TIDMSGN
RNS Number : 1908Y
Solgenics Limited
03 May 2023
News Release
Proposed Delisting and General Meeting
3 May 2023: Solgenics Limited (the "Company") an African
renewables development company focused on a 300MW solar PV plus
Battery Energy Storage System ("BESS") renewable energy project in
Tete Province, Mozambique (the "Tete Solar Project" or the
"Project") today announces that it will shortly be posting a
circular to shareholders (the "Circular") in connection with a
proposal for the cancellation of admission of the ordinary shares
of no par value in the Company (the "Ordinary Shares") to trading
on AIM (the "Cancellation"), pursuant to Rule 41 of the AIM Rules
for Companies (the "AIM Rules").
The Circular will include a notice of a general meeting of the
Company which will be convened at the offices of Simmons &
Simmons, Citypoint, 1 Ropemaker Street, London, EC2Y 9SS , UK (the
"General Meeting"), for the purposes of considering and, if thought
fit, passing the requisite shareholder resolution to approve the
Cancellation and certain matters ancillary to the Cancellation.
Further information on the proposed Cancellation and the General
Meeting is set out below.
Solgenics Chief Executive Officer, Hanno Pengilly said: "The
Company remains committed to progressing the Tete Solar Project and
the decision to delist comes after careful Board consideration and
evaluation of the advantages and disadvantages of remaining a
publicly traded company in the interests of both the Company and
shareholders.
The Company's recent delivery of a positive Project Feasibility
Study and approved transmission integration solution, amongst other
developments, have put it in a good position to deliver the Project
and generate value for shareholders. This is reflected by the
receipt in April 2023 of multiple expressions of interest from
financial investors and Independent Power Producers in funding the
Project's Bankable Feasibility Study ("BFS") work streams.
The delisting is expected to free up management time and
resources to more fully focus on the Project and allow a more
competitive approach with potential offtakers by limiting available
public information to its competitors. All whilst operating under
materially lower overheads.
The Company is prioritising a strategy to formalise offtake for
the first phase 100MW solar PV plant before the end of Q2 2023 and
"in principle" terms for a working capital loan have been agreed
from certain Directors to cover the delisting and working capital
costs during this period. Progression on the offtake is expected to
unlock more attractive funding terms for ongoing working capital
and the BFS, and the Company does not believe that a continued
listing on AIM will provide significantly more cost effective
sources of funding.
We are committed to our shareholders and believe that delisting
will provide us with greater flexibility to pursue our long-term
strategic objectives and create value for our stakeholders."
Reasons for the proposed AIM Delisting
The Directors have conducted a review of the benefits and
drawbacks to the Company and its shareholders in retaining its
quotation on AIM, and believe that Cancellation is in the best
interest of the Company and its shareholders as a whole. In
reaching this conclusion, the Directors have considered the
following key factors:
-- the continued listing on AIM is unlikely to provide the
Company with significantly wider or more cost-effective access to
capital than the funding options it already has from majority
shareholders in the near to mid-term;
-- with a market capitalisation of GBP 3.26 million the
Directors have concluded that the most likely source of future
funds will be through private capital;
-- the considerable cost, management time and legal and
regulatory burden associated with maintaining the Company's
admission to trading on AIM are disproportionate to the benefits to
the Company;
-- there are negative operational influences on the business
which come about directly as a result of being quoted, something
which is accentuated by operating in an industry where the vast
majority of the Company's peers are privately owned. The Company's
peers also have far greater insight into its strategy, operational
activities and future plans than the Company has into theirs, a
factor which reduces the Company's relative competitiveness;
-- the Company's market capitalisation and lack of liquidity in
the Ordinary Shares have impacted certain of the potential
advantages to having the shares admitted to trading on AIM.
Accordingly, the Directors believe that it is in the best
interests of the Company and its shareholders as a whole to cancel
the admission of the Company's Ordinary Shares to trading on AIM.
The Board does not consider that any potential benefits to the
Company or Shareholders from retaining the AIM Admission are
sufficient to justify the associated costs.
Effect of the AIM Delisting
The Directors are aware that certain Shareholders may be unable
or unwilling to hold Ordinary Shares in the event that the
Cancellation is approved and becomes effective. Such Shareholders
should consider selling their Ordinary Shares in the market prior
to the Cancellation becoming effective.
