TIDMHELD
RNS Number : 3199R
Hellenic Dynamics PLC
26 October 2023
26 October 2023
Hellenic Dynamics plc
("Hellenic Dynamics" or the "Company")
Mezzanine Loan and Posting of Circular
London, 26 October 2023 , Hellenic Dynamics Plc (LSE: HELD), a
medical cannabis cultivator with a dedicated focus on producing
tetrahydrocannabinol ("THC") dominant strains of medical cannabis
flowers for the burgeoning European medical cannabis markets,
announces it has signed a US$3 million unsecured Mezzanine Loan
facility (the "Facility") with RiverFort Global Opportunities PCC
Ltd (the "Lender"), an international financial institution. The
Facility will provide the Company with a structured medium-term
debt facility that offers draw down and repayment flexibility as it
enters its cultivation and sales stage of development.
Highlights
-- Hellenic Dynamics has entered into a US$3 million unsecured
Mezzanine Loan facility with the Lender for a 36-month term
-- US$450,000 has been advanced immediately under the Facility ("First Advance")
-- A further $300,000 is available during the next 150 days ("Second Advance")
-- The net proceeds from the Facility will be used to 1)
accelerate the Company's cultivation plans 2) move to an increased
cultivation area, and 3) execute its sales strategy in line with
the Company's ambitious growth plans
-- The annual interest rate payable by the Company is 15% per
annum payable on any outstanding amounts, quarterly in arrears
-- Each advance is repayable in monthly cash instalments after a
holiday period, expected to be serviced from operational cashflow
over the next 12-months
-- The principal and interest of the Facility are payable in
cash or can be converted at 9.884 pence following approval of the
Circular
-- 4,249,291 Warrants granted to the lender exercisable at
9.884p for 36 months, being a 40% premium to the 5-day preceding
VWAP
-- Notice of general meeting has been posted in order to effect
a capital reorganisation to access the Second Advance of the
Facility
The Facility provides for each tranche of funds drawn down to be
repayable within 12 months of drawdown in accordance with an agreed
repayment schedule. A First Advance of $450,000 has been made
available immediately, which the Company has today requested be
drawn down, and a Second Advance of US$300,000 may be drawn down by
the Company within the next 150 days. As the Facility allows for
the principle amounts to be repaid in cash or a mechanism for them
to be repaid in shares, a condition of the Facility is that the
Company must be in a position to be able to issue new shares.
Therefore, in conjunction with entering the Facility, the Company
has today posted a circular to all shareholders containing a Notice
of General Meeting ("Notice") and Form of Proxy for shareholders to
consider and, if thought fit, approve a capital reorganisation to
allow the Company to access the full extent of the Facility.
Further details of the Notice are included below.
Davinder Rai, CEO of Hellenic Dynamics, commented: "Having an
institutional investor grant a 3-year facility of up to US$3
million to the Company for its next stage of expansion further to
completion of phase 1 of its operations, allows the Company to move
forward with its expansion plans. The splitting of the First
Advance and the Second Advance provides capital optionality for the
Company, and the granting of warrants at a 40% premium to the
applicable Reference Price shows confidence from the Lender in the
Company. I look forward to updating the market on our progress in
due course."
Key Funding Terms
A summary of the key terms of the Facility are as follows:
-- 15% annual interest payable quarterly in arrears for the
term, with a drawdown fee of 6% per advance, payable in cash or
shares at the Company's discretion
-- The Lender is granted subscription rights for repayment by
way of conversion, based on a 40% premium to the Reference
Price
-- Interest only payable on the drawn down amount
-- Each tranche of funds drawn down by the Company are repayable
within 12 months of drawdown in accordance with an agreed repayment
schedule
-- In respect of each tranche of funds advanced, the Company
will grant the Lender warrants over ordinary shares in the Company
with an exercise period of 36 months from the date of grant:
o In respect of the First and Second Advance, the Company has
granted the Lender 4,249,291 warrants with an exercise price of
9.884 pence
o In respect of the remaining tranches the Company will grant
the Lender warrants to subscribe for new ordinary shares equal to
40% of the funds made available under the tranche divided by the
5-day VWAP prior to the date of each draw down ("Reference Price")
at an exercise price equal to a 40% premium to the Reference
Price
o The Lender has the right of set off for any warrant exercise
against any amount owed to it by the Company under the Facility
agreement
-- The Company may elect to miss payments in accordance with the
agreed repayment schedule. This would result in various rights
being granted to the Lender including the right to subscribe for
shares in the Company using a pre-determined calculation
-- The Facility is unsecured and Hellenic Dynamics S.A. is a party to a corporate guarantee.
