TIDMVRS
RNS Number : 4917J
Versarien PLC
22 December 2020
22 December 2020
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.
Versarien plc
("Versarien" or the "Company" or the "Group")
Acquisition of CVD Assets and IP from Hanwha Aerospace
Lanstead Subscription and Additional Sharing Agreement
Versarien plc (AIM: VRS), the advanced materials engineering
group, is pleased to announce that the Company has agreed to
acquire certain graphene production related assets and intellectual
property from South Korea based Hanwha Aerospace Co. Ltd ("Hanwha
Aerospace") (the "Acquisition"), for consideration comprising
11,000,000 ordinary shares of 1 pence each ("Ordinary Shares") in
the Company (the "Consideration Shares"). The consideration is
equivalent to GBP4.34 million at the 39.475 pence per Ordinary
Share closing mid-market price on 18 December 2020 .
In addition, the Company has e ntered into a subscription
agreement with Lanstead Capital Investors LP ("Lanstead") to
subscribe for 8,750,000 new Ordinary Shares (the "Subscription
Shares") at 40 pence per Subscription Share (the "Issue Price")
raising gross proceeds of GBP3.50 million, the proceeds of which
will be used for an additional sharing agreement with Lanstead, as
described below.
Highlights
-- Versarien has agreed to acquire certain assets and
intellectual property that form the South Korea based chemical
vapor deposition ("CVD") activities of Hanwha Aerospace Co. Ltd for
a consideration of 11,000,000 new Consideration Shares.
-- The Acquisition comprises a portfolio of over 100 patents and
patent rights , many originally developed by Samsung in South
Korea, covering CVD graphene manufacturing methods and related
applications, together with manufacturing equipment suitable for
producing high quality large format electronics grade graphene.
-- Subscription for 8,750 ,000 Subscription S hares by Lanstead,
who currently hold approximately 7.57% of the Company's issued
share capital, at the Issue Price to raise gross proceeds of GBP
3.50 million . The GBP 3.50 million gross proceeds of the Lanstead
S ubscription will be pledged by the Company pursuant to an
additional s haring a greement with Lanstead (the "Sharing
Agreement") , following the one entered into in March 2020, details
of which were notified in the Company's announcements of 23 March
and 6 April 2020 .
-- The Sharing Agreement, details of which are set out below,
entitles the Company to receive back th e proceeds on a pro rata
monthly basis over a period of 18 months, subject to adjustment
upwards or downwards each month depending on the Company's share
price. The net proceeds received by the Company from the Sharing
Agreement will be used primarily to establish operations in South
Korea following the Acquisition , as well as for the Company's
general working capital purposes.
Neill Ricketts, Chief Executive Officer of Versarien,
commented:
"We are delighted to have agreed the Acquisition which compl e
ments our existing portfolio of graphene materials technology. In
particular, it will provide us with access to patented technology
and equipment to produce high quality single and dual layer
graphene that has particular applications in the electronics
sector, together with other areas, including in relation to some of
our existing collaborations. The Acquisition will also help
facilitate our planned future Asian development.
"We are pleased that we have received additional support from
Lanstead to provide the funding and additional working capital
required for our international expansion strategy. "
The Acquisition
The Acquisition comprises certain assets and intellectual
property ("IP") that forms the South Korea based
CVD activities of Hanwha Aerospace, part of the Hanwha Group.
As part of the Acquisition, Versarien is acquiring over 100
patents that cover a number of areas including graphene manufacture
and certain graphene applications that the Directors believe will
complement the Group's existing 2D materials portfolio. These
patents cover areas including using CVD methods to produce high
quality single and dual layer graphene and methods to produce
graphene based thin film laminates that the Directors believe will
have potential applications in the electronics sector, amongst
others.
Additionally, the Acquisition comprises manufacturing equipment
suitable for producing high quality large format electronics grade
graphene. The Company plans to establish operations in South Korea
via its new subsidiary which will be overseen initially by
Versarien's Head of International Strategy and Government
Relations, Matt Walker.
