REG - Mercia Asset Mgt PLC - Completion of the sale of Faradion

Mercia Asset ManagementAnnouncement

05/01/2022 07:00

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RNS Number : 4299X  Mercia Asset Management PLC  05 January 2022

 RNS  5 January 2022

 

Mercia Asset Management PLC

("Mercia", the "Group" or the "Company")

 

Completion of the sale of Faradion

 

Mercia Asset Management PLC (AIM: MERC), the proactive, regionally focused
specialist asset manager with c.£948million of assets under management, is
pleased to confirm completion of the sale of Faradion Limited ("Faradion")
for a total enterprise value of £100.0million to Reliance New Energy Solar
Limited, a wholly owned subsidiary of India-based Reliance Industries Limited
("Reliance"), the multinational conglomerate.

 

Based in Sheffield, Faradion is a world leader in sodium-ion battery
technology that provides low-cost, high-performance and sustainable energy
storage solutions.

 

Mercia held a 16.4% fully diluted direct holding in Faradion and has received
initial unrestricted cash proceeds of £18.6million, plus a further
£0.8million ring-fenced for three months. Mercia made its first direct
investment in Faradion in January 2017 and Mercia's managed funds have held
equity stakes in Faradion since its inception in 2010.

 

The unrestricted cash proceeds of £18.6million result in a profit
of £5.7million above Mercia's direct investment holding value in Faradion
of £12.9million as at 30 September 2021. The sale has generated an initial
4.2x return on Mercia's direct investment cost of £4.4million and a c.72%
internal rate of return ("IRR").

 

The sale has also generated combined initial unrestricted cash returns of
£30.4million on a total investment cost of £3.6million for Mercia's managed
funds, delivering a combined funds return of 8.4x on invested fund capital and
fund IRRs of between c.30% and c.72%. Mercia has proactively supported
Faradion throughout its development, including representation from Mercia's
Investment Director, Ashwin Kumaraswamy, as a non-executive director on
Faradion's board through to exit.

 

Dr Mark Payton, CEO of Mercia Asset Management PLC, said: "We are delighted to
announce our successful exit from Faradion, delivering excellent returns for
both our shareholders and fund investors. Importantly, we have once again
demonstrated our ability to realise significant cash returns from our direct
investments, underpinning the evergreen status of our balance sheet. This
latest cash exit, which is 43.5% above September 2021's carrying value, also
demonstrates the significant potential unrealised value in the Group's direct
investment portfolio.

 

"I am also pleased that we can point to this Sheffield-based business where
Mercia has provided both founding investment and subsequent scale-up capital,
plus help in building the right management team alongside the founders. This
ability to provide Complete Connected Capital alongside hands-on support to
the most exciting regional businesses, is what makes Mercia an increasingly
attractive investment partner for entrepreneurs.

 

"I would also like to congratulate Chris Wright, James Quinn and the whole
Faradion team. Securing a sale to Reliance, one of India's leading companies,
is testament to the business they have created and the worldwide potential of
innovation that exists in the UK regions. We wish them every success under
their new ownership and are happy to see the significant ongoing investment
announced by Reliance in Faradion."

 

This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) 596/2014 which is part of UK law by virtue
of the European Union (Withdrawal) Act 2018. Upon publication of this
announcement, this inside information is now considered to be in the public
domain.

 

-Ends-

 

For further information, please contact:

 

 Mercia Asset Management PLC                          +44 (0)330 223 1430

 Mark Payton, Chief Executive Officer

 Martin Glanfield, Chief Financial Officer

 www.mercia.co.uk (http://www.mercia.co.uk/)

 Canaccord Genuity Limited (NOMAD and Joint Broker)   +44 (0)20 7523 8000
 Simon Bridges, Andrew Potts

 Singer Capital Markets (Joint Broker)                +44 (0)20 7496 3000
 Harry Gooden, James Moat

 FTI Consulting                                       +44 (0)20 3727 1051
 Tom Blackwell, Louisa Feltes, Immy Ransom
 mercia@fticonsulting.com

 

About Mercia Asset Management PLC

Mercia is a proactive, specialist asset manager focused on supporting regional
SMEs to achieve their growth aspirations. Mercia provides capital across its
four asset classes of venture, private equity, debt and proprietary capital:
the Group's 'Complete Connected Capital'. The Group initially nurtures
businesses via its third-party funds under management, then over time Mercia
can provide further funding to the most promising companies, by deploying
direct investment follow-on capital from its own balance sheet.

 

The Group has a strong UK footprint through its regional offices, 19
university partnerships and extensive personal networks, providing it with
access to high-quality deal flow. Mercia currently has c.£948million of
assets under management and, since its IPO in December 2014, has invested
c.£116million gross into its direct investment portfolio.

 

Mercia Asset Management PLC is quoted on AIM with the EPIC "MERC".

 

 

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