REG - AMTE Power PLC - Proposed £5 million convertible bond facility

Amte PowerAnnouncement

17/10/2022 07:00

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RNS Number : 0320D  AMTE Power PLC  17 October 2022

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF
THE UK VERSION OF REGULATION (EU) NO 596/2014 WHICH IS PART OF UK LAW BY
VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018, AS AMENDED. UPON THE
PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS
INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

For immediate release

17 October 2022

AMTE Power Plc

Proposed £5 million convertible bond facility

 

Introduction

AMTE Power Plc (AIM: AMTE) ("AMTE Power", the "Company" and together with its
subsidiary undertakings, the "Group"), a leading developer and manufacturer of
lithium-ion and sodium-ion battery cells for specialist markets, today
announces that  it has signed non-binding heads of terms (the "Heads of
Terms") to enter into a proposed £5 million convertible bond facility (the
"Proposed Facility") with Arena Investors, LP (together with its affiliates,
"Arena").

The Proposed Facility follows the recent signing of a production contract with
the UK Battery Industrialisation Centre ("UKBIC"), announced on 6(th) October
2022, for the Company's six minute re-chargeable Ultra High Power cells,
and it is expected that the Proposed Facility would give the Company the
financial capability to secure and execute on production contracts for both
these, and other cells to be produced at Thurso.  The Proposed Facility would
also provide general working capital for the Group into the second quarter of
2023, at which point it anticipates producing cells under customer production
contracts at the UKBIC.

Use of funding

Further to the uses outlined in the paragraph above, the Proposed Facility
would also be used to enable the Group to:

·    conclude the development for initial commercialisation of each of
its core cells: the Ultra High Power, the Ultra Safe and the Ultra Prime; and

 

·     meet the operating costs and capital expenditure required to produce
and sell into the Company's target markets:

 

o  the Ultra High Power cell, which is expected to commence commercial
production at the UKBIC in early 2023;

o  the Ultra Safe cell, which is expected to commence commercial production
at Thurso in 2023; and

o  the Ultra Prime cell, which is expected to be produced for initial supply
in 2023, with commercial production anticipated at Thurso in 2024.

Details of the Proposed Facility

Under the Heads of Terms 1 , Arena would provide an interest free, unsecured
bond facility to the Company for a total amount of up to £5 million,
available for drawdown in three tranches: £3 million on completion of the
Proposed Facility and two further tranches of £1 million each at least 60
days following drawdown of the previous tranche, provided that no more than
£4 million is outstanding under the Proposed Facility at the relevant time.
The subscription price payable by Arena would amount to 92 per cent. of the
principal value of each tranche. It is further anticipated that the Company
would pay an upfront fee equal to 3 per cent. of the Proposed Facility which
would be deducted from the first drawdown tranche.

Arena would be entitled to convert outstanding amounts (in minimum instalments
of £150,000) under the Proposed Facility into new ordinary shares of 0.5
pence each in the capital of the Company ("Ordinary Shares"), at a price per
share equal to 95 per cent. of the 3-lowest daily volume weighted average
prices over a 15-trading day look back period ("VWAP") prior to the date of
its conversion notice. Any amounts not so converted would become repayable on
the second anniversary of drawdown.

Arena would be unable to convert any amounts outstanding under the Proposed
Facility where such conversion would mean that it would become interested (as
defined in the City Code on Takeovers and Mergers (the "Takeover Code")) in
more than 29.9 per cent. of the Ordinary Shares, save in circumstances where
such conversion is conditional upon the Company's independent shareholders
waiving the obligation on Arena to make a mandatory bid for the remaining
Ordinary Shares under Rule 9 of the Takeover Code.

In addition, Arena would be entitled to receive warrants, exercisable until
the third anniversary of the Proposed Facility, to subscribe for £1.5 million
of new Ordinary Shares at a price of 82.04 pence per Ordinary Share,
representing a premium of 20 per cent. to the VWAP on 14 October 2022.

The Proposed Facility would be capable of redemption in cash at any time by
the Company at 115 per cent. of the principal amount then outstanding.

It is expected that the Proposed Facility will contain certain covenants,
representations and warranties and events of default typical for a facility of
this type and size.

Under the Heads of Terms, the Company has agreed, subject to limited
exceptions, not to solicit, accept or encourage any other debt or convertible
financing proposal with respect to the Proposed Facility for a period of 60
days following the entry into the Heads of Terms.  Further, the Company, in
the event of breaching such exclusivity provision, shall pay Arena's costs and
expenses.

