TIDMDSI
RNS Number : 5622S
Dial Square Investments PLC
10 March 2023
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (596/2014/EU) AS THE
SAME HAS BEEN RETAINED IN UK LAW AS AMED BY THE MARKET ABUSE
(AMMENT) (EU EXIT) REGULATIONS (SI 2019/310). UPON THE PUBLICATION
OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW CONSIDERED TO
BE IN THE PUBLIC DOMAIN.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN
PART, DIRECTLY OR INDIRECTLY IN, INTO OR FROM ANY JURISDICTION
WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR
REGULATIONS OF SUCH JURISDICTION.
10 March 2023
Dial Square Investments Plc
("Dial Square" or the "Company")
Proposed Acquisition of UK energy transition company, Proposed
Cancellation of Listing and Suspension of Trading
Dial Square, a London Stock Exchange traded special purpose
acquisition vehicle, is pleased to announce that it has entered
into Heads of Terms ("Term Sheet") to acquire 100% of the issued
and to be issued share capital by way of a reverse takeover ("the
Transaction") of EnergyPathways Ltd ("EnergyPathways"), an English
private company. EnergyPathways is an energy transition company,
targeting UK gas assets, with the aim of bringing into production,
in the near-term, low emission energy solutions to assist with the
UK's transition to Net Zero while also providing critical supply to
ensure domestic energy security.
EnergyPathways holds, indirectly through its subsidiary, a 100
per cent. interest in block 110/4a in Seaward Licence P2490 that
contains the Marram gas field ("Marram Field"), located 30km west
of mainland UK, close to the developed Morecambe gas complex in the
UK waters of the East Irish Sea Basin. The Marram Field, which was
discovered in 1993, contains 38.8 Bcf of undeveloped gas 2P
Reserves and lies approximately 15km east of the offshore South
Morecambe Gas Field Platform. Gas produced from the South Morecambe
Platform is transported along the existing South Morecambe
trunkline to the onshore North Morecambe Terminal in Barrow. At the
peak of its production, the Morecambe complex satisfied
approximately 20 per cent. of the UK's gas demand. In the Marram
Field, EnergyPathways has identified a 'ready-to-go' gas
development asset, that is, Marram has low sub-surface technical
risk, with no further appraisal drilling required. It also has
near-term production potential due to the ability to tie-in to
neighbouring existing infrastructure that has spare capacity.
EnergyPathways is targeting first gas in 2024.
The directors of the Company and EnergyPathways believe that
natural gas is a bridging fuel with a key role in the global energy
transition and that a successful development of the Marram Field
has the potential to make a favourable contribution towards
reducing emissions and supporting the UK's transition to Net Zero.
The extreme volatility experienced in the UK energy market through
2022, resulting from years of under-investment in oil and gas
projects, and exacerbated by the supply crunch caused by the
ongoing war in Ukraine, has highlighted the necessity for
development of gas projects like Marram that have the potential to
deliver cleaner, home-grown energy that contributes to UK energy
security.
EnergyPathways' initial focus will be the development of the
Marram Field, however, in line with its aims to develop low
emission energy solutions, EnergyPathways has identified potential
future opportunities to rejuvenate production from the UK East
Irish Sea. It has submitted applications to the UK Government
regulator for the award of additional licences with undeveloped gas
resources in the region. EnergyPathways anticipates that there may
also be potential to integrate new production with the nearby HyNet
Northwest CCS and hydrogen hub project by providing gas feedstock
as well as integrating with renewable offshore wind projects. It
also intends to consider opportunities to participate in other
selected discovered fields in the region and UK more broadly.
EnergyPathways has a strong management team with an established
track record for value creation, operational excellence and a
commitment to a progressive ESG agenda that prioritises
environmental impact alongside the positive socioeconomic impact of
its activities.
Pursuant to the Transaction, it is proposed that the issued and
to be issued shares of EnergyPathways be acquired for an aggregate
consideration of GBP4,080,833 to be satisfied by the issue of
68,013,885 ordinary shares in the capital of the Company to the
vendors of EnergyPathways at an issue price of 6 pence per ordinary
share of the Company.
The Transaction remains subject to various conditions, including
full due diligence to the Company's satisfaction and Re-admission
(defined below). As the market capitalisation of the enlarged group
following completion of the Transaction is expected to be less than
GBP30 million (being the minimum market capitalisation for new
applications for admission to Standard Segment and to trading on
the Main Market), the Company will not be seeking readmission of
its shares to the Standard Segment and to trading on the Main
Market for listed securities of the London Stock Exchange. Instead,
the Company intends to make an application for its ordinary shares
to be admitted to trading on the AIM market operated by the London
Stock Exchange ("Re-admission") and will, in due course, publish an
admission document.
