REG - Velocys PLC - Result of Placing and Retail Offer

VelocysAnnouncement

19/05/2023 12:15

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20230519:nRSS0604Aa&default-theme=true

RNS Number : 0604A  Velocys PLC  19 May 2023

Velocys plc

 

 

NOT FOR PUBLICATION, DISTRIBUTION OR RELEASE DIRECTLY OR INDIRECTLY, IN WHOLE
OR IN PART, IN OR INTO THE UNITED STATES OF AMERICA, CANADA, AUSTRALIA, NEW
ZEALAND, THE REPUBLIC OF SOUTH AFRICA OR JAPAN OR IN ANY OTHER JURISDICTION IN
WHICH OFFERS OR SALES WOULD BE PROHIBITED BY APPLICABLE LAW. THIS ANNOUNCEMENT
IS NOT AN OFFER TO SELL OR A SOLICITATION TO BUY SECURITIES IN ANY
JURISDICTION, INCLUDING THE UNITED STATES OF AMERICA, CANADA, AUSTRALIA, NEW
ZEALAND, THE REPUBLIC OF SOUTH AFRICA OR JAPAN IN WHICH SUCH OFFER OR
SOLICITATION WOULD BE UNLAWFUL OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE
SUCH OFFER OR SOLICITATION. NEITHER THIS ANNOUNCEMENT NOR ANYTHING CONTAINED
HEREIN SHALL FORM THE BASIS OF, OR BE RELIED UPON IN CONNECTION WITH, ANY
OFFER OR COMMITMENT WHATSOEVER IN ANY SUCH JURISDICTION.

 

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF
REGULATION 2014/596/EU AS IT FORMS PART OF THE LAW OF ENGLAND AND WALES BY
VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018. IN ADDITION, MARKET
SOUNDINGS WERE TAKEN IN RESPECT OF THE MATTERS CONTAINED IN THIS ANNOUNCEMENT,
WITH THE RESULT THAT CERTAIN PERSONS BECAME AWARE OF SUCH INSIDE INFORMATION.
UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW
CONSIDERED TO BE IN THE PUBLIC DOMAIN AND SUCH PERSONS SHALL THEREFORE CEASE
TO BE IN POSSESSION OF INSIDE INFORMATION.

 

 

19 May 2023

 

Velocys plc

 

("Velocys", the "Company" or the "Group")

 

Result of Placing and Retail Offer

Velocys plc (AIM: VLS), the sustainable fuels technology company, is pleased
to announce the completion of the Bookbuild and the Retail Offer, following
the announcement of the proposed Fundraise and Retail Offer made yesterday 18
May 2023. A total of 240,000,000 Placing Shares and Retail Offer Shares have
been conditionally placed at the Issue Price to raise gross proceeds of £6
million. The Issue Price of 2.5 pence per Placing Share represents a discount
of approximately 26.9 per cent. to the closing middle market price of 3.42
pence per ordinary share on 17 May 2023.

Allocation was made to existing retail Shareholders through the Retail Offer
applying the principles of soft pre-emption. Shareholders were allocated 100
per cent. of their soft pre-emptive allowance.

The Company has also announced details of an Open Offer to Eligible
Shareholders to subscribe for an aggregate of up to 77,648,390 Open Offer
Shares at the Issue Price, to raise additional gross proceeds of up to
approximately £2 million on the basis of 1 Open Offer Share for every 18
Existing Ordinary Shares held at the Record Date. Qualifying Shareholders
subscribing for their full entitlement under the Open Offer may also request
additional Open Offer Shares through the Excess Application Facility.

The Company has also announced a proposed conditional issue of convertible
loan notes. Carbon Direct Capital (a growth investment firm focused on carbon
management technologies) has conditionally agreed to subscribe for a minimum
of $15 million (approximately £12 million) Convertible Loan Notes, subject
to, inter alia, the Company raising or having received legally binding
commitments in respect of the Minimum Amount. The Convertible Loan Notes are
convertible at the Issue Price (subject to a limited number of customary
adjustments). A number of discussions are underway with additional potential
investors to raise further amounts to satisfy the Minimum Amount Condition
either through further issuances of Convertible Loan Notes and/or new Ordinary
Shares to investors other than Carbon Direct Capital.

The Placing, Retail Offer and Open Offer are conditional on, inter alia, the
Resolutions relating thereto being passed by the Shareholders at the General
Meeting to be held at 10.30 a.m. on 8 June 2023 at Magdalen Centre, Robert
Robinson Avenue, The Oxford Science Park, Oxford OX4 4GA ("GM").

