TIDMEDL
RNS Number : 7792L
Edenville Energy PLC
15 January 2021
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) 596/2014. Market soundings, as
defined in MAR, were taken in respect of the Placing with the
result that certain persons became aware of inside information, as
permitted by MAR. That inside information is set out in this
announcement and has been disclosed as soon as possible in
accordance with paragraph 7 of article 17 of MAR. Therefore, those
persons that received inside information in a market sounding are
no longer in possession of inside information relating to the
Company and its securities.
15 January 2021
EDENVILLE ENERGY PLC
("Edenville" or the "Company")
Agreement Reached with Lind Partners LLC
Oversubscribed Placing to Raise GBP900K
New Strategic Shareholder
Edenville Energy Plc (AIM: EDL), the AIM quoted company
operating the Rukwa Coal Project in southwest Tanzania ("Rukwa") is
pleased to provide the following corporate update.
Funding Agreement with Lind Partners LLC - Update
The Company provides an update regarding its outstanding funding
agreement with Lind Partners LLC ("Lind"), that was first announced
on 6 November 2018 (the "Funding Agreement").
As announced on 6 October 2020, Lind requested Edenville repay
the total outstanding balance of the Funding Agreement, being
US$580,000, by 30 November 2020. The Company has since been engaged
in a constructive dialogue with Lind regarding the repayment terms
of the Funding Agreement and is pleased to report the revised
repayment schedule has been agreed as follows:
- The company will pay Lind US$116,000 in cash, being 20% of the
outstanding debt, by 31 January 2021;
- The remainder, being US$464,000, will be repaid in monthly
instalments of US$50,000 starting from the end of April 2021;
- The monthly instalments may be paid in cash or via the
issuance of shares by mutual agreement; and
- No further interest or charges will be applied to the US$580,000 headline figure.
Following settlement of the Placing (outlined below) the Company
will have sufficient capital to meet its outstanding obligations to
Lind. The Company's cash position is expected to be further
strengthened by increased production and sales of washed coal from
its flagship Rukwa mine in Tanzania during the course of 2021.
Oversubscribed GBP900,000 Placing
The Company has conditionally raised GBP900,000 (before
expenses) by way of a placing of 3,600,000 new ordinary shares of
1p each in the Company ("Ordinary Shares") at a placing price of
25p per Ordinary Share (the "Placing Shares") (the "Placing Price")
with new and existing shareholders through Brandon Hill Capital
Limited ("Brandon Hill") (the "Placing").
Edenville's three largest shareholder groups (representing
approximately 50% of the shares currently in issue) have subscribed
for an aggregate of GBP250,000 in the Placing. In addition,
specialist mining investor RAB Capital, has subscribed for
GBP300,000 in the Placing and will own 10.2% of the enlarged issued
share capital of the Company following the admission of the Placing
Shares to trading on AIM ("Admission").
Significant Shareholder Participation
Brandon Hill, including Neal Griffith and Oliver Stansfield
(collectively the "Brandon Hill Group"), who currently hold
1,717,248 Ordinary Shares representing 21.08% of the Company's
issued share capital, have agreed to subscribe for, in aggregate,
280,000 Placing Shares representing a cash subscription of
GBP70,000. Following Admission, the Brandon Hill Group's revised
holding of 1,997,248 Ordinary Shares will represent 17% of the
Company's enlarged share capital.
The Brandon Hill Group have been granted warrants over 180,000
Ordinary Shares as a result of the Placing (the "Broker Warrants").
The Broker Warrants have a 3 year life and an exercise price of 25p
per Ordinary Share.
Pitchcroft Capital Limited and its executives, namely Alexander
Fullard, William Orgee and David Thomas (collectively the
"Pitchcroft Group"), who currently hold 1,218,327 Ordinary Shares
representing 14.9% of the Company's issued share capital, have
agreed to subscribe for, in aggregate, 360,000 Placing Shares
representing a cash subscription of GBP90,000. Following Admission,
the Pitchcroft Group's revised holding of 1,578,327 Ordinary Shares
will represent 13.4% of the Company's enlarged share capital.
John Story, who currently holds 1,019,161 Ordinary Shares
representing 12.5% of the Company's issued share capital, has
agreed to subscribe for 360,000 Placing Shares representing a cash
subscription of GBP90,000. Following Admission, John Story's
revised holding of 1,379,161 Ordinary Shares will represent 11.7%
of the Company's enlarged share capital.
