TIDMPHE
RNS Number : 1517R
Powerhouse Energy Group PLC
26 June 2020
PowerHouse Energy Group Plc
("PowerHouse" or the "Company")
Proposed issue of 1,437,440,277 new Ordinary Shares in
connection with the proposed acquisition of Waste2Tricity
Limited
Proposed Waiver of obligations under Rule 9 of the Takeover
Code
Notice of General Meeting
Further to the announcement by PowerHouse Energy Group plc (AIM:
PHE) on 23 December 2019, PowerHouse has entered into a conditional
agreement for the acquisition of the entire issued share capital of
Waste2Tricity Limited, the consideration for which shall be
satisfied through the issue by the Company of 1,437,440,277
ordinary shares in Powerhouse (the "Acquisition"). On 26 June 2020
the Company posted to shareholders a notice of the general meeting
of the Company to be held at 10 a.m. on 14 July 2020 at the private
residence of the Chairman along with a circular (the "Circular")
and the form of proxy in connection with the Acquisition and the
approval of a proposed waiver of obligations under Rule 9 of the
Takeover Code. The terms used in this announcement have the meaning
given to them in the Circular unless otherwise defined in the body
of this announcement.
Extracts from the letter from the Chairman contained in the
Circular are set out below, which includes the background to and
reasons for the Acquisition. A copy of the Circular will be
available for download from the Company's website shortly,
www.powerhouseenergy.net .
For more information, contact:
PowerHouse Energy Group plc Tel: +44 (0) 203
368 6399
David Ryan, Chief Executive
Officer
WH Ireland Limited (Nominated Tel: +44 (0) 207
Adviser) 220 1666
James Joyce / Lydia Zychowska
Turner Pope Investments (TPI) Tel: +44 (0) 203
Ltd (Joint Broker) 657 0050
Andrew Thacker / Zoe Alexander
Ikon Associates (Media enquiries) Tel: +44 (0) 1483
271291
Adrian Shaw Mob: +44 (0) 7979
900733
About PowerHouse Energy Group plc
PowerHouse has developed a proprietary process technology -
DMG(R) - which can utilise waste plastic, end-of-life-tyres, and
other waste streams to efficiently and economically convert them
into syngas from which valuable products such as chemical
precursors, hydrogen, electricity and other industrial products may
be derived. The PowerHouse technology is one of the world's first
proven, modular, hydrogen from waste (HfW) process.
The PowerHouse DMG(R) process can generate up to 2 tonnes of
road-fuel quality H2, and more than 58MW/h of exportable
electricity per day.
The PowerHouse process produces low levels of safe residues and
requires a small operating footprint, making it suitable for
deployment at enterprise and community level.
PowerHouse is quoted on the London Stock Exchange's AIM Market
under the ticker: PHE, and is incorporated in the United
Kingdom.
For more information see www.powerhouseenergy.net
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
Publication of this document and Form of Proxy 26 June 2020
. . . . . . . . . . . . . . . . . . . . . . . .
. . . .
Latest time and date for receipt of Forms of Proxy. 10 a.m. on 10
. . . . . . . . . . . . . . . . . . . . . . . . July 2020
.
General Meeting . . . . . . . . . . . .. . . . 10 a.m. on 14
. . . . . . . . . . . . . . . . . . . . . . . . July 2020
. . . . . . . . . . . . . .
Admission of Acquisition Shares . . . . . . . . 15 July 2020
. . . . . . . . . . . . .. . . . . . . . . . .
. . . . . . . . . .
Notes:
1. Each of the times and dates above are indicative only and are
subject to change. If any of the above times and/or dates change,
the revised times and/or dates will be notified by the Company to
the Shareholders by announcement through a regulatory information
service.
2. All of the above times refer to London time unless otherwise stated.
3. Admission of the Acquisition Shares on AIM is conditional on,
inter alia, the passing of the Allotment Resolution at the General
Meeting.
KEY STATISTICS
Number of Existing Ordinary Shares in issue
as at the date of this document 2,072,360,416
Number of Acquisition Shares to be issued
pursuant to the Acquisition 1,437,440,277
Enlarged Share Capital immediately following
Admission 3,509,800,693
Fully diluted enlarged share capital immediately
following Admission (taking into account
the options and warrants in issue) 3,593,600,693
Acquisition Shares as a percentage of the
Enlarged Share Capital 40.96%
DEFINITIONS
The following definitions apply throughout this document
(including Notice of General Meeting and the Form of Proxy) unless
the context requires otherwise:
Acquisition the proposed acquisition by PowerHouse
of the entire issued share capital of W2T,
in accordance with the terms and conditions
of the Acquisition Agreement
Acquisition Agreement the conditional agreement entered into
between PowerHouse and the Principal Sellers
in relation to the Acquisition dated on
or around the publication of this Circular,
further details of which are set out in
the letter from the Chairman incorporated
into this document
Acquisition Shares the 1,437,440,277 new Ordinary Shares proposed
to be issued to the Sellers pursuant to
the Acquisition
Admission the admission of the Acquisition Shares
to trading on AIM becoming effective in
accordance with the AIM Rules
AIM AIM, a market of that name
operated by the LSE
AIM Rules the AIM Rules for Companies published by
the LSE, as amended from time to time
Allotment Resolution resolution 1 as set out in the Notice,
to be voted on by the Shareholders at the
General Meeting to authorise the Board
to allot the Acquisition Shares on a non-pre-emptive
basis
Board or Directors the directors of the Company whose names
are set out on page 12 in the letter from
the Chairman incorporated into this document
Broker Turner Pope Investments (TPI) Ltd, a company
incorporated and registered in England
and Wales with company number 09506196
whose registered office is situated at
8 Frederick's Place, London, EC2R 8AB
Business Day any day on which banks are usually open
in England and Wales for the transaction
of sterling business, other than a Saturday,
Sunday or public holiday
certificated or in a share or other security not held in uncertificated
certificated form form (that is, not in CREST)
Code, City Code or the City Code on Takeovers and Mergers
Takeover Code
Company or PowerHouse PowerHouse Energy Group Plc, a company
incorporated in England and Wales with
registration number 03934451 whose registered
office is situated at 15 Victoria Mews,
Mill Field Road, Cottingley Business Park,
Bingley, England, BD16 1PY
Completion completion of the sale and purchase of
the entire issued share capital of W2T
in accordance with the Acquisition Agreement
Concert Party certain Sellers being Aquavista Limited,
Marianna Beck, Jane Bennett, Tony Bennett,
Bruce Drew, Linda Farnes, John Hall, Peter
Jones OBE, Keith Riley, Piangkwan Thummukgool,
Paul Warwick, Ben White, Howard White,
Josh White, Serena White-Reyes, Diane Yeo,
Timothy Yeo and Anna-Mariya Yordanova and
as further described in paragraph 9 of
Part I and paragraph 1 of Part II
Conditions the conditions to Completion as contained
within the Acquisition Agreement, being
Admission and the passing of the Resolutions
Circular this document
CREST Regulations the Uncertificated Securities Regulations
2001 (SI 2001/3755)
DMG Technology PowerHouse's proprietary distributed modular
generation technology that enables the
recovery of energy from unrecyclable plastic,
end-of-life tyres and other waste streams
through small scale pyrolosis and gasification
into an energy rich clean syngas (synthetic
gas similar to town gas) from which electrical
power and hydrogen can be produced
Enlarged Share Capital the issued share capital of the Company
at the date of Admission (assuming that
no further warrants and/or options will
be exercised between 25 July 2020 (being
the latest practicable date prior to publication
of the Circular) and Admission) as enlarged
by the issue and allotment of the Acquisition
Shares
Existing Ordinary the 2,072,360,416 Ordinary Shares in issue
Shares at the date of this document
Financial Conduct the Financial Conduct Authority in its
Authority capacity as the competent authority for
the purposes of Part IV of FSMA
Form of Proxy the enclosed form of proxy for use by Shareholders
in connection with the General Meeting
FSMA the Financial Services and Markets Act
2000 (as amended)
General Meeting the general meeting of PowerHouse to be
held at 10 a.m. on 14 July 2020 (or any
