TIDMAXS
RNS Number : 9662U
Accsys Technologies PLC
28 November 2019
AIM: AXS
Euronext Amsterdam: AXS
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION.
THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS
RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN
WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM THE
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DO SO WOULD BREACH ANY APPLICABLE LAW OR REGULATION.
THIS ANNOUNCEMENT IS AN ADVERTISEMENT AND DOES NOT CONSTITUTE A
PROSPECTUS OR PROSPECTUS EQUVALENT DOCUMENT. NOTHING HEREIN SHALL
CONSTITUTE AN OFFERING OF NEW ORDINARY SHARES. ANY DECISION TO
PURCHASE, SUBSCRIBE FOR, OTHERWISE ACQUIRE, SELL OR OTHERWISE
DISPOSE OF ANY NEW ORDINARY SHARES MUST BE MADE ONLY ON THE BASIS
OF THE INFORMATION CONTAINED IN AND INCORPORATED BY REFERENCE INTO
THE PROSPECTUS ONCE PUBLISHED. COPIES OF THE PROSPECTUS WILL,
FOLLOWING PUBLICATION, BE AVAILABLE FROM THE REGISTERED OFFICE OF
ACCSYS TECHNOLOGIES PLC AND ON ITS WEBSITE AT
WWW.ACCSYSPLC.COM.
ACCSYS TECHNOLOGIES PLC
("Accsys" or the "Company")
Firm Placing and Placing and Open Offer
to raise gross proceeds of approximately EUR46.3 million
Funding for fourth Accoya(R) reactor at Arnhem and
completion of the Tricoya(R) plant at Hull
Accsys, the fast-growing and eco-friendly company that combines
chemistry and technology to create high performance, sustainable
wood building products, today announces that it has conditionally
raised EUR46.3 million (before expenses) in aggregate by way of an
underwritten Firm Placing and Placing and Open Offer of 44,095,238
New Ordinary Shares at the Offer Price of EUR1.05 per New Ordinary
Share (the "Issue").
Highlights
-- The net proceeds of the Issue will be used to fund the
following as part of the Group's continued growth strategy:
(i) the further expansion and enhancement of the Arnhem Plant by
the addition of a fourth Accoya(R) acetylation reactor, increasing
annual production capacity to approximately 80,000m(3) , new
chemical storage facilities, a new wood stacker and associated
automatic wood handling equipment
(ii) the Company's expected share of the increase in
construction costs associated with the completion of the Tricoya(R)
Hull Plant, which is expected to be operational in the second half
of the 2020 calendar year with a targeted annual production
capacity of approximately 30,000 metric tonnes
(iii) preliminary evaluation work relating to the Group's
potential Accoya(R) plant in the United States
(iv) the increased working capital requirements of the Group
resulting from (i) and (ii) above
-- 27,239,764 New Ordinary Shares will be issued through the
Firm Placing at the Offer Price to raise gross proceeds of
approximately EUR28.6 million and 16,855,474 New Ordinary Shares
will be issued through the Placing and Open Offer at the Offer
Price to raise gross proceeds of approximately EUR17.7 million
-- The Offer Price of EUR1.05 represents a 10.3% discount to the
closing middle-market price of an Existing Ordinary Share listed on
Euronext Amsterdam, and a 7.6% discount to the closing
middle-market price of an Existing Ordinary Share quoted on AIM on
27 November 2019, being the last practicable date prior to the
publication of this announcement
-- The Issue is being fully underwritten by Numis Securities
Limited ("Numis"), Investec Bank plc ("Investec") and NIBC Bank
N.V. (together the "Joint Underwriters")
-- The Issue is conditional on, among other things, the approval
by the Company's shareholders of resolutions authorising the
Directors to allot, and to disapply pre-emption rights in respect
of, the New Ordinary Shares at a general meeting of the Company
which will take place at 9:00 a.m. (GMT) on 20 December 2019, and
admission of the New Ordinary Shares to listing and trading on
Euronext Amsterdam and to trading on AIM becoming effective by no
later than 8:00 a.m. (GMT) on 23 December 2019 (or such later time
and/or date as the Company and the Joint Underwriters may
determine)
The Group expects to publish a Prospectus, setting out full
details of the Issue and incorporating a Notice of General Meeting,
later today. Shareholders should read the Prospectus in full before
making any application for Open Offer Shares and/or Excess Open
Offer Shares.
Accsys will today also announce its interim results for the
period ended 30 September 2019. The key highlights of those results
are:
-- Group revenue up 39% compared with the same period in the
previous year, with continued strong demand for Accoya(R) and
Tricoya(R) products
-- Gross profit up 83% to EUR12.8m with gross margins up 6.9
percentage points as a result of higher sales volumes, an improved
product mix and higher selling prices
-- Underlying Group EBITDA of EUR2.5m (H1 FY19: loss of EUR1.4m)
-- Accoya(R) underlying EBITDA up 171%, to EUR7.6m (H1 FY19:
EUR2.8m) showing the benefit of the third Accoya(R) reactor coming
on stream
-- Cash-flow generated from operations continued to improve with
a positive cash inflow for the half of EUR2.6m (H1 FY 19:
EUR0.7m)
-- All customers continue to remain on allocation
Paul Clegg, commented:
"Sustainability is increasingly at the forefront of construction
and the environmental credentials of our products support our
belief that we are changing wood to change the world. Today's
proposed equity fundraise represents further progress on our
strategy and will allow us to increase the production of our
high-performance and sustainable products for which demand
continues to exceed supply.
The third reactor constructed at Arnhem last year is now
operating at capacity and the fourth reactor will allow us to
increase output significantly. In addition, the placing will allow
us to complete the construction of our Tricoya(R) plant in Hull,
which will be the first plant of its kind ever constructed, and
will address a highly exciting market.
On behalf of my Accsys colleagues, I would like to thank our
existing shareholders for their continued support of our
fast-growing business, and welcome new investors who will become
shareholders as a result of this Issue."
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF ARTICLE 7 OF THE MARKET ABUSE REGULATION EU 596/2014 ("MAR"). IN
ADDITION, MARKET SOUNDINGS (AS DEFINED IN MAR) WERE TAKEN IN
RESPECT OF THE MATTERS CONTAINED IN THIS ANNOUNCEMENT, WITH THE
RESULT THAT CERTAIN PERSONS BECAME AWARE OF SUCH 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. UPON THE
PUBLICATION OF THIS ANNOUNCEMENT, THE INSIDE INFORMATION IS NOW
CONSIDERED TO BE IN THE PUBLIC DOMAIN AND SUCH PERSONS SHALL
THEREFORE CEASE TO BE IN POSSESSION OF INSIDE INFORMATION IN
RELATION TO THE COMPANY AND ITS SECURITIES.
PLEASE SEE THE IMPORTANT NOTICE AT THE OF THIS ANNOUNCEMENT
Information on the Tricoya(R) Project, the ongoing expansion of
the Arnhem Plant and the Firm Placing and Placing and Open Offer is
set out below.
Capitalised terms in this announcement are defined in the
Appendix to this announcement. A Prospectus is expected to be
published and made available on the Company's website
(www.accsysplc.com) later today.
1. INTRODUCTION
The Company has today announced that it has conditionally raised
EUR46.3 million (before expenses) in aggregate by way of an
underwritten Firm Placing and Placing and Open Offer, comprising
EUR28.6 million (before expenses) through the issue of 27,239,764
New Ordinary Shares pursuant to a Firm Placing and EUR17.7 million
(before expenses) through the issue of 16,855,474 New Ordinary
Shares pursuant to a Placing and Open Offer.
The Firm Placing and Placing and Open Offer, which are fully
underwritten, will be at an offer price of EUR1.05 per New Ordinary
Share (the "Offer Price"). The Offer Price was set having regard to
the prevailing market conditions and the size of the Firm Placing
and Placing and Open Offer.
The net proceeds of the Firm Placing and Placing and Open Offer
will be used to fund the following as part of the Group's continued
growth strategy:
(i) the further expansion and enhancement of the Arnhem Plant by
the addition of a fourth Accoya(R) acetylation reactor, increasing
annual production capacity to approximately 80,000m(3) , new
chemical storage facilities, a new wood stacker and associated
automatic wood handling equipment;
(ii) the Company's expected share of the increase in
construction costs associated with the completion of the Tricoya(R)
Hull Plant, which is expected to be operational in the second half
of the 2020 calendar year with a targeted annual production
capacity of approximately 30,000 metric tonnes;
(iii) preliminary evaluation work relating to the Group's
potential Accoya(R) plant in the United States; and
(iv) the increased working capital requirements of the Group resulting from (i) and (ii) above.
2. INFORMATION ON THE COMPANY
The Company is incorporated in England and Wales and has its
shares admitted to trading on Euronext Amsterdam and AIM. The
Company combines chemistry, technology and ingenuity to make high
performance wood products that are both durable and stable,
sustainable and which open new opportunities for the global built
environment. In October 2019, Accsys became one of the first
companies to be awarded the new Green Economy Mark, developed by
the London Stock Exchange to recognise London-listed companies that
generate between 50% and 100% of their total annual revenues from
products and services that contribute to the global green
economy.
The Group continues to invest in the generation and protection
of intellectual property relating to the innovation associated with
its acetylation processes and products, seeking to ensure ongoing
differentiation and competitive advantage in the market place.
Patenting and/or maintaining valuable know-how as a trade secret
remains the typical route through which the Group's innovation is
protected, alongside trademark protection for its valuable
brands.
The Group has an extensive patent portfolio of 329 patent family
members in over 40 countries, with 167 granted patents, including
in relation to key technologies, in various countries throughout
the world. The Group's trademark portfolio is now well established
and covers the key distinctive brands Accoya(R) , Tricoya(R) and
the unique "Trimarque Device" trademarked logo under which products
are marketed, alongside the corporate Accsys brand. All of the
Group's key brands have now been registered in over 60 countries,
becoming recognisable names in the timber and panel industries.
The Group's principal products are:
-- Accoya(R) , a unique modified timber in which the acetylation
process, a patented technology, enables it to defy the elements and
stay strong for decades. It is stable, durable and resists rot.
Warranted for 50 years for use above ground and 25 years in ground
or freshwater, Accoya(R) 's properties match or exceed those of the
best tropical hardwoods, manufactured from abundantly available,
Forest Stewardship Council(R) ("FSC(R) ) certified wood species and
is Cradle to Cradle Certified(TM) at the Gold level. Accoya(R) is
the material of choice for a wide range of demanding applications
from windows and doors, decking to cladding, bridges to exterior
structures and applications that are presently only otherwise
feasible with non-sustainable or man-made materials on account of
its excellent dimensional stability and Class 1 durability; and
-- Tricoya(R) wood chips, which are produced using sustainable,
FSC(R) certified wood species and are used to manufacture
Tricoya(R) panel products by the Group's licensees. Tricoya(R)
panels demonstrate significantly-enhanced durability and
exceptional dimensional stability, allowing specifiers such as
architects, designers and joineries greater flexibility and scope
when designing. Tricoya(R) panels are used in a wide variety of
applications such as window components and door skins, façade
cladding, wet interiors, kitchen carcasses and art installations.
Tricoya(R) is also warranted by licensees for 50 years for use
above ground and 25 years in ground or freshwater.
The Group operates the Arnhem Plant, an Accoya(R) production
facility in Arnhem in the Netherlands, which, following the
successful completion of the construction of a third acetylation
reactor in 2018, currently has production capacity of approximately
60,000m(3) of Accoya(R) per annum. The completion of this reactor
at the Arnhem Plant was a notable milestone for the Company and led
to increased sales from the additional production capacity, helping
the Group to achieve an EBITDA positive result for the year ending
31 March 2019. The current financial year should see the further
benefits of this expansion as the Arnhem Plant reached full
capacity in the fourth quarter of the financial year ended 31 March
2019.
