TIDMFCRM
RNS Number : 5184I
Fulcrum Utility Services Ltd
05 December 2022
5 December 2022
FULCRUM UTILITY SERVICES LIMITED
("Fulcrum" or "the Group" or "the Company")
Convertible Loan Facility Agreement
Further to the Company's Trading Update on 24 October 2022 (RNS:
7933D) which notified that the Company was in discussions with its
substantial shareholders with regards to ensuring that the Group
remains adequately funded, the Company confirms that it has entered
into an arrangement (the "Facility Agreement") with Bayford &
Co Ltd ("Bayford") and funds managed by the Harwood Capital
Management Limited Group ("Harwood") (together the "Lenders") in
respect of the provision of funding of up to GBP6 million (the
"Facility") by way of a convertible loan.
The entry into the Facility Agreement, by Bayford and Harwood,
each being a substantial shareholder of the Company, constitutes a
related party transaction with each Lender under rule 13 of the AIM
Rules. Accordingly, the directors who are independent of the
Facility, being Jennifer Babington and Dominic Lavelle, (the
"Independent Directors") consider, having consulted with Cenkos
Securities plc, acting in its capacity as the Company's nominated
adviser and broker, that entering into the Facility Agreement is
fair and reasonable insofar as the Company's shareholders are
concerned.
The key terms of the Facility Agreement are:
-- Up to GBP6 million as principal (being GBP4 million from
Bayford and GBP2 million from Harwood on a pro rata basis);
-- Repayable on or before 1 November 2023 ("Repayment Date") or
such later date as may be agreed by the Lenders;
-- Convertible into Ordinary Shares at the discretion of the
Lenders from 1 April 2023 or earlier in the Event of Default which
is continuing ("Conversion");
-- If converted, the conversion price will be the lower of the
volume weighted average market value of the Company's Ordinary
Shares in the 5 trading days immediately preceding the date of the
conversion notice or 0.5p per Ordinary Share of the Company (the
"Conversion Price");
-- At or around the point of Conversion, the Company's
shareholders will be entitled to participate in an open offer or
similar arrangement, at the same price as the Conversion Price;
-- Interest will be accrued from the date monies are drawn down
under the Facility at a rate of 20 per cent. per annum, repayable
at the end of the term or on prepayment of the Facility;
-- A prepayment fee of 20 per cent. of the amount of the
Facility prepaid early and a non-utilisation fee of 6 per cent. per
annum.
The cash provided by the Facility will be drawn in tranches as
required by the Company.
Important matters to note for minority shareholders
The proceeds from the December 2021 fundraise were to support
the Company's stated growth strategy of entering the smart meter
infrastructure market as a Meter Asset Manager ("MAP"), as well as
for general working capital purposes. The considerable and
unprecedented volatility in the energy markets, and wider market
issues of supply chain pressure and cost inflation in materials,
have weighed heavily on the profitability of the Group's core
activities. Accordingly, the Group's priorities shifted during the
year from entering the smart meter infrastructure market as a MAP,
to focusing on protecting and improving margins in the Group's core
business and the proceeds of the fundraise have been utilised to
repay the existing debt facility in full and for working capital
purposes to support the business through trading losses in the
current difficult market conditions.
The Facility is expected to support the Group to initiate a
review of the various strategic options available to it to maximise
value for all shareholders ("Review") and to ensure the Group
continues to have adequate working capital.
The exercise of equity conversion rights by either Lender under
the Facility may result in that Lender acquiring Ordinary Shares
carrying more than 30 per cent. of the voting rights in Fulcrum,
and in certain circumstances more than 50 per cent.
Although Fulcrum is not a company that is subject to the UK
Takeover Code, the Company's Articles of Association (the
"Articles") contain certain protections equivalent to that afforded
to shareholders under Rule 9 of the City Code on Takeovers and
Mergers. As a condition of the Facility, the Independent Directors
of Fulcrum have agreed to exercise their discretion, pursuant to
the Articles, to waive any requirement for a mandatory offer for
the remaining Ordinary Shares in the Company which may otherwise
apply upon the exercise of equity conversion rights under the
Facility. For these purposes, the Independent Directors have not
made any determination that the Lenders are acting in concert and
each Lender has been granted a separate waiver. The Relationship
Agreements that exist between the Company and each of the Lenders
will remain in place.
In order to enable minority shareholders to participate in the
raising of funds for the Company on similar terms to the Lenders,
the Facility Agreement contains an entitlement for minority
shareholders, at or around the point of Conversion, to participate
in an open offer or similar arrangement at the Conversion Price,
with a right to subscribe for additional shares in the capital of
the Company pro rata to their existing shareholdings at that time.
This offer is expected to be undertaken shortly following exercise
by the Lenders of their Conversion right.
The issue of shares to the Lenders, resulting from Conversion,
is also subject to shareholders approving certain resolutions (the
"Resolutions"). A shareholder circular convening a general meeting
for the purposes of seeking approval of the Resolutions will be
sent to shareholders in due course. Shareholders should be aware
that it is a term of the Facility Agreement that these Resolutions
are approved by the requisite majority and the FacilitieAgreement
may be terminated if they are not so approved. The termination of
the Facility Agreement would likely result in little or no value
for Shareholders. Accordingly, it is important that Shareholders
vote in favour of all of the Resolutions so that Conversion may
proceed and all funding options are available to the Board.
Jennifer Babington, Chair, commented:
"Clearly the situation that the Company has found itself in is
disappointing. Whilst it was known that the Company had legacy
operational issues, these were deeper and more longstanding than
anticipated. This, set against a turbulent energy market and
difficult economic backdrop, have created deeply challenging and
unprecedented conditions for the Group that could not have been
predicted at the time of the fundraise in December last year.
The Facility is, however, I believe a positive demonstration of
our major shareholders' continued belief and commitment in Fulcrum
and an endorsement of the future potential of the business."
This announcement contains inside information for the purposes
of the UK version of the Market Abuse Regulation (EU No. 596/2014)
as it forms part of United Kingdom domestic law by virtue of the
European Union (Withdrawal) Act 2018 ("UK MAR"). Upon the
publication of this announcement, this inside information is now
considered to be in the public domain .
The identity and percentage holdings of the Company's major
shareholders:
Name of shareholder Number of ordinary Percentage of share
shares capital (%)
Harwood Capital 114,892,352 28.8
------------------- --------------------
Bayford Group* 161,212,821 29.1
------------------- --------------------
*Bayford Group and its connected parties (controlled by Jonathan
Turner)
Enquiries:
Fulcrum Utility Services Limited +44 (0)114 280
Antony Collins, Chief Executive Officer 4150
Cenkos Securities plc (Nominated adviser and broker)
Camilla Hume / Callum Davidson (Nomad) / Michael +44 (0)20 7397
Johnson (Sales) 8900
Notes to Editors:
Fulcrum is a multi-utility infrastructure and services provider.
The Group operates nationally with its head office in Sheffield,
UK. It designs, builds, owns, and maintains utility infrastructure.
https://investors.fulcrum.co.uk/
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
FURZZLFBLLLXFBX
(END) Dow Jones Newswires
December 05, 2022 02:00 ET (07:00 GMT)
Fulcrum Utility Services... (LSE:FCRM)
Historical Stock Chart
From Oct 2024 to Nov 2024
Fulcrum Utility Services... (LSE:FCRM)
Historical Stock Chart
From Nov 2023 to Nov 2024