reconvened meeting following any adjournment
of the general meeting) at the Chairman's
private residence, notice of which is set
out at the end of this document
Independent Directors the Board, excluding Mr David Ryan who
holds shares in W2T, being Dr William Cameron
Davies, Mr Nigel Brent Fitzpatrick, Mr
James John Pryn Greenstreet and Mr Myles
Kitcher
Independent Shareholders shareholders who are independent of a person
who would otherwise be required to make
a Rule 9 Offer and any person acting in
concert with him or her (as defined by
the Code) which, for the purposes of the
Panel Waiver, excludes all members of the
Concert Party and any other shareholders
of W2T who hold shares in the Company
Lock-In Deed the deed between the Company and each of
the Locked-In Sellers, further details
of which are set out in paragraph 11 of
the letter from the Chairman incorporated
into this document
Locked-In Sellers each of John Hall, Peter Jones OBE, Keith
Riley, Piangkwan Thummukgool, Howard White,
Josh White, Ben White, Serena White-Reyes,
Timothy Yeo, Diane Yeo, Paul Heagren, Steve
Medlicott and David Ryan
LSE or London Stock London Stock Exchange plc
Exchange
Notice or Notice of the notice of the General Meeting set out
General Meeting at the end of this document
Ordinary Shares ordinary shares of GBP0.005 each in the
capital of PowerHouse
Panel the Panel on Takeovers and Mergers
Peel Peel L&P Environmental Limited, a company
incorporated in England and Wales with
company number 04480419 whose registered
office is situated at Peel Dome Intu Trafford
Centre, Trafford City, Manchester, M17
8PL, England
Peel Collaboration the agreement between PowerHouse, W2T,
Agreement W2T Protos and Peel dated 9 August 2019
relating to the deployment of the Company's
DMG Technology in the UK in respect of
the Protos Project and a further 10 projects
(as varied by the Peel Supplemental Collaboration
Agreement)
Peel Supplemental the agreement between PowerHouse, W2T,
Agreement W2T Protos and Peel dated 10 February 2020
that varied the Peel Collaboration Agreement
to seek to accelerate the development of
the Protos Project
Peel UK Exclusivity the agreement between PowerHouse and Peel
Option Agreement dated 6 March 2020 pursuant to which Peel
has been granted an exclusive option to
commercialise the DMG Technology in the
UK
Principal Sellers John Hall and Howard White
Protos Project the proposed application of the DMG Technology
at the Protos Site
Protos Site part of a 54 hectare site known as 'Protos'
near Ellesmere Port, Cheshire, England
Registrar Neville Registrars Limited, a company incorporated
in England and Wales with registration
number 04770411 whose registered office
is situated at Neville House, Steelpark
Road, Halesowen, B62 8HD
Relationship Agreement the agreement in agreed form between PowerHouse
and the White Family, further details of
which are set out in paragraph 10 of the
letter from the Chairman incorporated into
this document
Resolutions the resolutions to be proposed at the General
Meeting as set out in the Notice of General
Meeting
Rule 9 Offer a general offer under Rule 9 of the Code
Sellers the sellers of the ordinary shares of GBP0.01
each in W2T, being Aquavista Limited, Marianna
Beck, Jane Bennett, Tony Bennett, Ron Bezalel,
Izhaki Omer Chalamis, Chris Vanezis, Moshe
Cohen, Dima Alfalasi, Bruce Drew, Linda
Farnes, Alon Gad, Steven Giles, Sheila
Gimson, Tristan Haley, John Hall, Neville
Harris, Paul Heagren, Ram Itzhaki, Peter
Jones OBE, Agnieszka Makarewicz, Steve
Medlicott, Stefan Iucovici, Mollyndave
PTY Ltd - Mollyndave Family A/C, N.O.M.
Itzhaki Consulting Limited, Nick Penn,
Martin Peters, Conrad Griffiths QC, Keith
Riley, Herardo Rippa, David Ryan, Ian Smith,
Maria Suttle, Kate Templeman, Piangkwan
Thummukgool, Joseph Tytunovich, Shlomit
Tytunovich, Nony Verioti, Paul Warwick,
Ben White, Howard White, Josh White, Serena
White-Reyes, Diane Yeo, Timothy Yeo and
Anna-Mariya Yordanova
Shareholders the holders of Ordinary Shares
uncertificated or recorded on the register of members of
in uncertificated PowerHouse as being held in uncertificated
form form in CREST and title to which, by virtue
of the CREST Regulations, may be transferred
by means of CREST
UK or United Kingdom the United Kingdom of Great Britain and
Northern Ireland
Waiver the waiver granted by the Panel (conditional
on the approval of the Waiver Resolution
by the Independent Shareholders) of the
obligation of the Concert Party to make
a Rule 9 offer under the Takeover Code
as a consequence of the allotment and issue
to it (or members of it) of the Acquisition
Shares
Waiver Resolution the ordinary resolution of the Independent
Shareholders to approve the Waiver, to
be proposed on a poll at the General Meeting
and set out as Resolution 2 in the Notice
Waste2Tricity or W2T Waste2Tricity Limited, a company incorporated
in England and Wales with company number
06708968 whose registered office is situated
at Finsgate, 5-7 Cranwood Street, London,
EC1V 9EE
WH Ireland WH Ireland Limited, a company incorporated
in England and Wales with company number
02002044 whose registered office is situated
at 24 Martin Lane, London, EC4R 0DR, England
W2T International Waste2Tricity International Limited, a
company incorporated in England and Wales
with company number 07979088 whose registered
office address is situated at Finsgate,
5-7 Cranwood Street, London EC1V 9EE
White Family Howard White, Josh White, Ben White and
Serena White-Reyes
W2T Protos Waste2Tricity (Protos) Limited, a company
incorporated in England and Wales with
company number 08361548 whose registered
office address is situated at Finsgate,
5-7 Cranwood Street, London, EC1V 9EE
W2T Thai Waste2Tricity International (Thailand)
Ltd, a company incorporated and registered
in Thailand with the Juristic Person Registration
Number 0105555173929
GBP, pounds sterling, UK pound sterling, the lawful currency
penny or pence of the United Kingdom
PART I
LETTER FROM THE CHAIRMAN
PowerHouse Energy Group Plc
( a public limited company incorporated in England and Wales
with registered number 03934451 )
Directors: Registered Office:
Dr William Cameron Davies (Non-Executive 15 Victoria Mews
Chairman) Mill Field Road
Mr David John Ryan (Chief Executive Cottingley Business Park
Officer) Bingley
Mr Nigel Brent Fitzpatrick (Non-Executive England
Director) BD16 1PY
Mr James John Pryn Greenstreet
(Non-Executive Director)
Mr Myles Kitcher (Non-Executive
Director)
26 June 2020
To holders of Ordinary Shares
Dear Shareholder,
Proposed issue of 1,437,440,277 new Ordinary Shares in
connection with the proposed acquisition of Waste2Tricity
Approval of Waiver of obligations under Rule 9 of the Takeover
Code
Notice of General Meeting
1. INTRODUCTION
On 23 December 2019, the Board announced that PowerHouse had
entered into heads of terms with W2T to acquire the entire issued
share capital of W2T (Heads), a structured solutions provider to
the energy-from-waste sector. The Board provided updates on the
proposed Acquisition and related arrangements on 11 February 2020
and 9 March 2020. On 25 June the Company and the Principal Sellers
entered into the Acquisition Agreement. The consideration for the
Acquisition, in accordance with the Acquisition Agreement, is the
issue of 1,437,440,277 Acquisition Shares to the Sellers in
proportion (as nearly as may be practicable) to their current
respective W2T holdings, which shall be issued and allotted
conditional only on the passing of the Allotment and Waiver
Resolutions and Admission and is expected to represent, in
aggregate, 40.96% of PowerHouse's Enlarged Share Capital and 40% of
PowerHouse's fully diluted enlarged share capital, taking into
account the options and warrants in issue. Certain of the Sellers
are acting in concert (as defined by the Takeover Code) and
therefore comprise the Concert Party as described further in
paragraph 9 of Part I and paragraph 1 of Part II of this
Circular.
The Acquisition Shares will rank pari passu in all respects with
the Ordinary Shares in issue including the right to receive all
dividends and other distributions made or paid following
Admission.
The issue of the Acquisition Shares is conditional upon, inter
alia, the Shareholders passing the Allotment Resolution and the
passing of the Waiver Resolution by the Independent Shareholders at
the General Meeting which will grant authority to the Board to
allot the Acquisition Shares on a non-pre-emptive basis.
