TIDMMWG
RNS Number : 8522A
Modern Water PLC
24 January 2020
THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS
RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN
WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM THE
UNITED STATES, AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF SOUTH
AFRICA OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION
OR DISTRIBUTION WOULD BE UNLAWFUL. THIS ANNOUNCEMENT IS NOT AN
OFFER OF SECURITIES FOR SALE IN THE UNITED STATES. THE SECURITIES
DISCUSSED HEREIN HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
US SECURITIES ACT OF 1933, AS AMED (THE "US SECURITIES ACT") AND
MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES ABSENT REGISTRATION
OR AN EXEMPTION FROM REGISTRATION UNDER THE US SECURITIES ACT.
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) No 596/2014 (MAR). Upon the
publication of this announcement via a regulatory information
service, this information is considered to be in the public
domain.
For immediate release
24 January 2020
Modern Water plc
Oversubscribed GBP1.85 million Conditional Placing of
370,000,000 new Ordinary Shares at a price of 0.5 pence per
share
Proposed Board Changes
Notice of General Meeting
Modern Water plc (AIM: MWG), the pioneering and innovative
technology company, specialising in membrane water treatment
solutions and advanced monitoring products, announces that it has
conditionally raised GBP1.85 million, before expenses, by way of an
oversubscribed placing (the Placing) of 370,000,000 new Ordinary
Shares (the Placing Shares) at a price of 0.5 pence per share
(Placing Price). The Placing is subject, inter alia, to approval by
Shareholders at a General Meeting.
Highlights:
-- The net proceeds of the Placing, amounting to approximately
GBP1.68 million, will be used for working capital purposes and to
repay Group debts.
-- The Placing Price represents a discount of approximately 60
per cent to the closing mid-market price of Modern Water's existing
Ordinary Shares of 1.25 pence on 23 January 2020.
-- The Placing Shares represent approximately 297 per cent of
the Company's existing issued voting share capital.
-- Turner Pope Investments (TPI) Limited (TPI), the Company's
broker, has introduced new cornerstone investors and arranged the
Placing, which was significantly over subscribed. In addition to a
cash commission, TPI will receive 2,000,000 Ordinary Shares at the
Placing Price (Placing Fee Shares) for its services and will also
be granted 92,500,000 non-transferable subscription warrants
(Broker Warrants) exercisable at 0.5 pence per Ordinary Share
during the three-year period following Admission.
-- Subject to completion of the Placing and the satisfactory
completion of regulatory due diligence checks, Gerard Brandon will
join the Board as Non-Executive Chairman and Nigel Burton will join
the Board as a Non-Executive Director, at which time Michael
Townend and Piers Clark will step down from the Board.
-- Further to the RNS announcement of 30 August 2019 the sale of
the Company's Monitoring Division is now halted and, subject to a
review by the new Board and management on completion, may play a
pivotal role in an amended business model.
The Placing is subject to the passing (without amendment) of
each of the Resolutions at a General Meeting of the Company which
it is expected will be convened for 10.00 a.m. on 14 February 2020
at the offices of the Company's legal advisers Michelmores LLP at
12(th) Floor, 6 New Street Square, London EC4A 3BF. Provided that
the Resolutions are passed and the Placing has otherwise become
unconditional, completion of the Placing and Admission of the
Placing Shares is expected to take place on 17 February 2020.
Simon Humphrey, Modern Water's CEO, commented:
"We are delighted to receive substantial support from a number
of new and existing investors introduced by TPI. The net funds from
the Placing will allow us to address all of our outstanding
liabilities, provide working capital to alter the business model to
drive increased revenues by collaborations and revenue sharing
opportunities that build and extend our existing sales, marketing
and distribution channels."
A Circular and a Notice of General Meeting will be posted to
Shareholders shortly and will then be available on Modern Water's
website, www.modernwater.com.