-- The Facility agreement contains customary covenants,
warranties, undertakings and indemnities for such project related
finance and default events and termination rights of the Lender, as
well as any penalties to be incurred by the Company, in the event
of such default
The Second Advance may be drawn down by the Company at any time
within the next 150 days provided that: (1) the Company completes
the share consolidation and (2) the Company provides evidence to
the Lender of either (a) GBP250,000 received from sales of product;
or (b) receipt of further grants following the date of the Facility
agreement which results in aggregate net receivable of no less than
GBP250,000. Subject to the satisfaction of these conditions, the
Company will have the ability to request further drawdowns up to a
maximum total additional amount of US$2.25 million. The Company
will pay interest only on the drawn down funds.
Proposed Capital Reorganisation and Notice of General
Meeting
The Company announces that it will today post a circular to all
shareholders containing a notice of general meeting and form of
proxy seeking shareholder approval for a capital reorganisation and
the adoption of new articles of association. A copy of the
circular, together with supporting documents, will be available
from the Company's website, www.hellenicdynamics.com .
The Directors are proposing a capital reorganisation by way of
a:
(i) Share Consolidation: consolidate every 100 Existing Ordinary
Shares held into one ordinary share of GBP0.10 each (the
"Consolidated Share"); and
(ii) Share Subdivision and Share Reclassification: subdivide and
reclassify each Consolidated Share into 99 Deferred Shares and one
New Ordinary Share of GBP0.001 each.
The effects of the capital reorganisation will be to consolidate
the number of shares in issue from 12,530,000,000 to 125,300,000,
which will increase the Company's share price by a factor of 100,
whilst maintaining the current nominal value per share of GBP0.001
each.
The General Meeting will be held at the offices of Shakespeare
Martineau LLP, 6th Floor, 60 Gracechurch Street, London, EC3V 0HR
on 20 November 2023 at 09:00 a.m. GMT.
Enquires:
Hellenic Dynamics plc +44 (0)20 3818 7850
Davinder Rai davinder@hellenicdynamics.com
Cairn Financial Advisers LLP +44 (0)20 7213 0880
Emily Staples / Jo Turner
Peterhouse Capital +44 (0)20 7469 0930
Lucy Williams / Charles Goodfellow
About Hellenic Dynamics plc
Founded in 2019, Hellenic Dynamics is specifically focused on
the cultivation and supply of THC ("tetrahydrocannabinol") -
dominant strains of medical cannabis flowers, destined for the
growing medical cannabis markets across Europe. Hellenic Dynamics'
core strategy is to develop and operate its 40,000 square metre
active cultivation licence from its 195,506 square metre facility
located near Thessaloniki in Northern Greece. In full production,
Hellenic Dynamics is capable of producing over 54,000 kg of dried
flowers per annum.
Hellenic Dynamics will take advantage of its relatively low cost
base resulting from a comparatively low cost of power, having its
own running water supply and the labour rates for skilled and
semi-skilled labour in Northern Greece.
25 European countries now allow medical cannabis via
prescription and the European cannabis market is expected to reach
EUR43.3 billion per annum by 2027. Sales of Hellenic Dynamics'
dried THC-dominant cannabis flowers and extracts are initially
intended for export into Europe's largest market - Germany, in
addition to other European markets including domestically in
Greece.
As the first medical cannabis cultivator to obtain a listing on
the main market for listed securities of the London Stock Exchange,
Hellenic is significantly different to the number of CBD
(Cannabidiol) related companies that have appeared over the recent
years. Hellenic Dynamics cultivates THC-dominant medical cannabis
flowers. THC-dominant medical cannabis products are only available
via a medical prescription. Medicinal cannabis has been approved
for use both in the United Kingdom and Germany, plus 23 other
European countries, for conditions including but not limited to
chronic pain, intractable chemotherapy-related nausea, anxiety,
insomnia, Tourette's syndrome, substance use disorder, multiple
sclerosis, IBS, spinal cord treatment, lack of appetite due to
HIV/AIDS, cachexia, anorexia and glaucoma.
For further information please visit our website
www.hellenicdynamics.com
Caution regarding forward looking statements
Certain statements in this announcement, are, or may be deemed
to be, forward looking statements. Forward looking statements are
identi ed by their use of terms and phrases such as "believe",
"could", "should" "envisage", "estimate", "intend", "may", "plan",
"potentially", "expect", "will" or the negative of those,
variations or comparable expressions, including references to
assumptions. These forward-looking statements are not based on
historical facts but rather on the Directors' current expectations
and assumptions regarding the Company's future growth, results of
operations, performance, future capital and other expenditures
(including the amount, nature and sources of funding thereof),
competitive advantages, business prospects and opportunities. Such
forward looking statements re ect the Directors' current beliefs
and assumptions and are based on information currently available to
the Directors.
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