New Energy One Acquisition Corp. Proposed Amendment of Warrant Instrument (2011K)

TIDMNEOA TIDMNEOW

RNS Number : 2011K

New Energy One Acquisition Corp.

19 December 2022

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, INTO OR WITHIN ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION. ANY FAILURE TO COMPLY WITH THESE RESTRICTIONS MAY CONSTITUTE A VIOLATION OF APPLICABLE SECURITIES LAWS.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION.

FOR IMMEDIATE RELEASE.

19 December 2022

New Energy One Acquisition Corporation Plc

("NEOA" or the "Company")

Proposed Amendment and Restatement of Warrant Instrument and Notice to Warrant Holders

The Company announces and notifies Warrant Holders that the Company intends to enter into on or around the date of this announcement a Deed of Amendment and Restatement in relation to the Warrant Instrument (Public Warrants) (the "Amended and Restated Warrant Instrument") amending and restating certain provisions of the Warrant Instrument dated 9 March 2022 (the "Original Warrant Instrument") relating to the Public Warrants.

A notice to Warrant Holders summarising the proposed amendments to be made in the Amended and Restated Warrant Instrument is set out in the Appendix to this announcement.

The Company is intending to, in accordance with the Warrant T&Cs, enter into the Amended and Restated Warrant Instrument in order to remove or amend certain features of the Warrants identified as resulting in the Warrants failing the fixed-for-fixed test under International Accounting Standard 32 and enable the Public Warrants to be accounted for as equity in its next financial statements. The Company is permitted to amend the Warrant T&Cs without the consent of Warrant Holders in certain circumstances, including where the purpose is making any amendments that are necessary to allow for the Public Warrants and the Sponsor Warrants to be classified as equity in the Company's financial statements, provided that any modification or amendment would not increase the Warrant Price or shorten the period in which a Warrant Holder can exercise its Warrants.

The Company confirms that it also intends to enter into a Deed of Amendment and Restatement in relation to the Warrant Instrument (Sponsor Warrants) amending and restating the Warrant Instrument dated 9 March 2022 relating to the Sponsor Warrants to make equivalent changes to the Sponsor Warrants.

Capitalised terms used but not defined in this announcement have the meanings given to them in the prospectus published by the Company dated 9 March 2022.

A copy of the Amended and Restated Warrant Instrument will shortly be available on the Company's website following its execution at: https://www.neoa.london/media-and-investors/default.aspx .

Background

Prior to the Company's initial public offering, the Company sought to ensure, with the support of its advisers, that the Public Warrants and the Sponsor Warrants would be accounted for as equity. The benefit of equity treatment of the Public Warrants and Sponsor Warrants is that this assists in preserving the Company's distributable reserves which are necessary for the redemption of the Company's Ordinary Shares by avoiding exposure to fair value movements in the value of the Warrants. As part of the Company's preparations for its initial public offering, the Company prepared an analysis of its financial instruments, including the Warrants, to determine their accounting treatment. This financial instruments memorandum concluded that the Warrants, following certain adjustments to their terms, should be classified as equity. This financial instruments memorandum, together with the terms and conditions of the Public Warrants and the Sponsor Warrants (the "Warrant T&Cs"), was considered by Grant Thornton (UK) LLP ("Grant Thornton"), as the Company's reporting accountant for the IPO, who concurred with the conclusion that the Public Warrants and the Sponsor Warrants should be treated as equity.

During the audit process on the Company's interim financial results for the period from 8 November 2021 (its date of incorporation) to 31 May 2022, Grant Thornton, in its capacity as the Company's independent auditor, re-assessed the interpretation of certain terms of the Warrant T&Cs and concluded that certain features of the Warrants fail the fixed-for-fixed test under International Accounting Standard 32 and, accordingly, the Warrants should be accounted for as financial liabilities under IFRS, rather than as equity.

Given the importance of preserving the Company's distributable reserves, the Board has concluded that it is appropriate to amend the terms of the Public Warrants and the Sponsor Warrants as further described below. The Company has considered the implications of the treatment of the Public Warrants and Sponsor Warrants as financial liabilities up until the anticipated date of the implementation of the amendments, and the Company does not believe that there will be any material reduction in the distributable reserves of the Company as the adverse impact on distributable reserves will crystallise at such date and be partially unwound. Following entry into the Amended and Restated Warrant Instrument to give effect to the equity accounting treatment of the Public Warrants (and the corresponding changes in respect of the Sponsor Warrants), the Company intends to prepare financial statements for the period from 8 November 2021 (its date of incorporation) to 31 December 2022 and file these as "initial accounts" with Companies House as soon as reasonably practicable and therefore a copy will be made available on the Company's website at: https://www.neoa.london/media-and-investors/default.aspx.

