REG - i(x) Net Zero PLC - Business Update & Appointment of Nomad & Broker

I (X) Net ZeroAnnouncement

20/04/2023 07:00

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RNS Number : 8866W  i(x) Net Zero PLC  20 April 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").

 

20 April 2023

i(x) Net Zero PLC

 

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

 

Strategic Update, Board Changes, New Loan Facility and Appointment of Nomad
and Broker

 

i(x) Net Zero PLC (AIM: IX.), the investing company which focuses on Energy
Transition and Sustainability in the Built Environment, is pleased to announce
a strategic update, management changes and a new loan facility, creating a
strong platform from which to drive shareholder value.

 

Strategy and Operations

 

i(x) Net Zero's mission is to create long term capital growth by investing in
companies that focus on Energy Transition and Sustainability in the Built
Environment.  Following a period of strategic and operational review, the
Board of Directors have determined that in order to meet that objective,
management will focus firmly on growing the Net Asset Value ("NAV") of the
Company's investments. This will be achieved by identifying and seeking to
execute profitable investment realisations from the existing investment
companies in the short term and by sourcing high growth investment
opportunities in accordance with its Investing Policy. The Board of Directors
have set ambitious NAV targets for the executive management team, in order to
drive growth in the business and diversify the Company's portfolio of
investments.

 

The Company will accelerate its pursuit of this strategy with a more
streamlined approach to operations. The Directors have introduced a near term
target of reducing operating expenditure to 2% of NAV, down more than 50% from
the 2022 operating expenditure.

 

Strengthened Executive Team

 

The Company is pleased to announce the appointment of Jonathan Carpenter
Stearns as CFO, conditional on regulatory approval. Jonathan is expected to
join the Board as an Executive Director of the Company.  Mr. Stearns brings
over 40 years of C-suite level experience as CFO, CEO and CIO in the operating
management of emerging growth companies. In addition, Mr. Stearns has
significant experience in portfolio management, complex financial structuring
and strategic consulting with both public and private companies located in the
US and Europe. Previously Mr. Stearns was a Managing Director with AIG in its
private capital group, and started his career at JP Morgan.

 

 

The proposed appointment of Jonathan Stearns as CFO follows the appointment,
in January 2023, of Pär Lindström, as Chief Executive Officer. Pär has over
25 years' investment experience, M&A experience and business development
expertise through a career focused on venture capital, growth capital and
private equity investments in the U.S., Europe and emerging markets.

 

The Board of i(x) Net Zero believe the new Executive team will be well placed
to identify new opportunities for value and to secure profitable investment
realisations within the existing portfolio.

 

Dmitri Tsvetkov, the former CFO of the Group, is stepping down from the Board
with immediate effect but will continue in a senior management role as COO and
Group Director of Finance.

 

New Loan Facility

 

The Company is pleased to announce that its wholly owned subsidiary, i(X)
investments LLC has entered into a new secured $7.5 million 2 year term loan
facility with European Depositary Bank S.A. ("EDB") ("Loan"). The Loan, once
drawn, bears interest at 10.5% coupon (subject to periodic change in line with
EDB's USD Base rate) and which is payable quarterly. The Loan can be utilised
for the purposes of the financing of investments and general working capital
purposes. The Loan is guaranteed by the Company.

 

i(X) Investments LLC has agreed to pay an arrangement fee equal to 2% of the
amount of the facility and a commitment fee of 1.75% per annum on any undrawn
funds, payable quarterly in arrears.

 

Drawdown of the Loan is conditional upon there being no event of default and
other customary provisions including delivery of documents.  The Loan is
repayable together with default interest in the event of  default which,
inter alia, includes a change of control and a reduction of aggregate NAV of
the Company below $50 million.

 

The Loan is secured by a pledge granted by the Company and its nominee of the
shares held by it including those in i(X) Investments LLC and all other
proceeds and property and assets owned by it.     In addition, as part of
the Facility Agreement, i(X) Investments LLC will pledge $4.0 million as a
security at a deposit account with EDB. The Company will be able to invest
this security deposit in certain money markets funds and other financial
instruments and generate a return on deposited funds (currently expected to be
approximately 4-5% per annum) thereby mitigating the interest payable. In
addition, i(X) Investments LLC has undertaken to maintain a minimum cash
balance in an operating account with amount varying depending on the remaining
time to facility maturity but being zero if draw downs are below $4 million.

 

In connection with the facility, i(X) Investments LLC has also agreed to give
customary undertakings, warranties and indemnities to the Lender, the Agent
and Security Agent including as to tax and undertkaings not to undertake
certain corporate transactions without consent.

 

The Company had a net cash position of $7.5 million at 31 December 2022 and
with the new Loan facility it will allow management to focus on scaling the
business, including compelling investments in the existing portfolio and new
opportunities.

 

Appointment of Nominated Advisor and Broker

 

The Company is pleased to announce the appointment of Canaccord Genuity
Limited as its Nominated Adviser and Sole Broker with immediate effect.

 

Nick R Hurd, Chairman of i(x) Net Zero, said: "We strongly believe in
building a portfolio of high quality companies that are actively engaged in
the much needed global energy transition. We were also cognisant of the fact
that we needed to take steps to streamline our business and so sharpen our
strategic focus on value creation for shareholders. We are confident that the
measures announced today give us a strong platform for growth and increased
liquidity."

 

 

- Ends -

 

 

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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