REG - Solgenics Limited - Proposed Delisting and General Meeting

SolgenicsAnnouncement

03/05/2023 07:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20230503:nRSC1908Ya&default-theme=true

RNS Number : 1908Y  Solgenics Limited  03 May 2023

 

 

 

News Release

 

Proposed Delisting and General Meeting

 

 

3 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 it will shortly be
posting a circular to shareholders (the "Circular") in connection with a
proposal for the cancellation of admission of the ordinary shares of no par
value in the Company (the "Ordinary Shares") to trading on AIM (the
"Cancellation"), pursuant to Rule 41 of the AIM Rules for Companies (the "AIM
Rules").

The Circular will include a notice of a general meeting of the Company which
will be convened at the offices of Simmons & Simmons, Citypoint, 1
Ropemaker Street, London, EC2Y 9SS, UK (the "General Meeting"), for the
purposes of considering and, if thought fit, passing the requisite shareholder
resolution to approve the Cancellation and certain matters ancillary to the
Cancellation.

Further information on the proposed Cancellation and the General Meeting is
set out below.

Solgenics Chief Executive Officer, Hanno Pengilly said: "The Company remains
committed to progressing the Tete Solar Project and the decision to delist
comes after careful Board consideration and evaluation of the advantages and
disadvantages of remaining a publicly traded company in the interests of both
the Company and shareholders.

The Company's recent delivery of a positive Project Feasibility Study and
approved transmission integration solution, amongst other developments, have
put it in a good position to deliver the Project and generate value for
shareholders. This is reflected by the receipt in April 2023 of multiple
expressions of interest from financial investors and Independent Power
Producers in funding the Project's Bankable Feasibility Study ("BFS") work
streams.

The delisting is expected to free up management time and resources to more
fully focus on the Project and allow a more competitive approach with
potential offtakers by limiting available public information to its
competitors. All whilst operating under materially lower overheads.

The Company is prioritising a strategy to formalise offtake for the first
phase 100MW solar PV plant before the end of Q2 2023 and "in principle" terms
for a working capital loan have been agreed from certain Directors to cover
the delisting and working capital costs during this period. Progression on the
offtake is expected to unlock more attractive funding terms for ongoing
working capital and the BFS, and the Company does not believe that a continued
listing on AIM will provide significantly more cost effective sources of
funding.

We are committed to our shareholders and believe that delisting will provide
us with greater flexibility to pursue our long-term strategic objectives and
create value for our stakeholders."

Reasons for the proposed AIM Delisting

The Directors have conducted a review of the benefits and drawbacks to the
Company and its shareholders in retaining its quotation on AIM, and believe
that Cancellation is in the best interest of the Company and its shareholders
as a whole. In reaching this conclusion, the Directors have considered the
following key factors:

·      the continued listing on AIM is unlikely to provide the Company
with significantly wider or more cost-effective access to capital than the
funding options it already has from majority shareholders in the near to
mid-term;

·      with a market capitalisation of £3.26 million the Directors have
concluded that the most likely source of future funds will be through private
capital;

·      the considerable cost, management time and legal and regulatory
burden associated with maintaining the Company's admission to trading on AIM
are disproportionate to the benefits to the Company;

·      there are negative operational influences on the business which
come about directly as a result of being quoted, something which is
accentuated by operating in an industry where the vast majority of the
Company's peers are privately owned. The Company's peers also have far greater
insight into its strategy, operational activities and future plans than the
Company has into theirs, a factor which reduces the Company's relative
competitiveness;

·      the Company's market capitalisation and lack of liquidity in the
Ordinary Shares have impacted certain of the potential advantages to having
the shares admitted to trading on AIM.

Accordingly, the Directors believe that it is in the best interests of the
Company and its shareholders as a whole to cancel the admission of the
Company's Ordinary Shares to trading on AIM. The Board does not consider that
any potential benefits to the Company or Shareholders from retaining the AIM
Admission are sufficient to justify the associated costs.

Effect of the AIM Delisting

The Directors are aware that certain Shareholders may be unable or unwilling
to hold Ordinary Shares in the event that the Cancellation is approved and
becomes effective. Such Shareholders should consider selling their Ordinary
Shares in the market prior to the Cancellation becoming effective.

Under the AIM Rules, the Company is required to give at least 20 clear
Business Days' notice of Cancellation. Additionally, Cancellation will not
take effect until at least 5 clear Business Days have passed following the
passing of the relevant resolution at the General Meeting (the "Resolution").
Accordingly, if the Resolution to cancel the Admission is approved, the last
day of dealings in the Ordinary Shares on AIM is expected to be 6 June 2023,
and the Cancellation is expected to become effective at 7.00 a.m. on 7 June
2023. A full timetable will be confirmed in the Circular.

The principal effects of the Cancellation will be that:

·      there will be no formal market mechanism enabling Shareholders to
trade Ordinary Shares and, consequently, there can be no guarantee that a
Shareholder will be able to purchase or sell any Ordinary Shares. This
decision has been taken due to prohibitive costs, probability of low liquidity
and the advantages of not having a publicly quoted share price during future
negotiations with potential strategic investors and development funders;

·      while the Ordinary Shares will remain freely transferrable, it is
possible that the liquidity and marketability of the Ordinary Shares will, in
the future, be even more constrained than at present and the value of such
Ordinary Shares may be adversely affected as a consequence;

·      in the absence of a formal market and quote, it may be more
difficult for Shareholders to determine the market value of their investment
in the Company at any given time;

·      the regulatory and financial reporting regime applicable to
companies whose shares are admitted to trading on AIM will no longer apply;

