REG - Mustang Energy PLC - Acquisition of 27.4% in VRFB Holdings Limited

Mustang EnergyAnnouncement

03/08/2022 08:30

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RNS Number : 6583U  Mustang Energy PLC  03 August 2022

3(rd) August 2022

 

Mustang Energy PLC

("MUST" or the "Company")

Acquisition of additional interest in VRFB Holdings Limited

MUST is pleased to announce that it has entered into a conditional agreement
with Acacia Resources Limited ("Acacia") to acquire its 27.4 per cent.
interest ("Acquisition (Stage 2)") in VRFB Holdings Limited ("VRFB-H"). On 26
April 2021, MUST conditionally acquired a 22.1 per cent. interest in VRFB-H
("Acquisition (Stage 1)") and, subject to the completion of certain
conditions, completion of the Acquisition (Stage 2) concurrent with the
Acquisition (Stage 1) will increase MUST's aggregate interest in VRFB-H to
49.5 per cent.  Acacia currently holds a 24.04 per cent interest in MUST and
holds a principal amount of US$2.3 million of the Company's US$8,000,000 10
per cent. unsecured convertible loan notes ("CLNs").

VRFB-H is a 50 per cent. shareholder in Enerox Holding Limited ("EHL"). The 84
per cent. owned subsidiary of AIM-quoted Bushveld Minerals Limited, Bushveld
Energy Limited ("BEL"), is VRFB-H's majority shareholder, holding 50.5 per
cent. of its issued share capital. EHL is a special purpose vehicle which
holds the entire issued share capital of Enerox GmbH ("Enerox"), an
Austrian-based vanadium redox flow battery ("vrfb") manufacturer. Enerox has
invested more than 20 years of research and development into its energy
storage system which is branded under the name CellCube. Its vanadium-based
technology is known to be state-of-the-art in the battery market and has
already deployed more than 130 systems / 23 MWh across 5 continents.

CellCube designs and delivers sustainable and cost-effective energy storage
solutions for microgrid and grid scale-applications. The CellCube brand is a
leader in an energy storage eco-system and has developed a reputation for
client service, system reliability and technical innovation. It has a stack
and system production capacity. It is focused on large commercial projects
using the new generation FB 500-2000 technology.

A contractual partnership with Munich Re (Muenchener
Rueckversicherungs-Gesellschaft AG) equips CellCube with the option to offer
vrfbs with a bankable insurance to guarantee for product and performance
accuracy. CellCube's customers may choose this additional asset of a long-term
performance warranty from Munich Re for 10 years and have the possibility of a
re-certification to prolong the coverage for a further 10 years. This grants a
continuous operation level, insures against malfunction, and covers exceeding
repair or replacement costs, problems in workmanship as well as manufacturer's
potential insolvency. Given this, sustainable renewable energy storage systems
from CellCube have become bankable assets.

The consideration for the Acquisition (Stage 2) is US$10,548,945 to be
converted to GBP:£ using an exchange rate of GBP£1.00/US$1.225 and to be
satisfied by the proposed issue of 43,056,989 new ordinary shares in the
capital of the Company issued at 20 pence each (the "Consideration Shares").

The Consideration Shares proposed to be issued to Acacia on completion of the
Acquisition (Stage 2), combined with Acacia's existing shareholding in the
Company, the shares proposed to be issued as a result of the conversion of the
US$2.3 million principal amount of CLNs held by Acacia (together with accrued
interest thereon) and the exercise of certain options and warrants held by
Acacia (assuming that such options and warrants are converted in full into
MUST shares), will mean that Acacia will hold in excess of 50% of the issued
capital of the Company. This will mean the Company will need to obtain a
waiver from the Panel (as defined and as more fully detailed in paragraph 5
below).

The Acquisition (Stage 2), together with the Acquisition (Stage 1), is
conditional, amongst other things, on:

1.         The publication of a prospectus by the Company, having been
approved by the Financial Conduct Authority, and readmission of the Company's
enlarged issued share capital to the Official List (by way of Standard Listing
under Chapter 14 of the Listing Rules) and to trading on the London Stock
Exchange's Main Market for listed securities ("Readmission").

2.            The approval by the Company's shareholders (to the
extent required).

3.        Acacia having obtained from BEL and/or any other third party as
required, a waiver of all rights of pre-emption or any similar rights to
acquire, or which otherwise restrict, the transfer of its 27.4 per cent.
interest in VRFB-H.

4.           The Company having obtained the relevant authorities (if
any) to allot its shares (and waive any applicable rights of pre-emption) as
consideration in relation to Acquisition (Stage 1) and Acquisition (Stage 2).

5.            The issue of shares in the capital of the Company
pursuant to Acquisition (Stage 2) having been approved by the Company's
independent shareholders in accordance with the City Code, and the Panel on
Takeovers and Mergers ("Panel") having waived any obligation on Acacia to make
a general offer under Rule 9 of the City Code.

Should the approval and waiver in paragraph 5 not be obtained, but the other
conditions be satisfied, each of the Company and Acacia will have a call
option and put option respectively, exercisable over 12 months from the date
of Readmission, to require the other to sell or buy respectively an additional
interest in VRFB-H in return for the issue to Acacia of new ordinary shares in
the capital of the Company on the same terms as the Acquisition (Stage 2),
provided that the new shares issued to Acacia, together with any others they
hold, do not represent more than 29.9% of the Company's voting shares.

As part of the transaction, Acacia and the Company have agreed to enter into a
relationship agreement and a lock-in agreement. Further details of these
agreements will be set out in the Company's forthcoming prospectus.

Dean Gallegos, the Managing Director of Mustang Energy, said: "The opportunity
to increase Mustang's interest in Enerox represents an exciting opportunity
for our stakeholders, thanks to Enerox's research and development initiatives
in the energy storage sector, and its state-of-the-art vanadium-based
technology. CellCube is a market leader in the vanadium-based energy storage
sector, a sector which is increasingly being recognised as a critical
component of global efforts towards net zero emissions.

We are delighted to have reached this agreement with Acacia and look forward
to working with them and our other stakeholders to conclude an RTO which we
believe will be value-enhancing for our stakeholders to participate in and
have exposure to a much-needed solution within the green energy field. The
board continues to explore further investments in the energy storage value
chain and renewable energy projects development space in line with its
articulated strategy."

 

 

 

ENQUIRIES

For further information, please visit www.mustangplc.com
(http://www.mustangplc.com) , follow us on Twitter @Mustang_Plc
(https://twitter.com/Mustang_Plc) , or contact:

 Mustang Energy PLC

 Dean Gallegos, Managing Director

 dg@mustangplc.com

 +61 416 220 007

 

This announcement contains inside information for the purposes of the UK
Market Abuse Regulation and the Directors of the Company are responsible for
the release of this announcement.

 

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