REG - Corcel PLC - Debt Conversion, Funding and Share Agreement

CorcelAnnouncement

21/02/2022 07:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20220221:nRSU2068Ca&default-theme=true

RNS Number : 2068C  Corcel PLC  21 February 2022

 

Corcel PLC

("Corcel" or the "Company")

 

Debt Conversion, Funding and Refinancing, Underwritten Equity Share Agreement

 

21 February 2022

 

Corcel, the natural resource exploration and development company with
interests in battery metals and flexible energy generation and storage is
pleased to announce a partial debt conversion and a new combined debt and
equity funding solution of up to £1,050,000.

Highlights:

 

o Corcel continues to progress its Battery Metals led strategy with multiple
potential near-term catalysts expected including the mining lease award at
Mambare, the JORC upgrade at Wo Wo Gap and the funding of the UK peaker plant
portfolio

o  Supporting these initiatives, the Company announces a funding package of
up to £1,050,000 which includes

o  A new £450,000 debt facility with warrants exercisable at £0.015

o  Refinancing of £405,000 of existing debt including the conversion of
£135,000 to equity and the extension of   the balance to end October 2022

o  A £600,000 Equity Share Agreement with a £0.015 floor price

 

Scott Kaintz, Chief Executive, commented: "The Board is pleased to announce a
partial conversion of our debt and a new funding solution for the business
organised and co-ordinated by a supportive shareholder which is expected to
bridge the Company to several major value inflection events, and likely does
so at prices well above the current market; therefore, reducing  dilution for
existing shareholders."

 

Debt Facility

The Company has agreed a Loan Note Facility ("Loan Facility") with Align
Research and Riverfort Global Opportunities PCC Limited, (the "Lenders") to
provide, in aggregate, £450,000 through an unsecured loan facility, for
working capital purposes in support of the execution of the Company's battery
metals led strategy.

The Loan Facility, which is aimed at reducing dilution at current prices,
provides for the loan ("Loan") to be drawn down in tranches beginning with
£250,000 immediately and the balance in equal instalments monthly through May
2022. The Loan plus a fixed coupon of 8% is repayable in full on 31 October
2022 (the "Repayment Date") except where the Lenders request part or all of
the Loan and any coupon to be utilised in paying for the warrants.

As part of the Loan Facility, the Company will issue a total of 30,000,000
warrants to the Lenders with a £0.015 strike price expiring on 20 February
2024 (the "Warrants"). The coupon is repayable in either cash or shares at
the Lender's discretion, and if in shares at a price of £0.015 per
share.

Should the Warrants be exercised in whole or part during the term of the Loan
Facility it has been agreed that the Warrant payment proceeds will be netted
off against the repayment of the pro-rata drawn Loan Facility.  In the event
of the Warrants being exercised during this period the full 8% Loan Facility
interest will be payable in shares ("Interest Shares") at a price of £0.015
per share.

If the entirety of the Warrants are exercised, this would result in an
additional 30,000,000 Ordinary shares in relation to the Warrants and
2,400,000 ordinary shares in relation to the Interest ultimately being
issued.

If the Company undertakes a new placing of ordinary shares before 20 February
2023 while the warrants remain outstanding and below a price of £0.015, then
the warrant strike price will be adjusted to reflect the placing price and the
Company will issue additional warrants such that the total value of the
warrants equates to £450,000.

Partially Underwritten Equity Share Agreement

The Company has agreed terms with Align Research on an Equity Share Agreement
by which the Company gives Align Research the right to subscribe for a maximum
of £600,000 of new ordinary shares of the Company at a minimum price of
£0.015 (the "Minimum Subscription Price") over a ten-month period (the
"ESA").

Any agreed issuance of shares under this structure above the Minimum
Subscription Price is to be determined by the price at which Align Research
has itself agreed to sell the relevant shares to another buyer ("the Agreed
Price") and would result in the Company receiving a subscription price per new
ordinary share of the Minimum Subscription Price plus 60% of the Agreed Price
above the Minimum Subscription Price.  An implementation fee of 2,400,000 new
ordinary shares is payable to Align Research (the "ESA Shares").

