Strategic Partnership, Subscription and Warrants
29/08/2024 07:00
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RNS Number : 0670C VSA Capital Group PLC 29 August 2024
29 August 2024
VSA Capital Group plc ("VSA" or the "Company")
New Strategic Partnership
Initial Subscription of 4,500,000 new ordinary shares at 9p to raise
£405,000,
Issue of Warrants
and
Appointment of Non-Executive Director
New Strategic Partnership
VSA (AQSE: VSA) and Drakewood Capital Management Limited ("Drakewood")
(together, the "Parties") are pleased to announce a strategic partnership to
support each other across commodities trading, commodity fund management and
commodity investment banking and broking ("Strategic Partnership"). VSA
expects the Parties' collaboration to lead to a compelling and unique
advisory, fundraising and capital services offering for junior mining
companies.
Both Parties believe we are in a commodities bull market and recognize that
junior mining companies have faced difficulties raising capital. VSA
anticipates that the Strategic Partnership combined with the additional
capital subscribed by Drakewood will allow VSA to attract more junior mining
companies as corporate clients, recruit experienced professionals and offer
junior mining companies capital for growth opportunities.
Subscription
As part of the Strategic Partnership, VSA is pleased to announce an initial
subscription ("Subscription") by Drakewood of 4,500,000 new ordinary shares in
the Company at a price of 9p per share ("the Initial Subscription Price")
raising gross and net proceeds of £405,000.
The Initial Subscription Price represents a 50 per cent premium to the closing
mid-price of the Company's shares at 28 August 2024.
Following the completion of the Subscription, Drakewood's shareholding will be
19.9 per cent of the Company's enlarged Total Voting Rights.
Warrants
The Company currently has approximately 6.9m warrants in issue to Directors
and certain senior staff members, exercisable at 2.33p per share. Drakewood
have been granted 1,750,000 warrants ("Warrants") to subscribe for new
ordinary shares. For the first 30-month period (ending on 28 February 2027),
the exercise price of the Warrants will be 2.33 pence per share.
In the event that the Warrants are exercised after this date, the exercise
price will be 9 pence per share, provided that either one or both of the
following conditions ("Conditions") applies/apply:
i) the closing mid-market price of the shares on the day
immediately prior to exercise (the "Day Prior's Closing Mid-Market Price") is
a minimum of 9 pence; or
ii) the latest monthly management accounts prior to exercise
indicate that the NAV per share, plus 20% (the "NAV per Share-Plus 20%
Amount"), amounts to not less than 9 pence.
In the event that neither of the Conditions is met, the exercise price per
Warrant shall instead be the lower of such Day Prior's Closing Mid-Market
Price or NAV per Share-Plus 20% Amount.
The Warrants can only be exercised at the same time as existing warrants or
options in the Company are exercised so as to enable Drakewood to maintain
their percentage shareholding in the Company. The Warrants have no expiry
date.
Grant of option by Andrew Monk
Subject to any applicable legal and regulatory considerations, Drakewood and
Andrew Monk will agree to the terms of an option agreement ("Option
Agreement") in respect of Andrew Monk's ordinary shares, and any warrants and
options in VSA that Andrew Monk presently holds or is hereafter granted in VSA
or its affiliated entities ("Holdings"). The Option Agreement is to provide
that should Andrew Monk cease to be employed by VSA, Drakewood will have the
right to acquire Andrew Monk's Holdings at a price equivalent to NAV+20% for a
period of six months from the date of his termination of employment or other
separation from VSA.
Drakewood will also have the right to match any offer received for Andrew
Monk's Holdings at the same price, or alternatively to tag along with Andrew
Monk to such a buyer of some or all of the Holdings at the same price.
Board appointment
As part of the Strategic Partnership the Company expects to appoint Mark
Edward Thompson (52) to the Board as a non-Executive Director. Mark has 30
years' experience in metals and mining markets and has previously held senior
roles at the Trafigura Group and Apollo Management International LLP. As a
representative of Drakewood on the VSA Board, he will endeavour to support
VSA's intended growth strategy in the junior mining sector by contributing his
extensive metals and mining expertise and valuable industry connections. Mark
Thompson holds no ordinary shares in VSA Capital. The names of companies and
partnerships of which Mark Thompson has been a director or partner at any time
in the previous five years reflect his experience and expertise and are set
out below for this purpose. The appointment is in process and a separate
announcement with all disclosures required pursuant to Rule 4.9 of the Aquis
Access Rules for Companies will be made in due course.
