TIDMVLS
RNS Number : 0604A
Velocys PLC
19 May 2023
Velocys plc
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19 May 2023
Velocys plc
("Velocys", the "Company" or the "Group")
Result of Placing and Retail Offer
Velocys plc (AIM: VLS), the sustainable fuels technology
company, is pleased to announce the completion of the Bookbuild and
the Retail Offer, following the announcement of the proposed
Fundraise and Retail Offer made yesterday 18 May 2023. A total of
240,000,000 Placing Shares and Retail Offer Shares have been
conditionally placed at the Issue Price to raise gross proceeds of
GBP 6 million. The Issue Price of 2.5 pence per Placing Share
represents a discount of approximately 26.9 per cent. to the
closing middle market price of 3.42 pence per ordinary share on 17
May 2023.
Allocation was made to existing retail Shareholders through the
Retail Offer applying the principles of soft pre-emption.
Shareholders were allocated 100 per cent. of their soft pre-emptive
allowance.
The Company has also announced details of an Open Offer to
Eligible Shareholders to subscribe for an aggregate of up to
77,648,390 Open Offer Shares at the Issue Price, to raise
additional gross proceeds of up to approximately GBP2 million on
the basis of 1 Open Offer Share for every 18 Existing Ordinary
Shares held at the Record Date. Qualifying Shareholders subscribing
for their full entitlement under the Open Offer may also request
additional Open Offer Shares through the Excess Application
Facility.
The Company has also announced a proposed conditional issue of
convertible loan notes. Carbon Direct Capital (a growth investment
firm focused on carbon management technologies) has conditionally
agreed to subscribe for a minimum of $15 million (approximately
GBP12 million) Convertible Loan Notes, subject to, inter alia, the
Company raising or having received legally binding commitments in
respect of the Minimum Amount. The Convertible Loan Notes are
convertible at the Issue Price (subject to a limited number of
customary adjustments). A number of discussions are underway with
additional potential investors to raise further amounts to satisfy
the Minimum Amount Condition either through further issuances of
Convertible Loan Notes and/or new Ordinary Shares to investors
other than Carbon Direct Capital.
The Placing, Retail Offer and Open Offer are conditional on,
inter alia, the Resolutions relating thereto being passed by the
Shareholders at the General Meeting to be held at 10.30 a.m. on 8
June 2023 at Magdalen Centre, Robert Robinson Avenue, The Oxford
Science Park, Oxford OX4 4GA ("GM").
The issue of Convertible Loan Notes to Carbon Direct and
potential further issuances of Convertible Loan Notes and/or new
Ordinary Shares) is conditional on, inter alia, the passing of all
of the Resolutions by the Shareholders at the GM. The Placing, the
Retail Offer and the Open Offer are not conditional on the issue of
the Convertible Loan Notes or on the Minimum Amount being raised.
The Retail Offer and the Open Offer are conditional upon completion
of the Placing. The Placing is not conditional on any other part of
the Fundraising completing. Subscription by Carbon Direct Capital
for the Convertible Loan Notes is conditional on the Company having
raised or having received legally binding commitments in respect of
the Minimum Amount from the Fundraise. Should Shareholder approval
for the Resolutions relating to the Placing, the Retail Offer and
the Open Offer not be obtained at the General Meeting, neither the
Placing, the Retail Offer nor the Open Offer will proceed. Should
Shareholder approval for the Resolutions not be obtained at the
General Meeting, the proposed conditional issue of Convertible Loan
Notes to Carbon Direct Capital will not proceed. The Minimum Amount
Condition has not currently been satisfied.
Use of Proceeds
-- The net proceeds of the Placing, the Retail Offer and the
Open Offer will be used primarily for:
o organisation costs including project delivery and business
development;
o engineering scale-up with investment in engineering
resource;
o initial commissioning of the Ohio manufacturing facility;
and
o working capital requirements to invest in achieving supply
chain resilience and to cover timeline of grant receipts.