Under Rule 9 of the Code, the issue of the Acquisition Shares to
the Concert Party and the resultant increase in the Concert Party's
percentage holding of Ordinary Shares would normally result in the
Concert Party being obliged to make a Rule 9 Offer. The Panel has
agreed to waive this obligation subject to the passing, on a poll,
of the Waiver Resolution by the Independent Shareholders of
PowerHouse at the General Meeting. Your attention is drawn to the
section on the Code contained in paragraph 8 of the letter from the
Chairman of PowerHouse.
A General Meeting is therefore being convened at 10 a.m. on 14
July 2020 (or any reconvened meeting following any adjournment of
the general meeting) at the Chairman's private residence for the
purposes of considering the Resolutions.
Due to ongoing circumstances surrounding COVID-19 Shareholders
wishing to participate are requested not to attend the meeting in
person and instead vote in advance by completing and returning the
hard copy Form of Proxy (or, alternatively, appointing a proxy or
proxies electronically by registering the proxy with the Registrar
at www.sharegateway.co.uk and completing the authentication
requirements as set out on the Form of Proxy) or if you hold your
shares in the Company in uncertificated form (that is, in CREST)
you may vote using the CREST Proxy Voting service in accordance
with the procedures set out in the CREST Manual. Please refer to
paragraph 13 of this Part 1 of this Circular and the Notice of
General Meeting set out at the end of this Circular, for further
information in respect of the General Meeting.
The formal Notice of General Meeting is set out at the end of
this document.
Prior to the Acquisition, PowerHouse, W2T and Peel have been
collaborating to develop the Protos Project as a 'first-of-a-kind'
application of the DMG Technology at the Protos Site, together with
10 additional potential projects. The terms of this collaboration
have, as it has developed over time, been recorded in a number of
agreements culminating in the Peel Collaboration Agreement, the
Peel Supplemental Agreement and, most recently, the Peel UK
Exclusivity Option Agreement (all together, Peel Agreements) with
the Acquisition being a condition to full implementation of the
Peel Agreements pursuant to which Peel has, on exercise of its
option (exercisable from Completion) (Option), agreed to pay the
sum of GBP500,000 to PowerHouse for the exclusive right to use the
DMG Technology in the United Kingdom (Exclusivity Sum) and, as a
consequence, will further lead the development and the further
funding strategy for all developments contemplated within the Peel
Agreements.
The purpose of this letter is to explain why the Independent
Directors recommend that Shareholders vote in favour of the
Resolutions to be proposed at the General Meeting as they intend to
do in respect of the Ordinary Shares held by them.
2. BACKGROUND
PowerHouse is the designer, creator, licensor and vendor of a
modular energy recovery system using renewable or waste feedstock
and owner of the DMG Technology. The DMG Technology is a
proprietary design that converts calorific waste streams into a
valuable intermediate product, a synthetic gas, a product that can
be used for power generation and as a source of hydrogen for fuel
cell vehicles.
W2T was established in September 2008 by Howard White to
identify technologies capable of generating low cost hydrogen. W2T
has two wholly owned UK subsidiaries, W2T International and W2T
Protos, both of which are dormant.
W2T and PowerHouse's former director, Keith Allaun, had regular
contact about technology development during Keith's tenure at
PowerHouse which was demonstrated by an agreement that was entered
into by PowerHouse for territorial use of technology in Thailand in
2014. Following this, PowerHouse and W2T continued to keep regular
contact regarding the potential of trialling the technology using
non-recyclable plastics as a feed to generate a stream of
hydrogen.
These exploratory project discussions led in January 2017 to a
memorandum of understanding (MOU) to harness PowerHouse and W2T's
strengths to develop, build and operate a number waste to energy
plants in the UK, utilising PowerHouse's technology but focussing
on hydrogen as a product, on a 50:50 partnership. Under this
development partnership, W2T arranged initially for the use of an
interim testing site from Peel, with whom they had a long standing
project co-operation agreement with and, subsequently a permanent
research and development site lease with Thornton Energy Park.
The partnership set the objectives of technology development by
PowerHouse, following W2T's key market application of distributed
hydrogen using waste plastic as an operational feedstock. This
hydrogen focussed product vision was developed from 2017 by the
Company using W2T team members including David Ryan, who at that
time had been seconded from W2T. The output from this programme
became the DMG Technology.
W2T fostered a closer relationship for PowerHouse with Peel,
whereby Peel considered exploiting the DMG Technology and its
applications in the UK, with Peel initially offering a site to the
Company for it to develop in another area of Ellesmere Port in
Cheshire, England. However, the Company faced commercial challenges
leading a development on this site and W2T therefore proposed that
they lead an alternative development. W2T and Peel continued
discussions and, as a result, in April 2019, Peel offered W2T a
124-year lease on part of the Protos Site, which presented a far
better route to commerciality.
On signature, PowerHouse initiated the site-specific design
engineering work whilst Peel and W2T developed the documentation to
enable planning applications to be made.
In August 2019, the MOU between the Company and W2T was
formalised into the Peel Collaboration Agreement under which
PowerHouse agreed to grant W2T and Peel exclusivity in respect of
the development of the DMG Technology in the UK in respect of at
least eleven 'waste plastic-to-hydrogen' facilities, with the
Protos Site identified as the first site.
Under the Peel Collaboration Agreement, PowerHouse was engaged
to provide engineering services and the license covering DMG
Technology for each project under development. PowerHouse enhanced
its engineering designs such that the Protos Project facility
capacity increased to 35 tonnes of waste plastic per day, targeting
production of 3.8MWe of electricity on site, exporting 3.4MWe to
local customers and up to two tonnes of hydrogen per day. Planning
submissions were finalised by Peel, W2T and W2T Protos in September
2019.
Throughout the negotiations in the second half of 2019, Peel
indicated their intent to engage in a potential UK wide roll out of
the DMG Technology, aligned to a wider 'Plastic Parks' strategic
development, where waste plastics are recycled and regenerated.
Under the Peel Collaboration Agreement, Peel further committed
to supporting W2T with ongoing engagement with third party funders,
with the intention of securing funding for the project pipeline
(the Protos Project and the envisaged further ten projects) from
sector market investors. The Board believes that Peel will develop
its 'Plastic Parks' concept in such a way that the DMG Technology
would be a key component of each facility and a cornerstone of each
'Plastic Park' bringing together potential counterparties for
waste, power and hydrogen and easing the contractual and funding
roadmap for DMG Technology applications.
Peel's investigations with the funding community for these DMG
Technology applications revealed that, for the strategy to be
attractive to funders, Peel would need to act as sole developer,
with exclusive rights to use the DMG Technology in the UK,
supported by PowerHouse as technology provider. However, the W2T
project rights of development acted as a contractual impediment to
this strategy, and with other commercial options ruled out, it was
proposed that, to follow the Peel led roll-out of the DMG
Technology at the Protos Project and the further ten projects
envisaged under the Peel Collaboration Agreement, PowerHouse would
acquire W2T thus allowing rights of development to be returned to
PowerHouse.
The PowerHouse board considered that given the research and
definition activities undertaken by Peel to date, they were in a
prime position as a developer and that any delay in adopting Peel's
offer to develop the DMG Technology application at the Protos
Project would have a deleterious effect on the capacity of
PowerHouse to deliver a project on any other site. The development
of this first site was critical to PowerHouse's plan to take the
DMG Technology to the next stage of its commercial development and
the Board was of the opinion that Peel would not be in a position
to progress the Protos Project to its conclusion without Completion
taking place. Hence, in December 2019 the Board initiated its due
diligence on W2T.
As a result of the proposal by the Company to acquire W2T,
subject to the execution by Peel, W2T and W2T Protos of the Peel
Supplemental Agreement, PowerHouse and W2T entered into the heads
of terms for the Protos site as announced on 23 December 2019. On 9
March 2020 Peel entered into the Peel UK Exclusivity Option
Agreement which is conditional upon and requires the completion of
the proposed PowerHouse acquisition of Waste2Tricity.
