TIDMPOS
RNS Number : 4737D
Plexus Holdings Plc
20 October 2022
Plexus Holdings PLC / Index: AIM / Epic: POS / Sector: Oil
equipment & services
20 October 2022
This announcement contains inside information
Plexus Holdings PLC
('Plexus', 'the Company' or 'the Group')
ISSUE OF CONVERTIBLE LOANS
Plexus Holdings plc is pleased to announce that it has raised
GBP1,550,000 through the issue of 1,550,000 convertible loan notes
("Loan Notes") to each of OFM Investment Limited (an entity
connected to the van Bilderbeek family), Ben van Bilderbeek, CEO of
Plexus, and Jeff Thrall, Non-executive Director of Plexus,
(together, the "Noteholders") under the terms of a loan note
instrument (the "Instrument").
The proceeds from the issue of the Loan Notes will be used for
working capital purposes and, along with the Company's existing
cash resources, fund the Company's activities as it seeks to
capitalise on the increasing pipeline of opportunities within
Plexus' markets, and in particular its re-entry into the
exploration wellhead rental from Jack-up rigs market where Plexus
is in a licencing partnership with Schlumberger.
Background to the Issue of the Loan Notes
The Board has considered a number of options to secure
additional working capital and strengthen the Company's balance
sheet, and has determined, in conjunction with its advisors that
the issue of the Loan Notes is the preferred approach and that it
is the most time and cost-efficient method to enable Plexus to fund
its strategic objectives and rental fleet build out in the
short-medium term.
The Board recognises the importance of the Company's existing
shareholders, and the issue of the Loan Notes will enable them to
avoid dilution to their holdings at this time. Furthermore, the
Loan Note structure provides for the participation of existing
shareholders in a future capital raise, which is anticipated to
take place alongside the conversion of the Loan Notes.
Details of the Loan Notes
The issue of the Loan Notes has raised an aggregate of
GBP1,550,000 loans from OFM Investment Limited (an entity connected
to the van Bilderbeek family), Ben van Bilderbeek and Jeff Thrall
in the following proportions:
a. OFM Investment Limited GBP1,000,000;
b. Ben van Bilderbeek GBP500,000; and
c. Jeff Thrall GBP50,000.
The Loan Notes are non-interest bearing, and their 'long stop'
maturity date is the second-year anniversary of the date of the
Instrument ("Maturity Date").
Although the Loan Notes are currently unsecured, the Instrument
contains obligations on the Company to use all reasonable
endeavours (so far as it lies within its powers so to do) to
satisfy certain conditions (including passing of requisite
shareholder resolutions to approve the grant of security) to enable
the Loan Notes to be secured by way of a first ranking charge over
all of the Company's assets (excluding any that are subject of a
Bank of Scotland security) to be granted in favour of Ben van
Bilderbeek as security trustee on behalf of the lenders.
The Instrument contains rights for the holders of Loan Notes to
convert the Loan Notes in certain circumstances, subject to certain
conditions being satisfied, specifically: (i) an offer of new
shares to all or substantially all of the then existing
shareholders of the Company (but excluding the Noteholders and
their connected persons, save to the extent that such offer is not
fully subscribed by such shareholders, in which case the offer may
be extended to the Noteholders and their connected persons) on a
materially pre-emptive basis before the Maturity Date (the
"Qualifying Financing"); (ii) the passing of all shareholder
resolutions required in respect of the Qualifying Financing and the
conversion of the Loan Notes; and (iii) the Company, acting in good
faith, deeming that any proposed exercise of such rights would not
result in an obligation pursuant to Rule 9 of the Takeover Code on
any person to extend an offer for all the shares in the
Company.
The Instrument also contains an obligation for the Company to
use reasonable endeavours (if, acting in good faith, it deems it
commercially appropriate to do so at the relevant time) to procure
satisfaction of the conditions to conversion following the receipt
of a trigger notice (which can be served by the Noteholders if: (i)
in the first year of the Instrument being constituted, the
Company's share price averages 4p or more in any rolling 45 day
period; or (ii) in the second year, the Company's share price
averages 8p or more in any rolling 45 day period), or, if earlier,
by mutual agreement of the Noteholders and the Company, or the
Maturity Date.
In respect of the shareholder resolutions required in respect
of: (i) the security described above; and (ii) the Qualifying
Financing and the conversion of the Loan Notes, the Company has
received irrevocable undertakings from the OFM Investment Limited,
Ben van Bilderbeek, Jeff Thrall, Thrall Enterprises, Inc. and
Mutual Holdings Limited to vote in favour of such resolutions.
