REG - Aura Renewable Acqns - Proposed Initial Transaction

Aura Renewable AcquisitionsAnnouncement

09/12/2024 08:00

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RNS Number : 2290P  Aura Renewable Acquisitions PLC  09 December 2024

 

Aura Renewable Acquisitions Plc

("ARA" or the "Company")

 

9 December 2024

 

This announcement contains inside information for the purposes of Article 7 of
the EU Market Abuse Regulation No. 596/2014/EU, which forms part of domestic
UK law pursuant to the European Union (Withdrawal) Act 2018, as amended. Upon
release via a Regulatory Information Service, this information is in the
public domain.

 

Not for release, publication or distribution in whole or in part, directly or
indirectly in, into or from any jurisdiction where to do so would constitute a
violation of the relevant laws or regulations of such jurisdiction.

 

Proposed Initial Transaction - acquisition of Zero Carbon Technologies Limited

Aura Renewable Acquisitions Plc, a UK-based company, whose objective is to
invest in the global renewable energy sector supply chain and thereby build
shareholder value, is pleased to announce that as of 6 December 2024, it has
entered into heads of terms (the "Heads of Terms") with Zero Carbon
Technologies Limited ("ZCT"), a UK incorporated company with planned battery
recycling operations in Europe, which set out the key terms for ARA to acquire
100% of the issued share capital of ZCT, in consideration for the issue of
ordinary shares in ARA to the shareholders of ZCT, subject to due diligence,
as well as the negotiation and execution of definitive agreements (the
"Proposed Acquisition", to which ARA and ZCT are the "parties"). The Heads of
Terms are non-binding except with regard to confidentiality, exclusivity,
costs and other customary conditions for a transaction of this nature which
are binding.

About Zero Carbon Technologies Limited

The directors of Zero Carbon Technologies Limited expect that it will be an
innovative leader in the battery recycling sector, dedicated to providing
sustainable solutions for the recycling of Lead-Acid batteries ("LAB") and
Lithium-ion batteries. Leveraging intellectual property licensed from
Regenerate Technology Global and Cambridge University, ZCT plans to expand its
operations into EV battery recycling. It intends to use advanced recycling
technology to recover black mass containing critical materials, including
copper, lithium, cobalt, manganese and nickel.

ZCT was incorporated in the UK on 26 May 2021, and has a non-binding agreement
for a proposed business combination (which it is intended will be completed
prior to the Proposed Acquisition) with Clean Tech Lab S.L. ("CTL")
(incorporated in Spain).

ZCT is in the process of acquiring land, buildings, and equipment with a view
to establishing two advanced recycling facilities in La Mancha province,
Spain. The board of directors of ZCT considers that the sites will be
strategically located for both logistical efficiency and regulatory
advantages. ZCT will manage the operations of these planned plants, with the
first facility in Puertollano intended to begin commissioning in Q1 2025,
followed by a facility in Montalbo anticipated to begin commissioning in Q4
2025.

With an estimated potential combined annual processing capacity of 75,000
tonnes of LAB -equivalent to approximately 1.5 million used units - ZCT aims
to recover up to 99% of the materials in these batteries, including by
enhancing lead oxide, a valuable composite containing recycling minerals. This
capability will be driven by proprietary technology, licensed from Regenerate
and Cambridge University, which is expected to allow efficient recycling of
LAB by the installation and commissioning of the plant within nine months from
inception.

Background to the Proposed Acquisition

ARA was established to acquire and then act as the holding company for
targeted businesses operating in the Global Renewable Energy Sector Supply
Chain, particularly participants in the wind, solar, biomass, hydropower,
carbon capture, waste management, smart grids and green hydrogen supply chain,
and their sub-sectors. These potential targets could range from raw materials
resourcing to power generation, energy storage and recycling.

The Proposed Acquisition is in line with the Company's acquisition strategy.

Overview of the Proposed Acquisition

Structure: ARA will acquire 100% of ZCT's issued share capital through an
all-share transaction. Post-acquisition, ZCT shareholders will hold a majority
stake in ARA as enlarged. ARA will require evidence that immediately prior to
the Proposed Acquisition, ZCT is the sole vehicle in which its current
shareholders and any joint venture partners own their share interests in its
business.

Admission: on completion of the Proposed Acquisition, ARA's resultant entire
issued share capital will be admitted to the Equity shares (commercial
companies) category of the Official List of the Financial Conduct Authority
("FCA") and to trading on the Main Market for listed securities of the London
Stock Exchange("LSE") ("Admission").

Target Financing:

·     It is proposed that ZCT will secure a minimum of £10 million of new
capital at a minimum pre-money valuation of £30 Million ("Target Financing")
contemporaneously with the Proposed Acquisition.

·   These funds would be utilised for capital expenditure and working
capital, including commissioning ZCT's two proposed facilities.

Costs:

·     All agreed transaction-related costs incurred by ZCT and ARA will be
paid by ZCT, provided such costs have been pre-approved by ZCT.

·    The only exception is that the costs of any independent third-party
reports procured during due diligence will be shared equally by ARA and ZCT.

Capital Raise:

·     New capital of £1-2 million is proposed to be raised by the issue
of ordinary shares in ARA contemporaneously with the Proposed Acquisition
("Capital Raise") to widen the shareholder base and to provide additional
working capital.

