TIDMEDL
RNS Number : 9794B
Edenville Energy PLC
05 February 2020
5 February 2020
EDENVILLE ENERGY PLC
("Edenville" or the "Company")
Notice of General Meeting
Edenville Energy Plc (AIM: EDL), the AIM quoted company
developing the Rukwa coal project in southwest Tanzania, announces
that further to the announcement of 23 January 2020, a circular
(the "Circular") convening a General Meeting is being published
today and will shortly be available on the Company's website at
https://edenville-energy.com/aim-rule-26/.
The General Meeting will be held at the offices of Brandon Hill
Capital Limited at 1 Tudor St, London EC4Y 0AH at 11.00 a.m. on 21
February 2020. Further details regarding the General Meeting are
set out below.
Capitalised terms used, but not otherwise defined in this
announcement, bear the meanings ascribed to them in the
Circular.
Introduction
I am writing to you with details of our General Meeting which
will be held at the offices of Brandon Hill Capital Limited at 1
Tudor St, London EC4Y 0AH on 21 February 2020 at 11.00 a.m.
The Company announced on 23 January 2020 that it raised
GBP700,000 (before expenses) by way of a placing of 1,750,000,000
new ordinary shares of 0.02p each in the Company at a placing price
of 0.04p per Ordinary Share with existing shareholders through
Brandon Hill Capital Limited (the "Placing"). In addition,
subscribers in the Placing will, subject to the passing of the
Resolutions, be issued with one warrant for every two Placing
Shares subscribed for under the Placing (the "Warrants"). The
Warrants will have an exercise price of 0.06p per Ordinary Share
and must be exercised prior to 23 January 2022 otherwise they will
lapse.
The Company is now calling a General Meeting in order to seek
authorities to grant the Warrants, as well as further Ordinary
Shares in the future, if required and additional relevant
securities in connection with the Funding Agreement with Lind
(although it is the intention of the Company to pay back Lind in
cash). If the Resolutions are passed, the Warrants are expected to
be granted immediately after the General Meeting.
Background to and reasons for the General Meeting
During 2019, Edenville funded and undertook several operational
initiatives at its Rukwa coal project in Tanzania ("Rukwa" or the
"Project") designed to expand production capacity and improve the
Project's economic potential. These included significant upgrades
to the wash plant and the opening up of the Northern Area for
mining (the "Northern Area"), which has subsequently proven to have
both a better quality of coal from previously mined areas and also
better recoveries. Despite these improvements the lack of working
capital has prevented the Project from operating effectively and
has materially impacted production, with only a de minimis level of
washed coal being produced between 30 November 2019 and 22 January
2020.
A sustained marketing initiative took place in Q4 2019,
following the appointment of Alistair Muir as the Company's new
CEO, coupled with in pit and stockpile sampling highlighting the
improved quality of Rukwa coal from the Northern Area. This was
well received by existing and potential customers, culminating in
the Company entering into two new long-term contracts, as announced
on 11 December 2019, to supply a combined 9,000 tonnes of washed
coal per month to industrial customers in Rwanda and Uganda,
complementing the Company's existing coal supply contracts.
With the proceeds of the Placing and the additional support of
Brian McMaster's Proposed Loan, which remains subject to formal
documentation and the consent of Lind, the Directors believe
Edenville is now able to address the shortfall in working capital
and that the Company is in a position to begin supplying these coal
contracts. In structuring the recent financing arrangements, the
Company has sought to minimise dilution by including a standby debt
component, which will only be utilised if required to bridge any
additional working capital requirements as the Project ramps up its
production to satisfy the current contracted demand for Rukwa
washed coal, which is outlined below.
Current Coal Contacts
As announced on 11 December 2019, Edenville entered into a
contract to supply up to 6,000 tonnes of washed coal per month with
Tara Group Ltd and a separate contract for up to 3,000 tonnes of
washed coal per month with Springwood Capital Ltd. These contracts
compliment a standing order for 500 tonnes per month from a
Tanzanian industrial user in Arusha and an up to 2,500 tonnes per
month order from a cement manufacturer located near Dar Es Salaam
in Tanzania.
