Announcement PDF ASX Announcement 27 November 2023 Verbrec Pro-Rata Entitlement Offer Verbrec Limited (ASX : VBC) (Verbrec or the Company) a leading engineering, training, mining technology and infrastructure services business executing work across Australia, New Zealand, PNG and Pacific Islands, announced on Monday 20 November 2023 details in relation to capital raising activities, including a Placement and an Entitlement Offer. Verbrec today announces that personalised letters, including an Entitlement Offer Information Booklet, have been distributed to eligible shareholders in relation to the Entitlement Offer. The Entitlement Offer Information Booklet is attached as an appendix to this announcement. The Entitlement Offer is a non-renounceable pro-rata offer to existing eligible shareholders in Australia and New Zealand. Shareholders who do not take up their entitlements will not receive any value in respect of those entitlements they do not take up. In addition to being able to apply for new Shares under the Entitlement Offer, eligible shareholders can also apply for additional new Shares in excess of their entitlements under a top-up facility. Entitlement Offer Ratio 1 New Share for every 6.5 Existing Share held by an Eligible Shareholder. Issue Price $0.06 per New Share. Total number of New Shares to be issued under the Entitlement Offer Up to approximately 34,073,256 New Shares (subject to rounding of fractional entitlements). Amount to be raised under the Entitlement offer before costs Up to approximately $2 million (subject to rounding of fractional entitlements). For more information on the Entitlement Offer, please see the announcement, investor presentation and Appendix 3B published on Monday, 20 November 2023. Key Dates ACTIVITY DATE Announcement of Entitlement Offer 20 November 2023 Record Date for Entitlement Offer 7:00 pm (AEDT) on 23 November 2023 Information Booklet and Entitlement and Acceptance Form despatched 27 November 2023 Entitlement Offer opens 27 November 2023 Closing Date 5:00 pm (AEDT) on 7 December 2023 Verbrec Limited Share Registry ASX : VBC ACN: 127 897 689 Computershare Investor Services Pty Ltd Ph: +61 3 9415 4000 Verbrec.com computershare.com ACTIVITY DATE Settlement of the Entitlement Offer 14 December 2023 Issue of New Shares under Entitlement Offer 14 December 2023 New Shares under the Entitlement Offer commence trading on ASX on a normal settlement basis 15 December 2023 Despatch of holding statements for New Shares 15 December 2023 This timetable is indicative only and subject to change. The Directors may, with the consent of the Lead Manager, vary these dates subject to the Corporations Act and the Listing Rules. An extension of the Closing Date will delay the anticipated date for issue of the New Shares. The Directors also reserve the right not to proceed with the whole or part of the Entitlement Offer any time before the allotment and issue of the New Shares. In that event, the relevant Application Monies (without interest) will be returned in full to Applicants. - ends – Authorised for release by the Board of Directors of Verbrec Limited. Company Enquiries Investor Relations Media Enquiries Phillip Campbell Joel Voss Joel Voss Chairperson Company Secretary Company Secretary Phillip.Campbell@verbrec.com Investors@verbrec.com Investors@verbrec.com About Verbrec Limited Verbrec is a leading engineering and project services company that supports customers across Australia, New Zealand, PNG and beyond. The Company serves the energy, infrastructure, and mining industries through their technical specialties; asset management, automation and control, pipelines, power, process plant and training, with capabilities that span across the entire life cycle of an asset. Verbrec is an Australian Securities Exchange listed company (ASX:VBC). Verbrec Limited Share Registry ASX : VBC ACN: 127 897 689 Computershare Investor Services Pty Ltd Ph: +61 3 9415 4000 Verbrec.com computershare.com Verbrec Limited Entitlement Offer Information Booklet Pro rata non-renounceable entitlement offer of 1 New Share for every 6.5 Existing Shares at an issue price of $0.06 per New Share. Last date for acceptance and payment is 5:00 pm (AEDT) on 7 December 2023 (unless extended) If you are an Eligible Shareholder, this document is important and requires your immediate attention. It should be read in its entirety. This document is not a prospectus under the Corporations Act 2001 (Cth) and has not been lodged with the Australian Securities & Investments Commission. If you have any questions, you should contact your stockbroker, solicitor, accountant or other professional adviser. NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OF AMERICA CONTENTS LETTER FROM THE CHAIRMAN ........................................................................................ 3 SUMMARY OF THE ENTITLEMENT OFFER ...................................................................... 