REG - Pineapple Power Corp - Proposed RTO of Element 2 Limited

Pineapple PowerAnnouncement

24/04/2023 08:00

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RNS Number : 1955X  Pineapple Power Corporation PLC  24 April 2023

This announcement contains inside information as stipulated under the UK
version of the Market Abuse Regulation No 596/2014 which is part of English
Law by virtue of the European (Withdrawal) Act 2018, as amended.  On
publication of this announcement via a Regulatory Information Service, this
information is considered to be in the public domain.

 

24 April 2023

Pineapple Power Corporation PLC (the "Company" or "Pineapple Power")

Heads of Terms signed

Proposed Reverse Takeover of Element-2 Limited

Suspension of Listing

The Company is pleased to announce that as of 21 April 2023 it has entered
into a non-binding heads of terms with Element 2 Limited ("E-2" or "Element
2"), based in Yorkshire in the United Kingdom, to acquire 100% of the
outstanding shares in E-2 in an all-share transaction, subject to legal,
financial and other due diligence and entry into a legally binding sale and
purchase agreement (the "Proposed Acquisition"). As no binding agreement has
yet been reached, the Company cannot guarantee that the Proposed Acquisition
will complete.

About Element 2

Element 2 is the UK's leading hydrogen refuelling business. The company works
closely with vehicle manufacturers, transport operators and fleet owners to
identify and develop hydrogen refuelling sites and provide a regular supply of
fuel cell grade hydrogen.

Element 2 is investing in prime locations across the UK and Ireland. The
company already has established strategic hydrogen refuelling sites along
critical haulage routes across the country. Element 2 is operating at five
refuelling locations across the UK and is in the process of building two
permanent refuelling stations along the M6 and A1(M) motorways, presently.

Background to the Proposed Acquisition

Pineapple Power was formed as a "cash shell" with a specific focus on
acquisitions in the clean and renewable energy sectors, as outlined in its
prospectus published on 21 December 2020 (the "Prospectus"), which can be
found on the Company's website -

https://www.pineapple-powercorp.com/investors/
(https://www.pineapple-powercorp.com/investors/)

The Proposed Acquisition is in line with the Company's acquisition strategy.

The Proposed Acquisition

Following recent discussions, on 21 April, 2023 Pineapple Power entered into
non-binding heads of terms with E-2 for the acquisition of 100% of the issued
share capital of Element 2 for a consideration of £120 million, to be
satisfied by the allotment and issue of new ordinary shares in Pineapple Power
to the shareholders of E-2.  It is envisaged that, in conjunction with the
Proposed Acquisition, there will be an equity financing to fund future
investment and working capital requirements of Element 2.

On completion of the Proposed Acquisition, it is the Company's intention is to
seek admission of its ordinary share capital, as enlarged following completion
of the Proposed Acquisition and related financing, to the Standard Segment of
the Official List of the Financial Conduct Authority ("FCA") and to trading on
the Main Market of the London Stock Exchange  (together, "Admission").

It is anticipated that, following completion of the Proposed Acquisition:

·    the current directors of Element 2 will form a majority of the board
of the Company; and

·    the shareholders of Element 2 will become majority shareholders of
the enlarged Company.

The Proposed Acquisition is conditional on, amongst other things:

·    obtaining the necessary regulatory approvals of the FCA;

·    the satisfactory completion, by each of the parties to the
transaction, of legal, financial and commercial due diligence;

·    the parties agreeing, signing and exchanging a legally binding share
sale and purchase agreement;

·    Admission;

·    the raising of an appropriate amount of new equity funds by the
Company;

·    the Takeover Panel waiving any obligation the E-2 shareholders (and
any persons acting in concert with them) might otherwise incur under Rule 9 of
the City Code by virtue the issue to them of consideration shares (the "Rule 9
Waiver"); and

·    the passing of necessary resolutions to approve the Proposed
Acquisition (including the Rule 9 Waiver) by the shareholders of the Company
at a duly convened general meeting (the "General Meeting").

In order to effect Admission, obtain the Rule 9 Waiver and to convene the
General Meeting, the Company is required to publish a prospectus, to be
approved by the FCA, which will include relevant details relating to the
Company, E-2 and the Proposed Acquisition, amongst other things. It is
currently expected that should the Proposed Acquisition proceed, the
prospectus will be published, and the Proposed Acquisition will complete,
during H2 2023.

The Company has engaged certain advisers, and will engage other professionals,
to rapidly progress the requisite due diligence and the preparation of
transaction documentation including the sale and purchase agreement and the
prospectus.

At this stage, there can be no guarantee that the Proposed Acquisition will
complete nor as to the final terms of the Proposed Acquisition. Further
announcements and updates will be made in due course.

Suspension of Listing

The Proposed Acquisition, if completed, would constitute a reverse takeover
under the Listing Rules. As the Company is currently unable to provide full
disclosure under Listing Rule 5.6.15, it has requested from the Financial
Conduct Authority, and been granted, a suspension of listing in its shares
with immediate effect pending either the issue of an announcement providing
further details on the Proposed Acquisition, the publication of a prospectus,
or an announcement that the Proposed Acquisition is not proceeding.  Any
restoration of the listing is subject to the approval of the Financial Conduct
Authority.

There can be no certainty that the Proposed Acquisition will take place and it
remains subject, amongst other things, to final terms being agreed.

Further announcements and updates will be made in due course.