Contacts:
Modern Water plc +44 (0)20 3827 3439
Simon Humphrey, Chief Executive
Cairn Financial Advisers LLP (Nominated
Adviser) +44 (0)20 7213 0880
Sandy Jamieson/Tony Rawlinson
Ludovico Lazzaretti
Turner Pope Investments (TPI) Limited
(Broker and placing agent) +44 (0)20 3657 0050
Andy Thacker / Zoe Alexander
Notes to editors:
Modern Water is a pioneering and innovative technology company,
specialising in membrane water treatment solutions and advanced
monitoring products. The Company works for customers in a range of
industries across the globe and owns proprietary technologies for
use in a diverse range of applications. Modern Water's Monitoring
Division has a portfolio of world-leading toxicity and trace metal
monitoring products, some of which constitute the regulatory
standard. The headline technology of the Company's Membrane
Division, called "AMBC", can be used to tackle complex wastewater
treatment problems at a reduced cost compared to standard
processes, while being simple to operate.
Important notice
Neither the contents of the Company's website nor the contents
of any website accessible from hyperlinks on the Company's website
(or any other website) is incorporated into, or forms part of, this
announcement.
This announcement does not constitute, or form part of, a
prospectus relating to the Company, nor does it constitute or
contain any invitation or offer to any person, or any public offer,
to subscribe for, purchase or otherwise acquire any shares in the
Company or advise persons to do so in any jurisdiction, nor shall
it, or any part of it form the basis of or be relied on in
connection with any contract or as an inducement to enter into any
contract or commitment with the Company.
The content of this announcement has not been approved by an
authorised person within the meaning of the Financial Services and
Markets Act 2000 (FSMA). This announcement has been issued by and
is the sole responsibility of the Company. The information in this
announcement is subject to change.
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,
as amended (the Securities Act), and may not be offered or sold,
directly or indirectly, in or into the United States, except
pursuant to an applicable exemption from registration. No public
offering of securities is being made in the United States. This
announcement is not for release, publication or distribution,
directly or indirectly, in or into the United States, Australia,
Canada, the Republic of South Africa, Japan or any jurisdiction
where to do so might constitute a violation of local securities
laws or regulations (a Prohibited Jurisdiction). This announcement
and the information contained herein are not for release,
publication or distribution, directly or indirectly, to persons in
a Prohibited Jurisdiction unless permitted pursuant to an exemption
under the relevant local law or regulation in any such
jurisdiction.
Cairn Financial Advisers LLP (Cairn) is authorised and regulated
by the Financial Conduct Authority in the United Kingdom. Cairn is
acting solely as nominated adviser exclusively for the Company and
no one else in connection with the contents of this announcement
and will not regard any other person (whether or not a recipient of
this announcement) as its client in relation to the contents of
this announcement nor will it be responsible to anyone other than
the Company for providing the protections afforded to its clients
or for providing advice in relation to the contents of this
announcement. Apart from the responsibilities and liabilities, if
any, which may be imposed on Cairn by FSMA or the regulatory regime
established thereunder, Cairn accepts no responsibility whatsoever,
and makes no representation or warranty, express or implied, for
the contents of this announcement including its accuracy,
completeness or verification or for any other statement made or
purported to be made by it, or on behalf of it, the Company or any
other person, in connection with the Company and the contents of
this announcement, whether as to the past or the future. Cairn
accordingly disclaims all and any liability whatsoever, whether
arising in tort, contract or otherwise (save as referred to above),
which it might otherwise have in respect of the contents of this
announcement or any such statement.
Turner Pope Investments (TPI) Limited (TPI) is authorised and
regulated by the Financial Conduct Authority in the United Kingdom.
