TIDMMUST
RNS Number : 6973H
Mustang Energy PLC
28 November 2022
28 November 2022
Mustang Energy PLC
(" MUST " or the " Company ")
Acquisition of additional interest in VRFB Holdings Limited
MUST is pleased to announce that it has entered into a
conditional agreement with Bushveld Energy Limited ("BEL") to
acquire its 50.5 per cent. interest ("Acquisition (Stage 3)") in
VRFB Holdings
Limited ("VRFB-H"). On 26 April 2021, MUST conditionally
acquired a 22.1 per cent. interest in VRFB-
H ("Acquisition (Stage 1)"). On 3 August 2022, MUST advised that
it had conditionally acquired Acacia Resources Limited's ("Acacia")
27.4 per cent. interest ("Acquisition (Stage 2)") in VRFB-H.
Subject to the completion of certain conditions, completion of the
Acquisition (Stage 1), Acquisition (Stage 2) and Acquisition (Stage
3) (together, the "Acquisition") will result in MUST having an
aggregate interest in VRFB-H of 100 per cent., resulting in VRFB-H
becoming a wholly-owned subsidiary of MUST.
BEL is the 84 per cent. owned subsidiary of AIM-quoted Bushveld
Minerals Limited ("BMN") . Neither BMN nor BEL currently hold any
ordinary shares in the capital of MUST ("Ordinary Shares").
However, BMN holds an aggregate principal amount of US$2.75 million
of the Company's US$6.75 million 10 per cent. and US$1.25 million
10 per cent. unsecured convertible loan notes issued in April 2021
(the "2021 CLNs") and October 2022 (the "2022 CLNs") respectively
(together, the "CLNs"). Acacia currently holds a 24.04 per cent.
interest in MUST and holds a principal amount of US$2.3 million of
the CLNs.
The consideration for the Acquisition (Stage 3) is US$19,441,633
to be converted to GBP :GBP using an exchange rate of
GBPGBP1.00/US$1.225 and to be satisfied by the proposed issue of
79,353,604 new Ordinary Shares issued at 20 pence each (the "Stage
3 Consideration Shares").
The Stage 3 Consideration Shares proposed to be issued to BEL on
completion of the Acquisition (Stage 3), when aggregated with the
shares proposed to be issued to BMN as a result of the conversion
of the US$2.75 million principal amount of CLNs held by BMN
(together with accrued interest thereon) and the exercise of
warrants held by BMN (assuming that such options and warrants are
converted in full into Ordinary Shares ), will mean that BMN will
hold in excess of 50% of the enlarged issued capital of the
Company. Given this, the allotment and issue of the Stage 3
Consideration Shares is conditional on the Company obtaining a
waiver from The Takeover Panel (the "Panel") which is subsequently
approved by the Company's independent shareholders at a general
meeting.
As announced on 3 August 2022, the consideration for the
Acquisition (Stage 2) is US $10,548,945 to be converted to GBP:GBP
using an exchange rate of GBPGBP1.00/US$1.225 and to be satisfied
by the proposed issue of 43,056,989 new Ordinary Shares issued at
20 pence each (the "Stage 2 Consideration Shares").
The Stage 2 Consideration Shares proposed to be issued to Acacia
on completion of the Acquisition (Stage 2), combined with Acacia's
existing shareholding in the Company, the shares proposed to be
issued as a result of the conversion of the US$2.3 million
principal amount of CLNs held by Acacia (together with accrued
interest thereon) and the exercise of certain options and warrants
held by Acacia (assuming that such options and warrants are
converted in full into Ordinary Shares), will mean that Acacia will
hold in excess of 30% of the issued capital of the Company. Given
this, the allotment and issue of the Stage 2 Consideration Shares
is conditional on the Company obtaining a waiver from The Panel
which is subsequently approved by the Company's independent
shareholders at a general meeting.
The Acquisition is conditional, amongst other things, on:
1. The publication of a prospectus by the Company, having been
approved by the Financial Conduct Authority, and readmission of the
Company's enlarged issued share capital to the Official List (by
way of Standard Listing under Chapter 14 of the Listing Rules) and
to trading on the London Stock Exchange's Main Market for listed
securities (" Readmission ").
2. The Company having obtained the relevant authorities (if any)
to allot its shares (and waive any applicable rights of pre-emption
) as consideration in relation to the Acquisition (the
"Consideration Shares").
3. The issue of the Consideration Shares having been approved by
the Company's independent shareholders in accordance with The City
Code on Takeovers and Mergers (the "Takeover Code"), and The Panel
having waived any obligation on BMN, BEL and/or Acacia to make a
general offer under Rule 9 of the Takeover Code.
Should the approval and waiver of the Panel and/or the approval
of the Company's independent shareholders not be obtained, but all
other applicable conditions be satisfied, the Company will have a
call option and put option respectively with Acacia and BEL,
exercisable over 12 months from the date of Readmission, to require
the other to sell or buy respectively an additional interest in
VRFB-H in return for the issue to Acacia and BEL of new Ordinary
Shares on the same terms as the Acquisition (Stage 2) and
Acquisition (Stage 3), provided that the new shares issued to
Acacia and BEL, together with any others they hold, do not
represent more than 29.9% of the Company's voting shares.
As part of the overall transaction and assuming the Acquisition
is declared unconditional in all respects, BMN and BEL, acting
together, will have the right to appoint two non-executive
directors to the board of the enlarged group and have agreed to
enter into a relationship agreement and a lock-in agreement.
