board post Admission and the appointment of the new Directors.

9.   Related Party Transactions

M&G Investment Management (''M&G''), Legal and General Investment Management ("L&G") and Schroder Investment Management ("SIM") are substantial Shareholders in the Company and consequently are considered to be related parties of the Company pursuant to Rule 13 of the AIM Rules for Companies. M&G, L&G and SIM are subscribing for 286,300,000 Placing Shares, 164,462,000 Placing Shares and 118,211,000 Placing Shares respectively. These subscriptions by M&G, L&G and SIM each constitute a related party transaction for the purposes of the AIM Rules for Companies. In the absence of any independent directors for the purposes of opining on the fairness of the terms of the transaction, given the expectation that each Director will participate in the Transaction, the Company's nominated adviser considers that that the participation in the Placing by M&G, L&G and SIM are fair and reasonable insofar as the Shareholders are concerned.

10. Overseas Shareholders

The attention of Qualifying Shareholders who have registered addresses outside the United Kingdom, or who are citizens or residents of countries other than the United Kingdom, or who are holding Existing Ordinary Shares for the benefit of such persons, (including, without limitation, custodians, nominees, trustees and agents) or who have a contractual or other legal obligation to forward the Circular or the Application Form to such persons, is drawn to the information which appears in paragraph 7 of Part 3 of the Circular.

In particular, Qualifying Shareholders who have registered addresses in or who are resident in, or who are citizens of, countries other than the UK (including, without limitation, the United States of America), should consult their professional advisers as to whether they require any governmental or other consents or need to observe any other formalities to enable them to take up their entitlements under the Open Offer.

Risk Factors and questions and answers about the Open Offer

The attention of Shareholders is drawn to the risk factors set out in Part 2 of the Circular, which provide some questions and answers about the Open Offer.

11. Annual General Meeting

The Company is convening its Annual General Meeting for 2018. Information on the ordinary business at the Annual General Meeting is set out at the end of the Notice of Annual General Meeting. The Directors do not currently have authority to issue all of the New Ordinary Shares and, accordingly, the Board is seeking the approval of Shareholders to issue the New Ordinary Shares at the Annual General Meeting.

A notice convening the Annual General Meeting, which is proposed to be held at the offices of Intertrust International Management Limited, Martello Court, Admiral Park, St. Peter Port, Guernsey GY1 3HB at 2.00 p.m. on 6 December 2018, is set out at the end of the Circular, which is expected to be posted to Shareholders shortly.   

Expected Timetable of Principal Events

If any of the details contained in the timetable above should change, the revised times and dates will be notified by means of an announcement through a Regulatory Information Service.

 Key Statistics

PLACING STATISTICS

OPEN OFFER STATISTICS

*on the assumption that the Open Offer is fully subscribed

DEFENITIONS

The following definitions apply throughout this announcement, unless the context requires otherwise: