REG - Tern PLC - Update regarding capital commitment to SVV2

TernAnnouncement

28/11/2025 07:00

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RNS Number : 3597J  Tern PLC  28 November 2025

28 November 2025

 

Tern Plc

 

("Tern" or the "Company")

 

Update regarding capital commitment to SVV2

 

Tern Plc ("Tern" or the "Company"), the AIM‑quoted investment company,
provides the following update regarding its capital commitment to Sure Valley
Ventures Enterprise Capital Fund LP ("SVV2").  As announced on 2 March 2022,
Tern committed to invest up to £5 million in SVV2 over the fund's 10-year
life and is required to provide capital to SVV2 from time to time, often at
short notice. As at 30 June 2025, the unaudited fair value of Tern's
shareholding in SVV2 was approximately £0.8 million. To date, Tern has
invested approximately £1.3 million into SVV2.

 

At the Company's AGM held on 30 June 2025 the resolution to give the Directors
the authority to disapply pre‑emption rights when allotting shares for cash
was not approved.  Subsequently, the open offer to Tern shareholders in
October 2025 to raise up to £642,486 only delivered gross proceeds of
£151,136.  The limited funds raised through the last open offer and the
inability of the Company to raise funds via the issue of new shares on a non
pre-emptive basis, has led the Directors to conclude that the Company has
insufficient funds, or potential access to future funding in the short to
medium-term, for the Company to meet SVV2's capital calls.

 

The Board respects shareholder views, and after exhausting what it considers
to be all reasonable mitigation measures, including salary reductions, open
offer fundraising, shareholder engagement, and collaborative effort with SVV2
to identify a replacement investor, Tern has requested relief from its funding
obligations to SVV2. The General Partner of SVV2 has confirmed that, under the
terms of the SVV2 Limited Partnership Agreement ("LPA"), this will result in
Tern being classified as a 'defaulting investor'. Remedies available under the
LPA include forfeiture of existing capital or compulsory transfer of Tern's
interest. In the event that Tern's existing paid‑in capital is not required
to be forfeited, and no other SVV2 Limited Partner elects to assume Tern's
commitment, Tern's paid‑in capital will remain invested within SVV2 until
the cessation of the fund, at which point any residual value will be returned
in accordance with the LPA, although defaulting investor status may reduce
Tern's rights to distributions during the life of the fund and could limit
Tern's recovery compared to non-defaulting investors.  Tern will make further
updates in relation to the position with SVV2 as appropriate.

 

An announcement by Tern on 15 October 2025 noted that, following the receipt
of the net proceeds from the result of the open offer announced on that date,
in the absence of Tern raising further funds or disposing of investments, and
on the basis that Tern does not make any investments in its portfolio
(including funding its investment in SVV2), the Directors believe that the
Company would maintain a cash runway which is expected to extend into the
first half of Q1 2026.  The Directors continue to believe this cash runway
remains unchanged.

 

Tern intends to continue to act as a constructive partner in respect of SVV2
investments already funded and will maintain its focus on protecting
shareholder interests and long‑term value creation from its key portfolio
companies, Device Authority, FundamentalVR and Talking Medicines.

 

Enquiries

 

 Tern Plc                                           via IFC Advisory

 Jane McCracken (Interim Non-Executive Chair)

 Allenby Capital Limited                            Tel: 0203 328 5656

 (Nominated Adviser and Broker)

 Alex Brearley / Ashur Joseph (Corporate Finance)

 Kelly Gardiner (Sales and Corporate Broking)

 IFC Advisory                                       Tel: 0203 934 6630

 (Financial PR and IR)

 Tim Metcalfe

 Graham Herring

 Florence Staton

 

 

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