The issue of Convertible Loan Notes to Carbon Direct and potential further
issuances of Convertible Loan Notes and/or new Ordinary Shares) is conditional
on, inter alia, the passing of all of the Resolutions by the Shareholders at
the GM. The Placing, the Retail Offer and the Open Offer are not conditional
on the issue of the Convertible Loan Notes or on the Minimum Amount being
raised. The Retail Offer and the Open Offer are conditional upon completion of
the Placing.  The Placing is not conditional on any other part of the
Fundraising completing. Subscription by Carbon Direct Capital for the
Convertible Loan Notes is conditional on the Company having raised or having
received legally binding commitments in respect of the Minimum Amount from the
Fundraise. Should Shareholder approval for the Resolutions relating to the
Placing, the Retail Offer and the Open Offer not be obtained at the General
Meeting, neither the Placing, the Retail Offer nor the Open Offer will
proceed. Should Shareholder approval for the Resolutions not be obtained at
the General Meeting, the proposed conditional issue of Convertible Loan Notes
to Carbon Direct Capital will not proceed. The Minimum Amount Condition has
not currently been satisfied.

Use of Proceeds

·      The net proceeds of the Placing, the Retail Offer and the Open
Offer will be used primarily for:

o  organisation costs including project delivery and business development;

o  engineering scale-up with investment in engineering resource;

o  initial commissioning of the Ohio manufacturing facility; and

o  working capital requirements to invest in achieving supply chain
resilience and to cover timeline of grant receipts.

·      In the event of the Minimum Amount being raised, the net proceeds
of the issuance of the Convertible Loan Notes to Carbon Direct Capital and the
issuance of further Convertible Loan Notes and/or Ordinary Shares to investors
other than Carbon Direct Capital will be used primarily for:

o  scaling-up of the organisation and corporate costs including increasing
labour from approximately 40 full time employees to approximately 100 full
time employees gradually over the next 12 to 18 months in line with client and
project demand in order to accelerate the capability of the Company to deliver
its technology to its clients at scale;

o  completion of capital investment in the Ohio reactor core manufacturing
facility including production start-up and catalysis upgrades;

o  funding for US Listing costs or interest payments due on the Convertible
Loan Notes in the event no US Listing occurs during the 21-month period from
issue of the Convertible Loan Notes;

o  supporting performance guarantees for the Company's proprietary
Fischer-Tropsch technology to be delivered to client projects; and

o  working capital requirements, build-up of reactor inventory at the Ohio
manufacturing facility and to manage timing of payments and grant receipts.

Henrik Wareborn, CEO of Velocys, commented:

"We are pleased with the result for the Placing and to have received the
support of our shareholders as well as a number of new investors. We are now
focussed on delivering important value inflection points for the Company and
continuing discussions with strategic investors into the Convertible Loan
Notes.

"The proposed transaction in Velocys plc which follows recent positive project
funding updates on the Altalto reference project will help consolidate our
position as the leading global provider of sustainable aviation fuel
technology and enable the supply of negative carbon intensity fuels to
airlines and others aiming towards net zero targets.

"We are fully committed on delivering the clear benefits of our patented
technology to support the decarbonisation of the aviation sector and enhance
shareholder returns."

Related Party Transaction and Director Participation

As part of the Placing, Lansdowne Partners (UK) LLP ("Lansdowne"), a
substantial shareholder of the Company and therefore a Related Party as
defined by the AIM Rules ("Related Party"), has subscribed for a total of
48,000,000 Placing Shares at the Issue Price under the Placing. Following
completion of the Placing, the Retail Offer and the Open Offer (assuming
subscription for the Open Offer Shares in full), Lansdowne will have an
aggregate interest in 303,156,632 Ordinary Shares, representing approximately
17.7 per cent. of the share capital of the Company as enlarged by the issue of
the New Ordinary Shares (Enlarged Share Capital").

Certain Directors of the Company, being Henrik Wareborn, Philip Sanderson,
Philip Holland, Ann Markey, and Thomas Quigley, all of which are deemed to be
a Related Party pursuant to the AIM Rules, have subscribed for an aggregate of
2,400,000 Placing Shares at the Issue Price. Following completion of the
Placing, the Retail Offer and the Open Offer (assuming subscription for Open
Offer Shares in full), the above Directors will hold an aggregate interest in
6,654,896 Ordinary Shares, representing approximately 0.4 per cent. of the
Enlarged Share Capital of the Company. A number of Velocys senior managers
have also subscribed for in aggregate 1,000,000 Placing Shares.

Darren Messem, being the director who is independent of the Placing, having
consulted with the Company's nominated adviser, considers that the terms of
the participation in the Placing by Lansdowne and certain of the Directors are
fair and reasonable insofar as its shareholders are concerned.