TPI is acting solely as the Company's broker and placing agent
exclusively for the Company and no one else in connection with the
contents of this announcement and will not regard any other person
(whether or not a recipient of this announcement) as its client in
relation to the contents of this announcement nor will it be
responsible to anyone other than the Company for providing the
protections afforded to its clients or for providing advice in
relation to the contents of this announcement. Apart from the
responsibilities and liabilities, if any, which may be imposed on
TPI by FSMA or the regulatory regime established thereunder, TPI
accepts no responsibility whatsoever, and makes no representation
or warranty, express or implied, for the contents of this
announcement including its accuracy, completeness or verification
or for any other statement made or purported to be made by it, or
on behalf of it, the Company or any other person, in connection
with the Company and the
contents of this announcement, whether as to the past or the
future. TPI accordingly disclaims all and any liability whatsoever,
whether arising in tort, contract or otherwise (save as referred to
above), which it might otherwise have in respect of the contents of
this announcement or any such statement.
Forward-looking Statements
This announcement includes "forward-looking statements" which
include all statements other than statements of historical facts,
including, without limitation, those regarding the Company's
business strategy, plans and objectives of management for future
operations, or any statements proceeded by, followed by or that
include the words "targets", "believes", "expects", "aims",
"intends", "will", "may", "anticipates", "would", "could" or
similar expressions or negatives thereof. Such forward-looking
statements involve known and unknown risks, uncertainties and other
important factors beyond the Company's control that could cause the
actual results, performance or achievements of the Company to be
materially different from future results, performance or
achievements expressed or implied by such forward-looking
statements. Such forward-looking statements are based on numerous
assumptions regarding the Company's present and future business
strategies and the environment in which the Company will operate in
the future. No undue reliance should be placed upon forward-looking
statements. These forward looking statements speak only as at the
date of this announcement. The Company expressly disclaims any
obligation or undertaking to disseminate any updates or revisions
to any forward-looking statements contained herein to reflect any
change in the Company's expectations with regard thereto or any
change in events, conditions or circumstances on which any such
statements are based, unless required to do so by applicable law or
the AIM Rules for Companies.
Conditional Placing of 370,000,000 new Ordinary Shares at a
price of 0.5 pence per share
Proposed Board Changes
Notice of General Meeting
1. Introduction
The Company announced today the conditional placing by Turner
Pope Investments (TPI) Limited of 370,000,000 new Ordinary Shares
at 0.5 pence per share to raise an aggregate GBP1.85 million
(before expenses). The net proceeds of the Placing, amounting to
approximately GBP1.68 million, will be used for working capital
purposes and to repay Group debt.
The Placing is conditional on, inter alia, the passing of the
Resolutions at the General Meeting and Admission. It is expected
that, subject to passing the Resolutions, the Placing Shares will
be admitted to trading on AIM on 17 February 2020.
The Placing Price represents a discount of 60 per cent. to the
closing mid-market price of 1.25 pence per Ordinary Share on 23
January 2020 (being the last practical date prior to the
announcement of the Placing).
2. Use of proceeds of the Placing
The proceeds of the Placing will strengthen the Company's
balance sheet and provide working capital to support growth of the
Company's patented Membrane technologies and its innovative
Monitoring products globally.
3. Current Trading and Prospects
Despite the Company's recent working capital shortfall, that
will be resolved in the short-term through the Placing, Modern
Water has continued to make progress in its two Divisions. As
announced on 25 November 2019, the Membrane Division was awarded an
innovative project in South Korea (Project) through its Chinese
partner, Hangzhou Shangtuo Environmental Technology Co. Ltd. In the
Project, salt is produced by concentrating deep seawater and is
further proof of the wide-ranging applications for the Company's
patented All-Membrane Brine Concentrator technology (AMBC).
As announced on 23 December 2019, the Company signed a
collaboration agreement with Ion Exchange (India) Ltd (Ion) to
integrate Modern Water's AMBC technology and forward osmosis
technology into Ion's projects across India, Oman, the United Arab
Emirates and Saudi Arabia, significantly increasing the
geographical scope of opportunities for deploying the Company's
technologies and supporting the continued growth of its project
pipeline.
