Twelve Seas Investment Company (“Twelve Seas”) (NASDAQ: BROG), a
company formed for the purpose of entering into a business
combination, and Brooge Petroleum and Gas Investment Company FZE
(“BPGIC”), a United Arab Emirates (“UAE”) company in the oil
storage and services business, announced they have filed with the
U.S. Securities and Exchange Commission (the “SEC”), a Registration
Statement on Form F-4 (the “Registration Statement”), a preliminary
proxy statement and an updated Investor Presentation (the “Recent
Public Filings”) related to their previously announced business
combination.
The Recent Public Filings contained the first public
announcement that BPGIC has executed an initial lease agreement for
new land in the Port of Fujairah, UAE, near its existing
facilities, which can accommodate its planned Phase III.
BPGIC currently intends to use such land to (i) further increase
its capacity for crude oil storage and services by developing
additional capacity, and (ii) if needed, host the remaining 90% of
the refinery facilities contemplated under the refinery and
services agreement and related agreements with Sahara Energy
Resources DMCC. BPGIC expects that Phase III alone could add
storage and services capacity of up to three and half (3.5) times,
or up to 3.5 million m3, the size of BPGIC’s projected operations
post-Phase II, which will be 1 million m3. BPGIC believes it
could execute a final lease agreement, which would permit
commencing plans and construction, for this land sometime in 2019,
but there can be no assurances that this will occur. Concurrently,
BPGIC has had discussions with top global end-users, who have
expressed interest in securing portions of the capacity of a Phase
III facility.
BPGIC was founded in 2013 to capitalize on an anticipated need
for oil storage capacity at the Port of Fujairah, in the UAE, which
was expected to become an important oil hub. Today, the Port
of Fujairah is one of the most attractive storage hubs and a key
strategic trading node globally. Twelve Seas’ management believes
that BPGIC’s award winning state-of-the-art terminals offer the
industry’s most advanced technologies, ensuring the highest level
of service to clients. BPGIC is developing terminals in phases and
aims to have a total capacity of 1 million m3 following the
scheduled completion of the second phase of construction by Q2
2020. If Phase III is completed successfully as planned, BPGIC
would become the largest oil storage and services business in
Fujairah, almost double that of its nearest competitor in the Port
of Fujairah.
Following the closing of the business combination, BPGIC will
continue to be led by its current management team of Nicolaas
Paardenkooper, as Chief Executive Officer, Saleh Yammout, as Chief
Financial Officer, Lina Saheb, as Chief Strategy Officer, and
Faisal El Selim, as Chief Marketing Officer. BPGIC will remain
headquartered in Fujairah, UAE.
Mr. Nicolaas Paardenkooper, CEO of BPGIC commented, “We are very
excited to be announcing our initial lease for significant land in
the Port of Fujairah, which alone represents future capacity
additions of over three and a half times our Phase I and Phase II
facilities that are currently operating and under construction,
respectively. After completion of Phase II in Q2 2020, we
expect to be the second largest non-captive storage provider in
Fujairah, and now with this Phase III land, we expect to be the
largest storage provider, captive or non-captive, in Fujairah, at a
time when the strategic importance of Fujairah within the region
and globally is increasing significantly. We are committed to
completing this merger with Twelve Seas and entering the U.S.
capital markets. We recognize that the U.S. capital markets are the
largest in the world and include sophisticated U.S. and global
investors with large investments in similar public companies within
our industry.”
Key Transaction Terms
Pursuant to the business combination agreement (the “BC
Agreement”), (i) Twelve Seas will merge with a newly formed Cayman
Islands merger subsidiary of Brooge Holdings Limited, which is a
newly formed Cayman Islands holding company (“Pubco”), pursuant to
which the Twelve Seas securityholders will receive substantially
identical securities of Pubco in the merger and Twelve Seas will
become a wholly-owned subsidiary of Pubco and (ii) simultaneously,
Pubco will acquire 100% of the issued and outstanding shares of
BPGIC in exchange for the sole shareholder of BPGIC receiving an
aggregate of 100.0 million newly issued ordinary shares of Pubco
(collectively, the “Transaction”); provided that at the election of
BPGIC, up to 40% of the Closing Proceeds (defined below) may be
paid as cash consideration instead of Pubco shares. The
transaction is valued at approximately $1 billion.
