TIDMBMN
RNS Number : 9312Y
Bushveld Minerals Limited
19 January 2022
Market Abuse Regulation ("MAR") Disclosure
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it
forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with
the Company's obligations under Article 17 of MAR.
19 January 2022
Bushveld Minerals Limited
("Bushveld Minerals" "Bushveld" or the "Company")
Revised Arrangement on the VRFB Holdings Limited ("VRFB-H")
Investment by Mustang Energy Plc ("Mustang Energy")
Bushveld Minerals Limited (AIM: BMN), the AIM-quoted, integrated
primary vanadium producer and energy storage solutions provider,
with ownership of high-grade assets in South Africa, announces
revised agreement terms regarding Mustang Energy's acquisition of a
22.10 per cent interest in VRFB-H.
On 27 April 2021, the Company announced an investment by Mustang
Energy of approximately US$7.5 million into VRFB-H by subscribing
for a 22.10 per cent interest in VRFB-H ("Mustang Subscription
Shares"), being an indirect interest of 11.05 per cent in Enerox
Holdings Limited ("EHL") which owns Enerox GmbH ("Enerox"), in
terms of an Investment Agreement between VRFB-H, Bushveld Minerals
and Mustang Energy ("Investment"). Enerox is a Vanadium Redox Flow
Battery manufacturer providing grid scale and micro-grid energy
storage solutions. Bushveld Energy Limited ("BEL") holds a 50.5 per
cent shareholding in VRFB-H which in turn holds a 50 per cent
shareholding in EHL. BEL [1] , is an 84 per cent owned subsidiary
of Bushveld Minerals.
Mustang Energy funded the Investment by way of an issue of US$8
million unsecured convertible loan notes ("CLNs") bearing a 10 per
cent coupon to certain investors ("Mustang Capital Raise").
Post completion of the Investment, on 14 July 2021, the Company
announced that Garnet Commerce Limited ("Garnet"), a 50 per cent
shareholder in EHL, issued a claim form in the High Court of
Justice: Business and Property Courts of England and Wales
(Chancery Division) against VRFB-H and EHL ("the Litigation").
Garnet's claim form seeks declarations against VRFB-H concerning
alleged breaches of the EHL joint venture agreement in respect of
the indirect investment into EHL through VRFB-H by Mustang Energy.
The matter is scheduled for trial commencing on 19 January
2022.
The Mustang Capital Raise and the concurrent acquisition by
Mustang Energy of shares in the capital of VRFB-H constitutes a
reverse takeover under the Financial Conduct Authority's Listing
Rules and requires the publication of a prospectus. The ongoing
uncertainty due to the Litigation, among other things, precludes
Mustang Energy from issuing a prospectus which is a precursor for
Mustang Energy's shares being readmitted to trading on the Standard
List of the Main Market of the London Stock Exchange
("Readmission").
A condition of the Investment Agreement is that if Readmission
did not occur by 31 December 2021 (the "Maturity Date"), Mustang
Energy shall have had the right, by serving written notice on
Bushveld Minerals within 5 Business Days following the Maturity
Date ("the Notice Date"), to require that Bushveld Minerals shall,
in return for Mustang Energy transferring to BEL all of the Mustang
Subscription Shares and payment of a backstop fee ("Backstop
Fee"):
-- issue to each CLN holder by 28 January 2022 such number of
new Bushveld Minerals shares (at a price equal to the 20-day volume
weighted average prior to the date of issue, and rounded down to
the nearest share) as is equivalent to the par value of the
noteholders' CLNs together with accrued and unpaid interest;
and
-- procure that such Bushveld Minerals shares are admitted to
trading on the AIM market of the London Stock Exchange plc within
five Business Days thereafter ("Backstop").
As announced on 11 January 2022, the parties to the Investment
Agreement and the CLN holders were in discussion to reach agreement
to extend the Maturity Date to allow some visibility as to the
potential outcome of the Litigation. Given these ongoing
discussions, Bushveld Minerals and Mustang Energy agreed to extend
the Notice Date to 18 January 2022.
