Up to £11.3m funding for the Company
Agreements have been entered into today to provide the Company with essential finance to meet its need for working capital.
The following definitions apply in this section of this document unless the context requires otherwise:
“AiM”
a market of the London Stock Exchange plc;
“Board”
the board of directors of the Company;
“Directors”
the directors of the Company;
“EPC”
Evolution Placements Corporation;
“EPC Agreement”
the agreement made today between the Company and EPC relating to the EPC Placing;
“EPC Initial Investment”
the subscription for 3,200,000 ordinary shares at a price of 80p per share (that raised a total of £2,560,000 before expenses for the Company) by EPC made on 15 July 2005 pursuant to the EPC Subscription Agreement;
“EPC Placing”
the proposed subscription by EPC for ordinary shares and options to raise £5,440,000 before expenses described in this document;
“EPC Subscription Agreement”
the subscription agreement between EPC and the Company dated 13 July 2005;
“Meditor”
Meditor European Master Fund Limited;
“Meditor Accrued Rights Investment”
the subscription by Meditor for 536,322 ordinary shares at a price of 80p per share (a total consideration of £429,058) to be made on or before 21 October 2005 as described in this document;
“Meditor Agreement”
the agreement made today between the Company and Meditor relating to the Meditor Accrued Rights Investment and the Meditor Placing;
“Meditor Placing”
the proposed subscription by Meditor for ordinary shares and options to raise £1,757,068 before expenses described in this document;
“Meditor Subscription Agreement”
the subscription agreement between the Company and Meditor dated 13 October 2004;
“ordinary shares”
ordinary shares of 5 pence each in the capital of the Company;
“the Placings”
together the EPC Placing, the Meditor Placing and the Yukos Placing (each a "Placing");
“Yukos”
Yukos International UK B.V.;
“Yukos Accrued Rights Investment”
the subscription by Yukos for ordinary shares and options to be made on or before 21 October 2005 to raise a total of £2,149,513 before expenses for the Company described in this document;
“Yukos Agreement”
the agreement made today between the Company and Yukos relating to the Yukos Accrued Rights Investment and the Yukos Placing;
“Yukos Option”
the option in favour of Yukos to subscribe for ordinary shares and options for a total cash consideration of £1,522,599 described in this document;
“Yukos Placing”
the proposed allotment and issue of ordinary shares and grant of options pursuant to the Yukos Option;
“Yukos Shareholders Agreement”
the agreement between, inter alia, Yukos and the Company dated 23 April 2004.
The maximum total funds provided from the investments for the Company would be £11,298,238 before expenses.
Meditor and Yukos have exercised certain anti-dilution rights to acquire ordinary shares and options to subscribe for ordinary shares pursuant to existing agreements which will provide the Company with approximately £2.6 million, before expenses, by 21 October 2005.
In addition the Board has negotiated three conditional placings of ordinary shares and options to raise up to approximately £8.7 million, before expenses. Each of the Placings is conditional upon shareholder approval of the Placings at an extraordinary general meeting which is to be called as soon as possible.
The sources of this finance are existing shareholders EPC, Meditor and Yukos. The details of the agreements follow.
(a) EPC Placing
The Company has entered into an agreement with EPC to raise £5,440,000 before expenses.
The EPC Agreement provides for the subscription by EPC for 6,800,000 ordinary shares at a price of 80p per share and five year options with an exercise price of 80p over 10,000,000 ordinary shares for a total cash consideration of £5,440,000. The agreement replaces the EPC Subscription Agreement which provided, inter alia, for the EPC Initial Investment and for a further investment similar to the EPC Placing. Accordingly, the EPC Agreement is effectively an acceleration of the second element of EPC’s previously agreed investment.
It is a requirement of the EPC Agreement that the proceeds from EPC’s investment shall be used by the Company for the purpose of providing working and development capital for the business of the Company.