Also announced on 23 December 2019 was the Company's
largest-ever single order for its Microtox(R) CTM to a customer in
China. The total value of the order was US$335,000. Microtox(R) CTM
is a site-based, broad range monitor which continuously measures
the chemical toxicity of a water source, providing an instant
indication of water health. Such equipment will be used for new
hydrological and water treatment stations in Shanghai.
In light of the Placing, negotiations over the potential sale of
the Company's Monitoring Division to be halted pending the outcome
of a review by the Directors following the changes in the Board's
composition detailed in paragraph 7 below.
The Group has also taken action to significantly reduce overhead
costs across the whole business. The results of the cost reductions
will be reflected in the Company's financial results for the year
ending 31 December 2019.
4. Details of the Placing
The Company is proposing to raise, in aggregate, GBP1.85 million
(before expenses) by means of the Placing. The Placing Shares will
represent approximately 297 per cent. of the Existing Ordinary
Shares and 74 per cent. of the Enlarged Issued Share Capital. The
aggregate net proceeds after costs related to the Placing are
expected to be approximately GBP1.68 million. The Placing Shares
shall, when issued, rank in full for any dividend or other
distribution declared, made or paid after Admission and otherwise
equally in all respects with the Existing Ordinary Shares.
Application will be made to London Stock Exchange for the
Placing Shares to be admitted to trading on AIM and, subject to the
passing of the Resolutions, it is anticipated that trading in the
Placing Shares will commence on AIM at 8.00 a.m. on 17 February
2020.
The Placing Shares have been conditionally placed by TPI, as
placing agent for the Company, with institutional and other
investors in accordance with the terms of the Placing Agreement.
The Placing is not underwritten.
The Placing is conditional upon, amongst other things:
i. each of the Resolutions being passed at the General Meeting;
ii. the Placing Agreement not having terminated; and
iii. Admission becoming effective by no later than 8.00 a.m. on
17 February 2020 or such later date as the Company and TPI may
agree.
5. The Placing Agreement
Pursuant to the terms of the Placing Agreement, TPI, as placing
agent for the Company, has agreed to use its reasonable endeavours
to procure subscribers for the Placing Shares at the Placing Price.
The Placing Agreement contains customary warranties and indemnities
given by the Company in favour of TPI.
In addition to the conditions referred to above, the Placing
Agreement is conditional upon, among other things, none of the
warranties or undertakings given to TPI prior to Admission being or
becoming untrue, inaccurate or misleading in any material
respect.
TPI has the right to terminate the Placing Agreement in certain
circumstances prior to Admission, in particular, in the event of a
material breach of the warranties, a material adverse change in the
financial position or prospects of the Group taken as a whole or if
the Placing Agreement does not become unconditional.
In consideration of its role as the Company's placing agent, TPI
will receive a cash commission equal to 7 per cent. of the gross
aggregate value of the funds raised from investors in the Placing;
92,500,000 non-transferable subscription warrants exercisable at
0.5 pence per share (Broker Warrants) during the period of 3 years
following Admission (equivalent to 25 per cent. of the gross
aggregate value of the funds raised from investors in the Placing)
and the Placing Fee Shares.
6. Effect of the Placing
Upon Admission, the Enlarged Issued Share Capital is expected to
be 502,693,214 Ordinary Shares. On this basis, the Placing Shares
will represent approximately 297 per cent. of the Company's
Existing Ordinary Shares and 73.6 per cent. of the Enlarged Issued
Share Capital. The Existing Shares will represent 24.8 per cent. of
the Enlarged Issued Share Capital
7. Prospective Board Changes
Conditional on the approval of the Resolutions at the General
Meeting and completion of the proposed Placing and subject to and
following approval to proceed from the Company's Nominated Adviser,
it is intended that Gerard Brandon will join the Board as Chairman
and non-executive director and Dr. Nigel Burton will join the Board
as an additional non-executive director at which time the current
non-executive directors Michael Townend and Piers Clark will step
down from the Board.
Gerard Brandon has agreed to receive payment for his director's
fees due in the first 2 years of his office in the form of Ordinary
Shares at the Placing Price.