Currently, approximately 24% of the capacity-constrained
Accoya(R) production volumes produced are being sold to MEDITE, the
Group's longstanding Tricoya(R) joint development partner and a
member of the Tricoya(R) Consortium, for chipping into Tricoya(R)
and the subsequent production and sale by MEDITE of MEDITE
Tricoya(R) , and to FINSA to support seeding of key European
markets ahead of Tricoya(R) production in Hull.
The Tricoya(R) Consortium was successfully formed in March 2017
and saw the Company attract equity investment from BP Ventures,
MEDITE, as well as financial investors BGF and Volantis into its
subsidiary company, TTL, in order for TTL to accelerate the global
exploitation of the Company's Tricoya(R) wood chip acetylation
technology. TTL's first project has been the construction of the
world's first dedicated Tricoya(R) wood chip acetylation plant in
Hull through its subsidiary company TVUK, into which MEDITE and BP
Chemicals have also invested. The Company currently has a 76.1%
interest in TTL (held by TWL), which in turn has a 60.7% interest
in TVUK.
Construction of the Hull Plant has been substantially progressed
since the formation of the Tricoya(R) Consortium, with EUR54
million invested to date and several significant milestones
reached. TVUK is the owner of the plant and responsible for the
overall delivery of the project. It is expected that the plant will
be operational in the second half of the 2020 calendar year.
The Hull Plant has a targeted annual production capacity of
30,000 metric tonnes of acetylated Tricoya(R) chips per annum,
enough to produce approximately 40,000m(3) of Tricoya(R) panel
products per annum, with the potential to expand at a later
date.
In addition, the Group is working with Eastman Chemical Company
("Eastman") to evaluate the feasibility of jointly constructing and
operating an Accoya(R) wood production facility in North America
(the "Project"). Eastman is the world's largest producer of acetic
anhydride, the key chemical used in the production of acetylated
wood. By establishing a production plant in the US, Accsys would be
able to provide increased volumes of locally-produced Accoya(R) ,
supply new customers, and improve logistical efficiency in the
region. A decision as to whether or not to proceed with the next
stage of the Project is expected to be taken by each party
following conclusion of the evaluation, and subject to entering
into legally binding agreements, during the course of 2020. Demand
for Accoya(R) remains very strong in the Americas, with sales
volumes in the region increasing by 39% from 2,241m(3) in the six
months to 30 September 2018 to 3,111m(3) in the six months to 30
September 2019, in what the Directors believe is the largest
Accoya(R) market opportunity. The Group intends that approximately
EUR1.5 million of the net proceeds of the Issue will be applied to
fund preliminary evaluation work relating to the Group's potential
Accoya(R) plant in the United States over the next 12 to 18 months
prior to making a final investment decision.
Work is also progressing with PETRONAS Chemicals Group Berhad,
the leading integrated chemicals producer in Malaysia and one of
the largest in South East Asia, to evaluate the feasibility of
jointly funding, designing, building and operating an integrated
acetic anhydride and Tricoya(R) wood chip production plant in
Malaysia. The commencement of the feasibility study represents an
important milestone as the Company looks to expand into new
markets. It is envisaged that Tricoya(R) wood elements produced at
the Malaysian plant would use acetic acid from PCG's existing joint
venture in Malaysia. The plant would then supply the wood panel
industry within South East Asia, under licence, as the key raw
material for the formation of Tricoya(R) panels for use in the
substantial construction industry in the region. Since entering
into a feasibility evaluation agreement in January 2019, TTL and
PCG have been progressing work on the various work streams, which
include evaluating preliminary engineering studies and regional
customer and market feasibility assessments. Under the terms of
this agreement, the evaluation is expected to last for a period of
at least another 9 months with a decision to be made as to whether
to proceed further taken after the Hull Plant becomes operational.
Approximately EUR1.5 million is expected to be incurred by Accsys
on the feasibility study activities during this period.
In June 2019, the Company announced that Paul Clegg would step
down as Chief Executive Officer ("CEO") and a Board member with
effect from 31 December 2019. In October 2019, the Company
announced that Robert Harris had been appointed CEO of the Company
with effect from 20 November 2019. Robert will join the Board as an
executive director on 29 November 2019.
3. CURRENT TRADING AND PROSPECTS
The Group today also announced its interim results for the six
months from 31 March 2019 to 30 September 2019. In that
announcement, the Group stated that demand for Accoya(R) was
strong, with sales from Arnhem reaching 28,113m(3) , increasing
from 21,379m(3) in the six months to 30 September 2018 and
increasing by 16.5% in the 12 months to 31 March 2019,
notwithstanding price increases implemented to manage demand, which
also increased margins.
Furthermore, with the Arnhem Plant now operating at or near
maximum production capacity of approximately 60,000m(3) per annum,
in the six months from 31 March 2019 to 30 September 2019, total
revenue for the Group increased 39% to EUR44 million compared with
the same period in the previous year.
The increase in sales volumes is attributable to consistent and
growing demand for the Group's products, with sales volumes at
present limited only by the Group's manufacturing capacity
throughout the year, even after the expansion of the Arnhem Plant
by the addition of a third acetylation reactor in 2018. The Company
continues to effectively manage this situation, with all customers
being on allocation and as the Company works to increase its
production capabilities and the market for Accoya(R) in the longer
term, the Company is supported by the knowledge that Accsys offers
a specialty product that its distributors can sell at consistently
high margins throughout the cycle.
Underlying EBITDA for the six months ended 30 September 2019 was
EUR2.5 million (2018: EUR1.4 million loss). Group revenues
increased by 39% over this period, evidencing continued strong
demand for the Group's Accoya(R) and Tricoya(R) products. Gross
margin improved to 29.1% in the first half (September 2018: 22.2%),
positively impacted by higher volumes, an improved product mix and
higher selling prices. Accoya(R) underlying EBITDA increased by
171% to EUR7.6 million for the first half (September 2018:
EUR2.8m), showing the benefit of the third Accoya(R) reactor coming
on stream.
Net debt as at 30 September 2019 was EUR59.3m. The net proceeds
of the Issue are expected to result in a significant reduction in
net debt in the short term. While the majority of the net proceeds
are expected to be invested in the Hull Plant and the further
expansion of the Arnhem Plant, the investment in the fourth
Accoya(R) acetylation reactor will take place over the next two
years. The Company is targeting further gross profit growth in the
short to medium term, in particular as the Company benefits from
the expansion projects, resulting in an improved EBITDA to net debt
ratio.
The Group's interim results for the six months from 31 March
2019 to 30 September 2019, coupled with the Firm Placing and
Placing and Open Offer, mark an exciting and important milestone
for the Company and the Directors expect to build upon the 12
months of positive EBITDA trading with real momentum across the
Group. Accsys is now well positioned to take advantage of its
sustainable products and substantial market opportunity.
The second half of the financial year has started well and the
Directors expect this to benefit from production at capacity levels
as well as further improvement to the Group's sales product mix.
The Group is targeting further improvement to gross margins over
the medium term, with the anticipated benefit from the Hull Plant
becoming operational, enabling an increase in higher-priced sales
to replace the volume currently being sold to Tricoya(R)
licensees.
The expansion of the Arnhem Plant by the addition of a fourth
reactor and the completion of the Hull Plant will enable Accsys to
significantly increase its sales over time, targeting Group
revenues of EUR160 million over the medium term. While the
significant increase in production capacity enables the Group to
grow to meet increasing demand, the Directors believe it is
essential to plan for the next phase of expansion and will continue
to develop the discussions concerning potential new manufacturing
plants in the US and Malaysia.
As explained in section 6 below, the Company's expected share of
the increase in construction costs associated with the completion
of the Tricoya(R) Hull Plant amounts to approximately EUR12
million. This figure may be subject to change depending on a number
of factors, including reaching final agreement on the additional
costs to complete the Tricoya(R) Project, the willingness and
ability of the other members of the Tricoya(R) Consortium, MEDITE
and BP Chemicals to fund their expected respective share of those
additional costs and the ability of TVUK to obtain any additional
financing on commercially acceptable terms. These uncertainties,
should they result in a material change to the construction costs
associated with the completion of the Tricoya(R) Hull Plant (and/or
the Company's share thereof) and/or the ability of the Tricoya(R)
Consortium, MEDITE and/or BP Chemicals to fund their expected
respective share of any additional costs, are reasonably likely to
have a material effect on the Company's prospects for at least the
current financial year. Please refer to section 7 below for further
information.
4. REASONS FOR THE FIRM PLACING AND PLACING AND OPEN OFFER AND USE OF PROCEEDS
The Company proposes to raise EUR46.3 million (before expenses)
in aggregate by way of the Issue, comprising EUR28.6 million
(before expenses) by way of the Firm Placing and EUR17.7 million
(before expenses) by way of the Placing and Open Offer.
The Directors have given careful consideration as to how to
structure the proposed issuance of equity and, following advice
from the Joint Underwriters, have concluded that a Firm Placing and
Placing and Open Offer is the most suitable option available to the
Company and its Shareholders at this time.
The Group is in the process of executing its growth strategy, a
core component of which is the steady ramp up of production
capacity for both Accoya(R) and Tricoya(R) to meet market demand.
The Group has therefore decided to undertake the Firm Placing and
Placing and Open Offer to raise additional equity capital to
support its growth ambitions with the net proceeds of the Issue to
be applied to:
(i) the further expansion of the Arnhem Plant, through the
construction of a fourth Accoya(R) acetylation reactor and
enhancements to the Arnhem Plant through new chemical storage
facilities, a new wood stacker and associated automatic wood
handling equipment. This will increase production capacity by
approximately 33% with targeted annual production capacity of
approximately 80,000m(3) when the fourth reactor is at capacity
which is currently expected during the financial year ending 31
March 2024. As part of the site's expansion, wood handling and
storage equipment will be upgraded in order to be able to process
higher levels of output and improve efficiency;
(ii) the Company's expected share of the increase in
construction costs associated with the completion of the Tricoya(R)
Hull Plant, which is expected to be operational in the second half
of the 2020 calendar year with a targeted annual production
capacity of approximately 30,000 metric tonnes;
(iii) funding for preliminary evaluation work relating to its
potential Accoya(R) plant in the United States. Demand for
Accoya(R) remains very strong in the Americas, with sales volumes
in the region increasing by 39% compared with the same period last
year, being an increase from 2,241m(3) in the six months to 30
September 2018 to 3,111m(3) in the six months to 30 September 2019,
in what continues to be a priority market for the Company. The
Company intends to fund preliminary evaluation work over the next
12 to 18 months prior to making a final investment decision;
and
(iv) supplementing the additional working capital requirements
of the Group resulting from (i) and (ii) above, particularly as
inventory levels rise to support increased production and sales to
customers.
The table below summarises the estimated amounts for each of the
above:
Estimated expenditure
(EUR million)
Additional costs the Company is expected to
fund in relation to the completion of the Hull
Plant by TVUK 12
Design, construction and commissioning of a
fourth Accoya(R) acetylation reactor at the
Arnhem Plant 20
Purchase and installation of new chemical storage
facilities, a new wood stacker and associated
automatic wood handling equipment at the Arnhem
Plant 6
Preliminary evaluation work for Accoya(R) plant
in the US 1.5
General working capital 3.5
TOTAL 43
5. ARNHEM ACCOYA(R) PLANT EXPANSION
The Group's existing Accoya(R) site in Arnhem increased its
production capacity during the financial year ended 31 March 2019
by 50% to 60,000m(3) per annum ("Reactor 3") and detailed planning
for a fourth Accoya(R) acetylation reactor, providing approximately
an additional 20,000m(3) per annum, has commenced ("Reactor
4").
