Convertible Loan Finalised
16/09/2022 07:00
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RNS Number : 6562Z Ncondezi Energy Limited 16 September 2022
News Release
Convertible Loan Finalised
16 September 2022: Ncondezi Energy Limited ("Ncondezi" or the "Company")
(AIM:NCCL) is pleased to announce:
· Restructuring of Seritza Limited ("Seritza") working capital
facility term loan ("Loan") to a convertible loan note ("Convertible Loan")
("Restructuring") finalised, subject to shareholder approval of the rights to
issue shares under the Convertible Loan
· Convertible Loan to be increased by an additional £100,000 to be
made available by certain Directors of the Company, to accelerate development
of the Solar Project ("First Tranche")
· An additional tranche of £150k may be made available to the
Company at the Convertible Loan lender's discretion in the six months
following the restructuring ("Second Tranche")
· Certain Directors have entered into a binding Undertaking (the
"Undertaking") preventing the Shareholder Loan being called before the later
of 30 November 2023 ("Undertaking Period")
Ncondezi Chief Executive Officer, Hanno Pengilly said: "The terms of the
Convertible Loan provide the Company with an attractive short term financing
solution, protecting existing working capital and against the dilution of an
equity fundraise in the current market. The additional investment from our
Chairman, Michael Haworth and NED, Scott Fletcher provides additional working
capital for the Company to deliver first results on the 300MW Solar PV Project
feasibility study and again demonstrates the Boards confidence and belief in
the long term value creation inherent in the Company's projects.
In addition, the Undertaking which includes Michael Haworth and myself,
prevents the Shareholder Loan being called before the later of 30 November
2023 or when the Shareholder Loan restructuring is completed, aligning all the
Company's debts to 30 November 2023, so the Company can focus on delivering
key project development milestones in the interim.
We continue to await clarity on whether financing will be possible from China
for the Ncondezi Coal Power Project. With no firm timeline for when this will
be received, the Board is reviewing the optimal strategy going forwards to
ensure the Company's funds are spent in the most productive way to unlock
value for all stakeholders.
In the meantime we are pleased to report that work on the Solar Feasibility
Study is progressing well and we expect the first results later this month. We
look forward to providing further updates then.
Following the Restructuring and the additional funds made available via the
increased Convertible Loan, the Company is funded into October 2022, taking
into account the additional spend for the Solar PV Project feasibility study.
The Second Tranche funding provides the Company with funding optionality to
extend working capital into November and complete the Solar PV Project
feasibility study and supporting development work costs, including
transmission integration, environmental and social required to accelerate the
development programme."
Convertible Loan Key Terms
· £373,447k Convertible Loan note, made up of:
o Restructured £273,447k Seritza working capital facility
o Additional £100k provided by Company Chairman Michael Haworth and NED
Scott Fletcher (split £20k and £80k respectively)
· Interest rate of 12%
· Maturity on 30 November 2023
· Right for each of the lenders to convert the principal amount
into Ncondezi Ordinary Shares ("Shares") at the higher of:
o the amount calculated by applying a 25% discount to the Volume Weighted
Average Price ("VWAP") on the thirty days immediately preceding the date of
the conversion notice;
o the amount calculated by applying a 25% discount to the placing price if a
placing of Shares has been concluded within 30 days prior to the date of the
conversion notice; and
o £0.005 per ordinary share
· Right to convert any new interest portion of the Convertible Loan
into Shares at the higher of:
o the amount calculated by applying a 30% premium to the VWAP on the thirty
days immediately preceding the date of the conversion notice;
o the amount calculated by applying a 30% premium to the placing price if a
placing of Shares has been concluded within 30 days prior to the date of the
conversion notice; and
o £0.005 per ordinary share.
· The Company can prepay all of the loan at any time at its
discretion, without penalty on 20 business days' notice.
· On receipt of a notice to convert, Ncondezi will have 15 business
days to exercise a right to exclude up to 50% of the amount to be converted on
condition that it is immediately redeemed in cash
· On receipt of a notice of early redemption of the Convertible
Loan by Ncondezi, the lenders will have 15 business days to execute its right
to convert up to 50% of the redeemable amount into equity on terms outlined
above
· Converted Shares will be subject to orderly market provisions for
12 months after the conversion date
· Conversions of any outstanding amounts are subject to the Company
receiving the necessary approvals to issue shares upon conversion free of
pre-emption rights at a General Meeting to be convened shortly
· An additional tranche of £150k may be made available to the
Company at the Convertible Loan lender's discretion in the six months
following the restructuring on the same terms as above
Shareholder Loan Undertaking
Company Chairman, Michael Haworth, and Company Chief Executive Officer, Hanno
Pengilly, have entered into the Undertaking, representing 35.2% of the
outstanding principal amount of the Shareholder Loan. The Undertaking prevents
the Shareholder Loan from being called as a majority agreement representing
66.67% of Loan holders is required.
The parties to the Undertaking have also indicated that during the Undertaking
Period they will not transfer their loan or convert it into shares without the
consent of the other signatories to the Undertaking or at all if it would
cause them to hold less than 34% of the then outstanding principal.
The Loan matured on 30 November 2019 and has been undergoing a restructuring
negotiation with loan holders. Whilst Ncondezi received "in principle" support
from all Shareholder Loan lenders for a restructuring in May 2020 this has not
yet been implemented.
Related Party Transaction
The Restructuring and the participation of certain Directors of the Company in
the Convertible Loan constitute related party transactions for the purposes of
AIM Rule 13 for Companies. Accordingly, Aman Sachdeva, a Non-Executive
Director and the only director considered to be independent for the purposes
of the related party transactions, considers, having consulted with Liberum
Capital Limited, the Company's Nominated Adviser, both the terms of the
Restructuring and the participation of the Directors in the Convertible Loan
to be fair and reasonable insofar as the Company's shareholders are concerned.
Enquiries
For further information please visit www.ncondezienergy.com or contact:
Ncondezi Energy Hanno Pengilly +27 (0) 71 362 3566
Scott Mathieson, Edward Thomas, Kane Collings +44 (0) 20 3100 2000
Liberum Capital Limited
NOMAD & Joint Broker
Novum Securities Limited Colin Rowbury +44 (0) 20 7399 9427
Joint Broker
Elizabeth Johnson +44 (0) 777 56 55 927
Pimlico Advisory Ltd
Investor Relations
This announcement contains inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014 which is part of UK law by virtue of
the European Union (Withdrawal) Act 2018. Upon publication of this
Announcement and such information is now considered to be in the public
domain. The person who arranged for the release of this announcement on behalf
of the Company was Hanno Pengilly, CEO.
About Ncondezi Energy
Ncondezi is an African power development company focused on the development of
renewable and baseload energy solutions at its concession located in the Tete
Province, northern Mozambique.
The Company is focused on providing reliable and affordable energy to
Mozambique to meet growing energy demands. Our projects support Mozambique's
energy strategy of universal electricity access by 2030. According to the
World Bank, only 30% of the Mozambican population had access to energy in
2017. Our projects would provide reliable and available power helping to close
the infrastructure gap of the region and serving as a catalyst for economic
development.
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