REG - Solgenics Limited - Directors Loan

SolgenicsAnnouncement

25/05/2023 13:45

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RNS Number : 6915A  Solgenics Limited  25 May 2023

News Release

 

Directors Loan

 

25 May 2023: Solgenics Limited (the "Company") an African renewables
development company focused on a 300MW solar PV plus Battery Energy Storage
System ("BESS") renewable energy project in Tete Province, Mozambique (the
"Tete Solar Project" or the "Project") today announces that, further to the
Company's announcement of 3 May 2023, it has entered into a up to $230,000
working capital loan with a Director and a Director controlled company (the
"Loan") to cover delisting costs and to fund the Company's working capital
requirements  up to the end of Q2 2023.

Solgenics Chief Executive Officer, Hanno Pengilly said: "The Company has an
urgent need for funding and finalisation of the up to US$230,000 loan ensures
the Company is adequately capitalised until the end of Q2 2023, which could
include progressing its Bankable Feasibility Study ("BFS") development funding
strategy as well as completion of the planned delisting. The fact that the
Loan is being provided on an unsecured basis by two directors of the Company
who own 34.44% of the Company's issued share capital in aggregate emphasises
the continued support from the Company's Board to capitalise the Company in a
non dilutive manner whilst the Project development and other funding solutions
are progressed before the end of Q2 2023. We believe the terms of the Loan to
be fair given no other viable funding solutions are available to the Company
in the required timeframe and that those funding solutions that were evaluated
were on more disadvantageous terms. The Loan is unsecured and ranks behind the
existing shareholder loans which are still being restructured."

Background

Solgenics has been running a development funding process to raise capital to
fund both the Project BFS and cover working capital costs during the BFS
programme. To date, the Company has received multiple expressions of interest
from potential funders including Development Funding Institutions ("DFI's")
and Independent Power Producers ("IPP's"), and it is the Company's intention
to finalise a preferred development funding partner before the end of June
2023.

In addition, on 3 May 2023, the Company announced its intention to delist the
Company by 7 June 2023 in order to, amongst other things, materially reduce
the Company's overhead and working capital requirements.

The Loan is intended to cover working capital costs to progress the BFS and
long-term working capital funding solutions and cover delisting costs.

Loan key terms

Agreement has been reached with Non-Executive Chairman, Michael Haworth, and
Lowry Trading Limited ("Lowry"), a UK company controlled by Non-Executive
Director, Scott Fletcher, (together, the "Lenders") to provide the Loan to
cover delisting costs and working capital up to the end of Q2 2023.

The Loan key terms are as follows:

·      Up to US$230,000 loan facility

o  US$150,000 from Lowry

o  US$80,000 from Michael Haworth

·      Coupon: 30%

·      Maturity: 30 July 2023

o  Right to extend maturity to 30 September 2023 subject to the Company
agreeing with the Lenders that genuine third-party offers have been received
for further Project development funding to fund Project development costs
and/or cover working capital.

·      Event of Default: coupon increases to 100%

·      Security: Unsecured

·      Availability: Drawdowns require consent prior to the extension of
the existing shareholder Loan.

No other viable funding solutions are available to the Company in the required
timeframe and those funding solutions that were evaluated were on more
disadvantageous terms. The Loan is unsecured and ranks behind the existing
shareholder loans which are still being restructured.

Related Party Transactions

The participations of Michael Haworth, being a Director of the Company, and
Lowry, being a company controlled by Scott Fletcher, a Director and a
Substantial Shareholder of the Company, in the Loan constitute related party
transactions for the purposes of the AIM Rules for Companies. Accordingly,
Hanno Pengilly and Aman Sachdeva, Chief Executive Officer and Non-Executive
Director respectively, acting in their capacities as independent directors for
the purposes of the related party transactions, consider, having consulted
with Liberum Capital Limited, the Company's Nominated Adviser, the terms of
the Loan and the participation of Michael Haworth and Lowry in the Loan to be
fair and reasonable insofar as the Company's shareholders are concerned.

Enquiries

For further information please visit www.solgenics.com
(http://www.solgenics.com) or contact:

 Solgenics:                 Hanno Pengilly                                 +27 (0) 71 362 3566
 Liberum Capital Limited:   Scott Mathieson, Edward Thomas, Kane Collings  +44 (0) 20 3100 2000

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 Solgenics

Solgenics is an African renewable energy development company focused on the
development of a 300MW solar PV plus BESS renewable energy plant in the Tete
Province in northern Mozambique (the "Tete Solar Project").

It is the intention that the Tete Solar Project will connect to the Mozambique
grid with target power offtakers in Mozambique and the Southern African Power
Pool ("SAPP").

The Tete Solar Project takes full advantage of Mozambique's leading
sustainable energy resources and is fully aligned with Government's objective
to become a champion for energy transition impacting all Southern Africa.

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