With Reactor 3 operating at or near full capacity and with
customers all on allocation, the Reactor 4 expansion is required to
satisfy the continued high demand in the market for Accoya(R) .
With the Front End Engineering and Design work expected to commence
in the second half of the financial year ending 31 March 2020 and
construction expected to commence in the second half of the
financial year ending 31 March 2021, Reactor 4 is expected to be
operational in the second half of the financial year ending 31
March 2022 and reach full capacity during the financial year ending
31 March 2024.
The Reactor 3 project included the construction of some of the
chemical infrastructure required for the addition of Reactor 4. In
addition, further work beyond the core Reactor 4 unit is required
to support full speed operation of four acetylation reactors
simultaneously. This additional work will have the potential to
improve the efficiency of the entire Arnhem operation, with the new
chemical storage facilities, a new wood stacker and associated
automatic wood handling equipment expected to be operational by the
second half of the financial year ending 31 March 2022. The Board
expects the addition of Reactor 4 to further improve operating
margins over the medium term as a result of the economies of scale
of operating on the same site, and with only a limited increase in
related overhead costs. The payback on the Reactor 4 investment is
expected to be approximately three years, allowing for a period of
ramp up of operations.
The Group plans to invest approximately EUR20 million towards
the capital costs of Reactor 4, which will increase overall
production capacity to approximately 80,000m(3) per annum, enabling
Accoya(R) revenues of EUR120 million to be achievable over the
medium term. In addition, approximately EUR6 million will be spent
on purchasing new chemical storage facilities and upgrading wood
stacking and automatic wood handling equipment at the Arnhem Plant.
The Group intends to fund this EUR26 million investment from part
of the proceeds of the Issue. These figures represent anticipated
funding requirements for the expansion of the Arnhem Plant and may
be subject to change depending on a number of factors.
The Reactor 4 expansion and further enhancement of the Arnhem
Plant follow a number of years of sustained and signi cant growth
in Accoya(R) sales. The Arnhem Plant now operates at or near to its
current maximum production capacity of approximately 60,000m(3) per
annum. In the six months from 31 March 2019 to 30 September 2019,
the sales volume of Accoya(R) was 28,113m(3) , an increase of
approximately 32% compared with the same period in the previous
year (31 March 2018 to 30 September 2018: 21,379m(3) ). The
Directors believe that the long-term market opportunity remains
substantial, with annual demand in excess of 1 million cubic metres
of Accoya(R) per annum being achievable in the long term and
average gross margins of at least 30% being achievable in the
medium to longer term in view of the reduced costs per unit which
could result from increased production and as a result of the
expected change in sales mix over the medium term following the
start-up of the Hull Plant, resulting in Tricoya(R) material no
longer being produced in Arnhem and instead replaced by sales of
normal Accoya(R) .
Additional capacity at the Arnhem Plant is required to enable
the Group to meet increasing market demand for Accoya(R) and to
maintain momentum in growth. The increased manufacturing capacity
will allow for an increase in the volume and mixture of Accoya(R)
inventory, enabling the Group to increase sales and to better
service customer needs both before and after the expansion. The
increased capacity will also provide the Company with greater
exibility for targeting new markets, as well as producing material
in the short term for production of MEDITE Tricoya(R) . The
expansion will facilitate lower costs per unit and should further
increase the overall ef ciency of the Arnhem Plant to the bene t of
the performance of the Group's manufacturing segment.
6. TRICOYA(R) HULL PLANT
The construction of the first dedicated Tricoya(R) wood chip
acetylation plant in Hull has been substantially progressed since
the formation of the Tricoya(R) Consortium in 2017, with
approximately EUR54 million invested to date and several
significant milestones reached. Most of the wood-handling aspects
of the plant have been constructed and all equipment has been
ordered, with most now on site already. TVUK has recruited the
first employees who will make up the operations team of 31, and
they are currently planning the commissioning and start-up of the
plant.
As announced previously, delays in construction mean that TVUK
expects the Tricoya(R) Hull Plant to be operational in the second
half of the 2020 calendar year with construction progressing and
the previously-reported issue concerning civil engineering works
being addressed. The civil works issue does not relate to Accsys'
Tricoya(R) acetylation technology, meaning that there is no impact
on the long-term expected profitability of the project, with gross
margins of approximately 40% expected to be achievable once the
plant reaches near capacity, which is expected to occur during the
financial year ending 31 March 2024.
Whilst the issues concerning engineering and related works are
being addressed, the delay has resulted in additional forecast
costs of approximately EUR28 million associated with the lead
contractor, the project team and related activities being required
for a longer period. Of this amount, under the Tricoya(R)
Consortium structure, the Company's expected share amounts to
approximately EUR12 million, with the balance of equity into TTL
expected to be funded by other members of the Tricoya(R) Consortium
and then into TVUK by TTL, MEDITE and BP Chemicals, alongside debt
funded to TVUK by RBS under the existing RBS Facility Agreement and
an additional facility expected to be entered into between TVUK and
RBS. As such, the total project cost is expected to amount to a
total of approximately EUR89 million, with approximately EUR54
million invested to date, including pre-operating costs. These
figures represent anticipated funding requirements for the
Tricoya(R) Project and may be subject to change depending on a
number of factors, including reaching final agreement on the
additional costs to complete the Tricoya(R) Project, the
willingness and ability of the other members of the Tricoya(R)
Consortium, MEDITE and BP Chemicals to fund their expected
respective share of those additional costs and the ability of TVUK
to obtain any additional financing on commercially acceptable
terms.
The RBS Facility Agreement, entered into with TVUK on 29 March
2017, contains certain obligations and other provisions, including
events of default, relating to the timing and manner of funding any
cost overruns by TVUK in relation to the construction of the Hull
Plant. The inability of TVUK to hitherto fund the cost overruns
referred to above with equity has resulted in a technical breach by
TVUK of the RBS Facility Agreement. However, RBS has not taken any
action to enforce any right or remedy under the RBS Facility
Agreement in connection with this technical breach, has continued
to fund TVUK and has confirmed in discussions that it remains
supportive of the Tricoya(R) Project. As explained above, the
balance of equity required to meet such cost overruns is expected
to be funded into TTL by the other members of the Tricoya(R)
Consortium and then into TVUK by TTL, MEDITE and BP Chemicals, all
of which remain committed to achieving the market potential of
Tricoya(R) , at which point TVUK is expected to cure the technical
breach under the RBS Facility Agreement.
The Company anticipates that demand from MEDITE and FINSA will
utilise the majority of the capacity of the Hull Plant as it ramps
up operation. Under a committed off-take agreement with MEDITE, in
the first year of production at the Hull Plant, a minimum of 6,000
tonnes of Tricoya(R) wood chips, representing 20% of the Hull Plant
design capacity, is to be sold or paid for by MEDITE. As production
at the plant ramps up, this off-take agreement provides for the
ramp up in MEDITE's commitment, reaching a minimum of 12,000 tonnes
of Tricoya(R) per annum, representing 40% of total design capacity,
by year six.
The Hull Plant has a targeted annual production capacity of
30,000 metric tonnes of acetylated Tricoya(R) chips per annum,
enough to produce approximately 40,000m(3) of Tricoya(R) panel
products per annum. Based on this targeted capacity of 30,000
metric tonnes of acetylated Tricoya(R) chips per annum, the Hull
Plant is anticipated to reach EBITDA breakeven at approximately 40%
design capacity. It is expected to take approximately three years
to reach full capacity following start-up, after which there will
be scope for expansion. The modular design of the Hull Plant is
expected to allow for an ef cient expansion when market conditions
dictate. The Company anticipates numerous Tricoya(R) revenue
streams from the start-up of the Hull Plant, including:
(i) licensee and sales agreements with a number of parties
(which includes the licensee and sale agreements already secured
with MEDITE and FINSA);
(ii) the sale of acetylated wood chips;
(iii) licence and royalty fees received by TTL for the right to
use Tricoya(R) intellectual property to manufacture Tricoya(R)
chips; and
(iv) the sale of acetic acid, which is a by-product of the Tricoya(R) manufacturing process.
7. WORKING CAPITAL AND IMPORTANCE OF THE VOTE
The Company is of the opinion that, taking into account existing
available facilities and the net proceeds of the Issue, the working
capital available to the Group is sufficient for its present
requirements, that is, for at least the next 12 months following
the date of this announcement.
Under its current business plan, the Company's expected capital
investments over the short to medium term include: (i) the
Company's expected share of the increase in construction costs
associated with the completion of the Tricoya(R) Hull Plant, being
approximately EUR12 million, with funding required by the end of
2019 and the plant expected to become operational in the second
half of the 2020 calendar year; and (ii) the commencement of
investment in the addition of a fourth Accoya(R) wood acetylation
reactor in Arnhem, together with new chemical storage facilities, a
new wood stacker and associated automatic wood handling equipment
for a total expected cost of approximately EUR26 million, with the
Front End Engineering and Design work expected to commence in the
second half of the financial year ending 31 March 2020,
construction expected to commence in the second half of the
financial year ending 31 March 2021 and Reactor 4 expected to be
operational in the second half of the financial year ending 31
March 2022.
In relation to these projects:
(i) The Tricoya(R) Hull Plant is a key part of the Group's
growth strategy with the objective of selling significant volumes
of Tricoya(R) and generating further revenues from the licensing of
its valuable intellectual property related to Tricoya(R) , both in
connection with the Hull Plant and potential future plants,
including in Malaysia. The Hull Plant is critical to this and
although the Group is not contractually committed to investing
further in TVUK, it intends to do so, alongside its Tricoya(R)
Consortium partners, given the amount of capital already invested
in the project. The Company's expected share of the increase in
construction costs associated with the completion of the Tricoya(R)
Hull Plant is approximately EUR12 million, which is to be funded
from the Issue by the end of 2019. If the Issue does not proceed
for any reason, the Company would need to seek alternative equity
and/or debt financing in order to complete the project. Without
this financing there are likely to be significant delays to the
Tricoya(R) Project which would significantly impact the Group's
ability to generate both Tricoya(R) sales volumes and licensing
revenues in the short to medium term. The liabilities of TVUK in
respect of the Hull Plant are ring-fenced (including, without
limitation, under the RBS Facility Agreement) and non-recourse to
the Company, giving the Company some flexibility to adjust the
timing and extent of its commitments in respect of this
project.
(ii) The expansion of the Group's manufacturing capacity in
Arnhem is also a key part of the Group's growth strategy with the
objective of driving significant increases in Accoya(R) sales
volumes. The proposed fourth reactor in Arnhem is critical to this
and, although the Group is not currently contractually committed to
building the fourth reactor (and new chemical storage facilities, a
new wood stacker and associated automatic wood handling equipment),
it intends to fund the total expected cost of approximately EUR26
million from the Issue. Investment is expected to commence in the
first half of the 2020 calendar year with the expansion targeted
for completion by the second half of the financial year ending 31
March 2022. It is expected that the significant majority of the
approximate EUR26 million total cost will be invested or committed
to in the next 18 months. If the Issue does not proceed for any
reason, the Company would need to seek alternative equity and/or
debt financing in order to complete the proposed fourth reactor and
associated equipment installation. Without this financing there are
likely to be significant delays to the expansion of the Group's
manufacturing capacity in Arnhem which will significantly impact
the Group's ability to grow its Accoya(R) sales volumes from
current levels in the medium term. The capital expenditure in
respect of the fourth reactor and the enhancements to the Arnhem
Plant currently remains uncommitted, giving the Company full
flexibility to adjust the timing and extent of its commitments in
respect of this project.
