TIDMVRS
RNS Number : 1223H
Versarien PLC
23 March 2020
23 March 2020
Versarien plc
("Versarien", the "Company" or the "Group")
Subscription to raise GBP6 million
Versarien plc (AIM: VRS), the advanced materials engineering
group, is pleased to to announce that it has entered into a GBP6
million subscription agreement with Lanstead Capital Investors LP
("Lanstead"), a US managed institutional investor, together with a
related sharing agreement ( the "Sharing Agreement") .
Highlights
-- Subscription for 15,000,000 new ordinary shares of 1 pence
each in the Company ("Ordinary Shares") (the "Subscription Shares")
by Lanstead at an issue price of 40 pence per Subscription Share
(the "Issue Price") to raise gross proceeds of GBP 6 million ,
representing approximately 9.74 % of the Company's existing issued
share capital (the "Subscription"). The issue price represents a
53.8 % premium to the closing mid-market price on 20 March 2020
.
-- The GBP 6 million gross proceeds of the Subscription will be
pledged by the Company pursuant to the Sharing Agreement with
Lanstead. The Sharing Agreement, details of which are set out
below, entitles the Company to receive back those proceeds on a pro
rata monthly basis over a period of 24 months, subject to
adjustment upwards or downwards each month depending on the
Company's share price at the time.
-- The Sharing Agreement provides the opportunity for the
Company to benefit from positive future share price performance ;
an underlying reason for undertaking the fund raise in this
way.
-- The proceeds of the Subscription , when added to the c.GBP2.2
million of cash and headroom available under the Group's facilities
as at 29 February 2020, will be used primarily by Versarien to
advance its graphene commercialisation strategy , as well as for
general working capital purposes.
Neill Ricketts , Chief Executive Officer of Versarien ,
commented:
"We are delighted to welcome Lanstead as a significant
institutional shareholder in Versarien . The proceeds of the
Sharing Agreement will underpin our activities over the next two
years.
"T he mechanics of the Sharing Agreement allow Versarien to
benefit from future share price appreciation and reflect an
alignment of both the Company and Lanstead's belief in the
potential for substantial value enhancement for shareholders
through the execution of our graphene commercialisation
strategy.
"With the Company having a sound financial base and despite the
background of the current global Covid-19 pandemic, I am confident
that the Company will continue to make significant progress in the
coming months. In particular, we continue to advance our
discussions in China and elsewhere and this fund raise does not
preclude us from obtaining additional funding from other sources to
accelerate the development of our graphene commercialisation
strategy should appropriate value enhancing options be
available."
Introduction
Lanstead has conditionally agreed to subscribe for 15,000,000
Subscription Shares at the issue price of 40 pence for gross
proceeds of GBP 6 million . The Subscription proceeds will be
pledged to Lanstead under the Sharing Agreement pursuant to which
the Company is entitled to receive back those proceeds on a pro
rata monthly basis over a period of 24 months, subject to
adjustment upwards or downwards each month depending on the
Company's share price at the time.
A significant factor in Versarien 's decision to enter into the
Subscription is that the Sharing Agreement provides the opportunity
for the Company to benefit from positive future share price
performance. There is no upper limit placed on the additional
proceeds receivable by the Company as part of the monthly
settlements and the amount available in subsequent months is not
affected. Whilst the Company notes the corresponding risk that a
fall in Versarien 's share price could reduce the amount of
proceeds received, as explained below, the Directors expect the
Company's graphene commercialisation strategy to make considerable
positive advancements over the 24 -month term of the Sharing
Agreement. If these advancements are successful, and if the success
of these advancements is reflected in Versarien 's share price, the
Company expects the proceeds to be received back from Lanstead to
exceed the amount pledged under the Sharing Agreement.
Further information on the Subscription
Pursuant to the subscription agreement between the Company and
Lanstead (the "Subscription Agreement"), 15,000,000 Subscription
Shares will be issued to Lanstead at 40 pence per Subscription
Share for an aggregate subscription of GBP 6 million before
expenses.