5 1. 2. 3. 4. DESCRIPTION OF THE ENTITLEMENT OFFER .................................................... 6 1.1 Overview...................................................................................................................... 6 1.2 Entitlement Offer ......................................................................................................... 6 1.3 Ineligible Shareholders ................................................................................................ 7 1.4 Ranking of New Shares ............................................................................................... 7 1.5 Allotment ..................................................................................................................... 7 1.6 Further information ...................................................................................................... 7 1.7 Offer under section 708AA of the Corporations Act ................................................... 7 1.8 Foreign Shareholders ................................................................................................... 8 HOW TO APPLY ...................................................................................................... 9 2.1 Shareholder's choices ................................................................................................... 9 2.2 Taking up all or part of your Entitlement and participating in the Top Up Facility ......................................................................................................................... 9 2.3 Do nothing and allow your Entitlement to lapse........................................................ 10 2.4 Payment ..................................................................................................................... 11 2.5 No minimum subscription ......................................................................................... 11 2.6 Entitlement and Acceptance Form is binding ............................................................ 11 2.7 Brokerage and stamp duty ......................................................................................... 13 2.8 No cooling off rights .................................................................................................. 13 2.9 Notice to nominees and custodians ............................................................................ 13 AUSTRALIAN TAX CONSIDERATIONS ................................................................ 14 3.1 Introduction................................................................................................................ 14 3.2 Income tax consequences of Entitlements ................................................................. 15 DEFINITIONS......................................................................................................... 17 No action has been taken to register or qualify the Entitlement Offer, the Entitlements or the New Shares, or otherwise permit the public offering of the New Shares, in any jurisdiction. IMPORTANT NOTICES This Information Booklet is dated 27 November 2023. The Entitlement Offer is being made without a prospectus under section 708AA of the Corporations Act (as notionally modified by ASIC Corporations (Non-Traditional Rights Issue) Instrument 2016/84 and ASIC Corporations (Disregarding Technical Relief) Instrument 2016/73). This Information Booklet does not contain all of the information which a prospective investor may require to make an informed investment decision. The information in this Information Booklet does not constitute financial product advice and does not take into account your investment objectives, financial situation or particular needs. Foreign exchange control restrictions or restrictions on remitting funds from your country to Australia may apply. Each Application will be subject to all requisite authorities and clearances being obtained for Verbrec to lawfully receive any or all of the Application Monies. Definitions, currency and time Defined terms used in this Information Booklet are contained in section 4. All references to currency are to Australian dollars and all references to time are to Australian Eastern Daylight Time (AEDT) unless otherwise indicated. This Information Booklet is important and should be read in its entirety before deciding to participate in the Entitlement Offer. This Information Booklet is not a prospectus under the Corporations Act and has not been lodged with ASIC. Taxation consequences for Applicants There will be tax implications associated with participating in the Entitlement Offer and receiving New Shares. Section 3 of this Information Booklet provides a general guide to the Australian income tax, goods and services tax and stamp duty implications of the Entitlement Offer for certain Eligible Shareholders who are Australian tax residents holding Shares on capital account. The guide does