As such, the Group intends to invest or commit to the vast
majority of the net proceeds of the Issue over the next 18 months
under its growth strategy. Based on the Company's current cash flow
forecasts, the Company is of the opinion that, taking into account
its existing cash balances, existing available facilities and the
net proceeds of the Issue, the Group will have sufficient working
capital for its requirements under (i) and (ii) above. However,
without the net proceeds of the Issue, the Group would only have
sufficient working capital to the end of December 2019 as this is
when the investment in the Hull Plant under (i) is expected to be
required. At such time, in order to continue to carry out its
current business plan, the Company would need to raise additional
capital (or obtain appropriate alternative financing). In such a
scenario, the shortfall at the end of December 2019 would be
approximately EUR12 million, being the Group's expected share of
TVUK's liabilities relating to the completion of the construction
of the Hull Plant.
The auditors' report on the Group's unaudited condensed
consolidated interim financial statements for the six months ended
30 September 2019 published today contain an emphasis of matter,
which in summary states (without modifying the auditors'
conclusion) that, if Shareholders do not vote in favour of the
Resolutions or the Issue has not otherwise taken place in December
2019, or if the gross aggregate proceeds of the Issue are less than
expected, the Group may be unable to complete the construction of
the Hull Plant and may be unable to meet its liabilities as they
fall due unless alternative financing arrangements are obtained.
The auditors reported that those factors, along with other factors
described in the unaudited condensed consolidated interim financial
statements for the six months ended 30 September 2019, indicate the
existence of a material uncertainty that may cast significant doubt
about the Group's ability to continue as a going concern.
The Company primarily intends to raise this required additional
capital and thereby address the auditors' emphasis of matter
through the Issue. The Issue is being fully underwritten by the
Joint Underwriters, subject to the conditions set out in the
Underwriting Agreement. In addition, the Company consulted with a
significant number of its Shareholders before announcing the Issue.
Following this consultation, the Company has conditionally raised
EUR46.3 million (before expenses) in aggregate from existing and
new Shareholders by way of an underwritten Firm Placing and Placing
and Open Offer. Accordingly, the Company is confident that the
Issue will be successful, subject to the passing by Shareholders of
Resolutions 1 and 3 at the General Meeting.
If Resolutions 1 and 3 are not passed and the Firm Placing and
Placing and Open Offer do not proceed, the Company will not receive
the net proceeds from the Issue and the Group would need to obtain
appropriate alternative financing by the end of 2019 in order to be
able to fund its expected share of TVUK's liabilities relating to
the completion of the construction of the Hull Plant. In addition,
the Company's expected share of the increase in construction costs
associated with the completion of the Tricoya(R) Hull Plant may be
subject to change depending on a number of factors, including
reaching final agreement on the additional costs to complete the
Tricoya(R) Project, the willingness and ability of the other
members of the Tricoya(R) Consortium, MEDITE and BP Chemicals to
fund their expected respective share of those additional costs and
the ability of TVUK to obtain any additional financing on
commercially acceptable terms. These uncertainties may result in
changes to the construction costs associated with the completion of
the Tricoya(R) Hull Plant (and/or the Company's share thereof)
and/or the ability of the Tricoya(R) Consortium, MEDITE and/or BP
Chemicals to fund their expected respective share of any additional
costs, in which case the Group may need to raise additional finance
to fund the project.
In the event that the Group is unable to obtain alternative
equity and/or debt financing (or such alternative financing is only
achievable on terms which are not acceptable to the Company), the
Company would not be able to fund its expected share of the costs
of completing the construction of the Hull Plant within the
forecast timetable, which may result in significant delays to the
Group's growth strategy and adversely impact the Group's returns
from the Tricoya(R) Project. In such a scenario, due to the Hull
Plant being a material asset of the Group and a key component of
the Group's growth strategy, this could result in costly
reputational harm to the Company or loss of trust from the Group's
customers, employees and/or other stakeholders, all of which could
have a material adverse effect on the Group's business, revenues,
financial condition or results of operations and, accordingly,
indicate the existence of a material uncertainty which may cast
significant doubt about the Group's ability to continue as a going
concern (as noted by the Company's auditors in their emphasis of
matter). If it is not possible for the Group to obtain the required
additional financing or the Group determines that it does not wish
to fund its expected share of the construction costs associated
with the completion of the Hull Plant for any reason, the other
members of the Tricoya(R) Consortium may fund the shortfall such
that the construction of the Hull Plant may continue. This would
have the effect of, among other things, diluting the Group's
economic interest in TVUK and its returns therefrom. Otherwise, the
Tricoya(R) Project may be abandoned altogether and TVUK could
eventually be sold or another corporate solution found, which may
result in the Group losing part or all of its investment in
TVUK.
Furthermore, the RBS Facility Agreement with TVUK contains
certain obligations and other provisions, including events of
default, relating to the timing and manner of funding any cost
overruns by TVUK in relation to the construction of the Hull Plant.
As explained in section 6 above, delays in the construction of the
Hull Plant have resulted in additional forecast costs of
approximately EUR28 million (of which the Company's expected share
is approximately EUR12 million) associated with the lead
contractor, the project team and related activities being required
for a longer period, with the delay meaning that the Hull Plant is
now expected to be operational in the second half of the 2020
calendar year. The inability of TVUK to hitherto fund these cost
overruns with equity has resulted in a technical breach by TVUK of
the RBS Facility Agreement. However, RBS has not taken any action
to enforce any right or remedy under the RBS Facility Agreement in
connection with this technical breach, has continued to fund TVUK
and has confirmed in discussions that it remains supportive of the
Tricoya(R) Project. The balance of equity required to meet such
cost overruns is
expected to be funded into TTL by the other members of the
Tricoya(R) Consortium and then into TVUK by TTL, MEDITE and BP
Chemicals, all of which remain committed to achieving the market
potential of Tricoya(R) , at which point TVUK is expected to cure
the technical breach under the RBS Facility Agreement.
In the event that TVUK is unable to comply with the terms of its
debt facilities and secure new equity funding from its shareholders
(including from TTL) or procure required amendments or waivers
under its existing or future debt facilities, it may default under
its facilities, following which the relevant bank(s) may have the
right to withdraw the relevant facility and/or enforce any charges
over shares in TVUK. This could result in a sale or other corporate
solution being found in respect of TVUK, which may ultimately cause
the Group to lose part or all of its investment in TVUK. As
explained above, the liabilities of TVUK in respect of the Hull
Plant (including, without limitation, under the RBS Facility
Agreement) are ring-fenced and non-recourse to the Company.
In addition, if the Issue does not proceed, the Group would need
to delay the development of the fourth Accoya(R) acetylation
reactor in Arnhem until appropriate alternative financing is
secured. In the event that the Group is unable to obtain
alternative equity and/or debt financing, the expansion of the
Group's manufacturing capacity in Arnhem is likely to be materially
delayed, which will significantly impact the Group's ability to
grow its Accoya(R) sales volumes from current levels in the medium
term. Consequently, the Arnhem Plant would continue to operate at
or near to its current maximum production capacity of approximately
60,000m(3) per annum.
If the Firm Placing and Placing and Open Offer do not proceed
for any reason, the Company would primarily intend to raise the
EUR43 million required to effect its growth strategy over the next
18 months through other equity and/or debt fundraisings. In those
circumstances, the Directors would need to determine the
appropriate timing, structure, size and other terms of such
proposed equity and/or debt fundraising taking into account all
relevant factors, including the reasons for the Issue not having
proceeded and prevailing market conditions. The Directors currently
believe that any such other equity or debt fundraisings would be
achievable on acceptable terms on the basis of the following
factors:
(i) the Directors believe that the current business plan
presents an attractive investment proposition and that the
Company's assets are increasingly valuable and may be of interest
to new investors;
(ii) the Directors believe that a number of the Company's
existing Shareholders may be interested in taking up Ordinary
Shares in future fundraisings to prevent dilution of their holdings
and to show their continued support for the Group's business plan,
as a number of them have done in relation to past equity
financings;
(iii) the Company has raised a total of: (i) approximately EUR28
million (net of expenses) by way of a Firm Placing and Placing and
Open Offer in February 2011; and (ii) approximately EUR14 million
(before expenses) by way of a Firm Placing and Open Offer in March
2017;
(iv) EUR34 million of funding was agreed with the other members
of the Tricoya(R) Consortium in March 2017; and
(v) the Directors believe that the Company's Ordinary Shares are
attractive to UK and Dutch institutional investors on the basis
that the Ordinary Shares are traded on Euronext Amsterdam and on
AIM.
If necessary, the Group would also consider the implementation
of mitigating actions as a method of ameliorating the working
capital position of the Group until appropriate financing is
secured. Such mitigating actions may include reducing R&D,
sales and marketing costs, cutting back on discretionary
expenditure, postponing future plans for the further expansion of
the Group's manufacturing capacity (in the US, for example) and/or
asset disposals. At a minimum, the Company reviews its cash
position and working capital requirements on a regular basis to
determine its financial position, so decisions on cost reductions
take place as required as part of that process. The timing and
means of execution of any decisions regarding cost reductions would
therefore take place in the context of the Company's financial
position at such time. The Directors are confident in the Company's
ability to effect cost reductions since such costs are monitored on
an ongoing basis and action can be taken to reduce costs as and
when required.
For the reasons set out above, the Directors believe that the
Firm Placing and Placing and Open Offer are in the best interests
of Shareholders as a whole. In order for the Firm Placing and
Placing and Open Offer to proceed, Resolutions 1 and 3 to be
proposed at the General Meeting must be passed.
8. PRINCIPAL TERMS AND CONDITIONS OF THE FIRM PLACING AND PLACING AND OPEN OFFER
The Firm Placing and Placing and Open Offer are conditional
upon:
-- the passing of the first and third resolutions to be proposed at the General Meeting;
-- Admission becoming effective by no later than 8:00 a.m. (GMT)
on 23 December 2019 (or such later time and/or date as the Company
and the Joint Underwriters may determine); and
-- the Underwriting Agreement having become unconditional in all
respects and not having been terminated in accordance with its
terms prior to Admission.
The shareholder approvals necessary for the Firm Placing and
Placing and Open Offer will be sought at the General Meeting to be
held at 9:00 a.m. (GMT) on 20 December 2019, the full details of
which are set out in the Notice of General Meeting at the end of
the Prospectus, expected to be published later today.
27,239,764 New Ordinary Shares will be placed with the Firm
Placees at the Offer Price of EUR1.05 per Ordinary Share subject
to, and in accordance with, the Underwriting Agreement. The Firm
Placing is expected to raise gross proceeds of approximately
EUR28.6 million. The Firm Placing Shares are not subject to
clawback and are not part of the Placing and Open Offer.
The Firm Placing and Placing and Open Offer are being fully
underwritten by the Joint Underwriters, subject to the conditions
set out in the Underwriting Agreement.
Open Offer Entitlements
The Directors propose to offer Open Offer Shares by way of the
Open Offer to all Qualifying Shareholders (other than, subject to
certain exceptions, Restricted Shareholders and persons in the
United States) on the following basis:
1 Open Offer Share at EUR1.05 each for every 7 Existing Ordinary
Shares
held and registered in that Shareholder's name as at the Record
Time, and so in proportion to any other number of Existing Ordinary
Shares that each Qualifying Shareholder then holds and otherwise on
the terms and conditions as set out in the Prospectus and, in the
case of Qualifying Non-CREST Shareholders, the Application
Form.
