TIDMBMN
RNS Number : 1728T
Bushveld Minerals Limited
12 November 2019
Market Abuse Regulation (MAR) Disclosure
Certain information contained in this announcement would have
been deemed inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014 until the release of this
announcement.
12 November 2019
Bushveld Minerals Limited
("Bushveld Minerals" or the "Company")
Potential investment in Enerox GmbH. ("Enerox")
Bushveld Minerals Limited (AIM: BMN), the AIM quoted, integrated
primary vanadium producer, with ownership of high-grade vanadium
assets in South Africa ("Bushveld"), is pleased to announce that it
has signed a term sheet setting out the main terms and conditions
on, and subject to which, a consortium of investors led by Bushveld
Energy, an 84 per cent subsidiary of Bushveld Minerals, (the
"Bushveld Consortium") would acquire the entire issued share
capital of Enerox GmbH ("Enerox") on a debt free basis from
CellCube Energy Storage Systems Inc. (the "Seller").
Enerox is one of the world's largest researchers, developers,
manufacturers and distributors of vanadium redox flow batteries
("VRFB"), headquartered in Wiener Neudorf, Austria. It has
installed VRFBs at over 130 sites globally.
The investment is in line with the Company's strategy of
establishing a VRFB Investment Platform ("VIP") to lead investments
in VRFB original equipment manufacturers ("OEMs") with attractive
upside potential. The VIP is one of multiple avenues of partnering
with OEMs.
-- The Company and its initial investments will play a catalyst
role and mobilise additional capital from third party funders to
establish an investment capital pool to support VRFB OEM
growth.
-- These partnerships support Bushveld Energy's business model,
that includes electrolyte manufacturing and rental, VRFB
manufacturing and deployments.
-- Bushveld Energy intends to own a significant minority
interest in the Bushveld Consortium, in line with its strategy of
holding minority positions in select VRFB OEMs and being a catalyst
to mobilise third party financing and assist the scale up VRFB
OEMs.
Rationale of the specific transaction:
-- The Enerox VRFB product is one of the most widely deployed
over the past 10 years, offering a unique value proposition in the
industry.
-- Enerox developed one of the first containerised energy
storage solutions in the market.
-- It has a global customer base with over 130 field
installations over the past 10 years across five continents.
-- Enerox has a newly redesigned VRFB product oriented around a
modular and stackable 40 ft container base configuration that
increases standardisation to reduce costs of manufacturing, field
installation and maintenance.
-- Diversification of Bushveld's customer and revenue base with
preferential vanadium supply rights into energy storage products to
support Bushveld's mining, processing and chemicals activities.
-- Under a separate agreement between Bushveld and Enerox,
Bushveld Minerals will be awarded a right of first refusal to
supply vanadium products to Enerox on the same material terms as
any other supplier. This provides a future hedge to Bushveld's
position against volatility in the vanadium price once the VRFB
market has developed.
Highlights
-- The Bushveld Consortium has been granted exclusivity until
the end of February 2020 to complete due diligence and negotiate
definitive acquisition documents. The transaction will, if
completed, see the Bushveld Consortium acquire the entire issued
share capital of Enerox GmbH ("Enerox") from the Seller for a total
sum of EUR11,000,000, and a working capital financing for Enerox of
EUR1.5 million. The transaction is structured in three parts:
-- Pursuant to the signing of the Term Sheet, The Bushveld
Consortium will pay the Seller EUR300,000, which the Seller will
in-turn contribute to Enerox as a shareholder capital contribution
for Enerox to fund its short terms working capital requirements. If
an Initial SPA (as defined below) has not been executed as soon as
practicable, the Seller is obliged to pay back the Bushveld
Consortium EUR300,000. These terms are legally binding but the
remaining terms below are not.
-- An initial sale and purchase agreement (the "Initial SPA"),
to be signed as soon as reasonably practicable after the signing of
the term sheet, whereby the Bushveld Consortium would for a sum of
EUR1.65 million (including the EUR300,000 referred to above)
purchase 24.90 per cent of the share capital of Enerox (the
"Initial Shares"), including shareholder capital contributions of
EUR1.2 million for working capital purposes over the course of the
coming four months.
-- A subsequent sale and purchase agreement (the "Main SPA"),
subject to a technical, legal and financial due diligence, which
will provide for the purchase of the remining 75.1 per cent of the
shares of Enerox for a further consideration of EUR10.85 million,
comprising:
o EUR8.35 million payable upon completion of the Transaction. Up
to EUR2.0 million of this consideration can be paid, at Bushveld's
discretion, in Bushveld Minerals shares (priced at the lesser of
the 10-day volume-weighted-average-price prior to, or the price on,
the 4(th) day before closing). It is intended that the Main SPA and
other principal transaction documents will be signed on or before
31 December 2019, with completion to occur as soon as practical
thereafter.
o An additional deferred consideration of EUR2.5 million payable
by the Bushveld Consortium to the Seller over 30 months comprising
EUR500,000 payable every six months starting in June 2020 (the
"Deferred Consideration").
-- Should the Seller or Bushveld Consortium elect not to enter
into the Main SPA, the Seller has a call option to purchase the
Initial Shares at a price equal to EUR1.65 million paid by the
Bushveld Consortium to the Seller and Enerox, plus an amount
equivalent to 12 per cent of such amount. In the event the call
option is not exercised by the Seller, the Bushveld Consortium has
an option to put the Initial Shares to the Seller for the same
amount. Should the Seller not honor the put, the Bushveld
Consortium would have the option of increasing its holding in
Enerox by 50 per cent plus one share for an additional amount of
EUR250,000. In circumstances where the Main SPA is not entered into
because the Bushveld Consortium withdraws from the transaction, it
would continue to provide the working capital payments to
Enerox.