not take into account the individual circumstances of particular Eligible Shareholders and does not constitute tax advice. Verbrec recommends that you consult your professional tax adviser in connection with the Entitlement Offer. Verbrec Limited (Verbrec) may make additional announcements after the date of this Information Booklet and throughout the period that the Entitlement Offer is open that may be relevant to your consideration about whether you should participate in the Entitlement Offer. No party other than Verbrec has authorised or caused the issue of this Information Booklet, or takes any responsibility for, or makes, any statements, representations or undertakings in this Information Booklet or for any action you take in reliance on this Information Booklet. Privacy The Lead Manager has not authorised, permitted or caused the issue or lodgement, submission, dispatch or provision of this Information Booklet and there is no statement in this Information Booklet which is based on any statement made by it or by any of its affiliates, officers, employees or advisers. To the maximum extent permitted by law, the Lead Manager, its related bodies corporates and affiliates and each of their respective, officers, employees and advisers expressly disclaim all liabilities in respect of, and make no representations or warranties regarding, and take no responsibility for, any part of this Information Booklet other than references to their names and make no representation or warranty as to the currency, accuracy, reliability or completeness of this Information Booklet. By submitting an Entitlement and Acceptance Form, you will be providing personal information to Verbrec (directly or through the Share Registry). Verbrec collects, holds and will use that information to assess your Application. Verbrec collects your personal information to process and administer your shareholding in Verbrec and to provide related services to you. Verbrec may disclose your personal information for purposes related to your shareholding in Verbrec, including to the Share Registry, Verbrec's related bodies corporate, agents, contractors and third party service providers, including mailing houses and professional advisers, and to ASX and regulatory bodies. You can obtain access to personal information that Verbrec holds about you. To make a request for access to your personal information, please contact the Share Registry. By returning an Entitlement and Acceptance Form or otherwise paying for your New Shares through BPAY® in accordance with the instructions on the Entitlement and Acceptance Form, you acknowledge that you have read this Information Booklet and you have acted in accordance with and agree to the terms of the Entitlement Offer detailed in this Information Booklet. Governing law This Information Booklet, the Entitlement Offer and the contracts formed on acceptance of the Applications are governed by the law applicable in Queensland, Australia. Each Applicant submits to the exclusive jurisdiction of the Queensland courts and courts competent to hear appeals from those courts. Foreign offers This Information Booklet and the accompanying Entitlement and Acceptance Form do not constitute an offer or invitation in any place in which, or to any person to whom, it would not be lawful to make that offer or invitation. In particular, this Information Booklet does not constitute an offer to Ineligible Shareholders and may not be distributed in the United States of America and the New Shares may not be offered or sold, directly or indirectly, to persons in the United States of America. No representations No person is authorised to give any information, or to make any representation, in connection with the Entitlement Offer which is not contained in this Information Booklet. Any information or representation in connection with the Entitlement Offer not contained in the Information Booklet may not be relied upon as having been authorised by Verbrec or any of its officers. Except as required by law, and only to the extent so required, neither Verbrec nor any other person warrants or guarantees the future performance of Verbrec or any return on any investment made pursuant to this Information Booklet. This Information Booklet is not to be distributed in, and no offer of New Shares is to be made in countries other than Australia and New Zealand. The distribution of this Information Booklet (including an electronic copy) in other jurisdictions may be restricted by law and, therefore, persons who come into possession of this Information Booklet should seek advice on and observe these restrictions. Any failure to comply with these restrictions may constitute a violation of applicable securities laws. Past performance Investors should note that Verbrec's past performance, including past share price performance, cannot be relied upon as an indicator of (and provides no guidance as to) 1 Verbrec's future