Admission and Settlement

Application will be made to the London Stock Exchange for the New Ordinary
Shares to be admitted to trading on AIM. Subject, inter alia, to the
Resolutions relating to the Placing, the Retail Offer and the Open Offer being
passed, it is expected that Admission will become effective and that dealings
in the New Ordinary Shares will commence on AIM at 8.00 a.m. on or around 9
June 2023. The New Ordinary Shares will rank pari passu in all respects with
the Existing Ordinary Shares.

Upon Admission, and assuming full take up of the Open Offer Shares, the
Enlarged Share Capital is expected to be 1,715,319,421 Ordinary Shares. On
this basis, the new Ordinary Shares will represent approximately 18.5 per
cent. of the Enlarged Share Capital. These figures do not take into account
the proposed conditional issue of the Convertible Loan Notes (and/or new
Ordinary Shares) up to the Maximum Amount.

Posting of Circular

A Circular to shareholders containing full details of the Fundraise, including
details of the Open Offer and the terms and conditions on which it is being
made (including the procedure for application and payment) and convening the
General Meeting to be held at 10.30 a.m. on 8 June 2023 at Magdalen Centre,
Robert Robinson Avenue, The Oxford Science Park, Oxford OX4 4GA, is expected
to be posted by 6.00 p.m. on 22 May 2023 and will also be available on the
Company's website around the same time (www.velocys.com
(https://url.avanan.click/v2/___http:/www.velocys.com___.YXAxZTpzaG9yZWNhcDphOm86MzcxYjVkYThlOGQwZjNiOGI3YWNjNzA4MzhjNTg5N2I6Njo3MTMxOjY4MTczNWE2ZDA2NzkxMzgwZjFiZTIwYmFhZGIyMWU1NzdhZWVmNWVlMjlkNDZhMDdkNDg2NmFiMzU0ZGUzMzk6cDpG)
).

 

 

The capitalised terms used in this announcement have the same meanings as in
the "Proposed Placing, Retail Offer and Open Offer" announcement published by
the Company at 5.40 p.m. on 18 May 2023 unless otherwise stated.

 

Enquiries:

 Velocys                                               +44 1865 800821

 Henrik Wareborn, CEO

 Philip Sanderson, CFO

 Panmure Gordon (UK) Limited (Nomad and Joint Broker)  +44 20 7886 2500

 Hugh Rich (Corporate Broking)

 Emma Earl (Corporate Finance)

 John Prior (Corporate Finance)

 Mark Rogers (Corporate Finance)

 Shore Capital Stockbrokers Limited (Joint Broker)     +44 20 7408 4090

 Henry Willcocks (Corporate Broking)

 Toby Gibbs (Corporate Advisory)

 James Thomas (Corporate Advisory)

 Angus Murphy (Corporate Advisory)

 Radnor Capital (Investor Relations)                   +44 20 3897 1830

 Joshua Cryer

 Iain Daly

 Buchanan (Financial PR)                               +44 20 7466 5000

 Helen Tarbet

 Simon Compton

 

 

Notes to Editors

 

Velocys is an AIM quoted, international sustainable fuels technology company,
providing customers with a technology solution to enable the production of
negative Carbon Intensity synthetic, drop-in fuels from a variety of waste
materials. Synthetic fuel is the only commercially available, permanent
alternative to fossil aviation fuels. The Velocys technology is IP-protected
in all major jurisdictions.

Two reference projects in the US and UK (Bayou Fuels and Altalto respectively)
are designed to accelerate the adoption and standardise the Velocys
proprietary Fischer Tropsch (FT) technology with an integrated end to end
solution, including renewable power and sequestration.

Velocys is enabling commercial scale synthetic fuel production in response to
the clean energy transition, with significant additional positive air quality
impacts.

www.velocys.com
(https://url.avanan.click/v2/___http:/www.velocys.com___.YXAxZTpzaG9yZWNhcDphOm86MzcxYjVkYThlOGQwZjNiOGI3YWNjNzA4MzhjNTg5N2I6Njo3MTMxOjY4MTczNWE2ZDA2NzkxMzgwZjFiZTIwYmFhZGIyMWU1NzdhZWVmNWVlMjlkNDZhMDdkNDg2NmFiMzU0ZGUzMzk6cDpG)

 

IMPORTANT NOTICE

 

The information contained in this announcement is for information purposes
only and does not purport to be full or complete. The information contained in
this announcement is given at the date of its publication (unless otherwise
marked) and is subject to updating, revision and amendment from time to time.
No reliance may be placed for any purpose on the information contained in this
announcement or its accuracy, fairness or completeness.

