Kingswood Holdings Limited 

("Kingswood", the "Company" or the "Group")

Conversion of Convertible Preference Shares

Total Voting Rights

Kingswood Holdings Limited (AIM:KWG), the international, vertically integrated wealth and investment management group, refers to its announcement of 29 December 2023 and is pleased to announce that, following the grant of the anticipated approvals by the applicable regulatory authorities in the US, UK and the Republic of Ireland, the Convertible Preference Shares are converting, at the agreed conversion price of 16.5 pence per Ordinary Share, into a total of 469,263,291 new Ordinary Shares in the Company ("Conversion").

On completion of Conversion:

·      the Company's enlarged issued share capital will be 686,184,011 Ordinary Shares, all of which will be admitted to trading on AIM; and

·      HSQ Investment Limited ("HSQ"), a wholly owned indirect subsidiary of funds managed and/or advised by Pollen Street Capital Limited ("Pollen Street"), will be beneficially interested in a total of 469,263,291 Ordinary Shares representing approximately 68.4 per cent of the enlarged issued share capital of the Company.

The Company and HSQ are in discussions in relation to the treatment and settlement of the accrued dividends on the Convertible Preference Shares and a further announcement will be made in due course.

Maintenance of AIM listing and new Relationship Agreement

HSQ has indicated to the Company that its current intention is to maintain the listing of the Company on AIM and has entered into a relationship agreement with the Company, which provides that any dealings between the Company and HSQ will be at arms' length and that the Company will continue to have at least two independent directors (being directors independent of HSQ). The relationship agreement with HSQ is similar in effect in these respects to the equivalent relationship agreement entered into between the Company and KPI (Nominees) Limited ("KPI") in July 2017, which continues in force.

In accordance with the arrangements approved by shareholders at the General Meeting of the Company on 30 September 2019 in relation to the waiver of any future application of Rule 9 of the Takeover Code, the Conversion of the Convertible Preference Shares will not trigger an obligation on HSQ to make an offer for the Company under the Takeover Code.

Guaranteed minimum return to HSQ

In accordance with the provisions of the articles of incorporation of the Company, the Deferred Contingent Value Share has also been issued to HSQ - further details of the Deferred Contingent Value Share (and of the Make Whole Instrument, which the Deferred Contingent Value Share is designed to underpin) are set out in the circular issued by the Company on 13 September 2019 (the "Circular").

The Circular notes that the Make Whole Instrument is to deliver a minimum two times return to HSQ on its investment in the Convertible Preference Shares (i.e. on the amount subscribed by HSQ for the Convertible Preference Shares). With the agreement of HSQ, the Make Whole Instrument was subsequently modified on 28 December 2021 (as announced by the Company on 31 December 2021) to provide that the level of return for monies invested by HSQ on or after 28 December 2021 was a minimum of 1.5 times rather than a minimum of two times.

This means that the aggregate level of return to HSQ guaranteed by the Company under the Make Whole Instrument (as so modified) is £140,056,886, being:

·      £95,656,886 (being the aggregate amount subscribed by HSQ for Convertible Preference Shares ahead of 28 December 2021 multiplied by 2); plus

·      £44,400,000 (being the aggregate amount subscribed by HSQ for Convertible Preference Shares on or after 28 December 2021 multiplied by 1.5).

This aggregate level of return will be assessed once HSQ has disposed of the Ordinary Shares it has acquired as a result of its investment in the Convertible Preference Shares.

The Circular also notes that the Company's obligations under the Make Whole Instrument extend to the value sharing payment summarised on page 27 of the Circular.

KPI agreement with HSQ

KPI, which is wholly owned by Gary Wilder, Non-Executive Director of Kingswood, and Jonathan Massing, Non-Executive Deputy Chairman of Kingswood, additionally holds an economic interest in a portion of each of (i) the dividends relating to the Ordinary Shares held by HSQ (the "HSQ Ordinary Shares"), (ii) the proceeds resulting from a sale of the HSQ Ordinary Shares; and (iii) certain additional amounts, if paid, under the Make Whole Instrument relating to the HSQ Ordinary Shares. HSQ is currently entitled to exercise all legal rights in relation to such Ordinary Shares.

Issue of Equity and Total Voting Rights

Application has been made to the London Stock Exchange for 469,263,291 new Ordinary Shares to be admitted to trading on AIM ("Admission") and it is expected that Admission will be effective and dealings will commence in respect of the new Ordinary Shares at 8.00 a.m. on or around 4 June 2024.

Following Admission, the Company's issued share capital will consist of 686,184,011 Ordinary Shares. The Company does not hold any Ordinary Shares in Treasury, therefore on Admission the total number of voting rights in the Company will be 686,184,011. This figure may be used by shareholders as the denominator for the calculation by which they may determine if they are required to notify their interest in, or change to their interest in, the Company under the FCA's Disclosure Guidance and Transparency Rules.

David Lawrence, Kingswood Group CEO commented:

"This conversion substantially completes the funding structure entered into with Pollen Street Capital in 2019. The financial and broader support of Pollen Street has enabled a transformative period for the business from 2019 to date, and this conversion makes for a clearer, simpler capital structure which we hope will be welcomed by investors."

Lindsey McMurray, Managing Partner of Pollen Street Capital commented:

"Kingswood continues to go from strength to strength with the wealth management sector presenting attractive opportunities for both organic growth and the consolidation of accretive bolt-on acquisitions. We look forward to continuing to work with the business to achieve its growth ambitions."

Defined terms used in this announcement shall (unless defined herein) bear the meaning ascribed to those terms in the circular issued by the Company on 13 September 2019 (the "Circular"), which will continue to be available on the investor section of the Company's website at https://www.kingswood-group.com/wp-content/uploads/2020/01/Circular_and_Notice_of_General_Meeting.pdf

ENDS

For further details, please contact:

About Kingswood

Kingswood Holdings Limited (trading as Kingswood) is an AIM-listed (AIM: KWG) international fully integrated wealth management group with circa £12 billion of assets under advice and management. It services circa 19k clients from a growing network of offices across the UK with overseas offices in Ireland, South Africa and the US.

Kingswood offers a range of trusted investment solutions to its clients, which range from private individuals to some of the UK's largest universities and institutions, including investment advice and management, personal and company pensions and wealth planning. Kingswood is focused on building on its position as a leading player in the wealth and investment management market through targeted acquisitions, creating a global business through strategic partnerships.

This announcement contains inside information for the purposes of article 7 of the Market Abuse Regulation (596/2014/EU) as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018.

Notification and public disclosure of transactions by persons discharging managerial responsibilities and persons closely associated with them.