REG - Tirupati Graphite - Placing, CLN issue and Corporate Update

Tirupati GraphiteAnnouncement

Wed 07:00

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RNS Number : 9158K  Tirupati Graphite PLC  10 December 2025

10 December 2025

Tirupati Graphite plc

('Tirupati' or the 'Company' or 'Group')

 Placing, CLN issue and Corporate Update

 

Tirupati Graphite plc (TGR.L), the specialist flake graphite company and
supplier of the critical mineral for the global energy transition, is pleased
to announce that it has received commitments for £3.1 million for a new round
of financing, including convertible loan notes and a conditional placing of
new shares, as part of a package of re-financing measures initiated by the
Board. This also includes a planned re-structuring of existing loan notes and
the convening of a general meeting of shareholders ("GM") to vote on related
shareholder resolutions. Updates on operations, Board and management positions
and financial matters, are also included below.

 

The Board considers that in the light of the operational issues experienced in
2025, the further upgrades and improvements required to achieve sustainable
production cash flows, and its present difficult liquidity position, the
proposed package of measures will best protect shareholder value and the
interests of all the Group's stakeholders.

 

Updates

 

On 14 August 2025, the Company announced that a further programme of remedial
measures would be needed to complete the operational turnaround launched under
new leadership in January 2025 and to achieve production at capacity levels.
Subsequently, the Company announced that operations at Vatomina had been
temporarily suspended from mid-September and production has remained suspended
to date, pending receipt and installation of equipment for the upgrades and
the repairs to the mining fleet and processing machinery designed to support
production at capacity levels. The previously noted shipments of certain parts
of that ordered equipment have  arrived at site.

 

On 6 October 2025, the Company announced it had received subscriptions for
£300,000 of convertible loan notes on the same terms as the £4.5m
convertible loan notes issued earlier in the year (together the "Existing 2025
CLNs"). This was intended to provide short term funding while more substantive
financing requirements and options were further explored. The Company received
£261,000 from that fundraise with discussions ongoing in respect of the non
payment to date by one investor of its subscription.

 

The Board concluded that the Group now needed additional resources to complete
the turnaround strategy and restart production, while also settling existing
creditors including the significant remaining balances dating from 2024
inherited from the prior leadership.

The Board has also identified additional capex and one-off operating cost
requirements to achieve a reliable production output. These reflect the
under-investment in the assets in prior periods and poor maintenance, as well
as processing upgrades to be able to process the mined graphite ore to the
required quality for sale.

 

In light of these requirements, the Board has initiated the following
measures:

 

I.     Fund Raise: a new fund raise of £2.5 to 3.5 million (the "Fund
Raise")  including the issue of new ordinary shares ("Ordinary Shares") by
way of a conditional placing (the "Placing") and the issue of new convertible
loan notes ("New 2025 CLNs") to meet existing requirements and, to provide a
more substantial margin for working capital and any future divergence from
forecasts. Commitments for the Fund Raise received to date comprise a total of
£ 3.1 million. The £3.1 million total commitments includes £2.40 million
for the Placing and £0.74 million to be received on an accelerated basis for
the New 2025 CLN (see (ii) below). Additional commitments to the Placing will
be targeted before closing.

Principal terms for the Placing are:

a.    Share issue price of 1.5 pence per Ordinary Share;

b.    Closing of the Placing is conditional on:

·    a minimum subscription amount for the Fund Raise of £2.5 million
being achieved, which has therefore been satisfied;

·    approval at a GM of the relevant shareholder resolutions (explained
below);

·    the proposed amendments, as described below, to the 2019 and the
Existing 2025 CLNs being agreed by the requisite majority of those
noteholders; and

·    the new shares to be allotted and issued pursuant to the Placing
("Placing Shares") being admitted to listing and trading,

(together, the "Closing Conditions").

c.     Warrants being issued to subscribers under the Placing, carrying
the right to subscribe for additional Ordinary Shares, on a one-for-two basis,
at an exercise price of 3.75p per share and with a duration of 24 months from
issue (the "Warrants").

 

Warrants: The Warrants will be created pursuant to a warrant instrument to be
entered into by the Company prior to admission of the Placing Shares to the
Official List and to trading on the Main Market of the London Stock Exchange
plc ("Admission"), and will be granted to placees on Admission.  Save as set
out below the Warrants will be exercisable at any time during the period of 24
months from the date of grant at a subscription price of 3.75 pence for each
share subscribed for on exercise of a Warrant ("Warrant Share").  Exercise of
the Warrants shall be conditional on the Company having sufficient shareholder
authorities to issue and allot the Warrant Shares on a non pre-emptive basis
which shall be proposed at a separate general meeting to be convened no later
than 31 March 2026.  Investors should be aware that neither the directors nor
the Company can guarantee that such resolutions will be passed by the
shareholders.

Use of Proceeds: The net proceeds of the Fund Raise are expected to be used
for capital expenditures and improvements at the Vatomina mine (approximately
£0.5 million), initial operating expenses and working capital as production
resumes (approximately £0.6 million), as well as general corporate purposes
including expenses of the prospectus preparation, payments to creditors and
corporate costs.