Shareholders should be aware that there is a possibility that
the Transaction will not proceed or that the terms may change
depending upon the outcome of due diligence. The Company will
provide further updates on the Transaction in due course.
The Company was initially established with the intention of
pursuing acquisition opportunities in the sports management sector.
The directors have considered a number of acquisition opportunities
in this sector, but to date has not yet found an acquisition target
that they consider would be appropriate for the Company or in the
best interests of its shareholders. As this search has been
ongoing, the board were made aware of an opportunity to acquire
EnergyPathways. The Transaction represents an opportunity for the
Company to invest in a business that has the potential to deliver
excellent value for shareholders and as such the directors consider
it appropriate to pursue the Transaction rather than continue to
spend time and resource seeking an opportunity in the sports
management sector that may not come to fruition.
Loan arrangement and Proposed Cancellation of Listing
In conjunction with the entry into the Term Sheet, the Company
has made available an unsecured term loan facility of a total
principal amount of GBP200,000 ("Loan") to EnergyPathways. The Loan
will accrue interest and will be repayable on the earlier of the
date of completion of the Transaction, on the first anniversary of
the loan agreement and the date falling 6 months after the Term
Sheet is terminated. The Company may, at its sole discretion, elect
to convert some or all of the Loan (together with the accrued
interest) into shares in the capital of EnergyPathways.
EnergyPathways shall use the Loan for working capital purposes,
including, in particular, costs in relation to progressing its
existing offshore gas project and new projects.
The Loan will constitute a reverse takeover of the Company for
the purposes of Listing Rule 5.6.4 R and therefore in accordance
with Listing Rule 5.2.3 G, the admission of the Company's shares to
the Standard Segment and to trading on the Main Market will be
cancelled. The Company does not intend to re-apply for its shares
to be readmitted to trading on the Main Market as it does not
satisfy the minimum market capitalisation requirement of GBP30
million.
As stated above, upon completion of the Transaction, the Company
would be seeking Re-admission on AIM and would have sought
cancellation of its existing listing in any event. The Company
expects the cancellation of its listing to be effective from 6
April 2023 and will update Shareholders in due course once the
timetable for cancellation is confirmed. Should the Transaction not
proceed, the Company will not be able to apply for its listing on
the Main Market to be reinstated.
Suspension of Listing
As a result of the entry into the Term Sheet and the making of
the Loan, the Company has requested, and has been granted, a
suspension of the listing in its shares with immediate effect
pending the cancellation of its listing as referred to above.
Neil Cousins, director of Dial Square said: " We are very
excited to have agreed initial terms with Ben Clube and his team on
the acquisition of EnergyPathways. The Marram Field off the coast
of Liverpool is located in a basin that has a well established
history of serving the UK with gas production with all key
infrastructure already in place. The vision of EnergyPathways is to
build on this 'ready to go' gas production and grow a portfolio of
additional near-term production gas assets in the UK. We are now
conducting due diligence and hope to conclude the transaction as
soon as possible. "
Ben Clube, CEO of EnergyPathways said: " We are delighted to
have agreed terms with the Dial Square team and believe this
Transaction will create a platform from which to deliver long-term
value for existing shareholders in both companies as well as
prospective investors going forward. The macro backdrop for
EnergyPathways is very compelling in terms of a raised awareness
about the critical role of natural gas in the UK energy mix and the
impact on domestic energy security. Our initial focus is the
development of a significant resource base of over 2 Tcf of
overlooked gas accumulations (based on EnergyPathways' internal
estimates) close to existing infrastructure in the UK East Irish
Sea, making the Marram Field a material and relevant development
that can boost UK near-term energy production and help secure the
UK's short and long-term energy security of a clean, natural gas
supply. EnergyPathways believes that the East Irish Sea region has
the potential to become a leading hydrogen, CCS, and renewable
energy centre and sees many integration opportunities for the
region to develop into a major low emission energy centre for the
UK. These broader opportunities are very much part of our
longer-term growth strategy."
Enquiries
Dial Square Investments Neil Cousins
plc (Non-Executive Chairman) +44 (0)1615040629
Optiva Securities Limited Christian Dennis /
(Company Broker) Daniel Ingram +44 (0)20 3137 1903
**ENDS**
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