Valuation: ZCT's pre-money valuation is required to be a minimum of £30
Million. The pre-money value of ARA will be calculated as 10% of the pre-money
value of the merged group, excluding the proceeds of the proposed Capital
Raise and the Target Financing, such that ARA shareholders will hold 10.0% on
an undiluted basis of the shares in ARA immediately after completion of the
Proposed Acquisition, excluding those issued to investors under the proposed
Target Financing and Capital Raise.

Exclusivity: each of ARA and ZCT have agreed to engage exclusively with each
other regarding the Proposed Acquisition and will use best efforts to mutually
agree within 14 days of execution of the Heads of Terms the scope and duration
of the transaction due diligence process, which is not intended to exceed 90
days from the signing of the Heads of Terms unless extended in writing by the
Parties. The Heads of Terms will terminate in certain circumstances, including
if the parties do not execute definitive agreements for the Proposed
Acquisition within 6 months from the date they are entered into, unless
extended in writing by the parties.

Completion of the Proposed Acquisition is subject to satisfaction of certain
conditions, including:

·      Receipt of all necessary regulatory approvals.

·      Satisfactory completion of legal, financial, and commercial due
diligence by both parties.

·      Execution of a legally binding sale and purchase agreement.

·      Admission taking place.

·      Successful raising of equity funds as described above.

·      Approval of the transaction by the boards of directors and, as
necessary, shareholders of both parties.

·      No material adverse change in the business, operations, or
financial condition of either party.

·     The representations and warranties of both parties, as contained in
the Heads of Terms and definitive transaction   agreements, remaining true
and correct in all material respects.

·    No inquiry or investigation by any regulatory body that could
materially impact the merged group after completion   of the Proposed
Acquisition.

·    Both parties complying with all relevant regulatory requirements and
being in good standing and not being in   default under applicable securities
laws, with no legal prohibition preventing the completion of the Proposed
Acquisition.

·   Lock-up: Insiders of ARA and ZCT, including directors, officers, and
key shareholders, entering into lock-up agreements, in a form agreed upon by
both parties. These agreements will require the lock-up of shares for a period
to be agreed following the re-admission to listing of ARA.

·   The Directors of ARA, acting reasonably, determining that ZCT has a
pre-money valuation (before the signing of definitive agreements and any
equity fundraising) of at least £30 Million.

ARA anticipates publishing a prospectus approved by the FCA, detailing the
Company, ZCT and the Proposed Acquisition at a date to be confirmed.

Suspension of Listing

Should the Proposed Acquisition complete, it would constitute an Initial
Transaction under the UK Listing Rules, and accordingly ARA would apply for
the admission of its shares to the Equity shares (commercial companies)
category of the Official List of the FCA and to trading on the Main Market for
listed securities of the LSE.  Therefore, at the request of ARA, the FCA has
suspended the Company's listing on the Equity shares (shell companies)
category of the Official List, and trading on the Main Market of the LSE has
also been suspended, as of 7.30am today, pending the publication of a
prospectus providing further detail on ZCT and ARA as enlarged by the Proposed
Acquisition, or an announcement that the Acquisition is not proceeding.
Should the Proposed Acquisition not proceed, then ARA would need to apply for
the suspension to be lifted and for trading to be restored.

There can be no certainty that the Proposed Acquisition will take place, and
it remains subject to, amongst other things, formal terms being agreed and the
completion of legal and financial due diligence.

A further announcement will be made in due course.

John Croft, Chairman of ARA said:  "We are delighted to be working with the
team from ZCT with the aim of bringing this exciting business with a dynamic
growth story to the public market. We have considered a number of potential
acquisitions during ARA's life as a listed company and have been very cautious
in our selection criteria, which has resulted in us taking longer than we
originally anticipated in identifying a suitable target. ZCT has excellent
synergy with our stated objective of identifying a transformational business
that can create a meaningful contribution in the renewable energy space."

Chris Farnworth, CEO of ZCT said: "We are excited to announce our proposed
acquisition by Aura Renewable Acquisitions Plc, which would mark a significant
milestone in ZCT's journey to contribute to the global transition to a
circular economy in battery recycling. This acquisition would enable us to
accelerate the deployment of our state-of-the-art battery recycling
technologies and expand into the rapidly growing electric vehicle (EV) battery
sector. We believe we are well positioned to make a meaningful contribution to
the sustainability of the energy transition while creating substantial value
for our shareholders. We look forward to working closely with ARA as we
proceed with the necessary steps to finalize the transaction, and to unlocking
the full potential of our innovative solutions to recover critical materials
from lead-acid and lithium-ion batteries."

-       Ends     -

Contact Information

Aura Renewable Acquisitions Plc

John Croft, Chairman: +44 77 8531 5588

LEI: 894500XA241IB9HL7147

 

Forward-Looking Statements

This announcement includes forward-looking statements based upon a number of
estimates and assumptions that, while considered reasonable, are subject to
risks and uncertainties. Actual results may differ materially. Accordingly,
readers should not place undue reliance on the forward-looking statements and
information contained in this announcement. Except as required by law, neither
ARA nor ZCT assumes any obligation to update the forward-looking statements of
beliefs, opinions, projections, or other factors, should they change. Aura
Renewable Acquisitions Plc

 

 

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