In February 2020, PowerHouse announced the entry into the Peel
Supplemental Agreement with Peel, W2T and W2T Protos under which it
was agreed that Peel will take lead responsibility for the
development and funding strategy of the first five of the earlier
announced eleven projects. This Peel Supplemental Agreement
contains commercial arrangements regarding the monetisation of the
DMG Technology at the Protos Site and subsequent sites which
includes the payment by Peel of a GBP500,000 annual licence fee per
project to PowerHouse starting when each project is commissioned
(PHE Licence Fee), and the immediate commitment to pay PowerHouse
GBP100,000 in historic costs. At the same time, fallback agreements
were made to cover PowerHouse sharing revenues with W2T should the
Acquisition not proceed. Notwithstanding commercial fallback
positions taken, the Board remains of the opinion that that neither
Peel nor the funders would progress the Protos Project to
completion without the Acquisition proceeding.
On 3 March 2020, the Cheshire West and Chester planning
committee approved the planning application made by Peel and W2T
for the DMG Technology to be utilised on the Protos Site. This
success arose from the successful partnership of the three
companies and the Board is happy to confirm that all principal team
members from W2T will be incorporated into the PowerHouse team at
completion of the acquisition, focussed either on the Protos
Project services delivery activities or international development,
and monthly operational costs will be reduced significantly.
The Board consider that, should the Acquisition be completed,
the key outcome would be that all project licence fees, and project
technology incomes would revert to PowerHouse, together with the
rights to assign project development for projects twelve and
beyond. Hence PowerHouse would then be in a position to grant
exclusivity for the DMG Technology in the UK.
The Board considers that the engagement of Peel as an
experienced player in the sustainable waste and energy sector,
together with the size, infrastructure credentials, national reach,
and expertise in industrial real estate of the wider Peel group
will bring additional credibility to the DMG Technology offering.
Peel is, in the Board's view, a natural fit for PowerHouse, given
Peel's land bank, industrial real estate and infrastructure
credentials.
On 9 March 2020, the Company announced the entry into the Peel
UK Exclusivity Option Agreement with Peel for all UK DMG Technology
development projects, under which it is envisaged that the DMG
Technology applications projects would be both owned by Peel and
third parties. Peel has agreed that they will pay a fee of
GBP500,000 for this exclusivity on award, in addition to the
project-by-project annual licences. As a result of this further
commitment to the future of PowerHouse, the Board considered it
appropriate to offer Peel the opportunity to nominate a
non-executive director to the Board and following this invitation,
on 18 March 2020, Myles Kitcher, managing director of Peel, was
appointed to the Board.
The Board firmly believes that the strategic rationale for the
Acquisition is underpinned by the success of the combined
PowerHouse and W2T team to date, in identifying and resolving the
key technology application, the importance of the delivery of the
Protos Project and the other four early projects. Post-Completion,
the longer-term collaboration with Peel provides a significant
commercial advantage compared to other delivery strategies or
partnering with alternative collaboration parties.
3. INFORMATION ON WASTE2TRICITY
PowerHouse granted W2T and Peel exclusive development rights to
the DMG Technology in the UK in respect of the 11 'waste
plastic-to-hydrogen' facilities and separately afforded W2T the
right to exclusive development of the DMG Technology in Japan and
Korea, subject to identifying suitable target projects and securing
initial contracts. PowerHouse has separately granted W2T Thai
exclusive development rights to the DMG Technology in Thailand. W2T
International recently sold 31% of the issued share capital in W2T
Thai pursuant to a share purchase agreement dated 17 April 2020
(Thai SPA) which, as a result, means that W2T International is no
longer the majority shareholder of W2T Thai, and has also agreed
(by way of granting an option) to divest the remaining shares held
by it in W2T Thai within six months of the date of the Thai
SPA.
For the period 1 May 2018 to 30 April 2019, W2T generated an
operating loss of GBP282,412 and a loss after exceptional items of
GBP459,937. The unaudited accounts as at 30 April 2020, show that
the net liabilities of Waste2Tricity totalled GBP722,550.
W2T's Board has recommended the Acquisition to the Sellers who
have accepted, conditional upon Admission.
4. ISSUE OF THE ACQUISITION SHARES IN POWERHOUSE
On or around the date of this Circular, the Company and the
Principal Sellers shall enter into the Acquisition Agreement, the
terms of which require that the Principal Sellers transfer their
respective number of shares held in the capital of W2T to the
Company on Completion. Arrangements are also in place to facilitate
the transfer of all of the remaining shares in the capital of W2T
from the Sellers (other than the Principal Sellers) to the Company
at Completion.
The consideration for the purchase of the share capital of W2T
held by the Principal Sellers under the Acquisition Agreement and
the arrangements with the Sellers (other than the Principal
Sellers) is the issue of the Acquisition Shares to each of the
Sellers in respect of their proportional shareholding in W2T such
that the Sellers, following Completion, will own 46.42% (which
includes, for the avoidance of doubt, any PHE shares owned by the
Sellers prior to the issue of the Acquisition Shares) of the
Enlarged Share Capital of the Company. The Acquisition Shares shall
rank pari passu in all respects with the Existing Ordinary Shares,
including the right (subject always to the rights attaching to the
Acquisition Shares) to receive all dividends declared, made or paid
after Completion (save that they shall not rank for any dividend or
other distribution declared made, or paid by reference to a record
date before Completion).
The Acquisition shall complete automatically and is conditional
on the satisfaction of the Conditions. If the Conditions are not
satisfied or waived on or before the date falling 2 months after
the date of the Acquisition Agreement (Longstop Date), the
Acquisition Agreement will cease to have effect immediately at
6.00pm on the Longstop Date.
In the Acquisition Agreement, the Principal Sellers have agreed
to give certain undertakings to assist the Company pre-Completion
with settling certain debts owed by W2T and, following Completion,
the Principal Sellers have agreed to give certain undertakings
related to events post-Completion covering customary restrictive
covenants and also in relation to the termination or winding up of
all of W2T's existing operational and corporate arrangements.
The Principal Sellers have also agreed under the Acquisition
Agreement to give limited warranties to the Company subject to
customary contractual limitations.
The Acquisition Shares will be issued at the mid-market closing
price of 3.71 pence on 25 June 2020, the latest practicable date
prior to the publication of this document, the Acquisition Shares
represent a total value of GBP53,329,034.28.
Conditional only on the passing of all the Resolutions at the
General Meeting, PowerHouse will allot the Acquisition Shares and
apply to the London Stock Exchange for Admission.
5. INFORMATION ON CURRENT TRADING
The Company's financial performance was set out in the Company's
unaudited interim results announcement released on 27(th) September
2019. As at 30 June 2019 the assets totalled GBP481,191.00 with
total current liabilities in the sum of GBP296,812.00 and the
Company's loss before tax was GBP865,408 for the 6 months ended 30
June 2019.
Since the interim results for June 2019 announced in September
2019, the Company has been engaged primarily in the continued
development of the intended first commercial use of the DMG
Technology at the Protos Site. This has involved the necessary
technical preparatory work carried out in advance of formal
contracts, and with Peel, tendering and selecting contracting
partners for the engineering definition.
The Company's results for the full year 2019 are currently being
audited but are expected to be in line with the trading position
reported in the interim results to June 2019. The 2019 results will
reflect the full cost of the Directors for the 2019 financial year
though it should be noted that the Directors did not take their
remuneration in pay during 2019 and will only be compensated for
this during 2020.
During 2020, the Company's work on the pre-contract stage for
the Protos Site, whilst not significant in value, has been invoiced
and represents the Company's first recognition of revenue. The
Company is now engaged with the client and contracting partners in
reviewing contractual structures suitable for the build phase and
their key terms. The Company is expected to act as a sub-contractor
in this phase providing engineering expertise for the technology
build and commissioning.
Financial performance in 2020, is represented by similar
operating costs to 2019, though aided by the recognition of some
engineering fees as detailed above. Cash has continued to be
managed during this period by the avoidance of unnecessary spend
and in utilising share settlement deals with contractors where
appropriate.
6. POWERHOUSE/W2T STRATEGY FOLLOWING COMPLETION
The Directors promote the Acquisition as they consider that the
post-Acquisition enlarged company will be better understood by its
customers and investors, with rights to markets and developments
in-house, and will be able to present a clear message to
international markets about its innovative technology designed to
address a major world challenge; that of efficiently eliminating
plastic waste. The substantial global potential for the application
of PowerHouse's DMG Technology will drive the Board's strategy to
exploit this opportunity as quickly and effectively as
possible.
