Conclusion of consultation being to remain on AIM
1 July 2020
Agronomics Limited
("Agronomics" or the "Company")
Conclusion of consultation being to remain listed on AIM
Further to the announcement of the Company dated 19 June 2020, the Board of Agronomics, having reviewed the shareholder feedback, has agreed unanimously to retain the Company's AIM Market listing, despite the short-term need for the Company to access capital to support existing portfolio companies and take advantage of new investment opportunities.
In particular, the results of its recent shareholder consultation confirmed a majority of shareholders recognise:
a) the need to raise the required capital to fully realise the Company's business plan;
b) that access to capital is limited at this time (partly due to the Covid-19 outbreak and also due to other factors); and
c) the need for the Company to access capital over the next 12 months to realise its ambitions and, to protect shareholder value and deliver growth in the net asset value of the portfolio, the Board must consider different forms of financing available to the Company;
In addition, a number of shareholders want:
d) the Company to review alternative structures for the Company to raise capital that would not result in the stock market listing being lost or surrendered; and
e) to retain a shareholding in the Company providing that its shares continue trading on AIM, and they would accordingly vote against any proposal to de-list.
The Board is conscious that, as a consequence of the consultation process, some shareholders, and/or potential new investors, may believe that, despite this decision, the medium-term ambition of the Board might be still to de-list the Company. To reassure shareholders that this is not the case, the Board has today provided Beaumont Cornish Limited (the Company's nominated adviser) with an undertaking that it will not, other than due to regulatory reasons beyond its control, or in the context of a proposed takeover by an arm's length third party (in compliance with the Takeover Code), seek to de-list the Company's shares for a period of three years from the date of the undertaking.
Meanwhile, the Board will continue to negotiate with potential funding partners for additional investment in the Company and/or its subsidiaries. Whilst terms for any such investment have not been agreed, and there can be no guarantee that such negotiations will be successful, to further reassure shareholders, the Board wishes to make clear that any proposal approved by the Board would (i) be at an implied net asset value per share ("NAV") equal to or not less than £0.06, being a 8.5% premium to the last published NAV, and (ii) existing shareholders of the Company would have the opportunity to participate on the same terms as any new investment.
As noted by the Board in previous announcements, the Company is fortunate to have the continued support of Jim Mellon, the largest shareholder and a non-executive director of the Company, at a time when funding is not easily available on terms that protect shareholder value. As such, Galloway Limited, a company indirectly wholly owned by Jim Mellon, has agreed to provide the Company with a nil interest unsecured 6-month bridging facility of £1.9 million (the "Mellon Facility") on a draw-down basis at its discretion. This will allow the Company, if required, to take advantage of the potential opportunities it currently has (within its existing portfolio and in relation to new investment opportunities).
The Mellon Facility (via Galloway Limited, a company indirectly wholly owned by Jim Mellon and of which Denham Eke is a director) is a Related Party Transaction under the AIM Rules for Companies and the Independent Directors (being Richard Reed, David Giampaolo and Anderson Whamond) having consulted with Beaumont Cornish Limited, the Company's nominated adviser, consider the terms of the Mellon Facility to be fair and reasonable insofar as the Company's shareholders are concerned.
Richard Reed, Non-Executive Chairman, Agronomics Limited commented:
"The Board has listened to its shareholders. In particular, smaller shareholders (who make up a significant minority of the shareholder base) made clear that they did not want the AIM listing to be lost, and would not want to retain a shareholding in a private company, even if that private company had better prospects of accessing private capital. The message received was that the Board had to find a funding solution that retained the public listing. This message has been heard loud and clear by your Board. We have gone back to the drawing board and are reaching out to new investors to find a funding solution that protects shareholder value, retains liquidity (in the form of the stock market listing), and allows the Company to grow the net asset value of its portfolio on a per share basis.
The Company and shareholders are fortunate that while we take these steps, we continue to have the support of Jim, who has agreed to provide a nil interest loan facility to bridge the Company so it can continue to invest and deliver on its business plan. Jim, like the rest of the directors, believes strongly that the Company can be a huge success, and deliver exceptional returns for shareholders if it can access capital and take advantage of its early mover status. That is the prize, for all shareholders, and that is what the Board will continue working hard to deliver."