As a result, the Company anticipates that there will be no adverse impact to distributable reserves arising from the temporary classification of the Public Warrants and Sponsor Warrants as financial liabilities and no adverse impact on the Company's ability to redeem the Ordinary Shares held by Public Shareholders.

For further details on the amendments to the Warrant T&Cs, please see below.

Amendment of Warrants T&Cs

Pursuant to the Warrant T&Cs and the Original Warrant Instrument, the Company is permitted to amend the Warrant T&Cs without the consent of Warrant Holders where the purpose is, among other things, (i) curing any ambiguity or correcting any mistake or (ii) making any amendments that are necessary to allow for the Public Warrants and the Sponsor Warrants to be classified as equity in the Company's financial statements, provided that any modification or amendment would not increase the Warrant Price or shorten the period in which a Warrant Holder can exercise its Warrants.

Rationale

Accordingly, pursuant to the Amended and Restated Warrant Instrument, the Company intends to amend the Warrant T&Cs to remove or amend those features identified as resulting in the Warrants failing the fixed-for-fixed test, namely:

(i) removal of the adjustment mechanism in former sub-section 4.4 relating to raising of capital in connection with a Business Combination, where, among other things, the Company issues additional Ordinary Shares or equity-linked securities for capital raising purposes in connection with the closing of a Business Combination at an issue price or effective issue price of less than GBP9.20 per Ordinary Share (as adjusted); and

(ii) amendment of the right of the Company in section 10.(ii) to add or change any provisions of the Warrant T&Cs without the consent of Warrant Holders as the Company deems necessary or desirable and not to adversely affect the rights of Warrant Holders, to include a proviso that any such amendment does not change or is not expected to change in the good faith determination of the Board the classification of the Public Warrants and the Sponsor Warrants as equity in the Company's financial statements (to the extent the Public Warrants and the Sponsor Warrants are classified as equity at any time).

The Board expects that, following these amendments becoming effective, the Warrants will be classified as equity in its next published accounts.

Furthermore, the Board intends to correct a mistake in sub-section 3.2 relating to the duration of the exercise period for the Warrants in a case of the liquidation of the Company in accordance with the Articles of Association.

A summary of the proposed amendments to be made in the Amended and Restated Warrant Instrument is set out in the Appendix to this announcement.

Rights of Warrant Holders

The Board acknowledges that, although the removal of the adjustment mechanism in sub-section 4.4 alters the rights of Warrant Holders, the circumstances in which such adjustment would become effective is considered by the Board to be remote and is within the control of the Company as it related to the issue of additional Ordinary Shares in connection with a Business Combination. Therefore, the Board does not consider this to be a material change to the Warrant T&Cs. Furthermore, section 10.(ii) was designed to protect the interests of Warrant Holders and the amendment thereto now limits the Company's ability to unilaterally make changes to the Warrant T&Cs under section 10.(ii) without the consent of Warrant Holders as any such change must in the determination of the Board not result in a change in the classification of the Warrants as equity.

The Board considers that the amendments to be made in the Amended and Restated Warrant Instrument to give effect to equity accounting treatment of the Public Warrants (and the corresponding changes in respect of the Sponsor Warrants) are in the best interests of Shareholders and Warrant Holders.

The person responsible for making this announcement on behalf of NEOA is Sanjay Mehta, Executive Director.

Enquiries:

NEOA

Sanjay Mehta [e-mail]

FGS Global [e-mail]

[phone]

Important Notice:

Neither this announcement nor the information contained herein, nor its publication, constitutes an offer or solicitation by the Company, or any other issuer or entity for the purchase or sale of any Warrant or any security relating thereto, nor does it constitute an offer, solicitation or publication to any person in any jurisdiction where such solicitation or publication would be unlawful.

This announcement may include statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements may be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "plans", "projects", "anticipates", "expects", "intends", "may", "will" or "should" or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. Forward-looking statements may and often do differ materially from actual results. Any forward-looking statements reflect the Company's current view with respect to future events and are subject to risks relating to future events and other risks, uncertainties and assumptions relating to the Company's business, results of operations, financial position, liquidity, prospects, growth and strategies. Forward-looking statements speak only as of the date they are made.

