Aura Renewable Acquisitions Plc
("ARA" or the "Company")
9 December 2024
This announcement contains inside
information for the purposes of Article 7 of the EU Market Abuse
Regulation No. 596/2014/EU, which forms part of domestic UK law
pursuant to the European Union (Withdrawal) Act 2018, as amended.
Upon release via a Regulatory Information Service, this information
is in the public domain.
Not
for release, publication or distribution in whole or in part,
directly or indirectly in, into or from any jurisdiction where to
do so would constitute a violation of the relevant laws or
regulations of such jurisdiction.
Proposed Initial Transaction - acquisition of Zero Carbon
Technologies Limited
Aura Renewable Acquisitions Plc, a
UK-based company, whose objective is to invest in the global
renewable energy sector supply chain and thereby build shareholder
value, is pleased to announce that as of 6 December 2024, it has
entered into heads of terms (the "Heads of Terms") with Zero Carbon
Technologies Limited ("ZCT"), a UK incorporated company with
planned battery recycling operations in Europe, which set out the
key terms for ARA to acquire 100% of the issued share capital of
ZCT, in consideration for the issue of ordinary shares in ARA to
the shareholders of ZCT, subject to due diligence, as well as the
negotiation and execution of definitive agreements (the "Proposed
Acquisition", to which ARA and ZCT are the "parties"). The Heads of
Terms are non-binding except with regard to confidentiality,
exclusivity, costs and other customary conditions for a transaction
of this nature which are binding.
About Zero Carbon Technologies Limited
The directors of Zero Carbon
Technologies Limited expect that it will be an innovative leader in
the battery recycling sector, dedicated to providing sustainable
solutions for the recycling of Lead-Acid batteries ("LAB") and
Lithium-ion batteries. Leveraging intellectual property licensed
from Regenerate Technology Global and Cambridge University, ZCT
plans to expand its operations into EV battery recycling. It
intends to use advanced recycling technology to recover black mass
containing critical materials, including copper, lithium, cobalt,
manganese and nickel.
ZCT was incorporated in the UK on 26
May 2021, and has a non-binding agreement for a proposed business
combination (which it is intended will be completed prior to the
Proposed Acquisition) with Clean Tech Lab S.L. ("CTL")
(incorporated in Spain).
ZCT is in the process of acquiring
land, buildings, and equipment with a view to establishing two
advanced recycling facilities in La Mancha province, Spain. The
board of directors of ZCT considers that the sites will be
strategically located for both logistical efficiency and regulatory
advantages. ZCT will manage the operations of these planned plants,
with the first facility in Puertollano intended to begin
commissioning in Q1 2025, followed by a facility in Montalbo
anticipated to begin commissioning in Q4 2025.
With an estimated potential combined
annual processing capacity of 75,000 tonnes of LAB -equivalent to
approximately 1.5 million used units - ZCT aims to recover up to
99% of the materials in these batteries, including by enhancing
lead oxide, a valuable composite containing recycling minerals.
This capability will be driven by proprietary technology, licensed
from Regenerate and Cambridge University, which is expected to
allow efficient recycling of LAB by the installation and
commissioning of the plant within nine months from
inception.
Background to the Proposed Acquisition
ARA was established to acquire and
then act as the holding company for targeted businesses operating
in the Global Renewable Energy Sector Supply Chain, particularly
participants in the wind, solar, biomass, hydropower, carbon
capture, waste management, smart grids and green hydrogen supply
chain, and their sub-sectors. These potential targets could range
from raw materials resourcing to power generation, energy storage
and recycling.
The Proposed Acquisition is in line
with the Company's acquisition strategy.
Overview of the Proposed Acquisition
Structure: ARA will acquire
100% of ZCT's issued share capital through an all-share
transaction. Post-acquisition, ZCT shareholders will hold a
majority stake in ARA as enlarged. ARA will require evidence that
immediately prior to the Proposed Acquisition, ZCT is the sole
vehicle in which its current shareholders and any joint venture
partners own their share interests in its business.
Admission: on completion of the
Proposed Acquisition, ARA's resultant entire issued share capital
will be admitted to the Equity shares (commercial companies)
category of the Official List of the Financial Conduct Authority
("FCA") and to trading on the Main Market for listed securities of
the London Stock Exchange("LSE") ("Admission").
Target Financing:
·
It is proposed that ZCT will secure a
minimum of £10 million of new capital at a minimum pre-money
valuation of £30 Million ("Target Financing") contemporaneously
with the Proposed Acquisition.
· These funds would be utilised for capital expenditure and
working capital, including commissioning ZCT's two proposed
facilities.
Costs:
·
All agreed transaction-related costs
incurred by ZCT and ARA will be paid by ZCT, provided such costs
have been pre-approved by ZCT.
· The only exception is that the costs of any independent
third-party reports procured during due diligence will be shared
equally by ARA and ZCT.
Capital Raise:
· New
capital of £1-2 million is proposed to be raised by the issue of
ordinary shares in ARA contemporaneously with the Proposed
Acquisition ("Capital Raise") to widen the shareholder base and to
provide additional working capital.