Bushveld Minerals, Mustang Energy and the CLN holders have now
agreed to an extension of the Maturity Date to 28 February
2022.
Fortune Mojapelo, Chief Executive of Bushveld Minerals Limited,
commented:
"I am pleased we were able to agree on new terms given the
unforeseen events that prevented the initial transaction from
closing within the original timeframe. The extension of the
Maturity Date may also allow some visibility as to the potential
outcome of the Litigation.
" It is Bushveld's continued belief that vanadium redox flow
batteries remain a favourable and competitive storage solution
option given the metal's unique characteristics and the development
and commercialisation of products, such as those produced by
Enerox."
Summary of updated agreement terms:
-- Requirement for the publication of a prospectus by Mustang
Energy and Readmission by no later than 28 February 2022.
-- In circumstances where Readmission does not take place by 28
February 2022, assuming Mustang Energy cannot redeem the CLNs:
o Mustang Energy will give notice to Bushveld Minerals to
exercise the Backstop and to the CLNs holders that it has done so,
with a request that the CLN holders advise of their election to
convert their CLNs into Bushveld or VRFB-H shares by the end of
March 2022;
o Bushveld will issue the new Bushveld shares under the Backstop
in return for the transfer of Mustang Energy's shares in VRFB-H;
and
o Mustang Energy will transfer up to an aggregate of 22.1 per
cent of the shares in VRFB-H to Bushveld Minerals. In terms of the
Investment Agreement, certain of the CLNs holders, on exercise of
the Backstop, have the discretion to elect not to receive new
Bushveld Minerals shares and instead receive shares directly in the
capital of VRFB-H.
o The Backstop Fee payable by Mustang Energy to Bushveld
Minerals will be reduced from 5.0% to 2.0% of the amount of any
CLNs converted to Bushveld Minerals shares, to be satisfied by the
issue of Mustang shares at a price of 20 pence each.
-- In the event that the Litigation is resolved such that
Mustang Energy can continue to hold the VRFB-H shares and the
Backstop has been exercised, then Mustang Energy has the option to
buy back the VRFB-H shares that have been transferred to Bushveld
Minerals in terms of the Backstop and Bushveld Minerals has the
option to put those VRFB-H shares to Mustang Energy at the original
subscription price.
-- One of the CLN holders, Primorus Investment Plc ("Primorus")
has elected to sell US$1.0 million of its CLNs to other CLN
noteholders. In addition, Bushveld Minerals has granted an option
to Primorus to sell its residual CLNs (face value of US$1.5
million) to Bushveld Minerals ("Primorus Option"), to be exercised
on or after 28 February 2022 in consideration for either cash or
the issuance of new Bushveld Minerals convertible loan notes ("BMN
CLNs") at the discretion of Bushveld Minerals. In the event that
the Primorus Option is exercised, a tranche of one sixth of the BMN
CLNs will be convertible into Bushveld Minerals shares, at the
20-day volume weighted average price on 28 February 2022
("Conversion Price"), within every three months period after 28
February 2022 (with the ability to roll forward any unconverted
tranche), plus additional Bushveld Minerals shares equivalent to
the interest accrued at 10 per cent per annum from 28 February
2022. Bushveld shall have the right to redeem, after 28 February
2022, the BMN CLNs not exercised at face value plus accrued
interest, plus an additional amount equal to the additional value
of the BMN shares at the date of redemption, had they been
converted at the Conversion Price. To the extent the BMN CLNs are
not converted or redeemed by 14 July 2023 they will be repaid at
face value plus accrued interest by Bushveld.
-- Bushveld has provided Mustang Energy with a working capital
loan of US$220 000 at no interest ("Loan"), repayable in the event
the Litigation is settled or determined such that Mustang Energy
can hold shares directly or indirectly in VRFB-H. Mustang Energy
shall repay the Loan in cash, or in shares (together with a warrant
for every two shares), in full on the earlier of 31 December 2023
or Mustang Energy completing a capital raise. The Loan shall be
waived in full in the event that the Litigation is settled or
determined such that Bushveld Energy cannot hold shares directly or
indirectly in VRFB-H and the Backstop arrangements have been
implemented.