Further details of these agreements will be set out in the
Company's forthcoming prospectus.
Extension of CLNs Maturity Date
As announced on 31 August 2022, a condition of the 2021 CLNs is
that if Readmission had not occurred by 28 October 2022 (or such
later date as agreed between the Company and the 2021 CLN holders
(the "2021 Noteholders")) (the "Maturity Date"), the Company has
the right to require BMN, in return for the Company transferring to
BEL all its shares in VRFB-H (or such number of shares as the
Company would be required to transfer to BEL pursuant to the
investment agreement entered into between them and the other
parties in April 2021 (the "Investment Agreement")) ("VRFB-H
Shares"), to issue to each 2021 Noteholder such number of new
ordinary shares in BMN (at a price equal to the 20 day volume
weighted average price of a new BMN ordinary share prior to the
date of issue) ("BMN Shares") as is equivalent to the principal
amount of each 2021 Noteholder's CLNs together with all accrued and
unpaid interest thereon (the "Backstop").
As announced on 10 October 2022, a 2021 Noteholder (the
"Redeeming Noteholder") with 2021 CLNs of a principal amount of
US$1.25 million (and accrued and unpaid interest thereon) notified
the Company that it wished to effect the Backstop in respect of its
2021 CLNs (the "Backstop CLNs"). As announced by BMN on 13
September 2022, BMN allotted BMN Shares to the Redeeming Noteholder
in settlement of the Backstop CLNs. On satisfaction of the Backstop
in relation to the Backstop CLNs and pursuant to the terms of the
instrument governing the 2021 CLNs (the "2021 CLN Instrument"), the
Backstop CLNs were cancelled and are not capable of being reissued.
Therefore, the outstanding principal amount of the 2021 CLNs was
reduced to US$6.75 million.
To obviate the requirement of the Company to transfer a pro-rata
amount of its VRFB-H Shares as a result of the cancellation of the
Backstop CLNs, in accordance with the terms of the Investment
Agreement and 2021 CLN Instrument, BMN subscribed for convertible
loan notes issued by the Company in October 2022 with a principal
amount of US$1.25 million (and accrued and unpaid interest thereon
amounting to approximately US$181,000 (the "Accrued Interest"))
bearing 10% interest per annum (the "2022 CLNs"). BMN now holds a
total principal amount of US$2.75 million CLNs (and accrued and
unpaid interest thereon together with the Accrued Interest).
The 2021 Noteholders and BMN (as the holders of the 2021 CLNs
and the 2022 CLNs respectively) and the parties to the Investment
Agreement have agreed to extend the Maturity Date until 31 March
2023 (the "Extended Maturity Date") to allow for the finalisation
of a prospectus and review process of that prospectus by the
Financial Conduct Authority in connection with Readmission, a
process that is well underway. The Noteholders, BMN and the Company
have also agreed to: (a) amend the conversion price, being the
price at which the 2021 CLNs and the 2022 CLNs are to be converted
into Ordinary Shares at the time of Readmission, from GBP0.18 to
GBP0.17; and (b) settle all accrued and unpaid interest on the 2021
CLNs and 2022 CLNs (together with the Accrued Interest in respect
of the 2022 CLNs) up to (and including) the Extended Maturity Date
regardless of Readmission occurring prior to such date. The Company
has elected to settle the accrued and unpaid interest by the issue
of Ordinary Shares.
About VRFB-H
VRFB-H is a 50 per cent. shareholder in Enerox Holdings Limited
("EHL"). EHL is a special purpose vehicle which holds the entire
issued share capital of Enerox GmbH ("Enerox"), an Austrian-based
vanadium redox flow battery ("vrfb") manufacturer. Enerox has
invested more than 20 years of research and development into its
energy storage system which is branded under the name CellCube. Its
vanadium-based technology is known to be state-of-the-art in the
battery market and has already deployed or is currently deploying
more than 130 systems / 43 MWh across 5 continents. In the
preceding 12 months Enerox has announced 5 new orders for 34 MWh,
which includes a 16 MWh battery to an Australian based renewable
project developer - Enerox's largest battery order to date.
CellCube designs and delivers sustainable and cost-effective
energy storage solutions for microgrid and grid scale-applications.
The CellCube brand is a leader in an energy storage eco-system and
has developed a reputation for client service, system reliability
and technical innovation. It has a stack and system production
capacity. It is focused on large commercial projects using the new
generation FB 500-2000 technology.
Dean Gallegos, the Managing Director of Mustang Energy, said: "
The opportunity to take 100% of VRFB-H and increase Mustang's
interest in Enerox to 50% represents an exciting opportunity for
our stakeholders, thanks to Enerox's research and development
initiatives in the energy storage sector, and its state-of-the-art
vanadium-based technology. CellCube is a market leader in the
vanadium-based energy storage sector, a sector which is
increasingly being recognised as a critical component of global
efforts towards net zero emissions. "
" We are delighted to have reached this agreement with BEL and
look forward to working with them and our other stakeholders to
conclude an RTO which we believe will be value-enhancing for our
stakeholders to participate in and have exposure to a much-needed
solution within the green energy field. The board continues to
explore further investments in the energy storage value chain and
renewable energy projects development space in line with its
articulated strategy. "
ENQUIRIES
For further information, please visit www.mustangplc.com ,
follow us on Twitter @Mustang_Plc , or contact:
Mustang Energy PLC
Dean Gallegos, Managing Director
dg@mustangplc.com
+61 416 220 007
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END
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