The fundamental tenet of the market engagement strategy, given
the vast size of the addressable market, will be to negotiate
similar exclusivity arrangements to the UK, with carefully selected
experienced well-financed development partners on a
country-by-country basis to enable rollout of its DMG Technology in
each region. This strategy will enable international delivery of
DMG Technology projects in a speedy yet manageable manner, whilst
also mitigating operational and financial risk to PowerHouse, thus
creating a company operation and management system to optimise
profit and deliver sustainable growth.
To deliver this strategy, the existing pipeline of two dozen
screened DMG Technology plant opportunities in the UK will be
handed over to Peel under the Peel Collaboration Agreement and a
future UK exclusivity agreement, freeing company operational
resource and removing all of associated UK business development
costs. The international business development activities of W2T
will now be integrated into those of PowerHouse and will focus on
developing territory-by-territory partnership agreements with
regional partners, contractors and operators to roll out the DMG
Technology in each territory. PowerHouse will continue these
international business development activities of seeking industrial
partner relationships, including the current W2T led Japanese and
Asian customer liaison which will be taken in-house and become
technically led.
Following Completion, the Board's immediate focus will be on
delivering the first commercial application of DMG Technology on
the contracted Protos Site. To support the Protos Project
development and other future projects, PowerHouse intends to seek
to expand its operational teams in a phased manner, aligned to
projects progress, with teams set up to maintain and develop the
delivery and supply chain relationships designed to enable it to
deliver and provide licensing support to multiple projects
simultaneously. PowerHouse intends to invest in operational
personnel, management systems and equipment to deliver these
services as required.
The Board will use reasonable endeavours to ensure that the
transfer of the remaining shares held by W2T International in W2T
Thai will be completed after Completion and that the opportunities
in Thailand are fully explored with the new W2T Thai owners. The
Board will also commence steps to wind up W2T's two wholly owned,
dormant subsidiaries (W2T Protos and W2T International) and W2T as
an entity as soon as reasonably practical after Completion.
PowerHouse will continue with the DMG Technology development.
PowerHouse will be the IP owner and licensor, providing technical
services and our partners will undertake the project development,
project funding and ownership. The Board consider that the global
outlook for the expanded Company is extremely positive, with sales
and marketing effort brought in house and more focused to deliver
the international ambitions of the Company and the roll out of the
application of the DMG Technology worldwide.
7. PROPOSED BOARD AND MANAGEMENT
On Completion, it is proposed that Timothy Yeo, current chairman
of W2T, will join the Board of the Company as a non-executive
director. Mr Yeo has wide experience in government, serving in the
Environment and Health Departments, and subsequently as Shadow
Secretary of State for Trade and Industry in the Shadow Cabinet. He
is currently the chairman of the New Nuclear Watch Institute,
Honorary Ambassador of Foreign Investment Promotion for South Korea
and since 2007 has been a non-executive director of Getlink SE,
operator of the Channel Tunnel whose market capitalisation on the
Paris Bourse exceeds GBP6 billion.
Upon his proposed appointment as a non-executive director, Tim
will enter into a new letter of appointment with PowerHouse.
Furthermore, it is proposed that John Hall and Howard White will
join PowerHouse at Completion as consultants. The Principal Sellers
and some of the other W2T directors who are also shareholders of
W2T will agree to certain restrictive covenants not allowing them
to promote similar distributed modular generation technologies to
the DMG Technology for a period of 24 months following
Completion.
8. CITY CODE ON TAKEOVERS AND MERGERS
The Code applies to the Company and as such the Shareholders are
subject to and entitled to the protections afforded by the Code, as
described in this paragraph (paragraph 8) and Part I of this
Circular. For the purposes of the Code, the members of the Concert
Party are regarded as acting in concert, as defined by the Code,
with regard to their respective holdings of shares in the issued
share capital of the Company.
The issue of the Acquisition Shares gives rise to certain
considerations under the Takeover Code. Brief details of the Panel,
the Takeover Code and the protections they afford are set out
below.
The Takeover Code is issued and administered by the Panel. The
Takeover Code applies to all takeover and merger transactions,
however effected, where the offeree company is, among other things,
a listed or unlisted public company resident in the United Kingdom,
the Channel Islands or the Isle of Man (and to certain categories
of private limited companies). The Company is a public company
whose Ordinary Shares are admitted to trading on AIM, and its
Shareholders are therefore entitled to the protections afforded by
the Takeover Code.
Under Rule 9 of the Takeover Code, where any person acquires,
whether by a series of transactions over a period of time or by one
specific transaction, an interest (as defined in the Takeover Code)
in shares which (taken together with shares in which he is already
interested and in which persons acting in concert with him are
interested) carry 30 per cent, or more of the voting rights of a
company that is subject to the Takeover Code, that person is
normally required by the Panel to make a Rule 9 Offer to all the
holders of any class of equity share capital or other class of
transferable securities carrying voting rights in that company to
acquire the balance of their interests in the company.
Similarly, Rule 9 of the Takeover Code also provides, among
other things, that where any person, together with persons acting
in concert with him, is interested in shares which in aggregate
carry not less than 30 per cent. of the voting rights of that
company which is subject to the Takeover Code but does not hold
shares carrying more than 50 per cent. of the voting rights of that
company and such person or any person acting in concert with him
acquires an interest in any other shares which increases the
percentage of shares carrying voting rights in which he is
interested, then such person or persons acting in concert with him
will normally be required by the Panel to make a Rule 9 Offer to
all the holders of any class of equity share capital or other class
of transferable securities carrying voting rights of that company
to acquire the balance of their interests in the company.
An offer under Rule 9 of the Takeover Code must be in cash (or
with a cash alternative) and at the highest price paid within the
preceding 12 months for any interest in shares in the company by
the person required to make the offer or any person acting in
concert with him.
Shareholders should be aware that Rule 9 of the Takeover Code
further provides, inter alia, that where any person who, together
with persons acting in concert with him, holds interests in shares
carrying more than 50 per cent. of the voting rights of a company,
acquires an interest in shares which carry additional voting
rights, then they will not normally be required to make a Rule 9
Offer to the other shareholders to acquire their shares.
For the purposes of the Takeover Code, persons acting in concert
include persons who, pursuant to an agreement or understanding
(whether formal or informal), co-operate, to obtain or consolidate
control of a company or frustrate the successful outcome of an
offer for a company subject to the Takeover Code. For the purposes
of the Takeover Code, "control" means a holding, or aggregate
holdings, of shares in the capital of a company carrying 30 per
cent. or more of the voting rights attributable to the share
capital of a company which are currently exercisable at a general
meeting, irrespective of whether the holding or aggregate holdings
give de facto control. Under the Takeover Code, shareholders in a
private company who sell their shares in that company in
consideration for the issue of new shares in a company to which the
Takeover Code applies are also presumed to be acting in concert in
respect of that company unless the contrary is established.
9. CONCERT PARTY AND TAKEOVER CODE
9.1 Background to Concert Party
Upon Admission, the Concert Party will hold a maximum 39.90% of
the voting rights of the Company which, without the Waiver, would
result in the Concert Party being required to make a Rule 9 Offer
for the Company. The Panel has agreed, subject to the Waiver
Resolution being passed on a poll by the Independent Shareholders
at the General Meeting, to waive the requirement under Rule 9 of
the Code for the Concert Party to make a Rule 9 Offer for the
Ordinary Shares of the Company, that would otherwise arise upon the
issuance to the Concert Party of the Acquisition Shares. Some
members of the Concert Party currently hold shares in the Company
and will not be able to vote on the Resolutions put forward in this
Circular as they are not viewed as independent.
The Independent Directors believe that it is in the best
interests of the Company that the Waiver Resolution be passed so as
to allow the Company to acquire Waste2Tricity. Further details in
relation to the Waiver are set out in this paragraph 9.
The Notice of General Meeting, at which the resolutions to
approve the issue of the Acquisition Shares, conditional on
Admission, and the approval of the Waiver Resolution will be
proposed, is set out at the end of this document. Should, at the
General Meeting, the approval of the Shareholders not be obtained
in respect of the Allotment Resolution and/or the Independent
Shareholders fail to approve the Waiver Resolution, the Acquisition
will not proceed.
The persons set out in the table below are presumed to be acting
in concert with each other. Their interests in the enlarged Company
immediately following Admission are also set out in the table
below. Further information is set out at paragraph 1 of Part II of
this document.