In addition, the Company has received enquiries from a potential
customer in the Democratic Republic of the Congo for the supply of
washed coal to a cement works on Lake Tanganyika. The Company is
also engaged in discussions with several other potential purchasers
of Rukwa coal and although no assurances can be given that
long-term contracts will materialise, the Directors are confident
that once additional stockpiles are at site, new supply contracts
should be forthcoming.
Rwandan Power Station Tender
The Company's subsidiary Edenville International (Tanzania)
Limited also recently lodged a tender for the supply of 12,000
tonnes of washed coal to a Rwandan power station. The Company
believes it is geographically well placed to provide coal at a
competitive price compared to other potential suppliers and is
awaiting the outcome of this tender. Further announcements
regarding this tender will be made as appropriate.
Additional Share Authorities
The Placing Shares were issued out of the existing authorities
previously granted to the Directors at the Company's General
Meeting which was held on 17 May 2019 and the Annual General
Meeting which was held on 23 July 2019. However, following the
Admission of the Placing Shares, the Directors have limited
authority to issue additional Ordinary Shares.
The Company may require further capital to execute its
longer-term strategy, which includes securing additional coal
supply contracts and significantly increasing production. The Board
will therefore continue to explore additional funding options,
including strategic partnerships and further issues of Ordinary
Shares, subject to the Directors being satisfied with the issue
price of these shares at the time.
Therefore, in order to ensure the Board has maximum flexibility
with regards to future funding opportunities, a General Meeting has
been convened to approve the Resolutions.
General Meeting
The Directors do not currently have the authority under section
551 of the Act to grant the Warrants. The Warrants will not be
issued therefore until the Resolutions are passed at the General
Meeting.
A notice convening the General Meeting to be held at the offices
of Brandon Hill Capital Limited at 1 Tudor St, London EC4Y 0AH at
11.00 a.m. on 21 February 2020 is being published at which the
following Resolutions will be proposed:
(A) Resolution 1, which will be proposed as an ordinary
resolution, is to authorise the Directors to allot up to
875,000,000 Ordinary Shares (being an aggregate nominal value of
GBP175,000) in connection with the Warrants;
(B) Resolution 2, which will be proposed as an ordinary
resolution, is to provide the Directors with a general authority to
allot up to: 2,750,000,000 Ordinary Shares (being an aggregate
nominal value of GBP550,000);
(C) Resolution 3, which will be proposed as an ordinary
resolution, is to authorise the Directors to allot up to:
2,000,000,000 Ordinary Shares (being an aggregate nominal value of
GBP400,000) in connection with the Funding Agreement with Lind;
(D) Resolution 4, which will be proposed as a special resolution
and which is subject to the passing of Resolution 1, is to disapply
statutory pre-emption rights;
(E) Resolution 5, which will be proposed as a special resolution
and which is subject to the passing of Resolution 2, is to disapply
statutory pre-emption rights; and
(F) Resolution 6, which will be proposed as a special resolution
and which is subject to the passing of Resolution 3, is to disapply
statutory pre-emption rights.
Recommendation
The Directors believe it is in the best interests of the
Company's Shareholders to approve the Resolutions at the General
Meeting.
The Directors therefore unanimously recommend that Shareholders
vote in favour of the Resolutions to be proposed at the General
Meeting as they intend to do in respect of their own beneficial
holdings amounting, in aggregate, to 304,791,761 Existing Ordinary
Shares, representing approximately 4.47 per cent. of the Existing
Ordinary Shares.
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) 596/2014.
For further information please contact:
Edenville Energy Plc
Jeff Malaihollo - Chairman
Alistair Muir - CEO +44 (0) 20 3934 6630
SP Angel Corporate Finance LLP
(Nominated Adviser and Joint Broker)
David Hignell
Charlie Bouverat
Abigail Wayne +44 (0) 20 3470 0470
Brandon Hill Capital Ltd
(Joint Broker)
Oliver Stansfield, Jonathan Evans +44 20 7936 5200
IFC Advisory Limited
(Financial PR and IR)
Tim Metcalfe
Graham Herring
Florence Chandler +44 (0) 20 3934 6630
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
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