TIDMQFI
RNS Number : 5796L
Quadrise Fuels International PLC
09 September 2019
NEITHER THIS ANNOUNCEMENT NOR ANY PART OF IT CONSTITUTES AN
OFFER TO SELL OR ISSUE OR THE SOLICITATION OF AN OFFER TO BUY,
SUBSCRIBE OR ACQUIRE ANY SECURITIES IN ANY JURISDICTION IN WHICH
ANY SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL AND THE
INFORMATION CONTAINED HEREIN IS NOT FOR PUBLICATION OR
DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES,
AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF IRELAND, SOUTH AFRICA OR
ANY JURISDICTION IN WHICH SUCH PUBLICATION OR DISTRIBUTION WOULD BE
UNLAWFUL.
THE INFORMATION WITHIN THIS ANNOUNCEMENT WAS DEEMED TO
CONSTITUTE INSIDE INFORMATION AS STIPULATED UNDER THE MARKET ABUSE
REGULATIONS (EU) NO. 596/2014 PRIOR TO ITS PUBLICATION. UPON
PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW
CONSIDERED TO BE IN THE PUBLIC DOMAIN.
9 September 2019
Quadrise Fuels International plc
("Quadrise", "QFI", the "Company" and together with its
subsidiaries the "Group")
Underwritten Open Offer of up to 46,555,039 Ordinary Shares at
a
price of 3.96 pence per Ordinary Share
Subscription for 18,101,012 Ordinary Shares at a price of 3.96
pence per Ordinary Share
Issue of Open Offer Warrants and Subscription Warrants
and
Notice of General Meeting
Further to the announcement made on 23 August 2019, Quadrise
announces a fully underwritten open offer to raise up to
approximately GBP1.8 million through the issue of up to 46,555,039
Open Offer Shares at the Issue Price of 3.96 pence per Open Offer
Share on the basis of 1 Open Offer Share for every 20 Existing
Ordinary Shares held on the Record Date (the "Open Offer"). The
Open Offer has been fully underwritten by Peel Hunt.
In addition, the Open Offer presents Qualifying Shareholders
with an opportunity, provided that they take up their Open Offer
Entitlements in full, to apply for additional Open Offer Shares
through the Excess Application Facility. The Open Offer is
conditional, inter alia, on Shareholder approval of the Resolutions
at the General Meeting.
The Company is also pleased to confirm that, as a result of
additional investor demand following the announcement by the
Company of the intended open offer on 23 August 2019, the Company
has entered into conditional binding agreements with the
Subscribers to raise additional gross proceeds of GBP716,800
through the issue of an aggregate 18,101,012 Subscription Shares at
3.96 pence per Subscription Share, with 9,050,506 Subscription
Warrants attached. The Subscription is conditional, inter alia, on
the Resolutions being passed at the General Meeting.
A circular setting out full details of the Open Offer and
Subscription, including the terms and conditions and details on how
to accept the Open Offer (the "Circular") and an accompanying
Application Form (for Qualifying Non-CREST Shareholders) will today
be posted to Shareholders and will shortly be available from the
Company's website at www.quadrisefuels.com.
A notice convening the General Meeting, which is to be held at
11.00 a.m. at Park Plaza Victoria London, 239 Vauxhall Bridge Road,
London SW1V 1EQ on 27 September 2019, is set out at the end of the
Circular.
Capitalised terms used but not otherwise defined in this
announcement bear the meanings ascribed to them in the
Circular.
Open Offer and Subscription
On 23 August 2019 the Company was pleased to announce that it
had secured funding of at least GBP2 million, being the first
tranche in an issue of convertible securities, in order to progress
recently announced business development opportunities towards trial
projects and commercial contracts. These funds will secure the
Company's financial position through to 30 June 2020, subject to
Shareholder approval of the Resolutions to be proposed at the
General Meeting and required to provide the necessary share
issuance authorities to enable the conversion of the initial
tranche of convertible securities. Further detail of this Funding
are set out in paragraph 8 of the Circular.
In recognition of the continuing support from Shareholders, the
Company also announced on 23 August 2019 that it intended to offer
existing Shareholders the opportunity to participate in an open
offer of new Ordinary Shares in the Company with warrants
attached.
Accordingly, the Company is now, conditional on Shareholder
approval of the Resolutions at the General Meeting, making the Open
Offer to Qualifying Shareholders of up to 46,555,039 Open Offer
Shares to raise up to approximately GBP1.8 million at the Issue
Price of 3.96 pence per Open Offer Share on the basis of 1 Open
Offer Share for every 20 Existing Ordinary Shares held on the
Record Date. The Open Offer has been fully underwritten by Peel
Hunt.
