TIDMVRS
RNS Number : 3696X
Versarien PLC
20 December 2023
20 December 2023
Versarien plc
("Versarien" or the "Company")
Company Update and Notice of General Meeting
Versarien plc (AIM: VRS), the advanced materials engineering
group, announces that a Notice of General Meeting ("General
Meeting") will be posted to shareholders today. The General Meeting
will be held on Wednesday 10 January 2024 at 10.00 a.m. at the
offices of Fieldfisher LLP, Riverbank House, 2 Swan Lane, London
EC4R 3TT. The purpose of the General Meeting is to approve a share
capital reorganisation, which consists of a redesignation of the
existing ordinary shares of the Company, and renewal of the
Company's share capital authorities.
The formal notice of the General Meeting including full details
of all resolutions to be proposed ("Resolutions") is available to
view on the Company's website at www.versarien.com.
The Company values shareholder participation and values the
votes of shareholders, so it encourages all shareholders to
exercise their voting rights by completing and submitting a proxy
form as soon as possible. It would also be helpful if shareholders
could submit any questions in advance of the General Meeting via
IFC Advisory Limited, the Company's financial PR and investor
relations adviser, at versarien@investor-focus.co.uk.
Background and Current Trading
At the last general meeting of the Company held on 30 October
2023 the Company explained that it wished to sub-divide its share
capital and renew its share capital authorities to enable it to
access bridging finance whilst certain assets were marketed for
sale.
The sale of those assets, in particular the interest in the
mature businesses, has not progressed as expected although the
Company continues to market them for sale. There is continued
interest in the South Korean assets and IP, however any transaction
is not expected to complete until next year and is likely to raise
less cash, at least initially, than was first anticipated.
The Group audit for the year ended 30 September 2023 ("FY23") is
ongoing and the FY23 results are expected to be released in early
February. The FY23 financial highlights, subject to audit, are
expected to be as follows:
-- Group revenues of GBP5.45m (2022: 18-month period GBP11.11m)
-- *Adjusted LBITDA of GBP3.03m (2022: 18-month period GBP2.40m)
-- H2 Adjusted LBITDA of GBP1.02m compared to H1 of GBP2.01m
-- Asset impairments of GBP7.5m treated as an exceptional item (30 September 2022: GBP1.33m)
-- Cash at bank of GBP0.60m (30 September 2022: GBP1.35m)
-- Post period end, placing to raise gross proceeds of c. GBP0.45m
*Adjusted LBITDA (Loss Before Interest, Tax, Depreciation and
Amortisation) excludes Exceptional items, Share-based payment
charges and other losses.
The Company continues to pursue its stated turnaround strategy
and it is the view of the Board that the Company now has a pipeline
of opportunities that could result in an improvement in the
financial condition of the Company in the short to medium term.
Since 21 July 2023, 28 new contracts have been won representing
approximately GBP1.0m of income over six to eighteen months and the
Company is pursuing 69 other contractual opportunities with a
potential aggregate value to the Company of approximately
GBP1.05m.
The open opportunities cover a number of sectors and situations
including Graphene-Wear(TM) coatings for textiles, Cementene(TM),
3D concrete printing, Polygrene(TM), commercial R&D, grants and
licensing and reflect, in part, the adoption of the turnaround
strategy. This improvement, albeit a first step, reflects the
efforts of the Company's management to move the business towards
being financially viable going forward. The Company's current
projections show an EBITDA positive position being reached in the
second half of 2025, assuming the conversion of sufficient
opportunities into revenue for the Company.
The sale of assets remains an integral part of the turnaround
strategy, but fundamentally, the Board now has sufficient
confidence in the business pipeline to seek the authority to issue
further equity to bridge the funding gap to profitability. This
further funding will be required to secure the future of Versarien
as, in the absence of any asset sales or the implementation of
further cost reduction measures, the Company has limited cash
resources, which as of 19 December stood at GBP0.42m together with
GBP0.12m available to draw from its invoice finance facility.
The nominal value of the Existing Ordinary Shares is currently
0.1 pence and, whilst the Existing Ordinary Shares are currently
trading at a premium to that nominal value, the Board believes that
there is a risk that any future fundraise could be at a discount
that reduces the issue price to less than 0.1 pence per Existing
Ordinary Share. Under the Companies Act, a company is unable to
issue shares at a subscription price which is less than the nominal
value and the Company would then not be able to proceed with that
fundraise. The Board, therefore, considers it prudent to implement
the proposed Share Capital Reorganisation in order that the nominal
value of the New Ordinary Shares is set at a level substantially
lower than the current trading price of the Existing Ordinary
Shares. This should provide the Company with greater flexibility to
raise funds by issuing further shares.
Whilst the Board will look to secure any further funding above
the current nominal value of the Existing Ordinary Shares, it needs
the flexibility should the ultimate placing price of any equity
raise be below the current nominal value of the Ordinary Shares.
