TIDMMUST
RNS Number : 9470V
Mustang Energy PLC
12 April 2023
12 April, 2023
Mustang Energy PLC
("MUST" or the "Company")
Acquisition of additional interest in Enerox Holdings
Limited
MUST is pleased to announce that it has entered into a
conditional agreement with Garnet Commerce Limited ("Garnet") and
VRFB Holdings Limited ("VRFB-H") pursuant to which VRFB-H has
agreed to acquire Garnet's 50% interest in Enerox Holdings Limited
("EHL"), (the "Garnet Acquisition"). Given the resulting group and
ownership structure (as more fully detailed below), the Company
will be responsible for paying or procuring the payment of the
consideration payable to Garnet on completion of the Garnet
Acquisition.
On 26 April 2021, MUST conditionally acquired a 22.1 per cent.
interest in VRFB-H ("Acquisition (Stage 1)"). On 3 August 2022,
MUST conditionally acquired Acacia Resources Limited's ("Acacia")
27.4 per cent. interest in VRFB-H ("Acquisition (Stage 2)"). On 28
November 2022, MUST conditionally acquired the remaining 50.5%
interest in VRFB-H ("Acquisition (Stage 3)") held by Bushveld
Energy Limited, an 84% owned subsidiary of AIM-quoted Bushveld
Minerals Limited ("BMN"). The Garnet Acquisition is expected to
complete contemporaneously with completion of Acquisition (Stage
1), Acquisition (Stage 2) and Acquisition (Stage 3).
Following completion of Acquisition (Stage 1), Acquisition
(Stage 2), Acquisition (Stage 3) and the Garnet Acquisition
(together, the "EHL Acquisition"), and subject to the completion of
certain regulatory approvals (as more fully detailed below), the
Company shall own the entire issued share capital of VRFB-H, and
VRFB-H would own the entire issued share capital of EHL. EHL owns
the entire issued share capital of Enerox GmbH ("Enerox"), the
owner of the CellCube brand (see below for further details on
CellCube).
Purchase Price
The total consideration payable to Garnet for its shareholding
in EHL is US$33,166,667 ("Purchase Price"). The Purchase Price
shall be payable by the Company on behalf of VRFB-H and shall be
comprised of:
-- a cash payment of a minimum amount of US$5,000,000 and a
maximum amount US$7,500,000, the final amount to be determined by
the quantum of any equity fundraise undertaken by MUST (being the
"Fundraise" defined below) at the time of Readmission (as defined
below);
-- The issue of up to US$2,500,000 of convertible loan notes
(the " Garnet CLNs " ) by MUST dependent on the quantum of the
Fundraise (so that the aggregate amount paid in cash and satisfied
by the issue of the Garnet CLNs by MUST to Garnet is not more than
US$7,500,000); and
-- the sum of US$25,666,667, to be converted to Pounds Sterling using an exchange rate of GBPGBP1.00/US$1.225 and to be satisfied by the proposed issue of 104,761,905 new ordinary shares in the capital of MUST issued at a price per share of 20 pence (the "Consideration Shares"), credited as fully paid and free from any encumbrances and ranking pari passu in all respects with all other issued ordinary shares.
The Garnet Acquisition is conditional upon, inter alia:
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 issue and allot to Garnet the Consideration Shares and any
shares which may become issuable under the Garnet CLNs (the "CLN
Shares") (and waive any applicable rights of pre-emption in respect
of such shares).
3. If required, the issue of the Consideration Shares and/or the
CLN 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 any applicable party to make a general offer under
Rule 9 of the Takeover Code.
4. The approval of the Federal Ministry of Labour and Economic
Affairs of the Austrian Government regarding the proposed change of
control of Enerox. By way of brief background, a Foreign Direct
Investment regime was introduced in Austria in 2020, which aims to
protect foreign investment into sectors relating to national
security or public order (including energy related matters). An
application for approval of the transaction has been made and a
formal response is expected within the next 30 days.
