REG - i(x) Net Zero PLC - $2.5m Enphys funding commitment

I (X) Net ZeroAnnouncement

07/08/2023 07:00

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RNS Number : 4849I  i(x) Net Zero PLC  07 August 2023

 The information contained within this Announcement is deemed by i(x) Net
Zero plc to constitute inside information as stipulated under the Market
Abuse Regulation (EU) No. 596/2014 as it forms part of UK law by virtue of
the European Union (Withdrawal) Act 2018 ("MAR").

 

07 August 2023

i(x) Net Zero PLC

 

("i(x) Net Zero" or the "Company")

 

i(x) Net Zero commits up to US$2.5 million to Enphys Management Company

 

i(x) Net Zero PLC (AIM: IX.), the investing company which focuses on the
Energy Transition, is pleased to announce that it has committed to invest an
additional US$2.5 million into Enphys Management Company ("EMC") and that its
wholly owned subsidiary i(x) Investments LLC has entered into a revised EMC
LLC Agreement with LAIG Investments.

 

The investment, the cost of which  will be spread over the next four years
and will immediately take the Company's ownership in Enphys from its current
level of 14.5% to 30.0%. The additional cash investment, together with the
increased valuation at which the investment was agreed generates an uplift in
the Net Asset Value of the Company's total holding in EMC from $10.3 million
to $16.7 million, based on the valuation as at 31 December 2022.  10% of the
issued capital in EMC is subject to pro-rata clawback if payments by the
Company are either stopped or not made  when due in accordance with the
revised terms and a further portion subject to additional  clawback if a
minimum of US$1 million is not funded in full, provided that the Company will
retain at least a 20% interest in EMC. In addition if before 5 August 2025
EMC's fair market value falls below $25 million and EMC issues additional
equity securities, the Company will benefit from anti dilution provisions to
ensure that that the value of its equity interest does not fall below the
amount contributed.

 

The new funding, being made from the Company's existing cash resources, will
provide additional support to EMC for budgeted working capital, certain other
approved costs and investments into new assets as it initally progresses
towards a merger opportunity for its SPAC, Enphys Acquisition Corp, with the
intention of forming a major renewables energy group that can be a regional
champion for sustainability in the Americas and later expanding its assets
under management with new assets and new investment structures.

 

EMC is looking at a range of public and private investment opportunities
focused on renewables and energy transition in Latin America and has a direct
ownership in Enphys Acquisition Sponsor, LLC, the sponsor company of Enphys
Acquisition Corp., a NYSE-listed SPAC targeting renewable energy businesses in
Latin America.

 

These revised funding provisions replace the previously agreed mechanism for
the Company to invest additional capital to increase its interest in EMC such
that its holding could increase to 25% of EMC.   The Company has also agreed
a revised distribution waterfall with LAIG and EMC to provide once unreturned
cash capital contributions have been returned in full, LAIG will receive an
amount equal to 50% of all returned cash capital contributions and thereafter
pro-rata between the owners.  As all of the Company's contributions have been
in cash, this maintains the Company's right to the first distributions up to
an amount equal to its capital contributions.  This replaces the previous
waterfall of returns and preferred returns.  The ability of LAIG and EMC to
redeem the Company's interest at a 2.5x multiple of the Company's
contributions has been amended so that it will now cease if the fair market
value of the Company's  interest remains at or above US$19.5 million for a
period of 12 months. LAIG and its founder have also entered into certain
security arrangements in favour of the Company until such time.

 

The board of EMC will now be amended to give the Company two directors with
LAIG having the right to appoint three directors.

 

Pär Lindström, Chief Executive Officer of the Company, said: "This
investment is reflective of our belief of the significant potential contained
within Enphys and our strategy at i(x) Net Zero to own considerable stakes in
our portfolio companies. We look forward to supporting the company as it looks
to establish itself as a leading operator in the alternative energy sector in
Latin America."

 

- Ends -

 

 

This announcement contains inside information.

 

 

For further information visit https://ixnetzero.com/
(https://url.avanan.click/v2/___https:/ixnetzero.com/___.YXAzOml4bmV0emVybzphOm86N2IwNzI5ZjFjNmRmYzY5Yjg5ODRhOGZiZWRiYWVmOTk6NjoyMjBhOjRmMGM4Yjg2ZmVkOWZiMzQwN2MwYjQ5ZDVjM2Q0N2I5ZjdmYjRmNDZmYTQ1NjM4Y2NkYTkwYmVjZGEyZTA4YWM6cDpU)
 or contact:

 i(x) Net Zero                              Via Buchanan below
 Pär Lindström - Chief Executive Officer

 Canaccord Genuity Limited                  +44 20 7523 8000

 Nominated Adviser & Broker
 Max Hartley
 Harry Pardoe

 Buchanan
 Helen Tarbet                               +44 7872 604 453
 Simon Compton                              +44 7979 497 324

 

 

Notes to Editors

About i(x) Net Zero PLC

i(x) Net Zero PLC is an AIM quoted investing company that seeks to provides
its shareholders with the opportunity to create long-term capital growth with
positive, scalable, measurable and sustainable impact on the environment and
on the communities it serves.

 

In accordance with its belief that the world's biggest problems are also the
biggest market opportunities, i(x) Net Zero focuses on two critical areas in
which it aims to make a positive impact: (i) Energy Transition and (ii)
Sustainability in the Built Environment.

 

The Company uses a multi-strategy investment approach, providing the companies
in which it invests with the expertise and catalytic capital to help them
grow. To date, i(x) Net Zero has invested in biofuels, direct air capture
(carbon removal), renewable energy, sustainable workforce housing and net zero
construction technology.

 

i(x) Net Zero is a  signatory to the UN Principles for Responsible
Investing.

 

The Company has received the London Stock Exchange's Green Economy Mark.

 

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