Placing & Intended Subscription to raise £425,000
26/07/2022 07:00
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RNS Number : 6906T Advance Energy PLC 26 July 2022
26 July 2022
Advance Energy plc
("Advance Energy" or the "Company")
Placing and Intended Subscription to raise £425,000 in total
The Company announces that it has raised £345,000 (gross), before expenses,
by way of a placing (the "Placing") and, in addition, has received intentions
to participate in the Placing and a subscription on the same terms as the
Placing to raise, in aggregate, a further £80,000 from certain directors (the
"Intended Director Participation").
The Placing has been arranged by Optiva Securities Limited and comprises the
issue to new and existing shareholders of 405,882,354 ordinary shares of no
par value ("Ordinary Share") at an issue price of 0.085 pence per Ordinary
Share ("Issue Price"), and the issue of one warrant ("Warrant") for every one
new Ordinary Share issued. Each Warrant gives the holder the right to
subscribe for one new Ordinary Share at a price of 0.13 pence per Ordinary
Share at any time from the issue of the Warrant up to (and including) 5.00
p.m. on 26 July 2025 (the "Warrant Exercise Period").
In addition, it is intended that certain directors subscribe for a further
47,058,823 new Ordinary Shares pursuant to the Placing and 47,058,823 new
Ordinary Shares pursuant to a subscription directly with the Company at the
Issue Price (the "Director Participation Shares"), with such shares also being
entitled to one Warrant per Ordinary Share.
The net proceeds from the Placing and the Intended Director Participation,
combined with the Company's existing cash resources, are expected to provide
the Company with sufficient working capital to enable it to select, negotiate
and pursue an acquisition that would be considered a reverse takeover under
the AIM Rules for Companies and specifically fund the required legal,
financial, commercial and technical due diligence, including the preparation
of the required Competent Persons Report and Admission Document to enable the
Company to undertake an acquisition. Any cash consideration which might be
payable to conclude an acquisition will require further funds. There is,
however, no guarantee at this stage that any acquisition will be completed.
Larry Bottomley, Interim CEO of Advance Energy said:
"Over the last six months the focus of the Board has been on progressing the
deal pipeline. Screening and due diligence has progressed and the Company is
now focused on a select number of potentially value accretive deals with an
emphasis on proven resources that are intended to provide immediate and
sustainable cash flow generation.
"We are now at the stage where we call on the support of third parties to
contribute to the relevant due diligence required to progress an acquisition
and this funding will allow that work to be undertaken. While the Board is
optimistic in progressing an acquisition there is no guarantee at this stage
that any transaction will be completed. We will keep the market updated as
these projects develop."
Background to the Placing and Intended Director Participation
As previously announced, the Buffalo Licence expired on 27 May 2022 and as a
consequence the Company became an AIM Rule 15 cash shell ("AIM Rule 15 Cash
Shell") on that date.
As an AIM Rule 15 Cash Shell, the Company is required to make an acquisition,
or acquisitions, which constitutes or constitute a reverse takeover under AIM
Rule 14 (including seeking re-admission under the AIM Rules for Companies)
within six months from 27 May 2022. Alternatively, within such time period,
the Company can seek to become an investing company pursuant to AIM Rule 8,
which requires, inter alia, the raising of at least £6 million and
publication of an admission document. In the event that the Company does not
complete a reverse takeover under AIM Rule 14 within such six month period or
seek re-admission to trading on AIM as an investing company pursuant to AIM
Rule 8 (either being, a "Re-admission Transaction"), the Company's ordinary
shares would be suspended from trading pursuant to AIM Rule 40. Thereafter,
if a Re-admission Transaction has not been completed within a further six
month period, admission to trading on AIM of the Company's Ordinary Shares
would be cancelled.
