TIDMMWG
RNS Number : 6922T
Modern Water PLC
05 July 2018
5 July 2018
Modern Water plc
("Modern Water", "the Company" or "the Group")
Chinese joint venture and equity issue
This announcement contains inside information for the purposes
of Article 7 of Regulation 596/2014.
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, or into or from the
United States, Australia, Canada, Japan, New Zealand or the
Republic of South Africa or any other jurisdiction in which the
same would be unlawful.
Further, this announcement is for information purposes only and
shall not constitute an offer to sell or issue or the solicitation
to buy, subscribe for or otherwise acquire any ordinary shares of
the company in any jurisdiction in which any such offer or
solicitation would be unlawful. This announcement should be read in
its entirety.
Introduction
Modern Water plc (AIM:MWG), the owner of leading technologies
for water and wastewater treatment and for the monitoring of water
quality, is pleased to announce that (i) it has entered into a
proposed joint venture with Chinese company Hangzhou Shangtuo
Environmental Technology Co. Ltd. (trading as "Sunup") and (ii)
Sunup has agreed conditionally to subscribe c.GBP550,000 for new
ordinary shares in Modern Water plc.
Proposed joint venture
Sunup is an environmental technology company integrating water
and wastewater solutions for industrial clients in the People's
Republic of China ("China"), with its headquarters in Hangzhou and
branches in Beijing, Hong Kong and Qingdao.
The joint venture, which has an initial term of 20 years, is
conditional upon (i) completion of the subscription by Sunup
referred to below, and (ii) the joint venture company, Encyclo
Water Technology (Zhejiang) Co., Ltd ("Encyclo"), being granted an
extendable business licence ("Business Licence") by the PRC State
Administration for Industry & Commerce.
Encyclo will promote Modern Water's innovative and proprietary
brine concentration technology, the AMBC, throughout China. Upon
grant of the Business Licence, Encyclo will enter into a licence
agreement with Modern Water whereby (i) Encyclo will exclusively
utilise the AMBC technology in all projects in China requiring
brine concentration, and (ii) subject to satisfactory performance
by Encyclo, Encyclo will be the exclusive vehicle for AMBC projects
for both Sunup and Modern Water in China.
Modern Water and Sunup will have respective equity interests of
49% and 51% in Encyclo, for which they will initially subscribe
approximately US$80,000 each within 3 months of the grant of the
Business Licence. Encyclo will have a registered share capital of
US$5m.
Modern Water and Sunup will appoint to the board of directors of
Encyclo two and three directors, respectively.
Equity issue
Modern Water is also pleased to announce that Sunup has
committed to subscribe for 5,021,353 new ordinary shares
("Subscription") at 11 pence per share (total GBP552,348.83),
conditional upon (i) confirmation of foreign investment by the
local government of Hangzhou province in China, and (ii) admission
of the new ordinary shares ("New Shares") to trading on AIM.
Upon completion of the Subscription, Sunup will be interested in
5% of the enlarged share capital of the Company. Sunup has agreed
to lock-in restrictions for 12 months following the Subscription
and orderly market restrictions for a period of 12 months after
that. Finally, Sunup has been granted one non-transferrable warrant
per New Share, exercisable within 12 months from completion of the
Subscription, at 13 pence per new ordinary share.
The issue price of 11 pence for the Subscription represents a
premium of 27% over the 90-day volume-weighted average and the
share price of 13 pence for the warrants represents a premium of
50% over the 90-day volume-weighted average.
Equity issue to existing shareholders
Modern Water is finally pleased to announce that, subject to
completion of the Subscription by Sunup, the Company intends to
give existing shareholders the opportunity to subscribe new
ordinary shares, on the basis of one share for every ten held, at
the same price as Sunup. Details of the open offer will be
announced as soon as practicable following completion of the
Subscription by Sunup.
Any questions concerning the issue of new ordinary shares should
be addressed to the corporate broker, whose details are set out
below.
Simon Humphrey, Modern Water's CEO, said: "A partnership between
Sunup and Modern Water will create value for both companies by
combining Modern Water's innovative brine concentration technology
with Sunup's knowledge of the market in China and its ability to
execute projects effectively and to a high standard. This
represents a landmark moment in the commercialisation of our brine
concentration technology."
Commenting on the project, Noah Tan, Sunup's CEO said: "I am
delighted to be able to announce this important strategic
partnership which will bring innovative technology to the Chinese
market where water conservation is highly prized. We are expressing
our confidence in the technology by making a sizable investment in
Modern Water plc."
--Ends--
For further information:
Modern Water plc +44 (0) 1483 696 000
Simon Humphrey, Chief Executive
WH Ireland Limited +44 (0) 207 220 1666
Chris Fielding (Nominated Adviser)
James Sinclair-Ford
Hayley Richardson (Corporate Broker)
Tavistock +44 (0) 207 920 3150
James Collins
Notes to editors:
Modern Water owns, installs and operates advanced membrane
systems using its world-leading membrane technologies; and develops
and supplies advanced systems for water monitoring. Its shares
trade on the Alternative Investment Market of the London Stock
Exchange.
www.modernwater.com
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
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contact rns@lseg.com or visit www.rns.com.
END
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