Related Party Transaction
The Brandon Hill Group, the Pitchcroft Group and John Story are
Substantial Shareholders of the Company and are therefore related
parties as defined by the AIM Rules for Companies (the "Related
Parties").
Accordingly, the participation of the Related Parties in the
Placing and the issue of Broker Warrants to the Brandon Hill Group
constitute related party transactions pursuant to Rule 13 of the
AIM Rules for Companies.
The Directors, having consulted with the Company's nominated
adviser, consider that the terms of the Related Parties'
participation in the Placing and the issue of the Broker Warrants
to the Brandon Hill Group are fair and reasonable insofar as
Edenville's shareholders are concerned.
Admission to AIM
Application will be made for admission of the 3,600,000 Placing
Shares to trading on AIM, which is expected to occur at 8am on or
around 21 January 2021. The Placing Shares will rank pari passu
with the existing Ordinary Shares.
Operational Update
The Company now expects to hand over operations at Rukwa to its
strategic partner Infrastructure and Logistics Tanzania Ltd
("ILTL") in February 2021, pursuant to the terms of the previously
announced Coal Mining Agreement ("CMA") between the two
parties.
T he Company acknowledges this has taken longer than previously
envisaged, with timing impacted by both the global COVID-19
pandemic and the Tanzanian general elections, which took place on
28 October 2020. The election, for both President and members of
the National Assembly, created an administrative vacuum, with a
number of relevant Ministerial positions only being appointed in
December 2020. As previously outlined, this resulted in a number of
logistical problems for ILTL, including the securing of work
permits.
Both ILTL and the Company have continued to work closely during
this period, not only on handover preparations but also on securing
additional contracts for the sale of washed coal from Rukwa. The
Company believes both the handover and additional contracts will
come to fruition in February 2021 and in the meantime Edenville
International (Tanzania) Limited, the Company's in-country
operating company, is continuing to meet current customer orders
and demands.
Additional Assets & Board Restructuring
Given the expected handover of operations at Rukwa in the
current quarter to ILTL, combined with the anticipated cashflow to
be received from Rukwa, the Board of Edenville will also utilise
its existing networks to identify new potential projects that could
be accretive to the Company.
The mining and capital markets expertise of its significant
shareholders, which also now includes RAB Capital, should support
the Board with the identification and any subsequent execution of
this strategy.
To further streamline costs during this period, Jeff Malaihollo
will assume the title of CEO of the Company, in addition to his
current Chairman role, with no additional remuneration. Alistair
Muir will continue as a Director of the Company responsible for
Tanzanian operation.
CEO's Comments
Jeff Malaihollo, now acting CEO of Edenville, said "I am pleased
to confirm we have reached an agreement with Lind regarding the
outstanding debt repayment schedule. This had clearly been cause
for investor concern, particularly during Q4 2020. We are also
pleased to see the confidence the market has shown in the potential
of Edenville and Rukwa through an oversubscribed placing and I am
delighted to welcome specialist mining investor RAB Capital as a
significant shareholder to the Company.
Whilst 2020 was a challenging year for Edenville as a result of
the COVID-19 pandemic, we can now look forward to 2021 with renewed
optimism. Rukwa is a producing mine with a sizeable JORC compliant
resource of 143Mt and recent upgrades to the processing plant have
now boosted capacity to 12,500t per month of washed coal.
The three agreements (Coal Mining Agreement, Loan Agreement and
Sales & Marketing Agreement) signed with our strategic partner
during the course of 2020 remain in place and we expect to finally
see the benefits of their implementation this year, starting with
the handover of Rukwa under the Coal Mining Agreement next
month."
Total Voting Rights
Following Admission, the Company will have 11,745,575 Ordinary
Shares in issue, each share carrying the right to one vote. The
Company does not hold any Ordinary Shares in treasury. The above
figure of 11,745,575 Ordinary Shares may be used by shareholders in
the Company as the denominator for the calculations by which they
will determine if they are required to notify their interest in, or
a change to their interest in, the share capital of the Company
under the Financial Conduct Authority's Disclosure and Transparency
Rules.
For further information please contact:
Edenville Energy Plc
Jeff Malaihollo - CEO & Chairman +44 (0) 20 3934 6630
SP Angel Corporate Finance LLP
(Nominated Adviser)
David Hignell
Charlie Bouverat +44 (0) 20 3470 0470
Brandon Hill Capital Ltd
(Broker)
Oliver Stansfield, Jonathan Evans +44 20 7936 5200
IFC Advisory Limited
(Financial PR and IR)
Tim Metcalfe
Florence Chandler +44 (0) 20 3934 6630
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END
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