Together, such shareholders are interested in shares totalling
59.4% of the issued share capital of the Company (note, however,
that the irrevocable undertakings relate to any shares held by such
shareholders at the time such shareholder resolutions are tabled at
the relevant general meetings of the Company).
The Loan Notes will be repayable on a winding up/ insolvency of
the Company, or at any time (in whole or in part) at the election
of the Company with the consent of the Noteholders. If the Loan
Notes are repaid in cash, the Noteholders will, in addition to the
principal amount of their Loan Notes, be paid an amount equal to
20% of the principal amount of their Loan Notes.
It has been agreed that the Noteholders, subject to shareholder
authority, will convert their loans into new shares at a 20%
discount to the share price paid by investors in the corresponding
Qualifying Financing in recognition of and compensation for the
funding support that has been provided.
The Board had considered this scenario and has agreed that when
the loan note instrument conversion event occurs within the
two-year term of the Loan Notes, all shareholders, with the
exception of the Noteholders, will be given the opportunity to
participate in a future capital raise via an offer of new shares
alongside the conversion. The Noteholders may participate to the
extent that the open offer, or equivalent, is not fully subscribed.
This mechanism gives existing shareholders the opportunity to
participate in a capital raise and to broadly maintain their
shareholding percentage in Plexus, or indeed potentially increase
their holding if there was headroom to do so.
Related Party Transaction
The Noteholders consist of Jeff Thrall and Ben van Bilderbeek,
both of whom are directors and shareholders of the Company, and OFM
Investment Limited (a party connected to the Ben van Bilderbeek
family), and the issue of the Loan Notes (the "Transaction") to the
Noteholders is deemed to be a related party transaction pursuant to
AIM Rule 13 of the AIM Rules for Companies. The Company's directors
(excluding Jeff Thrall and Ben van Bilderbeek, who are both
interested in the Transaction) consider, having consulted with the
Company's Nominated Adviser, that the terms of the Transaction are
fair and reasonable insofar as the shareholders of the Company are
concerned.
The Takeover Code
The Takeover Code (the "Code") applies to the Company. Under
Rule 9 of the Code, any person who acquires an interest in shares
which, taken together with shares in which that person or any
person acting in concert with that person is interested, carry 30%
or more of the voting rights of a company which is subject to the
Code is normally required to make an offer to all the remaining
shareholders to acquire their shares.
Similarly, when any person, together with persons acting in
concert with that person, is interested in shares which in the
aggregate carry not less than 30% of the voting rights of such a
company but does not hold shares carrying more than 50% of the
voting rights of the company, an offer will normally be required if
any further interests in shares carrying voting rights are acquired
by such person or any person acting in concert with that
person.
An offer under Rule 9 must be made in cash at the highest price
paid by the person required to make the offer, or any person acting
in concert with such person, for any interest in shares of the
company during the 12 months prior to the announcement of the
offer.
The Company has agreed with the Takeover Panel (the "Panel")
that Ben van Bilderbeek (Chief Executive of Plexus) and Jeff Thrall
(Non-executive Chairman of Plexus), and their immediate families
and related trusts (the "Concert Party"), are acting in concert in
relation to the Company. The Concert Party is interested in
59,684,919 Ordinary Shares, representing 59.4 per cent. of the
voting rights of the Company. A table showing the respective
individual interests in shares of the members of the Concert Party
is set out below.
Concert Party Holdings Ordinary Shares Percentage of
held issued share capital
Mutual Holdings Limited 42,700,001 42.5%
--------------------------------- ----------------------
OFM Investment Limited 15,069,767 15.0%
--------------------------------- ----------------------
Nazdar Limited 1,591,512 1.6%
--------------------------------- ----------------------
Ben van Bilderbeek (1) 307,639 0.3%
--------------------------------- ----------------------
Jeff Thrall (2) 16,000 0.02%
--------------------------------- ----------------------
59,684,919 59.4%
--------------------------------- ----------------------
(1) Ben van Bilderbeek is settlor of a trust which controls
59.96% of the shares of Mutual Holdings Limited and the entire
issued share capital of OFM Investment Limited. Ben van Bilderbeek
and his immediate family and related trusts have voting control
over approximately 57.8% of the issued share capital of the Company
and are free to increase their aggregate interests in shares
without incurring any obligation to make an offer under Rule 9.
(2) Jeff Thrall has an indirect beneficial interest in a company
which controls 32.5% of Mutual Holdings Limited. Additionally, Jeff
Thrall has both a direct and an indirect beneficial interest in
Nazdar Limited. Jeff Thrall and his immediate family and related
trusts have voting control over approximately 1.6% of the issued
share capital of the Company and are not able to increase their
percentage interests in shares through or between a Rule 9
threshold without Panel consent.
