TIDMSPC
RNS Number : 1380H
U.K. SPAC PLC
02 August 2021
2 August 2021
U.K. SPAC PLC
("UK SPAC" or the "Company")
Proposed Reverse Take-Over of Hellenic Dynamics S.A. and
Suspension of Trading in the Company's Shares on AIM
U.K. SPAC Plc (AIM: SPC), an AIM Rule 15 cash shell, announces
that it has entered into a binding sale and purchase agreement (the
"Agreement") with the shareholders of Hellenic Dynamics S.A.
("Hellenic") ("Sellers") in relation to the acquisition of 100 per
cent. of the issued share capital of Hellenic (the "Acquisition")
for a total consideration of GBP45.2 million, to be satisfied by
the issue of new UK SPAC ordinary shares (the "Transaction").
Hellenic is a European medical cannabis cultivation company.
The proposed Acquisition is classified as a reverse takeover
pursuant to Rule 14 of the AIM Rules for Companies. Accordingly, at
the request of the Company, the Company's ordinary shares will be
suspended from trading on AIM with effect from 07:30 a.m.
today.
HIGHLIGHTS
-- Proposed acquisition of European medical cannabis cultivation company Hellenic Dynamics S.A.;
-- Consideration of GBP45.2 million to be fully satisfied by way
of the issue of an expected maximum of 9,578,937,499 new ordinary
shares in the Company ("Consideration Shares") at an expected
minimum of 0.472 pence per ordinary share ("Issue Price"), subject
to a minimum cash balance held on completion by UK SPAC of GBP3.92
million ("Minimum Cash Balance") , net of transaction costs;
-- The proposed transaction is expected to value UK SPAC at a
minimum of GBP11.76 million at the Issue Price, assuming the
minimum net cash balance of GBP3.92 million on completion is
achieved. Based on the Company's current cash balance of GBP2.5
million, achievement of this minimum cash balance on completion
will require the exercise of a minimum of 640,000,000 existing
warrants (at 0.3 pence per ordinary share);
-- The Agreement includes a mechanism to further increase the
value of UK SPAC and the Issue Price in the event that the cash
held by UK SPAC at completion is greater than the minimum cash
balance;
-- Proposed admission of enlarged group, at a market
capitalisation of more than GBP50 million, to the standard segment
of the Official List of the Financial Conduct Authority ("FCA") and
to trading on the London Stock Exchange's main market for listed
securities ("Standard Listing");
-- Suspension of trading in the Company's ordinary shares with immediate effect.
Details of the Acquisition
Hellenic is a medical cannabis cultivation business based in
Europe, further details of which are included below.
Under the terms of the Agreement, the consideration payable in
respect of the Acquisition is GBP45.2 million which is proposed to
be satisfied entirely by the allotment and issue to the Sellers the
Consideration Shares. The Acquisition is conditional on UK SPAC
having the Minimum Cash Balance at completion, which the Company
expects to achieve through the exercise of existing warrants by
warrant holders or the issue of new ordinary shares by means of a
placing. The Company's current net cash balances stand at GBP 2.5
million.
Further, under the terms of the Agreement, the Acquisition is
conditional on admission of the Company's enlarged ordinary share
capital by way of a Standard Listing ("Admission"). Accordingly,
the Company will seek shareholders' consent to cancel the admission
of the Company's ordinary shares to trading on AIM simultaneously
with the Admission.
The Company has submitted a first draft of the prospectus to the
FCA and has made an application in respect of a Standard
Listing.
The Agreement contains a number of conditions such that
completion of the proposed Acquisition remains subject to certain
matters including, inter alia, the following:
a) no person (being a governmental or regulatory authority)
having enacted any legislation (including any subordinate
legislation) which would prohibit, materially restrict or
materially delay the completion of the Acquisition or prohibit the
operations of the enlarged group following completion;
b) there being granted a waiver by the Panel of any requirement
under Rule 9 of the Takeover Code that would otherwise arise on the
Sellers (whether individually or as a concert party or otherwise)
to make a general offer to the Company's shareholders as a result
of the issue to any one or more of the Sellers of the Consideration
Shares on completion (subject to Admission);
c) an adjustment to the value of the Company occurring on
Admission, resulting from the exercise of outstanding warrants in
UK SPAC;
d) the passing of the requisite resolutions at a general meeting
of the Company (to be convened);
e) the Company having the Minimum Cash Balance at completion,
being GBP3,920,000 held after deducting all costs incurred in
relation to the Acquisition and Admission. In the event that there
is a shortfall of the Minimum Cash Balance on completion, the
difference between the actual cash balance at completion and the
Minimum Cash Balance shall be made up by way of the proceeds of any
Adjustment resulting from the exercise of various outstanding
warrants in the Buyer, and if required, the proceeds raised by the
Company pursuant to a placing;
f) the allotment and issue of the Consideration Shares credited
as fully paid subject only to Admission on or before the Long Stop
Date, being 31 October 2021 unless extended mutually by the Sellers
and the Company; and
g) Admission taking place on or before the Long Stop Date.
Information about Hellenic Dynamics S.A.
Hellenic was founded in March 2019 and its operations are based
in a 200,000 square meter facility in Northern Greece. Hellenic
plans to grow, manufacture, process and sell THC-dominant dried
medicinal cannabis flowers and related extracted oils for export
initially into the German market with further export markets in
Europe to follow. Hellenic also intends to provide a medicinal
cannabis oil extract product for the envisaged domestic Greek
market.