9.2 Information on the Concert Party
For the purposes of the Takeover Code, the members of the
Concert Party are regarded by the Panel as acting in concert with
regard to their holdings of shares in the issued share capital of
the Company.
The members of the Concert Party and their respective interests
in the existing share capital of W2T and the Company and also the
Enlarged Share Capital of the Company are:
Name Holdings Holdings Current Current Acquisition Total
in W2T % in holdings % holdings shares % in PHE
W2T in PHE in PHE Enlarged
Share
Capital
Aquavista
Limited 16,000 1.23% - - 17,642,161 0.50%
---------------------------- --------- ------------------------------- ------------------------- ----------------------- ---------
Beck,
Marianna 11,290 0.87% - - 12,448,750 0.35%
---------------------------- --------- ------------------------------- ------------------------- ----------------------- ---------
Bennett,
Tony 1,222 0.09% 3,762,306 0.18% 1,347,420 0.15%
---------------------------- --------- ------------------------------- ------------------------- ----------------------- ---------
Bennett,
Jane 1,222 0.09% 23,715,616 1.14% 1,347,420 0.71%
---------------------------- --------- ------------------------------- ------------------------- ----------------------- ---------
Drew, Bruce 3,500 0.27% - - 3,859,223 0.11%
---------------------------- --------- ------------------------------- ------------------------- ----------------------- ---------
Farnes, Linda 5,000 0.38% - - 5,513,175 0.16%
---------------------------- --------- ------------------------------- ------------------------- ----------------------- ---------
Hall, John 103,431 7.93% - - 114,046,647 3.25%
---------------------------- --------- ------------------------------- ------------------------- ----------------------- ---------
Jones OBE,
Peter 47,500 3.64% - - 52,375,166 1.49%
---------------------------- --------- ------------------------------- ------------------------- ----------------------- ---------
Riley, Keith 11,000 0.84% - - 12,128,986 0.35%
---------------------------- --------- ------------------------------- ------------------------- ----------------------- ---------
Thummukgool,
Piangkwan 82,024 6.29% - - 90,442,538 2.58%
---------------------------- --------- ------------------------------- ------------------------- ----------------------- ---------
Warwick,
Paul 11,560 0.89% 48,818,890 2.36% 12,746,461 1.75%
---------------------------- --------- ------------------------------- ------------------------- ----------------------- ---------
White, Ben 172,987 13.27% 32,756,786 1.58% 190,741,532 6.37%
---------------------------- --------- ------------------------------- ------------------------- ----------------------- ---------
White, Howard 131,001 10.05% 16,172,010 0.78% 144,446,296 4.58%
---------------------------- --------- ------------------------------- ------------------------- ----------------------- ---------
White, Josh 309,019 23.70% - - 340,735,185 9.71%
---------------------------- --------- ------------------------------- ------------------------- ----------------------- ---------
White-Reyes,
Serena 172,986 13.27% - - 190,740,429 5.43%
---------------------------- --------- ------------------------------- ------------------------- ----------------------- ---------
Yeo, Diane 56,879 4.36% - - 62,716,780 1.79%
---------------------------- --------- ------------------------------- ------------------------- ----------------------- ---------
Yeo, Timothy 8,303 0.64% - - 9,155,179 0.26%
---------------------------- --------- ------------------------------- ------------------------- ----------------------- ---------
Yordanova,
Anna-Mariya 11,560 0.89% - - 12,746,461 0.36%
---------------------------- --------- ------------------------------- ------------------------- ----------------------- ---------
Total 1,156,484 88.71% 125,225,608 6.04% 1,275,179,809 39.90%
---------------------------- --------- ------------------------------- ------------------------- ----------------------- ---------
Other than as disclosed in this document, there are no further
relationships (personal, financial and commercial) arrangements and
understandings between the Concert Party members. For further
information on the Concert Party see paragraph 1 of Part II.
9.3 Waiver of Rule 9 obligation
Under Note 1 on the Notes on the Dispensations from Rule 9 of
the Takeover Code, the Panel will normally waive the requirement
for a Rule 9 Offer to be made in accordance with Rule 9 if, inter
alia, those shareholders of the company who are independent of the
persons who would otherwise be required to make a Rule 9 Offer
(being the shareholders of the Company other than any member of the
Concert Party, any of the other shareholders in W2T or any person
acting in concert with any such persons) pass an ordinary
resolution on a poll at a General Meeting approving such a
Waiver.
The Company has applied to the Panel for the Waiver in order to
permit the Acquisition to proceed without triggering an obligation
on the part of the Concert Party to make a Rule 9 Offer to the
Shareholders. Subject to the approval of the Independent
Shareholders of the Waiver Resolution, to be taken on a poll at the
General Meeting, the Panel has agreed to waive the obligation of
the Concert Party to make a Rule 9 Offer. To be passed, the Waiver
Resolution will require a simple majority of the votes cast on a
poll by the Independent Shareholders participating and voting at
the General Meeting.
Shareholders should be aware that under Rule 9 of the Takeover
Code, any person who acquires an interest (as such term is defined
in the Takeover Code) in shares which, taken together with the
shares in which he and persons acting in concert with him are
interested, carry 30% or more of the voting rights in a company
which is subject to the Takeover Code, is normally required to make
a Rule 9 Offer to all of the remaining shareholders to acquire
their shares. Similarly, when any person, together with persons
acting in concert with him, is interested in shares which in
aggregate carry not less than 30% of the voting rights but does not
hold shares carrying more than 50% of the voting rights of such a
company, a Rule 9 Offer will normally be required if any further
interests in shares are acquired by any such person. These limits
apply to the entire Concert Party as well as the total beneficial
holdings of individual members. Such an offer would have to be made
in cash at a price not less than the highest price paid by him, or
by any member of the group of persons acting in concert with him,
for any interest in shares in the Company during the 12 months
prior to the announcement of the offer.
Notwithstanding the Waiver, the individual members of the
Concert Party will not be able to increase their percentage
shareholding through or between a Rule 9 threshold without the
consent of the Panel. In the event that the Waiver is approved at
the General Meeting, neither the Concert Party nor any of its
connected persons or other persons acting in concert with it will
be restricted from making an offer for the Company.
Shareholders should be aware that Rule 9 of the Takeover Code
further provides, inter alia, that where any person who, together
with persons acting in concert with him, holds interests in shares
carrying more than 50 per cent. of the voting rights of a company,
acquires an interest in shares which carry additional voting
rights, then they will not normally be required to make a Rule 9
Offer to the other shareholders to acquire their shares.
9.4 Dealings by the Concert Party
9.4 (a) Dealings in the past 12 months
Certain persons within the Concert Party have made the following
dealings in the 12 months preceding the date of this Circular.