In the Transaction, BPGIC will become a wholly-owned subsidiary
of Pubco, and the post-transaction business of the combined company
will be that of BPGIC. All cash remaining in Twelve Seas at
the closing of the Transaction is expected to be used for BPGIC’s
growth. If no Twelve Seas shareholders elect to redeem their
shares, and there is no election by BPGIC for cash consideration in
lieu of shares, then the current shareholder of BPGIC will hold
approximately 78% of the issued and outstanding shares of Pubco,
and current shareholders of Twelve Seas will hold approximately 22%
of the issued and outstanding shares of Pubco. In the event
additional funds are raised in connection with the Transaction, the
ownership percentages will be adjusted accordingly. A total
of 20.0 million of the 100.0 million ordinary shares being issued
to BPGIC’s shareholder will be placed into escrow and subject to
release upon Pubco satisfying certain milestones.
The parties expect the Transaction to close by the end of the
fourth quarter of 2019, subject to certain closing conditions,
including that Twelve Seas will have net cash proceeds at closing
(after payment of expenses and any redemptions from Twelve Seas’
trust account), including any proceeds of any new equity
financings, in excess of $125 million (“Closing Proceeds”). In
addition, the closing is subject to the approval of the
shareholders of Twelve Seas and BPGIC, as well as certain other
third parties.
Advisors
EarlyBirdCapital, Inc. is acting as financial and capital
markets advisor to Twelve Seas and Ellenoff Grossman & Schole
LLP is acting as its legal advisor.
K&L Gates LLP is acting as legal advisor to BPGIC.
Maples and Calder is acting as Cayman Islands legal counsel for
the Transaction.
About Twelve Seas Investment Company
Twelve Seas is a blank check company formed for the purpose of
entering into a merger, share exchange, asset acquisition, stock
purchase, recapitalization, reorganization or other similar
business combination with one or more businesses or entities.
Twelve Seas is led by Chairman Neil Richardson, Chief Executive
Officer Dimitri Elkin, Chief Operating Officer Bryant B. Edwards,
President Stephen A. Vogel, and Chief Financial Officer Stephen N.
Cannon.
About Brooge Petroleum and Gas Investment
Company
Established in 2013, BPGIC is an independent oil storage
provider, strategically located in the Emirate of Fujairah within
the UAE. The Port of Fujairah is one of the most attractive storage
hubs and a key strategic trading node globally. BPGIC's terminals
are award winning state-of-the-art facilities which BPGIC’s
management believes offer the industry’s most advanced
technologies, ensuring the highest level of service to clients.
BPGIC’s current terminal is located at a prime location in close
proximity to the Port of Fujairah’s berth connection points. BPGIC
is developing terminals in phases and aims to have a total capacity
of 1 million m3 following the completion of the second phase
of construction. Phase I commenced operations in December 2017 with
0.4 million m3 of capacity. The terminals are capable of
storing fuel oil and clean products. Phase II is currently under
construction and expected to be operational in Q2 2020. Upon
completion of Phase II, there will be total capacity of 1.0 million
m3, and capability to store crude oil, fuel oil and clean products.
The design of Phase II will enable efficient loading and unloading
of VLCC vessels (very large crude carriers).
The Company also focuses on value added services to its
customers including: Blending, Heating, Inter-tank transfer and
Throughput transfer. BPGIC is fully compliant with current
environmental standards.
Forward-Looking Statements
This press release contains “forward-looking statements” within
the meaning of the safe harbor provisions of the U.S. Private
Securities Litigation Reform Act of 1995, that involve risks and
uncertainties concerning the Business Combination, BPGIC’s and
Pubco’s expected financial performance, as well as their strategic
and operational plans. The actual results may differ materially
from expectations, estimates and projections due to a number of
risks and uncertainties and, consequently, you should not rely on
these forward looking statements as predictions of future events.
