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Active Energy Update

  Download PDF - 1st February 2021

Alpha Prospects Limited
("Alpha" or the "Company")

Proposed Fundraising, Convertible Loan Note Restructuring and Board changes

Alpha Prospects Limited, the investment management company focussed on companies with fast growth and/or recovery prospects, is pleased to inform shareholders of an update issued by its investee company Active Energy Group Plc ('Active Energy', ‘AEG’, ‘the Company’).

“Active Energy, the London quoted international biomass based renewable energy and forestry management business, is pleased to announce its intention to carry out a non-pre-emptive fundraise (the "Fundraising") through the issue and allotment of a minimum of 600,000,000 new Ordinary Shares to raise minimum gross proceeds for the Company of £6 million at a price of 1.0 pence per new Ordinary Share (the "Issue Price"), as well as a proposed restructuring of the £17.7 million of convertible loan notes previously issued by the Company.

The Fundraising will comprise a placing of a minimum of 600,000,000 new Ordinary Shares (the "Placing Shares") with new and existing shareholders (the "Placing"). In addition, participation in the Fundraising is available to individual investors through PrimaryBid.com (the "PrimaryBid Offer") from 4.35 p.m. on 1 February 2021. Further announcements will be made shortly in connection with this offer.

The Placing Shares are being offered by way of an accelerated bookbuild process (the "Bookbuild"), which will be launched immediately following this announcement. Allenby Capital Limited ("Allenby Capital") will be acting as broker. The Placing is subject to the terms and conditions set out in Appendix II to this announcement (which forms part of this announcement, such announcement and its Appendices together being this "Announcement").

Highlights

  • Fundraising to raise a minimum of £6 million (before expenses) through the issue of a minimum of 600,000,000 new Ordinary Shares at the Issue Price.
  • Certain Directors of the Company have indicated that they intend to acquire in aggregate £20,000 Placing Shares pursuant to the Placing.
  • The net proceeds of the Fundraising will be used, inter alia, to finalise the installation and commissioning of the up to 5tph CoalSwitch™ reference plant and the accelerate the development of the up to 50tph Coalswitch™ production plant.
  • Conditional on completion of the Fundraising, the Company is proposing to restructure the terms of its existing £17.7 million of outstanding convertible loan notes ("CLNs"), which are listed on The International Stock Exchange and are secured by way of a debenture over the entire assets and undertakings of the Company (the "CLN Restructuring").
  • The CLN Restructuring will remove the debenture over the assets and undertakings of the Company and can be undertaken with the consent of at least 50 per cent. of the holders of the CLNs (the "Noteholders") by value. Pursuant to the CLN Restructuring, the conversion price of the 3.295p CLNs will be amended to the Issue Price, such that all CLNs will have a conversion price of 1.0 pence.
  • The Company has received undertakings and confirmations of support agreeing to the CLN Restructuring from Noteholders accounting for more than 95 per cent of the value of the CLNs in issue, including from the largest Noteholders by value.
  • The Company has received, or expects to receive, instructions from Noteholders holding approximately £15.6 million of CLNs to convert their CLN holdings into New Ordinary Shares in the Company at a conversion price of 1.0 pence, subject to the conditions detailed below. This will result in the issue of 1,560,418,800 New Ordinary Shares pursuant to the CLN Conversions (assuming no further conversion notices are received) resulting in substantially all of the Company's current CLN indebtedness being extinguished.


The Issue Price represents a discount of approximately 13.4 per cent. to the closing middle market price of 1.155 pence per Ordinary Share on 29 January 2021, being the latest practicable date prior to the publication of this Announcement.

In connection with the Placing, the Company has today entered into the Placing Agreement pursuant to which Allenby Capital has agreed, in accordance with its terms, to use reasonable endeavours to procure subscribers for the Placing Shares at the Issue Price. The Placing is not being underwritten.

Participation in the Placing is subject to the terms and conditions set out in Appendix II to this announcement. Allenby Capital will commence the Bookbuild immediately following the publication of this Announcement. The number of Placing Shares which are to be placed at the Issue Price will be determined at the close of the Bookbuild. The timing of the closing of the Bookbuild and the allocations are at the absolute discretion of Allenby Capital and the Company. Details of the number of Placing Shares to be placed will be announced as soon as practicable after the close of the Bookbuild.

The Directors value the Company's private investor base and believe that it is appropriate to provide private and other investors with an opportunity to participate in the Fundraising alongside institutional investors. The Company therefore intends to open this opportunity to individual investors through PrimaryBid.com and further announcements will be made shortly in connection with this offer. For the avoidance of doubt, the PrimaryBid Offer is not part of the Placing and is the sole responsibility of the Company. Allenby Capital has no responsibilities, obligations, duties or liabilities (whether arising pursuant to any contract, law, regulation, or tort) in relation to the same.

The Fundraising and the CLN Restructuring are conditional on, inter alia, the passing of the Resolutions to be proposed at a General Meeting which will be convened shortly.

A circular providing further details of the Fundraising and CLN Restructuring and include a notice convening the General Meeting (the "Circular"), are expected to be sent to Shareholders shortly and be available on the Company's website once published.


Board changes

In conjunction with the Fundraising and the CLN Restructuring and AEG's imminent transition to a commercial producer of CoalSwitch™, the Company announces the following board changes with immediate effect.

James Leahy, Non-Executive Director, will assume the role of Non-Executive Chairman of AEG. James is also Chairman of the Company's Remuneration Committee.

Antonio Esposito, Chief Operating Officer, has stepped down from the Board but will continue to work with AEG. In the near term, Antonio will focus on the construction and commissioning of the first CoalSwitch™ reference plant at Lumberton and subsequently on the development of future CoalSwitch™ plants in North America.

These board changes follow on from the recent appointment of Andrew Diamond, who joined the AEG Board on 1 January 2021 as Finance Director, as per the Company's announcement of 23 November 2020.


This Announcement should be read in its entirety. In particular, your attention is drawn to the detailed terms and conditions of the Placing and further information relating to the Placing and any participation in the Placing that is described in Appendix II to this Announcement. Set out in Appendix I is an adapted extract from the draft Circular that is proposed to be sent to Shareholders after the closure of the Bookbuild. This contains further details on the Fundraising and CLN Restructuring. The final Circular and Notice of General Meeting is expected to be sent to Shareholders and published on the Company's website shortly.

The capitalised terms not otherwise defined in the text of this Announcement are defined in Appendix III and the expected timetable of the principal events is set out in Appendix IV.”

www.aegplc.com

The Directors are responsible for the contents of this announcement.

Company website: http://www.alphaprospectsplc.com


Enquiries:

Alpha Prospects
Christopher Foster
+44 (0) 7525 688 741

Lothbury Financial Services
Michael Padley
+44 20 3290 0707

Editors’ Note

About Alpha Prospects

The Company’s strategy is to make investments in companies with fast growth and/or recovery prospects. Typically the companies in which Alpha Prospects will invest are in the small and micro-cap sector and the Company’s interest in its investments is proactive. Currently Alpha has 11 investments.

The Directors are responsible for the contents of this announcement.