REG - Mast Energy Dvlpmts. - Loan, Proposed Equity Fundraise, and Share Consol.

Mast Energy DevelopmentsAnnouncement

23/05/2025 16:00

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RNS Number : 0449K  Mast Energy Developments PLC  23 May 2025

Mast Energy Developments PLC

(Incorporated in England and Wales)

(Registration Number: 12886458)

LEI :213800HFVHGJ9YGO9F71

Share code on the LSE: MAST

ISIN: GB00BMBSCV12

('MED' or 'the Company')

 

Dated: 23 May 2025

 

Mast Energy Developments PLC ('MED' or 'the Company')

 

Convertible Loan, Proposed Equity Fundraise, and Share Consolidation

 

 

Mast Energy Developments PLC (LSE: MAST) is pleased to announce that it has
entered into a convertible loan note instrument ("CLN") and, conditionally, as
set out below, an equity fundraise pursuant to a warrant instrument ("Equity
Fundraise") to raise up to £5.0 million in gross proceeds in aggregate with a
syndicate of investors in two stages. The CLN and Equity Fundraise have been
arranged by the Company's appointed corporate broker, Fortified Securities.

 

At the same time the Company has undertaken to seek shareholder approval for a
40:1 share consolidation (the "Consolidation"), as well as for the necessary
share headroom to accommodate the Equity Fundraise (together the
"Resolutions"), at the next general meeting. The Company will comply with any
requirements under the Prospectus Regulation Rules with regard to share
capital headroom, including if required issuing a supplementary prospectus.
References to the terms of the Equity Fundraise relate to the post
Consolidation share price.

 

Key Highlights:

·    Stage 1 - CLN delivers £350,000 gross proceeds of interest-free
working capital in the immediate term, with the use of proceeds to cover the
transaction costs including the issue of a supplementary prospectus and
working capital while the parties conclude the Equity Fundraise; and

·    Stage 2 - Equity Fundraise delivers £4.65 million gross proceeds via
a warrant instrument (explained below), putting the Company in a strong
financial position from which to advance its current projects and grow its
asset base and portfolio of MWs in production.

 

Pieter Krügel, MED CEO, commented: "We have been making significant positive
progress over the past year, most notably with the successes at Pyebridge and
the Growth Capital Partnership with Powertree which commenced with a £5m
investment into our Hindlip project. We are very well positioned to expedite
the Company's growth trajectory and reach our strategic target of 300+ MWs in
production."

 

"This financing package secures the future of the Company's existing projects,
while allowing it to grow its asset base and MWs in production with a war
chest at some pace. Importantly, it also introduces a new source of future
capital and enthusiasm to our register."

 

Stage 1: Convertible Loan Note Instrument

 

Pursuant to Stage 1, MED has entered into an interest-free CLN with a
principal amount of £350,000. The subscriber under the CLN is Big Sky
Management Limited, a company controlled by Canadian based corporate financier
Eric Boehnke. The CLN is intended as a working capital bridge until completion
of the financing under the Equity Fundraise. Upon shareholder approval and
completion of the Equity Fundraise, the CLN will convert on the same terms as
the Equity Fundraise at Stage 2 detailed below. In the unlikely event the
Equity Fundraise does not complete within 90 days, the notes under the CLN
become repayable in cash or convertible (at the Company's election) into
shares at a 20% discount to the closing share price on the trading day
immediately preceding the date of conversion. Further details on the
conditions and restrictions under the CLN are included below and will be
included in the notice of general meeting.

 

The net proceeds from the CLN will be used to cover the transaction costs
including the issue of a supplementary prospectus and working capital while
the parties conclude the Equity Fundraise.

 

Stage 2: Equity Fundraise

 

Pursuant to Stage 2, the Company has entered into a warrant instrument and has
received conditional subscription letters from investors introduced by
Fortified Securities totalling £4.65 million. The Equity Fundraise is
conditional upon, amongst other matters, the Resolutions. A further
announcement with details in respect of the general meeting will be notified
in due course.

 

The material terms of the Equity Fundraise are set out below.

 

·    The Equity Fundraise is structured as prepaid warrants and ordinary,
standard cash warrants. Each warrant, on exercise, entitles each subscriber to
one new fully paid ordinary share in the capital of the Company.

 

·    In return for their prepayment of an aggregate of £4.65 million
(excluding the CLN), each subscriber under the Equity Fundraise is entitled to
receive prepaid warrants ("Prepaid Warrants") in the Company exercisable at a
fixed price of £0.04 per warrant along with two attaching cash warrants
("Cash Warrants"), also exercisable at £0.04 per warrant (the Prepaid
Warrants and the Cash Warrants together the "Warrants") as set out in the
schedule in the Appendix below. The Cash Warrants are exercisable for a period
of six months from the date of grant and, if exercised, would bring in
substantial additional proceeds to the Company (see Appendix).