Shares acquired
Jane Bennett
Date Number of Shares Price
14 January 2020 457,142 0.79
----------------- ------
Ben White
Date Number of Shares Price
24 January 2020 1,000,000 0.80
------------------------------ ------
24 January 2020 1,000,000 0.80
------------------------------ ------
24 January 2020 1,000,000 0.79
------------------------------ ------
24 January 2020 1,000,000 0.79
------------------------------ ------
24 January 2020 1,000,000 0.78
------------------------------ ------
10 January 2020 545,248 0.60
------------------------------ ------
19 December 2019 8,928,572 0.51
------------------------------ ------
16 December 2019 1,078,774 0.33
------------------------------ ------
16 December 2019 2,985,764 0.31
------------------------------ ------
16 December 2019 1,985,489 0.31
------------------------------ ------
16 December 2019 2,000,000 0.31
------------------------------ ------
16 December 2019 2,000,000 0.30
------------------------------ ------
16 December 2019 2,000,000 0.30
------------------------------ ------
16 December 2019 2,000,000 0.30
------------------------------ ------
16 December 2019 1,085,679 0.30
------------------------------ ------
16 December 2019 1,056,876 0.29
------------------------------ ------
16 December 2019 1,089,670 0.28
------------------------------ ------
09 December 2019 30,000 0.32
------------------------------ ------
Shares disposed
Ben White
Date Number of Shares Price
08 June 2020 - 1,000,000 3.91
----------------- ------
08 June 2020 - 500,000 4.01
----------------- ------
08 June 2020 - 1,000,000 3.90
----------------- ------
08 June 2020 - 100,000 4.01
----------------- ------
08 June 2020 - 500,000 4.01
----------------- ------
08 June 2020 - 1,000,000 3.93
----------------- ------
08 June 2020 - 1,000,000 3.96
----------------- ------
08 June 2020 - 1,400,000 4.03
----------------- ------
05 June 2020 - 1,000,000 3.60
----------------- ------
05 June 2020 - 500,000 3.51
----------------- ------
05 June 2020 - 500,000 3.50
----------------- ------
04 June 2020 - 500,000 3.32
----------------- ------
03 June 2020 - 2,000,000 2.62
----------------- ------
03 June 2020 - 1,000,000 2.65
----------------- ------
02 June 2020 - 1,000,000 2.80
----------------- ------
02 June 2020 - 1,000,000 2.71
----------------- ------
02 June 2020 - 1,000,000 2.84
----------------- ------
02 June 2020 - 2,000,000 2.81
----------------- ------
02 June 2020 - 2,000,000 2.70
----------------- ------
02 June 2020 - 1,000,000 2.76
----------------- ------
02 June 2020 - 1,000,000 2.85
----------------- ------
02 June 2020 - 2,000,000 2.62
----------------- ------
02 June 2020 - 1,000,000 2.85
----------------- ------
02 June 2020 - 1,000,000 3.05
----------------- ------
02 June 2020 - 2,000,000 2.69
----------------- ------
02 June 2020 - 957,142 2.83
----------------- ------
01 June 2020 - 786,072 3.68
----------------- ------
01 June 2020 - 1,000,000 3.87
----------------- ------
01 June 2020 - 2,500,000 3.96
----------------- ------
13 December 2019 - 580,658 0.27
----------------- ------
12 December 2019 - 500,000 0.26
----------------- ------
12 December 2019 - 980,000 0.27
----------------- ------
12 December 2019 - 1,010,000 0.27
----------------- ------
12 December 2019 - 200,000 0.27
----------------- ------
11 December 2019 - 500,000 0.27
----------------- ------
11 December 2019 - 94,504 0.27
----------------- ------
11 December 2019 - 198,576 0.28
----------------- ------
11 December 2019 - 1,018,976 0.29
----------------- ------
11 December 2019 - 990,950 0.29
----------------- ------
11 December 2019 - 80,000 0.29
----------------- ------
11 December 2019 - 1,008,767 0.29
----------------- ------
11 December 2019 - 105,679 0.29
----------------- ------
11 December 2019 - 35,000 0.29
----------------- ------
11 December 2019 - 360,888 0.29
----------------- ------
11 December 2019 - 150,000 0.29
----------------- ------
11 December 2019 - 250,000 0.28
----------------- ------
11 December 2019 - 94,344 0.29
----------------- ------
11 December 2019 - 43,565 0.29
----------------- ------
11 December 2019 - 430,565 0.29
----------------- ------
11 December 2019 - 90,600 0.29
----------------- ------
11 December 2019 - 33,000 0.29
----------------- ------
11 December 2019 - 222,221 0.29
----------------- ------
11 December 2019 - 120,000 0.29
----------------- ------
10 December 2019 - 30,800 0.29
----------------- ------
10 December 2019 - 55,000 0.29
----------------- ------
10 December 2019 - 124,580 0.28
----------------- ------
10 December 2019 - 50,000 0.29
----------------- ------
10 December 2019 - 996,000 0.28
----------------- ------
10 December 2019 - 1,025,879 0.30
----------------- ------
09 December 2019 - 1,001,856 0.31
----------------- ------
09 December 2019 - 500,000 0.30
----------------- ------
09 December 2019 - 1,058,707 0.31
----------------- ------
09 December 2019 - 1,096,457 0.32
----------------- ------
06 December 2019 - 1,254,877 0.32
----------------- ------
06 December 2019 - 1,158,707 0.32
----------------- ------
05 December 2019 - 1,058,447 0.32
----------------- ------
05 December 2019 - 1,008,467 0.33
----------------- ------
04 December 2019 - 1,050,008 0.33
----------------- ------
04 December 2019 - 1,100,000 0.34
----------------- ------
10 October 2019 - 1,897,647 0.38
----------------- ------
20 September 2019 - 1,985,764 0.40
----------------- ------
19 September 2019 - 1,654,273 0.39
----------------- ------
18 September 2019 - 1,728,062 0.39
----------------- ------
18 September 2019 - 1,258,497 0.39
----------------- ------
17 September 2019 - 1,899,999 0.40
----------------- ------
12 September 2019 - 1,258,797 0.39
----------------- ------
06 September 2019 - 999,999 0.38
----------------- ------
05 September 2019 - 1,005,000 0.39
----------------- ------
14 August 2019 - 1,500,000 0.44
----------------- ------
12 August 2019 - 2,506,897 0.48
----------------- ------
12 August 2019 - 1,000,000 0.49
----------------- ------
20 June 2019 - 1,015,828 0.40
----------------- ------
18 June 2019 - 1,245,804 0.41
----------------- ------
17 June 2019 - 1,258,096 0.42
----------------- ------
9.4 (b) Disqualifying Transactions
The Panel will not normally waive an obligation under Rule 9 of
the Takeover Code if any member of the Concert Party, or any person
acting in concert with it, has acquired any interest in shares in
the Company in the 12 months preceding the date of this Circular
but subsequent to negotiations, discussions or the reaching of
understandings or agreements with the Directors of the Company in
relation to the proposed issue of new shares. In addition, the
Waiver will be invalidated if any acquisition of any interest in
shares in the Company are made in the period between the date of
this Circular and the General Meeting.
The Panel has considered the transactions below, which took
place in the time period referred to above, and in the
circumstances concluded that these do not prejudice the grant of
the Waiver:
Name Date Number of shares Price
purchased
Jane Bennett 14 January 2020 457,142 0.79
------------------ ------------------------------ ------
Ben White 24 January 2020 1,000,000 0.80
------------------ ------------------------------ ------
Ben White 24 January 2020 1,000,000 0.80
------------------ ------------------------------ ------
Ben White 24 January 2020 1,000,000 0.79
------------------ ------------------------------ ------
Ben White 24 January 2020 1,000,000 0.79
------------------ ------------------------------ ------
Ben White 24 January 2020 1,000,000 0.78
------------------ ------------------------------ ------
Ben White 10 January 2020 545,248 0.60
------------------ ------------------------------ ------
Ben White 19 December 2019 8,928,572 0.51
------------------ ------------------------------ ------
Ben White 16 December 2019 1,078,774 0.33
------------------ ------------------------------ ------
Ben White 16 December 2019 2,985,764 0.31
------------------ ------------------------------ ------
Ben White 16 December 2019 1,985,489 0.31
------------------ ------------------------------ ------
Ben White 16 December 2019 2,000,000 0.31
------------------ ------------------------------ ------
Ben White 16 December 2019 2,000,000 0.30
------------------ ------------------------------ ------
Ben White 16 December 2019 2,000,000 0.30
------------------ ------------------------------ ------
Ben White 16 December 2019 2,000,000 0.30
------------------ ------------------------------ ------
Ben White 16 December 2019 1,085,679 0.30
------------------ ------------------------------ ------
Ben White 16 December 2019 1,056,876 0.29
------------------ ------------------------------ ------
Ben White 16 December 2019 1,089,670 0.28
------------------ ------------------------------ ------
Ben White 09 December 2019 30,000 0.32
------------------ ------------------------------ ------
9.5 Intentions of the Concert Party
The Concert Party has confirmed that there is no agreement,
arrangement or understanding for the transfer of their Acquisition
Shares to any third party.
The Concert Party has no intention of making any changes in
relation to:
-- the future business of the Company;
-- the continued employment of the Company's (and its
subsidiaries) employees and management, including any material
change in the conditions of employment or in the balance of the
skills and functions of the employees and management;
-- the strategic plans of the Company;
-- the location of the Company's places of business;
-- any research and development activities of the business;
-- the redeployment of any fixed assets of the Company;
-- employer contributions into the Company's pension scheme and the admission of new members; or
-- the maintenance of the existing trading facilities for the Company's shares on AIM.
The Company has no employees other than the Directors and does
not operate a pension scheme.
The Concert Party does not intend to change its own current
business strategy, or any other matter referred to in the paragraph
above as a result of the Acquisition.
10. RELATIONSHIP AGREEMENT
The Company and each member of the White Family entered into the
Relationship Agreement (which is conditional on Admission) to
manage the relationship between them to ensure that the Company
will at all times be capable of carrying out its business
independently of the White Family.