Any fractional entitlements to Open Offer Shares will be
disregarded in calculating Qualifying Shareholders' Open Offer
Entitlements and will be aggregated and made available under the
Excess Application Facility.
Excess Application Facility
Qualifying Shareholders are also being given the opportunity to
apply for Excess Open Offer Shares at the Offer Price through the
Excess Application Facility. Qualifying Shareholders may apply for
Excess Open Offer Shares up to a maximum number of Excess Open
Offer Shares equal to 10 times the number of Existing Ordinary
Shares held and registered in their name as at the Record Time. The
total number of Open Offer Shares is fixed and will not be
increased in response to any applications under the Excess
Application Facility. Such applications will therefore only be
satisfied to the extent that other Qualifying Shareholders do not
apply for their Open Offer Entitlements in full or in respect of
the aggregated fractional entitlements to Open Offer Shares.
Applications under the Excess Application Facility shall be
allocated in such manner as the Directors may determine, in their
absolute discretion, and no assurance can be given that the
applications by Qualifying Shareholders will be met in full or in
part or at all.
Placing
Any Open Offer Shares which are not applied for under the Open
Offer may be allocated to Conditional Placees (subject to the
Excess Application Facility) at the Offer Price, with the proceeds
retained for the benefit of the Company. 16,855,474 Open Offer
Shares will be conditionally placed to Conditional Placees at the
Offer Price, subject to clawback to satisfy Open Offer Entitlements
and Excess Open Offer Entitlements taken up by Qualifying
Shareholders under the Open Offer.
Miscellaneous
Open Offer Entitlements and Excess Open Offer Entitlements set
out in an Application Form may be converted into uncertificated
form, that is, deposited into CREST (whether such conversion arises
as a result of a renunciation of those rights or otherwise).
Similarly, Open Offer Entitlements and Excess Open Offer
Entitlements held in CREST may be withdrawn from CREST and an
Application Form may be used instead.
The New Ordinary Shares, when issued and fully paid, will rank
pari passu in all respects with the Existing Ordinary Shares and
will rank in full for all dividends and other distributions made,
paid or declared in respect of the Ordinary Shares after their
issue. The ability of the Company to pay dividends on its Ordinary
Shares in the future will be a function of its pro tability and
cash ow and the extent to which, as a matter of law, it has
available to it suf cient distributable reserves out of which any
proposed dividend may be paid. Future dividends to Shareholders
will be at the discretion of the Board after taking into account
various factors including the Group's business prospects, cash
requirements, level of distributable reserves, nancial performance,
new product development and plans for international expansion. The
Board deems it prudent for the Company to maintain as strong a
financial position as possible during the current phase of the
Company's growth strategy and therefore the Company does not expect
to pay a dividend in the near term.
Applications will be made for the New Ordinary Shares to be
admitted to listing and trading on Euronext Amsterdam and to
trading on AIM. It is expected that Admission will become effective
and that dealings in the New Ordinary Shares will commence on
Euronext Amsterdam and on AIM at 8:00 a.m. (GMT) on 23 December
2019. Following Admission, the total number of Ordinary Shares in
issue in the Company will be 162,083,543. Accsys currently holds no
Ordinary Shares in treasury, and, therefore, following Admission,
the total number of Ordinary Shares will be 162,083,543. This
figure may be used by Shareholders as the denominator for the
calculations by which they determine if they are required to notify
their interest in, or a change to their interest in, the Company
under the Disclosure Guidance and Transparency Rules.
If a Qualifying Shareholder who is not a Placee does not take up
any of his Open Offer Entitlements or Excess Open Offer
Entitlements, such Qualifying Shareholder's holding, as a
percentage of the enlarged share capital, will be diluted by 27.2%
as a result of the Issue. If a Qualifying Shareholder who is not a
Placee takes up his Open Offer Entitlements in full (assuming it
does not participate in the Excess Application Facility), such
Qualifying Shareholder's holding, as a percentage of the enlarged
share capital, will be diluted by 16.8% as a result of the Firm
Placing. Subject to certain exceptions, Shareholders in the United
States and the Restricted Jurisdictions will not be able to
participate in the Open Offer.
Details of the further terms and conditions of the Open Offer,
including the procedure for acceptance and payment and the
procedure in respect of entitlements not taken up, are set out in
the Prospectus expected to be published later today.
9. GENERAL MEETING
The Firm Placing and Placing and Open Offer are subject to a
number of conditions, including Shareholder approval of the first
and third resolutions to be proposed at the General Meeting.
The second resolution seeks a new general authority for the
Directors to allot Ordinary Shares and the fourth resolution seeks
a new general authority for the Directors to disapply statutory
pre-emption rights on the allotment of a limited number of equity
securities for cash, each to apply until the Company's annual
general meeting to be held in 2020 or, if earlier, the date that is
15 months after 30 September 2019, being the date of the annual
general meeting of the Company held in 2019.
For the avoidance of doubt, the Firm Placing and Placing and
Open Offer are not conditional upon Shareholder authority being
given for any Resolutions besides the first and third
resolutions.
Notice convening the General Meeting to be held at 9:00 a.m.
(GMT) on 20 December 2019 at Brettenham House, 19 Lancaster Place,
London, WC2E 7EN is set out at the end of the Prospectus and is
expected to be published later today.
First resolution - Authority to allot Ordinary Shares in respect
of the Firm Placing and Placing and Open Offer
The first resolution is an ordinary resolution authorising the
Directors to allot Ordinary Shares and grant rights to subscribe
for or convert any security into Ordinary Shares up to a nominal
amount of EUR2,204,762 in connection with the Firm Placing and
Placing and Open Offer. This authority will expire on the date that
is six months after the date of the General Meeting.
Second resolution - Authority to allot Ordinary Shares
The second resolution is an ordinary resolution that, in
addition to all existing authorities, the Directors be generally
and unconditionally authorised to allot Ordinary Shares and grant
rights to subscribe for or convert any security into Ordinary
Shares up to a nominal amount of EUR734,920. This authority will
expire on the date of the annual general meeting of the Company to
be held in 2020 or, if earlier, the date that is 15 months after 30
September 2019, being the date of the annual general meeting of the
Company held in 2019. Together with the existing authority granted
at the Company's 2019 annual general meeting, this general
authority will give the Directors the power to allot Ordinary
Shares up to an aggregate nominal amount equivalent to
approximately one third of the Company's enlarged share capital
following the Firm Placing and Placing and Open Offer.
Third resolution - Disapplication of pre-emption rights in
respect of the Firm Placing and Placing and Open Offer
The third resolution is a special resolution that, subject to
the first resolution being passed, authorises the Directors to
allot Ordinary Shares and grant rights to subscribe for or convert
any security into Ordinary Shares pursuant to the authority given
by the first resolution, as if section 561 of the Companies Act
2006 did not apply to such allotment. This authority will be
limited to the allotment of New Ordinary Shares in connection with
the Firm Placing and Placing and Open Offer (on the terms and
conditions set out in the Prospectus). This authority will expire
on the date that is six months after the date of the General
Meeting.
Fourth resolution - Disapplication of pre-emption rights
The fourth resolution is a special resolution that, subject to
the second resolution being passed, authorises the Directors to
allot Ordinary Shares and grant rights to subscribe for or convert
any security into Ordinary Shares pursuant to the authority given
by the second resolution, as if section 561 of the Companies Act
2006 did not apply to such allotment. This authority will be
limited to the allotment of equity securities up to a nominal
amount of EUR220,476. This authority will expire on the date of the
annual general meeting of the Company to be held in 2020 or, if
earlier, the date that is 15 months after 30 September 2019, being
the date of the annual general meeting of the Company held in 2019.
Together with the existing authority granted at the Company's 2019
annual general meeting, this authority will give the Directors the
power to allot equity securities for cash, as if section 561 of the
Companies Act 2006 did not apply to such allotment, up to an
aggregate nominal amount equivalent to 10% of the Company's
enlarged share capital following the Firm Placing and Placing and
Open Offer.
10. DIRECTORS' PARTICIPATION AND RELATED PARTY TRANSACTION
The Directors beneficially own, in aggregate, 1,118,566 Ordinary
Shares (including Ordinary Shares held by their immediate families)
representing approximately 0.95% of the issued Ordinary Share
capital of the Company as at 27 November 2019 (being the Last
Practicable Date). The Directors intend to subscribe for an
aggregate of 188,887 New Ordinary Shares through the Firm Placing
as outlined below:
As at the Last Practicable
Date As at Admission
Number of Number of
Ordinary % of issued Firm Placing Ordinary % of issued
Shares share capital Shares Shares share capital
Patrick Shanley 70,981 0.06 44,444 115,425 0.07%
Robert Harris - - 44,444 44,444 0.03%
Michael Sean Christie 72,258 0.06 11,111 83,369 0.05%
Montague John Meyer 29,745 0.03 44,444 74,149 0.05%
Geertrui Elizabeth
Schoolenberg - - 44,444 44,444 0.03%
Teslin Capital Management B.V. ("Teslin") intends to subscribe
for up to 19,811,740 New Ordinary Shares pursuant to the Firm
Placing and Placing and Open Offer (assuming full take-up under the
Open Offer). On this basis, as at Admission, funds advised and
managed by Teslin will directly and indirectly hold up to 22% of
the issued share capital of the Company.
Teslin is a related party of Accsys for the purposes of the AIM
Rules for Companies as it is a substantial shareholder of the
Company which is entitled to exercise, or control the exercise of,
10% or more of the votes able to be cast at general meetings of the
Company. The Board considers, having consulted with Numis as the
Company's nominated adviser, that the terms of Teslin's
participation in the Firm Placing and Placing and Open Offer are
fair and reasonable insofar as Shareholders are concerned.
11. DIRECTORS' RECOMMATION
The Directors consider the Firm Placing and Placing and Open
Offer and the Resolutions to be in the best interests of
Shareholders taken as a whole.
The Board believes that the net proceeds of the Firm Placing and
Placing and Open Offer are necessary to fund the two significant
capital projects that the Group is undertaking, alongside funding
the feasibility review for a new Accoya(R) plant in the United
States and providing additional working capital for the Group as it
increases in size. The Issue allows this substantial investment to
take place without putting additional pressure on the Company's
balance sheet. If the Group does not proceed with the Firm Placing
and Placing and Open Offer, the Group will need to delay or curtail
its intended growth plans in order to operate with an appropriate
level of headroom within its existing resources and facilities.
This will include delaying the development of Reactor 4 and pausing
the construction of the Hull Plant until appropriate financing is
secured which will significantly impact the Group's ability to grow
both its Accoya(R) and Tricoya(R) sales volumes from current levels
in the short to medium term. In order for the Firm Placing and
Placing and Open Offer to proceed, Resolutions 1 and 3 to be
proposed at the General Meeting must be passed. The Directors
believe that it is important that Shareholders vote in favour of
all the Resolutions at the General Meeting. The Directors consider
the Firm Placing and Placing and Open Offer and the Resolutions to
be in the best interests of Shareholders taken as a whole.
Accordingly the Directors unanimously recommend that
Shareholders vote in favour of the Resolutions to be put to the
General Meeting, as they intend to do, or procure, in respect of
any of their own beneficial holdings, amounting to 1,118,566
Ordinary Shares (including Ordinary Shares held by their immediate
families) in aggregate, representing approximately 0.95% of the
Existing Ordinary Shares as at the Last Practicable Date.