performance including Verbrec's future financial position or share price performance. Forward looking statements This Information Booklet contains certain forward-looking statements with respect to the financial condition, results of operations, projects and business of Verbrec and certain plans and objectives of the management of Verbrec. These forward-looking statements involve known and unknown risks, uncertainties and other factors which are subject to change without notice, and may involve significant elements of subjective judgement and assumptions as to future events which may or may not be correct. Forwardlooking statements are provided as a general guide only and there can be no assurance that actual outcomes will not differ materially from these statements. Neither Verbrec, nor any other person, gives any representation, warranty, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statement will actually occur. In particular, those forward-looking statements are subject to significant uncertainties and contingencies, many of which are outside the control of Verbrec. A number of important factors could cause actual results or performance to differ materially from the forward-looking statements. Investors should consider the forward-looking statements contained in this Information Booklet in light of those disclosures. Risks Refer to the 'Key Risks' section of the investor presentation lodged with the ASX on 20 November 2023 for a summary of general and specific risk factors that may affect Verbrec. Trading of New Shares Verbrec and the Lead Manager will have no responsibility and disclaim all liability (to the maximum extent permitted by law) to persons who trade New Shares they believe will be issued to them before they receive their holding statements, whether on the basis of confirmation of the allocation provided by Verbrec or the Share Registry or otherwise, or who otherwise trade or purport to trade New Shares in error or to which they do not hold or are not entitled. If you are in any doubt as to these matters, you should first consult with your stockbroker, solicitor, accountant or other professional adviser. Interpretation In this Information Booklet, references to: (a) ‘you’ are references to Eligible Shareholders and references to ‘your Entitlement’, ‘your Entitlement and Acceptance Form’ or similar expressions are references to the Entitlement or Entitlement and Acceptance Form of Eligible Shareholders; (b) terms which are defined in the Corporations Act have the same meaning when used in this Information Booklet, unless the context requires otherwise; and (c) unless otherwise specified, ‘section’ is a reference to a section of this Information Booklet. 2 LETTER FROM THE CHAIRMAN 27 November 2023 Dear Shareholder On 20 November 2023, Verbrec Limited (ASX: VBC) (Verbrec or Company) announced its plan to undertake: • an institutional placement of new ordinary fully paid shares in the Company (New Shares) at an issue price of $0.06 per New Share (Issue Price) to raise up to $2 million (Placement); and • a 1 for 6.5 pro rata non-renounceable entitlement offer at the same Issue Price as the Placement to raise approximately $2 million (Entitlement Offer and, together with the Placement, the Equity Raising). Veritas Securities Limited is acting as lead manager for the Equity Raising (Lead Manager). The proceeds of the Equity Raising will be used for the following purposes: • approximately $1.5 million will be used invest into growth activities; • approximately $1 million for working capital purposes, including the costs of the Equity Raising; and • approximately $1.5 million to reduce net debt position. Entitlement Offer On behalf of the Board, I am pleased to invite you to participate in the Entitlement Offer. The Entitlement Offer, to which this entitlement offer information booklet (Information Booklet) relates, is expected to raise gross proceeds of up to approximately $2 million. Under the Entitlement Offer, eligible shareholders will have the opportunity to subscribe for 1 New Share for every 6.5 fully paid ordinary shares in Verbrec (Existing Shares) held as at 7:00 pm (AEDT) on 23 November 2023 (Record Date) at the Issue Price. The issue price of $0.06 per New Share represents a discount of: • 24.1% to the theoretical ex-rights issue price1 (TERP) of $0.079; • 26.8% to the last traded price of shares on 15 November 2023 (the last trading day prior to announcement of the Entitlement Offer) of $0.082; and • 25.4% to the five-day volume weighted average price of shares on 15 November 2023 (the last trading day prior to announcement of the Entitlement Offer) of $0.080. If you take up your full Entitlement, you may also apply for additional New Shares in excess of your Entitlement, at the same issue price of $0.06 per New Share (Top Up Facility). Any shortfall under the Entitlement Offer will be made available for Eligible Shareholders who have taken