Oracle Power PLC Posting of Circular and Notice of General Meeting (7341V)

TIDMORCP

RNS Number : 7341V

Oracle Power PLC

05 December 2019

5 December 2019

Oracle Power PLC

("Oracle", the "Company" or the "Group")

Posting of Circular and Notice of General Meeting

Oracle, the UK energy developer of a combined lignite mineral resource and mine mouth power plant located in the Thar desert in the south-east of Sindh Province, Pakistan, is pleased to announce that, further to the Company's announcement of 28 November 2019, it has posted a circular (the "Circular") and accompanying Form of Proxy in relation to a General Meeting of the Company.

The Circular contains Notice of the General Meeting that will be held at the offices of Brandon Hill, 1 Tudor Street, London, EC4Y 0AH at 10.00 a.m. on 20 December 2019. A copy of the Circular and the Form of Proxy will be available shortly on the Company's website at www.oraclepower.co.uk.

The Letter from the Chairman of the Company, Expected Timetable of Principal Events and Placing Statistics have been extracted and included in this announcement below.

Unless the context requires otherwise, definitions used in this announcement will have the same meaning as ascribed to them in the Circular.

For further information please contact:

 
 Oracle Power PLC                               [phone] 
  Naheed Memon                                   4314 
 Strand Hanson Limited (Nominated Adviser)      [phone] 
  Rory Murphy, James Harris, Jack Botros         3494 
 Brandon Hill Capital Limited (Joint Broker)    [phone] 
  Oliver Stansfield                              5000 
 Shard Capital (Joint Broker)                   [phone] 
  Damon Heath                                    9952 
 

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014.

Extracts from the Circular

Letter from the Chairman

Introduction

I am writing to you to convene a General Meeting which will be held at the offices of Brandon Hill, 1 Tudor Street, London EC4Y 0AH on 20 December 2019 at 10.00 a.m. A formal Notice of General Meeting, which includes details of the Resolutions to be proposed, is set out at the end of this Document.

The Company announced on 28 November 2019 that it had raised a total of GBP250,000 (before expenses) by means of the Firm Placing and conditionally raised a further GBP450,000 (before expenses) by means of the Conditional Placing, together the Placing.

This Document sets out details of the Placing, explains why the Directors consider the Placing to be in the best interests of the Company and its Shareholders and why the Directors unanimously recommend that you vote in favour of the Resolutions to be proposed at the General Meeting, as they

intend so to do in respect of their own beneficial interests.

Background to and reasons for the Placing

As announced on 28 November 2019, the private office of His Highness Sheikh Ahmed Bin Dalmook Al Maktoum (the "Investor") agreed to invest an aggregate of GBP500,000 towards the gross Placing proceeds of GBP700,000. The Placing was at the Placing Price of 0.25 pence per Ordinary Share. The Placing Price represents a premium of 6.4 per cent. to the Company's closing middle market price of 0.235 pence on 27 November 2019 (being the last Business Day prior to the announcement of the Placing).

The 100,000,000 Firm Placing Shares were issued to the Investor, raising gross proceeds of GBP250,000, utilising the Directors' existing authorities (given at the Annual General Meeting of the Company held on 16 July 2019) to allot shares and disapply pre-emption rights under section 551 and section 570 of the Companies Act. Admission of the Firm Placing Shares occurred at 8.00 a.m. on 2 December 2019.

In addition to the Firm Placing, the Company has conditionally raised a further GBP450,000 before expenses, by way of the Conditional Placing of the 180,000,000 Conditional Placing Shares with the Investor and new and existing investors.

The issue of the Firm Placing Shares used up the Directors' existing authorities to allot Ordinary Shares and disapply pre-emption rights under sections 551 and 570 of the Companies Act. Accordingly, the General Meeting is being convened to authorise the Directors to, inter alia, allot shares on a non-pre-emptive basis in order to issue the Conditional Placing Shares.

The investment by the Investor is regarded by Oracle as an important investment and follows a recent

update by the Company that its flagship Block VI has been included in a proposed new initiative between the governments of Pakistan and China with respect to gasification of coal into fertilizer projects. The Board understands that the Investor has a broad portfolio of investments in the natural resources sector and believes this experience should significantly aid Oracle in moving its projects forward.

In addition, the Company is engaged in ongoing discussions with other state-owned enterprises in both Pakistan and China which have expressed a willingness to provide financial and technical support in the event Block VI was included in a coal gasification to fertiliser initiative, which has now been acknowledged by both governments.

