THIS ANNOUNCEMENT IS NOT FOR PUBLICATION, DISTRIBUTION OR RELEASE, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH THE PUBLICATION, DISTRIBUTION OR RELEASE WOULD BE UNLAWFUL.

THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT CONSTITUTE OR CONTAIN ANY INVITATION, SOLICITATION, RECOMMENDATION, OFFER OR ADVICE TO ANY PERSON TO SUBSCRIBE FOR, OTHERWISE ACQUIRE OR DISPOSE OF ANY SECURITIES IN MCCOLL'S RETAIL GROUP PLC OR ANY OTHER ENTITY IN ANY JURISDICTION. NEITHER THIS ANNOUNCEMENT NOR THE FACT OF ITS DISTRIBUTION SHALL FORM THE BASIS OF, OR BE RELIED ON IN CONNECTION WITH, ANY INVESTMENT DECISION IN RESPECT OF MCCOLL'S RETAIL GROUP PLC.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION.

For immediate release

13 August 2021

McColl's Retail Group plc

("McColl's", the "Company", or the "Group")

Successful completion of Accelerated Bookbuild

Further to the Company's announcement on 12 August 2021 regarding the proposed £35 million Capital Raising (the "Launch Announcement"), the Company is pleased to announce the successful completion of the bookbuilding process for the Firm Placing (the "Bookbuild"), which has now closed. The Company has conditionally placed 150,000,000 New Ordinary Shares at the Offer Price of 20 pence per share (the "Offer Price"), raising gross proceeds of approximately £30 million. The Offer Price represents a discount of 31.03 per cent. to the Closing Price of 29 pence per Ordinary Share on 11 August 2021 (being the last Business Day before the Launch Announcement).

Defined terms in this announcement shall have the meaning given to them in the Launch Announcement.

Capital Raise Highlights

·      Firm Placees have agreed to subscribe for 150,000,000 Firm Placing Shares at the Offer Price raising £30 million before expenses.

·   Each of the Director's participated in the Firm Placing and together the Directors have agreed to subscribe approximately £3.19 million in aggregate for 15,950,000 New Ordinary Shares via the Firm Placing at the Offer Price.  

As described in the Launch Announcement, the net proceeds of the Firm Placing of £27.3 million together with the proceeds from the Open Offer will be used to:

1.                Increase the number, and accelerate the pace of rollout, of Morrisons Daily stores, from 56 to 350 by the end of the financial year ending November 2022 (an increase of 50 stores against the Group's previous target of 300 stores by the end of December 2023);

2.               Improve the grocery infrastructure in the Morrisons Daily sites, thus enhancing the standard of the refit and expanding the chilled offer with more refrigeration, adding further profit potential;

3.               Further invest in the store estate, including the potential to extend the rollout of Morrisons Daily beyond 350 stores; and

4.                To reduce the Group's financial leverage.

The Firm Placing Shares represent approximately 130.1 per cent. of the Existing Ordinary Shares of the Company and approximately 56.5 per cent. of the issued share capital of the Company as enlarged by the Firm Placing (excluding the impact of the Open Offer).

Jonathan Miller, Chief Executive, said: "Today's successful capital raise represents a transformational opportunity to accelerate our strategy and capitalise on the growth opportunity available to us in food-led convenience. On behalf of the Board, I would like to thank our existing shareholders for their ongoing support and welcome all new shareholders in the Company."

General Meeting

Completion of the Capital Raising is conditional upon, inter alia, approval by Shareholders the Resolutions to be proposed at a General Meeting expected to be held at 11.00 at Ground Floor West, One London Road, Brentwood, Essex, England, CM14 4QW on 1 September 2021.

Directors' participation in the Firm Placing

The following Directors have agreed to subscribe for in aggregate 15,950,000 New Ordinary Shares at the Offer Price in the Firm Placing as follows:

Related Party Transactions

Jonathan Miller

The subscription by Jonathan Miller for 15,000,000 New Ordinary Shares at the Offer Price for the total amount of £3,000,000 constitutes a related party transaction for the purposes of paragraph 11.1.7 of the Listing Rules and, consequently, such subscription requires Shareholder approval under the Listing Rules which will be sought at the General Meeting. Jonathan Miller is not entitled to vote on the Fourth Resolution at the General Meeting and has taken all reasonable steps to ensure that his associates do not vote on the Fourth Resolution.

Each Director's subscription (other than Jonathan Miller's) constitutes a smaller related party transaction for the purposes of paragraph 11.1.10 of the Listing Rules.