-- Sixty per cent of the Backstop Fee has been waived in the
event the Litigation does not result in Mustang Energy being able
to hold shares in VRFB-H.
The above terms have been encapsulated in an addendum to the
Investment Agreement, a Novation Agreement between Primorus and
Bushveld Minerals which includes an agreed form Bushveld
Convertible Loan Note Instrument attached thereto, and a Loan
Agreement between Bushveld Minerals and Mustang Energy.
S
Enquiries: info@bushveldminerals.com
+27 (0) 11 268
Bushveld Minerals Limited 6555
Fortune Mojapelo, Chief Executive
Officer
Andrew Mari, Investor Relations
Nominated Adviser +44 (0) 20 3470
SP Angel Corporate Finance LLP & Broker 0470
Richard Morrison / Charlie Bouverat
Grant Baker / Richard Parlons
Tavistock Financial PR
Gareth Tredway / Tara Vivian-Neal/ +44 (0) 207 920
Adam Baynes 3150
ABOUT BUSHVELD MINERALS LIMITED
Bushveld Minerals is a low-cost, vertically integrated primary
vanadium producer. It is one of only three operating primary
vanadium producers, owning 2 of the world's 4 operating primary
vanadium processing facilities. In 2020, the Company produced more
than 3,600 mtV, representing approximately three per cent of the
global vanadium market. With a diversified vanadium product
portfolio serving the needs of the steel, energy and chemical
sectors, the Company participates in the entire vanadium value
chain through its two main pillars: Bushveld Vanadium, which mines
and processes vanadium ore; and Bushveld Energy, an energy storage
solutions provider. Bushveld Vanadium is targeting to materially
grow its vanadium production and achieve an annualised steady state
production run rate of between 5,000 mtVp.a. and 5,400 mtVp.a by
the end of 2022, from projects currently being implemented. Beyond
that, pre-feasibility studies are in progress to determine the
optimal path to increase production even further to a steady state
production run rate of between 6,400 mtVp.a. and 6,800 mtVp.a. in
the medium-term and to a steady state production run rate of 8,400
mtVp.a in the long term.
Bushveld Energy is focused on developing and promoting the role
of vanadium in the growing global energy storage market through the
advancement of vanadium-based energy storage systems, specifically
Vanadium Redox Flow Batteries ("VRFBs").
Detailed information on the Company and progress to date can be
accessed on the website www.bushveldminerals.com
ABOUT BUSHVELD ENERGY LIMITED
Bushveld Energy is a leading energy storage solutions provider,
focusing on the African market. Bushveld Energy recognises that the
requirement for electricity in Africa touches on both the paramount
potential for social transformation and an immense commercial
opportunity.
Bushveld Energy is focused on developing and promoting the role
of vanadium in the growing global energy storage market through
application in vanadium redox flow batteries ("VRFB"). Its
near-term strategy is to deploy several VRFB systems as part of its
longer term vision to become a significant electricity storage
provider in Africa, meeting the demand for utility scale energy
storage in Africa by leveraging South Africa-mined and beneficiated
vanadium. Bushveld Energy's business model embraces a number of
activities along the VRFB value chain, including electrolyte
manufacturing, investment in VRFB manufacturing, battery deployment
and project development.
http://www.bushveldenergy.com
ABOUT MUSTANG ENERGY
Mustang Energy PLC is a Special Purpose Acquisition Company
(SPAC), whose shares are listed on the Standard List of the Main
Market of the London Stock Exchange, which intends to utilise its
strong management experience and strategic relationship with Acacia
Resources Limited, the Company's largest shareholder, to acquire
interests in energy storage and stationary battery assets.
http://www.mustangplc.com/
[1] BEL is an 84% owned subsidiary of Bushveld Minerals. This
was inadvertently incorrectly stated as 74% in the announcement of
11 January 2022.
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