The consideration for the Acquisition is being satisfied through
the issue of the 11,000,000 Consideration Shares to Hanwha
Aerospace. Hanwha Aerospace have agreed not to dispose of 2,000,000
of the Consideration Shares for a minimum period of six months and
not to dispose of 2,000,000 of the Consideration Shares for a
minimum period of 12 months.
Completion of the Acquisition is conditional on the admission to
AIM of all of the Consideration Shares. Following Second Admission
(as defined below), Hanwha Aerospace will hold approximately 5.79%
of the Company's issued ordinary share capital, as enlarged by the
issue of the Consideration Shares, the Subscription Shares and the
Value Payment Shares .
T he Lanstead Subscription and the Lanstead Sharing
Agreement
Existing Lanstead Sharing Agreement
As announced on 23 March 2020, Lanstead subscribed for
15,000,000 Ordinary Shares at an issue price of 40 pence per
Ordinary Share and the Company entered into a related sharing
agreement to receive the proceeds on a pro rata basis over 24
months (the "March 2020 Lanstead Sharing Agreement"). The Company
has, as expected, to date received seven of the 24 settlements due
under the March 2020 Lanstead Sharing Agreement providing gross
proceeds to the Company of approximately GBP1.42 million with the
proceeds from the remaining 17 settlements receivable on a monthly
basis as they fall due, in addition to the proceeds from the
additional Lanstead sharing agreement described below.
If the Company's share price had been equal to the average
Benchmark Price of 53.33p for the seven settlements received to
date, then it would have received gross proceeds to date of GBP 1 .
75 million from the March 2020 Lanstead Sharing Agreement.
Additional Lanstead Subscription and Sharing Agreement
Pursuant to th is additional subscription agreement between the
Company and Lanstead (the " Lanstead Subscription Agreement") ,
Lanstead has conditionally agreed to subscribe for 8,750,000
Ordinary Shares at the issue price of 40 pence for gross proceeds
of GBP 3.50 million before expenses (the "Lanstead Subscription")
.
The Lanstead 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.
As part of the Lanstead Subscription, the Company will enter
into the Sharing Agreement, pursuant to which the GBP 3.50 million
gross proceeds of the Lanstead Subscription will be pledged to
Lanstead under the Sharing Agreement pursuant to 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 18 months, as detailed below. As a
result of entering into the Sharing Agreement , the aggregate gross
amount received by the Company under the Lanstead Subscription and
the related Sharing Agreement may be more or less than GBP 3.50
million, as further explained below.
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 Lanstead Subscription which were
pledged by the Company to Lanstead at the outset.
The Sharing Agreement provides that the Company will receive 18
monthly settlement amounts as measured against an 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 months following the
admission to trading on AIM of the Lanstead 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, the Company would
receive aggregate proceeds of GBP 3.50 million (before expenses)
from the Lanstead Subscription and Sharing Agreement. I f the
Measured Price is less than the Benchmark Price on the date of each
and every monthly settlement, the Company would receive aggregate
proceeds of less than GBP 3.50 million (before expenses). If the
Measured Price is more than the Benchmark Price on the date of each
and every monthly settlement, the Company would receive aggregate
proceeds of more than GBP 3.50 million (before expenses).
The Company will pay Lanstead's legal costs incurred in the
Lanstead Subscription and in entering into the Sharing Agreement
and, in addition, has agreed to issue to Lanstead 437,500 new
Ordinary Shares ("Value Payment Shares") in connection with
entering into the Sharing Agreement at a price of 40p per share, a
deemed consideration of GBP175,000 .
In no event will fluctuations in the Company's share price
result in any increase in the number of Lanstead Subscription
Shares issued by the Company or received by Lanstead.
In total, Lanstead will be issued with 9,187,500 new Ordinary
Shares , comprising the Lanstead Subscription Shares and the Value
Payment Shares, pursuant to the Lanstead Subscription. No shares,
warrants or additional fees are owed to Lanstead at any point
during this agreement other than those disclosed above. Following
Second Admission (as defined below), Lanstead will hold
approximately 11. 60 % of the Company's issued ordinary share
capital, as enlarged by the issue of the Consideration Shares, the
Subscription Shares and the Value Payment Shares.