Pursuant to the EPC Agreement, EPC will have the right to appoint two Directors until the EPC Placing is completed and thereafter the right to appoint one Director for so long as it holds 10% or more of the fully diluted share capital of the Company (taking account of ordinary shares and rights to subscribe for ordinary shares).
The EPC Agreement terminates the EPC Subscription Agreement with effect from shareholder approval of the Placings being obtained.
(b) Meditor Accrued Rights Investment and Meditor Placing
The Company has entered into an agreement with Meditor to raise £2,186,126 before expenses.
The Meditor Agreement provides for the exercise in full by Meditor of its anti-dilution rights arising under the Meditor Subscription Agreement in respect of the allotment and issue of shares pursuant to the EPC Initial Investment and thus provides for Meditor to subscribe for 536,322 ordinary shares at 80p per share for a total consideration of £429,058. This subscription is to take place on or before 21 October 2005.
The Meditor Agreement goes on to provide for the subscription by Meditor for 2,196,335 ordinary shares and five year options with an exercise price of 80p per share over 3,229,905 ordinary shares for an aggregate cash consideration of £1,757,068 to be made following approval of the Placings by shareholders.
It is a requirement of the Meditor Agreement that the proceeds from Meditor’s investments shall be used by the Company for the purpose of providing working and development capital for the business of the Company.
Pursuant to the Meditor Agreement, Meditor will have the right for so long as it holds 10% or more of the fully diluted share capital of the Company (taking account of ordinary shares and rights to subscribe for ordinary shares) to appoint one Director.
The Meditor Agreement terminates the Meditor Subscription Agreement with effect from shareholder approval of the Placings being obtained save to the extent that it provides for the existing option held by Meditor to subscribe for up to 10,000,000 ordinary shares on or before 13 October 2007.
(c) Yukos Accrued Rights Investment and Yukos Placing
The Company has entered into an agreement with Yukos to raise up to £3,672,112 before expenses.
The Yukos Agreement provides for the exercise in full by Yukos of its anti-dilution rights arising under the Yukos Shareholders Agreement in respect of the allotment and issue of ordinary shares and the grant of options under the initial investment in the Company by Meditor pursuant to the Meditor Subscription Agreement and the allotment and issue of ordinary shares pursuant to the EPC Initial Investment and thus Yukos will subscribe for 2,686,891 ordinary shares and be granted options with an exercise price of 80p per share over 2,985,409 ordinary shares exercisable on or before 13 October 2007 for a total cash consideration of £2,149,513. This subscription and grant of options is to take place on or before 21 October 2005.
The Yukos Agreement also provides for the grant to Yukos of an option relating to its anti-dilution rights under the Yukos Shareholders Agreement regarding the allotment and issue of ordinary shares and grant of options pursuant to the EPC Placing. The Yukos Option grants Yukos the right to subscribe for 1,903,249 ordinary shares and five year options with a strike price of 80p per share over 2,798,896 ordinary shares for a total cash consideration of £1,522,599. The Yukos Option may be exercised before 31 January 2006, and must be exercised by Yukos before 31 January 2006 if before that date the shares in the Company are admitted to AiM or if an offer made for the Company by a listed company or a company whose shares are admitted to AiM has been declared unconditional in all respects. If the Yukos Option is not exercised by that date, it may be exercised before 28 February 2006 by EPC and/or Meditor in equal shares.
It is a requirement of the Yukos Agreement that the proceeds from Yukos’s investments shall be used by the Company for the purpose of providing working and development capital for the business of the Company.
Pursuant to the Yukos Agreement, Yukos will have the right for so long as it holds 10% or more of the fully diluted share capital of the Company (taking account of ordinary shares and rights to subscribe for ordinary shares) to appoint one Director.
The Yukos Agreement terminates the Yukos Shareholders Agreement with effect from shareholder approval of the Placings being obtained.
Enquiries:
Intelligent Energy Holdings plc 020 7958 9033
Mark Lawson-Statham
ARC Associates 020 7614 4000
John Allen/Christopher Graves/Rishi Shah