The Company retains the right to terminate this agreement at any time with the
exception of any shares Align Research has already agreed to sell onto a third
party prior to such termination.

To provide further certainty of funding to the Company, Align Research has
agreed to underwrite the first £350,000 of the Equity Share Agreement.  This
portion of new equity, if required, is to be priced at the closing bid price
of the Company's shares on 31 March 2022. (the "Placing")  A 5% placing fee
will be due at completion of the placing payable in new ordinary shares of the
Company, and any share issuance and payments made to the Company under the ESA
prior to 31 March 2022 will serve to reduce the underwritten portion of the
Equity Share Agreement.

The Company has also agreed to issue a further 4,800,000 new Ordinary
Shares at a price of £0.015 ("Supplier Shares") for an invoice received from
Align Research in respect of research services retainer for a 24-month
period.

Debt Restructuring, Debt Conversion and Warrant Repricing

Corcel has agreed with the Lenders of an unsecured loan facility of £405,000
of principal and interest, originally announced on 12 May 2021 and due 30
April 2022, to restructure the debt and interest due.  The restructuring
includes the Lenders irrevocably committing to subscribe £135,000 of the
existing loan facility into new ordinary shares in the Company at the closing
bid price of the Company's shares on 31 March 2022 and the due date on the
balance being extended to 31 October 2022.  An additional 5% interest is due
on these refinanced amounts as a restructuring fee payable 31 October 2022
taking the overall coupon to 13%.

As previously announced on 14 December 2021, C4 Energy Limited ("C4"), a
Company controlled by the Company's Chairman, also intends to convert its
current debt position of £126,917 to equity, which will be subject to a
further announcement as appropriate once a formal agreement has been entered
into.  C4 has indicated its intention to convert this debt at a minimum price
of £0.015 per share.

In addition, following the funding solution, 20,000,000 warrants, previously
issued on 12 May 2021, have now been repriced from £0.025 to £0.015 per
share.  These warrants shall be fixed at £0.015 per share until after the
Placing, at which time they will have an adjustment mechanism whereby the
warrant strike price adjusts downward to reflect any future placing completed
at lower than £0.015 during the remaining life of the warrants.

Following the funding solution announced today and the planned conversions
outlined herein, the Company would have a total £1,460,000 debt of which
principal amounts of £125,000 are due 31 April 2022, £720,000 being due end
October 2022 and as announced on 14 December 2022, a further £619,000 due end
December 2022.

Admission to Trading on AIM and Total Voting Rights

Application is being made to AIM for 7,200,000 shares to be admitted to
trading on AIM, the admission of which it is expected on or around 25 February
2022.

In accordance with the provision of the Disclosure Guidance and Transparency
Rules of the Financial Conduct Authority, the Company confirms that, following
the issue of the ESA Shares and the Supplier Shares, its issued ordinary share
capital will comprise 391,987,601 ordinary shares.

All of the ordinary shares have equal voting rights and none of the ordinary
shares are held in Treasury. The total number of voting rights in the Company
will therefore be 391,987,601. The above figure may be used by shareholders as
the denominator for the calculations to determine if they are required to
notify their interests in, or change to their interest in, the Company.

 

Scott Kaintz 020 7747 9960
                        Corcel Plc CEO

James Joyce / Andrew de Andrade 0207 220 1666
  WH Ireland Ltd NOMAD & Broker

Simon Woods 0207 3900
230
                     Vigo Communications IR

 

This announcement contains inside information for the purposes of Article 7 of
Regulation 2014/596/EU, which is part of domestic UK law pursuant to the
Market Abuse (Amendment) (EU Exit) regulations (SI 2019/310) and is disclosed
in accordance with the Company's obligations under Article 17.

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  MSCFFFLIFSIIFIF