REG - Bens Creek Group PLC - Acquisition of 29.9% holding in the Company

Bens CreekAnnouncement

12/05/2023 07:00

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RNS Number : 1793Z  Bens Creek Group PLC  12 May 2023

 

Certain information contained within this Announcement is deemed by the
Company to constitute inside information as stipulated under the Market Abuse
Regulation (EU) No. 596/2014 ("MAR") as applied in the United Kingdom. Upon
publication of this Announcement, this information is now considered to be in
the public domain.

 

 

Bens Creek Group plc

(Bens Creek" or the "Company")

 

 Statement re: acquisition of 29.9 per cent. holding in the Company by Avani
Resources Pte Ltd

 

Introduction

 

Bens Creek (AIM:BEN), the owner of a metallurgical coal mine in North America
supplying the steel industry, has been notified on 11 May 2023 by MBU Capital
Group Limited ("MBU"), the Company's largest shareholder, that, further to the
announcement released by the Company on 14 April 2023, it has sold 119,218,394
existing Ordinary Shares in the Company to Avani Resources Pte Ltd ("Avani").
As a result Avani now owns 29.86 per cent. of the existing Ordinary Shares in
the Company (the "Ordinary Shares").  The transaction was undertaken on 10
May 2023 at a price of 18p per share (the "Transaction").  The Transaction
was conducted off-market and will settle on 12 May 2023.

 

The Board of the Company welcomes the investment by Avani. Avani is a private
limited company incorporated in Singapore and is a trader of commodities to be
used in energy and infrastructure industries as well as making investments in
related assets. Avani mainly deals with physical trading of raw material for
steel and power production, namely coal, steel, ferro alloys, metals and ores.
Avani is a supplier of metallurgical coal to India and China and buys from a
large range of coking coal exporting regions including Australia, Africa, the
United States, Canada, China and Indonesia. Avani caters for customers across
the iron and steel industries, from standalone pellet producers, special and
alloy steel producers to very large integrated steel mills. More information
on Avani can be found at  https://avani.sg/ (https://avani.sg/) .

 

Following the Transaction Avani will hold 119,218,394 Ordinary Shares,
representing approximately 29.86 per cent. of the current issued share capital
of the Company. MBU will continue to hold 94,944,813 Ordinary Shares,
representing 23.78 per cent. of the current issued share capital of the
Company. In addition, Mohammed Iqbal, MBU's ultimate beneficial owner, holds
3,333,336 Ordinary Shares in the Company, representing 0.83 per cent. of the
current issued share capital of the Company.

 

Relationship agreements

 

The Company and Allenby Capital Limited ("Allenby Capital"), the Company's
nominated adviser, have on 5 May 2023 entered into a relationship agreement
with Avani (the "Avani Relationship Agreement"), pursuant to which Avani has
undertaken to the Company and Allenby Capital that, for so long as it is
interested in Ordinary Shares carrying 20 per cent. or more of the Company's
voting share capital and the Company's shares are admitted to trading on AIM,
it agrees to various undertakings aimed at ensuring the Company is managed for
the benefit of shareholders as a whole and independently of Avani, In addition
Avani has undertaken in the Avani Relationship Agreement that transactions
between the Company and Avani shall be in the best interests of the Company
and at arm's length and on normal commercial terms.

 

The Avani Relationship Agreement also provides that, for so long as Avani is
interested in Ordinary Shares carrying a minimum of 20 per cent. of the
Company's voting share capital, it shall be entitled to appoint one director
to the board of the Company and it has been agreed that this right will
continue during the two years following the Avani Relationship Agreement is
entered into where Avani is interested in at least 17.5 per cent. of the
Company's voting share capital. Any proposed director appointment will be
subject to the appropriate due diligence to be carried out by the Company's
nominated adviser.

 

Avani also have a right, pursuant to the Avani Relationship Agreement, to
participate on a pro rata basis in any fundraising by the Company which
involves the issue of any right to subscribe for, or convert securities into,
shares in the capital of the Company (including any issuance of debt
convertible into shares in the Company or options over shares in the Company
but excluding any shares options issued under any management or employee
incentive scheme).

