TIDMCHAL
RNS Number : 7200X
Challenger Acquisitions Limited
01 September 2020
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR
INDIRECTLY, WITHIN, INTO OR IN THE UNITED STATES, AUSTRALIA, CANADA
OR JAPAN.
For immediate release 1 September 2020
Challenger Acquisitions Limited
('Challenger' or the 'Company')
Offer Letter to Cindrigo Shareholders
Challenger Acquisitions Limited (LSE: CHAL) is pleased to
announce that, further to its announcement dated 19 August 2020, it
has issued a letter ("Offer Letter") to certain of the shareholders
of Cindrigo Energy Limited ("Cindrigo Shareholders") of British
Columbia, Canada making an offer ("Offer") to acquire from such
shareholders at least 50.1% of the shares of Cindrigo Limited
("Cindrigo") that they will hold following the completion of a
proposed reorganisation of the Cindrigo Group pursuant to a Plan of
Arrangement ("PoA") of Cindrigo Energy Limited. Cindrigo is part of
a group of companies pursuing renewable energy projects built on
broad Swedish expertise and experience in the waste to energy and
biomass energy sector (see www.cindrigo.com).
The Offer Letter includes the following principal points:
-- The Offer Letter is open for acceptance until 21 September 2020.
-- The Offer Letter has been approved by the boards of
Challenger and Cindrigo Energy Limited and Cindrigo, and the
Cindrigo boards have recommended acceptance of the Offer by the
Cindrigo Shareholders.
-- The Offer is conditional upon Cindrigo shareholders who will
together hold at least 50.1% of the shares in Cindrigo accepting
the Offer. Challenger then proposes to acquire the remaining shares
through the operation of drag-along rights in the articles of
association of Cindrigo.
-- Cindrigo has received irrevocable undertakings to accept the
Offer from Cindrigo shareholders holding 60% of the shares in
Cindrigo Energy Limited and who will hold a corresponding number of
shares in Cindrigo
-- After a proposed reorganisation of the current issued share
capital of Challenger, consisting of a consolidation of
Challenger's ordinary shares on the basis of a consolidation factor
of 266 existing shares to 1 ("Challenger Reorganisation"),
Challenger will be offering 1 new share in Challenger
("Consideration Shares") for each share in Cindrigo (there will be
146,572,394 shares Cindrigo shares outstanding on completion of the
PoA). If the Challenger Reorganisation does not proceed, the number
of shares being offered will increase by the consolidation
factor.
-- It has been agreed between Challenger and Cindrigo that the
Consideration Shares will be issued at a price of GBP1.09 per
share.
-- Zero coupon convertible loan notes 2030 ("Loan Notes") may be
issued to Cindrigo Shareholders who would otherwise hold 30% or
more of Challenger's issue share capital on completion of the
acquisition of Cindrigo in respect of the number of shares that
they would hold in excess of 29.9%. The Loan Notes will be
convertible by the Company or noteholders at any time prior to
maturity at the same price per share as shares are to be issued
pursuant to the Offer. Loan Notes shall not be convertible where
doing so would trigger a mandatory offer obligation, require
Challenger to publish a prospectus or cause the proportion of
Challenger's issued share capital that is in public hands for the
purposes of the Listing Rules to drop below 25%. To the extent that
the Loan Notes have not been converted, they will be redeemable at
face value ten years from issue.
-- The Offer, if completed, will represent a reverse takeover for Challenger.
-- Upon making the Offer, Cindrigo has agreed to transfer
GBP450,000 to the client account of Challenger's solicitors,
McCarthy Denning, in order to fund the costs of the Offer and
reverse takeover process as well as certain and present public
company costs of Challenger.
-- Upon making the Offer and completing the funds transfer
referred to above, Challenger has agreed to appoint two of the
directors of Cindrigo Energy Limited, (Mustaq Patel and Lars
Guldstrand) as directors of Challenger and accept the resignation
of two of the existing four Challenger directors (George Lucan and
Rupert Baring).
-- The new Chairman of Challenger will be Lars Guldstrand.
-- Cindrigo Energy Limited, the current parent of Cindrigo will
transfer all of its business, assets and liabilities to Cindrigo
pursuant to the PoA. The PoA will also involve the transfer of the
existing shares and/or new shares in Cindrigo to the current
shareholders of Cindrigo Energy Limited so that they hold the same
number of shares in Cindrigo as they currently hold in Cindrigo
Energy Limited The PoA requires the approval of at least 75% of the
current shareholders in Cindrigo Energy Limited and the court in
British Columbia, Canada. The Offer is conditional on the
completion of the PoA on terms satisfactory to Challenger.
-- Cindrigo Shareholders will, in aggregate, hold 96.5% of the
issued share capital of Challenger when Challenger has acquired
100% of the shares in Cindrigo.
-- The Offer is also conditional on there not being any
mandatory offer required under the UK City Code on Takeovers and
Mergers UK. The Company will seek confirmation from the Takeover
Panel that the Cindrigo shareholders, or any of them, are not
acting in concert and that the presumption in the Takeover Code
that they are so acting is rebutted. If this confirmation is not
given, Challenger will use its reasonable endeavours to procure
from its independent shareholders holding more than 50% of the
voting rights that would be exercisable on a formal Rule 9
Whitewash resolution ("Whitewash Resolution"), were one proposed,
written confirmation that they would vote in favour of such a
resolution and a waiver by the Takeover Panel of the mandatory
offer obligation on this basis. Should neither of these
confirmations be given by the Takeover Panel, Challenger will
propose a formal Whitewash Resolution at a general meeting.