12. EXPECTED TIMETABLE OF PRINCIPAL EVENTS
Record Time for entitlement under 6:00 p.m. on 26 November
the Open Offer for Qualifying CREST 2019
Shareholders and Qualifying Non-CREST
Shareholders
Announcement of the Firm Placing 7:00 a.m. on 28 November
and Placing and Open Offer 2019
Publication and posting of the 28 November 2019
Prospectus (including the Notice
of General Meeting) and Forms of
Proxy, and despatch of Application
Forms to Qualifying Non-CREST Shareholders
Record Time for entitlement under 6:00 p.m. (CET) on 28 November
the Open Offer for Qualifying Euroclear 2019
Shareholders
Existing Ordinary Shares marked 8:00 a.m. on 29 November
"ex" by AIM and Euronext Amsterdam 2019
Open Offer Entitlements and Excess 29 November 2019
Open Offer Entitlements credited
to stock accounts of Qualifying
CREST Shareholders in CREST
Open Offer Entitlements and Excess 29 November 2019
Open Offer Entitlements enabled
in CREST
Euroclear Open Offer Entitlements 8:00 a.m. (CET) on 29 November
and Excess Euroclear Open Offer 2019
Entitlements credited to appropriate
stock accounts held with Intermediaries
for Qualifying Euroclear Shareholders
Recommended latest time for requesting 4:30 p.m. on 13 December
withdrawal of Open Offer Entitlements 2019
and Excess Open Offer Entitlements
from CREST
Latest time for depositing Open 3:00 p.m. on 16 December
Offer Entitlements and Excess Open 2019
Offer Entitlements into CREST
Latest time for splitting Application 3:00 p.m. on 17 December
Forms (to satisfy bona fide market 2019
claims only)
Latest time for receipt of Forms 9:00 a.m. on 18 December
of Proxy by registered Shareholders 2019
for the General Meeting
Latest time for election and payment 2:00 p.m. (CET) on 18 December
in full by applying Qualifying 2019
Euroclear Shareholders via their
Intermediaries
Latest time for receipt of completed 11:00 a.m. on 19 December
Application Forms and payment in 2019
full under the Open Offer and settlement
of relevant CREST instructions
(as appropriate)
General Meeting 9:00 a.m. on 20 December
2019
Announcement of the result of the 20 December 2019
Firm Placing and Placing and Open
Offer through a Regulatory Information
Service
Date of Admission and dealings 23 December 2019
in New Ordinary Shares commences
on AIM
Commencement of dealings in New 23 December 2019
Ordinary Shares on Euronext Amsterdam
New Ordinary Shares credited to 23 December 2019
CREST stock accounts (Qualifying
CREST Shareholders only) and to
stock accounts held with Intermediaries
(Qualifying Euroclear Shareholders
only)
Despatch of definitive share certificates 8January 2020
for the New Ordinary Shares in
certificated form
13. KEY STATISTICS OF THE FIRM PLACING AND PLACING AND OPEN OFFER
Offer Price EUR1.05 per New
Ordinary Share
Basis of Open Offer 1 New Ordinary
Share for every
7 Existing Ordinary
Shares(1)
Number of Existing Ordinary Shares(2) 117,988,305
Number of Firm Placing Shares to be issued
pursuant to the Firm Placing 27,239,764
Number of Open Offer Shares to be issued
pursuant to the Placing and Open Offer 16,855,474
Number of Ordinary Shares in issue immediately
following the Firm Placing and Placing
and Open Offer(3) 162,083,543
Firm Placing Shares as a percentage of
the enlarged issued share capital of
the Company immediately following the
Firm Placing and Placing and Open Offer(3) 16.8%
Open Offer Shares as a percentage of
the enlarged issued share capital of
the Company immediately following the
Firm Placing and Placing and Open Offer(3) 10.4%
Estimated gross proceeds of the Firm
Placing and Placing and Open Offer(3) EUR46.3 million
Estimated proceeds receivable by the
Company from the Firm Placing and Placing
and Open Offer, after deduction of expenses(3,4) EUR43 million
____________________
Notes:
1. Fractions of New Ordinary Shares will not be allotted
to Shareholders in the Open Offer and fractional entitlements
under the Open Offer will be rounded down to the nearest
whole number of New Ordinary Shares.
2. In issue as at 27 November 2019, being the Last Practicable
Date.
3. Unless otherwise stated, for the purposes of the table
above and this announcement, the number of New Ordinary
Shares to be issued under the Firm Placing and Placing
and Open Offer is stated on the assumption that no further
Ordinary Shares are issued as a result of the exercise
of any options under any share plan, or otherwise, between
the date of the Prospectus and the relevant time. In addition,
the gross and net proceeds of the Firm Placing and Placing
and Open Offer have been calculated on the basis that 27,239,764
New Ordinary Shares are issued under the Firm Placing and
that 16,855,474 New Ordinary Shares are issued under the
Placing and Open Offer.
4. Expenses are expected to be approximately EUR3.3 million
(inclusive of VAT).
The person responsible for arranging for the release of
this announcement on behalf of Accsys is Angus Dodwell,
Legal Counsel & Company Secretary.
For further information, please contact: Accsys Technologies Robert Harris, CEO (incoming) via FTI Consulting
PLC Paul Clegg, CEO (outgoing)
William Rudge, FD
Numis Securities Limited
- Joint Underwriter, Oliver Hardy (NOMAD)
Nominated Adviser, Christopher Wilkinson
Joint Financial Adviser Ben Stoop
and Joint Broker Oliver Cox +44 (0) 20 7260 1000
Investec Bank plc -
Joint Underwriter, Carlton Nelson
Joint Financial Adviser James Rudd
and Joint Broker Alex Wright +44 (0) 20 7597 5970
NIBC Bank N.V. - Joint Jean-Paul Mannie
Underwriter Jeroen Willard +31 20 550 8415
Matthew O'Keeffe
FTI Consulting Alex Le May +44 (0) 20 3727 1340
Frank Neervoort +31 681 734 236
Off the Grid (The Netherlands) Giedo Van Der Zwan +31 624 212 238
Notes to editors:
Accsys Technologies PLC (www.accsysplc.com) is a fast-growing
and eco-friendly company that combines chemistry and technology to
create high performance, sustainable wood building products.
Accsys' primary focus is on the production of Accoya(R) wood and
Tricoya(R) wood elements, technology licensing via its subsidiary,
Titan Wood Limited, which has manufacturing operations in Arnhem,
the Netherlands (through its subsidiary Titan Wood B.V.), a
European office in London, United Kingdom, an American office in
Dallas, Texas (via its subsidiary Titan Wood, Inc.) and technology
licensing associated with the acetylation of wood elements via its
subsidiary Tricoya Technologies Limited. Any references in this
announcement to agreements with Accsys shall mean agreements with
either Accsys or its subsidiary entities unless otherwise
specified. Accsys Technologies PLC is listed on the London Stock
Exchange AIM market and on Euronext Amsterdam, under the symbols
'AXS'. Accsys' operations comprise four principal business units:
(i) Accoya(R) wood production; (ii) building and operating of
Tricoya(R) wood chip acetylation plant in Hull; (iii) technology
development, focused on a programme of continuous development of
and improvements to the process engineering and operating protocols
for the acetylation of solid wood and the development of technology
for the acetylation of wood elements; and (iv) the licensing of
technology for the production of Accoya(R) wood and Tricoya(R) wood
elements across the globe.
Tricoya(R) Consortium In March 2017, Accsys announced the
formation of the Tricoya(R) Consortium to fund, build and operate
the Tricoya(R) plant in Hull, UK. Members of the consortium include
BP and the leading manufacturer of sustainable wood-based panels,
MEDITE Europe DAC. Tricoya Ventures UK Ltd (TVUK), a subsidiary of
Accsys, owns and will operate the Tricoya(R) plant. TTL exploits
all Tricoya(R) related intellectual property and benefits from any
Tricoya(R) related revenues other than those generated by the
Tricoya(R) plant. The Tricoya(R) plant has a targeted annual
production capacity of 30,000 metric tonnes of Tricoya(R) chips per
annum, enough to produce approximately 40,000m(3) of Tricoya(R)
panel products per annum. The Tricoya(R) plant is expected to reach
EBITDA breakeven at approximately 40% design capacity and to take
approximately three years to reach full capacity following
start-up. The location of the Tricoya(R) plant at Saltend Chemicals
Park in Hull allows for expansion when market conditions
dictate.
Accoya(R) Wood (www.accoya.com) is produced using Accsys'
proprietary patented acetylation technology that effectively
converts sustainably grown softwoods and non-durable hardwoods into
what is best described as a "high technology wood". Distinguished
by its durability, dimensional stability and, perhaps most
importantly of all, its reliability (in terms of consistency of
both supply and quality), Accoya(R) wood is particularly suited to
exterior applications where performance and appearance are valued.
Moreover, the Accoya(R) wood production process does not compromise
the wood's strength or machinability. The combination of
dimensional stability, durability and retained strength means that
Accoya(R) wood offers a wealth of new opportunities to architects,
designers and specifiers. These benefits result in lower
maintenance and total cost of ownership while using a higher
sustainable and environmental responsible building material. For a
full archive of Accoya(R) news, visit www.accoya.com/news.
Tricoya(R) Wood Elements (www.tricoya.com) are produced using
Accsys' proprietary technology for the acetylation of wood chips
and particles for use in the fabrication of panel products such as
medium density fibreboard and particle-board. These products
demonstrate enhanced durability and dimensional stability which
allow them to be used in a variety of applications that were once
limited to solid wood or man-made products. Exploitation of Accsys'
proprietary technology relating to Tricoya(R) Wood Elements is
carried out through Tricoya Technologies Limited. Tricoya(R) Wood
Elements are lauded as the first major innovation in the wood
composites industry in more than 30 years.
Wood Acetylation is a process which increases the amount of
'acetyl' molecules in wood, thereby changing its physical
properties. When carried out to a sufficient level throughout the
wood, this process protects wood from rot by making it "inedible"
to most micro-organisms and fungi, without - unlike conventional
treatments - making it toxic. It also greatly reduces the wood's
tendency to swell and shrink, making it less prone to cracking and
ensuring that, when painted, it requires dramatically reduced
maintenance.
'Accsys' and 'Accsys Technologies' are trading names of Titan
Wood Limited. Accsys, ACCOYA(R) , TRICOYA(R) and the Trimarque
Device are registered trademarks owned by Titan Wood Limited
("TWL"), a wholly owned subsidiary of Accsys Technologies PLC, and
may not be used or reproduced without written permission from TWL,
or in the case of the Tricoya(R) registered trademark, from Tricoya
Technologies Limited, a subsidiary of TWL with exclusive rights to
exploit the Tricoya(R) brand.