·      Shareholders will no longer be afforded the protections given by
the AIM Rules, such as the requirement to be notified of certain material
developments or events (including substantial transactions, financing
transactions, related party transactions and certain acquisitions and
disposals) and the separate requirement to seek shareholder approval for
certain other corporate events such as reverse takeovers or fundamental
changes in the Company's business; the legal requirements applicable to
private companies relating to transparency and corporate governance are less
stringent than those applicable to public companies quoted on AIM and whilst
the Company currently follows the QCA Corporate Governance Code, following the
cancellation it will no longer be required to follow a recognised corporate
governance code.;

·      the Company will no longer be required to publicly disclose any
change in major shareholdings in the Company under the AIM Rules or the
Disclosure Guidance and Transparency Rules;

·      the Company will cease to have a nominated adviser and broker;

·      the Company's Depositary Interest Facility which is required for
a BVI company whose shares are admitted to trading to AIM to facilitate
settlement of shares through the CREST facility will also terminate in June on
or after the cancellation becoming effective. Holders of Depositary interests
will, at that time, be moved to the main share register and be issued with
share certificates.  Although the Ordinary Shares will remain transferable,
they will cease to be transferable through CREST; and

·      the Cancellation may have taxation or other commercial
consequences for Shareholders. Shareholders who are in any doubt about their
tax position should consult their own professional independent tax adviser.

The Company will remain registered with the Registrar of Companies in British
Virgin Islands in accordance with and subject to the Law, notwithstanding the
Cancellation.

The Company proposes to seek shareholder approval to amend the Articles to
remove certain provisions which were included as a consequence of its
Admission to AIM, conditional upon the Cancellation becoming effective.

The Company will continue to be bound by the Articles (which require
shareholder approval for certain matters) following the Cancellation.

The above considerations are not exhaustive and Shareholders should seek their
own independent advice when assessing the likely impact of the Cancellation on
them.

The Company currently intends that it will continue to provide certain
facilities and services to Shareholders that they currently enjoy as
shareholders of an AIM company. The Company will:

·      continue to communicate information about the Company (including
annual accounts) to its Shareholders, as required by the Law;

·      continue to hold annual general meetings; and

·      continue, for at least 12 months following the Cancellation, to
maintain its corporate website, www.solgenics (http://www.solgenics) .com and
to post updates on the website from time to time, although Shareholders should
be aware that there will be no obligation on the Company to include all of the
information required under AIM Rule 26 or to update the website as required by
the AIM Rules.

Cancellation Process

In accordance with Rule 41 of the AIM Rules, the Company's Nominated Adviser
has notified the London Stock Exchange of the proposed Cancellation.

Pursuant to AIM Rule 41, the Cancellation can only be effected by the Company
after securing a resolution of Shareholders in a general meeting passed by a
requisite majority, being not less than 75 per cent. of the votes cast by
Shareholders (in person or by proxy).

The Directors have indicated they will vote in favour of the Cancellation.

Under the AIM Rules, the Cancellation can only take place after the expiry of
a period of twenty Business Days from the date on which notice of the
Cancellation is given. In addition, a period of at least five Business Days
following the Shareholder approval of the Cancellation is required before the
Cancellation may be put into effect. Accordingly, if the Resolution to cancel
the Admission is approved, the last day of dealings in the Ordinary Shares on
AIM is expected to be 6 June 2023, and the Cancellation is expected to become
effective at 7.00 a.m. on 7 June 2023.

General Meeting

The Circular will include a copy of the notice convening the General Meeting
to be held at the offices of Simmons & Simmons, Citypoint, 1 Ropemaker
Street, London, EC2Y 9SS, UK at 10:00 a.m. on or around 26 May 2023 at which,
inter alia, the Cancellation Resolution will be proposed.

The Directors of the Company are responsible for the release of this
announcement.

Expected Timetable of Principle Events

 Notice given of the proposed Cancellation                                       3 May 2023
 Publication of the Circular and Notice of General meeting                       On or around 10 May 2023
 General Meeting                                                                 On or around 26 May 2023
 Announcement of results of General Meeting                                      On or around 26 May 2023
 Expected last day of dealings in Ordinary Shares on AIM                         6 June 2023
 Expected time and date that the Admission to trading of the Ordinary Shares on  7:00 a.m. 7 June 2023
 AIM will be cancelled

 

Directors Loan

"In Principle" agreement has been reached with Non-Executive Chairman, Michael
Haworth, and Non-Executive Director, Scott Fletcher, (together, the "Lenders")
to provide a working capital facility term loan ("Loan") up to US$230,000 to
cover delisting costs and working capital up to the end of Q2 2023.

The proposed terms of the Loan are as follows:

·      Maturity: 31 July 2023

·      Coupon: 0.3x

·      Security: none

·      In the event the Company enters into third party debt for the BFS
and/or future working capital requirements, the right to amend the terms of
the Loan such that it is on the same terms and ranks equally with the third
party debt.

·      The Loan is subject to the lenders agreeing to the documentation
and the necessary related party transaction process being completed by the
Company's Independent Directors

·      Loan documentation to be finalised and is expected to be
completed before the end of June 2023

·      A further announcement will be made once definitive documentation
to effect the Loan has been entered into if it is entered into prior to the
Cancellation.

Related Party Transaction

The proposed Directors Loan would likely constitute a related party
transaction for the purposes of AIM Rule 13 for Companies. Accordingly, if the
Loan is entered into prior to the Cancellation, the Company's Independent
Directors would need to consider that the terms of the Directors Loan are fair
and reasonable insofar as its shareholders are concerned before finalising the
loan.

There can be no certainty that the transactions contemplated by this
announcement will occur.

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 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.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  MSCBLLLBXELZBBZ