Appendix

The Amended and Restated Warrant Instrument

This notice provides a summary of the amendments to be made in the Amended and Restated Warrant Instrument.

The entire original sub-section 4.4 of the Warrant T&Cs in the Original Warrant Instrument is as follows and will be deleted in the Amended and Restated Warrant Instrument:

4.4 Raising of the Capital in connection with the Business Combination. If (x) the Company issues additional Ordinary Shares or equity-linked securities for capital raising purposes in connection with the closing of its Business Combination at an issue price or effective issue price of less than GBP9.20 per Ordinary Share (as adjusted for share splits, share consolidations, share dividends, reorganisations, recapitalisations and similar corporate actions) (with such issue price or effective issue price to be determined in good faith by the Board or such person or persons granted a power of attorney by the Board and, in the case of any such issuance to the Sponsor Entities or their affiliates, without taking into account any Sponsor Shares held by the Sponsor Entities or their affiliates, as applicable, prior to such issuance) (the "Newly Issued Price"), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of the Business Combination on the date of the completion of the Business Combination (net of redemption), and (z) the volume-weighted average trading price of Ordinary Shares during the twenty (20) Trading Day period starting on the Trading Day prior to the day on which the Company consummates its Business Combination (as adjusted for share splits, share consolidations, share dividends, reorganisations, recapitalisations and similar corporate actions) (such price, the "Market Value") is below GBP9.20 per Ordinary Share, the Warrant Price will be adjusted (to the nearest penny) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, and the GBP18.00 per Ordinary Share redemption trigger price described in Section 6.1 will be adjusted (to the nearest penny) to be equal to 180% of the higher of the Market Value and the Newly Issued Price.

The entire original section 10 of the Warrant T&Cs in the Original Warrant Instrument is as follows:

               10.          Amendments 

These Warrant T&Cs may be amended by the Company without the consent of the Registered Holder and/or any beneficial holder of such Warrants for the purpose of (i) curing any ambiguity or correcting any mistake, including to conform the provisions of these Warrant T&Cs to the description of the terms of the Warrants set out in the Prospectus, or defective provision, or (ii) adding or changing any provisions with respect to matters or questions arising under these Warrant T&Cs as the Company may deem necessary or desirable and that the Company deems not to adversely affect the rights of the holders of Warrants, or (iii) making any amendments that are necessary in the good faith determination of the Board (taking into account then existing market precedents) to allow for the Public Warrants and the Sponsor Warrants to be classified as equity in the Company's financial statements (to the extent the Public Warrants and the Sponsor Warrants are not classified as equity at any time), provided that this shall not allow for any modification or amendment to these Warrant T&Cs that would increase the Warrant Price or shorten the period in which a holder can exercise its Warrants. All other modifications or amendments, including any amendment to increase the Warrant Price or shorten the Exercise Period and any amendment to the terms of only the Sponsor Warrants, shall require the vote or written consent of the Registered Holders of at least 50% of the then outstanding Public Warrants, provided that any amendment that solely affects the terms of the Warrant T&Cs with respect to the Sponsor Warrants will also require the vote or written consent of the Registered Holders of at least 50% of the then outstanding Sponsor Warrants. Notwithstanding the foregoing, the Company may lower the Warrant Price set out in Section 3.1 or extend the duration of the Exercise Period set out in Section 3.2, without the consent of the Registered Holders.

The entire original section 10 of the Warrant T&Cs in the Original Warrant Instrument will be deleted and replaced in the Amended and Restated Warrant Instrument as follows:

               10.          Amendments 

These Warrant T&Cs may be amended by the Company without the consent of the Registered Holder and/or any beneficial holder of such Warrants for the purpose of (i) curing any ambiguity or correcting any mistake, including to conform the provisions of these Warrant T&Cs to the description of the terms of the Warrants set out in the Prospectus, or defective provision, or (ii) adding or changing any provisions with respect to matters or questions arising under these Warrant T&Cs as the Company may deem necessary or desirable and that the Company deems not to adversely affect the rights of the holders of Warrants, provided that it does not change or is not expected to change in the good faith determination of the Board (taking into account advice of professional advisers) the classification of the Public Warrants and the Sponsor Warrants as equity in the Company's financial statements (to the extent the Public Warrants and the Sponsor Warrants are classified as equity at any time), or (iii) making any amendments that are necessary in the good faith determination of the Board (taking into account then existing market precedents) to allow for the Public Warrants and the Sponsor Warrants to be classified as equity in the Company's financial statements (to the extent the Public Warrants and the Sponsor Warrants are not classified as equity at any time), provided that this shall not allow for any modification or amendment to these Warrant T&Cs that would increase the Warrant Price or shorten the period in which a holder can exercise its Warrants. All other modifications or amendments, including any amendment to increase the Warrant Price or shorten the Exercise Period and any amendment to the terms of only the Sponsor Warrants, shall require the vote or written consent of the Registered Holders of at least 50% of the then outstanding Public Warrants, provided that any amendment that solely affects the terms of the Warrant T&Cs with respect to the Sponsor Warrants will also require the vote or written consent of the Registered Holders of at least 50% of the then outstanding Sponsor Warrants. Notwithstanding the foregoing, the Company may lower the Warrant Price set out in Section 3.1 or extend the duration of the Exercise Period set out in Section 3.2, without the consent of the Registered Holders.