The Subscription proceeds of GBP 6 million will be pledged to
Lanstead under the Sharing Agreement under which Lanstead will then
make, subject to the terms and conditions of that Sharing
Agreement, monthly settlements (subject to adjustment upwards or
downwards) to the Company over 24 months, as detailed below. As a
result of entering into the Sharing Agreement the aggregate amount
received by the Company under the Subscription and the related
Sharing Agreement may be more or less than GBP 6 million , as
further explained below.
The Sharing Agreement
As part of the Subscription, the Company will enter into the
Sharing Agreement, pursuant to which Versarien will return the GBP
6 million gross proceeds of the Subscription to Lanstead. The
Sharing Agreement will enable the Company to benefit from any share
price appreciation over the average Benchmark Price of 53.33 pence
(as defined below). However, if the Company's share price is less
than the average Benchmark Price then the amount received by the
Company under the Sharing Agreement will be less than the gross
proceeds of the Subscription which were pledged by the Company to
Lanstead at the outset.
The Sharing Agreement provides that the Company will receive 24
monthly settlement amounts as measured against a n average
benchmark share price of 53.33 pence per Subscription Share (the
"Benchmark Price"). The monthly settlement amounts for the Sharing
Agreement are structured to commence approximately two month s
following the admission to trading on AIM of the Subscription
Shares.
If the measured share price (the "Measured Price"), calculated
as the average volume weighted share price of the Company's
Ordinary Shares over a period of 20 trading days prior to the
monthly settlement date, exceeds the Benchmark Price, the Company
will receive more than 100 per cent. of that monthly settlement due
on a pro rata basis according to the excess of the Measured Price
over the Benchmark Price. There is no upper limit placed on the
additional proceeds receivable by the Company as part of the
monthly settlements and the amount available in subsequent months
is not affected. Should the Measured Price be below the Benchmark
Price, the Company will receive less than 100 per cent. of the
monthly settlement calculated on a pro rata basis and the Company
will not be entitled to receive the shortfall at any later
date.
For example, if on a monthly settlement date the calculated
Measured Price exceeds the Benchmark Price by 10 per cent., the
settlement on that monthly settlement date will be 110 per cent. of
the amount due from Lanstead on that date. If on the monthly
settlement date the calculated Measured Price is below the
Benchmark Price by 10 per cent., the settlement on the monthly
settlement date will be 90 per cent. of the amount due on that
date. Each settlement as so calculated will be in final settlement
of Lanstead's obligation on that settlement date.
Assuming the Measured Price equals the average Benchmark Price
on the date of each and every monthly settlement, Versarien would
receive aggregate proceeds of GBP 6 million (before expenses) from
the Subscription and Sharing Agreement.
The Company will pay Lanstead's legal costs incurred in the
Subscription and in entering into the Sharing Agreement and, in
addition, has agreed to issue to Lanstead 750,000 new Ordinary
Shares (" Value Payment Shares ") in connection with entering into
the Sharing Agreement.
In no event will fluctuations in the Company's share price
result in any increase in the number of Subscription Shares issued
by the Company or received by Lanstead. A decline in the Company's
share price would not result in any advantage accruing to Lanstead
and the Sharing Agreement allows both Lanstead and the Company to
benefit from future share price appreciation.
In total, Lanstead will be issued with 15,750,000 new Ordinary
Shares pursuant to the Subscription which, when issued, will equate
to approximately 9.28 per cent of the Company's Enlarged Issued
Share Capital. No shares, warrants or additional fees are owed to
Lanstead at any point during this agreement other than those
disclosed above.
The Subscription Shares and the Value Payment Shares will rank
pari passu with the existing Ordinary Shares and application has
been made for their admission to trading on AIM ("Admission"). The
Subscription is conditional, inter alia , on Admission and there
being: (i) no breach of certain customary warranties given by the
Company to Lanstead at any time prior to Admission; and (ii) no
force majeure event occurring prior to Admission. Application will
be made to the London Stock Exchange for the Subscription Shares
and the Value Payment Shares to be admitted to trading on AIM
('Admission'). It is expected that Admission will become effective
on or around 26 Ma rch 20 20 .