The members of the Concert Party currently hold shares carrying
more than 50% of the voting rights of the Company and (for so long
as they continue to be acting in concert) may accordingly increase
their aggregate interests in shares without incurring any
obligation to make an offer under Rule 9, although individual
members of the concert party will not be able to increase their
percentage interests in shares through or between a Rule 9
threshold without Panel consent.
Under sections 979 to 982 of the Companies Act (the "Act"), if
an offeror were to acquire 90 per cent. of the Ordinary Shares
within four months of making a takeover offer as defined in section
974 of the Act, it could then compulsorily acquire the remaining 10
per cent. It would do so by sending a notice to outstanding
shareholders telling them that it will compulsorily acquire their
shares and then, six weeks later, it would execute a transfer of
the outstanding shares in its favour and pay the consideration to
the Company, which would hold the consideration on trust for
outstanding shareholders. The consideration offered to the
shareholders whose shares are compulsorily acquired under the Act
must, in general, be the same as the consideration that was
available under the takeover offer unless the shareholders can show
that the offer value is unfair.
Pursuant to sections 983 to 985 of the Act, minority
shareholders in the Company have a right to be bought out in
certain circumstances by an offeror who has made a takeover offer.
If a takeover offer related to all the Ordinary Shares and at any
time before the end of the period within which the offer could be
accepted the offeror held or had agreed to acquire not less than 90
per cent. of the Ordinary Shares, any holder of shares to which the
offer relates who has not accepted the offer can require the
offeror to acquire his shares. The offeror would be required to
give any shareholder notice of his right to be bought out within
one month of that right arising. The offeror may impose a time
limit on the rights of minority shareholders to be bought out, but
that period cannot end less than three months after the end of the
acceptance period. If a shareholder exercises its rights, the
offeror is bound to acquire those shares on the terms of the offer
or on such other terms as may be agreed.
Update
Although the Company continues to actively promote its
proprietary wellhead and related technologies, it has taken longer
than anticipated to recover from what has been for some time
challenging market conditions. However, the Board of Plexus is
confident that the medium-term outlook for the Company remains
strong and is encouraged by the recent increase in activity that is
taking place, which has resulted in a growing number of customer
enquiries and tenders. Strengthening the Company's working capital
position at this time will help enable the Company to respond to
and secure new orders as it seeks to make inroads into new markets.
These include the "Exact-EX" and Centric-15" Jack-up rental
exploration wellhead market, where Plexus is in a licencing
partnership with Schlumberger, and for example the surface
production wellhead and Plug & Abandonment markets.
In further consideration of steps being taken to strengthen the
financing of Plexus, one of Plexus' licencing partners has
indicated its agreement in principle to provide equipment
manufacturing credit funding on a 'lease to own' basis, to help
accelerate the build out of the Company's wellhead rental
inventory, which if actioned would be paid down over a three-year
period.
The Company continues to monitor its cost base and will manage
this in line with the requirements of the business and the
anticipated uplift in activity. With this in mind, the Board is
also considering how best to manage its asset base in relation to
non-core assets, and currently anticipates selling the long
leasehold interest in a property in Aberdeen, which has become
surplus to requirements. This property has already been sub-let to
a third-party tenant and, if such a transaction could be concluded,
it would accelerate the receipt of income from the property to
further improve Plexus' working capital position and support the
Company's planned capex programme.
Finally, it must not be forgotten what lies behind Plexus' value
and prospects, and what its technology can contribute to the oil
and gas industry. The Board believes that the vast majority of
older hydrocarbon producing wellheads around the world are not
operating to a recognised standard. This is because conventional
annular seals have limited field-life, and for much of their
service life must seek remedial solutions to address leaking, such
as the use of unregulated periodic injection of sealing liquids, by
service providers, who themselves have described such external
intervention as a temporary fix. As Plexus' approach is to promote
"prevention" and the long-term integrity of its equipment and the
capabilities of its metal-to-metal "HG" seals, the Board considers
that the case for the continuing use of conventional wellhead seal
"cures", which it believes to be unreliable is becoming
increasingly hollow. With the focus now firmly on eliminating
methane emissions wherever possible, Plexus' leak-free metal
sealing wellhead capability, based on the POS-GRIP method of
engineering, which uniquely meets ESG and NetZero objectives, and
which has resulted in the Company achieving the LSE "Green Economy
Mark", should logically secure the place in the industry it
deserves.
The Board appreciates the ongoing support of its shareholders,
the market, and the industry, and looks forward to providing
further updates as the above initiatives progress.