Words such as “expect,” “estimate,” “project,” “budget,”
“forecast,” “anticipate,” “intend,” “plan,” “may,” “will,” “could,”
“should,” “believes,” “predicts,” “potential,” “continue,” and
similar expressions are intended to identify such forward-looking
statements. These risks and uncertainties include, but are not
limited to: (1) BPGIC’s inability to obtain additional land on
which it can develop additional facilities on commercially
attractive terms, including its ability to enter into a final lease
agreement for the plot of land in the port of Fujairah where BPGIC
currently plans to locate its Phase III facilities; (2) the loss of
any end-users; (3) the occurrence of any event, change or other
circumstances that could give rise to the termination of the BC
Agreement; (4) the outcome of any legal proceedings that may be
instituted against Twelve Seas, BPGIC, Pubco or others following
announcement of the BC Agreement and the transactions contemplated
therein; (5) the inability to complete the Transaction due to the
failure to obtain approval of the shareholders of Twelve Seas; (6)
the inability to complete the transactions contemplated by the BC
Agreement due to the failure to obtain consents and approvals of
BPGIC’s shareholders and investors or other relevant third parties;
(7) delays in obtaining, adverse conditions contained in, or the
inability to obtain necessary regulatory approvals required to
complete the transactions contemplated by the BC Agreement; (8)
delays in satisfying in a timely manner the other conditions
contained in the BC Agreement; (9) the risk that the Business
Combination disrupts current plans and operations as a result of
the announcement and consummation of the transactions described
herein; (10) the inability to recognize the anticipated benefits of
the Business Combination; (11) the ability to obtain or maintain
the listing of Pubco’s securities on NASDAQ following the Business
Combination, including having the requisite number of shareholders;
(12) costs related to the Business Combination; (13) changes in
applicable laws or regulations; (14) the possibility that BPGIC may
be adversely affected by other economic, business, and/or
competitive factors; and (15) other risks and uncertainties
indicated from time to time in filings with the SEC by Twelve Seas
or Pubco. Readers are referred to the most recent reports filed
with the SEC by Twelve Seas and Pubco. Readers are cautioned not to
place undue reliance upon any forward-looking statements, which
speak only as of the date made, and we undertake no obligation to
update or revise the forward-looking statements, whether as a
result of new information, future events or otherwise.
No Offer or Solicitation
This press release is for informational purposes only and shall
not constitute an offer to sell or the solicitation of an offer to
buy any securities pursuant to the proposed transactions or
otherwise, nor shall there be any sale of securities in any
jurisdiction in which the offer, solicitation or sale would be
unlawful prior to the registration or qualification under the
securities laws of any such jurisdiction. No offer of securities
shall be made except by means of a prospectus meeting the
requirements of Section 10 of the Securities Act of 1933, as
amended, or an exemption from such registration requirements.
No Assurances
There can be no assurance that the proposed Transaction will be
completed, nor can there be any assurance that if the Transaction
is completed, the potential benefits of combining the companies
will be realized. The description of the Transaction contained
herein is only a summary and is qualified in its entirety by the
disclosures in the Registration Statement and by the definitive
agreements relating to the Transaction, copies of which have been
filed by Twelve Seas with the SEC as an exhibit to a Current Report
on Form 8-K.
Additional Information and Where to Find It
On September 27, 2019, Pubco filed the Registration Statement
with the SEC, which included a preliminary proxy statement of
Twelve Seas and a prospectus in connection with the proposed
business combination. The definitive proxy statement and other
relevant documents will be mailed to shareholders of Twelve Seas as
of a record date to be established for voting on the business
combination. Shareholders of Twelve Seas and other interested
persons are advised to read the preliminary proxy statement and
amendments thereto, and the definitive proxy statement, when
available, in connection with Twelve Seas’ solicitation of
proxies for the special meeting to be held to approve the business
combination because these documents will contain important
information about Twelve Seas, BPGIC, Pubco, and the business
combination. Shareholders will also be able to obtain copies of the
Registration Statement and the related proxy statement/prospectus,
without charge, on the SEC’s website at www.sec.gov or by directing
a request to Twelve Seas by contacting its Chief Financial Officer,
Stephen N. Cannon, c/o Twelve Seas Investment Company, 135 East
57th Street, 18th Floor, New York, New York 10022, or at
info@twelveseascapital.com.
Participants in Solicitation
Twelve Seas, Pubco, BPGIC, BPGIC’s shareholder and their
respective directors, executive officers, other members of
management and employees, under SEC rules, may be deemed to be
participants in the solicitation of proxies from the shareholders
of Twelve Seas in connection with the business combination.
Shareholders of Twelve Seas and other interested persons may obtain
more information regarding the names and interests in the proposed
Transaction of Twelve Seas’ directors and officers in Twelve Seas’
filings with the SEC, including Twelve Seas’ annual report on Form
10-K for the year-ended December 31, 2018, which was filed with the
SEC on March 29, 2019. Additional information regarding the
interests of such potential participants is also included in the
Registration Statement (and will be included in the related
definitive proxy statement/prospectus) and other relevant documents
when they are filed with the SEC.
FOR INVESTOR AND MEDIA INQUIRIES, PLEASE CONTACT:
Investor Relations The Equity Group Inc. Fred Buonocore – (212)
836-9607 / fbuonocore@equityny.com Mike Gaudreau – (212) 836-9620 /
mg@equityny.com
Twelve Seas Investment Company Stephen N Cannon,Chief Financial
Officer info@twelveseascapital.com
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