Valuation: ZCT's pre-money
valuation is required to be a minimum of £30 Million. The pre-money
value of ARA will be calculated as 10% of the pre-money value of
the merged group, excluding the proceeds of the proposed Capital
Raise and the Target Financing, such that ARA shareholders will
hold 10.0% on an undiluted basis of the shares in ARA immediately
after completion of the Proposed Acquisition, excluding those
issued to investors under the proposed Target Financing and Capital
Raise.
Exclusivity: each of ARA and
ZCT have agreed to engage exclusively with each other regarding the
Proposed Acquisition and will use best efforts to mutually agree
within 14 days of execution of the Heads of Terms the scope and
duration of the transaction due diligence process, which is not
intended to exceed 90 days from the signing of the Heads of Terms
unless extended in writing by the Parties. The Heads of Terms will
terminate in certain circumstances, including if the parties do not
execute definitive agreements for the Proposed Acquisition within 6
months from the date they are entered into, unless extended in
writing by the parties.
Completion of the Proposed Acquisition is subject to
satisfaction of certain conditions, including:
· Receipt of all necessary regulatory approvals.
· Satisfactory completion of legal, financial, and commercial
due diligence by both parties.
· Execution of a legally binding sale and purchase
agreement.
· Admission taking place.
· Successful raising of equity funds as described
above.
· Approval of the transaction by the boards of directors and, as
necessary, shareholders of both parties.
· No
material adverse change in the business, operations, or financial
condition of either party.
·
The representations and
warranties of both parties, as contained in the Heads of Terms and
definitive transaction agreements, remaining true and
correct in all material respects.
· No inquiry or investigation by any regulatory body that could
materially impact the merged group after completion of the
Proposed Acquisition.
· Both parties complying with all relevant regulatory
requirements and being in good standing and not being in
default under applicable securities laws, with no legal prohibition
preventing the completion of the Proposed Acquisition.
·
Lock-up: Insiders of ARA and ZCT,
including directors, officers, and key shareholders, entering into
lock-up agreements, in a form agreed upon by both parties. These
agreements will require the lock-up of shares for a period to be
agreed following the re-admission to listing of ARA.
· The
Directors of ARA, acting reasonably, determining that ZCT has a
pre-money valuation (before the signing of definitive agreements
and any equity fundraising) of at least £30 Million.
ARA anticipates publishing a
prospectus approved by the FCA, detailing the Company, ZCT and the
Proposed Acquisition at a date to be confirmed.
Suspension of Listing
Should the Proposed Acquisition
complete, it would constitute an Initial Transaction under the UK
Listing Rules, and accordingly ARA would apply for the admission of
its shares to the Equity shares (commercial companies) category of
the Official List of the FCA and to trading on the Main Market for
listed securities of the LSE. Therefore, at the request of ARA, the FCA has suspended the
Company's listing on the Equity shares (shell companies) category
of the Official List, and trading on the Main Market of the LSE has
also been suspended, as of 7.30am today, pending the publication of
a prospectus providing further detail on ZCT and ARA as enlarged by
the Proposed Acquisition, or an announcement that the Acquisition
is not proceeding. Should the Proposed Acquisition not
proceed, then ARA would need to apply for the suspension to be
lifted and for trading to be restored.
There can be no certainty that the
Proposed Acquisition will take place, and it remains subject to,
amongst other things, formal terms being agreed and the completion
of legal and financial due diligence.
A further announcement will be made
in due course.
John Croft, Chairman of ARA said:
"We are delighted to be
working with the team from ZCT with the aim of bringing this
exciting business with a dynamic growth story to the public market.
We have considered a number of potential acquisitions during ARA's
life as a listed company and have been very cautious in our
selection criteria, which has resulted in us taking longer than we
originally anticipated in identifying a suitable target. ZCT has
excellent synergy with our stated objective of identifying a
transformational business that can create a meaningful contribution
in the renewable energy space."
Chris Farnworth, CEO of ZCT said: "We are excited to announce our proposed acquisition by Aura
Renewable Acquisitions Plc, which would mark a significant
milestone in ZCT's journey to contribute to the global transition
to a circular economy in battery recycling. This acquisition would
enable us to accelerate the deployment of our state-of-the-art
battery recycling technologies and expand into the rapidly growing
electric vehicle (EV) battery sector. We believe we are well
positioned to make a meaningful contribution to the sustainability
of the energy transition while creating substantial value for our
shareholders. We look forward to working closely with ARA as we
proceed with the necessary steps to finalize the transaction, and
to unlocking the full potential of our innovative solutions to
recover critical materials from lead-acid and lithium-ion
batteries."
- Ends
-
Contact Information
Aura Renewable Acquisitions
Plc
John Croft, Chairman: +44 77 8531
5588
LEI: 894500XA241IB9HL7147
Forward-Looking Statements
This announcement includes
forward-looking statements based upon a number of estimates and
assumptions that, while considered reasonable, are subject to risks
and uncertainties. Actual results may differ materially.
Accordingly, readers should not place undue reliance on the
forward-looking statements and information contained in this
announcement. Except as required by law, neither ARA nor ZCT
assumes any obligation to update the forward-looking statements of
beliefs, opinions, projections, or other factors, should they
change. Aura Renewable Acquisitions Plc