TIDMPPS
RNS Number : 8687U
Proton Motor Power Systems PLC
07 December 2021
This announcement contains Inside Information for the purposes
of Article 7 of EU Regulation 596/2014 (which forms part of
domestic UK law pursuant to the European Union (Withdrawal) Act
2018). Upon the publication of this announcement this Inside
Information is now considered to be within the public domain.
7 December 2021
Proton Motor Power Systems plc
("Proton Motor" or the "Company")
Proposed waiver of conversion rights and share subdivision
Proton Motor Power Systems plc (AIM: PPS), Europe's leading
designer, developer and producer of fuel cells and electric hybrid
systems with a zero-carbon footprint, is pleased to announce that
it has entered into an agreement with the Company's largest
shareholders and lenders with the objective of eliminating all and
any potential future dilution effects arising from the Company's
current financing structure. In addition, the Company is proposing
to implement a share subdivision of each existing ordinary share
into two new ordinary shares (together, the "Proposals").
Waiver of conversion rights on debt facilities
On 7 December 2021, Proton Motor entered into a waiver agreement
with SFN CleanTech Investment Ltd ("SFN") and Mr Falih Nahab (the
"Agreement") pursuant to which and subject to the passing of a
share subdivision resolution at a general meeting to be convened
shortly (the "General Meeting"), they will each waive all the
existing conversion rights which they hold over the existing
ordinary shares of 1p each in the Company ("Ordinary Shares").
SFN and Mr Falih Nahab are the Company's two largest
shareholders and providers of finance to the Company through the
following debt facilities:
-- a EUR26.1 million loan facility with SFN (the "SFN Facility"); and
-- a EUR50.7 million loan facility with Falih Nahab (the "Falih
Nahab Facility") (together, the "Debt Facilities").
The principal amounts of the Debt Facilities are not convertible
and are repayable on 31 December 2025. SFN and Falih Nahab
currently have the right to convert interest accrued up to 30 June
2020 on the Debt Facilities, comprising approximately GBP15.7
million, at 2 pence per Ordinary Share into 786,218,749 new
Ordinary Shares, representing 102% of the existing issued ordinary
share capital of the Company. Pursuant to the Agreement and subject
to the approval of the Subdivision by shareholders in a general
meeting, these conversion rights will be waived and the interest
accrued of approximately GBP15.7 million, together with interest
accrued and accruing since 1 July 2020, will be rolled up and
repaid on 31 December 2025.
Subdivision
In order to facilitate the Agreement, the Company has also
agreed to propose the subdivision (the "Subdivision") of each
existing Ordinary Share of 1p each into two new ordinary shares of
0.5p each (the "New Ordinary Shares"). The Subdivision will require
the approval of shareholders in a general meeting and the Company
will shortly publish a circular providing further details on the
Subdivision and a notice convening the general meeting. A further
announcement will be made at that time.
Share transfer
The Company has been advised by SFN that it intends to transfer,
for nil consideration, up to 320 million New Ordinary Shares
following completion of the Subdivision to Mr Falih Nahab, subject
to completion of the Subdivision and subject to the Takeover Panel
confirming that such a transfer would not trigger any obligation on
SFN and/or Falih Nahab to make a mandatory offer to the independent
shareholders under Rule 9 of the Takeover Code.
As Mr Falih Nahab is also a substantial shareholder in SFN, SFN
and Falih Nahab are deemed to be acting in concert under the
Takeover Code (the "SFN Concert Party"). The Agreement, the
Subdivision and the proposed transfer will not change the aggregate
percentage holding of the members of the SFN Concert Party over the
Company's share capital.
Effect of the Proposals on the Company
Following completion of the proposed Agreement and Subdivision,
SFN and Mr Falih Nahab would no longer hold any conversion rights
over the New Ordinary Shares and, as announced on 2 November 2020,
interest on the Debt Facilities since 1 July 2020 is charged at 12
months LIBOR plus 3% and no longer carries any conversion rights.
As at 30 November 2021, the aggregate principal debt and accrued
interest under the Debt Facilities amounted to EUR93.5 million.
In addition, the waiver of convertible rights over the accrued
interest up to 30 June 2020 will eliminate the requirement to
record movements on the embedded derivative in the balance sheet.