APPIX
DEFINITIONS
The following definitions apply throughout this announcement
(unless the context otherwise requires):
"1985 Act" the Companies Act 1985 of England and Wales;
"2017 General Meeting" the general meeting of the Company held
at 11:00 a.m. on 21 April 2017;
"2017 Prospectus" the prospectus published by the Company
on 29 March 2017, available at https://www.accsysplc.com/wpcontent/uploads/sites/
2/2017/09/Accsys-Technologies-March-2017-Prospectus.pdf;
"Admission" the admission of the New Ordinary Shares
to listing and trading on Euronext Amsterdam
and to trading on AIM;
"Admitted Institution" an admitted institution (aangesloten instelling)
of Euroclear Nederland within the meaning
of the Dutch Securities Giro Act (Wet giraal
effectenverkeer), which holds a collective
depot (verzameldepot) in relation to Euroclear
Shares;
"AIM" the Alternative Investment Market, a market
operated by the London Stock Exchange;
"AIM Rules for Nominated the rules published by the London Stock
Advisers" Exchange setting out the eligibility, ongoing
responsibilities and certain disciplinary
matters in relation to nominated advisers,
as amended or reissued from time to time;
"Application Form" the personalised application form on which
Qualifying Non-CREST Shareholders may apply
for New Ordinary Shares under the Open
Offer;
"Arnhem Plant" the Group's Accoya(R) production facility
in Arnhem, the Netherlands;
"BGF" BGF Investments LP, a limited partnership
with number LP14928 whose registered office
is at 13-15 York Buildings, London, WC2N
6JU;
"Board" or "Directors" the directors of the Company as at the
date of this announcement;
"BP Chemicals" BP Chemicals Limited, a company incorporated
in England and Wales with company number
00194971, whose registered office is at
Chertsey Road, Sunbury On Thames, Middlesex,
TW16 7BP;
"BP Ventures" BP Technology Ventures Limited, a company
incorporated in England and Wales with
company number 09534543, whose registered
office is at Chertsey Road, Sunbury On
Thames, Middlesex, TW16 7BP;
"Class 1 durability" the highest classification of wood durability
defined within European Standard EN 350-1;
"Conditional Placee" any person who has agreed to conditionally
subscribe for Open Offer Shares (subject
to clawback to satisfy Open Offer Entitlements
and Excess Open Offer Entitlements taken
up by Qualifying Shareholders under the
Open Offer) pursuant to the Placing;
"CREST" the United Kingdom paperless share settlement
system and system for the holding of shares
in uncertificated form in respect of which
Euroclear UK is the operator;
"Disclosure Guidance the disclosure guidance and transparency
and Transparency Rules" rules made under Part VI of FSMA (as set
out in the FCA Handbook), as amended;
"Euroclear Nederland" the Dutch Central Institute for Giro Securities
Transactions (Nederlands Centraal Instituut
voor Giraal Effectenverkeer B.V.), trading
as Euroclear Nederland;
"Euroclear Open Offer the entitlement of a Qualifying Euroclear
Entitlement" Shareholder, pursuant to the Open Offer,
to apply to acquire an interest in Open
Offer Shares pursuant to, and subject to
the terms of, the Open Offer;
"Euroclear Shares" interests in and corresponding to the Existing
Ordinary Shares which at the Record Time
are registered in the name of Euroclear
Nederland and which are traded on Euronext
Amsterdam;
"Euroclear UK" Euroclear UK & Ireland Limited, the operator
of CREST;
"Euronext Amsterdam" the regulated market operated by Euronext
Amsterdam N.V.;
"Excess Application the arrangement pursuant to which Qualifying
Facility" Shareholders may apply for New Ordinary
Shares in excess of their Open Offer Entitlements;
"Excess Euroclear Open in respect of each Qualifying Euroclear
Offer Entitlements" Shareholder, the conditional entitlement
to apply for Excess Open Offer Shares under
the Excess Application Facility, which
are subject to allocation in accordance
with the Prospectus;
"Excess Open Offer in respect of each Qualifying Shareholder,
Entitlements" the conditional entitlement to apply for
Excess Open Offer Shares under the Excess
Application Facility, which are subject
to allocation in accordance with the Prospectus;
"Excess Open Offer the New Ordinary Shares which Qualifying
Shares" Shareholders will be invited to acquire
pursuant to the Excess Application Facility,
or (in the case of Qualifying Euroclear
Shareholders) an interest in such shares;
"Existing Ordinary the existing Ordinary Shares in issue at
Shares" the date of this announcement;
"FCA" the Financial Conduct Authority of the
UK;
"FCA Handbook" the FCA's Handbook of Rules and Guidance,
as amended from time to time;
"Financial Conduct the Financial Conduct Authority of the
Authority" UK;
"Firm Placee" any person who has agreed to subscribe
for Firm Placing Shares pursuant to the
Firm Placing;
"Firm Placing" the placing of 27,239,764 New Ordinary
Shares with the Firm Placees;
"Firm Placing Shares" the 27,239,764 New Ordinary Shares which
are the subject of the Firm Placing;
"Form of Proxy" the form of proxy for use at the General
Meeting which accompanies the Prospectus;
"FSMA" the Financial Services and Markets Act
2000 (as amended);
"General Meeting" the general meeting of the Company to be
convened pursuant to the Notice of General
Meeting;
"Group" Accsys and its existing subsidiary undertakings
(and, where the context permits, each of
them);
"Hull Plant" a wood chip acetylation plant with a targeted
annual production capacity of approximately
30,000 metric tonnes currently being built
at the Saltend Chemical Park in Hull;
"Intermediary" an Admitted Institution or an investment
firm or bank within the meaning of the
Dutch Financial Supervision Act (Wet op
het financieel toezicht), which holds a
collective depot (verzameldepot) in relation
to Euroclear Shares;
"Last Practicable Date" 27 November 2019, being the Last Practicable
Date prior to the publication of this announcement;
"London Stock Exchange" London Stock Exchange plc;
"Market Abuse Regulation" Regulation (EU) No 596/2014;
"MEDITE" MEDITE Europe DAC (formerly MEDITE Europe
Limited);
"MEDITE Tricoya(R) Extreme Durable Medium Density Fibreboard
" panels produced by MEDITE using Tricoya(R)
under licence from TTL;
"New Ordinary Shares" the Firm Placing Shares and/or the Open
Offer Shares and/or the Excess Open Offer
Shares, as the context requires;
"Notice of General the notice convening the General Meeting,
Meeting" set out at the end of the Prospectus;
"Offer Price" EUR1.05 (GBP0.90) per New Ordinary Share;
"Open Offer" the conditional invitation to Qualifying
Shareholders (other than, subject to certain
exceptions, Restricted Shareholders and
persons in the United States) to apply
to acquire the Open Offer Shares and Excess
Open Offer Shares pursuant to, and subject
to the terms of, the Open Offer set out
in the Prospectus and, in the case of Qualifying
Non-CREST Shareholders, the Application
Form;
"Open Offer Entitlement" the entitlement of a Qualifying Shareholder,
pursuant to the Open Offer, to apply to
acquire Open Offer Shares pursuant to,
and subject to the terms of, the Open Offer
or (in the case of Qualifying Euroclear
Shareholders) the entitlement to acquire
an interest in Open Offer Shares;
"Open Offer Shares" the 16,855,474 New Ordinary Shares which
Qualifying Shareholders will be invited
to acquire pursuant to the Open Offer,
or (in the case of Qualifying Euroclear
Shareholders) an interest in such shares;
"Ordinary Shares" the ordinary shares of EUR0.05 each in
the capital of Accsys;
"PCG" PETRONAS Chemicals Group Berhad;
"Placee" a Conditional Placee or a Firm Placee;
"Placing" the conditional placing of Open Offer Shares
as described in the Prospectus and subject
to clawback to satisfy Open Offer Entitlements
and Excess Open Offer Entitlements taken
up by Qualifying Shareholders under the
Open Offer;
"Prospectus" the prospectus expected to be published
later today in connection with the Issue
(incorporating the Notice);
"Qualifying CREST Shareholders" Qualifying Shareholders (other than Qualifying
Euroclear Shareholders) holding Ordinary
Shares in uncertificated form in CREST;
"Qualifying Euroclear holders of a stock account with an Intermediary
Shareholders" which at the Record Time includes Euroclear
Shares, resulting in the holders having
an interest in the relevant Intermediary's
collective depot (verzameldepot) of Euroclear
Shares;
"Qualifying Non-CREST Qualifying Shareholders (other than Qualifying
Shareholders" Euroclear Shareholders) holding Ordinary
Shares in certificated form;
"Qualifying Shareholders" holders of Ordinary Shares on the register
of members of the Company at the Record
"R&D" Time but including, where the context permits,
Qualifying Euroclear Shareholders;
research and development;
"RBS" The Royal Bank of Scotland plc;
"RBS Facility Agreement" the facility agreement between (1) TVUK
as borrower, (2) RBS as mandated lead arranger,
(3) RBS as original lender, (4) RBS as
agent of the other finance parties, (5)
Natwest Markets plc as security trustee
for the secured parties and (6) National
Westminster Bank plc as original hedge
counterparty dated 29 March 2017, as amended
and restated on 17 May 2018;
"Record Time" (i) in respect of Qualifying CREST Shareholders
and Qualifying Non-CREST Shareholders,
6:00 p.m. on 26 November 2019 and (ii)
in respect of Qualifying Euroclear Shareholders,
6:00 p.m. (CET) on 28 November 2019;
"Regulatory Information one of the regulatory information services
Service" approved by the London Stock Exchange for
the distribution to the public of AIM announcements
and included within the list maintained
on the London Stock Exchange website www.londonstockexchange.com;
"Resolutions" the resolutions to be proposed at the General
Meeting, as set out in the Notice of General
Meeting;
"Restricted Jurisdictions" Australia, Canada, Japan, the Republic
of South Africa and Switzerland, and "Restricted
Jurisdiction" shall be construed accordingly;
"Restricted Shareholders" Qualifying Shareholders with registered
addresses in, or who are citizens, residents
or nationals of, any Restricted Jurisdiction;
"Shareholder" a holder of Ordinary Shares;
"SLC Registrars" SLC Registrars of Elder House, St Georges
Business Park, Brooklands Road, Weybridge,
Surrey, KT13 0TS, United Kingdom in its
capacities as registrar and receiving agent
in respect of the Firm Placing and Placing
and Open Offer;
"Tricoya(R) Consortium" the consortium of equity investors subscribing
for shares in TTL pursuant to the TTL SSA,
being TWL, BP Ventures, MEDITE, BGF and
Volantis;
"Tricoya(R) Project" the Tricoya(R) Consortium's project to,
among other things, finance, construct
and operate the Hull Plant and to exploit
all Tricoya(R) related intellectual property;
"TTL" Tricoya Technologies Limited, a company
incorporated in England and Wales with
company number 08231894, whose registered
office is at Brettenham House, 19 Lancaster
Place, London, WC2E 7EN, United Kingdom;
"TTL SSA" shareholder and subscription agreement
dated 2 February 2016 relating to TTL and
made between TWL, BP Ventures and TTL,
as amended on 20 October 2016 and 20 December
2016 and as amended and restated on 29
March 2017 and 11 December 2017;
"TVUK" Tricoya Ventures UK Limited, a company
incorporated in England and Wales with
company number 10087465, whose registered
office is at Brettenham House, 19 Lancaster
Place, London, WC2E 7EN, United Kingdom;
"TWL" Titan Wood Limited, a company incorporated
in England and Wales with company number
04738951, whose registered office is at
Brettenham House, 19 Lancaster Place, London,
WC2E 7EN, United Kingdom;
"UK" or "United Kingdom" the United Kingdom of Great Britain and
Northern Ireland;
"Underwriting Agreement" the agreement dated 28 November 2019 between
the Company and the Joint Underwriters
relating to the Firm Placing and Placing
and Open Offer, a summary of which is set
out in paragraph 8(a) of Part XI (Additional
Information) of the Prospectus;
"US" or "United States" the United States of America, its possessions
and territories, any state of the United
States of America and the District of Columbia;
"VAT" value added tax; and
"Volantis" Alphagen Capital Limited, a company incorporated
in England and Wales with company number
00962757, whose registered office is at
201 Bishopsgate, London, EC2M 3AE.
GLOSSARY OF TECHNICAL TERMS
acetic acid a commodity chemical made from natural
gas, used in food preservation, solvent
manufacture and chemical derivatives;
acetic anhydride a highly active form of acetic acid
made by eliminating water from acetic
acid; used in the manufacture of acetate
fibres and DMT, a raw material for
polyester;
acetylation the chemical process where acetyl groups
are chemically bonded to cellulose
pulp and to chemical components in
wood;
cladding exterior boards and panels on buildings
and houses (known in the US as "siding"),
which serves both as a decorative material
and as a weather barrier;
m(3) cubic metres; and
MDF medium density fibreboard.
