TIDMBMN
RNS Number : 9469V
Bushveld Minerals Limited
12 April 2023
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.
12 April 2023
Bushveld Minerals Limited
("Bushveld Minerals" "Bushveld" or the "Company")
Conditional acquisition by VRFB-H of Garnet's interest in Enerox
Holdings Limited
Bushveld Minerals Limited (AIM: BMN), the integrated primary
vanadium producer and energy storage solutions provider, announces
that VRFB Holdings Limited ("VRFB-H") has entered into a
conditional agreement with Garnet Commerce Limited ("Garnet" or the
"Seller") and Mustang Energy plc ("Mustang") pursuant to which
VRFB-H has agreed to acquire Garnet's 50% interest in Enerox
Holdings Limited ("EHL"), which wholly owns Enerox GmbH (the
"Garnet Acquisition").
Highlights:
-- On the assumption that all stages of the proposed Garnet
Acquisition complete and Readmission of Mustang takes place,
Bushveld Minerals will hold approximately between 21% and 23% of
Mustang with final shareholding interest dependent on the final
amount raised by Mustang.
-- On Readmission, Mustang will own 100% of VRFB-H, which will
in turn own 100% of EHL, which owns the entire issued share capital
of Enerox GmbH ("Enerox"). The resulting simplified ownership
structure will allow investors greater transparency of value for
the underlying energy storage assets.
-- The standalone energy storage focused company will be better
positioned to attract the appropriate energy storage focused
investors and achieve a market valuation that is more reflective of
underlying value.
-- Mustang will have a dedicated Board and management team
focused on implementing its strategy of a scalable energy storage
platform that is fully integrated across the VRFB value chain.
-- The sale of Bushveld's interest in VRFB-H to Mustang is an
important part of the Group's previously announced process to carve
out Bushveld Energy into an independent entity focussed on the VRFB
value chain. The carve out is now expected to be completed during
the second half of 2023.
Fortune Mojapelo, CEO of Bushveld Minerals Limited,
commented:
"I am pleased to announce today's transaction, another step in
simplifying and consolidating the ownership structure of this
exciting energy storage platform.
As mentioned previously and with the commitment of its
investors, this series of transactions provide Enerox and its
CellCube brand access to the capital markets, the ability to
achieve a transparent market value and attract energy focused
investors looking to participate in this exciting growing
sector.
As we have communicated in recent months, we feel this is the
right time for this emerging energy storage story to take on a life
of its own, while still keeping an interest in the business and
most importantly maintaining our vertically integrated business
model."
Transaction Details
-- Conditional acquisition announced on 26 April 2021, by
Mustang for a 22.1% interest in VRFB-H ("Acquisition (Stage
1)").
-- Conditional acquisition announced on 3 August 2022, by
Mustang for Acacia Resources Limited's ("Acacia") 27.4% interest in
VRFB-H ("Acquisition (Stage 2)").
-- Conditional acquisition announced on 28 November 2022, by
Mustang for the remaining 50.5% interest in VRFB-H ("Acquisition
(Stage 3)") held by Bushveld Energy Limited, an 84% owned
subsidiary of AIM-quoted Bushveld Minerals Limited.
The Garnet Acquisition is expected to complete contemporaneously
with the Acquisition (Stage 1), Acquisition (Stage 2) and
Acquisition (Stage 3).
Following completion of the Acquisition (Stage 1), Acquisition
(Stage 2), Acquisition (Stage 3) and the Garnet Transaction, and
subject to the completion of certain regulatory approvals (as more
fully detailed below), Mustang would be readmitted to trading and
listing and own the entire issued share capital of VRFB-H, and
VRFB-H would own the entire issued share capital of EHL. EHL owns
the entire issued share capital of Enerox GmbH ("Enerox"), the
owner of the CellCube brand (see below for further details on
CellCube).
Purchase Consideration
The total consideration payable by Mustang on behalf of VRFB-H
for the acquisition of Garnet's interest in EHL is US$33,166,667
("Purchase Price"). The Purchase price comprises of:
-- A US$7,500,000 payable in the form of:
-- A cash payment of between US$5,000,000 and US$7,500,000, with
the final amount to be determined by the quantum of the proposed
equity fundraise to be undertaken by Mustang ("Fundraise") at the
time of the proposed readmission of its enlarged issued share
capital to listing on the Official List (by way of Standard Listing
under Chapter 14 of the Listing Rules) and to trading on the London
Stock Exchange's Main Market for listed securities ("Readmission");
and
-- The issue of up to US$2,500,000 of convertible loan notes
(the "Convertible Loan Notes") by Mustang dependent on the amount
of the Fundraise.
-- The aggregate amount paid in cash and Convertible Loan Notes
by Mustang to Garnet is not more than US$7,500,000.
-- The sum of US$25,666,667, to be converted to Pounds Sterling
using an exchange rate of GBPGBP1.00/US$1.225 and to be satisfied
by the proposed issue of 104,761,905 new ordinary shares in the
capital of Mustang, priced at 20 pence per share (the
"Consideration Shares").
The Garnet Acquisition is conditional upon, inter alia:
-- The publication of a prospectus by Mustang, having been
approved by the Financial Conduct Authority, and Readmission (and
thereby completion of Acquisition (Stage 1), Acquisition (Stage 2),
Acquisition (Stage 3)).
-- Mustang having obtained the relevant approvals from its shareholders to allot and issue the Consideration Shares and any ordinary share arising on conversion of the Convertible Loan Notes (the "CLN Shares") (and waiver of any applicable rights of pre-emption in respect of such shares).