Under the AIM Rules, the Company is required to give at least 20
clear Business Days' notice of Cancellation. Additionally,
Cancellation will not take effect until at least 5 clear Business
Days have passed following the passing of the relevant resolution
at the General Meeting (the "Resolution"). Accordingly, if the
Resolution to cancel the Admission is approved, the last day of
dealings in the Ordinary Shares on AIM is expected to be 6 June
2023, and the Cancellation is expected to become effective at 7.00
a.m. on 7 June 2023. A full timetable will be confirmed in the
Circular.
The principal effects of the Cancellation will be that:
-- there will be no formal market mechanism enabling
Shareholders to trade Ordinary Shares and, consequently, there can
be no guarantee that a Shareholder will be able to purchase or sell
any Ordinary Shares. This decision has been taken due to
prohibitive costs, probability of low liquidity and the advantages
of not having a publicly quoted share price during future
negotiations with potential strategic investors and development
funders;
-- while the Ordinary Shares will remain freely transferrable,
it is possible that the liquidity and marketability of the Ordinary
Shares will, in the future, be even more constrained than at
present and the value of such Ordinary Shares may be adversely
affected as a consequence;
-- in the absence of a formal market and quote, it may be more
difficult for Shareholders to determine the market value of their
investment in the Company at any given time;
-- the regulatory and financial reporting regime applicable to
companies whose shares are admitted to trading on AIM will no
longer apply;
-- Shareholders will no longer be afforded the protections given
by the AIM Rules, such as the requirement to be notified of certain
material developments or events (including substantial
transactions, financing transactions, related party transactions
and certain acquisitions and disposals) and the separate
requirement to seek shareholder approval for certain other
corporate events such as reverse takeovers or fundamental changes
in the Company's business; the legal requirements applicable to
private companies relating to transparency and corporate governance
are less stringent than those applicable to public companies quoted
on AIM and whilst the Company currently follows the QCA Corporate
Governance Code, following the cancellation it will no longer be
required to follow a recognised corporate governance code.;
-- the Company will no longer be required to publicly disclose
any change in major shareholdings in the Company under the AIM
Rules or the Disclosure Guidance and Transparency Rules;
-- the Company will cease to have a nominated adviser and broker;
-- the Company's Depositary Interest Facility which is required
for a BVI company whose shares are admitted to trading to AIM to
facilitate settlement of shares through the CREST facility will
also terminate in June on or after the cancellation becoming
effective. Holders of Depositary interests will, at that time, be
moved to the main share register and be issued with share
certificates. Although the Ordinary Shares will remain
transferable, they will cease to be transferable through CREST;
and
-- the Cancellation may have taxation or other commercial
consequences for Shareholders. Shareholders who are in any doubt
about their tax position should consult their own professional
independent tax adviser.
The Company will remain registered with the Registrar of
Companies in British Virgin Islands in accordance with and subject
to the Law, notwithstanding the Cancellation.
The Company proposes to seek shareholder approval to amend the
Articles to remove certain provisions which were included as a
consequence of its Admission to AIM, conditional upon the
Cancellation becoming effective.
The Company will continue to be bound by the Articles (which
require shareholder approval for certain matters) following the
Cancellation.
The above considerations are not exhaustive and Shareholders
should seek their own independent advice when assessing the likely
impact of the Cancellation on them.
The Company currently intends that it will continue to provide
certain facilities and services to Shareholders that they currently
enjoy as shareholders of an AIM company. The Company will:
-- continue to communicate information about the Company
(including annual accounts) to its Shareholders, as required by the
Law;
-- continue to hold annual general meetings; and
-- continue, for at least 12 months following the Cancellation,
to maintain its corporate website, www.solgenics .com and to post
updates on the website from time to time, although Shareholders
should be aware that there will be no obligation on the Company to
include all of the information required under AIM Rule 26 or to
update the website as required by the AIM Rules.
Cancellation Process
In accordance with Rule 41 of the AIM Rules, the Company's
Nominated Adviser has notified the London Stock Exchange of the
proposed Cancellation.
Pursuant to AIM Rule 41, the Cancellation can only be effected
by the Company after securing a resolution of Shareholders in a
general meeting passed by a requisite majority, being not less than
75 per cent. of the votes cast by Shareholders (in person or by
proxy).
