REG - Cordel Group PLC - Proposed Placing to raise approximately £1.0m

CordelAnnouncement

26/09/2024 07:45

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20240926:nRSZ7794Fa&default-theme=true

RNS Number : 7794F  Cordel Group PLC  26 September 2024

This Announcement contains inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014 which forms part of domestic law pursuant to the
European Union (Withdrawal) Act 2018 ("MAR"). Prior to publication, certain
information contained within this Announcement was deemed to constitute inside
information for the purposes of Article 7 of MAR. In addition, market
soundings (as defined in MAR) were taken in respect of the Placing with the
result that certain persons became aware of inside information (as defined in
MAR), as permitted by MAR. Due to the publication of this Announcement, those
persons that received inside information in a market sounding are no longer in
possession of such inside information relating to the Company and its
securities.

26 September 2024

Cordel Group plc

("Cordel" or the "Company")

Proposed Placing to raise approximately £1.0 million

Cordel Group plc (AIM: CRDL), the Artificial Intelligence ("AI") platform for
transport corridor analytics, is pleased to announce a placing
(the "Placing"), of new ordinary shares of 1p each in the capital of the
Company ("Ordinary Shares").  The Placing has conditionally raised gross
proceeds of £1.0 million through a placing of 15,384,616 new Ordinary Shares
at 6.5 pence per share with institutional investors.

Background to the Placing and use of proceeds

On 23 July 2024, the Company announced its trading update for the year ended
30 June 2024 which set out the continued progress being made. FY24 saw the
Company win 4 significant new customer contracts with key wins in the USA,
Mexico, the Middle East and APAC. In addition, the Company announced ongoing
progress with its marquee clients - Amtrak in the US, Network Rail and Angel
Trains in the UK and with ARTC in Australia. Post period end, the Company
announced the extension of its relationship with Amtrak to serve a new part of
Amtrak's network.

During the year the Company continued at pace to extend its process automation
and AI capabilities, alongside its LiDAR scanning technology.  This platform
enables high speed data capture, processing and delivery of actionable
insights to rail customers.  At its core is a deep machine learning model
which classifies assets within digital point clouds, from 2 Dimensional ("2D")
cross sections. The Company has continued to invest in enhancing its
technology capabilities and has recently made excellent progress in the
effectiveness of its AI capabilities in the recognition of complex 3
Dimensional ("3D") objects within point clouds.

Following the recent trading update, the Company received an indication of
significant support from one of its institutional investors, Rathbones
Investment Management Limited, who noted that as a result of the Company's
strategic progress they sought to provide the Company with additional funds at
a premium to the prevailing market price.

After careful consideration the Directors determined that, while the Company
had not anticipated a placing given management's expectation of a positive
cashflow profile for the 2025 fiscal year, in light of the progress being made
in its AI capabilities, the additional funds would enable the Company to
accelerate the development of the Company's 3D object recognition capabilities
through its AI platform. The Directors believe that this will enable the
Company to broaden the application of its technology portfolio across rail
networks and should lead to enhanced revenue opportunities.

Therefore, the Directors have decided to undertake the Placing.

The gross proceeds of the Placing will be used as follows:

-       c. £0.8m: additional headcount into the Company's R&D and
delivery teams; and

-       c. £0.2 m: working capital and Placing expenses.

Details of the Placing and the Placing Agreement

Pursuant to the Placing the Company has conditionally raised gross proceeds of
£1.0 million through a placing of 15,384,616 new Ordinary shares (the
"Placing Shares") at 6.5 pence per share with institutional investors. The
Company has entered into a placing agreement with Cavendish Capital Markets
dated 26 September 2024 (the "Placing Agreement") under which Cavendish
Capital Markets has agreed to use its reasonable endeavours to procure placees
("Placees") for the Placing Shares. The Placing has not been underwritten.

The Placing Shares will represent approximately 7.2 per cent. of the enlarged
issued share capital. The Placing Shares will be issued under existing
shareholder authorities. The Placing price represents a premium of
approximately 24 per cent to the closing mid-market price of 5.25 pence per
Ordinary Share on 25 September 2024, being the last dealing day prior to the
date of this announcement.

The Placing Agreement is conditional on the satisfaction (or waiver) of
certain conditions including:

-           the Placing Agreement becoming unconditional in all
respects save for Admission and not having been terminated in accordance with
its terms; and

-           Admission occurring by no later than 8.00 a.m. on 1
October 2024 (or such later date as Cavendish Capital Markets and the Company
may agree, not being later than 8.00 a.m. on 18 October 2024).

The Placing Shares issued pursuant to the Placing will be issued as fully paid
and will rank pari passu in all respects with the Company's existing
ordinary shares, including the right to receive dividends and other
distributions declared on or after the date on which they are issued.

The Directors have  sought independent advice and believe that the Placing
Shares will rank as "eligible shares" for the purposes of the Enterprise
Investment Scheme and will be capable of being a "qualifying holding" for the
purposes of investment by Venture Capital Trusts to investors who qualify and
are seeking the benefit of tax advantages pursuant to the Enterprise
Investment Scheme and available to Venture Capital Trusts, respectively, each
as governed by HMRC, although neither the Company nor the Directors give any
warranty or undertaking that this will be the case. There is no guarantee HMRC
will agree with the written opinion obtained by the Company and Placees must
seek their own advice to rely on.

Admission and settlement

Application will be made for the Placing Shares to be admitted to trading on
AIM ("Admission"). It is expected that Admission will become effective and
dealings in the Placing Shares will commence at 8.00 a.m. on or around 1
October 2024. These dates and times may be subject to change.

It is intended that, if applicable, definitive share certificates in respect
of the Placing Shares will be distributed as soon as practicable post
Admission. No temporary documents of title will be issued.

Following Admission, the Company's enlarged issued share capital will be
214,873,230 Ordinary Shares. The Company holds no Ordinary Shares in Treasury.
This figure of 214,873,230 Ordinary Shares may be used by shareholders in the
Company as the denominator for the calculations by which they will determine
if they are required to notify their interest in, or a change in their
interest in, the share capital of the Company under the FCA's Disclosure
Guidance and Transparency Rules.

Commenting on the Placing, Ian Buddery, Chairman

"I am delighted by the support shown by one of our institutional investors to
undertake this placing at a premium to the prevailing market price. The
Company has demonstrated excellent progress in 2024 and this additional
capital enhances our ability to efficiently capture the market opportunity
before us. We continue to see strong market engagement in our software and
technology and we remain very focused on further customer acquisitions in
FY25."

 

 Cordel Group PLC                            C/o Strand Hanson
 Ian Buddery, Chairman

 John Davis, Chief Executive Officer

 Cavendish Capital Markets Limited, Broker   +44 (0)20 3829 5000
 Marc Milmo / Rory Sale (Corporate Finance)

 Sunila de Silva (ECM)

 Strand Hanson Limited, Nominated Adviser

 Richard Johnson / James Bellman              +44 (0)20 7409 3494

About Cordel

Cordel produces specialist hardware and software for capturing, analysing and
reporting on large datasets within the transport sector, employing
sophisticated artificial intelligence algorithms.

Further information on the Company is available at: www.cordel.ai

 

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  IOEQKABNABKKFCB