Update re. Secured Bonds 2020 and Company Update
Prior to publication, the information contained within this announcement was deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). With the publication of this announcement, this information is now considered to be in the public domain.
Vela Technologies plc
("Vela" or the "Company")
Update re. Secured Bonds 2020
and Company Update
The Board of Vela (AIM: VELA) today provides an update on its £550,000 10% Secured Bonds 2020 (the "Bonds") and an update on the future strategy for the Company.
Key points
· Supported by the Security Trustee and principal Bondholders, Vela has extended the repayment date on the Bonds by 6 months to August 2020
· The Board continues to progress discussions with a view to effecting a corporate transaction, which may result in a substantial investment or an acquisition to utilise Vela as a reverse takeover vehicle
Bond Instrument
In February 2017 the Company completed the issuance of the Bonds to a number of sophisticated and high net worth Bondholders (the "Bondholders") via UK Bond Network, now part of Pello Capital. The Bonds are due for repayment on 17 February 2020. Further details on the terms of the Bonds are set out in the Company's announcement of 17 February 2017.
Certain Bondholders are also existing shareholders in Vela including Kevin Sinclair (a substantial shareholder who subscribed for £100,000 of the Bonds), Scott Fletcher (a substantial shareholder who subscribed for £95,000 of the Bonds) and Antony Laiker (Executive Director of the Company who, as announced on 20 December 2019, inherited £50,000 of the Bonds in December 2019 following a grant of probate) (the "Principal Bondholders").
As at 30 September 2019, the Company had cash balances of £120,000 and investments with a total book value of £2.14 million. As such, the Company is currently only able to repay the outstanding principal on the Bonds in full by liquidating certain of its investments. The Directors do not believe this is in the best interests of the Company.
On 13 February 2020, Jade State Wealth Limited (the "Security Trustee") confirmed, in its capacity as Security Trustee to the Bonds and under the powers granted to it under the terms of the Bonds, that it had no objection to granting an indulgence of six months to Vela on the repayment date, being satisfied that it is in the interests of all parties to grant this period. Other than the repayment date of the Bonds being extended to 17 August 2020 (the "Extended Repayment Date"), all other terms of the Bonds (including Bondholder rights) remain unchanged.
The Bonds continue to be secured by way of a debenture on the Company's assets and by a fixed charge over certain shares held by Vela in Portr Limited, one of the Company's unquoted investee companies. Bondholders will continue to also have the benefit of a personal guarantee that has been given by Scott Fletcher, which guarantees in full the payment obligations of Vela in respect of the Bonds.
The Security Trustee is considered a related party under the AIM Rules for Companies (the "AIM Rules") by virtue of being classified as an associate of the Principal Bondholders. Accordingly, the extension of the repayment date of the Bonds constitutes a related party transaction pursuant to Rule 13 of the AIM Rules. The independent director, being Brent Fitzpatrick, having consulted with the Company's nominated adviser, Allenby Capital Limited, considers the extension of the repayment date of the Bonds to be fair and reasonable insofar as the Company's shareholders are concerned.
Company Update
Further to the Company's previous announcements, most recently in the Company's interim results announced on 20 December 2019, Vela continues to focus on progressing discussions with a view to effecting a corporate transaction, which may result in a substantial investment or an acquisition to utilise Vela as a reverse takeover vehicle. In conjunction with this the Company will continue to actively explore means to repay the Bonds by the Extended Repayment Date.
Further announcements will be made in due course.
For further information, please contact:
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Vela Technologies plc |
Tel: +44 (0) 7802 262 443 |
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Brent Fitzpatrick, Non-Executive Chairman Antony Laiker, Director
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Allenby Capital Limited (Nominated Adviser and Broker) |
Tel: +44 (0) 20 3328 5656 |
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Nick Athanas/Asha Chotai
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About Vela Technologies
Vela Technologies (AIM: VELA) is an investing company focused on early stage and pre-IPO long term disruptive technology investments. There are currently 12 investments in the portfolio which either have developed ways of utilising technology or developing technology with a view to disrupting the businesses or sector in which they operate. More recently, Vela Technologies has also started to focus on existing listed companies where valuations may offer additional opportunities.
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