 

·    The Equity Fundraise is conditional on, inter alia, the following
conditions being satisfied on or before 31 July 2025 (the "Conditions"):

 

i)          The Company convening a general meeting to approve, inter
alia:

 

a.   share authorities to enable the full and unconditional exercise of the
Warrants (subject to the relevant terms of the warrant instrument); and

 

b.   a share capital reorganisation by consolidating every forty ordinary
shares into 1 new ordinary share.

 

ii)         Issue of an FCA approved supplementary prospectus (the
"Supplemental Prospectus").

 

iii)        The entry into of a relationship agreement, in agreed form,
between the Company and each of the investors.

 

The full terms of the Equity Fundraise and the use of proceeds will be
confirmed in the Supplemental Prospectus.

 

The Equity Fundraise is expected to operate as follows: the five investors
(the "Investors") will, subject to the conditions described below having been
satisfied, pay the subscription price for the Prepaid Warrants as a
pre-payment (at which time the Company receives the £4.65 million in cash);
however, the Prepaid Warrants shall remain unexercised until such time as the
Investors provide an exercise notice to the Company. The Investors expect
that, having invested sufficient capital to advance the business strategy, the
Company's share price and liquidity will improve significantly. Accordingly,
the Investors then expect to see demand for the Company's shares and be able
to exercise their Warrants (within the agreed ownership thresholds detailed in
the Appendix) and trade their shares.

 

Further details on the conditions and restrictions under of the Equity
Fundraise are included in the Appendix below.

 

Stay up to date with MED's latest news and updates by joining our emailing
list and social media channels, as follows:

 

MED emailing list - https://www.med.energy/contact
(https://www.med.energy/contact)

MED LinkedIn page -
https://uk.linkedin.com/company/mast-energy-developments-plc
(https://uk.linkedin.com/company/mast-energy-developments-plc)

MED X (formerly Twitter) handle - @mastplc

 

ENDS

 

This announcement contains inside information for the purposes of the UK
version of the Market Abuse Regulation (EU No. 596/2014) as it forms part of
United Kingdom domestic law by virtue of the European Union (Withdrawal) Act
2018 ('UK MAR'). Upon the publication of this announcement, this inside
information is now considered to be in the public domain.

 

For further information please visit www.med.energy (http://www.med.energy/)
or contact:

 Pieter Krügel      info@med.energy (mailto:info@med.energy)  Mast Energy           CEO

                                                              Developments PLC
 Jon Belliss        +44 (0)20 7399 9425                       Novum Securities      Corporate Broker
 Guy Wheatley, CFA  +44 (0)74 9398 9014                       Fortified Securities  Corporate Broker

APPENDIX

 

Additional Key Terms of the CLN

 

·    As stated above, in the unlikely event the Equity Fundraise does not
complete within 90 days, the notes under the CLN become repayable in cash or
convertible (at the Company's election) into shares at a 20% discount to the
closing share price on the trading day immediately preceding the conversion
date.

·    However, if the Conditions are satisfied by 31 July 2025, but in the
unlikely event the investors fail to close the Equity Fundraise, the CLN is
not repayable.

·    The CLN is unsecured and interest free.

·    No Investor is permitted to exercise notes to the extent that, as a
result of such exercise, the Investor will own or control more than 2.99% of
the issued ordinary shares of the Company.

·    No Investor is permitted to exercise notes (in whole or in part) held
by it to the extent that, as a result of such exercise, the Investor (together
with persons "acting in concert" with it, as such term is applied for the
purposes of the City Code on Takeovers and Mergers) will own or control more
than 29.99% of the issued ordinary shares of the Company.

·    The Company is subject to a 90-day standstill from the date of the
CLN on general equity issuances, subject to carve outs in respect of, amongst
other things, issues in connection with existing options and warrants and
issues to the Company's employee benefit trust.

·    For a period of 180 days from the date of the CLN, each Investor has
a right to participate in further fundraisings by the Company up to a maximum
aggregate value of £5 million.

·    The CLN includes standard terms relating to events of default,
warranties by the Company to the Investor, change of control provisions and
negative covenants.

 

Additional Key Terms of the Equity Fundraise

 

·    The Company is subject to a six-month standstill from the date of the
warrant instrument on general equity issuances, subject to carve outs in
respect of, amongst other things, issues in connection with existing options
and warrants, issues to the Company's employee benefit trust and the Company
undertaking an open offer or similar structure to existing shareholders as
described above.

·    No Investor is permitted to exercise warrants to the extent that, as
a result of such exercise, such Investor will own or control more than 2.99%
of the issued ordinary shares of the Company.

·    No Investor is permitted to exercise warrants (in whole or in part)
held by it to the extent that, as a result of such exercise, such Investor
(together with persons "acting in concert" with it, as such term is applied
for the purposes of the City Code on Takeovers and Mergers) will own or
control more than 29.99% of the issued ordinary shares of the Company.

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