-- Challenger will hold a General Meeting to propose to its
shareholders certain resolutions to facilitate the Cindrigo
acquisition including resolutions to grant authority to issue some
of the Consideration Shares and disapply the existing shareholders'
pre-emption rights (the "Share Issuance Resolutions"). Resolutions
will also be proposed to consolidate the issued share capital
pursuant to the Challenger Reorganisation and, conditional upon the
completion of the Offer, change the name of the Company to Cindrigo
Holdings Limited and a Rule 9 whitewash resolution if necessary.
The Offer is conditional on the passing of the Share Issuance
Resolutions and the Whitewash Resolution (if required) but not
conditional on the Challenger Reorganisation being approved by
shareholders nor the change of name. The two main Challenger
convertible loan note holders have agreed to support the Cindrigo
acquisition and, conditional on completion of the acquisition of
Cindrigo , will (by way of partial conversion and settlement of the
notes and accumulated interest ("Note Settlement")) receive between
them 2.25% of the shares that Cindrigo shareholders will receive.
These note holders will also be granted 18 month warrants to
purchase the same number of shares for GBP900,000 in aggregate
("Warrants"). Loan notes held by a third noteholder will be
redeemed in accordance with their terms, such redemption to be
funded by the issue of new convertible loan notes ("New Notes") to
one of the other noteholders which will then be converted. The
Offer is conditional on the Note Settlement becoming unconditional
other than as to completion of the Offer.
-- On completion of the acquisition and of the conversion of the
existing loan notes and the New Notes, the existing Challenger
shareholders will together hold 3% of the issued share capital of
Challenger. If the Warrants are exercised, all the shareholders of
Challenger will be diluted, but the Company will receive the
exercise price for additional working capital.
-- The Offer will complete on the satisfaction or waiver of the
last of the conditions pursuant to which it is made. If the
conditions have not been satisfied or waived by 30 October 2020 or
such later date as Cindrigo and Challenger shall agree (the
"Longstop Date") and have not been waived by Cindrigo and
Challenger, or if there is an adverse change in the financial
position, profits or prospects of Cindrigo prior to the Longstop
Date that is, in the reasonable opinion of Challenger, material in
the context of the Offer, the Offer will lapse and be of no further
force or effect.
When the Offer completes, completes, the Company's listing on
the standard segment of the Official List and trading on the Main
Market of the London Stock Exchange ("Listing") will be cancelled
pursuant to the Listing Rules applicable on a reverse takeover.
Challenger intends to commence work on the preparation of a
prospectus to enable the enlarged share capital to be readmitted to
Listing. The Offer is not conditional on readmission and there is
no certainty that Challenger's prospectus will be approved by the
FCA and that permission will be given for readmission. Challenger
will call a general meeting of shareholders shortly to propose the
above mentioned resolutions. Cindrigo will proceed with the PoA as
quickly as possible.
The Board of the Company will update the market further as and
when necessary.
Biographies for two new directors:
Lars Guldstrand -
Mr. Guldstrand has more than 35 years of executive and
international investing experience in the energy, technology,
telecom and media sector.
During his career, Mr. Guldstrand has held executive positions
in a number of private and public companies in Europe, the United
States, the Middle East and Africa. Mr. Guldstrand is currently
serving as the Chairman of Ellge Kapital I Stockholm AB and
Bergasols Stiftelse.
Mr. Guldstrand started his career in his family business between
1978-1992, thereafter, during 1992-1998 with Telia as CEO Din Del
AB, Exec VP Marketing & Business Development for TeleMedia
Group, CEO for Local Touch Co (USA), TeleMedia North America LLC
(USA) and Telia InfoMedia International (Sweden & USA). Between
1998-2003 he was CEO of Eniro AB (publ) and, between 2004-2007, he
was Chairman Monetar Pensionsförvaltning AB (Sweden), Paynova AB
(publ) (Sweden), European Directories / Maquiere Capital
Scandinavia (Denmark) and Deputy Chairman Golden Pages (Israel).
Between 2007-2013 he was CEO of KMW Renewable AB (Sweden), Chairman
GKL Growth Capital AB (Sweden), Director Auriant Mining AB (publ)
(Sweden) & Director Amari Mining (South Africa).
Mr. Guldstrand has a Master of Business Administration from
California Coast University.
Mustaq Patel -
Mr. Patel has served as the group Managing Director since the
inception of Cindrigo and has been the President since January
2018. He has a background in mergers and acquisitions for clients
such as Hewlett Packard, Compaq, Ford Motor Company, Hutchinson
Whampoa, Rank Organization, Airbus and the Royal Bank of
Scotland.
He spent two years working for the Government of Brunei in the
recovery and restructuring of assets for the Government of Brunei
and the Brunei Investment Agency. Mr. Patel was previously the Head
of Legal & Corporate Affairs for Jumar Holdings and Petromir,
one of the world's largest gas fields (Angaro-Lenskoye field) in
the East Siberian region of Russia.
Mark Gustafson, Challenger's Chief Executive Officer, said, "The
making of the Offer is a substantial step forward for the Company.
We will now work directly with Cindrigo on completing this
transaction. We want to express our deep gratitude to George Lucan
and Rupert Baring for their endless support during this reverse
takeover process."
**ENDS**
For more information visit www.challengeracquisitions.com or
enquire to:
Challenger Acquisitions Limited
Mark Gustafson +1 604 454 8677
St Brides Partners Ltd (PR)
Cosima Akerman +44 (0) 20 7236 1177
Cindrigo Limited
Mustaq Patel +44 (0) 7961 376 640
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END
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