TIDMINSP
RNS Number : 2187N
Inspirit Energy Holdings PLC
04 May 2018
4 May 2018
Inspirit Energy Holdings PLC
("Inspirit Energy" or "the Company)
Issue of Convertible Loan Notes
Related Party Transaction
Proposed Capital Reorganisation
Inspirit Energy Holdings PLC (AIM: INSP), the developer of micro
Combined Heat and Power (microCHP) boiler, is pleased to announce
it has issued convertible loan notes ("CLNs") totalling
GBP845,000.
Issue of Convertible Loan Notes and Use of Proceeds
(a) The Company has raised GBP530,000 in cash from private
investors through the issue of CLNs and converted existing debt due
to Related Parties (as further detailed below) and other third
party debt valued at GBP315,000 into the CLNs. Whilst the Company
has issued the CLNs, conversion into equity is conditional on
Shareholder approval and therefore the Company will shortly post a
Circular to Shareholders seeking such authority. The principal
amount of the CLNs are convertible at the higher of either 0.07 p
per Ordinary Share of 0.1p each (the "Ordinary Shares" or "Existing
Ordinary Shares" and subject to the Capital Reorganisation as set
out below) or a discount of 25 per cent. to the previous trading
day's closing market share price. The CLNs are interest free,
convertible at the Company's option and, in the ordinary course,
only are repayable by the Company in Ordinary Shares following a
conversion notice. Any Ordinary Shares issued on conversion of the
CLNs will rank pari passu with Existing Ordinary Shares. Conversion
of the CLNs is subject to a restriction that no conversion shall
take place in circumstances where as a result of the conversion the
Noteholder or any party deemed to be acting in concert with such
Noteholder, as defined in the Takeover Code, would own more than
29.9% of the issued share capital of the Company or otherwise
trigger a requirement for the Noteholder to make a general offer
for the Company pursuant to Rule 9 of the Takeover Code. The CLNs
will not be admitted to trading on AIM or any other exchange.
The conversion is at the full discretion of the Company and on
conversion, each new Ordinary Share will attract a half warrant
(one warrant issued for every two CLNs converted) at the relevant
conversion price valid for 12 months from the date of issue.
The funds will be used for the following:
-- Continued certification of the microCHP boiler;
-- Commercial trials of the microCHP boiler;
-- General working capital; and
-- Potentially to make investments in complementary areas and
technologies that will utilise the Company's existing technical
expertise.
Related Party Transaction
As set out above, certain of the CLNs being issued are to settle
accrued Director's fees of GBP100,000 and GBP20,000 owed to two of
the Company's Directors, John Gunn and Nilesh Jagatia,
respectively, along with GBP95,000 owed to Global Investment
Strategy UK Ltd ("GIS"), an associate of John Gunn (collectively
the "Director Transactions"). The Director Transactions is a
Related Party Transaction in accordance with AIM Rule 13 and
therefore, Anthony Samaha, a Non-Executive Director of Inspirit
Energy, who is independent of the Director Transactions, having
consulted with the Company's Nominated Adviser, considers the terms
of the Director Transactions to be fair and reasonable insofar as
Inspirit Energy's Shareholders are concerned.
Proposed Capital Reorganisation
The Company is proposing to hold a general meeting (a "GM") to
consider and, if thought fit, approve the Capital Reorganisation
and to grant the directors authority to facilitate the issue of new
Ordinary Shares under the terms of the CLNs and provide additional
headroom for the future issue of new Ordinary Shares for cash.
Accordingly the Company is finalising a Circular to Shareholders
which it expects to publish shortly and a further announcement will
be made once this has been done.
The Company currently has 1,420,806,857 Existing Ordinary Shares
in issue. The market price of the Existing Ordinary Shares has for
much of the last 6 months been less than 0.1 pence, which is the
nominal value of such shares. The issue of shares at less than
nominal value of the Existing Ordinary Shares is prohibited by the
Companies Act, so the nominal value of the Existing Ordinary Shares
must be reduced below market price before new Ordinary Shares can
be issued (for example for an equity fundraise or to issue Ordinary
Shares in order to convert a convertible loan). It is therefore
proposed to undertake the Capital Reorganisation which will have
the effect of reducing the nominal value of each Existing Ordinary
Share in the Company to considerably below market value.
The Capital Reorganisation, which comprises a sub-division of
shares has been structured so that each new Ordinary Share created
pursuant to the Capital Reorganisation shall have a nominal value
of 0.001 pence (the "New Ordinary Shares").
The number of Ordinary Shares in issue, and held by each
Shareholder, as a result of the passing of the relevant resolutions
will not change. It is simply the nominal value of the Existing
Ordinary Shares which will change.
It is proposed therefore that each Existing Ordinary Share of
0.1 pence each in the capital of the Company be sub-divided into 1
New Ordinary Shares of 0.001 pence each and 1 B Deferred Share of
0.099 pence each ("B Deferred Share"). This will result in
1,420,806,857 New Ordinary Shares and 1,420,806,857 B Deferred
Shares being in issue immediately following the Sub-Division.
Previous share allotments have utilised all of the Directors'
current authorities to issue Ordinary Shares free of pre-emption
rights and accordingly they will be seeking Shareholders' authority
to issue New Ordinary Shares in order to:
- facilitate the issue of New Ordinary Shares under the terms of
the CLNs to the Related Parties and other third party debt;
- facilitate the issue of New Ordinary Shares under the terms of
the CLNs to private investors; and
- provide additional headroom for the future issue of further
New Ordinary Shares up to an aggregate nominal amount of GBP6,500
being 650,000,000 New Ordinary Shares. If such authority were to be
granted, the 650,000,000 New Ordinary Shares would represent
approximately 24.7% of the enlarged issued share capital of the
Company following conversion of the CLNs, assuming the CLNs
converted at a price of 0.07 pence per New Ordinary Share.
The B Deferred Shares will have no rights and the Company will
not issue any share certificates or credit CREST accounts in
respect of them.
The Capital Reorganisation is expected to be implemented at
close of business on the date the Resolutions are passed at the
General Meeting.
Application will be made to the London Stock Exchange for
admission of the 1,420,806,857 New Ordinary Shares to trading on
AIM; but no application will be made to the London Stock Exchange
for admission of the B Deferred Shares to trading on AIM.
Approval for the Capital Reorganisation will be sought by
passing of the required Resolutions at the General Meeting.
Following the Capital Reorganisation, the ISIN code for the New
Ordinary Shares will remain the same as that for the Existing
Ordinary Shares. CREST accounts will be updated for the new share
designation but no new share certificates will be issued.
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014.
-ends-
For further information please contact:
Inspirit Energy Holdings
plc
John Gunn, Chairman and
CEO +44 (0) 207 048 9400
Beaumont Cornish Limited
www.beaumontcornish.com
(Nominated Advisor)
Roland Cornish / James
Biddle +44 (0) 207 628 3396
Peterhouse Corporate
Finance
(Joint Broker)
Lucy Williams / Duncan
Vasey +44 (0) 207 469 0930
This information is provided by RNS
The company news service from the London Stock Exchange
END
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