Total Voting Rights
Following the issue of the Subscription Shares and the Value
Payment Shares , the Company will have 169,682,290 ordinary shares
of 1p each in issue. The figure of 169,682,290 may be used by the
Company's shareholders as the denominator for the calculations by
which they will determine if they are required to notify their
interest in, or a change to their interest in, the Company under
the Financial Conduct Authority's Disclosure Guidance and
Transparency Rules.
THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED TO
CONSTITUTE INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE
MARKET ABUSE REGULATION (EU) NO. 596/2014. UPON THE PUBLICATION OF
THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE
IN THE PUBLIC DOMAIN.
Enquiries:
Versarien
Neill Ricketts, CEO
Chris Leigh, CFO +44 (0)1242 269 122
SP Angel Corporate Finance (Nominated
Adviser and Joint Broker)
Ewan Leggat, Soltan Tagiev +44 (0)20 3470 0470
Berenberg (Joint Broker)
Mark Whitmore, Simon Cardron +44 (0) 20 3207 7800
Yellow Jersey (Investor Relations)
Charles Goodwin
Georgia Colkin
Henry Wilkinson +44 (0)20 3004 9512
About Versarien
Versarien plc (AIM: VRS), is an advanced engineering materials
group. Leveraging proprietary technology, the Group creates
innovative engineering solutions for its clients in a diverse range
of industries. Versarien has seven subsidiaries operating under two
divisions:
Graphene and Plastics
2-DTech Ltd, which specialises in the supply, characterisation
and early stage development of graphene products. 2-DTech is based
at the Graphene Innovation Engineering Centre, a GBP60 million
facility set up to work in collaboration with industry partners to
create, test and optimise new concepts for the delivery of graphene
to the market. www.2-dtech.com
AAC Cyroma Limited, which specialises in the supply of
vacuum-formed and injection-moulded products to the automotive,
construction, utilities and retail industry sectors. Using
Versarien's existing graphene manufacturing capabilities, AAC has
the ability to produce graphene-enhanced plastic products.
www.aaccyroma.co.uk
Cambridge Graphene Limited, supplies novel inks based on
graphene and related materials, using patented
processes to develop graphene materials technology. www.cambridgegraphene.com
Gnanomat S.L. ("GNA"), based in the Parque Cientifico Madrid,
Spain, is a company capable of utilising Versarien's graphene
products in an environmentally friendly, scalable production
process for energy storage devices that offer high power density,
fast recharging and very long lifetimes for use in electrical
vehicles and portable electronics products. www.gnanomat.com
Versarien Graphene Inc - based in Texas, is the recently
incorporated sales business for the UK's graphene products.
Hard Wear and Metallic Products
Versarien Technologies Limited has developed an additive process
for creating advanced micro-porous metals targeting the thermal
management industry and supplies extruded aluminium.
www.versarien-technologies.co.uk
Total Carbide Limited, a leading manufacturer in sintered
tungsten carbide for applications in arduous environments such as
the oil and gas industry. www.totalcarbide.com
About Lanstead
Lanstead is an institutional investor that since 2007 has
provided funding for ongoing business objectives to listed small
and mid-cap growth companies. Lanstead focuses on equity
investments in listed companies with management teams with a clear
growth strategy.
Lanstead's extensive experience allows it to invest in most
industries, focusing on providing supportive, longer term capital
that rewards company growth. Companies with Lanstead on the
shareholder register via an equity placement to Lanstead with an
accompanying sharing agreement benefit from a unique and flexible
approach to finance growth. This provides the opportunity for
companies to benefit from additional cash beyond the original
placing proceeds without having to issue additional shares.
Further information is available at www.Lanstead.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
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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