Retail Entitlement Offer Booklet and Covering Letter - AJ Lucas

Overview of the Recapitalisation Plan
(cont.)
• Participation by AJL’s largest shareholder - Kerogen - of up to $85.3mm
– Kerogen has confirmed its intention to take up its full pro-rata entitlement in the Entitlement Offer of circa $61mm
– Kerogen has also entered into an Underwriting Agreement with AJL under which it has agreed to underwrite any shortfall arising from
the Institutional Entitlement Offer, excluding pre-commitments obtained from other existing institutional shareholders
– This Underwriting Agreement is for up to a maximum of 20.3mm shares or $24.3mm
– Eligible institutional shareholders and institutional investors can also apply for any shortfall arising from the Institutional Entitlement
Offer which would cause Kerogen’s holding to exceed 49.99%
– Settlement of the Kerogen subscription will occur across both the Institutional Offer and Retail Offer so it does not cause Kerogen’s
shareholding to exceed 49.99%
– Kerogen will not be paid any fees for either its commitment or entering into its Underwriting Agreement
• Kerogen has the right to nominate, while it holds more than 30% of the issued capital of AJL, 2 directors to the AJL Board
• Kerogen currently holds a 44.3% shareholding in AJL. As a result of the Entitlement Offer, this shareholding could increase to a maximum of
49.99%, but this level may be reduced by:
– The number of entitlements taken up by shareholders under the Institutional Entitlement Offer who have not pre-committed, if any
– The ability of other institutional shareholders and institutional investors to apply for shares under any shortfall arising under the
Institutional Entitlement Offer
• AJL has also agreed with Kerogen that it will not raise capital in the next 12 months unless via way of pro-rata offer to all shareholders
• Kerogen’s underwriting uses a substantial part of Kerogen’s current capacity to “creep” to 50.88% of AJL
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