The entire original sub-section 3.2 of the Warrant T&Cs in the Original Warrant Instrument is as follows:

3.2 Duration of Warrants. Warrants may be exercised only during the period (the "Exercise Period") (A) commencing on the date that is thirty (30) days after the date on which the Company completes its Business Combination, and (B) terminating at the earliest to occur of (x) 6:00 p.m. (London time) on the date that is five (5) years after the date on which the Company completes its Business Combination, (y) the liquidation of the Company in accordance with the Articles of Association, if the Company fails to complete a Business Combination by the Business Combination Deadline, and (z) other than with respect to the Sponsor Warrants then held by the Sponsor Entities or their respective Permitted Transferees with respect to a redemption pursuant to Section 6.1 below, 6:00 p.m. (London time) on the Redemption Date (as defined below) as provided in Section 6.3 below (in each case, the "Expiration Date"). Except with respect to the right to receive the Redemption Price (as defined below) (other than with respect to a Sponsor Warrant then held by the Sponsor Entities or their respective Permitted Transferees in connection with a redemption pursuant to Section 6.1 below) in the event of a redemption (as set forth in Section 6 below), each Warrant (other than the Sponsor Warrants then held by the Sponsor Entities or their respective Permitted Transferees in the event of a redemption pursuant to Section 6.1 below) not exercised on or before the Expiration Date shall become void, and all rights thereunder and all rights in respect thereof under these Warrant T&Cs shall cease at 6:00 p.m. (London time) on the Expiration Date.

The entire original sub-section 3.2 of the Warrant T&Cs in the Original Warrant Instrument will be deleted and replaced in the Amended and Restated Warrant Instrument as follows:

3.2 Duration of Warrants. Warrants may be exercised only during the period (the "Exercise Period") (A) commencing on the date that is thirty (30) days after the date on which the Company completes its Business Combination, and (B) terminating at the earliest to occur of (x) 6:00 p.m. (London time) on the date that is five (5) years after the date on which the Company completes its Business Combination, (y) the liquidation of the Company in accordance with the Articles of Association[, if the Company fails to complete a Business Combination by the Business Combination Deadline] [wording in square brackets deleted], and (z) other than with respect to the Sponsor Warrants then held by the Sponsor Entities or their respective Permitted Transferees with respect to a redemption pursuant to Section 6.1 below, 6:00 p.m. (London time) on the Redemption Date (as defined below) as provided in Section 6.3 below (in each case, the "Expiration Date"). Except with respect to the right to receive the Redemption Price (as defined below) (other than with respect to a Sponsor Warrant then held by the Sponsor Entities or their respective Permitted Transferees in connection with a redemption pursuant to Section 6.1 below) in the event of a redemption (as set forth in Section 6 below), each Warrant (other than the Sponsor Warrants then held by the Sponsor Entities or their respective Permitted Transferees in the event of a redemption pursuant to Section 6.1 below) not exercised on or before the Expiration Date shall become void, and all rights thereunder and all rights in respect thereof under these Warrant T&Cs shall cease at 6:00 p.m. (London time) on the Expiration Date.

The following definitions in the Warrant T&Cs in the Original Warrant Instrument, which are used only in sub-section 4.4, will be deleted in the Amended and Restated Warrant Instrument:

"Market Value"

"Newly Issued Price"

The reference to sub-section 4.4 in sub-section 4.6 will be deleted in the Amended and Restated Warrant Instrument.

Should any Noteholder have any queries in relation to the contents of this announcement, such Noteholder should contact the Company using the following contact details: Sanjay Mehta ([e-mail]).

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December 19, 2022 08:17 ET (13:17 GMT)