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 agreed a new secured £1.0 million loan facility with Arena Investors LP in order to provide sufficient time for the Company and a potential new equity investor to complete a proposed initial equity investment of £2.5 million.
Funds under the Facility will be made available to the Group in two equal tranches of £0.5 million each, the first of which will be drawn down within two business days. The second tranche will be available to be drawn down upon mutual written consent between Arena and the Company. The Facility, which bears no interest but is fully secured over the assets of the Company, is repayable in full at 110 percent of the total amount drawndown on the earlier of: (a) the completion of the Proposed Subscription; or (b) the date falling three months following entry into the Facility.
In addition to providing this Facility, Arena has agreed to relinquish the conversion rights attaching to its pre-existing convertible bond facility (the “CBF”), announced on 17 October 2022, of which £4.0 million has been drawn down to date, with £3.75 million outstanding. The Company and Arena are due to formalise an agreement to repay amounts drawn down under the CBF as to £1.0 million on the first anniversary of the bridge loan agreement, subject to available funds, with the balance due on the second anniversary. In consideration for this amendment, the Company and Arena will enter into documentation granting Arena warrants to subscribe for 2 percent of the share capital of the Company as enlarged by the Initial Recapitalisation Plan at a 100 percent premium to the issue price thereunder. The warrants will become exercisable 12 months following the subscription under the Initial Recapitalisation Plan with a duration of 24 months from issue. Additionally, the Company has granted Arena security over the Company’s assets for the full loan.
The Equity Investor has conditionally proposed to subscribe £2.5 million, at an indicative price, subject to due diligence and certain other conditions, of 1.7 pence per share for 147,058,823 new ordinary shares of 0.5p each in the capital of the Company, which would result in the Equity Investor holding 80 percent of the issued share capital of the Company, as enlarged by such subscription. The Proposed Subscription of £2.5 million will, if completed, provide the Company with sufficient financial resources to the end of September 2023. However the Equity Investor has indicated that, following its Proposed Subscription and at its own discretion, it intends to implement a financial solution for the Group, including providing for future funding requirements. The Equity Investor would also have the sole discretion to allow the investment in the Company under the terms of the Initial Recapitalisation Plan to be extended to other investors. The Company notes that the terms and quantum of the Initial Recapitalisation Plan and any funding beyond has yet to be agreed and remains uncertain at this stage.
At this stage, discussions on the Initial Recapitalisation Plan remain at an early stage and there can be no certainty that these discussions will be successfully concluded, nor the terms or timing thereof. The Initial Recapitalisation Plan would be subject to, amongst other things: (i) the Equity Investor satisfactorily concluding its internal procedures and due diligence; (ii) the Takeover Panel agreeing to waive the obligation under Rule 9 of the City Code on Takeovers and Mergers to make a mandatory offer for the entire issued share capital of the Company, subject to the approval of the independent shareholders; (iii) the Investment Security Unit of the Department for Business, Energy and Industrial Strategy approving the Proposed Subscription in accordance with the terms of the National Security and Investment Act 2021; and (iv) the Company obtaining the necessary shareholder authorities at a general meeting of shareholders of the Company to issue the Subscription Shares.
Further announcements will be made in due course.
Alan Hollis, CEO at AMTE Power, said:
“I am very pleased to announce the bridging loan to be provided by Arena, which buys AMTE Power the time and financial resources to allow the Equity Investor to complete its due diligence and internal procedures ahead of some much needed further investment in the business.”