Gerard Brandon
Gerard Brandon is Chief Executive Officer of both Integumen plc
and Cellulac plc. In 1996 he became founder and CEO of Alltracel
Pharmaceuticals PLC, where he built a team that oversaw numerous
patents granted on refined cellulose. Alltracel Pharmaceuticals PLC
was admitted to trading on AIM in 2001. In 2004, he was appointed
as a Managing Partner for Farmabrand Private Equity. In 2009, he
was appointed as an Executive Consultant to Eplixo Limited. He is a
Fellow of the Ryan Academy of Entrepreneurs in Dublin.
Dr. Nigel Burton
Following over 14 years as an investment banker at leading City
institutions including UBS Warburg and Deutsche Bank, including as
the Managing Director responsible for the energy and utilities
industries, Nigel spent 15 years as Chief Financial Officer or
Chief Executive Officer of a number of private and public
companies. Nigel is currently a Non-Executive Director of AIM
quoted companies Remote Monitored Systems plc, Digitalbox plc,
Regency Mines plc, eEnergy Group plc and Mobile Streams plc.
Each of the proposed new directors has agreed to participate in
the Placing. Gerard Brandon has agreed to subscribe for 10,000,000
Placing Shares and Nigel Burton has agreed to subscribe for
4,000,000 Placing Shares.
8. Shareholder Circular and General Meeting
A circular to Shareholders is expected to be posted to
Shareholders on or before 29 January 2020 giving notice of the
General Meeting of the Company to be held at the Company's
registered office (being the offices of the Company's legal
advisers Michelmores LLP) at 12(th) Floor, 6 New Street Square
London EC4A 3BF on 14 February 2020 at 10.00 a.m. The notice will
contain the Resolutions that are to be proposed at the General
Meeting to authorise the Directors to:
-- allot the Placing Shares;
-- allot the Placing Fee Shares;
-- allot to TPI a further 6,000,000 new Ordinary Shares at the
Placing Price in satisfaction of the Company's annual retainer fee
for the twelve month period from 28 February 2020 of GBP30,000
(exclusive of VAT) (Retainer Fee Shares);
-- grant the Broker Warrants;
-- disapply Shareholders' pre-emption rights under the Companies
Act 2006 in respect of the Placing Shares, the Placing Fee Shares,
the Retainer Fee Shares and the grant of the subscription rights
under the Broker Warrants; and
-- generally allot additional Ordinary Shares or rights over
Ordinary Shares equal to 20 per cent of the Enlarged Issued Share
Capital on a non pre-emptive basis. The Board have no present
intention of exercising this additional authority.
The Placing is conditional, inter alia, on the passing of each
of the Resolutions. Once published, a copy of the circular will be
available on the Company's website www.modernwater.com.
PLACING STATISTICS
Issue Price 0.5 pence
Number of Existing Ordinary Shares
as at the date of this announcement 124,693,214
Number of Placing Shares 370,000,000
Number of Placing Fee Shares 2,000,000
Number of Retainer Fee Shares 6,000,000
Enlarged Issued Share Capital 502,693,214
Broker Warrants 92,500,000
Placing Shares as a percentage of 296.7 per cent.
the Existing Issued Share Capital
Placing Shares as a percentage of 73.6 per cent.
the Enlarged Issued Share Capital
Gross proceeds of the Placing GBP1.85 million
Net proceeds of the Placing Approximately GBP1.68
million
ISIN GB00B1XF5X66
SEDOL B1XF5X6
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
Publication and Posting of the Circular 29 January 2020
and Form of Proxy
Latest time and date for receipt 10.00 a.m. on 12 February
of Forms of Proxy 2020
General Meeting 10.00 a.m. on 14 February
2020
Results of the General Meeting announced 14 February 2020
Admission and dealings in the Placing 17 February 2020
Shares expected to commence on AIM
Where applicable, expected date 17 February 2020
for CREST accounts to be credited
in respect of Placing Shares in
uncertificated form
Where applicable, expected date By 24 February 2020
for despatch of definitive share
certificates for Placing Shares
in certificated form
Notes:
1. Each of the above times and/or dates is subject to change at
the absolute discretion of the Company, Cairn and TPI. If any of
the above times and/or dates should change, the revised times
and/or dates will be announced through a Regulatory Information
Service.
