REG - eEnergy Group PLC - Issue of Secured Bonds and Warrants

EenergyAnnouncement

25/11/2022 17:45

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RNS Number : 6900H  eEnergy Group PLC  25 November 2022

 

25 November 2022

eEnergy Group plc

("eEnergy" or "the Group")

 

Issue of secured bonds to raise £2,525,000 and issue of Warrants

 

Proposed Director Appointment

 

eEnergy (AIM: EAAS), the net zero energy services provider, announces that it
has secured further debt finance of £2,525,000 (the "Subordinated Debt"), in
order to provide additional funding to the Group.

 

The Subordinated Debt has been structured as secured discounted capital bonds
("Bonds") which are due for repayment on 24 May 2024 and 21 June 2024. £1
million of the Subordinated Debt is being provided by each of, Hawk Investment
Holdings Limited ("Hawk"), an existing shareholder of eEnergy, and FFIH
Limited (("FFIH"), with the balance of £525,000 being provided by the
directors of the Company ("Directors").

 

FFIH is an investment company owned by John Foley and his wife. John is a
barrister and chartered accountant who has served on a number of public and
private company boards. He was CEO of MacLellan Group plc, a UK facilities
management provider, for 12 years until its sale in 2006 to Interserve plc for
an enterprise value of £130m. He was co founder of Premier Technical Services
Group Ltd (PTSG) a specialist provider of facilities services, and was its
Chairman from inception in 2007 until early November 2022 (he remains a
Non-Executive Director). PTSG became a public listed company in 2015 and was
acquired by Macquarie Group Ltd in 2019 for an enterprise value of
approximately £300m which represented a 304% premium to the 2015 listing
share price. He is also currently Chairman of SEC Newgate Spa, the parent
company of a global strategic communications and advisory group and is also
Chairman of Servoca Plc, a provider of staffing solutions and outsourced
services.

 

As announced in the Company's preliminary results for the year ended 30 June
2022 published concurrently with this announcement, the Subordinated Debt will
be used to fund additional Energy Services working capital as a result of
lengthened cash collection cycles as well as funding the next phase of MY
ZeERO stock-build, other balance sheet liabilities and general working
capital.

 

Issue of Warrants

 

In connection with the Subordinated Debt, the subscribers to the Bonds will
also be granted warrants to subscribe for, in aggregate 42,083,328 ordinary
shares of the Company (the "Warrants"), on a pro rata basis. The Warrants will
have an exercise price of 6p and will be exercisable for a period of 5 years
from the date of issue.

 

The Company intends to utilise its remaining share authorities from its 2021
AGM to grant 32,791,216 Warrants immediately. The remaining 9,292,112 Warrants
will be issued to the subscribers to the Bond (including the Directors)
subject to obtaining shareholder approval at the Company's next AGM, expected
to be held in December 2022.

 

 

Details of the Subordinated Debt

 

Under the terms of the Bonds, Hawk, FFIH and the Directors are subscribing in
aggregate for £2,525,000 of the Bonds. The Bonds are being issued at a 21.29%
discount to their face value (equivalent to a discount rate of 1.25% per month
plus a 2% repayment fee) and are due to be redeemed by the Company (through
the payment of in aggregate £3,207,754) on or before 24 May 2024 (in respect
of amounts owed to Hawk and FFIH) and on or before 21 June 2024 (in respect of
amounts owed to the Directors) (the "Redemption Dates").

 

The Bonds being subscribed for by Hawk and FIFH will be issued immediately on
funds being received by the Company. The £525,000 of Bonds being issued to
the Directors will be issued following the AGM and the associated funds are
expected to be received by the Company on or around 21 December 2022.

 

The Bonds are secured on a second-charge basis behind Silicon Valley Bank UK
Limited ("SVB"), the Company's senior creditor. The maturity of SVB's fully
drawn £5.0 million revolving credit facility provided to the Group has been
shortened by 12 months to 12 February 2024, to maintain SVB's priority as
senior creditor. The security relating to the Hawk and FFIH loans will rank
senior to the Directors loans.

 

The Bond contains certain customary terms, including accelerated payment in an
event of default. The Bond can be repaid early at the election of the Company
without penalty. In the event that the Subordinated Debt is not redeemed in
whole on or before the Redemption Date, then interest shall accrue thereon at
the rate of 15% per annum above the prevailing base rate of the Bank of
England.

 

Security for the Bonds will be secured through a debenture held on trust by a
security trustee, which will be Derek Myers, a Director participating in the
Bond issue and Non-Executive Director of the Company.