In order for shareholders to further understand the possible
outcomes from the Sharing Agreement, the Company set s 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
the Company in the period prior to the settlement . This does not
include the amounts due to the Company from the ongoing March 2020
Lanstead Sharing Agreement, details of which were contained in the
Company's announcements on 23 March and 6 April 2020.
Measured Price (20 Monthly gross proceeds Approximate monthly
day volume weighted #2 net proceeds after
average share price) all costs #3
80 pence GBP291,685 GBP273,004
----------------------- --------------------
60 pence GBP218,764 GBP201,906
----------------------- --------------------
53.33 pence #1 GBP194,444 GBP178,194
----------------------- --------------------
40 pence GBP145,842 GBP130,807
----------------------- --------------------
20 pence GBP72,921 GBP59,709
----------------------- --------------------
#1 the Benchmark Price for the Sharing Agreement
#2 being the number of Lanstead 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 18 settlements
#3 assuming this is the average Measured Price over the 18 months of the Sharing Agreement
The proceeds receivable by the Company over the 18 month
duration of the Sharing Agreement will be net of the cost of GBP
175,000 incurred by the Company in entering into the Sharing
Agreement with Lanstead, satisfied by the issue of the Value
Payment Shares to Lanstead, approximately GBP 30,000 of other costs
incurred by Versarien in connection with the Lanstead 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.
The Directors believe that the Sharing Agreement provides a
number of benefits to Versarien and its shareholders including: the
certainty of near - term funding 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. There are
corresponding risks that the aggregate amount of cash proceeds
received under the Sharing Agreement might be less than the
original subscription and there is uncertainty as to the amount
that the Company might receive.
Whilst the Company could potentially raise 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 o
utweigh the risks associated with any such theoretical placing
given the uncertainty of when such a placing may be possible and
the uncertainty of achieving a positive outcome when compared with
the possible proceeds from the Sharing Agreement .
Related Party Transaction
For the purposes of the Sharing Agreement, Lanstead has been
treated as a related party of the Company. The Directors of the
Company (all of whom are independent of Lanstead), having consulted
with SP Angel Corporate Finance LLP, the Company's nominated
adviser, consider that the Sharing Agreement is fair and reasonable
insofar as Shareholders are concerned.
Admission and Total Voting Rights
The Consideration Shares (11,000,000 Ordinary Shares), the
Subscription Shares (8,750,000 Ordinary Shares) and the Value
Payment Shares (437,500 Ordinary Shares) will rank pari passu with
the existing Ordinary Shares .
A pplication has been made for the admission to trading on AIM
for 9,000,000 of the Consideration Shares, the Subscription Shares
and the Value Payment Shares (" First Admission"). It is expected
that First Admission will become effective on or around 23 December
2020. Application has been made for the remaining 2,000,000
Consideration Shares to be admitted to trading on AIM ("Second
Admission"). It is expected that Second Admission will become
effective on or around 24 December 2020.
Following the First Admission , the Company will have
187,869,790 ordinary shares of 1p each in issue. The figure of
187,869,790 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.
Following the Second Admission, the Company will have
189,869,790 ordinary shares of 1p each in issue. The figure of
189,869,790 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 .
Enquiries:
Versarien
Neill Ricketts, CEO +44 (0)1242 269
Chris Leigh, CFO 122
SP Angel Corporate Finance (Nominated Adviser
and Joint Broker) +44 (0)20 3470
Matthew Johnson, Ewan Leggat, Adam Cowl 0470
Berenberg (Joint Broker) +44 (0)20 3207
Mark Whitmore, Simon Cardron 7800
Yellow Jersey (Investor Relations)
Charles Goodwin
Georgia Colkin
Henry Wilkinson +44 (0)20 3004
Versarien@yellowjerseypr.com 9512
Notes to Editors:
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.
For further information please see: http://www.versarien.com
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