-- In the event of the Minimum Amount being raised, the net
proceeds of the issuance of the Convertible Loan Notes to Carbon
Direct Capital and the issuance of further Convertible Loan Notes
and/or Ordinary Shares to investors other than Carbon Direct
Capital will be used primarily for:
o scaling-up of the organisation and corporate costs including
increasing labour from approximately 40 full time employees to
approximately 100 full time employees gradually over the next 12 to
18 months in line with client and project demand in order to
accelerate the capability of the Company to deliver its technology
to its clients at scale;
o completion of capital investment in the Ohio reactor core
manufacturing facility including production start-up and catalysis
upgrades;
o funding for US Listing costs or interest payments due on the
Convertible Loan Notes in the event no US Listing occurs during the
21-month period from issue of the Convertible Loan Notes;
o supporting performance guarantees for the Company's
proprietary Fischer-Tropsch technology to be delivered to client
projects; and
o working capital requirements, build-up of reactor inventory at
the Ohio manufacturing facility and to manage timing of payments
and grant receipts.
Henrik Wareborn, CEO of Velocys, commented:
"We are pleased with the result for the Placing and to have
received the support of our shareholders as well as a number of new
investors. We are now focussed on delivering important value
inflection points for the Company and continuing discussions with
strategic investors into the Convertible Loan Notes.
"The proposed transaction in Velocys plc which follows recent
positive project funding updates on the Altalto reference project
will help consolidate our position as the leading global provider
of sustainable aviation fuel technology and enable the supply of
negative carbon intensity fuels to airlines and others aiming
towards net zero targets.
"We are fully committed on delivering the clear benefits of our
patented technology to support the decarbonisation of the aviation
sector and enhance shareholder returns."
Related Party Transaction and Director Participation
As part of the Placing, Lansdowne Partners (UK) LLP (" Lansdowne
"), a substantial shareholder of the Company and therefore a
Related Party as defined by the AIM Rules (" Related Party "), has
subscribed for a total of 48,000,000 Placing Shares at the Issue
Price under the Placing. Following completion of the Placing, the
Retail Offer and the Open Offer (assuming subscription for the Open
Offer Shares in full), Lansdowne will have an aggregate interest in
303,156,632 Ordinary Shares, representing approximately 17.7 per
cent. of the share capital of the Company as enlarged by the issue
of the New Ordinary Shares ( Enlarged Share Capital ").
Certain Directors of the Company, being Henrik Wareborn, Philip
Sanderson, Philip Holland, Ann Markey, and Thomas Quigley, all of
which are deemed to be a Related Party pursuant to the AIM Rules,
have subscribed for an aggregate of 2,400,000 Placing Shares at the
Issue Price. Following completion of the Placing, the Retail Offer
and the Open Offer (assuming subscription for Open Offer Shares in
full), the above Directors will hold an aggregate interest in
6,654,896 Ordinary Shares, representing approximately 0.4 per cent.
of the Enlarged Share Capital of the Company. A number of Velocys
senior managers have also subscribed for in aggregate 1,000,000
Placing Shares.
Darren Messem, being the director who is independent of the
Placing, having consulted with the Company's nominated adviser,
considers that the terms of the participation in the Placing by
Lansdowne and certain of the Directors are fair and reasonable
insofar as its shareholders are concerned.
Admission and Settlement
Application will be made to the London Stock Exchange for the
New Ordinary Shares to be admitted to trading on AIM. Subject,
inter alia, to the Resolutions relating to the Placing, the Retail
Offer and the Open Offer being passed, it is expected that
Admission will become effective and that dealings in the New
Ordinary Shares will commence on AIM at 8.00 a.m. on or around 9
June 2023. The New Ordinary Shares will rank pari passu in all
respects with the Existing Ordinary Shares.