The final installation phases of cultivation equipment are
currently taking place at the facility and Hellenic expects to
cultivate and sell its first products in Q1 2022. The Company has
signed two term sheets for off-take agreements with two licensed
distributors in Germany, which cover the total first year's
production of dried medicinal cannabis flowers.
The medicinal cannabis market in Europe was worth GBP2.5bn in
2019 and is expected to reach GBP26.4bn by 2027 ((1) ). Hellenic's
cultivation strategy is set across three stages of development.
Stage one is intended to provide full proof of concept and initial
sales, with the following stages to be based on Hellenic's strategy
of utilising sales revenues to increase the total cultivation area,
in line with increased European demand of medicinal cannabis
products.
Hellenic also has a memorandum of understanding with The
American Farm School, based in nearby Thessaloniki, for the
purposes of promoting joint research and development projects and
training in connection with the optimisation of cannabis
cultivation.
Hellenic aims in the next few years to be a leading grower of
medicinal cannabis in Europe, a market where there are currently
very few cultivators that have the ability to cultivate and export
THC medical cannabis products.
Greek legislation describes a two-stage licensing process; the
first being an installation licence and the second an operational
licence. As at the date of the Agreement, Hellenic holds a facility
installation licence (the "Licence"), granted on 24 October 2019,
which permits it to construct and establish a cannabis processing
and production facility. Hellenic is in the final stages of
completing the necessary works to apply for an operational
licence.
It is a general warranty of the Agreement that the Acquisition
shall not violate any terms or provisions of the Licence or cause
the Licence (or application for the operation licence) to be
suspended, revoked or terminated provided that the Company notifies
the Directorate for Business Licensing and Business Parks of the
General Secretariat of Industry in Greece of the new shareholding
structure pursuant to Article 2 of the Joint Ministerial Decision
51483/700/ .15 ( '1692/2018). In addition to the above, the
Agreement contains market standard undertakings and warranties from
both the Sellers and the Purchaser.
AIM Rule 15 Cash Shell status
The Company became an AIM Rule 15 cash shell on 3 March 2021
and, as such, is required to make an acquisition or acquisitions
which would constitute a reverse takeover pursuant to AIM Rule 14
(a " Reverse Takeover ") or be re-admitted to trading on AIM as an
investing company under the AIM Rules, on or before the date
falling six months after 3 March 2021, being 3 September 2021.
After this date, the Company's shares will be suspended for a
maximum of a further six months.
As neither a Reverse Takeover nor readmission to trading on AIM
as an investing company have been completed, trading in the
Company's ordinary shares on AIM will be suspended as of 07:30 a.m.
today. The Company's shares will remain suspended from trading on
AIM until either completion and Admission or termination of the
Acquisition. In the event that no such transaction is completed
within six months of today's suspension, the Company's shares will
be cancelled from trading on AIM pursuant to AIM Rule 41. There can
be no assurance that the Company will be able to complete the
Acquisition or any other Reverse Takeover during the six-month
suspension period.
U.K. SPAC Chairman, Peter Jay, said :
"I am delighted that the Company has been able to contract to
acquire this extremely exciting and impressive company which has
the ambition and the potential to become one of the major growers
of medicinal cannabis in Europe."
Hellenic Vice President Davinder Rai commented:
" This is a major step forward for Hellenic as we look to
establish ourselves as a leading cultivator of THC dominant medical
cannabis in Europe and develop specialist strains of cannabis
specific to individual medical ailments. With patient demand for
medical cannabis increasing and a willingness among governments to
regulate and open up this important market we are very optimistic
about our future as a listed company. "
For further information, please visit http://www.ukspacplc.com
or contact the following:
U.K. SPAC Plc 07500 558 235
Peter Jay
Cairn Financial Advisers
LLP 020 7213 0880
Jo Turner / Sandy Jamieson
Peterhouse Capital Limited 020 7469 0930
Lucy Williams / Eran Zucker
Forward Looking Statements
Certain statements made in this announcement are forward-looking
statements. These forward-looking statements are not historical
facts but rather are based on the Company's current expectations,
estimates, and projections about its industry; its beliefs; and
assumptions. Words such as 'anticipates,' 'expects,' 'intends,'
'plans,' 'believes,' 'seeks,' 'estimates,' and similar expressions
are intended to identify forward-looking statements. These
statements are not guarantees of future performance and are subject
to known and unknown risks, uncertainties, and other factors, some
of which are beyond the Company's control, are difficult to
predict, and could cause actual results to differ materially from
those expressed or forecasted in the forward-looking statements.
The Company cautions shareholders and prospective shareholder
holders not to place undue reliance on these forward-looking
statements, which reflect the view of the Company only as of the
date of this announcement. The forward-looking statements made in
this announcement relate only to events as of the date on which the
statements are made. The Company will not undertake any obligation
to release publicly any revisions or updates to these
forward-looking statements to reflect events, circumstances, or
unanticipated events occurring after the date of this announcement
except as required by law or by any appropriate regulatory
authority.
References
(1)
https://www.businesswire.com/news/home/20200826005435/en/European-Cannabis-Market-Worth-37-Billion-by-2027-Rising-at-a-CAGR-of-29.6-Between-2020-2027---ResearchAndMarkets.com
(A conversion rate of $1:GBP0.719 was used to change the
statistics quoted in $ in the above article, to GBP)
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END
MSCDKKBPPBKDQON
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