Aberforth

Aberforth Partners LLP, in its capacity as discretionary fund manager on behalf of its clients, ("Aberforth") is a related party of the Company for the purposes of the Listing Rules as it is a substantial shareholder of the Company which is entitled to exercise, or control the exercise of, approximately 11.94 per cent. of the votes able to be cast at general meetings of the Company. Aberforth agreed to subscribe for 25,000,000 Firm Placing Shares in the Firm Placing at the Offer Price, equating to £5,000,000 million in aggregate. Accordingly, the issue of such New Ordinary Shares to Aberforth is a transaction of sufficient size to require Shareholder approval under the Listing Rules as Aberforth is a related party. Such shareholder approval will be sought at the General Meeting and Aberforth and its affiliates will not vote on the Fifth Resolution. Any New Ordinary Shares issued to Aberforth as a result of it taking up its Open Offer Entitlements are exempt from the rules regarding related party transactions under chapter 11 of the Listing Rules.

Open Offer

As described in the Launch Announcement, the Company is providing all Qualifying Shareholders with the opportunity to subscribe for an aggregate of up to 25,000,000 Open Offer Shares at the Offer Price, on and subject to the terms and conditions of the Open Offer, pro rata to their holdings of Existing Ordinary Shares, on the basis of:

3 Open Offer Shares at the Offer Price for every 14 Existing Ordinary Shares held at the Record Date

Qualifying Shareholders are also invited to apply for additional Open Offer Shares (up to the total number of Open Offer Shares available to Qualifying Shareholders under the Open Offer) through the Excess Application Facility.

The Company intends to publish the Prospectus, containing relevant information regarding the Open Offer and incorporating the Notice of General Meeting later today and Shareholders should read the Prospectus in full before making any application for Open Offer Shares and/or Excess Open Offer Shares.

The Firm Placing and Open Offer are conditional, inter alia, upon:

(i)            all of the Resolutions being passed by the Shareholders without material amendment at the General Meeting;

(ii)           the Placing and Sponsor Agreement becoming or being declared unconditional in all respects (save in respect of Admission) and not having been terminated in accordance with its terms prior to Admission; and

(iii)         Admission becoming effective by no later than 8.00 a.m. on 6 September 2021 (or such later time and/or date as the Company and the Joint Bookrunners may determine).

If any of the conditions are not satisfied or, if applicable, waived, then the Firm Placing and Open Offer will not proceed.

Admission

Applications will be made to the FCA for admission of the New Ordinary Shares to listing on the premium listing segment of the Official List of the FCA and to the London Stock Exchange for admission of the New Ordinary Shares to trading on its main market for listed securities. Subject to the conditions above being satisfied, it is expected that Admission will become effective on 6 September 2021 and that dealings for normal settlement in the New Ordinary Shares will commence at 8.00 a.m. on the same day.

The New Ordinary Shares will be issued credited as fully paid and will 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 on the Existing Ordinary Shares by reference to a record date on or after Admission.

Total Voting Rights

On 6 September 2021, following admission of the New Ordinary Shares, the Company's enlarged issued share capital will comprise of 290,304,400 Ordinary Shares with voting rights in the Company assuming full take up occurs under the Open Offer. 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 in the interest in, the share capital of the Company under the FCA's Disclosure Guidance and Transparency Rules.

Enquiries:

For further information, please contact:

EXPECTED TIMETABLE OF PRINCIPLE EVENTS

CAPITAL RAISE STATISTICS

Notes:

(1) The  Closing Price on the London Stock Exchange on 11 August 2021 being the last Business Day prior to the announcement of the Capital Raising

(2) On the assumption that the maximum number of Open Offer Shares made available under the Open Offer are issued.

(3) On the assumption that no further Ordinary Shares are issued from the date of this document until completion of the Capital

Raising other than the New Ordinary Shares. The actual number of New Ordinary Shares may be subject to rounding to eliminate fractions.

Important Information

This Announcement is not for public release, publication, distribution or forwarding, in whole or in part, directly or indirectly, in or into the United States, Australia, Canada, the Republic of South Africa, Japan or any other jurisdiction in which such release, publication, distribution or forwarding would be unlawful. No public offering of the securities referred to herein is being made in any such jurisdiction or elsewhere.

The securities referred to herein have not been and will not be registered under the US 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 or sold in the United States, except pursuant to an exemption from the registration requirements of the Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction of the United States. No public offering of the New Ordinary Shares is being made in the United States.

Notes to editors

McColl's is a leading neighbourhood retailer, with an estate of over 1,200 managed convenience stores and newsagents. We operate McColl's and Morrisons Daily branded convenience stores as well as newsagents branded Martin's across the UK, except in Scotland where we operate under our heritage brand, RS McColl.

LEI: 213800R1TLR536P8YJ67