up their full entitlement to take up under the Top Up Facility. The allocation of additional New Shares under the Top Up Facility 1 The theoretical ex-rights price of $0.079 is calculated using Verbrec’s closing price on 15 November 2023 assuming proceeds from the Entitlement Offer are $2 million. TERP is the theoretical price at which shares should trade immediately after the ex-date for the Entitlement Offer assuming 100% take-up of the Entitlement Offer. TERP is a theoretical calculation only and the actual price at which shares trade immediately after the ex-date for the Entitlement Offer will depend on many factors and may not be equal to the TERP. 3 will be subject to the availability of New Shares under the Entitlement Offer. Verbrec retains the flexibility to scale back applications for additional New Shares at its discretion. New Shares will be issued on a fully paid basis and will rank equally with Existing Shares on issue. The number of New Shares you are entitled to subscribe for under the Entitlement Offer (i.e. your Entitlement) is set out in your personalised Entitlement and Acceptance Form that is enclosed in this Information Booklet. Other information The Directors encourage you to read this Information Booklet carefully (in particular, the “Risks” section set out in the investor presentation lodged with the ASX on 20 November 2023, which contains a number of key risks associated with an investment in Verbrec). You should also consult your stockbroker, solicitor, accountant or other professional adviser to evaluate whether or not to participate in the Entitlement Offer. The Entitlement Offer closes at 5:00 pm (AEDT) on 7 December 2023. If you wish to participate in the Entitlement Offer you must submit your application to the Share Registry by that time. For further information regarding the Entitlement Offer, please contact the Share Registry on 1300 850 505 (within Australia) or +61 3 9415 4000 (outside Australia) between 8:30 am to 5:00 pm (AEDT) Monday to Friday during the offer period. On behalf of the board of Directors of Verbrec, I encourage you to consider this investment opportunity and thank you for your ongoing support. Yours faithfully, Phillip Campbell Non-Executive Chairman Verbrec Limited 4 SUMMARY OF THE ENTITLEMENT OFFER Entitlement Offer Ratio 1 New Share for every 6.5 Existing Share held by an Eligible Shareholder Issue Price $0.06 per New Share Total number of New Shares to be issued under the Entitlement Offer Up to approximately 34,073,256 New Shares (subject to rounding of fractional entitlements) Amount to be raised under the Entitlement Offer before costs Up to approximately $2 million (subject to rounding of fractional entitlements) Key dates for the Entitlement Offer Activity Date Announcement of Entitlement Offer 20 November 2023 Record Date for Entitlement Offer 7:00 pm (AEDT) on 23 November 2023 Information Booklet and Entitlement and Acceptance Form despatched 27 November 2023 Entitlement Offer opens 27 November 2023 Closing Date 5:00 pm (AEDT) on 7 December 2023 Settlement of the Entitlement Offer 14 December 2023 Issue of New Shares under Entitlement Offer 14 December 2023 New Shares under the Entitlement Offer commence trading on ASX on a normal settlement basis 15 December 2023 Despatch of holding statements for New Shares 15 December 2023 This timetable is indicative only and subject to change. The Directors may, with the consent of the Lead Manager, vary these dates subject to the Corporations Act and the Listing Rules. An extension of the Closing Date will delay the anticipated date for issue of the New Shares. The Directors also reserve the right not to proceed with the whole or part of the Entitlement Offer any time before the allotment and issue of the New Shares. In that event, the relevant Application Monies (without interest) will be returned in full to Applicants. Enquiries If you require further information regarding the Entitlement Offer, or if you would like a replacement Entitlement and Acceptance Form, please contact the Share Registry on 1300 850 505 (within Australia) or +61 3 9415 4000 (outside Australia) at any time from 8:30 am to 5:00 pm (AEDT) Monday to Friday. 5 1. DESCRIPTION OF THE ENTITLEMENT OFFER 1.1 Overview The Entitlement Offer is a pro rata non-renounceable entitlement offer of approximately 34,073,256 New Shares at $0.06 per New Share to raise up to approximately $2 million (before direct offer costs including fees paid to advisers and to providers of specific services to cover share registry, printing and postage costs). 