As part of the Open Offer, each subscribing Shareholder shall
receive 1 Open Offer Warrant for every 2 Open Offer Shares
subscribed for, vesting immediately on Admission. Each Open Offer
Warrant will grant the right to subscribe for one new Ordinary
Share at 7.48 pence. The Open Offer Warrants shall expire on the
date falling 36 months from Admission.
The Open Offer is fully underwritten and will raise total gross
proceeds of approximately GBP1.8 million. The Issue Price
represents:
-- a discount of 10 per cent. to the closing mid-market price of
4.40 pence per Existing Ordinary Share on 22 August 2019, being the
last practicable date prior to the announcement of the Company's
intention to launch the Open Offer on 23 August 2019; and
-- a discount of 15 per cent. to the closing mid-market price of
4.65 pence per Existing Ordinary Share on 6 September 2019, being
the last practicable date prior to this announcement.
Both of the Executive Directors of the Company and two of the
Non-executive Directors of the Company have irrevocably undertaken
to subscribe under the Open Offer, in respect of an aggregate of
610,586 Open Offer Shares, with all four of the Directors
undertaking to subscribe for their entire Open Offer Entitlements
(an aggregate of 245,045 Open Offer Shares) and certain of the
Directors applying for an aggregate of 365,541 Open Offer Shares
under the Excess Application Facility.
The Company is also pleased to confirm that, as a result of
additional investor demand following the announcement by the
Company of the intended open offer on 23 August 2019, the Company
has entered into conditional binding agreements with the
Subscribers to raise additional gross proceeds of GBP716,800
through the issue of an aggregate 18,101,012 Subscription Shares at
3.96 pence per Subscription Share, with 9,050,506 Subscription
Warrants attached. The Subscription is conditional, inter alia, on
the Resolutions being passed at the General Meeting.
The terms of the Open Offer, the Subscription and the recently
announced Funding are described in the Circular and, as explained
below, the Directors believe the funds raised as a result of the
Open Offer, the Subscription and the Initial Tranche of the Funding
will, subject to the passing of the Resolutions at the General
Meeting, secure the Company's financial position in enabling the
Company to continue to operate and advance its business development
initiatives at current levels of expense until 31 December
2020.
However, should the Company successfully enter into a trial
project with a prospective partner during this period, the
Directors would expect current expenses of approximately GBP260,000
per month to increase materially prior to the Company being able to
advance any secured project to the stage of positive cash flow
generation. As a result, should the Company enter into a trial
project with a prospective partner, the Directors consider that the
Company would be required to raise additional funds prior to the
end of calendar year 2020.
The Open Offer is subject to the satisfaction, inter alia, of
the following conditions on or before 2 October 2019:
(i) the Resolutions being passed at the General Meeting;
(ii) the Underwriting Agreement having become wholly
unconditional (other than as to Admission) and not having been
terminated in accordance with its terms prior to Admission; and
(ii) Admission.
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
Announcement of the proposed Open Offer 7.00 a.m. on 23 August
2019
Record Date for the Open Offer 6.00 p.m. on 6 September
2019
--------------------------
Announcement of the Open Offer 7.00 a.m. on 9 September
2019
--------------------------
Publication and posting of the Circular, the 9 September 2019
Application Form and the Forms of Proxy
--------------------------
Existing Ordinary Shares marked 'ex' by London 8.00 a.m. on 10 September
Stock Exchange 2019
--------------------------
Open Offer Entitlements and Excess CREST Open as soon as practicable
Offer Entitlements credited to stock accounts after 8.00 a.m. on 10
in CREST of Qualifying CREST Shareholders September 2019
--------------------------
Recommended latest time for requesting withdrawal 4.30 p.m. on 23 September
of Open Offer Entitlements and Excess CREST 2019
Open Offer Entitlements from CREST
--------------------------
Latest time for depositing Open Offer Entitlements 3.00 p.m. on 24 September
and Excess CREST Open Offer Entitlements into 2019
CREST
--------------------------
Latest time for splitting Application Forms 3.00 p.m. on 25 September
(to satisfy bona fide market claims only) 2019
--------------------------
Latest time and date for receipt of Forms 11.00 a.m. on 25 September
of Proxy 2019
--------------------------
Latest time and date for receipt of completed 11.00 a.m. on 27 September
Application Forms and payment in full under 2019
the Open Offer and settlement of relevant
CREST instructions (as appropriate)
--------------------------
General Meeting 11.00 a.m. on 27 September
2019