Upon Admission, and assuming full take up of the Open Offer
Shares, the Enlarged Share Capital is expected to be 1,715,319,421
Ordinary Shares. On this basis, the new Ordinary Shares will
represent approximately 18.5 per cent. of the Enlarged Share
Capital. These figures do not take into account the proposed
conditional issue of the Convertible Loan Notes (and/or new
Ordinary Shares) up to the Maximum Amount.
Posting of Circular
A Circular to shareholders containing full details of the
Fundraise, including details of the Open Offer and the terms and
conditions on which it is being made (including the procedure for
application and payment) and convening the General Meeting to be
held at 10.30 a.m. on 8 June 2023 at Magdalen Centre, Robert
Robinson Avenue, The Oxford Science Park, Oxford OX4 4GA, is
expected to be posted by 6.00 p.m. on 22 May 2023 and will also be
available on the Company's website around the same time (
www.velocys.com ).
The capitalised terms used in this announcement have the same
meanings as in the " Proposed Placing, Retail Offer and Open Offer"
announcement published by the Company at 5.40 p.m. on 18 May 2023
unless otherwise stated.
Enquiries:
Velocys
Henrik Wareborn, CEO
Philip Sanderson, CFO +44 1865 800821
Panmure Gordon (UK) Limited (Nomad and Joint
Broker)
Hugh Rich (Corporate Broking)
Emma Earl (Corporate Finance)
John Prior (Corporate Finance)
Mark Rogers (Corporate Finance) +44 20 7886 2500
Shore Capital Stockbrokers Limited (Joint
Broker)
Henry Willcocks (Corporate Broking)
Toby Gibbs (Corporate Advisory)
James Thomas (Corporate Advisory)
Angus Murphy (Corporate Advisory) +44 20 7408 4090
R adnor Capital (Investor Relations)
Joshua Cryer
Iain Daly +44 20 3897 1830
Buchanan (Financial PR)
Helen Tarbet
Simon Compton +44 20 7466 5000
Notes to Editors
Velocys is an AIM quoted, international sustainable fuels
technology company, providing customers with a technology solution
to enable the production of negative Carbon Intensity synthetic,
drop-in fuels from a variety of waste materials. Synthetic fuel is
the only commercially available, permanent alternative to fossil
aviation fuels. The Velocys technology is IP-protected in all major
jurisdictions.
Two reference projects in the US and UK (Bayou Fuels and Altalto
respectively) are designed to accelerate the adoption and
standardise the Velocys proprietary Fischer Tropsch (FT) technology
with an integrated end to end solution, including renewable power
and sequestration.
Velocys is enabling commercial scale synthetic fuel production
in response to the clean energy transition, with significant
additional positive air quality impacts.
www.velocys.com
IMPORTANT NOTICE
The information contained in this announcement is for
information purposes only and does not purport to be full or
complete. The information contained in this announcement is given
at the date of its publication (unless otherwise marked) and is
subject to updating, revision and amendment from time to time. No
reliance may be placed for any purpose on the information contained
in this announcement or its accuracy, fairness or completeness.
Neither this announcement, nor any copy of it, may be taken or
transmitted, published or distributed, directly or indirectly, in
or into any jurisdiction where to do so would constitute a
violation of the relevant securities laws of such jurisdiction.
This aannouncement is for information purposes only and does not
constitute an offer to sell or issue, or the solicitation of an
offer to buy, acquire or subscribe for any shares in the Company in
any state or jurisdiction in which such offer or solicitation is
not authorised or to any person to whom it is unlawful to make such
offer or solicitation. Any failure to comply with these
restrictions may constitute a violation of securities laws of such
jurisdictions.
This announcement is not for publication or distribution,
directly or indirectly, in or into the United States of America.
This announcement is not an offer of securities for sale into the
United States. The securities referred to herein have not been and
will not be registered under the U.S. Securities Act of 1933, as
amended, and may not be offered or sold in the United States,
except pursuant to an applicable exemption from registration. No
public offering of securities is being made in the United
States.