1.2 Entitlement Offer The Entitlement Offer constitutes an offer only to persons who: (a) are registered as a Shareholder as at the Record Date, being 7:00 pm (AEDT) on 23 November 2023; (b) have a registered address on Verbrec’s share register in Australia or New Zealand; (c) are not in the United States and are not acting for the account or benefit of a person in the United States (to the extent such person holds Shares for the account or benefit of such person in the United States); and (d) are eligible under all applicable securities laws to receive an offer under the Entitlement Offer, (Eligible Shareholders). Eligible Shareholders are entitled to acquire 1 New Share for every 6.5 Existing Shares held by them on the Record Date. The Entitlement Offer opens on 27 November 2023 and will close at 5:00 pm (AEDT) on 7 December 2023. This Information Booklet relates to the Entitlement Offer and is relevant only to Eligible Shareholders. A personalised Entitlement and Acceptance Form setting out your Entitlement accompanies this Information Booklet. If you are an Eligible Shareholder, your choices with respect to your Entitlement are outlined in section 2.1. By returning a completed personalised Entitlement and Acceptance Form with payment or making a payment by BPAY®, you will be taken to have represented and warranted that you satisfy each of the criteria listed above to be an Eligible Shareholder. Nominees, trustees or custodians are, therefore, advised to seek independent professional advice as to how to proceed. Eligible Shareholders should be aware that an investment in Verbrec involves risks. The key risks identified by Verbrec are summarised in the 'Key Risks' section of the investor presentation lodged with the ASX on 20 November 2023. Any fractional Entitlement will be rounded up to the nearest whole number of New Shares. Verbrec reserves the right to round the Entitlement of any relevant holdings down so as to negate the effect of any intentional shareholding splitting or division which in Verbrec’s reasonable opinion have been conducted in an attempt to gain an advantage by reference to the rounding provided for in the calculation of Entitlements. No New Shares will be issued including under the Top-Up Facility if to do so would, to the knowledge of Verbrec, result in a breach of the Listing Rules or the restrictions on obtaining or increasing relevant interests of greater than 20% of Verbrec’s issued voting shares under Chapter 6 of the Corporations Act, or would otherwise be contrary to the Listing Rules or Corporations Act. 6 1.3 Ineligible Shareholders Shareholders who are not Eligible Shareholders are Ineligible Shareholders. Verbrec reserves the right to determine whether a Shareholder is an Eligible Shareholder or an Ineligible Shareholder. The Entitlement Offer is not being extended to Ineligible Shareholders because of the small number of those Shareholders, the number and value of the Shares they hold and the cost of complying with applicable regulations in foreign jurisdictions. Verbrec may (in its absolute discretion) extend the Entitlement Offer to Shareholders that have registered addresses outside Australia and New Zealand (except the United States of America) in accordance with applicable law. New Shares to which Ineligible Shareholders would have been entitled, had they been eligible, will form part of the shortfall. 1.4 Ranking of New Shares The New Shares issued under the Entitlement Offer will be fully paid and rank equally with Existing Shares. The rights and liabilities attaching to the New Shares are set out in Verbrec’s constitution, a copy of which can be obtained by contacting Verbrec. 1.5 Allotment Verbrec has applied for quotation of the New Shares on ASX in accordance with the Listing Rules. Allotment of the New Shares under the Entitlement Offer will take place as soon as practicable after the close of the Entitlement Offer (as applicable). Application Monies will be held by Verbrec on trust for Applicants until the New Shares are allotted. No interest will be paid on Application Monies. It is the responsibility of Applicants to determine the number of New Shares allotted and issued to them before trading the New Shares. The sale by an Applicant of New Shares before receiving their holding statement is at the Applicant's own risk. 1.6 Further information Eligible Shareholders can obtain a copy of this Information Booklet from the Verbrec website at http://www.verbrec.com/investor-centre or by contacting the Share Registry on 1300 850 505 (within Australia) or +61 3 9415 4000 (outside Australia) at any time from 8:30 am to 5:00 pm (AEDT) Monday to Friday during the offer period. Persons who access the electronic version of this Information Booklet should ensure that they download and read the entire Information Booklet. The electronic version of this Information Booklet will not include an Entitlement and Acceptance Form. A replacement Entitlement and Acceptance Form can be requested by calling the Share Registry on 1300 850 505 (within Australia) or +61 3 9415 4000 (outside Australia) at any time from 8:30 am to 5:00 pm (AEDT) Monday to Friday. 1.7 Offer under section 708AA of the Corporations Act The Entitlement Offer is being made pursuant to provisions of the Corporations Act (as notiona