Ben van Bilderbeek CEO today said, " As your CEO, and the
principal shareholder of Plexus Holdings Plc, I could not be
prouder of our company, although I m ore than anyone am frustrated
about the challenges faced by Plexus in recent years.
"Primarily because of circumstances beyond our control, Plexus
had to navigate difficult trading conditions since 2015. Indeed,
the huge drop in the price of oil placed us in the crosshairs of
the major service providers who had to fight over every scrap of
work, which meant that our potentially disruptive presence became
less tolerated as drilling activity declined, whereas now this
trend is reversing.
"Our choice was to soldier on, or to lock-down and preserve our
IP assets until better days. However, the value of uniquely
enabling intellectual property requires a qualified team to keep it
active, which is why your Board decided to absorb negative cash
flow, whilst we repositioned ourselves to be ready with a more
diversified product mix once the market returns. In the event, we
survived very challenging times by selling IP applications,
non-core assets and by licencing non-exclusive rights to certain
applications of our POS-GRIP technology.
"As the purveyors of disruptive technologies, Plexus elected to
compete with the established gatekeepers of our industry. To their
credit, some of these companies such as TechnipFMC ('TFMC') and
Schlumberger/Cameron ('Cameron') recognised the value of our
technology by entering into license agreements for certain aspects
of our array of POS-GRIP applications.
"Specifically, the Plexus POS-GRIP Jack-up exploration wellhead
system, now owned by TFMC, is still, we believe, the top choice in
the Jack-up exploration wellhead rental market, and a few years
later Cameron is developing its own version of POS-GRIP surface
production wellheads, also under license.
"As a coincidence, I believe the two most competent ESG
compliant exploration wellhead systems from Jack-up rigs in use
today, have both been designed and developed by Plexus. The
POS-GRIP system is now owned by TFMC, and our previous EXACT-15
exploration drilling system was bought by Cameron in 1995.
"In a welcome development, Plexus was able to licence back the
rights to its original Exact-15 system from Cameron and has
initiated a joint rental wellhead inventory investment programme,
based on upgraded threaded hanger technology, which will soon be
online.
"Our return to the exploration wellhead rental market is
assisted by access to international markets through our partner
Cameron, and Plexus is still well known throughout the industry as
the original inventors of through the BOP Jack-up drilling
technology, with previous customers looking forward to once again
doing business with Plexus.
"In the meantime, the Ukrainian conflict has refocussed the
North Sea and the rest of the world on the need to increase
exploration and production activities, which is reflected by
growing enquiry levels for our rental exploration and sold
production wellheads.
"As announced today, I am pleased to be supporting Plexus
through my investment in the Loan Notes, to meet the short-term
investment needs of the Company. We recognise the support and
importance of our shareholders, and it is intended that they will
be given the opportunity to invest at the time of loan conversion,
and I strongly recommend that they seriously consider 'standing
their corner', when the opportunity presents.
"After the Gulf of Mexico incident of 2010, the opportunity for
Plexus to develop a new subsea wellhead application using POS-GRIP
technology lifted the Company's market cap to record highs. We
backed our belief in the technology by developing, through a widely
supported JIP, our Python subsea wellhead system. Only a concept
then, the Python subsea wellhead is now a qualified, circa GBP4
million invested prototype ready for trial, which the Board of
Plexus believes offers a wide range of operational, time saving and
safety advantages, and represents an early example of a progressive
collaboration approach to a significant challenge faced by the
industry.
"With Python ready to undergo field trials, Plexus' extensive IP
suite, know-how and goodwill is today far greater in scope compared
to the time when Plexus was valued at circa GBP300 million.
Although a return to such Halcyon days is not anticipated in the
near future, the opportunity to re-enter the rental exploration
wellhead market, where we were the original "go to" supplier for
the North Sea, together with renewed interest in our Python subsea
wellhead and surface production technology, gives me growing
confidence that Plexus' shareholder value can recover, this time
driven by a more diversified product and services mix, and now also
in partnership with the world's largest international oil and gas
service company.
"Our current product and service range includes exploration
rental wellhead services; leak-free surface and subsea production
wellheads; plug and abandonment technology; gas and hydrogen
storage applications; POS-GRIP geothermal wellhead solutions; and
special applications when inaccessible bespoke challenges present
themselves.
"Although our industry has in the past been reluctant to openly
recognise ESG objectives and NetZero targets, the reality is that
engineers have an obligation to pursue the Best and Safest
Technology available, which logically extends to both personnel and
the environment.