2. All of the above times refer to London time unless otherwise stated.
3. All events listed in the above timetable following the
General Meeting are conditional on the passing of each of the
Resolutions at the General Meeting.
DEFINITIONS
The following definitions apply throughout this announcement
unless the context otherwise requires:
Admission the admission of the Placing Shares to
trading on AIM becoming effective in
accordance with the AIM Rules
AIM the market of that name operated by London
Stock Exchange
AIM Rules the AIM Rules for Companies, published
by London Stock Exchange
Articles the articles of association of the Company
Board the board of directors of the Company
Circular the circular to be posted to Shareholders
on or before 29 January 2020 containing
the notice of General Meeting
Company or Modern Water Modern Water plc
CREST the relevant system (as defined in the
Uncertificated Securities Regulations
2001) for the paperless settlement of
trades and the holding of uncertificated
securities operated by Euroclear UK &
Ireland Limited
CREST Regulations the Uncertificated Securities Regulations
2001 (S.I. 2001 No. 3755)
Directors the directors of the Company
Enlarged Issued Share all of the Ordinary Shares in issue on
Capital Admission inclusive of the Placing Shares,
the Placing Fee Shares and the Retainer
Fee Shares
Existing Issued Share the 124,693,214 existing Ordinary Shares
Capital or Existing in issue at the date of this announcement
Ordinary Shares
Euroclear Euroclear UK & Ireland Limited, the operator
of CREST
Existing Ordinary Shares the 124,693,214 existing Ordinary Shares
in issue at the date of this announcement
FCA the Financial Conduct Authority
Form of Proxy the form of proxy for use by Shareholders
in connection with the General Meeting
FSMA the Financial Services and Markets Act
2000
General Meeting the general meeting of the Company intended
to be convened for 10.00 a.m. on or around
14 February 2020 or at any adjournment
thereof, notice of which is set out at
the end of the Circular
Group the group comprising the Company and
its subsidiary undertakings
London Stock Exchange London Stock Exchange plc
Money Laundering Regulations the Money Laundering, Terrorist Financing
and Transfer of Funds (Information on
the Payer) Regulations 2017, the money
laundering provisions of the Criminal
Justice Act 1993 and the Proceeds of
Crime Act 2002
Ordinary Shares the ordinary shares of 0.25 pence each
in the capital of the Company
Placees subscribers for the Placing Shares
Placing Agreement the conditional placing agreement entered
into between the Company and TPI on 24
January 2020
Placing Price 0.5 pence per Placing Share
Placing Shares 370,000,000 new Ordinary Shares
Registrar Neville Registrars Limited, Neville House,
Steelpark Road, Halesowen B62 8HD
Regulatory Information a service approved by the FCA for the
Service distribution to the public of regulatory
announcements and included within the
list maintained on the FCA's website
Resolutions the resolutions to be set out in the
notice of General Meeting which is set
out at the end of the Circular
Shareholders holders of Existing Ordinary Shares
TPI Turner Pope Investments (TPI) Limited
UK the United Kingdom of Great Britain and
Northern Ireland
US or United States the United States of America, each State
thereof, its territories and possessions
(including the District of Columbia)
and all other areas subject to its jurisdiction
uncertificated or in an Ordinary Share recorded on a company's
uncertificated form share register as being held in uncertificated
form in CREST and title to which, by
virtue of the CREST Regulations, may
be transferred by means of CREST
GBP, pounds sterling, are references to the lawful currency
pence or p of the United Kingdom
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
MSCVZLBLBFLXBBZ
(END) Dow Jones Newswires
January 24, 2020 03:36 ET (08:36 GMT)
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