Details of the Placing and the Placing Agreement

The Conditional Placing is conditional, inter alia, on the passing of the Placing Resolutions by the Shareholders at the General Meeting in order to authorise the Directors to issue Ordinary Shares for cash on a non-pre-emptive basis.

If the Placing Resolutions are passed, the Conditional Placing Shares are expected to be issued as soon as practicable after the General Meeting with Admission of the Conditional Placing Shares and commencement of dealings therein expected to occur at 8.00 a.m. on 23 December 2019.

If the Placing Resolutions are not passed, then the Conditional Placing will not complete and the Company will not receive the proceeds of the Conditional Placing, nor will the Placing Warrants and Broker Warrants be issued.

The Conditional Placing Shares will, if and when issued, rank in full for all dividends and other distributions declared, made or paid on the Ordinary Shares and otherwise rank pari passu in all respects with the Existing Ordinary Shares (including the Firm Placing Shares).

Assuming the issue of all of the Placing Shares, the Placing Shares will represent approximately 18.0 per cent. of the Existing Ordinary Shares.

The Placing Shares are not being made available to the public and none of the Placing Shares are being offered or sold in any jurisdiction where it would be unlawful to do so, including Australia, Canada, Japan, the Republic of Ireland, the Republic of South Africa or the United States.

In connection with the Placing, on 28 November 2019, the Company entered into the Placing Agreement pursuant to which Brandon Hill agreed to act as agent for the Company and use its reasonable endeavours to place the Placing Shares with certain new and existing investors. The Conditional Placing is conditional, inter alia, upon: (i) the passing of the Placing Resolutions; and (ii) Admission of the Conditional Placing Shares occurring as soon as practicable following the General Meeting or by such later time and/or date as Brandon Hill and the Company may agree but not later than 8.00 a.m. on the Long Stop Date.

The Placing Agreement contains customary warranties from the Company in favour of Brandon Hill in relation to, inter alia, the accuracy of the information in this Document and other matters relating to the Company and its business. In addition, the Company has agreed to indemnify Brandon Hill in relation to certain liabilities they may incur in undertaking the Placing. Brandon Hill has the right to terminate the Placing Agreement in certain circumstances prior to Admission of the Conditional Placing Shares. In particular, Brandon Hill may terminate in the event that there has been a breach of any of the warranties, the conditions of the agreement have become incapable of fulfilment or for force majeure. The Placing is not being underwritten.

Directors' Participation in the Placing

As announced on 28 November 2019, the Conditional Placing includes subscriptions of GBP40,000 by the Company's CEO, Naheed Memon, and GBP10,000 by the Company's Chairman, Mark Steed. Subject to the passing of Placing Resolutions, on completion of the Conditional Placing, Ms Memon and Mr Steed will be in interested in 16,000,000 Ordinary Shares and 18,100,000 respectively, representing 0.92 per cent. and 1.04 per cent. of the Enlarged Share Capital respectively, and 24,000,000 Director Warrants and 6,000,000 Director Warrants respectively.

Warrants to be issued

In addition to the Placing Shares, the Company is conditionally issuing, in aggregate, 434,000,000 warrants to subscribe for new Ordinary Shares in connection with the Placing and, in aggregate, 210,000,000 warrants to subscribe for new Ordinary Shares in connection with the August 2019 Placing.

The issue of the Placing Warrants and the Broker Warrants is conditional, inter alia, on the passing of Resolutions 1 and 4 by the Shareholders at the General Meeting. If Resolutions 1 and 4 are passed, the Placing Warrants and the Broker Warrants are expected to be issued immediately after the General Meeting.

The issue of the August 2019 Placing Warrants and the August 2019 Broker Warrants is conditional, inter alia, on the passing of Resolutions 2 and 5 by the Shareholders at the General Meeting. If Resolutions 2 and 5 are passed, the August 2019 Placing Warrants and the August 2019 Broker Warrants are expected to be issued immediately after the General Meeting.

The Warrants comprise the following issues:

 
 Warrant Issue               Amount     Term*   Exercise Price 
 Placing Warrants       420,000,000   2 years            0.25p 
                       ------------  --------  --------------- 
 Broker Warrants         14,000,000   2 years            0.25p 
                       ------------  --------  --------------- 
 August 2019 Placing 
  Warrants              200,000,000   2 years            0.50p 
                       ------------  --------  --------------- 
 August 2019 Broker 
  Warrants               10,000,000   2 years            0.25p 
                       ------------  --------  --------------- 
 Total                  644,000,000 
                       ------------  --------  --------------- 
 

* The warrant term will become effective following passing of Resolutions 1 and 2 for the Placing Warrants and the Broker Warrants and Resolutions 2 and 5 for the August 2019 Placing Warrants and August 2019 Broker Warrants as set out in page 10 of this document.

