REG - Seeing Machines Ltd - Exclusive agreement with Magna & US$65m investment

Seeing MachinesAnnouncement

06/10/2022 07:00

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RNS Number : 9471B  Seeing Machines Limited  06 October 2022

This announcement contains inside information

 

Seeing Machines Limited

6 October 2022

 

Seeing Machines enters key collaboration with Magna, includes US$65 million
investment through an exclusivity arrangement and convertible note

 

 

Seeing Machines Limited (AIM: SEE, "Seeing Machines" or the "Company"), the
advanced computer vision technology company that designs AI-powered operator
monitoring systems to improve transport safety, is pleased to announce an
exclusive collaboration agreement ("Agreement") with Magna International
("Magna"), to pursue driver and occupant monitoring system business targeting
the vehicle's interior rear-view mirror. At the same time, Magna is also
providing significant additional investment in the Company through a
Convertible Note.

 

Highlights:

-     Seeing Machines and Magna will exclusively co-market driver and
occupant monitoring systems targeting the interior rear-view mirror

-     In return, Magna has agreed to invest US$65m into Seeing Machines
via an exclusivity arrangement payment of US$17.5m and up to $47.5m through a
Convertible Note maturing in October 2026 and having a conversion rate per
ordinary share of 11 British pence

 

Paul McGlone, CEO of Seeing Machines commented: "We are extremely pleased to
see Magna's investment as we work closely together to win market share
targeting the interior rear-view mirror and grow our mutual businesses. Seeing
Machines is now funded to deliver on our current business plan and we look
forward to focusing on achieving significant growth across each of our target
transport sectors."

 

Under the terms of the Agreement, subject to certain exceptions, Seeing
Machines and Magna will exclusively co-market driver and occupant monitoring,
solely where the Company's IP is fully integrated inside the rear-view mirror,
until the end of June 2025. In return for Seeing Machines granting exclusivity
to Magna for the mirror, Magna will make an upfront payment to Seeing Machines
of US$10m, with an additional US$7.5m payable over the following 2 years.

 

At the same time, Magna has also agreed to invest up to an additional US$47.5m
into Seeing Machines via a non-transferable 4-year convertible note maturing
in October 2026 (the "Convertible Note"). The Convertible Note, which can be
drawn down in two tranches across the 4-year term, subject to the satisfaction
of certain closing conditions, is convertible into ordinary shares at a price
of 11 British pence per share. The first tranche, being US$30m, will be drawn
at closing with the remainder available until December 2024.  The Convertible
Note has an all-in yield of 8%, inclusive of fees.

 

Magna may elect to convert the principal and at Seeing Machines' election,
interest outstanding under the Convertible Note at any time during its term,
up to a maximum of 349,650,350 shares which, when added to Magna's existing
shareholding in the Company, will represent approximately 9.9% of the fully
diluted share capital of the Company. The Convertible Note contains standard
covenants, and anti-dilution provisions. The interest due at the end of the
facility can be paid in cash or converted into equity at Seeing Machines'
election.

 

"As driver monitor systems start to become more standard safety technology, we
see a lot of potential to lead the change with our integrated driver and
occupant solution, an industry-first when it hits the market," said Sharath
Reddy, Senior Vice President Magna Electronics.  "Our solution addresses
growing automaker challenges associated with managing vehicle electronics
integration and cost, with the need for seamless camera packaging across a
diverse line of vehicle models.  It also opens up new possibilities for the
integration of other ADAS vehicle technologies."

 

As previously announced, Seeing Machines has worked with Magna to help deliver
integrated mirror technology to the market.

 

The rear-view mirror offers an effective cabin camera position and field of
view for both driver and occupant monitoring for many passenger vehicles,
enabling OEMs to meet the Euro NCAP and regulatory standards associated with
driver distraction and impairment. The mirror is also suitable to support
expanded interior occupant view which will enable a range of safety and
convenience features inside the cabin.

 

Given over 60% of Seeing Machines revenues are in US Dollars there is a large
degree of natural hedge in place and Seeing Machines will begin reporting in
US$ from the start of the current financial year.

 

The person responsible for this announcement is Paul McGlone, CEO.

 

Enquiries:

 Seeing Machines Limited                            +61 2 6103 4700
 Paul McGlone - CEO

 Sophie Nicoll - Corporate Communications

 Stifel Nicolaus Europe Limited (Nomad and Broker)  +44 20 7710 7600
 Alex Price

 Nick Adams

 Ben Burnett

 Lionsgate Communications (Media Enquiries)         +44 07791 892509

 Jonathan Charles

 

 

Seeing Machines (LSE: SEE), a global company founded in 2000 and headquartered
in Australia, is an industry leader in vision-based monitoring technology that
enable machines to see, understand and assist people. Seeing Machines'
technology portfolio of AI algorithms, embedded processing and optics, power
products that need to deliver reliable real-time understanding of vehicle
operators. The technology spans the critical measurement of where a driver is
looking, through to classification of their cognitive state as it applies to
accident risk. Reliable "driver state" measurement is the end-goal of Driver
Monitoring Systems (DMS) technology. Seeing Machines develops DMS technology
to drive safety for Automotive, Commercial Fleet, Off-road and Aviation. The
company has offices in Australia, USA, Europe and Asia, and supplies
technology solutions and services to industry leaders in each market vertical.

 

www.seeingmachines.com (http://www.seeingmachines.com)

 

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