5. The Company raising a minimum of US$15.0 million at the time of Readmission.
Convertible Loan Note Issue
MUST will raise up to US$2,000,000 through the issue of new
convertible loan notes to new and existing investors (the "2023
CLNs"). Pursuant to the terms of a loan agreement entered into
between the Company and Enerox (the "Enerox Loan"), the proceeds of
the 2023 CLNs will be used to provide Enerox with additional
funding until Readmission. Acacia and Garnet have agreed to
subscribe for US$500,000 each of the 2023 CLNs.
The terms of the 2023 CLNs are as follows:
Maturity 31 July 2023
Interest 10.0% per annum
Conversion Automatically into new ordinary shares in the capital
of the Company on Readmission at the lower of GBP0.17 per share or
a 20% discount to the price per share which is placed with or
otherwise subscribed by new and existing investors in connection
with the Fundraise (as defined below).
If (i) the full amount of the 2023 CLNs has not been raised by
30 April 2023; (ii) the full amount has been raised, but the
Company has not obtained binding commitments of at least US$15m
towards the Fundraise (defined below), nor funded Enerox with
another US$1m until the end of June 2023, in each case by 31 May
2023; or (iii) the Company has not obtained approval of its
proposed prospectus in relation to the Fundraise by the 30 June
2023, Garnet will have an option to terminate the Garnet
Acquisition, and upon investing a minimum of US$3.5m into EHL, take
a controlling position in EHL. In such circumstances the Company
may still choose to complete the Acquisition (Stage 1), Acquisition
(Stage 2) and Acquisition (Stage 3) and continue to Readmission but
only with its minority position in EHL which would be approximately
46.4%.
If Readmission does not occur by 31 July 2023, the 2023 CLN
Holders will be able to effect backstop arrangements similar to
those previously agreed between the Company and BMN (as more fully
detailed in the Company's announcements dated 31 August 2022 and 28
November 2022), which would result in the issuance to each 2023 CLN
Holder of 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 2023 CLN Holder's CLNs
together with all accrued and unpaid interest thereon. In return
for BMN issuing the relevant shares to the 2023 CLN Holders, the
Company will novate to BMN the benefit of the Enerox Loan.
The Company is in discussions with the holders of the existing
US$8,000,000 convertible loan notes issued by the Company to extend
the maturity date of such notes to 31 July 2023 on the same terms
as the 2023 CLNs. Under the loan note instrument governing these
convertible loan notes, the Company has until 28 April 2023 to
finalise this extension. Once agreement has been reached with the
existing noteholders, a further announcement will be made.
Fundraise
MUST is proposing to raise a minimum of US$15,000,000 through
the issue of new ordinary shares (the "Fundraise") to new, and
potentially existing, investors. The issue price of the new
ordinary shares is yet to be finalised but shall be agreed as part
of the roadshow the Company proposes to undertake to raise the
necessary capital to complete the EHL Acquisition. The proceeds of
the Fundraise will be used to pay or procure the payment of the
cash consideration to Garnet, provide growth funding to Enerox and
provide working capital to the enlarged group.
As part of the overall transaction and assuming the Garnet
Acquisition is declared unconditional in all respects, Garnet will
have the right to appoint one non-executive director to MUST's
board of directors. The Company and Garnet have agreed to enter
into a relationship agreement and a lock-in agreement as part of
the Readmission process and it has been agreed that such agreements
shall contain such terms as shall be customary for a transaction
which constitutes a reverse takeover under the FCA's Listing Rules.
Further details of these agreements will be set out in the
Company's forthcoming prospectus and its announcement relating
thereto.
About Enerox
EHL is a special purpose vehicle which holds the entire issued
share capital of 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 Enerox is an exciting and welcome
opportunity for our stakeholders. The simplified ownership
structure will allow our investors to obtain transparent value for
the underlying energy storage assets. 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 Garnet and
look forward to working with them and our other stakeholders to
conclude a reverse takeover 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
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 or visit 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.
END
STRNKBBDABKKPQD
(END) Dow Jones Newswires
April 12, 2023 03:00 ET (07:00 GMT)
Mustang Energy (LSE:MUST)
Historical Stock Chart
From Feb 2025 to Mar 2025
Mustang Energy (LSE:MUST)
Historical Stock Chart
From Mar 2024 to Mar 2025