 

 

Proposed Director Appointment

 

Under the terms of the Bonds and until the Subordinated Debt owed to Hawk and
FFIH has been repaid in full, Hawk and FFIH jointly have the right to appoint
a Non-Executive Director to the board of the Company, subject to satisfactory
completion of customary due diligence and approval by the Company's nominated
adviser. The Company intends to appoint John Foley as the Company's
Non-Executive Chair at the time of publication of the Group's interim results
for the six months to 31 December 2022.

 

It is expected that David Nicholls will remain on the Company's board as a
Non-Executive Director. Further announcements will be made in due course.

 

Related Party Transaction

 

The Directors have subscribed for, in aggregate, £525,000 Bonds and are
thereby being granted 8,749,996 Warrants in aggregate (subject to shareholder
approval at the AGM). The participation of the Directors in the Bonds, and
associated grant of Warrants, constitutes a related party transaction under
Rule 13 of the AIM Rules.

 

As all of the Directors are participating in the transaction, Singer Capital
Markets Advisory LLP, acting in its capacity as the Company's nominated
adviser, having consulted with the Directors, considers that the terms of the
Directors participation in the Bonds and the associated grant of Warrants are
fair and reasonable insofar as the Company's Shareholders are concerned.

 

Details of the subscriptions for the Bonds are set out below:

 

 Name               Amount subscribed  Number of Warrants  Redemption amount

                    £
 Hawk               1,000,000          16,666,666          1,270,400
 FFIH               1,000,000          16,666,666          1,270,400
 Nigel Burton       200,000            3,333,333           254,077
 Crispin Goldsmith  25,000             416,666             31,760
 Andrew Lawley      25,000             416,666             31,760
 Derek Myers        200,000            3,333,333           254,077
 David Nicholl      25,000             416,666             31,760
 Harvey Sinclair    25,000             416,666             31,760
 Gary Worby         25,000             416,666             31,760
                    2,252,000          42,083,328          3,207,754

 

 

Harvey Sinclair, CEO of eEnergy Group plc, commented: "As announced in our
preliminary results, today, eEnergy continues to deliver significant year on
year growth. As we win larger contracts, we are seeing longer cash collection
cycles and for this reason we have secured a £2,525,000 facility with Hawk
and John Foley's FFIH investment vehicle, a new strategic investor, as well as
support from the Directors. The Board believes that John Foley has an
excellent track record in building high growth companies and we look forward
to his appointment to our Board."

 

 

 

This announcement contains inside information for the purposes of Article 7 of
EU Regulation 596/2014 (which forms part of domestic UK law pursuant to the
European Union (Withdrawal) Act 2018.

 

The person responsible for arranging the release of this announcement on
behalf of the Company is Crispin Goldsmith Chief Financial Officer of the
Company.

 

Contacts:

 

 eEnergy Group plc                                                  Tel: +44 20 7078 9564
 Harvey Sinclair, Chief Executive Officer                           info@eenergyplc.com (mailto:info@eenergyplc.com)  ;  www.eenergyplc.com

                                                                  (http://www.eenergyplc.com/)
 Crispin Goldsmith, Chief Financial Officer

 Singer  Capital Markets  (Nominated Adviser and Joint Broker)      Tel: +44 20 7496 3000
 Justin McKeegan, Asha Chotai, James Maxwell (Corporate Finance)

 Tom Salvesen (Corporate Broking)

 Canaccord Genuity Limited  (Joint Broker)                          Tel: +44 20 7523 8000
 Max Hartley, Tom Diehl, Gerel Bastin (Corporate Broking)

 Tavistock                                                          Tel: +44 207 920 3150
 Jos Simson, Heather Armstrong, Katie Hopkins                       eEnergy@tavistock.co.uk (mailto:eEnergy@tavistock.co.uk)

 

About eEnergy Group plc

 

eEnergy (AIM: EAAS) is a net zero energy services provider, empowering
organisations to achieve net zero by tackling energy waste and transitioning
to clean energy, without the need for upfront investment. It is making net
zero possible and profitable for all organisations in four ways:

·     Transition to the lowest cost clean energy through the Group's
digital procurement platform and energy management services. 

·     Tackle energy waste with granular data and insight on energy use
and dynamic energy management. 

·     Reduce energy use with the right energy efficiency solutions
without upfront cost. 

·     Reach net zero with onsite renewable generation and electric
vehicle (EV) charging. 

 

eEnergy is a Top 5 B2B energy company and has been awarded The Green Economy
Mark by London Stock Exchange. 

 

 

 

 

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