AMTE Power placing proposed retail offer

AMTE Power Plc (LON:AMTE), a leading developer and manufacturer of lithium-ion and sodium-ion battery cells for specialist markets, has announced that it has conditionally placed 124,476,380 new ordinary shares of 0.5 pence each in the capital of the Company at a price of 1.7 pence per Placing Share to raise approximately £2.1 million (before expenses).

Furthermore, to enable existing shareholders of the Company to participate in the equity fundraising, the Company is proposing to raise up to a further £0.25 million (before expenses) by way of a retail offer to be made to existing Shareholders of up to 14,705,880 new Ordinary Shares at the Issue Price via the Bookbuild Platform.  The Retail Offer will be launched following Conditional Admission (as defined below) becoming effective. A separate announcement will be made in due course regarding the Retail Offer and its terms. For the avoidance of doubt, the Retail Offer is not part of the Placing.

WH Ireland Limited is acting as nominated adviser, joint bookrunner and joint broker  in connection with the Placing. SI Capital Limited is acting as joint bookrunner and joint broker in connection with the Placing.

The Initial Recapitalisation Plan

Further to the announcement of the Initial Recapitalisation Plan on 25 July 2023, the net proceeds of the Placing will be used to provide further time for the Company and the potential new equity investor.

During the course of its due diligence, the Potential Equity Investor has advised that it can, where suitable, introduce companies in which it has an equity interest to AMTE Power with the view to generating offtake agreements for sodium-ion battery cells. It would also provide similar introductions to other companies with which it has strategic relationships, where battery technology is currently being deployed at large scale in various industries, for example in renewable energy.

Given the potential for revenue growth that, in the Directors’ view, can be realised through these arrangements, AMTE Power intends to issue the Potential Equity Investor with compensatory warrants in recognition of the value of such offtake agreements. If required, shareholder approval for the issue of any such warrants will be sought in due course.

The board of directors of the Company has been informed by the Potential Equity Investor that its due diligence is progressing; that significant strategic work has been undertaken; that further confirmatory and technical due diligence is its current focus; and that this work is now anticipated to complete by the end of October 2023.

Arena Loan

The Company has, to date, drawn £0.5 million under the loan facility announced in the Previous Announcement (the “Arena Loan”) with the remaining balance of £0.5 million available for drawdown upon agreement between Arena Investors LP (“Arena”) and AMTE Power.

Pursuant to the terms of the Arena Loan, AMTE Power shall be obliged to repay Arena an amount equal to 50 per cent. of the amount which the aggregate net proceeds of the Placing and the Retail Offer received by AMTE Power exceeds £1.5 million, up to a maximum repayment amount of £0.6 million, based on the amount currently drawn.

The Placing

The Placing will be conducted in two tranches, with the first tranche (the “Firm Placing”) of 11,879,770 Placing Shares (the “Firm Placing Shares”) being issued and allotted under AMTE Power’s existing shareholder authorities and the second tranche (the “Conditional Placing”) of 112,596,610 Placing Shares (the “Conditional Placing Shares”) being issued and allotted subject, among other things, to the necessary resolutions (the “Resolutions”) required to implement the Conditional Placing being duly passed by Shareholders at a general meeting of shareholders which is proposed to be held at Scotland House, 58 Victoria Embankment, London EC4Y 0DS at 10.00 a.m. on 25 September 2023 (the “General Meeting”). 

Application has been made to the London Stock Exchange for the admission of the Firm Placing Shares to trading on the AIM market. It is anticipated that Firm Admission will take place on or before 8.00 a.m. on 11 September 2023.  Application will be made to the London Stock Exchange for the admission of the Conditional Placing Shares to trading on the AIM market and Conditional Admission will take place, subject to the passing of the Resolutions, on or before 8.00 a.m. on 26 September 2023.

The Issue Price represents a discount of approximately 81.62% per cent. to the closing middle market price of 9.25 pence per Ordinary Share on 7 September 2023, being the latest practicable date prior to the publication of this announcement.

Following Firm Admission, the Company will have 48,312,070 Ordinary Shares in issue and, following Conditional Admission, the Company will have 160,908,680 Ordinary Shares in issue. The Placing Shares, assuming Conditional Admission occurs, will represent approximately 77.4 per cent. of the current issued share capital as enlarged by the Placing, and will be issued fully paid and will rank pari passu in all respects with the Company’s existing Ordinary Shares, including the right to receive all dividends and other distributions declared, made or paid after the date of issue.

Assuming Conditional Admission occurs, the proceeds of the Placing, net of expenses, will provide the Company with working capital until early November 2023.

The Company will make a further announcement in due course with respect to the publication of the circular, containing further details of the Placing and convening the General Meeting (the “Circular”). Such announcement will also set out the expected timetable for the Conditional Placing. Once published, the Circular will also be made available on the Company’s website at www.amtepower.com.

Importance of the vote

If the resolutions are not approved by Shareholders at the General Meeting, the Conditional Placing and the Retail Offer would not proceed as currently envisaged and, as such, the anticipated net proceeds of the Conditional Placing and the Retail Offer would not become available to AMTE Power. Accordingly, in light of the Group’s reducing cash position, it would be likely that AMTE Power would not be able to meet its financial obligations as they fall due and there would be no alterative other than for the Group to enter into administration or some other form of insolvency procedure under which the prospects for recovery of value, if any, by Shareholders would be uncertain.

The Retail Offer

The Company values its Shareholder base and believes that it is appropriate to provide its eligible existing retail Shareholders in the United Kingdom the opportunity to participate in the Retail Offer.

To enable other existing Shareholders not able to participate in the Placing, an opportunity to subscribe for additional Ordinary Shares and to mitigate an element of dilution, the Company is proposing to raise up to an additional £0.25 million (before expenses) by way of the Retail Offer following the close of the Company’s General Meeting.

The Company shall make a further announcement shortly after Conditional Admission becoming effective containing further information on how existing Shareholders can participate in the Retail Offer. The Retail Offer may not be fully subscribed.

Alan Hollis, Chief Executive Officer at AMTE Power, said:

We are very pleased to have the support of existing and new shareholders as we look to put in place the Initial Recapitalisation Plan and progress towards restoring the Group’s financial foundations. I am particularly excited to be working with a potential investor who can truly support the strategic growth and development of the business.”

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