--------------------------
Expected date of announcement of the results 30 September 2019
of the Open Offer
--------------------------
Expected time and date Admission and dealings 1 October 2019
in New Ordinary Shares on AIM effective
--------------------------
CREST accounts credited in respect of New 1 October 2019
Ordinary Shares, Open Offer Warrants and Subscription
Warrants
--------------------------
Share certificates dispatched for the New 14 October 2019
Ordinary Shares and Warrant certificates for
the Open Offer Warrants and Subscription Warrants
--------------------------
For further information, please refer to the Company's website
at www.quadrisefuels.com or contact:
Quadrise Fuels International Plc
Mike Kirk, Executive Chairman +44 (0)20 7031 7321
Jason Miles, Chief Operating Officer
Nominated Adviser
Cenkos Securities plc
Dr Azhic Basirov +44 (0)20 7397 8900
Ben Jeynes
Katy Birkin
Joint Brokers
Peel Hunt LLP
Richard Crichton +44 (0)20 7418 8900
David McKeown
Shore Capital Stockbrokers Limited
Andy Crossley
Daniel Harris +44 (0)20 7601 6108
Public & Investor Relations
FTI Consulting
Ben Brewerton +44 (0)20 3727 1000
Ntobeko Chidavaenzi
Notes to Editors
QFI is the supplier of MSAR(R) emulsion technology and fuels, a
low-cost alternative to heavy fuel oil (one of the world's largest
fuel markets, comprising over 450 million tons per annum) in the
global shipping, refining and steam and power generation
industries.
Background to and reasons for the Open Offer
2019 has, to date, been a year in which the Group has built
considerable momentum in implementing its new strategy of
developing a wider range of MSAR(R) project and commercial
opportunities. We have demonstrated staged progress in a number of
important markets for the Group and are, therefore, well positioned
to progress these opportunities with our commercial partners in the
relevant countries/regions. This provides, we believe, firm
foundations for the Company's future growth.
The Directors believe the funds raised as a result of the Open
Offer and the Subscription will, subject to the passing of the
Resolutions at the General Meeting and together with the proceeds
of the Initial Tranche of the Funding and the Company's existing
cash balances, secure the Company's financial position in enabling
the Company to continue to operate and advance its business
development initiatives at current levels of expense until 31
December 2020. Whilst the Board anticipate being able to make
substantial progress, the Company does not expect to be able to
advance any secured project to the stage of sustained positive cash
flow generation in this timeframe.
As a result, and given the longstanding support of Shareholders,
the Board believes it is appropriate to raise additional funds by
way of the Open Offer and the Subscription through the underwritten
Open Offer available to Qualifying Shareholders of up to 46,555,039
Open Offer Shares at the Issue Price of 3.96 pence per Open Offer
Share and the Subscription by the Subscribers for 18,101,012
Subscription Shares.
The Subscription
As a result of additional investor demand following the
announcement by the Company of the intended open offer on 23 August
2019, the Company has entered into binding commitments under the
Subscription to raise additional gross proceeds of GBP716,800
through the issue of an aggregate of 18,101,012 Subscription Shares
at the Issue Price of 3.96 pence per Subscription Share by way of
direct subscription with the Company, with 9,050,506 Subscription
Warrants attached on the basis of 1 Subscription Warrant for every
2 Subscription Shares subscribed for.
Each Subscription Warrant will grant the right to subscribe for
one new Ordinary Share exercisable at 7.48 pence. The Subscription
Warrants shall expire on the date falling 36 months from
Admission.
The Subscription is conditional on, inter alia, the Resolutions
being passed at the General Meeting.
Views of the Board
The Board believes that the net proceeds of the Open Offer,
which is underwritten by Peel Hunt, alongside the proceeds of the
Initial Tranche of the Funding, the Company's existing cash
balances and the net proceeds of the Subscription, will secure the
Company's financial position in enabling the Company to continue to
operate and advance its business development initiatives at current
levels of expense until 31 December 2020, subject to the passing of
the Resolutions at the General Meeting.
The Board therefore considers the Proposals to be in the best
interests of the Company and its Shareholders as a whole.
Both of the Executive Directors of the Company and two of the
Non-executive Directors of the Company have irrevocably undertaken
to subscribe under the Open Offer, in respect of an aggregate of
610,586 Open Offer Shares, with all four of the Directors
undertaking to subscribe for their entire Open Offer Entitlements
(an aggregate of 245,045 Open Offer Shares) and certain of the
Directors applying for an aggregate of 365,541 Open Offer Shares
under the Excess Application Facility.
