TIDMTERN
RNS Number : 4159C
Tern PLC
12 June 2023
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF ARTICLE 7 OF EU REGULATION 596/2014 (WHICH FORMS PART OF
DOMESTIC UK LAW PURSUANT TO THE EUROPEAN UNION (WITHDRAWAL) ACT
2018). UPON THE PUBLICATION OF THIS ANNOUNCEMENT THIS INSIDE
INFORMATION IS NOW CONSIDERED TO BE WITHIN THE PUBLIC DOMAIN.
12 June 2023
Tern Plc
("Tern" or the "Company")
Funding facility
Tern Plc (AIM:TERN), the investment company specialising in
supporting high growth, early-stage, disruptive Internet of Things
("IoT") technology businesses, announces that it has signed a loan
facility agreement (the "Facility") with an investor (the
"Investor") to provide a loan facility of up to GBP3.0 million,
available for up to 36 months.
The Directors intend that the Facility will be used to provide
Tern with a stronger negotiating position and access to funding for
follow-on investment opportunities in future syndicated fundraises
undertaken by Tern's existing portfolio companies.
The Facility provides for an initial drawdown (the "Initial
Advance") of GBP500,000, which the Company has drawn down, with
further drawdowns being subject to the conditions of the Facility
at that point in time. Funds advanced under the Facility will
attract a fixed interest rate of 1.0% per calendar month and will
be repayable with accrued interest, in equal monthly instalments,
commencing 180 days from the date of drawdown until the end of the
18 month term of each drawdown.
The Company may repay any amounts drawn down under the Facility
in cash and it is the Directors current intention that any amounts
drawn down under the Facility will be repaid from the proceeds from
the full or partial exit of one or more of its current
investments.
Alternatively, the Company may settle any outstanding amounts
owed as monthly repayments through the issue of new ordinary shares
of 0.02p each in the Company (the "Ordinary Shares") (a "Non-cash
Repayment"). Following any decision by the Company to make a
Non-cash Repayment the Investor will be automatically granted
conversion rights over such drawndown principal and interest
balances that were due pursuant to a repayment (the "Conversion
Rights"). Pursuant to such Conversion Rights, the Investor will
then have the right for 12-months to convert such amounts into
Ordinary Shares. For the first 10 trading days following a Non-cash
Repayment, the Investor may require that the Company satisfies the
principal and interest balances that are due via the sale of shares
in Wyld Networks AB ("Wyld") held via the Wyld Escrow Facility (as
defined below). Following these 10 trading days, the Investor may
exercise its Conversion Rights and subscribe for Ordinary Shares to
satisfy the principal and interest balances that remain
outstanding. In respect of its Conversion Rights, the Investor may
subscribe for Ordinary Shares at a price per share equal to the
lower of: (i) 90% of the average of the lowest five daily volume
weighted average share prices of the Ordinary Shares on AIM ( "
VWAPs " ) in the 20 trading days preceding a Non-cash Repayment
(the "Adjusted Issue Price"); or (ii) an amount equal to 130% of
the average of the daily VWAPs for the 5 trading days immediately
prior to the applicable drawdown date If at the end of the relevant
12 month period such conversion has not occurred and/or repayment
has not been satisfied via the sale of shares in Wyld held via the
Wyld Escrow Facility (as defined below), then any balance
outstanding shall be paid to the Investor in cash by the
Company.
The Investor shall receive warrants (the "Warrants") equal to 5
0% of the value of each drawdown divided by the average of the
daily VWAP for the five trading days immediately prior to the
applicable drawdown date ( the "Reference Price"), with a 36-month
term to expiry from the date of issuance. The warrants are
exercisable into new Ordinary Shares at a subscription price being
equal to 1 5 0% of the then prevailing Reference Price. With
regards to the Initial Advance, the Investor has received 5,524,007
warrants with an exercise price of 6.78855 pence per Ordinary Share
. If these Warrants were to subsequently be exercised in full, it
would result in the issue of 5,524,007 new Ordinary Shares raising
gross proceeds of GBP375,000 for the Company. In the event that the
Company prepays the Facility, in whole or in part, then the
Warrants shall be repriced to the average of the daily VWAPs for
the five trading days prior to the date of the prepayment, if such
value is less than the existing exercise price of the Warrants. If
the Company issues and allots new Ordinary Shares at an issue price
that is below the exercise prices of the Warrants (other than
pursuant to the Facility) within 18 months of each drawdown, the
exercise prices of the relevant Warrants shall be amended to be
equivalent to that issue price to the extent any Warrants remain
unexercised.
Pursuant to the Facility's terms, for the Initial Advance the
Company has issued new Ordinary Shares in settlement of a Facility
implementation fee of GBP50,000 in the amount of 1,104,801 new
Ordinary Shares at a deemed price of 4.5257 pence per share (the
"Implementation Fee Shares") being a price equivalent to the daily
VWAPs for the five trading days prior to the date of the Facility.
Any further drawdowns under the Facility will incur a Facility
implementation fee equal to 7% of the amount drawn down if paid in
cash, or 10% of the amount drawn down if settled via the issue of
new Ordinary Shares in the Company at an issue price equivalent to
the daily VWAPs for the five trading days prior to the date of such
draw down (the mechanism of settlement in Ordinary Shares or cash
is at the election of the Company).
As security for the Facility, the Company will, inter alia,
place in an escrow account shares in Wyld owned by the Company,
which are to be maintained at a value not less than 1.5 times the
value of any outstanding amount drawn down and accrued interest
under the Facility ("the Wyld Escrow Facility").
The Company has provided a number of warranties and undertakings
to the Investor pursuant to the Facility. The Facility is also
subject to certain events of default and default processes, which
include demanding repayment of the Facility's principal and
interest, and the Investor being able to satisfy such repayment via
the sale of shares in Wyld utilising the security arrangements via
the Wyld Escrow Facility and/or following a continuing event of
default the Investor may subscribe for Ordinary Shares at a
discounted price per share . In the event of a default, the
Facility also provides for additional monthly interest, applicable
to any and all outstanding principal, interest and fees that have
become payable.
The Company shall be entitled to prepay the Facility at any
time, in whole or in part, provided that a prepayment fee
representing 10% of the balance being repaid is paid at the time of
such prepayment. Once repaid or prepaid the Facility may not be
redrawn unilaterally by the Company.
Admission and Total Voting Rights
Application will be made for the Implementation Fee Shares to be
admitted to trading on AIM ("Admission") and it is expected that
Admission will take place on or around 16 June 2023.
In accordance with the Financial Conduct Authority's Disclosure,
Guidance and Transparency Rules, the Company confirms that
following Admission, the Company's enlarged issued ordinary share
capital will comprise 389,676,311 Ordinary Shares. The Company does
not hold any shares in Treasury. Therefore, from Admission, the
total number of voting rights in the Company will be 389,676,311
and this figure may be used by shareholders in the Company as the
denominator for the calculations to determine if they are required
to notify their interest in, or a change to their interest in the
Company, under the Disclosure Guidance and Transparency Rules.
Enquiries
Tern Plc via IFC Advisory
Al Sisto (CEO)
Sarah Payne (CFO)
Allenby Capital Limited Tel: 0203 328 5656
(Nominated Adviser and Broker)
Alex Brearley / Dan Dearden-Williams
(Corporate Finance)
Matt Butlin / Kelly Gardiner (Sales
and Corporate Broking)
IFC Advisory Tel: 0203 934 6630
(Financial PR and IR) tern@investor-focus.co.uk
Tim Metcalfe
Graham Herring
Florence Chandler
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END
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