Details of the Mellon Facility
The Mellon Facility was agreed at the request of the Company and the terms of the Mellon Facility were approved by the Company's Independent Directors for the purposes of the transaction, being Richard Reed, David Giampaolo and Anderson Whamond. The size of the Mellon Facility meant that the transaction was a related party transaction under the AIM Rules. A summary of the terms of the Mellon Facility are set out below:
· £1.9 million facility made available (no fees or set-off or contribution to costs)
· D rawn down at the request of the Company (subject to agreed use of proceeds with Galloway Limited)
· 6-month availability and repayment term
· Unsecured
· Nil interest
· Accelerated repayment if Company completes a debt or equity fundraising realising gross proceeds of greater than £2 million
· Standard events of default and warranties from both parties
This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.
For further information, please contact:
|
Agronomics Limited |
Beaumont Cornish Limited
|
Zeus Capital |
Peterhouse Capital |
|
The Company
|
Nomad |
Joint Broker |
Joint Broker |
|
Richard Reed Denham Eke
|
Roland Cornish James Biddle
|
Rupert Woolfenden Jamie Peel Daniel Harris
|
Lucy Williams
|
|
+44 (0) 1624 639396 |
+44 (0) 207 628 3396 |
+44 (0) 20 3829 5000 |
+44 (0) 207 469 0936
|
Important Notices
This announcement contains 'forward-looking statements' concerning the Company that are subject to risks and uncertainties. Generally, the words 'will', 'may', 'should', 'continue', 'believes', 'targets', 'plans', 'expects', 'aims', 'intends', 'anticipates' or similar expressions or negatives thereof identify forward-looking statements. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. Many of these risks and uncertainties relate to factors that are beyond the Company's ability to control or estimate precisely. The Company cannot give any assurance that such forward-looking statements will prove to have been correct. The reader is cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this announcement. The Company does not undertake any obligation to update or revise publicly any of the forward-looking statements set out herein, whether as a result of new information, future events or otherwise, except to the extent legally required.
Nothing contained herein shall be deemed to be a forecast, projection or estimate of the future financial performance of the Company or any other person.
The price of shares and the income from them may go down as well as up and investors may not get back the full amount invested on disposal of the shares. Past performance is no guide to future performance and persons who require advice should consult an independent financial adviser.
This announcement is not for publication or distribution, directly or indirectly, in or into the United States of America. This announcement is not an offer of securities for sale into the United States. The securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, except pursuant to an exemption from registration. No public offering of securities is being made in the United States.
The distribution of this announcement may be restricted by law. No action has been taken by the Company, Zeus Capital Limited, Peterhouse Corporate Finance Limited or Beaumont Cornish Limited that would permit distribution of this announcement or any other offering or publicity material relating to such shares in any jurisdiction where action for that purpose is required. Persons into whose possession this announcement comes are required by the Company, Zeus Capital Limited, Peterhouse Corporate Finance Limited and Beaumont Cornish Limited to inform themselves about, and to observe, any such restrictions.
This announcement is not for release, publication or distribution, in whole or in part, directly or indirectly, in or into Australia, Canada, Japan or the Republic of South Africa or any jurisdiction into which the publication or distribution would be unlawful. This announcement is for information purposes only and does not constitute an offer to sell or issue or the solicitation of an offer to buy or acquire shares in the capital of the Company in the United States, Australia, Canada, the Republic of South Africa or Japan or any jurisdiction in which such offer or solicitation would be unlawful or require preparation of any prospectus or other offer documentation or would be unlawful prior to registration, exemption from registration or qualification under the securities laws of any such jurisdiction.
This announcement has been issued by, and is the sole responsibility of, the Company. No representation or warranty, express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by Zeus Capital Limited, Peterhouse Corporate Finance Limited or Beaumont Cornish Limited or by any of their respective affiliates or agents as to or in relation to, the accuracy or completeness of this announcement or any other written or oral information made available to or publicly available to any interested party or its advisers, and any liability therefore is expressly disclaimed.
THE CONTENT OF THIS ANNOUNCEMENT HAS NOT BEEN APPROVED BY AN AUTHORISED PERSON WITHIN THE MEANING OF THE FINANCIAL SERVICES AND MARKETS ACT 2000. RELIANCE ON THIS ANNOUNCEMENT FOR THE PURPOSE OF ENGAGING IN ANY INVESTMENT ACTIVITY MAY EXPOSE AN INDIVIDUAL TO A SIGNIFICANT RISK OF LOSING ALL OF THE PROPERTY OR OTHER ASSETS INVESTED.
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