Assuming the Resolutions are passed, the Company will have, in aggregate, warrants over 644,000,000 Ordinary Shares in issue, representing 37.0 per cent. of the Enlarged Share Capital. The exercise of the Warrants, in full, would result in the Company receiving cash proceeds of, in aggregate, GBP2,110,000.

Related Party Transactions

As announced on 28 November 2019, the participations of Naheed Memon and Mark Steed in the Placing and the proposed issue of the Director Warrants, as directors of the Company, constitute related party transactions pursuant to Rule 13 of the AIM Rules. The independent director (being Andreas Migge) considers, having consulted with the Company's nominated adviser, Strand Hanson Limited, that the terms of Ms Memon's and Mr Steed's participation in the Placing (including receiving Director Warrants) are fair and reasonable insofar as the Company's shareholders are concerned.

The Company will pay cash fees of GBP35,000, pro rata to the Firm Placing and Conditional Placing, and, subject to shareholder approval, issue the Broker Warrants to Brandon Hill, in its capacity as broker to the Placing, (taken together, the "Brandon Hill Fees"), which, together with its connected entities, is a substantial shareholder of the Company. In addition, Neal Griffith and Oliver Stansfield, directors of Brandon Hill and existing Oracle Shareholders, have agreed to subscribe for GBP15,000 each in the Conditional Placing (the "Brandon Hill Subscriptions") and accordingly, subject to Shareholder approval, will each be issued with 9,000,000 Placing Warrants (together with the Brandon Hill Subscriptions, the "Brandon Hill Participation").

The payment of the Brandon Hill Fees and the Brandon Hill Participation constitute related party transactions pursuant to Rule 13 of the AIM Rules. The Directors consider, having consulted with the Company's nominated adviser, Strand Hanson Limited, that the terms of the payment of the Brandon Hill Fees and the Brandon Hill Participation are fair and reasonable insofar as the Company's shareholders are concerned.

Use of Proceeds

The net proceeds of the Placing, which are estimated to be GBP635,000 will be used for general working capital. The net proceeds of the Placing are expected to provide the Company with sufficient working capital for the short to medium term.

The exercise of Warrants, in full, would result in the Company receiving cash proceeds of, in aggregate, GBP2,110,000.

Corporate Update

The Company will continue to pursue the development of a combined lignite mineral resource and mine mouth power plant located in Block VI of the Thar desert in the south east of Sindh province in Pakistan whilst also exploring the development of a lignite to gas fertiliser processing plant within the same Block VI.

The Company is engaging in discussions with various state owned Chinese companies to provide finance and EPC services with regard to the above.

Finally, it should be noted that Block VI is the only block in the Thar desert that has the support of the Joint Co-ordination Committee of CPEC for the potential of both lignite to power and lignite to gas/fertiliser/liquid.

If the Placing Resolutions are not passed, the Company will only have sufficient funding for the near term and would be required to seek alternative funding for working capital purposes.

General Meeting

The Directors do not currently have the authority to issue the Conditional Placing Shares and the Warrants. Accordingly, the Conditional Placing and the grant of the Placing Warrants and the Broker Warrants is subject to Shareholders approving the Placing Resolutions and the grant of the August 2019 Placing Warrants and August 2019 Broker Warrants is subject to Shareholders approving Resolutions 2 and 5 so as to provide the Directors with such authority and to disapply statutory pre-emption rights.

A Notice of General Meeting is set out at the end of this Document, convening the General Meeting to be held at 10.00 a.m. on 20 December 2019 at the offices of Brandon Hill,1 Tudor Street, London EC4Y 0AH at which the following Resolutions will be proposed:

-- Resolution 1 - this will be proposed as an ordinary resolution, and is tabled to authorise the Directors to allot the Conditional Placing Shares and Ordinary Shares to be issued upon any exercise of the Placing Warrants and the Broker Warrants;

-- Resolution 2 - this will be proposed as an ordinary resolution, and is tabled to authorise the Directors to issue and allot Ordinary Shares to be issued upon any exercise of the August 2019 Placing Warrants and the August 2019 Broker Warrants;

-- Resolution 3 - this will be proposed as an ordinary resolution, and is tabled to authorise the Directors, conditional upon the passing of Resolution 1, to issue and allot Ordinary Shares representing approximately one third of the Enlarged Share Capital;