It is intended that definitive and legally binding contractual documentation
(the "Definitive Documents"), incorporating the summary terms referenced
above, will be entered into as soon as reasonably practicable.  Further, the
entry into Definitive Documents is conditional upon, amongst other things, the
conclusion of due diligence satisfactory to Arena, there being no material
adverse change to the Group and Arena remaining satisfied with the financial
performance of the Company, the Company's shareholders approving certain
shareholder resolutions (the "Resolutions") required to implement the Proposed
Facility at a general meeting of shareholders (the "General Meeting") and
other conditions which are customary for a facility of this type.

Accordingly, there can be no guarantee that the Definitive Documents will be
entered into or that the Proposed Facility becomes unconditional in which
event the Company would not receive the funding under the Proposed Facility.

The Proposed Facility will provide funds for the Group as outlined above and
will supersede alternative funding options which the Group has been exploring
to support its growing commercial cell production requirements.

Shareholder approval and importance of the vote

In order to provide the Company with the flexibility to be able to enter into
Definitive Documents as soon as possible, the Company proposes to despatch a
shareholder circular (the "Circular") containing details of the Proposed
Facility and convening the General Meeting in order to pass the Resolutions,
on or around 17 October 2022. The Circular, once published, will be available
on the Company's website at www.amtepower.com/investors.

Shareholders should be aware that, if for any reason (including the
Resolutions not being passed at the General Meeting), the Definitive Documents
in respect of the Proposed Facility are not entered into or the Proposed
Facility does not become unconditional, the Company would need to consider the
options available to it in terms of alternative sources of funding. It may be
that such sources would not be available or available on favourable terms.
 Accordingly, if alternative sources of funding anticipated by the Board
could not be secured, the Company expects that it would not have sufficient
cash for its current level of activities beyond November 2022.

The person responsible for arranging the release of this announcement on
behalf of the Company is James Hobson Chief Financial Officer of the Company.

Enquiries:

 AMTE Power plc                                                        +44 (0)1847 867 200
 Kevin Brundish (Chief Executive Officer)

James Hobson (Chief Financial Officer)
 WH Ireland Limited - Nominated Adviser and Joint Broker               +44 (0)207 220 1666
 Chris Fielding / James Bavister / Ben Good (Corporate Finance)

 Fraser Marshall (Corporate Broking)
 Panmure Gordon (UK) Limited - Joint Broker                            +44 (0)207 886 2500
 John Prior / James Sinclair-Ford / Soman Thakran (Corporate Finance)

 Hugh Rich (Corporate Broking)
 Camarco - Public Relations Adviser                                    +44 (0)20 3757 4992
 Ginny Pulbrook / Rosie Driscoll

 

Notes to Editors:

AMTE Power was founded in 2013 and is a leading developer and manufacturer of
lithium-ion and sodium-ion battery cells for specialist markets. In March
2021, the Company was admitted to trading on the AIM market of the London
Stock Exchange. The Company is focused on launching a series of next
generation battery cells based on new chemistries and cell structures that are
designed to solve key problems in power delivery, energy performance, and
safety.  These new products are targeted at a range of specialist markets
including the electric vehicle industry and energy storage sector.

AMTE Power's purpose-built cell manufacturing facility in
Thurso, Scotland has the second largest cell manufacturing capacity in
the UK and the Company also has a product development team based in Oxford.
Amte Power's proposed state-of-the-art MegaFactory in Dundee, Scotland is
expected to be operational and in production by Q3 2025 and be capable of
producing over 25,000 high added value batteries per day enabling the Company
to rapidly scale up cell production.

For further information visit the Company's website: www.amtepower.com
(http://www.amtepower.com) .

 

Information on Arena

Arena is an institutional asset manager founded in partnership with The
Westaim Corporation (TSXV: WED). With $3.6 billion of invested and committed
assets under management as of August 1, 2022, and a team of over 100 employees
in offices globally, Arena provides creative solutions for those seeking
capital in special situations. The firm brings individuals with decades of
experience, a track record of comfort with complexity, the ability to deliver
within time constraints, and the flexibility to engage in transactions that
cannot be addressed by banks and other conventional financial institutions.
See www.arenaco.com (http://www.arenaco.com) for more information.

 1  Which are non-binding save in respect of exclusivity, expenses, governing
law, confidentiality and indemnification.

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