Neither this announcement, nor any copy of it, may be taken or transmitted,
published or distributed, directly or indirectly, in or into any jurisdiction
where to do so would constitute a violation of the relevant securities laws of
such jurisdiction. This aannouncement is for information purposes only and
does not constitute an offer to sell or issue, or the solicitation of an offer
to buy, acquire or subscribe for any shares in the Company in any state or
jurisdiction in which such offer or solicitation is not authorised or to any
person to whom it is unlawful to make such offer or solicitation. Any failure
to comply with these restrictions may constitute a violation of securities
laws of such jurisdictions.

This announcement is not for publication or distribution, directly or
indirectly, in or into the United States of America.  This announcement is
not an offer of securities for sale into the United States. The securities
referred to herein have not been and will not be registered under the U.S.
Securities Act of 1933, as amended, and may not be offered or sold in the
United States, except pursuant to an applicable exemption from registration.
No public offering of securities is being made in the United States.

This announcement has been issued by, and is the sole responsibility of, the
Company. No undertaking, representation, warranty or other assurance, express
or implied, is made or given by or on behalf of the Company, Panmure Gordon
(UK) Limited "("Panmure Gordon"") or Shore Capital Stockbrokers Limited
"("Shore Capital"") or any of their respective directors, officers, partners,
employees, agents or advisers or any other person as to the accuracy or
completeness of the information or opinions contained in this announcement and
no responsibility or liability is accepted by any of them for any such
information or opinions or for any errors, omissions or misstatements,
negligence or otherwise in this announcement.

Panmure Gordon is authorised and regulated in the UK by the FCA and is acting
as nominated adviser and joint broker to the Company. Panmure Gordon is not
acting for, and will not be responsible to, any person other than the Company
for providing the protections afforded to its customers or for advising any
other person on the contents of this announcement or on any transaction or
arrangement referred to in this announcement. No representation or warranty,
express or implied, is made by Panmure Gordon as to, and no liability is
accepted by Panmure Gordon in respect of, any of the contents of this
announcement. The responsibilities of Panmure Gordon as the Company's
nominated adviser under the AIM Rules for Companies "("AIM Rules"") and the
AIM Rules for Nominated Advisers are owed solely to London Stock Exchange plc
and are not owed to the Company or to any director or shareholder of the
Company or any other person, in respect of his decision to acquire shares in
the capital of the Company in reliance on any part of this announcement, or
otherwise.

Shore Capital is authorised and regulated in the UK by the FCA and is acting
as joint broker to the Company. Shore Capital is not acting for, and will not
be responsible to, any person other than the Company for providing the
protections afforded to its customers or for advising any other person on the
contents of this announcement or on any transaction or arrangement referred to
in this announcement. No representation or warranty, express or implied, is
made by Shore Capital as to, and no liability is accepted by Shore Capital in
respect of, any of the contents of this announcement.

The information in this announcement may not be forwarded or distributed to
any other person and may not be reproduced in any manner whatsoever. Any
forwarding, distribution, reproduction, or disclosure of this information in
whole or in part is unauthorised. Failure to comply with this directive may
result in a violation of applicable securities laws and regulations of other
jurisdictions.

This announcement contains (or may contain) certain forward-looking statements
with respect to certain of the Company's current expectations and projections
about future events and the Company's future financial condition and
performance. These statements, which sometimes use words such as "aim",
"anticipate'', "believe", "may", "will", "should", "intend", "plan",
"assume'', "estimate", "expect' (or the negative thereof) and words of similar
meaning, reflect the current beliefs and expectations of the directors of the
Company, Panmure Gordon and/or Shore Capital and involve known and unknown
risks, uncertainties and assumptions, many of which are outside the Company's
control and difficult to predict, that could cause actual results and
performance to differ materially from any expected future results or
performance expressed or implied by the forward-looking statement. The
information contained in this announcement speaks only as of the date of this
announcement and is subject to change without notice and the Company does not
assume any responsibility or obligation to, and does not intend to, update or
revise publicly or review any of the information contained to this
announcement, whether as a result of new information, future events or
otherwise, except to the extent required by the FCA, the London Stock Exchange
or by applicable law.

Any information in this announcement in respect of past performance (including
without limitation past performance of the Company, its group, shares in the
Company and/or the Company's portfolio) cannot be relied upon as a guide to
future performance. The price of shares and the income from them may fluctuate
upwards or downwards and cannot be guaranteed.

This announcement contains inside information as defined in Regulation (EU)
No. 596/2014 on market abuse which is part of UK domestic law by virtue of the
European Union (Withdrawal) Act 2018 ("MAR") and is made in accordance with
the Company's obligations under article 17 of MAR. The person responsible for
arranging the release of this announcement on behalf of Velocys is David Bate,
General Counsel of Velocys.

 

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  ROIFKLFFXELBBBZ