-- If required, the issue of the Consideration Shares and/or the
CLN Shares having been approved by Mustang's independent
shareholders in accordance with The City Code on Takeovers and
Mergers (the "Takeover Code"), and The Panel having waived any
obligation on any applicable party to make a general offer under
Rule 9 of the Takeover Code .
-- The approval of the Federal Ministry of Labour and Economic
Affairs of the Austrian Government regarding the proposed change of
control of Enerox. By way of brief background, a Foreign Direct
Investment regime was introduced in Austria in 2020 (after EHL had
acquired control of Enerox), which aims to protect foreign
investment into sectors relating to national security or public
order (including energy related matters). An application for
approval of the transaction has been made and a formal response is
expected within the next 30 days.
-- Mustang raising a minimum of US$15 million at the time of Readmission.
Convertible Loan Note Issue
Pending readmission, Mustang will raise up to US$2,000,000
through the issue of a new Convertible Loan Notes (the "2023 CLNs")
to new and existing investors (the "2023 CLN Holders"). Pursuant to
a loan agreement entered into between Mustang and Enerox (the
"Enerox Loan"), the proceeds of the 2023 CLNs will be used to
provide Enerox with additional funding until Readmission. Both
Acacia and Garnet have agreed to subscribe for US$500,000 each of
the 2023 CLNs.
The terms of the 2023 CLNs are as follows:
Maturity 31 July 2023
Interest 10.0% per annum
Conversion on Readmission, into new Mustang shares at the lower
of GBP0.17 per share or a 20% discount to the price per share which
is placed with or otherwise subscribed by new and existing
investors in connection with the Mustang's fundraise.
If (i) the full amount of the 2023 CLNs has not been raised by
30 April 2023; (ii) the full amount has been raised, but Mustang
has not obtained binding commitments of at least US$15 million
towards its proposed fundraise at Readmission, nor funded Enerox
with another US$1 million until the end of June 2023, in each case
by 31 May 2023; or (iii) Mustang has not obtained approval of its
proposed prospectus in relation to Readmission by the 30 June 2023,
Garnet will have an option to terminate the Garnet Acquisition, and
upon investing a minimum of US$3.5 million into EHL, take a
controlling position in EHL. In such circumstances Mustang may
still choose to complete the Acquisition (Stage 1), Acquisition
(Stage 2) and Acquisition (Stage 3) and continue to Readmission but
only with its minority position in EHL which would be approximately
46.4%.
If Readmission does not occur by 31 July 2023, the 2023 CLN
Holders will be able to effect the backstop arrangements similar to
those previously agreed between Bushveld and Mustang (as more fully
detailed in Mustang's announcements dated 31 August 2022 and 28
November 2022), which would result in the issuance to each 2023 CLN
Holder such number of new ordinary shares in Bushveld at a price
equal to the 20 day volume weighted average price prior to the date
of issue, equivalent to the principal amount of each 2023 CLN
Holder's CLNs together with all accrued and unpaid interest). In
return for Bushveld issuing the relevant shares to the 2023 CLN
Holders, Mustang will novate to Bushveld the benefit of the Enerox
Loan.
Update on Existing loan notes
Mustang is in discussions with the holders of the existing US$8
million convertible loan notes that were issued to investors in
April 2021 as part of the Acquisition (Stage 1), to extend the
maturity date of such notes to 31 July 2023 on the same terms as
the 2023 CLNs. Under the loan note instrument governing these
convertible loan notes, the Company has until 28 April 2023 to
finalise this extension. Once an agreement has been reached with
the existing noteholders, a further announcement will be made.
ENDS
Enquiries: info@bushveldminerals.com
+27 (0) 11 268
Bushveld Minerals Limited 6555
Fortune Mojapelo, Chief Executive
Officer
Chika Edeh, Head of Investor Relations
Nominated Adviser +44 (0) 20 3470
SP Angel Corporate Finance LLP & Broker 0470
Richard Morrison / Charlie Bouverat
Grant Baker / Richard Parlons
+44 (0) 20 7653
RBC Capital Markets Joint Broker 4000
Jonathan Hardy / Caitlin Leopold
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 2022, the Company produced 3,842
mtV, representing more than 3% of the global vanadium market.
Bushveld Vanadium is targeting to grow its vanadium production and
achieve an annualised steady state production run rate of between
5,000 mtVp.a. and 5,400 mtVp.a in the near term from existing
capacity. Growth plans to expand to 8,000 mtVp.a. will be pursued,
subject to funding and market conditions. 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 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 Enerox
Enerox is an Austrian-based vanadium redox flow battery ("VRFB")
manufacturer that has invested more than 20 years of research and
development into its energy storage system, branded under the name
CellCube. Its vanadium-based technology is known to be
state-of-the-art in the battery market and has already deployed or
is currently deploying more than 130 systems / 43 MWh across 5
continents. In the preceding 12 months Enerox has announced 5 new
orders for 34 MWh, which includes a 16 MWh battery to an Australian
based renewable project developer - Enerox's largest battery order
to date.
About CellCube
CellCube designs and delivers sustainable and cost-effective
energy storage solutions for microgrid and grid scale-applications.
The CellCube brand is a leader in the energy storage eco-system and
has developed a reputation for client service, system reliability
and technical innovation. It has a stack and system production
capacity and is focused on large commercial projects using the new
generation FB 500-2000 technology.
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END
ACQITMFTMTMBMPJ
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April 12, 2023 03:00 ET (07:00 GMT)
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