The net proceeds of the Placing and Intended Director Participation, together
with certain of the Company's existing cash resources, are intended to be used
to enable the Company to select and pursue a Re-Admission Transaction. The
Company continues to evaluate a number of oil and gas opportunities, with an
emphasis on proven resources that are intended to provide immediate and
sustainable cash flow generation in line with its stated strategy. In that
regard, the Company has been active in its screening and initial due diligence
processes and has now focused on a small number of potentially value accretive
deals. Should an acquisition opportunity progress the Board expects the net
proceeds of the Placing and Intended Director Participation to provide
sufficient capital to support the Company in achieving:
· completion of legal, financial, technical and commercial due
diligence of an acquisition target;
· preparation of a competent persons report on the selected acquisition
target; and
· the preparation of all documentation and approvals required to
complete an acquisition.
There is, however, no guarantee at this stage that any acquisition will be
completed.
The Company will also issue Warrants to those participating in the Placing and
Intended Director Participation, subject to passing the required resolutions
to increase the authorities that enable the issue additional Ordinary Shares
pursuant to exercise of the Warrants, exercisable at a 52% premium to the
Issue Price.
Warrants are only likely to be exercised once the Company's share price has
increased substantially from the Issue Price so there is no guarantee that
they will be exercised and further funds received by the Company during the
Warrant Exercise Period.
Details of the Placing and Intended Director Participation
The 405,882,354 new Ordinary Shares are being issued to placees ("Placing
Shares"), and it is intended that a further 94,117,646 be issued to certain
directors pursuant to the Intended Director Participation, at the closing
middle market price of 0.085 pence per Ordinary Share, which represents a
discount of approximately 22.7% to the closing middle market price on 25 July
2022, being the last business day prior to the announcement of the Placing and
the Intended Director Participation. The Placing Shares have been
conditionally placed by the Company and by the Broker as agent of the Company,
with certain existing and new investors, subject only to the admission of the
Placing Shares ("Admission"). The Placing Shares are being issued and it is
intended that the Director Participation Shares would be issued utilising the
authorities the Directors were granted at the Company's 2021 Annual General
Meeting held on 30 November 2021, to allot shares or rights to subscribe for
or to convert any security into shares under the Company's Articles 5.1-5.2
(authority to allot shares) and 5.5 (dealing with pre-emption rights). This
authority is sufficient to enable the Company to allot and issue the full
amount of Placing and the Director Participation Shares pursuant to the
Placing and the Intended Director Participation.
Further authority (the "Authority") will need to be sought from shareholders
to issue the Warrants and new Ordinary Shares potentially arising from the
exercise of the Warrants. The Directors intend to seek such Authority when
practicable. Until such time as such Authority is given, the Company will not
be permitted to issue all the Warrants / Ordinary Shares that may fall to be
issued pursuant to the exercise of such Warrants.
Application has been made to the London Stock Exchange for the Placing Shares
to be admitted to trading on AIM. The Placing Shares and any Director
Participation Shares will rank pari passu with the existing Ordinary Shares,
and it is expected that Admission will become effective and that dealings in
respect of the Placing Shares and any Director Participation Shares will
commence at 8.00 a.m. on 29 July 2022. Following Admission, assuming
completion of the Intended Director Participation, there would be
1,527,613,961 Ordinary Shares in issue.
The Warrants will not be admitted to trading on AIM or on any other stock
exchange and will be issued in certificated form only.
Enquiries:
Advance Energy plc +44 (0)1624 681 250
Larry Bottomley (Interim CEO)
Strand Hanson Limited (Financial and Nominated Adviser) +44 (0)20 7409 3494
Rory Murphy / James Harris / James Bellman
Buchanan (Public Relations) +44 (0)20 7466 5000
Ben Romney / Jon Krinks
Tennyson Securities Limited (Joint Broker) +44 (0)20 7186 9030
Peter Krens / Ed Haig-Thomas
Optiva Securities Limited (Joint Broker) +44 (0)20 3411 1881
Christian Dennis
This announcement contains inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014 ("MAR") as it forms part of UK domestic law by
virtue of the European Union (Withdrawal) Act 2018. Upon publication of this
announcement, the inside information is now considered to be in the public
domain in accordance with the Company's obligations under Article 17 of MAR.
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