-- Resolution 4 - this will be proposed as a special resolution, and is tabled to authorise the Directors, conditional upon the passing of Resolution 1, to disapply statutory pre-emption rights relating to the issue and allotment of the Ordinary Shares authorised pursuant to Resolution 1;

-- Resolution 5 - this will be proposed as a special resolution, and is tabled to authorise the Directors, conditional upon the passing of Resolution 2, to disapply statutory pre-emption rights relating to the issue and allotment of the Ordinary Shares authorised pursuant to Resolution 2; and

-- Resolution 6 - this will be proposed as a special resolution, and is tabled to authorise the Directors, conditional upon the passing of Resolution 3, to disapply statutory pre-emption rights relating to the issue and allotment equity securities for cash in connection with an issue or offer of equity securities and of Ordinary Shares representing up to approximately one third of the Enlarged Share Capital.

Importance of vote

If the Placing Resolutions are not passed by Shareholders, the Conditional Placing will not complete and the Company will not receive gross proceeds of GBP450,000, which will mean that the Company will need to raise further funding in the near term.

In addition, the Company will not be able to issue Placing Warrants and the Broker Warrants which would mean the Company may not be able to access further funding through the exercise of Placing and/or Broker Warrants.

Action to be taken

The issue of the Conditional Placing Shares, the grant of the Warrants, and the ability of the Company thereafter to issue Ordinary Shares require the passing of the Resolutions at the General Meeting.

Whether or not you propose to attend the General Meeting, you are requested to complete the Form of Proxy in accordance with the instructions printed thereon and return it, duly signed, together with any power of attorney under which it is executed, as soon as possible but in any event so as to arrive

not later than 10.00 a.m. on 18 December 2019. Completion and return of a Form of Proxy will not preclude a member from attending and voting at the General Meeting should they wish. Shareholders are able to vote online by logging on to www.sharegateway.co.uk and following the instructions provided, you will need your personal proxy registration code as shown on your Form of Proxy. In the case of CREST members, by using the CREST electronic proxy appointment service set out in note 7 to the Notice of General Meeting.

Recommendation

The Directors consider that the Placing and the Resolutions are in the best interests of the Company and its Shareholders as a whole. The Directors draw Shareholders' attention to paragraph 10 above, which provides detail on the position of the Company should the Placing Resolutions not be passed. Accordingly, the Directors unanimously recommend the Shareholders to vote in favour of the Resolutions at the General Meeting as they intend to do in respect of their own beneficial holdings amounting, in aggregate, to 18,500,000 Ordinary Shares, representing approximately 1.19 per cent. of the Existing Ordinary Shares.

Yours faithfully,

Mark Steed

Chairman

Expected Timetable of Principal Events

 
                                                          Time and date 
 Admission of the Firm Placing Shares           8.00 a.m. on 2 December 
                                                                   2019 
 Publication of the Circular                            4 December 2019 
 Latest time and date for receipt of          10.00 a.m. on 18 December 
  Forms of Proxy, CREST and online votes                           2019 
  to be valid at the General Meeting 
 General Meeting                              10.00 a.m. on 20 December 
                                                                   2019 
 Admission and dealings in the Conditional     8.00 a.m. on 23 December 
  Placing Shares expected to commence                              2019 
  on AIM 
 CREST stock accounts expected to be           8.00 a.m. on 23 December 
  credited for the Conditional Placing                             2019 
  Shares (where applicable) 
 Despatch of definitive share certificates   by no later than 7 January 
  in respect of the Conditional Placing                            2019 
  Shares in be held in certificated form 
 

All references are to London time unless otherwise stated. Each of the times and dates above are indicative only and if any of the details contained in the timetable above should change, the revised times and dates will be notified to Shareholders by means of an announcement through a Regulatory

Information Service.

Placing Statistics

 
 Placing Price                                               0.25 pence 
 Number of Existing Ordinary Shares                       1,559,468,634 
 Number of Placing Shares to be issued pursuant 
  to the Conditional Placing                                180,000,000 
 Enlarged Share Capital                                   1,739,468,634 
 Percentage of the Enlarged Share Capital represented    16.1 per cent. 
  by the Placing Shares 
 Aggregate number of Warrants to be issued pursuant 
  to the Resolutions                                        644,000,000 
 Percentage of the Enlarged Share Capital represented    37.0 per cent. 
  by the Warrants 
 Gross proceeds of the Firm Placing                          GBP250,000 
 Gross proceeds of the Conditional Placing                   GBP450,000 
 Aggregate gross proceeds of the Placing                     GBP700,000 
 

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 [e-mail] or visit www.rns.com.

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December 05, 2019 02:00 ET (07:00 GMT)