Financial information
Audited accounts for the Group for each of the three financial
years ended 30 June 2018, 30 June 2017 and 30 June 2016 are
available on the Company's website www.quadrisefuels.com.
As at 31 August 2019, the Group's unaudited cash balance was
approximately GBP0.7 million. The net proceeds of the Open Offer
and Subscription, together with the proceeds of the Initial Tranche
of the Funding now received by the Company, will materially enhance
the Company's cash balance.
Use of proceeds
The net proceeds of the Open Offer and the Subscription will be
used to further strengthen the Group's balance sheet and will
provide the Company with additional funding in pursuing its
business development plans and will extend the time horizon
available to the Company to progress existing material project
opportunities.
The Directors believe the funds raised as a result of the Open
Offer and the Subscription will, subject to the passing of the
Resolutions at the General Meeting and together with the proceeds
of the Initial Tranche of the Funding and the Company's existing
cash balances, secure the Company's financial position in enabling
the Company to continue to operate and advance its business
development initiatives at current levels of expense until 31
December 2020.
Should the Company successfully enter into a trial project with
a prospective partner during this period, the Directors would
expect current expenses of approximately GBP260,000 per month to
increase materially prior to the Company being able to advance any
secured project to the stage of positive cash flow generation. As a
result, should the Company enter into a trial project with a
prospective partner, the Directors consider that the Company may be
required to raise additional funds prior to the end of calendar
year 2020.
It has always been the Directors' intention to minimise dilution
to Shareholders and so it is not intended to raise the funds
necessary to progress projects from trials to commercial
operations. With the structured milestone driven approach to
project development, it is the Directors' view that these funds
would be raised immediately on entering into such agreements.
Should the Resolutions not be passed at the General Meeting,
neither the Open Offer nor the Subscription will proceed and an
"Event of Default" would arise under the Funding agreement, which
would enable the provider of the Funding the right to demand
repayment in cash of the aggregate amount of the Initial Tranche of
the Funding that had not been converted at such date and to receive
a payment of GBP90,000 in respect of the Funding Warrants which
would not be capable of issue. As at the Record Date, an amount of
GBP2.15 million was outstanding and unconverted under the Initial
Tranche of the Funding. In such a scenario, the Company would
thereafter need to secure additional funding by either making a
further open offer or pursuant to a further, potentially much less
attractive, funding alternative.
The Board therefore considers the passing of the Resolutions at
the General Meeting to be critical and unanimously recommend that
Shareholders vote in favour of the Resolutions.
Recommendation
The Directors unanimously recommend that Shareholders vote in
favour of the Resolutions to be proposed at the General Meeting as
they have irrevocably undertaken to do so in respect of their
beneficial holdings amounting, in aggregate, to 34,310,504 Ordinary
Shares, representing approximately 3.68 per cent. of the existing
issued ordinary share capital of the Company as at 6 September
2019, being the latest practicable date prior to the publication of
the announcement.
Shareholders should be aware that if any of the Resolutions are
not passed, this will constitute an "Event of Default" under the
Agreement, which gives the Investor the right to demand repayment
in cash of the aggregate amount of the Initial Tranche which has
not been converted at such date. Additionally, if the Resolutions
are not passed, neither the Open Offer nor the Subscription will
proceed.
As at the Record Date, an amount of GBP2.15 million of remains
outstanding and unconverted under the Initial Tranche. In light of
the potentially fluctuating share price, the Investor may have the
right to a further cash repayment if the ability to convert any
outstanding amount of the Initial Tranche changes. Similarly,
following this, default interest of 15 per cent. would be payable
under the Agreement.
Additionally, if the Resolutions are not passed, the Funding
Warrants will not be capable of issue by the Company and instead a
payment of GBP90,000 shall be payable by the Company to the
Investor.
As such, if the Resolutions are not passed, the Company would
need to secure further alternative funding in the near future which
may not be forthcoming and in this event, the Directors may be
required to take action which could result in the value
attributable to Shareholders being severely reduced or becoming
nil. The Board considers that it may need to consider the
commencement of an orderly winding down of the business at that
time.
THE DIRECTORS THEREFORE BELIEVE THAT THE PASSING OF THE
RESOLUTIONS TO BE PROPOSED AT THE GENERAL MEETING IS CRITICAL AND
IS IN THE BEST INTERESTS OF THE COMPANY AND SHAREHOLDERS AS A WHOLE
AND UNANIMOUSLY RECOMMEND THAT SHAREHOLDERS VOTE IN FAVOUR OF THE
RESOLUTIONS.
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.
END
MSCUBAWRKWAKRAR
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