REG - Emmerson PLC - Litigation Funding Secured

EmmersonAnnouncement

02/01/2025 07:00

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RNS Number : 8324R  Emmerson PLC  02 January 2025

Emmerson Plc / Ticker: EML / Index: LSE / Sector: Mining

 

2 January 2025

Emmerson PLC

("Emmerson" or the "Company")

Litigation Funding Secured

and

Litigation Counsel Confirmed

Emmerson Plc, the Moroccan focused potash development company, is pleased to
announce that it has signed a Capital Provision Agreement ("CPA") with a
specialist litigation funding firm to provide up to US$11,000,000 in both
litigation finance capital and working capital for the Company (the "Funding")
and has confirmed Boies Schiller Flexner LLP ("BSF") as its litigation
counsel. The Company has also put a Management Incentive Plan into place.

Litigation funding

The Funding shall primarily be used to progress the Company's dispute with the
Government of the Kingdom of Morocco under the Agreement between the
Government of the United Kingdom of Great Britain and Northern Ireland and the
Government of the Kingdom of Morocco for the Promotion and Protection of
Investments, which entered into force on 14 February 2002, being a Bilateral
Investment Treaty (the "BIT").

Emmerson's CPA funding counterparty (the "Funding Party") is one of the
world's largest and most successful litigation finance companies and a
significant institution within the legal financing industry. The detailed
terms of the CPA are confidential but, in summary:

·    Up to US$11,000,000 can be drawn down in tranches, at the Company's
request, to satisfy litigation funding requirements and for general working
capital purposes;

·    The Funding shall be provided on a non-recourse basis and the Funding
Party shall receive no return if the arbitration claim is unsuccessful; and

·    In the case of a successful settlement or award, the return to the
Funding Party shall be based upon the greater of a multiple of the final
drawn-down amount or a percentage of the final award.

The Company notes that it has obtained litigation funding for its potential
arbitration proceedings under the BIT within two months from the original
Notification of Dispute, a process that can typically take six to nine months,
oftentimes longer. The Company is of the opinion that the Funding will provide
the platform to provide the best long-term return for shareholders.

Litigation Counsel

The Company has confirmed the appointment of Boies Schiller Flexner LLP
("BSF") as its litigation counsel. BSF have a highly successful track record
in similar BIT arbitration cases, including some recent high-profile awards.
The funding is now in place for BSF to commence work in the New Year on our
case.

Management Incentive Plan (MIP)

To retain the services of certain Directors and members of the Company's
management team who are important to the Company's ongoing management and the
progress of the litigation, and who have important historical information and
knowledge to contribute towards the litigation, the Company has established a
long-term Management Incentive Program (the "MIP"). The retention of the
assistance of the Directors and member of the Company's management team for
the litigation through the MIP will allow the Company to maintain its
compliance with the terms of the CPA.

In line with recent litigation funding cases, the named members of the MIP
will be entitled to 6%, in aggregate, of any monies awarded as damages to the
Company ("Management Entitlement Amount") through arbitration or any other
means, including early settlement.

After the final determination of each participant's entitlement to the
Management Entitlement Amount, any remaining balance of the Management
Entitlement Amount which has not been distributed to participants will be
returned to the Company.

Graham Clarke, Managing Director of Emmerson PLC commented:

"The Company has undertaken a tremendous amount of work and effort in a short
period of time to secure substantial financing from a reliable funding
partner. This CPA secures the medium-term future of the Company and we can now
move forward with BSF as our legal partners to deliver the best possible
outcome for the Company and its shareholders. BSF tend to only take on winning
cases and their confidence in the case reinforces our confidence in the
outcome".

 

**ENDS**

 For further information, please visit www.emmersonplc.com
 (http://www.emmersonplc.com) , follow us on Twitter (@emmerson_plc), or
 contact:

Emmerson Plc                                                  +44 (0) 207 138 3204

 Graham Clarke / Hayden Locke
 Panmure Liberum Limited (Nominated Adviser and Joint Broker)  +44 (0) 20 3100 2000

 Scott Mathieson / Will King
 Shard Capital Partners LLP (Joint Broker)                     +44 (0) 207 186 9927

 Damon Heath / Isabella Pierre

Notes to Editors

Emmerson has been focused on advancing the Khemisset project ("Khemisset" or
the "Project") in Morocco into a low cost, high margin supplier of potash, and
the first primary producer on the African continent. With an initial 19-year
life of mine, the development of Khemisset is expected to deliver long-term
investment and financial contributions to Morocco including the creation of
permanent employment, taxation, and a plethora of ancillary benefits. As a
UK-Moroccan partnership, the Company has been working towards significant
international investment over the life of the mine.

Morocco is one of the leading phosphate producers globally and the development
of this mine is set to consolidate its position as the most important
fertiliser producer in Africa. The Project has a large JORC Resource Estimate
(2012) of 537Mt @ 9.24% K2O, with significant additional exploration
potential, and is perfectly located to support the expected growth of African
fertiliser consumption whilst also being located on the doorstep of European
markets. The need to feed the world's rapidly increasing population is driving
demand for potash and Khemisset is well placed to benefit from the
opportunities this presents. The Feasibility Study released in June 2020
indicated the Project has the potential to be among the lowest capital cost
development stage potash projects in the world and also, as a result of its
location, one of the highest margin projects. Updated financial estimates
published in February 2024 indicated a net present value of US$2.2 billion,
with an internal rate of return of approximately 40%.

Market Abuse Regulation (MAR) Disclosure

The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulations
(EU) No. 596/2014.

 

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