TIDMVRS
RNS Number : 8113I
Versarien PLC
06 April 2020
6 April 2020
Versarien plc
("Versarien", the "Company" or the "Group")
Clarification relating to the Lanstead Sharing Agreement and
further information on the China joint venture
Versarien plc (AIM: VRS), the advanced materials engineering
group, is, pleased to provide further examples, following press
comment, in respect of the subscription and sharing agreement with
Lanstead Capital Investors LP, announced on 23 March 2020 and
re-iterate the terms thereof (the "Lanstead Announcement") in order
to aid shareholders understanding and further information on the
China joint venture.
Terms defined in the Lanstead Announcement are used throughout
this announcement, unless otherwise advised. No new information is
contained in this announcement other than the table below with
examples of proceeds receivable pursuant to the Share Agreement at
different prices for the ordinary shares of Versarien based on the
Lanstead Subscription price of 40 pence per share (being an
approximate premium of 2.5% to the Versarien volume weighted
average share price in the 20 days prior to the Lanstead
Announcement), and the issue price of the Value Payment Shares
issued to Lanstead.
Following receipt by the Company of GBP6 million of gross funds
from the Subscription, all of the proceeds were pledged to the
Sharing Agreement. Accordingly, and as previously stated, the
proceeds of the Subscription were only available for use by the
Company for entering into the Sharing Agreement. Consequently, the
Company will receive cash settlements from Lanstead over a period
of 24 months , commencing in approximately two months, and the
amount of proceeds to be received is wholly dependent on the share
price performance of the ordinary shares of Versarien each month
over the term of the Sharing Agreement.
As outlined in the Lanstead Announcement, shareholders should
note that t he Company also issue d to Lanstead 750,000 Value
Payment Shares as consideration for entering into the Sharing
Agreement, such shares having been issued at a price of 40 pence
per share.
The Sharing Agreement provides that the Company will receive 24
monthly settlement amounts as measured against a benchmark share
price of 53.33 pence per Subscription Share , a premium of
approximately 33.33% . Notwithstanding the Subscription Price of 40
pence, shareholders should note that the share price of the Company
needs to be on average over the 24 months of the Sharing Agreement
at or above the Benchmark Price of 53.33 pence per share for the
Company to receive at least, or more, than the gross Subscription
proceeds of GBP6 million.
If the Measured Price , calculated as the volume weighted
average share price of the Company's ordinary s hares 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.
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. If the Measured Price is
less than the Benchmark Price on the date of each and every monthly
settlement, Versarien would receive aggregate proceeds of less than
GBP6 million (before expenses). If the Measured Price is more than
the Benchmark Price on the date of each and every monthly
settlement, Versarien would receive aggregate proceeds of more than
GBP6 million (before expenses).
In order for shareholders to further understand the possible
outcomes from the Sharing Agreement, the Company is pleased to set
out below some examples of the amount of proceeds that it would
receive in a monthly settlement from the Sharing Agreement,
depending on the 20 day average volume weighted share price of the
ordinary shares of Versarien in the period prior to the
settlement:
Measured Price (20 Monthly gross proceeds Approximate monthly
day volume weighted #2 net proceeds after
average share price) all costs #3
80 pence GBP375,000 GBP352,000
----------------------- --------------------
60 pence GBP282,000 GBP261,000
----------------------- --------------------
53.33 pence #1 GBP250,000 GBP230,000
----------------------- --------------------
40 pence GBP188,000 GBP170,000
----------------------- --------------------
20 pence GBP94,000 GBP78,000
----------------------- --------------------
#1 the Benchmark Price for the Sharing Agreement
#2 being the number of Subscription Shares multiplied by the
Subscription Price multiplied by the Measured Price divided by the
Benchmark Price (being a premium of 33.33% to the Subscription
Price) and divided by 24 settlements
#3 assuming this is the average Measured Price over the 24 months of the Sharing Agreement
The proceeds receivable by the Company over the 24 month
duration of the Sharing Agreement will be net of the cost of
GBP300,000 incurred by the Company in entering into the Sharing
Agreement with Lanstead, satisfied by the issue of the Value
Payment Shares to Lanstead, approximately GBP30,000 of other costs
incurred by Versarien in connection with the Subscription and
Sharing Agreement, together with advisory fees paid to a third
party adviser to Versarien of 2.5% of the amounts received under
the Sharing Agreement.
By way of illustration, if the average Versarien share price
over the duration of the Sharing Agreement equates to the Benchmark
Share Price (an approximate 5% premium to the closing mid-price of
the Versarien shares on 3 April 2020) the gross proceeds received
by Versarien from the Sharing Agreement would be GBP6.0 million and
the proceeds net of all costs and fees would be approximately
GBP5.5 million.
The Directors believe that the Sharing Agreement provides a
number of benefits to Versarien and its shareholders including: the
certainty of near term income, albeit the quantum is dependent on
the Versarien share price; the opportunity to benefit from positive
future share price performance ; and that the amount of shares
issued are fixed, together with the cost of their issue.
Whilst theoretically the Company could have potentially raised a
greater sum of money per share issued from a future placing of
shares if the share price rises above the Benchmark Price, when
compared to the proceeds from the Sharing Agreement, this would be
dependent on a number of factors such as the willingness of
investors to participate in any placing, the ability to achieve a
placing at an appropriate discount and the ability of the Company
to limit the costs of any such placing. The Directors believe that
the proceeds the Company will receive from the Sharing Agreement
with Lanstead significantly outweigh the risks associated with any
such theoretical placing, the uncertainty of when such a placing
may be possible and the uncertainty of achieving a positive
outcome.
Further information on China joint venture
Versarien is pleased to provide further information in respect
of the joint venture agreement with Young-Graphene (Beijing)
Technology Company Limited (" YG ") announced on 25 March 2020,
following press speculation.
The Company initially entered into negotiations with the Beijing
Institute of Graphene Technology Co. Ltd (" BIGT ") in March 2019
and a term sheet was executed with BIGT and announced on 15 April
2019. The Company has worked subsequently in co-operation with both
BIGT and the China International Graphene Industry Union ("CIGIU")
towards the establishment of a joint venture in China which
culminated in the joint venture agreement with YG.
Due to BIGT's regulatory obligations, exchange controls in China
and the downward movement in the Company's share price since
executing the term sheet with BIGT, it became unfeasible for BIGT
to invest in Versarien at a price level that would have been
acceptable to the Company. YG, with the support of both BIGT and
CIGIU was established to facilitate, inter alia, an acceptable
investment into the Company.
As previously announced, the joint venture with YG is
conditional on it procuring that strategic equity investment in
Versarien within the time frames disclosed in the announcement of
25 March 2020. Further notifications and updates regarding the
joint venture and associated financing will only be made in the
event that a development occurs that is sufficiently significant to
require a regulatory notification .
Further details concerning the joint venture with YG, including
the terms and conditions and other risk factors are set out in the
Company's 25 March 2020 "China update" announcement.
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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