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RNS Number : 3700G Mustang Energy PLC 29 March 2022
Tuesday 29 March 2022
Mustang Energy PLC
VRFB-H Investment Update
As announced on 27 April 2021, the Company acquired a 22.1% interest in VRFB
Holdings Limited ("VRFB-H"), a joint venture partner in Enerox Holdings
Limited ("EHL"), for a consideration of US$7,524,000 (the "Investment
Agreement"). The investment was financed through the issue of US$8,000,000
Convertible Loan Notes ("CLNs") bearing 10% interest per annum, with surplus
funds being used to pay costs associated with the investment and working
capital.
Soon after the announcing completion of the Investment Agreement, Garnet
Commerce Limited ("Garnet"), the other joint venture partner in EHL, objected
to the Company's investment. In July 2021, a claim form was issued in the High
Court of Justice: Business and Property Courts of England and Wales (Chancery
Division) by Garnet against VRFB-H and EHL, as more fully detailed in the
announcement made by Bushveld Minerals Ltd ("BMN") on 14 July 2021 (the "High
Court proceedings"). As advised on 8 March 2022, the High Court proceedings
were successfully defended.
Whilst the Company was not a party to the High Court proceedings, the ongoing
uncertainty precluded
the Company from progressing the process of seeking the readmission of its
shares to trading and the issuing of a prospectus in relation to this. Now
that the matter has been successfully defended, the Company intends to prepare
a prospectus and lodge it as soon as practicable with the Financial Conduct
Authority ("FCA").
As announced on 19 January 2022, a condition of the CLNs is that if the
Company's shares were not reinstated to trading by no later than 28 February
2022 ("Maturity Date"), the Company had the right, by serving written notice
on BMN within 5 business days thereafter, to require that BMN, in return for
the Company transferring to Bushveld Energy Limited (a 84% owned subsidiary of
BMN) ("BEL") all its shares in VRFB-H ("Backstop") and payment of a 2.0%
'backstop fee' to BMN, issue to each CLN holder by 28 March 2022 such number
of new shares in BMN at a price equal to the 20 day volume weighted average
price of a BMN share prior to the date of issue, as is equivalent to the value
of each holder's CLNs together with accrued and unpaid interest thereon. BEL
holds a 50.5% interest in VRFB-H. Acacia Resources Limited, which has a 24.03%
interest in the Company, owns the remaining 27.4% interest of VRFB-H.
The parties to the Investment Agreement, including the Company, have agreed to
extend the Maturity Date until the 31 July 2022 to allow for the preparation
of a prospectus and review process of that prospectus by the FCA.
Additionally, it has been agreed to reduce the conversion price of the CLNs
into Mustang shares from £0.20 to £0.18.
As announced on 18 March 2022, the Company was notified by Primorus
Investments Plc ("Primorus") that it would effect the backstop in respect of
its CLNs with a nominal value of US$1.5 million (and accrued and unpaid
interest thereon) (the "Primorus CLNs"). Bushveld has notified the Company
that it has elected to purchase the Primorus CLNs the consideration being the
issue of a new Bushveld convertible loan note, as such the Company has
registered Bushveld as the owner of US$1.5 million CLN (and accrued and unpaid
interest thereon). The Company will pay Bushveld a backstop fee of
USD$32,737.
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
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