The effect of this is that the embedded derivative on convertible
interest liability position in the balance sheet as at 31 December
2020, amounting to GBP609.2 million, will be reversed in the
accounts. in its entirety. This will result in a one-off
non-operating non-cash gain for the respective financial year in
which the Waiver takes effect.
Subject to shareholder approval, the Subdivision will result in
shareholders holding two New Ordinary Shares for each existing
Ordinary Share they held immediately prior to the Subdivision.
Following the Subdivision, while each shareholder will hold two
times as many ordinary shares than held before, each shareholder's
proportionate interest in the share capital of the Company will
remain unchanged. It is only the number of ordinary shares in issue
which will have changed as a result of the Subdivision, and, other
than this, each New Ordinary Share, will carry the same rights and
entitlements as set out in the Company's Articles of Association
that currently attach to the existing Ordinary Shares. The New
Ordinary Shares will rank equally with one another. No fractional
entitlements will be created by the Subdivision.
Following the Subdivision, and assuming no further Ordinary
Shares are issued, the Company's share capital would consist of
1,548,740,548 New Ordinary Shares.
Proton Motor extends its gratitude to SFN and Mr Falih Nahab for
agreeing to implement the Proposals for no consideration, which are
expected to have the following positive consequences for Proton
Motor shareholders:
-- to eliminate all and any potential future dilution effects to
shareholders arising from the current financing structure which
will also ensure that there remains a sufficient free float in the
New Ordinary Shares for the Company's continued admission to
trading on AIM;
-- to eliminate the embedded derivative liability balance from
the Company's balance sheet; and
-- the Directors believe that the Subdivision will result in
improved liquidity in the Company's shares.
Related Party Transaction
Mr. Falih Nahab is indirectly, via SFN, a substantial
shareholder (as defined in the AIM Rules for Companies) of the
Company and, therefore both Mr. Falih Nahab and SFN, which is a lso
a substantial shareholder, are related parties of the Company. The
entry into the Agreement is therefore classified as a transaction
with a related party for the purposes of the AIM Rules for
Companies.
In accordance, therefore, with the AIM Rules for Companies, the
directors of the Company, with the exclusion of Dr. Faiz Nahab, the
Company's Chief Executive, who is the brother of Mr. Falih Nahab
and a shareholder in SFN, having consulted with the Company's
nominated adviser, Allenby Capital, consider that the terms of the
Agreement are fair and reasonable insofar as the Company's
shareholders are concerned.
A further announcement will be provided once the notice of
General Meeting is posted to shareholders.
For further information:
Proton Motor Power Systems Plc
Dr Faiz Nahab, CEO
Helmut Gierse, Chairman
Brendan Bilton, Investor and Business
Relations +44 (0) 7798 554 191
Roman Kotlarzewski, CFO +49 (0) 173 189 0923
Antonio Bossi, Non-Executive Director,
Investor Relations
www.protonpowersystems.com
investor-relations@proton-motor.de
Allenby Capital Limited
Nominated Adviser & Broker +44 (0) 20 3328 5656
James Reeve / Vivek Bhardwaj
About Proton Motor Fuel Cell GmbH
Proton Motor has more than 20 years of experience in Power
Solutions using CleanTech technologies such as hydrogen fuel cells,
fuel cell and hybrid systems with a zero carbon footprint. Based in
Puchheim near Munich, Proton Motor offers complete fuel cell and
hybrid systems from a single source - from the development and
production through the implementation of customized solutions. The
focus of Proton Motor is on back-to-base, for example, for mobile,
marine, stationary and rail solutions applications. The product
portfolio consists of base-fuel cell systems, standard complete
systems, as well as customized systems.
Proton Motor serves IT, Telecoms, public infrastructure and
healthcare customers in Germany, Europe and Middle East with power
supply solutions for DC and AC power demand. In addition to power
supply, SPower also offers solutions for Solar Systems as well as a
new product line for Solar Energy Storage.
Proton Motor Fuel Cell GmbH is a wholly owned subsidiary of
Proton Motor Power Systems plc. The Company has been quoted on the
AIM market of the London Stock Exchange since October 2006 (code:
PPS).
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