 

On 13 October 2021, MBU, Adam Wilson and Raju Haldankar entered into a
relationship agreement with the Company and Allenby Capital (the "MBU
Relationship Agreement"). The MBU Relationship Agreement continues for so long
as: (i) the Ordinary Shares are admitted to trading on the AIM; and (ii) MBU
(and its connected persons and group companies) are interested in voting
rights representing, in aggregate, 20 per cent. or more of total voting
rights attaching to the Ordinary Shares. For as long as MBU, individually or
together with Adam Wilson and Raju Haldankar, is interested in voting rights
representing: (a) rights to vote more than 50 per cent. of the rights to vote
at a general meeting of the Company attaching to Ordinary Shares, it shall be
entitled to nominate two directors to the board of the Company; or (b)
representing more than 20 per cent. of the rights to vote at a general meeting
of the Company attaching to Ordinary Shares, it shall be entitled to nominate
one director to the board of the Company. As announced on 27 February 2023,
Mark Cooper was appointed to the board of Bens Creek as a Non-Executive
Director and was nominated to the board upon recommendation by MBU.

 

MBU concert party

 

Following the Transaction, MBU will hold 94,944,81 Ordinary Shares in the
Company, representing 23.78 per cent. of the ordinary issued share capital of
the Company. MBU, together with persons acting in concert with MBU (the "MBU
Concert Party Group"), will hold 37.21 per cent. of the ordinary issued share
capital of the Company (reduced from 67.07 per cent. immediately prior to this
announcement).

 

Adam Wilson, the Company's Chief Executive Officer, and Raju Haldankar, the
Company's former Chief Financial Officer, are members of the MBU Concert Party
Group. Mr Wilson and Mr Haldankar hold options over 10,500,000 Ordinary Shares
and 1,750,000 Ordinary Shares of the Company respectively (the "Options"). If
Mr Wilson and Mr Haldankar were to exercise the Options in full then, provided
the MBU Concert Party Group continues to hold its 37.21 per cent. interest in
the Company and based on the issued share capital of the Company as at the
date of this announcement, the MBU Concert Party Group would increase its
interest in the Company to 39.08 per cent.

 

In circumstances where the MBU Concert Party Group is interested in 30 per
cent. of the ordinary issued share capital of the Company (but is not
interested in more than 50 per cent.) and either Mr Wilson and/or Mr Haldankar
exercise the Options (whether in full or in part) this would, on the face of
it, trigger a mandatory offer under Rule 9 of the Takeover Code (the "Code").
However, since the Options were issued to Mr Wilson and Mr Haldankar at a time
when the MBU Concert Party Group was interested in excess of 50 per cent. of
the ordinary issued share capital of the Company, the directors of Bens Creek
who are independent of the MBU Concert Party Group (the "Independent
Directors") have consented (with the agreement of The Takeover Panel to them
so consenting) to Mr Wilson and/or Mr Haldankar exercising the Options
(whether in full or in part) at such time in the future as is at their
discretion (but subject always to the conditions attaching to the Options)
without causing the MBU Concert Party Group to be required to make a mandatory
offer under Rule 9 of the Code. The Independent Directors further confirmed
that Mr Wilson and Mr Haldankar may hold, and deal with, any Ordinary Shares
arising from the exercise of the Options as they see fit and are not required
to dispose of those Ordinary Shares upon exercise of the Options.

 

Further details on the MBU Concert Party are set out in the Company's
admission document dated 13 October 2021.

 

Adam Wilson, Chief Executive Officer of Bens Creek, commented:

 

"We are delighted to welcome Avani as a shareholder. The arrival of a global
commodity trading group, which is the largest importer of metallurgical coal
into India, on our share register is further confirmation of the appeal of the
Bens Creek coal brand and testament to the underlying quality of our product.
We are very much looking forward to working with our new shareholder, and we
are sure that this is the start of what will be a burgeoning relationship.
The skills and expertise that they bring with them are sure to be invaluable
as we build the business."

For further information please contact:

 

 Bens Creek Group plc                                            +44 (0) 204 558 2300

 Adam Wilson, CEO

 Peter Shea, Chief of Staff

 Allenby Capital Limited (Nominated Adviser and Joint Broker)    +44 (0) 203 328 5656

 Nick Athanas / Nick Naylor / George Payne (Corporate Finance)

 Kelly Gardiner (Sales and Corporate Broking)

 WH Ireland Limited (Joint Broker)

 Harry Ansell / Katy Mitchell                                    +44 (0) 207 220 1666

 

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