The Placing is proposed to be implemented by way of a cashbox structure
involving a subscription for non‐cash consideration, further details of
which are set out below. This structure is being used so as to enable the
Placing to complete as quickly as possible. Optiva Securities and Albr Capital
are acting as placing agents for the Placing.

 

II.    New 2025 CLNs: In order to permit an earlier restart of production
ahead of closing of the conditional Placing, investors who have subscribed
£0.74 million to the Fund Raise by way of a the New 2025 CLNs without the
Closing Conditions applying, will benefit from enhanced terms as to Warrant
eligibility (one Warrant-for-one conversion share) and a coupon until
conversion. The New 2025 CLNs will also be convertible into Ordinary Shares at
a share price of 1.5 pence per share, as soon as the Closing Conditions for
the Placing have been met, and will have a final maturity date, if not
previously converted, of 31 March 2026. The terms of the New 2025 CLNs would
permit the allotment of Ordinary Shares arising on conversion via a cashbox
structure for the same reasons as noted above.

 

III.   Amendments to the Existing 2025 CLNs:  Under the terms of the
Existing 2025 CLNs, the conversion price will be adjusted on the grant of the
New 2025 CLN as that new issue will constitute an adjustment event under the
terms of the Existing 2025 CLNs. The adjusted conversion price will also be
1.5 pence per Ordinary Share. A resolution to amend the terms of the Existing
2025 CLNs is being sent to noteholders shortly, acceptance of which is a
condition of the Placing closing and is therefore vital to the success of the
re-structuring package. Proposed amendments comprise:

 

a.    Adjustment of the number of warrants that would otherwise be issued
on conversion as a result of the adjustment event triggered, which will remain
the same as under the existing terms, but will now represent 2 warrants for
every 5 Ordinary Shares arising on conversion given the conversion price will
have been adjusted;

b.    Retention of a 3.75p per Ordinary Share exercise price for those
warrants (i.e. no re pricing at the adjusted conversion price) and extension
of the duration of the warrants to be issued to 24 months from issue, from 18
months;

c.     Extension of the final maturity date from 31 December 2025 to 31
March 2026;

d.    Certain other amendments to permit the allotment of Ordinary Shares
arising on conversion via a cashbox structure for the same reasons as noted
above.

Further details of the above will be provided in a separate communication to
holders of the Existing 2025 CLNs.

 

IV.  Amendments to the 2019 CLNs: A resolution to amend the terms of the
existing 2019 CLNs("2019 CLNs") is being sent shortly to noteholders. Proposed
amendments comprise:

 

a.    Adjustment of the conversion price from 3.75 pence to 2.5 pence per
Ordinary Share;

b.    Extension of the final maturity date from 31 December 2025 to 31
March 2026;

c.     Certain amendments to permit the allotment of Ordinary Shares
arising on conversion via a cashbox structure for the same reasons as noted
above.

Further details of the above will be provided in a separate communication to
holders of the 2019 CLNs.

V.    Amendments to the 2022 CLNs: A resolution to amend the terms of the
existing 2022 CLNs ("2022 CLNs") is being sent shortly to noteholders.
Proposed amendments comprise:

 

a.    Adjustment of the conversion price from 7.5 pence to 3.75 pence per
Ordinary Share;

b.    Extension of the final maturity date from 26 July 2026 to 31 March
2027.

Further details of the above will be provided in a separate communication to
holders of the 2022 CLNs. Amendments to this 2022 CLN are not a condition to
the Placing but if not passed would potentially require a re -financing of the
CLN in mid 2026.

VI.  Subdivision: As the proposed issue price pursuant to the Placing is less
than the current nominal value of an Ordinary Share of 2.5 pence, it will be
necessary, in order for the Placing to proceed, to reduce the nominal value of
the Ordinary Shares by way of a subdivision of the issued share capital such
that each Ordinary Share is subdivided into one Ordinary Share of 1 pence and
one deferred share of 1.5 pence (the "Subdivision").  The deferred shares
would have no significant rights attached to them and carry no right to vote
or participate in a distribution of surplus assets and will not be admitted to
listing or trading        .

 

VII. GM: a GM will be convened for 6(th) January 2026 with details to be
provided in a circular to shareholders expected to be sent shortly. The
meeting will propose ordinary resolutions to approve (i) the Subdivision and
(ii) the grant of the necessary authority to issue and allot (a) the Placing
Shares; (b) any new Ordinary Shares which will result from the conversion of
the New 2025 CLNs and the amendments to the other CLNs referred to above; and
(iii) any new Ordinary Shares required to be issued on the exercise of the
Warrants. The Circular including the notice of the GM will include further
details of the proposals set out in this Announcement.

Cashbox Structure

The Placing will be effected by way of a cashbox placing of new Ordinary
Shares for non‐cash consideration. Optiva will, pursuant to a subscription
and transfer agreement ("Agreement"), subscribe for redeemable preference
shares in TGF Limited a Guernsey incorporated subsidiary of the Company
("NewCo") in an amount equal to the net proceeds of the Placing. The Company
will allot and issue the new Ordinary Shares on a non‐pre‐emptive basis to
placees in consideration for the transfer, pursuant to the Agreement, of the
redeemable preference shares in NewCo that will be issued to Optiva. No
Shareholder approval is therefore required to effect the Placing on a non
pre-emptive basis.