"Ever since the Company's inception in 1987, Plexus has sought
to identify and address certain established operating practices,
which caused us to naturally gravitate towards leak-proof seal
solutions and through the BOP operating practices. We did not have
to be asked to adopt EGS principles! Indeed, although Plexus'
efforts over many years were, I believe, labelled disruptive, our
company today is (to my knowledge) the only oil and gas service
company to have its emissions reducing technology recognised
through the London Stock Exchange Green Economy Mark programme.
"For these reasons, and with the world in desperate need for
safe and near NetZero energy sources whilst alternatives are in
reality still a long way off, and with Putin exposing the risk of
global sourcing energy policies, our time, in respect of a
NetZero-Now capability may have come. This is particularly the case
for natural gas, where recently the UK and European energy policies
have pivoted back to exploration and production closer to home,
whilst at the same time our partners have strengthened our reach
into international markets.
"In the case of the UK, such fast moving developments are
clearly evidenced by the Prime Minister's recent pronouncements in
relation to energy security and the need to make Britain energy
independent by 2040. Such a pledge to strengthen domestic power
supplies after decades of short-term thinking, and the focus on
homegrown fossil fuel extraction was bolstered by the Government
indicating that it is poised to make available more than 100 new
oil and gas permits in the North Sea, the first licencing round of
its kind since 2020. This, I believe, bodes well for the future of
Plexus, particularly if we can convince our industry and the
regulators that in the field of critical wellhead technology
home-grown leak-proof solutions are available, and which are based
on prevention rather than cure."
**ENDS**
For further information please visit www.plexusplc.com or
contact:
Plexus Holdings PLC Tel: 020 7795 6890
Ben van Bilderbeek, CEO
Graham Stevens, CFO
Cenkos Securities PLC Tel: 0131 220 6939
Derrick Lee
Pete Lynch
------------------------------
St Brides Partners Ltd plexus@stbridespartners.co.uk
Isabel de Salis
Ana Ribeiro
Max Bennett
------------------------------
Notes to Editors
Plexus Holdings plc (AIM: POS)
Plexus is an IP led company focussed on establishing its
patented leak-proof POS-GRIP(R) wellhead and associated equipment
as the go-to technology for energy markets whilst making a genuine
contribution to the oil and gas industry's ESG and NetZero goals by
championing "through the BOP" (Blow-out Preventer) designs, and
lifetime leak-proof HG(R) metal-to-metal sealing systems. Having
protected the environment for many years through these
technological innovations, the Company was awarded the London Stock
Exchange's Green Economy Mark in July 2021 and continues to place
emphasis on its ability to reduce harmful methane emissions and
unnecessary maintenance and intervention costs.
Headquartered in Aberdeen, the Company has provided leak-free
wellhead performance in over 400 wells worldwide and worked with an
array of blue-chip oil and gas company clients. As well as
generating direct revenues from securing orders for surface
production wellheads particularly in the UK and European North Sea
regions, the Company has several licencing agreements with major
partners including FMC Technologies, which is a subsidiary of
TechnipFMC and Cameron, a Schlumberger Group company. Cameron has a
non-exclusive licence to use the POS-GRIP and HG(R) metal-to-metal
seal method of wellhead engineering for the development of
conventional and unconventional oil and gas surface wellheads, and
Plexus entered into a Cooperation Agreement, which enabled Plexus
to return to the Jack-up Exploration (Adjustable) Wellhead rental
business for 'through the BOP' jack-up applications, where Cameron
will help to provide Plexus with sales leads and market insight
through a formal Sales Advisory Board.
Plexus' current suite of products and applications include: "HG"
wellheads, which combine POS-GRIP technology with gas tight leak
free metal-to-metal sealing; the Python(R) subsea wellhead,
developed in a Joint Industry Project with several industry
leaders; the POS-SET(TM) Connector for the de-commissioning and
abandonment market; and Tersus-PCT, an innovative HP/HT tie back
connector product. Having proved the superior uniquely enabling
qualities of POS-GRIP Technology, Plexus is now also focused on
establishing its technology and equipment in other markets such as
Plug and Abandonment de-commissioning, carbon capture, gas storage,
hydrogen and geothermal where it can play an important role in
reducing harmful methane emission risks as operators strive to
deliver on ESG commitments and NetZero goals in a safe and
cost-effective way.
For more information visit: https://www.plexusplc.com/
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.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
MSCDKLFFLBLFFBF
(END) Dow Jones Newswires
October 20, 2022 02:00 ET (06:00 GMT)
Plexus (AQSE:POS.GB)
Historical Stock Chart
From Dec 2024 to Jan 2025
Plexus (AQSE:POS.GB)
Historical Stock Chart
From Jan 2024 to Jan 2025
