REG - Seed Innovations Ltd - Partial Sale of Avextra:60% Premium to Entry Point

Seed InnovationsAnnouncement

11/09/2023 07:00

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RNS Number : 9324L  Seed Innovations Limited  11 September 2023

This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) No. 596/2014, as it forms part of UK Domestic
Law by virtue of the European Union (Withdrawal) Act 2018. Upon the
publication of this announcement, this inside information is now considered to
be in the public domain.

11 September 2023

SEED Innovations Limited

("SEED" or the "Company")

Partial Sale of Shareholding in Avextra AG

60% Premium to Entry Point

SEED Innovations Ltd, the AIM-quoted company investment company providing
shareholders with exposure to early-stage health, wellness and medical
cannabis companies to which, in normal circumstances, they have limited access
to, is pleased to announce the sale of 2,900 share units of Avextra AG
('Avextra'), a German-based, European vertically integrated medical cannabis
company, representing 56.4% of SEED's holding in Avextra (formerly Eurox
Group) for gross proceeds of €2.9 million (£2.45 million) (the 'Sale').

SEED remains a holder of 2,242 shares in Avextra representing approximately 3%
of Avextra on a fully diluted basis.

 

Highlights

·    Sale has resulted in gross proceeds of €2.9 million (£2.45
million), a 62% (1.6x) return on SEED's original investment in 2021 and 2022

·    SEED remains a supportive shareholder, continuing to hold 2,242 units
representing approximately 3% of Avextra on a fully diluted basis.

·    SEED's total cash position will be approximately £4.6M following the
Sale, with further cash receivables due from the sale of Leap Gaming of around
£2.5 million.

·    Total Cash and Receivable position at £7.1 million is markedly
(c.38.9%) higher than the current market capitalisation of SEED of c.£5.11
million (per closing on 8 September 2023).

·    Last published NAV of SEED included Avextra at £4,436,000, based on
a price per share of €980.

o  Sale at €1,000 per share represents a 2% premium to the EURO price per
share

o  Following the Sale, SEEDs remaining holding in Avextra can be valued at
€2,240,000 (c£1.9M) based on this new price.

·    With an increased level of cash available, and a robust potential
deal flow, SEED remains confident that the current environment will offer
superior opportunities to invest and in turn, create long-lasting value for
investors.

·    SEED remains committed to its investment policy of providing exposure
to disruptive growth opportunities, diversifying into life sciences and
biotechnology sectors, and leveraging its resources and expertise for maximum
returns while mitigating risks.

·    In addition to multi-year time horizon investments, the Board may
look to make shorter term, opportunistic investments where there are
significant levels of liquidity and in keeping with SEED's Investing Policy,
as indicated in the Company's 2023 Final Results.

 

CEO, Ed McDermott commented: "The opportunity arose for a partial exit of our
Avextra holding and the board agreed that generating another c.£2.45 million
via a premium asset sale was the right decision. The Sale represents a 60%
premium to our entry point which is pleasing, especially when prevailing
market conditions are accounted for. We remain supportive shareholders of
Avextra and appreciate the progress they continue to make along with their
focus on meeting the needs of patients and healthcare professionals across
Europe.

"As an agile fund that can adapt to the movements in the markets, SEED is
looking to speed up the investment cycle and, where appropriate, seek full or
partial exits within as close to a 24-month timeframe as possible. Current
market conditions have created strong opportunities for investment companies
with cash and, with the Board's broad network and access to investment
opportunities, we intend to utilise our cash and cash receivables balance of
some £7.1m to invest in fast moving enterprises with excellent upside
potential."

Avextra CEO, Bernhard Babel, commented: "SEED joined us as an investor very
early on and the initial investment came at an important time for Avextra to
enable its growth and add to the confidence of other institutional
investors who have, like SEED, supported the company across a number of
raises. SEED's representative on the supervisory board, Alfredo Pascual, has
helped us with his experience and deep insights in the sector and we would
like to thank him and SEED for their valuable support. We are pleased SEED
remains an investor and we look forward to providing further positive Avextra
updates in the coming weeks."

Further Information

As announced on 5 July 2021, SEED invested €3 million in Avextra (formally
Eurox Group). In addition, SEED invested a further €0.17million in preferred
shares, as announced on 6 April 2022 taking the total investment by SEED into
Avextra to €3.17 million.

SEED has completed the Sale at €1,000 per share with gross proceeds to the
Company of €2.9 million (£2.45 million), a 60% (1.6x) return on SEED's
original investment.

SEED remains a holder of 2,242 shares in Avextra representing 3.8% of
Avextra's issued share capital.

 

It is intended that Alfredo Pascual, SEED's Executive Director, will step down
from his role on the Avextra supervisory board in the near future.

 

-Ends-

For further information on the Company please visit:  www.seedinnovations.co
(http://www.seedinnovations.com/) or contact:

 Ed McDermott       SEED Innovations Ltd         E: info@seedinnovations.co

 Lance de Jersey
 James Biddle       Beaumont Cornish Limited,    T: (0)20 7628 3396

 Roland Cornish     Nomad
 Isabella Pierre    Shard Capital Partners LLP   T: (0)20 7186 9927

 Damon Heath        Broker
 Catherine Leftley  St Brides Partners Ltd,      E: seed@stbridespartners.co.uk

 Ana Ribeiro        Financial PR

 Isabelle Morris

Notes

Seed Innovations Ltd

SEED Innovations is an AIM quoted investment company focused primarily on
disruptive high growth life sciences and technology businesses particularly
within the medical cannabis arena. The Company's strategy is to identify
early-stage opportunities that have an upcoming investment catalyst and grow
its portfolio in terms of value whilst limiting the number of investee
companies to a level where relevant time can be devoted to each.

 

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