Whilst the Board would naturally hope that this would not be the
case, it would seem imprudent, in the current circumstances and
with an uncertain stock market outlook, not to further amend the
nominal value as a protection mechanism.
Additionally, the Directors are seeking shareholder approval to
renew and increase the Company's authority to issue new equity as
well as its authority to issue new equity for cash other than on a
pre-emptive basis. Each of these authorities is for up to an
aggregate nominal value of GBP99,233.90 (992,339,000 New Ordinary
Shares), being approximately 200 per cent. of the issued share
capital of the Company as at 19 December 2023. Unless previously
revoked or varied, these authorities will expire at the conclusion
of the next Annual General Meeting of the Company, expected to be
held in March 2024.
Share Capital Reorganisation and amendments to the Articles of
Association
Accordingly, it is proposed to sub-divide each Existing Ordinary
Share into one New Ordinary Share and one New Deferred Share.
The New Ordinary Shares will in all material respects, have the
same rights (including rights as to voting, dividends and return of
capital) as the Existing Ordinary Shares. The New Ordinary Shares
will be traded on AIM in the same way as the Existing Ordinary
Shares, with the exception of the difference in nominal value.
The rights attached to the New Deferred Shares will be set out
in the Articles (as per Resolution 2 in the Notice of General
Meeting). The New Deferred Shares will have little economic value
as they will not carry any rights to vote or dividend rights,
although the New Deferred Shares will rank pari passu with the New
Ordinary Shares on a return of capital or on a winding up of the
Company.
The Company does not intend to make any application for the New
Deferred Shares to be admitted to trading on AIM or any other
public market. The New Deferred Shares will not be transferable
without the prior written consent of the Company. No share
certificates will be issued in respect of the New Deferred Shares.
The Board may further appoint any person to act on behalf of all
the holders of the New Deferred Shares to transfer all such shares
to the Company in accordance with the terms of the Companies
Act.
It is not intended to issue new share certificate(s) to the
holders of the New Ordinary Shares following the Share Capital
Reorganisation. Existing share certificate(s) will remain valid for
the same number of shares but with a different nominal value of
0.01p per share. The nominal value of shares already held in CREST
will be updated at approximately 8.00 a.m. on 11 January 2024.
By effecting the Share Capital Reorganisation in this way, the
total nominal value of the Company's entire issued share capital
remains the same with New Ordinary Shares having a nominal value of
0.01p plus New Deferred Shares having a nominal value of 0.09p each
(as well as the existing deferred shares of 0.9p each).
The Share Capital Reorganisation is conditional upon, and
effected by, the approval of Resolutions 1 and 2 at the General
Meeting as required by the Companies Act 2006 and the Articles. If
Resolutions 1 and 2 are passed, the Share Capital Reorganisation
will become effective at 6.00 p.m. on the Record Date.
The Articles are proposed to be amended to allow for the issue
of the New Deferred Shares, which are proposed to be issued as part
of the Share Capital Reorganisation. Resolution 2 amends the
Company's existing Articles to include provision in respect of the
rights and restrictions attaching to the Deferred Shares. The
changes are set out in Part 2 of the Circular.
Recommendation
The Board considers that the Resolutions are in the best
interests of the Company and its shareholders, taken as a whole.
The Board unanimously recommends that the Shareholders to vote in
favour of the Resolutions, as the Directors intend to do so in
respect of their own beneficial holdings.
If the Resolutions are not approved at the General Meeting, the
Company will not be able to raise equity funding, and if no
alternative funding can be secured, the Company's ability to
operate as a going concern will be put at risk.
Expected timetable of principal events
2023/2024
Publication and dispatch of the circular and Form of Proxy
20 December
Latest time and date for receipt of the Form of Proxy 10.00 a.m.
on 8 January
Time and date of the General Meeting 10.00 a.m. on 10
January
Results of the General Meeting announced through RNS 10
January
Record Date for Share Capital Reorganisation 6.00 p.m. on 10
January
Admission and dealings in New Ordinary Shares 8.00 a.m. on 11
January
All references to times in this timetable are to London times
and each of the times and dates are indicative only and may be
subject to change.
Terms used and not defined in this announcement shall have the
same meanings given to them in the Notice of General Meeting.
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it
forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with
the Company's obligations under Article 17 of MAR.
For further information please contact:
Versarien c/o IFC
Stephen Hodge, Chief Executive Officer
Chris Leigh, Chief Financial Officer
SP Angel Corporate Finance (Nominated
Adviser and Broker) +44 (0)20 3470
Matthew Johnson, Adam Cowl 0470
IFC Advisory Limited (Financial PR and
Investor Relations) +44 (0)20 3934
Tim Metcalfe, Zach Cohen 6630
For further information please see : http://www.versarien.com
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END
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December 20, 2023 02:00 ET (07:00 GMT)
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