The names of all companies and partnerships of which Mark Thompson, has been a
director or partner at any time in the previous five years are set out below:
Current directorships or partnerships: Previous directorships or partnerships:
Cayenne Copper Limited Aggregates West Limited
Cayenne Copper (Malaysia) Sdn Bhd Drakelands Restoration Limited
Godolphin Exploration Limited DTF Holdings Limited
Godolphin Minerals Limited First Tin plc
Godolphin Mining (UK) Limited Meridian Mining UK Societas
MET Trading Limited Treliver Minerals Trustees Limited
Newhenge Limited Tungsten West PLC
Romcem Limited Tungsten West Services Limited
Stannum Resources Limited
Admission of new ordinary shares to Aquis Growth Market
Application will be made for the 4,500,000 new ordinary shares to be admitted
to trading on the Aquis Growth Market ("Admission"). It is expected that
Admission of the new ordinary shares will become effective at 8.00 a.m. on or
around 4 September 2024. The new ordinary shares will be issued credited as
fully paid and will rank in full for all dividends and other distributions
declared, made or paid after Admission and will otherwise rank on Admission
pari passu in all respects with the existing ordinary shares.
Total Voting Rights
Following Admission, the Company's issued share capital will comprise
23,928,966 ordinary shares with voting rights. The Company holds 1,337,400
ordinary shares in treasury. Therefore the figure of 22,591,566 ordinary
shares, being the total number of voting rights in issue, may be used by
shareholders in the Company as the denominator for the calculations by which
they will determine if they are required to notify their interest in, or a
change in their interest in, the share capital of the Company under the FCA's
Disclosure and Transparency Rules.
Director Shareholdings
Following the Subscription and the increase in Total Voting Rights, the
shareholding percentages of the Directors will be as follows:
Name Shareholding Percentage of enlarged Total Voting Rights Warrants and options
Andrew Monk 4,361,800 19.3 3,234,300
Andrew Raca 998,700 4.4 3,877,200
Marcia Manarin - - 728,600
Mark Steeves - - 332,200
Mark Thompson - - -
Andrew Monk, CEO of VSA commented:
"Due to recent pressure for all players in Investment Banking in London and
a prolonged funding drought for the junior mining sector, the junior mining
sector offers a unique opportunity for VSA in collaboration with Drakewood to
capitalise on this situation and become a much more dominant player in the
junior mining sector. By providing a compelling, unique offering, we expect
VSA to attract a larger client base, increased deal flow, and ultimately,
achieve significant success. The junior mining sector is probably already in a
bull market phase, and we expect it to experience growth similar to the
commodities boom between 2000 and 2008. For those positioned correctly, the
potential rewards could be substantial."
David Lilley, CEO of Drakewood commented:
"Drakewood is a leading investment manager bringing metal sector opportunities
to institutional and other types of investors. We build and manage specialised
investment solutions targeting complex opportunities across the global metals
value chain. We believe this investment positions us well to take advantage
of the evolving opportunity set across the metals and mining ecosystem and
expect to realize several shared benefits that will support our ability to
deliver attractive investment returns for our investors, including supply side
market research and analysis and a broader set of local operator
relationships. We have enjoyed the opportunity to develop a great relationship
with the VSA team and believe they will bring impactful synergies to the
Drakewood platform and strengthen our position as a creative solutions
provider to investors seeking differentiated exposure to our markets."
For more information, contact:
VSA Capital Group plc +44(0)20 3005 5000
Andrew Monk, CEO
Andrew Raca, Head of Corporate Finance
Marcia Manarin, Finance Director & COO
Drakewood Capital Management Limited
Alan Spangler, CFO
Email: Investors@drakewood.co.uk (mailto:Investors@drakewood.co.uk)
Drakewood Capital Management Inc.
Samantha Richman, Business Development Associate
Email: Investors@drakewoodcapital.com
(mailto:Investors@drakewoodcapital.com)
Alfred Henry - AQSE Corporate Adviser +44 (0)20 3772 0021
Nick Michaels, Maya K. Wassink
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