This announcement has been issued by, and is the sole
responsibility of, the Company. No undertaking, representation,
warranty or other assurance, express or implied, is made or given
by or on behalf of the Company, Panmure Gordon (UK) Limited
"("Panmure Gordon"") or Shore Capital Stockbrokers Limited "("Shore
Capital"") or any of their respective directors, officers,
partners, employees, agents or advisers or any other person as to
the accuracy or completeness of the information or opinions
contained in this announcement and no responsibility or liability
is accepted by any of them for any such information or opinions or
for any errors, omissions or misstatements, negligence or otherwise
in this announcement.
Panmure Gordon is authorised and regulated in the UK by the FCA
and is acting as nominated adviser and joint broker to the Company.
Panmure Gordon is not acting for, and will not be responsible to,
any person other than the Company for providing the protections
afforded to its customers or for advising any other person on the
contents of this announcement or on any transaction or arrangement
referred to in this announcement. No representation or warranty,
express or implied, is made by Panmure Gordon as to, and no
liability is accepted by Panmure Gordon in respect of, any of the
contents of this announcement. The responsibilities of Panmure
Gordon as the Company's nominated adviser under the AIM Rules for
Companies "("AIM Rules"") and the AIM Rules for Nominated Advisers
are owed solely to London Stock Exchange plc and are not owed to
the Company or to any director or shareholder of the Company or any
other person, in respect of his decision to acquire shares in the
capital of the Company in reliance on any part of this
announcement, or otherwise.
Shore Capital is authorised and regulated in the UK by the FCA
and is acting as joint broker to the Company. Shore Capital is not
acting for, and will not be responsible to, any person other than
the Company for providing the protections afforded to its customers
or for advising any other person on the contents of this
announcement or on any transaction or arrangement referred to in
this announcement. No representation or warranty, express or
implied, is made by Shore Capital as to, and no liability is
accepted by Shore Capital in respect of, any of the contents of
this announcement.
The information in this announcement may not be forwarded or
distributed to any other person and may not be reproduced in any
manner whatsoever. Any forwarding, distribution, reproduction, or
disclosure of this information in whole or in part is unauthorised.
Failure to comply with this directive may result in a violation of
applicable securities laws and regulations of other
jurisdictions.
This announcement contains (or may contain) certain
forward-looking statements with respect to certain of the Company's
current expectations and projections about future events and the
Company's future financial condition and performance. These
statements, which sometimes use words such as "aim", "anticipate",
"believe", "may", "will", "should", "intend", "plan", "assume",
"estimate", "expect' (or the negative thereof) and words of similar
meaning, reflect the current beliefs and expectations of the
directors of the Company, Panmure Gordon and/or Shore Capital and
involve known and unknown risks, uncertainties and assumptions,
many of which are outside the Company's control and difficult to
predict, that could cause actual results and performance to differ
materially from any expected future results or performance
expressed or implied by the forward-looking statement. The
information contained in this announcement speaks only as of the
date of this announcement and is subject to change without notice
and the Company does not assume any responsibility or obligation
to, and does not intend to, update or revise publicly or review any
of the information contained to this announcement, whether as a
result of new information, future events or otherwise, except to
the extent required by the FCA, the London Stock Exchange or by
applicable law.
Any information in this announcement in respect of past
performance (including without limitation past performance of the
Company, its group, shares in the Company and/or the Company's
portfolio) cannot be relied upon as a guide to future performance.
The price of shares and the income from them may fluctuate upwards
or downwards and cannot be guaranteed.
This announcement contains inside information as defined in
Regulation (EU) No. 596/2014 on market abuse which is part of UK
domestic law by virtue of the European Union (Withdrawal) Act 2018
("MAR") and is made in accordance with the Company's obligations
under article 17 of MAR. The person responsible for arranging the
release of this announcement on behalf of Velocys is David Bate,
General Counsel of Velocys.
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END
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