IMPORTANT NOTICE
This announcement has been issued by and is the sole
responsibility of Accsys. The information contained in this
announcement is for background purposes only and does not purport
to be full or complete. No reliance may or should be placed by any
person for any purpose whatsoever on the information contained in
this announcement or on its accuracy or completeness. The
information in this announcement is subject to change.
This announcement is not a prospectus but is an advertisement.
Any decision to purchase, subscribe for, otherwise acquire, sell or
otherwise dispose of any New Ordinary Shares referred to in this
announcement must be made only on the basis of the information
contained in and incorporated by reference into the Prospectus to
be published by Accsys in connection with the Firm Placing and
Placing and Open Offer. Copies of the Prospectus will, following
publication, be available from the registered office of the Company
and on its website at www.accsysplc.com.
This announcement is for information purposes only and is not
intended to and does not constitute or form part of any offer or
invitation to sell, allot or issue, or any offer or invitation to
purchase or subscribe for, or any solicitation to purchase or
subscribe for, any securities in the United States, Australia,
Canada, Japan, Switzerland, the Republic of South Africa or in any
jurisdiction to whom or in which such offer or invitation is
unlawful, nor does the fact of its distribution form the basis of,
or be relied upon in connection with, or act as any inducement to
enter into, any contract or commitment whatsoever with respect to
such securities, the Company or otherwise.
Neither this announcement nor any copy of it nor the information
contained in it and any related materials is for publication,
distribution or release, in whole or in part, directly or
indirectly, in or into or from the United States (including its
territories and possessions, any State of the United States and the
District of Columbia), Australia, Canada, Japan, Switzerland, the
Republic of South Africa or any other jurisdiction where to do so
would constitute a violation of the relevant laws of such
jurisdiction. The distribution of this announcement may be
restricted by law in certain jurisdictions and persons into whose
possession any document or other information referred to herein
comes should inform themselves about and observe any such
restriction. Any failure to comply with these restrictions may
constitute a violation of the securities laws of any such
jurisdiction.
Recipients of this announcement and/or the Prospectus who are
considering acquiring New Ordinary Shares pursuant to the Firm
Placing and Placing and Open Offer are reminded that they should
conduct their own investigation, evaluation and analysis of the
business, data and property described in this announcement and/or
the Prospectus. This announcement does not constitute a
recommendation concerning any investor's options with respect to
the Firm Placing and Placing and Open Offer. The price and value of
securities can go down as well as up. Past performance is not a
guide to future performance. The contents of this announcement are
not to be construed as legal, business, financial or tax advice.
Each investor or prospective investor should consult his, her or
its own legal adviser, business adviser, financial adviser or tax
adviser for legal, financial, business or tax advice.
This announcement is directed only at persons whose ordinary
activities involve them in acquiring, holding, managing and
disposing of investments (as principal or agent) for the purposes
of their business and who have professional experience in matters
relating to investments and: (i) if in a member state of the
European Economic Area, are, unless otherwise agreed with the Banks
(as defined below), qualified investors within the meaning of
article 2(e) of the Prospectus Regulation; and (ii) if in the
United Kingdom, fall within: (a) article 19(5) (investment
professionals) of the Financial Services and Markets Act 2000
(Financial Promotion) Order 2005, as amended (the "Order"); (b)
article 49(2)(a) to (d) (high net worth companies, unincorporated
associations, etc.) of the Order; or (c) any other person to whom
it may lawfully be communicated (all such persons together being
referred to as "Relevant Persons"). This announcement must not be
acted on or relied on by persons who are not Relevant Persons. Any
investment or investment activity to which this announcement
relates is available only to Relevant Persons and will be engaged
in only with Relevant Persons. This announcement does not itself
constitute an offer for sale or subscription of any securities in
Accsys.
Notice to all investors
Numis Securities Limited ("Numis") is authorised and regulated
in the United Kingdom by the Financial Conduct Authority (the
"FCA"). Investec Bank plc ("Investec") is authorised by the
Prudential Regulation Authority (the "PRA") and regulated in the
United Kingdom by the PRA and the FCA. Numis, Investec and NIBC
Bank N.V. (together, the "Banks") are acting for Accsys and are
acting for no one else in connection with the Firm Placing and
Placing and Open Offer and will not regard any other person as a
client in relation to the Firm Placing and Placing and Open Offer
and will not be responsible to anyone other than Accsys for
providing the protections afforded to their respective clients, nor
for providing advice in connection with the Firm Placing and
Placing and Open Offer or any other matter, transaction or
arrangement referred to herein.
Numis' responsibilities as the Company's nominated adviser under
the AIM Rules for Nominated Advisers are owed solely to the London
Stock Exchange and are not owed to the Company or to any Director
or to any other person.
Apart from the responsibilities and liabilities, if any, which
may be imposed upon the Banks by the Financial Services and Markets
Act 2000, none of the Banks nor any of their subsidiary
undertakings, affiliates or any of their directors, officers,
employees, advisers or agents accepts any responsibility or
liability whatsoever and makes no representation or warranty,
express or implied, for the contents of this announcement,
including its accuracy, fairness, sufficiency, completeness or
verification or for any other statement made or purported to be
made by it, or on its behalf, in connection with Accsys or the New
Ordinary Shares or the Firm Placing and Placing and Open Offer and
nothing in this announcement is, or shall be relied upon as, a
promise or representation in this respect, whether as to the past
or future. The Banks accept no liability or responsibility for any
such information or opinions or for any errors or omissions or any
loss howsoever arising, directly or indirectly, from any such or
opinions or otherwise arising in connection therewith. Each of the
Banks and their subsidiary undertakings, affiliates or any of their
directors, officers, employees, advisers and agents accordingly
disclaims to the fullest extent permitted by law all and any
responsibility and liability whether arising in tort, contract or
otherwise (save as referred to above) which it might otherwise have
in respect of this announcement or any such statement.
In connection with the Firm Placing and Placing and Open Offer,
the Banks and any of their affiliates, acting as investors for
their own accounts, may subscribe for or purchase Ordinary Shares
and in that capacity may retain, purchase, sell, offer to sell or
otherwise deal for their own accounts in such Ordinary Shares and
other securities of the Company or related investments in
connection with the Firm Placing and Placing and Open Offer or
otherwise. Accordingly, references to the Ordinary Shares being
offered, subscribed, acquired, placed or otherwise dealt in should
be read as including any offer to, or subscription, acquisition,
placing or dealing by the Banks and any of their affiliates acting
as investors for their own accounts. In addition, the Banks or
their affiliates may enter into financing arrangements and swaps in
connection with which they or their affiliates may from time to
time acquire, hold or dispose of Ordinary Shares. The Banks have no
intention to disclose the extent of any such investment or
transactions otherwise than in accordance with any legal or
regulatory obligations to do so.
No person has been authorised to give any information or to make
any representations other than those contained in this announcement
and the Prospectus and, if given or made, such information or
representations must not be relied on as having been authorised by
Accsys or the Banks.
Cautionary statement regarding forward-looking statements
This announcement may contain certain forward-looking
statements, beliefs or opinions, with respect to the financial
condition, results of operations and business of Accsys and the
Group.
This announcement includes statements that are, or may be deemed
to be, "forward-looking statements". The words "believe,"
"estimate," "target," "anticipate," "expect," "could," "would,"
"intend," "aim," "plan," "predict," "continue," "assume,"
"positioned," "may," "will," "should," "shall," "risk", their
negatives and other similar expressions that are predictions of or
indicate future events and future trends identify forward-looking
statements. An investor should not place undue reliance on
forward-looking statements because they involve known and unknown
risks, uncertainties and other factors that are in many cases
beyond the control of the Company or the Group. By their nature,
forward-looking statements involve risks and uncertainties because
they relate to events and depend on circumstances that may or may
not occur in the future. The Company cautions investors that
forward-looking statements are not guarantees of future performance
and that its actual results of operations and financial condition,
and the development of the industry in which it operates, may
differ materially from those made in or suggested by the
forward-looking statements contained in this announcement and/or
information incorporated by reference into this announcement. In
addition, even if the Company's or the Group's results of
operation, financial position and growth, and the development of
the markets and the industry in which the Group operates, are
consistent with the forward-looking statements contained in this
announcement, these results or developments may not be indicative
of results or developments in subsequent periods. The cautionary
statements set forth above should be considered in connection with
any subsequent written or oral forward-looking statements that the
Company, or persons acting on its behalf, may issue.
Past performance of the Company cannot be relied on as a guide
to future performance. A variety of factors may cause the Company's
or the Group's actual results to differ materially from the
forward-looking statements contained in this announcement. The
Group and the Banks and any of their respective directors,
officers, employees, agents, affiliates and advisers expressly
disclaim any obligation to supplement, amend, update or revise any
of the forward-looking statements made herein, except where
required to do so under applicable law.
No statement in this announcement is intended as a profit
forecast, project, prediction or estimate and no statement in this
announcement should be interpreted to mean that earnings per share
of Accsys for the current or future financial years would
necessarily match or exceed the historical published earnings per
share of Accsys.
Information to Distributors
Solely for the purposes of the product governance requirements
contained within: (a) EU Directive 2014/65/EU on markets in
financial instruments, as amended ("MiFID II"); (b) Articles 9 and
10 of Commission Delegated Directive (EU) 2017/593 supplementing
MiFID II; and (c) local implementing measures (together, the "MiFID
II Product Governance Requirements"), and disclaiming all and any
liability, whether arising in tort, contract or otherwise, which
any "manufacturer" (for the purposes of the MiFID II Product
Governance Requirements) may otherwise have with respect thereto,
the New Ordinary Shares have been subject to a product approval
process, which has determined that the New Ordinary Shares are: (i)
compatible with an end target market of retail investors and
investors who meet the criteria of professional clients and
eligible counterparties, each as defined in MiFID II; and (ii)
eligible for distribution through all distribution channels as are
permitted by MiFID II (the "Target Market
Assessment"). Notwithstanding the Target Market Assessment,
distributors should note that: the price of the New Ordinary Shares
may decline and investors could lose all or part of their
investment; the New Ordinary Shares offer no guaranteed income and
no capital protection; and an investment in the New Ordinary Shares
is compatible only with investors who do not need a guaranteed
income or capital protection, who (either alone or in conjunction
with an appropriate financial or other adviser) are capable of
evaluating the merits and risks of such an investment and who have
sufficient resources to be able to bear any losses that may result
therefrom. The Target Market Assessment is without prejudice to the
requirements of any contractual, legal or regulatory selling
restrictions in relation to the Firm Placing and Open Offer.
Furthermore, it is noted that, notwithstanding the Target Market
Assessment, the Banks will only procure investors who meet the
criteria of professional clients and eligible counterparties.
For the avoidance of doubt, the Target Market Assessment does
not constitute: (a) an assessment of suitability or appropriateness
for the purposes of MiFID II; or (b) a recommendation to any
investor or group of investors to invest in, or purchase, or take
any other action whatsoever with respect to the New Ordinary
Shares.
Each distributor is responsible for undertaking its own target
market assessment in respect of the New Ordinary Shares and
determining appropriate distribution channels.
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
IOECKFDNABDKCDB
(END) Dow Jones Newswires
November 28, 2019 02:01 ET (07:01 GMT)
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