The Directors have indicated they will vote in favour of the
Cancellation.
Under the AIM Rules, the Cancellation can only take place after
the expiry of a period of twenty Business Days from the date on
which notice of the Cancellation is given. In addition, a period of
at least five Business Days following the Shareholder approval of
the Cancellation is required before the Cancellation may be put
into effect. Accordingly, if the Resolution to cancel the Admission
is approved, the last day of dealings in the Ordinary Shares on AIM
is expected to be 6 June 2023, and the Cancellation is expected to
become effective at 7.00 a.m. on 7 June 2023.
General Meeting
The Circular will include a copy of the notice convening the
General Meeting to be held at the offices of Simmons & Simmons,
Citypoint, 1 Ropemaker Street, London, EC2Y 9SS, UK at 10:00 a.m.
on or around 26 May 2023 at which, inter alia, the Cancellation
Resolution will be proposed.
The Directors of the Company are responsible for the release of
this announcement.
Expected Timetable of Principle Events
Notice given of the proposed 3 May 2023
Cancellation
Publication of the Circular On or around 10 May 2023
and Notice of General meeting
-------------------------
General Meeting On or around 26 May 2023
-------------------------
Announcement of results of General On or around 26 May 2023
Meeting
-------------------------
Expected last day of dealings 6 June 2023
in Ordinary Shares on AIM
-------------------------
Expected time and date that 7:00 a.m. 7 June 2023
the Admission to trading of
the Ordinary Shares on AIM will
be cancelled
-------------------------
Directors Loan
"In Principle" agreement has been reached with Non-Executive
Chairman, Michael Haworth, and Non-Executive Director, Scott
Fletcher, (together, the "Lenders") to provide a working capital
facility term loan ("Loan") up to US$230,000 to cover delisting
costs and working capital up to the end of Q2 2023.
The proposed terms of the Loan are as follows:
-- Maturity: 31 July 2023
-- Coupon: 0.3x
-- Security: none
-- In the event the Company enters into third party debt for the
BFS and/or future working capital requirements, the right to amend
the terms of the Loan such that it is on the same terms and ranks
equally with the third party debt.
-- The Loan is subject to the lenders agreeing to the
documentation and the necessary related party transaction process
being completed by the Company's Independent Directors
-- Loan documentation to be finalised and is expected to be
completed before the end of June 2023
-- A further announcement will be made once definitive
documentation to effect the Loan has been entered into if it is
entered into prior to the Cancellation.
Related Party Transaction
The proposed Directors Loan would likely constitute a related
party transaction for the purposes of AIM Rule 13 for Companies.
Accordingly, if the Loan is entered into prior to the Cancellation,
the Company's Independent Directors would need to consider that the
terms of the Directors Loan are fair and reasonable insofar as its
shareholders are concerned before finalising the loan.
There can be no certainty that the transactions contemplated by
this announcement will occur.
Enquiries
For further information please visit www.solgenics.com or
contact:
Solgenics: Hanno Pengilly +27 (0) 71 362 3566
Liberum Capital Limited: Scott Mathieson, Edward Thomas, +44 (0) 20 3100
NOMAD & Joint Broker Kane Collings 2000
Novum Securities
Limited +44 (0) 20 7399
Joint Broker Colin Rowbury 9427
Pimlico Advisory
Ltd +44 (0) 777 56 55
Investor Relations Elizabeth Johnson 927
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) No 596/2014 which is part of UK law
by virtue of the European Union (Withdrawal) Act 2018. Upon
publication of this Announcement and such information is now
considered to be in the public domain. The person who arranged for
the release of this announcement on behalf of the Company was Hanno
Pengilly, CEO.
About Solgenics
Solgenics is an African renewable energy development company
focused on the development of a 300MW solar PV plus BESS renewable
energy in the Tete Province in northern Mozambique (the "Tete Solar
Project").
It is the intention that the Tete Solar Project will connect to
the Mozambique grid with target power offtakers in Mozambique and
the Southern African Power Pool ("SAPP").
The Tete Solar Project takes full advantage of Mozambique's
leading sustainable energy resources and is fully aligned with
Government's objective to become a champion for energy transition
impacting all Southern Africa.
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END
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