Claudio Morandi, Chairman of Pineapple Power, commented:

"We are delighted to have agreed a heads of terms on this potential
acquisition. During the past few months, we have reviewed numerous projects
and believe the Proposed Acquisition meets our stated objective of identifying
a potentially extremely valuable entity involved in the renewable energy
sector and clean and green technologies."

Dr Graham Cooley, M&A Advisor to Pineapple Power, stated:

"In the UK, heavy-duty road transport will have a critical role to play in our
country's decarbonisation goals. Transport accounts for around one-fifth of
global CO₂ emissions of which 20% comes from trucks carrying freight.
McKinsey and the Hydrogen Council believe the most competitive use of hydrogen
lies in decarbonising trucks. Vehicles using batteries or hydrogen fuel cells
instead of diesel engines will need to make up most of new truck sales by 2040
under government plans to reduce CO2 emissions from medium and heavy-duty
vehicles. As these sales build in the coming years, it becomes imperative that
the refuelling infrastructure necessary to service this growing demand needs
to be implemented, commencing immediately."

Clive de Larrabeiti, Corporate Finance Advisor of Pineapple Power Corporation,
stated:

"We are delighted to have identified such a high-quality acquisition. We look
forward to completing this transformative transaction and returning to the
market as soon as possible."

Tim Harper, CEO of Element 2, stated:

 

"Element 2 has been generating rapidly growing revenues for over two years as
we have consistently delivered for our customers. We secure hydrogen,
transport it to refuelling locations, provide refuelling infrastructure, and
deliver the regular supply of fuel cell grade hydrogen needed to accelerate
commercial fleets' net zero strategies.

 

We are playing a critical role in the UK's energy transition, and the
transaction with Pineapple Power will provide an expressway to capital
infusion, powering a significant expansion of our network of hydrogen
refuelling stations and propelling our growth trajectory to new heights. Our
goal is to make UK road transport a global decarbonisation success story -
supplying hydrogen for all vehicle types, including HGVs, vans, buses, refuse
vehicles and cars."

 

 Pineapple Power Corporation PLC
 Claudio Morandi - Director

                                     +44 203 039 3913

 Clive de Larrabeiti

 Corporate Finance Advisor

 clive.d.l@pineapple-powercorp.com

                                     +44 797 317 7973
 Joint Corporate Broker

 Peterhouse Capital                  +44 207 220 9791

 Charles Goodfellow

 cg@peterhousecap.com

 Joint Corporate Broker              +44 203 026 0320

 Axis Capital Markets

 Richard Hutchison

 rh@axcap247.com
 Media Relations

 David Burton

 Total Market Solutions

 davidburton.tms@gmail.com

 

This announcement has been issued by and is the sole responsibility of
Pineapple Power.

This announcement is not intended to, and does not, constitute or form part of
any offer, invitation or the solicitation of an offer to purchase, otherwise
acquire, subscribe for, sell or otherwise dispose of, or vote in any manner,
any securities pursuant to this announcement or otherwise. The distribution of
this announcement in jurisdictions outside the United Kingdom may be
restricted by law and therefore persons into whose possession this
announcement comes should inform themselves about, and observe such
restrictions. Any failure to comply with the restrictions may constitute a
violation of the securities law of any such jurisdiction.

The statements contained in this announcement that are not historical facts
are "forward-looking" statements.  These forward-looking statements are
subject to a number of substantial risks and uncertainties, many of which are
beyond the Company's control and actual results and developments may differ
materially from those expressed or implied by these statements for a variety
of factors.  These forward-looking statements are statements based on the
Company's current intentions, beliefs and expectations about among other
things, the Company's financial condition, prospects, growth, strategies and
the industry in which the Company operates.  Forward-looking statements are
typically identified by the use of forward-looking terminology such as
"believes", "expects", "may", "will", "could", "should", "intends",
"estimates", "plans", "assumes" or "anticipates" or the negative thereof or
other variations thereon or comparable terminology, or by discussions of
strategy that involve risks and uncertainties.  By their nature,
forward-looking statements involve risks and uncertainties because they relate
to events and depend on circumstances that may or may not occur in the
future.  In addition, from time to time, the Company or its representatives
have made or may make forward-looking statements orally or in writing.
Furthermore, such forward-looking statements may be included in, but are not
limited to, press releases or oral statements made by or with the approval of
an authorised executive officer of the Company.  No assurance can be given
that such future results will be achieved; actual events or results may differ
materially from those expressed in or implied by these statements as a result
of risks and uncertainties facing the Company and its subsidiaries.  Many of
these risks and uncertainties relate to factors that are beyond the Company's
ability to control or estimate precisely, such as changes in taxation and
fiscal policy, future market conditions, currency fluctuations, the behaviour
of other market participants, the actions of governmental regulators and other
risk factors such as the Company's ability to continue to obtain financing to
meet its liquidity needs, changes in the political, social and regulatory
framework in which the Company operates or in economic or technological trends
or conditions, including inflation and consumer confidence, on a global,
regional or national basis.  Such risks and uncertainties could cause actual
results to vary materially from the future results indicated, expressed or
implied in such forward-looking statements.  The forward-looking statements
contained in this announcement speak only as of the date of this announcement
and the Company undertakes no duty to update any of them publicly in light of
new information or future events, except to the extent required by applicable
law or regulation.

Neither the content of the Company's or Element-2's website (or any other
website) nor the content of any website accessible from hyperlinks on the
Company's or Element 2's website (or any other website) is incorporated into,
or forms part of, this announcement.

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