-- Under a separate agreement between Bushveld and Enerox,
Bushveld Minerals will be awarded a right of first refusal to
supply vanadium products to Enerox on the same material terms as
any other supplier.
-- Bushveld anticipates contributing not more than 50% of the
Transaction and will in due course consider additional investors as
part of its Consortium.
Fortune Mojapelo, CEO of Bushveld Minerals Limited,
commented:
"The potential acquisition of Enerox is in line with Bushveld's
previously announced strategy of establishing a VRFB Investment
Platform through which the Company will mobilise additional capital
from third party funders to help credible VRFB OEMs build scale to
respond to a growing stationary energy storage market
opportunity.
Investing in the development and deployment of VRFB technology
is a key part of Bushveld's corporate strategy for several reasons.
Firstly, the market opportunity presented by the widespread
adoption of VRFBs is sufficiently attractive to grow Bushveld and
generate returns for shareholders. Secondly, by helping to increase
the speed and scale of adoption of VRFBs, the Company will help
boost long term structural demand for vanadium, which is key for
our existing primary vanadium production platform. In addition, the
combination of vanadium production and commercial exploitation
provides a natural hedge for the Company against vanadium price
volatility.
The advantages this strategy brings are clearly illustrated by
the right of first refusal agreement, also concluded with Enerox,
whereby Bushveld will have the right to match commercial terms for
the provision of vanadium products.
Enerox's existing platform complements the relationships that
Bushveld Minerals and Bushveld Energy already have in place, for
example, the Enerox acquisition will help the Company develop
potential opportunities in Europe more quickly."
Brett Whalen, Interim president and Chairman, Cellcube Energy
Storage Systems Inc. commented:
"As a leader in the VRFB space, Enerox deserves the capital
necessary to maintain its competitive advantage. We are confident
the Bushveld Consortium will maximise Enerox's full potential for
its 4(th) generation project while increasing manufacturing
capacity."
Inquiries: info@bushveldminerals.com
+27 (0) 11 268
Bushveld Minerals 6555
Fortune Mojapelo, Chief Executive
Officer
Chika Edeh, Head of Investor
Relations
SP Angel Corporate Finance Nominated Adviser +44 (0) 20 3470
LLP & Broker 0470
Richard Morrison / Stephen
Wong
Abigail Wayne / Richard Parlons
+44 (0) 20 7418
Peel Hunt LLP Joint Broker 8900
Ross Allister / James Bavister
+44 (0) 20 7236
BMO Capital Markets Limited Joint Broker 1010
Tom Rider/ Michael Rechsteiner
/
Neil Elliot
+44 (0) 20 7920
Tavistock Financial PR 3150
Charles Vivian / Gareth Tredway
Financial PR (South +27 (0) 11 502
Brunswick Africa) 7300
Miyelani Shikwambana
ABOUT BUSHVELD MINERALS LIMITED
Bushveld Minerals is a low-cost, integrated, primary vanadium
producer, with ownership of high-grade vanadium assets.
The Company's flagship vanadium platform includes a 74 per cent
controlling interest in Bushveld Vametco Alloys (Pty) Ltd, a
primary vanadium mining and processing company; 100 per cent of
Bushveld Vanchem, a primary vanadium processing facility with a
beneficiation plant; the Mokopane Vanadium Project and the Brits
Vanadium Project.
Bushveld's vision is to become a significant, low-cost,
integrated primary vanadium producer through owning high grade
assets. Whilst the demand for vanadium remains largely anchored in
the steel industry, Bushveld Minerals believes there is strong
potential for an imminent and significant global vanadium demand
surge from the fast-growing energy storage market, particularly
through the use and adoption of Vanadium Redox Flow Batteries.
Bushveld Energy, the Company's energy storage solutions provider,
plays a leading role in the development and promotion of the role
of vanadium in this market.
While the Company's focus is on vanadium operations and the
development and promotion of VRFBs, it has additional investments
in coal, power and tin.
The Company's approach to project development recognises that,
whilst attractive project economics are imperative, they may be
insufficient to secure capital to bring them to account. A clear
path to production within a visible timeframe, low capital
expenditure requirements and scalability are important factors in
ensuring a positive return on investment. This philosophy is core
to the Company's strategy in developing projects.
Detailed information on the Company and progress to date can be
accessed on the website www.bushveldminerals.com.
About Bushveld Energy Limited
Bushveld Energy is a leading energy storage solutions provider,
focusing on the African market. Bushveld Energy recognises that
electricity in Africa intersects paramount potential for social
transformation with an immense commercial opportunity.
Launched in 2016, Bushveld Energy is focused on developing and
promoting the role of vanadium in the growing global energy storage
market through application in vanadium redox flow batteries. Its
near term strategy is to deploy several VRFB systems as part of its
longer term vision to become a significant electricity storage
provider in Africa by 2020, meeting the demand for utility scale
energy storage in Africa by leveraging South Africa-mined and
beneficiated vanadium.
Detailed information on the Company and progress to date can be
accessed on the website www.bushveldenergy.com.
About Enerox
Enerox is the battery subsidiary of CellCube, specializing in
the planning, development and turnkey construction of Utility Scale
projects worldwide. It is one of the world's first and largest
developers, manufacturers and distributors of vanadium redox flow
batteries, headquartered in Wiener Neudorf, Austria.
With more than 136 installations across five continents, Enerox
has substantial industry and operational experience. The technology
has proven to deliver long lasting energy storage (now rated for 30
years) and infrastructure for deployment in a wide range of
applications including: grid storage and micro grids; storage
collocated with renewables such as solar and wind; time shift;
diesel power replacement; commercial and industrial solutions such
as farming; electrical vehicle charging stations; industrial
plants; office buildings and emergency power sources.
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
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