Instead of receiving cash as consideration for the issue of new Ordinary
Shares, following completion of the Placing, the Company will own the entire
issued share capital of NewCo, whose only asset will be its cash reserves,
which will represent an amount approximately equal to the net proceeds of the
Placing. The Company will then be able to access those funds by redeeming the
redeemable preference shares it holds in NewCo.

Accordingly, by subscribing for new Ordinary Shares under the Placing and
submitting a valid payment in respect thereof, each placee would instruct
Optiva to hold such payment on their behalf and: (i) to the extent of a
successful application under the Placing, to apply such payment solely to
permit Optiva to subscribe (as principal) for redeemable preference shares in
NewCo; and (ii) to the extent of an unsuccessful application under the
Placing, to return the relevant payment without interest to the applicant.

 

A similar structure is intended to be used for the conversion of the Existing
2025 CLNs, the New 2025 CLNs and the 2019 CLNs, but with the subscription and
transfer agreement being entered into directly between the relevant noteholder
and NewCo.

 

Summary

 

Subject to securing the shareholder and noteholder approvals described above,
the Company expects to:

 

a)    be able to file its delayed annual report and accounts for the year
ended 31 March 2025 in January 2026, together with delayed half year financial
statements to 30 September 2025, allowing it to apply for the suspension of
trading in its shares to be lifted shortly thereafter; and

b)    receive approval for the Prospectus required for the issue of
Ordinary Shares pursuant to the Placing and in respect of the conversion of
the New 2025 CLNs, the Existing 2025 CLNs and the 2019 CLNs. The Company
expects to issue a conversion notice under the terms of each of those CLNs as
soon as the Prospectus is approved and necessary resolutions have been passed
at the GM.

 

 

Management and Board

 

On successful conclusion of the new financing, the Company intends to recruit
a permanent CEO and a CFO for the Group who will oversee and expand the
existing operations while executing a growth agenda going forward. Mr Arun
Somani remains as Interim CEO for the time being and will drive the turnaround
programme. Further enhancements to the Executive and Board composition will be
assessed as the Company makes progress with strategic initiatives during
2026.

 

An investor presentation in connection with these measures has been posted on
the Company's website at https://tirupatigraphite.co.uk

 

Outlook

 

On successful completion of the above measures, the Group intends to restart
production, complete various repairs and upgrades at its Vatomina mine and to
build production levels through the first half of 2026.  The Group sees
growing graphite demand and planned measures to improve production will also
support the potential for significant new offtake arrangements.  In parallel,
the Group intends, as the local security situation permits, to progress
towards development of the two projects in Mozambique during the coming year,
as well as evaluate downstream integration opportunities which are currently
under investigation.

 

 

Arun Somani, Interim Chief Executive Officer of Tirupati Graphite Plc
commented:

"This fundraising and the re-structuring resolutions are crucial to complete
the turnaround at Vatomina, started earlier this year and move the Company
forward beyond its legacy issues. We are delighted to receive the support of
new and existing investors through the commitments  already received.  The
funding will be used to complete remaining workstreams identified by the team
and support a production ramp-up to capacity levels. Having spent some time at
the site, I am impressed by the local team and am confident that there is now
a full understanding of the steps needed to reach sustainable production and
financial results at Vatomina."

 

 

 

 

ENDS

For further information, please
visit https://www.tirupatigraphite.co.uk/ or contact:

 Tirupati Graphite Plc                                  info@tirupati.co.uk

 Mark Rollins - Executive Chairman                      ir@tirupati.co.uk

 Alastair Bath - Investor Relations                     +44 7356 057 265

 Placing agents:

 Optiva Securities - Vishal Balasingham / Bartu Cifti   corporatebroking@optivasecurities.com

                                                        +44 20 3137 1904

 AlbR Capital Limited - David Coffman / Dan Harris      44 (0)207 7469 0930

 Colin Rowbury

About Tirupati Graphite Plc

 

Tirupati Graphite is a specialist graphite producer and a supplier of the
critical mineral for a decarbonised economy and the energy transition, with
leading low development capital and operating costs. The Company places a
special emphasis on green applications including renewable energy, e-mobility,
energy storage and thermal management, and is committed to ensuring its
operations are sustainable.

 

The Group's operations include primary mining and processing in Madagascar
where the Group operates two key projects, Sahamamy and Vatomina, with a
potential combined final nameplate production capacity of 36,000tpa, subject
to permits and ongoing work at Vatomina, and redevelopment of Sahamamy,
currently on care and maintenance. The Madagascar operations produce
high-quality flake graphite concentrate with up to 97% purity and selling to
customers globally.

 

The Group also holds two world class, natural graphite projects in Mozambique
including the Montepuez graphite project, which is permitted for 100,000tpa
production and where substantial construction work has already been
undertaken, although the projects remain under force majeure at the present
time.

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