Further details of the Relationship Agreement are set out in the
Appendix to this document.
11. LOCK-IN DEED
The Company and each of the Locked-In Sellers have entered into
a Lock-In Deed (which is conditional on Admission) containing
certain restrictions on each of the Locked-In Sellers regarding the
disposal of their Acquisition Shares following Admission including
a restriction on disposals of any interest over any Acquisition
Shares held by them for 12 months following Admission and, at the
end that 12 month period, orderly market restrictions for a further
12 months. These restrictions will not prevent the Locked-In
Sellers from, among other things, accepting a general offer (in
accordance with the Takeover Code) made to the Shareholders of the
Company to acquire all the Company's issued Ordinary Shares or to
the execution and delivery of an irrevocable undertaking to accept
such general offer.
12. GENERAL MEETING
For the reasons set out above, Completion is conditional upon,
inter alia, the approval by the Shareholders of the Resolutions at
the General Meeting. Set out at the end of this document is a
notice convening the General Meeting which is to be held at the
Chairman's private residence at 10 a.m. on 14 July 2020, for the
purpose of considering, and if thought fit, passing the Resolutions
set out in the Notice of General Meeting, and further described
below.
As Shareholders will be aware, the UK government's announcement
on 23 March 2020 of new restrictive measures in connection with
COVID-19 will restrict the ability of Shareholders to attend the
General Meeting in person.
Unless the measures change prior to the General Meeting, the
Company anticipates that it will run the General Meeting as a
closed meeting. In order to comply with relevant legal
requirements, and to ensure the General Meeting is quorate, the
General Meeting will be convened with one Shareholder, being the
Chairman of the General Meeting, and two proxy shareholders each
appointed by a Shareholder, at the Chairman's private residence at
10 a.m. on 14 July 2020. This will be facilitated by the
Company.
As such Shareholders will not be permitted to attend the General
Meeting in person and, instead, are advised to submit a Form of
Proxy (either by completing and returning the hard copy Form of
Proxy or, alternatively, appointing a proxy or proxies
electronically by registering the proxy with the Registrar at
www.sharegateway.co.uk and completing the authentication
requirements as set out on the Form of Proxy) in advance of the
General Meeting. In order to ensure that each Shareholder's vote
counts, the Board recommends that Shareholders appoint the Chairman
of the General Meeting as their proxy for the General Meeting to
vote on their behalf. If you hold your shares in the Company in
uncertificated form (that is, in CREST) you may vote using the
CREST Proxy Voting service in accordance with the CREST Manual
(please also refer to the accompanying notes to the Notice of the
General Meeting set out at the end of this document).
Should a Shareholder have any questions that they would have
raised at the General Meeting in connection with the business of
that meeting, the Board asks that Shareholders send any questions
by email to inquire@powerhousegroup.co.uk .
The Board will endeavour to provide answers to all appropriate
questions and to publish such answers on the Company's website as
soon as practicable following the General Meeting. Shareholder
engagement is important to the Company even in these exceptional
times.
At the current time it is anticipated that Shareholders
attempting to attend the General Meeting in person will be refused
entry.
The Board will continue to assess the situation in the UK, and
in particular any new or existing measures that the UK government
takes and will duly notify Shareholders if appropriate and what
further action, if any, Shareholders are permitted to take in
respect of the General Meeting via a regulatory news service.
Resolution 1
Resolution 1 is an ordinary resolution to provide the Directors
with authority to allot shares in the Company, and grant rights to
subscribe for or to convert any security into shares of the Company
(such shares, and rights to subscribe for or to convert any
security into shares of the Company) up to an aggregate nominal
amount of GBP7,187,201.39, in connection with the Acquisition.
Resolution 2
Resolution 2 is an ordinary resolution and is subject to the
approval of the Independent Shareholders (being the Shareholders
other than the members of the Concert Party and any other
shareholders of W2T who hold shares in the Company) on a poll and
each Independent Shareholder will be entitled to vote for each
ordinary share held.
The authority granted by the Allotment Resolution is required to
provide the Board with authority to allot the Acquisition Shares
and the Directors will not use the authority granted by the
Allotment Resolution for any other reason. The passing of the
Waiver Resolution by the Independent Shareholders is a condition of
the Panel granting the Waiver.
For the avoidance of doubt the share authority in place from
last year's AGM also remains in place.
13. ACTIONS TO BE TAKEN
Please check that you have received with this document a Form of
Proxy for use in respect of the General Meeting.
In light of the restrictive measures introduced by the UK
government in connection with COVID-19, the Board strongly advises
and recommends that all Shareholder's complete, sign and return a
Form of Proxy in accordance with the instructions printed thereon
as soon as possible, but in any event so as to be received, by post
to the Registrar at Neville House, Steelpark Road, Halesowen, B62
8HD by no later than 10 a.m. on 10 July 2020 (or, in the case of an
adjournment of the General Meeting, not later than 48 hours before
the time fixed for the holding of the adjourned meeting).
In order to ensure that each Shareholder's vote counts, the
Board recommends that Shareholders appoint the Chairman of the
General Meeting as their proxy for the General Meeting to vote on
their behalf.
Please note that in light of the restrictive measures introduced
by the UK government in connection with COVID-19, the Board
recommends that all Shareholders vote in advance by completing and
returning the Form of Proxy, as per above, or voting by way of
CREST Proxy Voting, as per below.
As an alternative to completing and returning the printed hard
copy Form of Proxy, you can also appoint a proxy or proxies
electronically by registering the proxy with the Registrar at
www.sharegateway.co.uk and completing the authentication
requirements as set out on the Form of Proxy. For an electronic
proxy appointment to be valid, the appointment must be received by
the Registrar by no later than 10 a.m. on 10 July 2020.
If you hold your Ordinary Shares in uncertificated form (that
is, in CREST) you may vote using the CREST Proxy Voting service in
accordance with the procedures set out in the CREST Manual (please
also refer to the accompanying notes to the Notice of the General
Meeting set out at the end of this document). Proxies submitted via
CREST must be received by the Company's agent (the Registrar (ID:
7RA11)) by no later than 10 a.m. on 10 July 2020 (or, in the case
of an adjournment, not later than 48 hours before the time fixed
for the holding of the adjourned meeting). The completion and
return of the Form of Proxy would not normally prevent you from
attending and voting in person at the General Meeting, or any
adjournment thereof, but due to COVID-19 we are instructing
Shareholders not to attend this meeting in person and instead to
raise any questions in relation to the business to be considered at
the General Meeting by following the procedure as set out on pages
29 to 31 of this document.
Appointing a proxy in accordance with the instructions set out
above will enable your vote to be counted at the General Meeting in
the event of your absence. As noted previously, the Board
recommends that you appoint the chairman of the forthcoming General
Meeting as your proxy. In accordance with the UK Government's
advice in relation to COVID-19, it is not anticipated that you will
be permitted to attend the General Meeting in person.
14. APPLICATION FOR ADMISSION OF THE ACQUISITION SHARES
Application will be made to the London Stock Exchange for the
Acquisition Shares to be admitted to trading on AIM and it is
expected that trading in the Acquisition Shares will commence on
AIM at 8.00 a.m. on or around 15 July 2020. Admission of the
Acquisition Shares is subject to, inter alia, approval of the
Allotment Resolution and the Waiver Resolution at the General
Meeting.
15. RECOMMATIONS AND UNDERTAKINGS
Shareholders should be aware that if the Allotment Resolution
and the Waiver Resolution are not passed at the General Meeting,
the Acquisition will not proceed, and the engagement with Peel,
which is conditional on Completion, will therefore be terminated.
This would in turn have a significant impact on PowerHouse's
ability to develop the Protos Project, if at all.
The Independent Directors, having been so advised by WH Ireland,
consider the Acquisition and the grant of the Waiver to be fair and
reasonable and in the best interests of the Company as a whole.
Accordingly, the Independent Directors recommend that the
Independent Shareholders vote in favour of the Resolutions at the
General Meeting.
The Independent Directors have undertaken to vote in favour of
the Resolutions in respect of their holdings of Ordinary Shares, in
aggregate, 2,303,459 Ordinary Shares, representing approximately
0.11% of the Company's issued share capital.
Yours faithfully
Dr William Cameron Davies
Non-Executive Chairman
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
MSCKKPBQDBKBDAB
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