RCS - Ridgecrest PLC - Company Update

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09/09/2022 08:15

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RNS Number : 7952Y  Ridgecrest PLC  09 September 2022

9 September 2022

Ridgecrest plc

("Ridgecrest" or the "Company")

 

Company update

 

 

Ridgecrest is today providing an update on its investment in Fast2Fibre
Limited ("Fast2Fibre").

 

About Fast2Fibre

 

Fast2Fibre is a UK technology company with an innovative, patented solution
for upgrading cabling. Fast2Fibre's patented copper replacement solution
allows the inner core of buried or ducted copper telecommunications, coaxial
or electrical distribution cables to be extracted and replaced with fibre,
without the need for excavation. Fast2Fibre's initial target market is
telecoms companies, both domestic and overseas, installing fibre from
exchanges to homes and businesses. The market is being fuelled by customer
demand and by a requirement from governments around the world for
fibre-enabled networks. Fast2Fibre's secondary growth opportunity is in the
power sector, where companies are seeking to recover and sell significant
volumes of copper, with substantial financial value.

 

Fast2Fibre is now focused on the commercial delivery of its technology.  Over
the last couple of years this has been hampered by the global pandemic and, in
particular, its impact on global supply chains. However, in recent months
Fast2Fibre has seen a positive change in its prospective customers'
willingness to engage and progress commercial terms with Fast2Fibre. The board
of Ridgecrest believes that the opportunities Fast2Fibre is currently working
on are significant, and therefore as expected, the customer evaluation and
assessment process is very structured, controlled, and detailed.

 

Following demonstration of its technology and process to CEPCO in Saudi
Arabia, Fast2Fibre has agreed key commercial terms for a deployment in Saudi
Arabia in 2023 and expects to sign a binding contract later this year. CEPCO
is a large multi-disciplined engineering group, headquartered in Jeddah, which
operates throughout the Middle East and represents an excellent engineering
and strategic partner for Fast2Fibre. Specifically, CEPCO is a key supplier to
the Saudi Electric Company, which has engaged CEPCO to recover copper from
obsolete electricity cables. CEPCO has concluded that the Fast2Fibre processes
represent the only cost-effective solution available.

 

Vodafone in Germany is also seeking a nationwide solution for the upgrade of
its network and Fast2Fibre is currently undertaking demonstrations of its
process.  Should these demonstrations be successful, Fast2Fibre expects to
earn material revenues in 2023 and beyond.

 

Fast2Fibre's client engagement is strong, its costs have been well controlled,
and its research and development activities have placed it in a strong
position to exploit its defined customer opportunities and to scale the
business to meet prospective customer demand.

 

Update on the Company's investment in Fast2Fibre

 

On 31 March 2022, Ridgecrest announced its investment of £300,000 in
Sparkledun Limited ("Sparkledun"), the parent company of Fast2Fibre, in the
form of a convertible loan note (the "Initial CLN") and that it had agreed to
subscribe for a further £200,000 convertible loan note (the "Further CLN") in
Sparkledun on the same terms as the Initial CLN, subject to Sparkledun raising
at least £1 million as part of a separate equity fundraising.

 

In advance of Sparkledun completing its separate proposed equity fundraising,
Ridgecrest has now made an additional investment of £250,000 in Sparkledun in
the form of a new convertible loan note (the "September 2022 CLN"). The
September 2022 CLN, that supersedes and replaces the Further CLN which has
been terminated, is unsecured, carries an interest rate of 10% per annum
(payable on redemption) and, unless otherwise agreed between the parties, is
to be repaid by 31 December 2022. Ridgecrest may elect to convert the
principal amount of the September 2022 CLN and all accrued interest into a
minority interest in the ordinary shares of Sparkledun at a price (subject to
a downwards adjustment in certain customary circumstances) of £32.05 per
share.

 

While Ridgecrest also remains entitled to subscribe for a further 5,046
ordinary shares in Sparkledun at £59.45 per share in respect of those
warrants that were granted to it in respect of the Initial CLN, its further
entitlement to be granted warrants to subscribe for an additional 3,364
ordinary shares in Sparkledun at the same price following completion of its
subscription under the Further CLN has also now lapsed.

 

No further warrants have been granted to Ridgecrest as part of its
subscription for the September 2022 CLN.

 

In order to represent the interests of Ridgecrest, Robert Thesiger, Chairman
of Ridgecrest, was appointed as a director of Sparkledun on 1 July 2022.

 

After subscribing for the Initial CLN and the September 2022 CLN, Ridgecrest's
current cash balances are approximately £940,000.

 

Proposed reverse takeover of Fast2Fibre by Ridgecrest

 

Ridgecrest and Sparkledun continue to be focused on a public listing for
Fast2Fibre and intend that it or Sparkledun will undertake a reverse takeover
transaction ("RTO") with Ridgecrest. Ridgecrest's current intention is that it
would invest its residual cash resources in the RTO process and, to the extent
it has remaining cash, in the Fast2Fibre business as part of the RTO. Work on
the RTO transaction will now commence but shareholders should be aware that
the timing of any RTO will, among other things, be dependent upon market
conditions.  Given these are so unfavourable at present, it is expected that
any RTO will not occur until Q1 or Q2 of 2023.

 

The board of Ridgecrest will provide further updates as appropriate.

 

 Enquiries:                                    www.ridgecrestplc.com (http://www.ridgecrestplc.com/)

 Ridgecrest plc
 Robert Thesiger, Chairman                     07714 502807

 Allenby Capital Limited (Financial Adviser)   www.allenbycapital.com (http://www.allenbycapital.com)
 Nick Naylor / George Payne                    020 3328 5656

 Peterhouse Capital Limited (Broker)           020 7469 0930

 Eran Zucker

 

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